Financial Review Debate — In Committee 
Financial Review Debate — In Committee 
[Volume:630;Page:2414] 
Financial Review Debate 
In Committee 
The CHAIRPERSON (H V Ross Robertson) 
: The Standing Orders provide for the financial review debate to be the Committee stage of the Appropriation (2004/05 Financial Review) Bill. The debate is organised into three distinct parts. It commences with a debate on the annual financial statements of the Government as reported on by the Finance and Expenditure Committee. Once this debate is disposed of the Committee debates individual financial reviews of the departments and Offices of Parliament as reported on by select committees. There is a list of financial reviews available for debate on the Table along with copies of the select committee reports for members. 
The debate on the Government’s financial position may be fairly wide ranging but the debates on the individual financial reviews of departments and Offices of Parliament should be relevant to their performance in the 2004-05 financial year and their current operations. Members should note that they may have no more than two calls on each financial review. 
Four hours is allowed for these two segments of the financial review debate. At the conclusion of the 4 hours a single question is put on the provisions of the bill. There is no amendment or debate on this question. The Chairperson reports the bill to the House and it is set down for its third reading forthwith. There is no debate on the third reading. 
I ask members to turn to the report of the Finance and Expenditure Committee on the annual financial statements of the Government. The question is that the report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June be noted. 
Treasury 
Financial Statements of the Government of New Zealand for the year ended 30 June 2005 
JOHN KEY (National—Helensville) 
: 
 Let me start by saying that the financial statements in relation to the year ended 30 June 2005 will make a lot better reading than the financial statements for the year ended 30 June 2006. As we know this Government has presided over an economy it inherited—that it did absolutely nothing to create—and over the 6 years that it has had the economy under its control it has done nothing to improve it. It squandered the conditions and failed to pick up the most fundamental of challenges around our economy—the ability to make sure that New Zealand is competitive and goes forward with a spring in its step and the ability to cope with the down cycles that happen in every economic cycle. 
I contrast that performance with the performance in Australia. What I saw and what New Zealanders see every day in Australia is a Government committed to lowering taxes and the tax burden to pouring billions of dollars into infrastructure to welcoming the private sector to fixing tertiary education and to fixing outputs from skills. What have we seen from this Government? We have not seen a single private toll road constructed in New Zealand. The energy sector is in complete disarray. The Minister of Finance or the Minister for Tertiary Education—wearing one of his many other hats today—is finally coming out and recognising that there is a major blunder in the tertiary education sector. We had a growth rate that was zero for the 6 months of last year and is likely to be considerably poorer for the balance of this year. Yesterday Treasury told the country that growth would be weaker than it thought. All of this has come from a Government that has had all of the revenue in the world to do some decent things but has failed miserably. 
What is even worse and is probably even more alarming than that—and I know that it privately worries Dr Cullen a great deal—is a report in the “Business Herald” today about Fletcher Building one of the icons of the New Zealand business community that it is looking with its advisers Credit Suisse First Boston to move its head office to Australia. 
 New Zealanders might wonder why a company like Fletcher Building which has been very successful is considering joining many others like Lion Nathan and Nufarm that have picked up their head offices and moved them to Australia. Dr Cullen knows exactly the reason for companies doing that: our company tax rate is higher than the company tax rate in Australia. Our tax revenue is being hollowed out because Australian investors are snapping up New Zealand companies left right and centre. Those Australian shareholders want imputation credits and fully franked dividends. So a company like Fletcher Building which can be and has been a very successful company providing an enormous amount of ancillary business and growth in our economy is looking at moving to Australia when it should be staying in New Zealand. I say that move if nothing else is a sheer sign of this Government’s failure in the last 6 years. The fact that Fletcher Building is looking at moving its operation is clear and demonstrable evidence that this Government has failed in the last 6 years. That company is not alone; many other companies are doing the same thing. 
Today we came down to the House and we asked Michael Cullen the Minister of Finance the most simple question of all on the very same topic: does he support a business tax review that would be revenue neutral—that is one that he has to take from one hand and give to the other. We asked whether that was the reason he is exploring these crazy options such as a payroll tax and looking at all these unusual things. The Minister of Finance—the man who has said: “The fiscal buck stops with me.”—could not even get up in the House today and tell us whether the whole aim of the business tax review is to be fiscally neutral. 
When we asked him the question a couple of weeks ago he came out with what I thought was a pretty interesting answer. When I asked him whether the review would be fiscally neutral he said: “The review will determine what the review will do.” It was not one of Dr Cullen’s greatest lines I have to say. He is known for saying better one-liners than that. Even though I may not have agreed with the comment about the “ideological burp” at least it was half-amusing when he said it. He told us that the review will decide what the review will do—even though he told us that he actually decides whether these things happen and that the fiscal buck stops with him. 
Well the Minister of Finance is losing it because he does not even know whether he will still be the Minister of Finance when Budget 2007 and Budget 2008 roll around. I do not think Helen Clark was trying to give him the message publicly. Journalists asked me that question yesterday and I answered that it was a bit unkind to say Helen Clark was trying to move Michael Cullen on permanently—she just does not know whether he is coming or going. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 Yesterday Treasury warned us of a possible recession. Treasury says the economy has stalled. We know it stalled in the second half of last year and Treasury says it does not look as if it will grow much this year. I think it is fair to say that all the barriers hurdles bureaucratic red tape and the huge tax grab of this Labour Government are finally catching up and throttling our economy. 
A classic example of one of the things that is throttling New Zealand’s economy is Transit New Zealand’s assumption of the role of the ultimate dictator of development. I could do no better than to read to this Committee what the Rodney Economic Development Trust has said. The trust is a group based north of Auckland that contains some of the serious business hitters north of Auckland including some of the major business players who have business investments around most of the North Island. The trust states: “It is not the people of Rodney who are determining our district’s future but Transit New Zealand. They now decide where people will live where people will work where we will develop our infrastructure where our children will go to school how we use our land where business will locate.” 
Transit is now dictating totally the development of the Rodney district. Yesterday I met with a constituent who has a proposal for a major investment in part of Rodney. It would require the purchase of land. He does not know whether to go ahead and buy that land because he is worried that Transit will say he cannot go ahead with that development and therefore he cannot afford to buy the land if he cannot go ahead with the development. That is the extent to which Transit now totally dictates investment north of Auckland. That example is the tip of the iceberg. At present there is $2 billion worth of investment ready to go ahead in Rodney which would create a lot of growth. Do people know how much of that growth can go ahead because of what Transit dictates? One-tenth of that investment can go ahead because of Transit’s dictating and saying no to 90 percent of it. 
The Rodney Economic Development Trust also said that only 15 percent of the knowledge economy zone in Rodney—which is the largest industrial development in Auckland—can go ahead because Transit says it will not construct off ramps because it cannot connect that development to its motorway. So the rest of that development will not be able to go ahead. 
I want this Minister the Hon Dr Michael Cullen to explain to this Parliament how New Zealand’s growth can go ahead when Transit is dictating and controlling so much development. Even in Helensville—in my good colleague John Key’s electorate—Transit has said a birthing unit cannot expand because it will not be allowed to have extra vehicles come on to Transit’s highway. That is how dopey this situation is becoming. 
The economy and growth are being throttled. The Rodney Economic Development Trust has said Transit’s control has now cost Rodney 6251 jobs. In just one area 6251 jobs have been lost and $129 million worth of export earnings are gone because of Transit’s dictatorship and Transit’s saying no to all developments. The President of the Labour Party Mike Williams is on the Transit board and that is the extent to which cronyism and the Labour Party are now crippling and throttling our economy. It is not just the high taxes or the high interest rates that people are labouring under with this Government; it is also the direct control over and the throttling of investment by Transit New Zealand. 
Do members know what Transit has said to the people of Warkworth? It has said that 50 years ago it built a bypass there and because those stupid people have dared to build houses on the other side of that bypass it will not build them another one. Imagine if Telecom had that attitude. I invite members to think back to the telephones of 50 years ago. In my patch we had party lines. One picked up the telephone receiver and said: “Working?” and if no one said: “Yes I am working.” one would ring the handle. If Telecom had said it would not put in any more infrastructure compared with what it had 50 years ago we would still be on party lines and Telecom would be saying we could not have any more people live invest and work in an area because it would not put in any more infrastructure. That is what Transit is saying. Michael Cullen cannot hide behind Transit because at the end of the day this Labour Government funds Transit so it cannot complain about loss of growth opportunity when Transit is crippling this economy. 
SHANE JONES (Labour) 
: 
 In speaking to the set of statements I want to focus on three themes. Although members of the Finance and Expenditure Committee did not obviously have the pleasure of agreeing with each other we had the pleasure of the Minister of Finance’s company and that of the senior civil servants from Treasury. In particular I want to direct members’ attention to an element that reflects the very moderate if not conservative approach that has been taken and that we are likely to see a great deal more of. I direct members’ attention to page 5 of this very lucid document which reflects quite a great deal of sensible discussion. 
A great deal of nonsense has been spoken about in relation to whether there is a ballooning number of either wages or bureaucrats and about how we as the Government are doing precious little about it. I direct those members’ attention to page 5 where it is quite clearly stated that the Government and the senior advisers from Treasury have injected a tone and a note of moderation into future discussions to do with the personnel costs of the State. 
Of course this issue takes me on as well to respond to those unwise remarks made in relation to productivity. Yes over recent time we have seen a great deal of growth and improvement in fortunes on the basis of labour utilisation rates but there is now a great deal of focus on productivity. I have no doubt that during the upcoming 12 months when we exercise and show the moderation reflected on page 5 we will remind the key people—as Treasury and indeed the Minister of Finance have reminded people—of the importance of achieving more productivity. 
But let us remind the many New Zealanders who are either listening or who remain concerned that a more balanced account is given as to what is happening in terms of our strategy to drive fine ideas. We had a fantastic tranche idea to use the use the term “dividend day” to describe 1 April when the third tranche of our family assistance package was rolled out. It is something that was a key part to the election contest but indeed it has been well and truly built into our fiscal projections. The group of people on this side of the House when they conceive of the role of the State in relation to our economic stewardship believe there are very few things more precious than those who have the role of raising children. The education productivity attitude and aptitude of the next generation we are raising—I have more than a passing interest in this having enjoyed the pleasure both of fathering and rearing seven children and I look to many mokopunas on the way. However Working for Families is an element that clearly distinguishes the way in which we conceive of our role in the wider debate about political economy. 
A great deal of nonsense including unwise statements made on websites etc. has been spoken about our interest-free student loan programme. I can tell members that people up and down Te Taitokerau throughout Auckland and in a variety of far-flung places are completely and utterly over the moon with the bold step our Prime Minister took in relation to the student loan scheme. It will cause a whole host of people to enjoy coming back to Aotearoa to join the great march of achieving productivity outcomes but more important it will also remove a great deal of burden from the minds of parents and grandparents as they watch their children and mokopuna move on to university. 
In relation to business tax changes it is unfortunate today that a great deal has been said and that rather emotional and inaccurate words such as “secrecy” have been used in respect of the business tax change reform agenda. The reality is that when the civil servants are providing advice and when the Ministers are looking at options they need the space the scope and indeed a small measure of privacy so that when public documents are being prepared for consultation that process can be done on the basis that no injudicious or unwise things are thrown out into the public before the appropriate time. I hope that the very people who have been making those accusations and using in a very silly fashion emotional words such as “secrecy” bear in mind that a key element to our system is that officials must be able to give free and frank advice and that Ministers have the scope to take or reject it. 
We have had the election we have identified and have been very public about those things that we will spend our time on and business tax changes and policies are an important element into the future. I look forward to the not too distant future when the sentiments that the people invested in can be shown to have been true. 
CRAIG FOSS (National—Tukituki) 
: 
 Where do we stand on the Appropriation (2004/05 Financial Review) Bill? We oppose it of course. Why? Are we against investment in the economy? No. Are we against quality spending? No. But given the track record of this current Labour Government of course we oppose the bill. We have to oppose it. 
There has been a massive growth of taxpayer funds. We have referred to its misappropriation—to turn a phrase—which the Finance and Expenditure Committee discussed at some length throughout its deliberations. Even in spite of what we have just heard from the previous speaker we have recently had Treasury’s forecast that the economy is stalled and has shrunk. That is not an ideological burp. They are hard economic numbers and the chickens are starting to come home to roost. How can that be? How can we be going into recession as warned by Treasury and numerous other forecasters after we have had a nominal GDP growth of 43.1 percent over the last 6 years according to forecasts for 1999-2000 to 2005-06? The economy has grown 43 percent. Congratulations to the dairy farmers and lamb producers on helping us grow but here is perhaps a clue. Core Government revenue grew 55.7 percent over the same period. That core Government revenue was taken from the productive part of the economy. 
But why on earth are we going into recession given the policies and the accolades that the previous speaker was talking about? This Government is spending and taxing us into recession. Again it is not National Party doomsayers who have made those accusations. This is not spin from some public relations unit. These are hard economic statistics and fact backed up by Treasury and numerous other producers. Growth in the last quarter December 2005 was negative 0.1 percent. Combine that with September 2005 which was plus 0.1 percent and members will see that we are already in a flat economy of 0 percent. 
There has been a lot of talk lately in various speeches around the place from various Ministers about economic transformation. What a massive admission of defeat! After 6 years of 43-odd percent growth we have to somehow transform the economy? I tell Mr Cullen that that is a massive admission of defeat. I say to Mr Mallard that he is about to get a hospital pass because he is about to inherit a bit of a lame duck I feel. There is nothing to show for the 43.1 percent nominal growth we have had over recent years which again was no thanks to and in spite of the current policies of the Government. We have nothing to show for it. Is this as good as it gets after such growth? In the 1999-2000 year $41.6 billion in revenue was taken by the Government. The 2005-06 forecast is $69 billion—money that the Government has decided it needs to take out of the economy to run affairs as it thinks it should. Yet hospital waiting lists are as bad as they have ever been. There have been no new roads and no real roading infrastructure has been invested in. Again this bill is not an appropriation bill; it is a misappropriation into the welfare for families package. It should be called the “Kiwislaver Bill”. 
With regard to electoral spending there has been a large growth in misappropriation of public funds for election spending which is under review by the Auditor-General. Where has that money gone? Is the 10.3 percent growth in Government administration in the December 2005 year not a mass misappropriation of funds? What on earth are all those people doing? Even given the growth and the statistics with $69 billion - odd about to be taken from our economy by this Government to be redistributed our OECD standings are exactly the same as they were about 5 or 6 years ago. In spite of about $18 billion more being taken by the Government out of the economy and in spite of the 43 percent growth in GDP our OECD standings have not moved. 
Other nations are rocketing up behind us. Previous socialist economies are rocketing up behind us and are totally rejecting the idea that someone earning $480 a week should have some of his or her taxes redistributed to some family earning over $100000 per annum. People will reject that model; they know that it does not work and for the life of me I cannot understand why this current administration keeps looking back to the past to find some solution to the future. That administration is wrong. If we keep looking to the past we will stay in the past. With growth at that rate there will be nothing left to redistribute. Is this the utopia that the current administration has taken us towards? 
JOHN KEY (National—Helensville) 
: 
 We know from this Government that it has run out of puff just like the Minister of Finance has. That is why Helen Clark does not know whether the Minister will be in the job in another 12 months or 24 months. I can assure him that he will not be in the job in 30 months because by then at least there will have been an election and he will be gone along with a whole lot of his colleagues. They are destined to sit on some park bench somewhere to reflect on 9 years—6 years when they inherited an economy with which they could have delivered substantial changes to New Zealand and 3 years when they sat around contemplating their navel unsure of what to do. 
My parliamentary colleague the Hon Dr Lockwood Smith talked very eloquently about the issue of infrastructure. Infrastructure is a very interesting issue as it relates to New Zealand. New Zealand’s infrastructure is failing us and not just in roading. I heard a very interesting example just the other week about the  
New Zealand Herald 
 whose sales force used to achieve something like 14 calls a day around Auckland and now achieves six. That is not a productivity gain. Mr Jones can read some sort of clapped-out piece of research on productivity that ignores half the economy—the fast-growing bit around the public sector. He can ignore at his peril if he chooses to as Dr Cullen has the research from Treasury that told him: “We don’t know quite where you’re spending the $4 billion a year each and every year in health; we don’t really know what you’ve got for it but we think you’ve got nothing we think it’s delivered nothing and we think that fundamentally you’re going down the wrong track.” We think that is called a productivity disaster. We are not surprised that Dr Cullen referred to the Treasury report as an “ideological burp” although funnily enough Dr Cullen himself has made it quite clear that he will not keep funding a health system that is clearly out of control. He demands results from it because he knows it is on the wrong course and it has failed miserably. 
But my colleague Dr Lockwood Smith made a point around infrastructure that I thought was absolutely right. New Zealand cannot drive productivity and greater growth without infrastructure in our community. It is not just roading it is around all sorts of areas of infrastructure such as energy. We have a lakes system that is low. We are not building power generation in this country at the level that we should that we demand and that we need. The Government has no solutions at all. We are starting to see some very interesting mutterings and utterances coming out of places like the Commerce Commission which runs the risk I think of frightening off some New Zealand businesses in relation to the amount of investment they might make. 
It goes on and on. It goes around the area of telecommunications and ultimately goes around the issue of water. New Zealand’s infrastructure cannot cope with the kind of growth that New Zealand needs. Yet we are seeing a Government that is quite happy to trade that position for a position that says: “We would rather have the support of the Greens and therefore we will let the Green Party negotiate and draft probably one of the most important pieces of legislation in New Zealand’s history the Land Transport Management Bill even though we know that it will do very little.” 
I want to make some comments in relation to Working for Families and the Inland Revenue Department. The department made a number of comments when it came before the Finance and Expenditure Committee. One of the comments that I think will prove very interesting over the next 12 to 24 months related to the number of New Zealand families that find themselves debtors of the Inland Revenue Department. I say that because “Welfare for Families”—the package the Government rolled out on April Fool’s Day—requires New Zealand families to estimate exactly their level of income. If they incorrectly estimate their income and therefore underestimate their paid income they will be overpaid under Working for Families. A very similar policy was involved in Australia. That policy was rolled out and Australian families ran up about $1 billion in debt. After 24 months those Australian families had to have their debts written off because they could not afford to repay them. When we raised this issue with Dr Cullen he was kind enough to tell us that the Inland Revenue Department had made numerous changes and that those issues would not occur in New Zealand. The only small problem is that although the department has invested a little bit in technology it does not seem to have the people who can ring to tell New Zealanders that they have been overpaid. They will be ringing past tense so the families will be in debt anyway. 
By the way Dr Cullen might be a little alarmed to know that people in the department have been emailing to tell me that they are under huge pressure from the Minister to try to comply even though they have no hope of doing it. These emails are telling us that those people cannot comply with the issues and that New Zealand families will become debtors. What a disgrace it is to put families in debt. 
RODNEY HIDE (Leader—ACT) 
: 
 One of the interesting questions as we look at what might be Dr Cullen’s final Budget is what will his legacy be as Minister of Finance. I struggle during my time in Parliament to think what Michael Cullen’s legacy as Minister of Finance will be. What will he be known for? Will it be for hiking taxes to 39c in the dollar? Perhaps the “chewing gum Budget” might be the one that sticks in people’s memories. It might be the dopey Cullen fund that is his legacy. It is a struggle to think what Michael Cullen’s legacy will be for the financial health and financial management of this country. That shows that the Clark-Cullen Government has lost any sense of vision any sense of purpose and any policy programme. 
We know that Michael Cullen is one of the only competent Ministers that Helen Clark has and that is why Michael Cullen is exhausted. He is absolutely exhausted because he has to do everything. He has to come to the House and rescue his ministerial colleagues. He is the one who has to mop up when a Minister is in trouble. What is the reward that Helen Clark gives Michael Cullen for those years of service? It is this: “Well he is in his early sixties and he will do this Budget but maybe no more.” Helen Clark does not say something like that by mistake. She sunk the knife into her own Minister of Finance; that is what she did. How can New Zealand have confidence in the Minister of Finance Michael Cullen when Helen Clark herself the Prime Minister of New Zealand has said: “Well he is in his early sixties. He may not do any more Budgets.” That is what she said. She has wrecked what little vestige of credibility Michael Cullen had. Helen Clark is signalling that he will not be around for much longer. 
By the way what difference would it make if Michael Cullen were not the Minister of Finance or the Treasurer? It would not make any difference at all would it? Last year’s Budget was a “nothing” Budget. Mike Williams tried to talk it up and he talked it up rather well. The problem was that there was nothing to talk up. That is why I think Helen Clark has come along ladies and gentlemen boys and girls and stuck the knife deep into Michael Cullen’s side. How like Helen Clark it is! I guarantee she has not sat down with Michael Cullen to discuss his future with him. I guarantee she has not sat down with Michael Cullen and said: “Michael we have been good friends for 30 years.” Oh no she would not say that would she? She could not say that. It would be: “We were terrible friends for 30 years and we’ve been working together for a few.” She would say to him: “What are your plans?”. But no Helen Clark has gone public and said that this year’s Budget could be Michael Cullen’s last because he is getting to be an old man. That is what Helen Clark has told the nation. 
I have to ask what Michael Cullen did as Minister of Finance when he was young when he was fresh when he was new and when he had enthusiasm for the job. The only thing I can recall is his putting up taxes rather than letting ordinary hard-working Kiwis keep the money. And there was the New Zealand Superannuation Fund. Oh and he accidentally bought an airline. He said: “I didn’t mean to end up being the owner of it but I sort of accidentally found myself being the owner.” Michael Cullen’s legacy will be a sad empty legacy—a legacy of lost opportunity. The best economic growth conditions in my adult lifetime have been squandered. We are now facing growth of next to zero a possibility of some negative growth a loss of economic confidence and a Minister of Finance whom Helen Clark has no confidence in. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 That member has had his one call in the debate and as usual he has wasted it. At least for once he managed to exit from the sewer for a brief moment to talk about the state of the economy. How his cheeks must be blushing—all four of them—from the attacks on him by his previous leader and founder of the ACT party who has accurately summed up Mr Hide’s contribution to politics in this country. 
But one thing that happened this afternoon is that I did not hear a single call from Mr Key—who has become the Tony Ryall of fiscal policy more and more in this House—for massive borrowing in order to fund tax cuts. That is another policy being prepared for dumping by the time of the next election because that was the core of National’s policy at the last election. But of course Mr Key will not be the finance spokesperson by the time of the next election if he achieves that ambition because he is spending every week white-anting Don Brash trying to take over the job of Leader of the Opposition. Well bring another one on and another one down and another one up and another one down. It is a bit like National’s policy on trade in honey and apples. It depends where one sits as to which side one is on. 
We inherited an economy that had been through nearly 2 years of sub-zero growth under National with 7 percent unemployment under National. That is what we inherited. We have delivered not merely 43 percent nominal growth but also the lowest unemployment rate in the developed world. If that were my only legacy I would be damned proud to leave it because none of the members opposite can claim that. Nor can the previous leader of the ACT party claim that as his legacy as a Minister of Finance. Unfortunately for them I will be around for a lot more years yet. I have seen off so many National Party finance spokespeople in the last 15 years I have lost count and I expect to see off a fair few more yet as Mr Key gives up his great hope to save New Zealand and goes back to being merely a very rich man. 
What else do we have to show for our growth? We have seen real income growth for New Zealanders—not just for the rich as under National but for the great bulk of New Zealanders who are seeing real income growth. We have seen a massive increase in infrastructure spending particularly in roading—and more is to come. We have seen the creation of the super fund and the Government saving for the long-term future. We will see the creation of the KiwiSaver scheme. We have reduced spending on benefits as a proportion of Government spending and a proportion of GDP. We have increased spending on health education science and roading. And what does National come here and call for every day? It asks us to spend spend spend. Half National’s questions every day are about why the Government is not spending more in some area or another. Well it will take a large pot of indigenous honey spread as thinly as the National Party thinks it needs to be spread to pay for all the promises National is implying at present. 
The National Party has discovered the bottom of the cycle. Dr Lockwood Smith has discovered a particular interest in the bottom of the economic cycle. Let me tell him that National’s bottom was a lot flabbier than the bottom will be under the Labour Government. National’s bottom was sub-zero growth for nearly 2 years. Its bottom was rising unemployment. Its bottom was increasing poverty. Its bottom was cutting the level of New Zealand’s superannuation. That is what we saw in the last 2 years of the previous National-led Government. I must say that my cheeks are firm and rosy compared to the bottom under the National Government in the late 1990s. We are very proud of our record and our success. 
Business is telling National to stop talking the economy down. Business is telling National that we will not have a recession; this economy is healthy. The chief executive of Fletcher Building—which is not planning to go offshore—has told National many times that he prefers New Zealand’s corporate tax system to Australia’s corporate tax system. But Mr Key will not listen because he has no respect for the people who actually produce and make things. His idea of an economy is people who make money out of nothing by shuffling paper around and speculating on the foreign exchange market. That is the kind of Minister of Finance he would be—a Minister of Finance for international financiers not for New Zealand’s productive sector. 
Reports noted. 
Office of the Auditor-General 
GORDON COPELAND (United Future) 
: 
 Every year the Government distributes hundreds of millions of dollars to various non-governmental organisations dealing with health social development sport and education to mention but a few. Shortly after I arrived in Parliament I was very struck by the number of people who came to me spontaneously with tales about how much of that money is poorly spent or indeed misappropriated. They told me that massive wastage was going on in the system. Since then of course there have been scandals—such as that involving the Pipi Foundation and all kinds of misappropriation of funds in polytechs and many other areas—to actually prove the point. 
About 2 years ago I first raised with the Auditor-General the question of whether non-governmental organisations were obliged to produce audited accounts before the Government disbursed money to them. I was told that there was no such requirement. Two years later—the first time since then that the Auditor-General has appeared before the Finance and Expenditure Committee—I was able to ask him the same question. By the way the Auditor-General made it clear 2 years ago that he would like to see the Government adopt a strategy whereby no Government funds would be granted to a non-governmental organisation unless the organisation first produced audited accounts. So again I asked the Auditor-General whether that was now a requirement in that situation and again he said it was not. So the fact is that as we sit here today Government funds continue to be disbursed willy-nilly to many many non-governmental organisations in all the sectors I have mentioned and others without the necessity of audited financial accounts being produced as a prerequisite. I believe today that Parliament needs to determine—and I recommend this strongly to the Government—that that situation be brought to an end. 
I have asked many people whether they would be prepared to hand say $5000 of their own money in $1 coins to a stranger for a purpose to be determined without that person producing audited financial accounts and of course everyone has told me that they would not be so stupid. I then ask them whether the standard should be any lower when the $5000 in $1 coins is handed to a stranger—a non-governmental organisation in this context—without previously produced audited accounts simply because that money belongs to someone else. That is the situation we are talking about. We are talking about money that has been compulsorily collected from taxpayers being given to non-governmental organisations without the prerequisite of financial statements. I answer that question myself by saying surely that requires of us not a lower standard than we would apply to our financial affairs but a higher standard. Therefore I believe it is time the Government said that it will not dispense as it currently does. I agree there needs to be a threshold. I have suggested in the Finance and Expenditure Committee that it could be say $5000. 
I suggest that figure because that is the threshold the Lottery Grants Board insists on when it gives away money that has been collected from the profits of gambling. It does not give more than $5000 to any organisation without two prerequisites being met: first that the organisation produces audited accounts for the previous financial year; and second that the organisation produces a post-grant audit report stating exactly how the funds are spent. That system came into being some years ago when we had the great “ghost-busting” scandal about such grants. I say to Parliament today that if that is good enough for the Lottery Grants Board then surely it is good enough for the Government itself. 
I warn that if the Government fails to change the rules and adopt those requirements as a standard right across the whole system of disbursement of Government funds to non-governmental organisations then we will continue to see scandals coming to the attention of this House. To me it follows as night follows day and as day follows night that if we continue to give out money as we currently do that will be the case. I can tell the House that those scandals will be about league clubs spending grants—grants given to them to promote rugby league—on Friday night booze-ups. I could mention many things that as I said earlier people have brought to my attention about the way their money is spent. They tell me that as taxpayers they are brassed off and they wonder how the Government could be so stupid as to continue with the present line. So with those few remarks I signal my strong support for change. This is covered in the report of the Finance and Expenditure Committee and I wanted to strengthen it. 
There is another matter in the report which I want to touch on briefly. I agree there is a need to put in place ethical standards around the question of conflicts of interest in respect of agencies outside the supervision of the State Services Commission. Those agencies include polytechs other tertiary education institutes and so on and all sorts of other non-governmental organisations. If that is not done the House will continue to hear of scandals in that regard as well. 
Report noted. 
Ministry of Agriculture and Forestry 
Hon DAVID CARTER (National) 
: 
 In the brief chance we get to speak on the financial review of the Ministry of Agriculture and Forestry I want to take the opportunity to put issues to the Minister in the chair the new Minister of Agriculture the Hon Jim Anderton. I want him to know that farmers throughout New Zealand have put him on notice that it is his job to represent the concerns of the industry. It has a lot of very significant concerns particularly as we face a downturn in commodity prices—coming after what I do accept have been 4 or 5 very good years. The Minister’s appointment follows on from the reign of his predecessor Jim Sutton who as Minister of Agriculture can only be described as a total disaster. He failed around the Cabinet table to represent the concerns of farmers. He promoted issues like public access through privately owned farms in this country and I certainly hope the new Minister will not continue with that sort of debate around the Cabinet table. Mr Sutton also promoted the infamous “fart tax” which I am sure the new Minister will assure us is completely off the agenda. Is it little wonder when a Minister like Mr Anderton’s predecessor promoted notions like that that he lost the once-safe seat of Aoraki to our member Jo Goodhew? 
The farmers of New Zealand treated the appointment of Mr Anderson with absolute dismay when that Minister was appointed. They took the opportunity to say to the Minister: “We accept that you don’t understand much about agriculture but we understand that you’re prepared to listen.” I repeat the famous words of Mr Anderton: “I will represent you because I’m No. 3 in Cabinet.” He said: “What part of No. 3 don’t you understand?”. I think those words are particularly relevant considering the issue of the microchipping of farm dogs. Mr Anderton had gone to the farming community and said that that law was ludicrous and he would ensure that it was changed. He went to the Cabinet room on the 10th floor of the Beehive and he failed to deliver change because he at No. 3 was rolled by the Minister at No. 18 in Cabinet. 
So Mr Anderton to date has failed the first test as Minister of Agriculture. But there is now another issue which we saw signs of on the front steps of Parliament today—the future biosecurity of New Zealand. Farmers whether or not they are involved in the bee industry are watching the Minister to make sure that that decision does not put the biosecurity of this country at risk. 
Federated Farmers have presented to the Minister a list of 10 simple doable things they want him to achieve. I have addressed the first issue which is microchipping. He failed on that account. The second issue is that the Department of Conservation and the Minister have the ability within the Resource Management Act to argue in more than an advocacy role. To date the Minister has failed in accepting the decision that Chris Carter the Minister of Conservation made with regard to Whangamata. The third doable issue is for the Minister to achieve a way whereby the Department of Conservation will not continue to increase its landholding around the country unless it has budgeted sufficiently to ensure adequate management of those lands. National waits to see whether the Minister of Agriculture achieves that one. The fourth doable thing is the funding of rural roads which is a huge component of the rates that farmers throughout New Zealand pay. I remind the Minister that farmers alone as an industry pay more than 20 percent of all rates collected by territorial local authorities. Federated Farmers have said to the Minister that he should ensure there is a fair mechanism for paying for those roads and that all the funds collected from roads end up being spent on roads. 
Dr ASHRAF CHOUDHARY (Labour) 
: 
 I would like to congratulate the Hon Jim Anderton on his roles as Minister of Agriculture and Minister of Fisheries. When we were doing the financial reviews I had an opportunity to go around and talk to farmers and a number of submitters. I looked at Landcorp and visited Asure New Zealand and in talking to them and to AgriQuality and a number of those people I was happily surprised at how much confidence they had in the new Minister of Agriculture. It was a delight to hear farmers saying that although they had a few misgivings about the new Minister in the beginning because in their view he had probably had little to do with farming in the past that had changed. I received very good reviews from a whole lot of these people during the financial reviews of all those Government entities. 
Agriculture is the backbone of this country. We export over 90 percent of what we produce and we have to make sure we keep ahead of other countries in terms of research increasing value for money and increasing quality assurance. Particularly in terms of patents and adding value to our products it is very important that we keep ahead of other nations to make sure that our income keeps coming from export markets. 
I was delighted when I had the opportunity to visit Asure New Zealand and also to talk with AgriQuality board members. When we hear about the increase in productivity achieved in this country over a number of years it is really tremendous. Some years ago about 90 percent of our meat was exported as carcasses but now 90 percent is processed which is added-value. That is great to see. I was very pleased to see that the meat industry and dairy industry are progressing and adding value to our export market. 
Of particular interest to me is biosecurity. That is of very high importance. As an exporting nation particularly in agriculture it is very important to ensure that any products that come into the country do not present any biosecurity risk. We recall the false scare about foot-and-mouth on Waiheke Island last year. We have to act quickly and ensure such problems do not occur here. 
I do not want to say a lot more. Suffice to say I am delighted the financial reviews of these entities and the Ministry of Agriculture and Forestry show they are doing a great job. 
R DOUG WOOLERTON (NZ First) 
: 
 I too would like to talk about the new Minister of Agriculture and Minister of Forestry but I want to take a bit of a different tack and say that I think it is appropriate believe it or not that we have a Minister of Agriculture who does not have a long history in farming or in matters applying to land. The reason is that on two fronts we have some particular issues that need to be attended to and with due respect they need to be attended to by a person who is seen as being for want of a better word non-partisan. 
The first issue—and I am surprised it is not mentioned more often by my colleagues these days in Parliament—is our huge balance of payments deficit. As everybody in this Chamber knows or should know there is only one real sector of the economy we can realistically look to for the sorts of numbers that will do anything about that balance of payment deficit—and I see the Minister in the chair Mr Anderton and my colleague Shane Ardern both nodding—and that is the pastoral farming and forestry sector. There is also fishing and tourism but this discussion is on agriculture and forestry. We need somebody in the role of Minister who can look at all who are in those industries as being exporters not just as farmers as pastoral farmers or as forestry or sector groups because with any other area of exporting in this country the imports to fuel the exports—if that makes any sense—are so high that the net gain to New Zealand is infinitesimal. This sector is our major exporting area. 
We have a Minister who is non-partisan so hopefully he will look at these things in a holistic manner. I have read a couple of things he has written that indicate he will. I hope he thinks I am on the right track and that he sees things as we in New Zealand First do because we do not accept that all economic activity is good. We believe in the old-fashioned way of earning more than one spends and our country has not been doing that. We look to the Minister to make this thing right. 
The other area is far more difficult far more delicate and it something that we all know about. Certainly when I was farming I shied away from it and my brothers who are still farming shy away from it: the quality of our water in New Zealand. About 3 years ago Fonterra took the initiative to try to sort this problem out. It required farmers to fence streams and plant appropriate plantings besides streams. It was criticised at the time but it is not being criticised now. In fact I am pleased to be able to say—and I hope the Minister will confirm this—we are ahead of the targets in those areas which just shows that if farmers are shown the need they will respond. Here I acknowledge my friend Shane Ardern who I know personally got out there in his gumboots and planted thousands of trees on his properties or on his numerous blocks of land whatever he happens to own at this point in time. He is not a man to go along with whatever the current fashion is; he is doing it because the science tells him it needs to be done. 
I have heard that from our Minister as well that if the science says it must be done then it will be done. We need input from central government we need local bodies to attend to the matter and we need farmers to be involved. But I dare go one step further and say that we need other people downstream of them to be involved in the clean-up too because clean-up is what it is all about. We in this country cannot have a situation or accept a situation where our rivers are being polluted and our lakes are dying—so they tell us. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 I say to the Committee at the outset of my speech in this financial review debate that I do not agree entirely with my colleague who has just resumed his seat. There are very few issues on which we disagree but on this one I do. I think the biggest risk to New Zealand’s economy is our Minister for Biosecurity. He is the single biggest risk. The second biggest risk to our New Zealand balance of payments is our Minister of Agriculture and Minister of Forestry who is the same person. I shall tell members why I think that is so. 
The New Zealand Institute of Economic Research reporting to Biosecurity New Zealand put the cost of the didymo incursion in New Zealand at $285 million. We know that that is probably on the conservative side because its estimates in the past have always been conservative as will be the estimates we are likely to get from the Ministry of Agriculture and Forestry on this. We know they are probably on the light side. Yet after repeated questioning the Minister both through written questions and through questions in the House has constantly said: “Unlike the member Mr Ardern I do not believe we could have overcome this problem by treating didymo. There is nowhere in the world that knows anything about killing didymo.” Well I just bring the Minister’s attention to some of the substantial work that has been done internationally that suggests that the two rivers where the incursion was first found could have and should have been chemically treated which would have brought the situation under control for much less than the conservative estimate of $285 million. That is not to mention the further biodiversity loss that will come from the incursion particularly when it spreads throughout New Zealand. 
Once again today a group of land-based agricultural-based hard-working New Zealanders protested on the steps of Parliament against this Government and its suggestion that the importation of honey does not present a biosecurity risk. That is what the Minister said—that it does not present a biosecurity risk. Quite frankly it does. The Minister also said to the group of bee-keepers on the steps of Parliament that he as the Minister cannot under the Biosecurity Act intervene on matters that are in the realm of the director-general of Biosecurity New Zealand. I thought that was an interesting comment to make so I went to the Parliamentary Library—our very good Parliamentary Library—for an explanation of which part of the 1993 Act excludes the Minister from being able to intervene when he is not convinced there is a potential biosecurity risk. 
I have the library’s findings here which are that it cannot find anything to suggest that the Minister is unable to intervene in a decision in terms of imports or potential biosecurity risks. The library rather than just relying on its reading of the Act went further and asked for  
Laws of New Zealand 
 a legal encyclopaedia to have a look at whether that was so. The answer came back that it could not find any area in the 1993 Act that precludes the Minister from being able to intervene in this matter. So I say to the Minister—and I am sure he has his officials scurrying as we speak to find the relevant legislation—that I will be interested to hear from him on that. I am sure he will take a call and respond and that will be good. 
Also during this financial review debate the Minister was asked whether he thought the biosecurity structure in New Zealand was adequately resourced and I think what he said was: “Unlike the previous Government we have resourced this structure better than it has ever been resourced before.” Yet we found in the case of the foot-and-mouth hoax on Waiheke Island that Biosecurity New Zealand was in breach of section 4 of the Public Finance Act because the Minister had to appropriate—or misappropriate it could be suggested because there was not enough money there—$886000 under Vote Biosecurity to control what could have been a devastating incursion in this country. So members of the House and anybody else who might be listening can surely see by this that Minister Anderton is not on top of his portfolio and therefore we have a major risk to this nation. A biosecurity breach in this country is the single greatest risk to our exports. If it is the case that heat treatment of honey can keep European foulbrood out then why does the Ministry of Agriculture and Forestry not say unequivocally that this is so? It does not. 
Hon JIM ANDERTON (Minister of Agriculture) 
: 
 I have to say the biggest threat to any of the portfolios I represent would be if the National Party—if it ever got into Government—ever made Mr Ardern responsible for any of them. 
Shane Ardern 
: Just answer the question. 
Hon JIM ANDERTON 
: I will answer one. This Government has increased resources. There has been an 80 percent increase in baselines for biosecurity since there was a National Government. [ 
Interruption 
] What is it about an 80 percent increase that Mr Ardern does not understand? He clearly does not understand it so he should look at the facts. If Mr Ardern thinks I can make the decisions on biosecurity matters he should examine the Biosecurity Act and see who makes the decisions. It is the chief technical officer. 
Shane Ardern 
: I just told the Minister I have. 
Hon JIM ANDERTON 
: Well I suggest that the member read it again. 
Shane Ardern 
: I got the library to do it. 
Hon JIM ANDERTON 
: Can the member not read? 
I want to talk about the reality of accountability in this House. We were told by the first National Party speaker debating this report that I am on notice. Well all Ministers are on notice. They are on notice from the Prime Minister for a start who appoints them. They are accountable to the Prime Minister they are accountable to their Cabinet colleagues and they are accountable to their constituency which in this case is the agricultural and horticultural community. I suggest to Mr Ardern that he consult with that community sometimes. He has been railing about how I should not be here and how I should not do this or that but I have not noticed Federated Farmers saying that. It is a funny thing that in the  
Dominion Post 
 this morning I read the headline: “Farmers back Anderton …”. When did I ever dream that I would see a headline like that in the  
Dominion Post 
—that well-known socialist newspaper in Wellington? 
I know that Mr Ardern does not back Anderton but he may contemplate why it might be that Federated Farmers do not agree with him. This is supposed to be Mr Ardern’s constituency. Last time I looked at the electoral roll there was not one farmer in Wigram. But the farmers who do not live in my electorate and who do not actually vote for me there because they cannot—there are no farmers in Wigram—are supporting the existing Minister. They do not do so because they are all altruistic or will vote for a Labour-led Government this time or next time but because they recognise that when I asked them to give me their agenda so I could see what I could do I never said that I would fix everything. I did not say that; I said that I would give it my best shot and I did. I took my best shot to a Cabinet that had already made a decision. I say to members that they should try doing that some time. They should try taking to one’s Cabinet colleagues an issue that those colleagues have already decided on and try to get them to relitigate the issue and see how that goes. 
Did I think this would be difficult? Yes I did. Did I think that I did not want to take on something hard like that? No I did not. I gave it a shot. Federated Farmers to their credit know that I did not promise anything. I said I would try and I did and they know that. The fact is that Federated Farmers have expressed their support for the style I am showing because I am listening to them and I am going out there. I was surprised to be invited to practically every Federated Farmers annual meeting in the country. The meetings are all in May so it is a bit hard. What I have said is that I will go to these ones this year and the other ones next year—in the 3 years I have this portfolio I will visit every Federated Farmers AGM in the country. The National Party might like to look up in the library when the last National Minister of Agriculture visited in one term of office every single AGM of every Federated Farmers branch in the country and spoke to them. If National members can tell me when that last happened then we will see. That may be the secret as to why Federated Farmers are saying that they will give me a go. 
The other thing about it is that I am trying to make sure that city people—and there are more of them than country people—understand the points that Doug Woolerton was making. Here is an industry—including fishing in there which is not in today’s debate—that collectively earns 65 percent of our entire exchange-rate earnings. We are the country—developed or undeveloped—that is most dependent on our exports and their success in the world. The only global scale industry we have is our primary sector industry. The only globally competitive industry we have is our primary base sector industries and we depend on those for our economic and social well-being. If we do not have a First World economy it will be because those industries have not succeeded. If those industries do not succeed we will not have a First World health system we will not have a First World education system and we will not have a First World infrastructure—we will not have a First World anything. So it is critical that those industries succeed and we should not take that for granted. I say to members that it is no use thinking that because the sun shines the rain falls and the wind blows occasionally we will be OK on the night. We will not be. 
If one goes around the world one will understand. I have the privilege of being thrown out of the country occasionally by the Prime Minister to have a look—as I did recently although I do not like to travel much. The image that most New Zealanders have of say French agriculture is of an over-subsidised bloated peasant-type industry. But a combination of all of the event centres in New Zealand put together with most of our largest malls would look something like the International Agricultural Show in Paris. The elite agriculture of France is on display—the highest technology the highest science-based research the highest productivity and all the rest of it. It is true that it is more costly than ours because of all the grain-fed animals but nevertheless it is highly competent highly efficient and very productive. So we have some real competition out there and that does not include the emerging Eastern European nations and everything else that is coming at us. 
The world does not owe us a living in those areas and one of the things that New Zealanders have to acknowledge is that we are good at it because we have invested a lot of money in scientific research into the development of our pastoral farming animal husbandry and all the rest of it. So scientific research and development is crucial. This is a real challenge for New Zealand and I do not see the ministry as being partisan because the whole of New Zealand depends on its success. I do not think urban communities fully comprehend this because in many ways urban communities are now much more separate than they once were from rural communities in terms of the activities of rural communities. 
Almost at the bottom of the Western Springs street I used to live in was a dairy farm. Western Springs is now a close inner-city suburb of Auckland. It was on the outskirts of Auckland when I lived there in the 1940s. 
Hon Judith Tizard 
: There are still six farms in Auckland Central though. 
Hon JIM ANDERTON 
: Now it is part of Auckland Central but then there were dairy farms down the road. People did not think milk came from the supermarket; they saw the dairy farm and orchards and they went and picked up their fruit in the summertime. So we knew where fruit came from we knew where agriculture was done we knew how cows were milked and we all had uncles cousins and aunties who lived on farms and whom we visited in the holidays. 
Those days are well and truly over. Basically we have to get a synergy between city dwellers and our urban communities because we are interdependent on each other. The urban communities have to succeed and so do the rural communities. I think one of the reasons that the Prime Minister has asked me to do the job is to get someone from the city who can actually talk to people from the country and to get some understanding between the two. I am very proud to do this job. I admit readily that I was very comfortable as the Minister for Economic Development and the Minister for Industry and Regional Development. I think I was making a reasonable fist of those portfolios and because I invented them in a sense I was very comfortable there. But the Prime Minister has taken me out of my comfort zone. She said: “I’ve got some news for you. You’re going to be the Minister of Agriculture the Minister of Fisheries the Minister of Forestry and the Minister for Biosecurity.” I said: “Run that past me again!”. But anyway there it is. The challenge is there. It is exciting. It is interesting to deal with new people whom one has not had to relate to before. 
I think we can all be proud of what we have achieved in the agricultural and horticultural community. We are world-class but we have to be creative and innovative. There is a new era of technology here. If one thinks of forestry one thinks of trees and what one can do to trees. But actually the new technology is fibre technology. People can grow soya beans in Brazil and make wood products out of those soya beans because they can rearrange the fibre. Basically this is the kind of challenge that our industries face at a primary level. We have to start thinking of materials of technology input and of high-class quality products with added value at the top end of the value market because that is where our future lies. So I look forward to the cooperation of parliamentarians in achieving those objectives. 
Report noted. 
Ministry of Education 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 This is an opportunity for the Minister of Education to get up and explain himself to the House. The reason he should explain himself is that no Minister of Education has left a longer trail of policy wreckage than the Hon Steve Maharey. 
Today’s announcements about tertiary education policy are about as vacuous as we all expected but at least they are an attempt to try to clean up his mess. The interesting thing about today’s announcements is that they sound an awful lot like what the Government was saying 6 years ago. But the result of 6 years of strategies reports reviews and bureaucratic expansion has been a total failure by this Minister to achieve any of the objectives that he laid out for himself. Apart from the climate change policy this is the biggest policy mess I have seen in 20 years of watching public policy in New Zealand as it has unravelled. 
The Minister might want to explain why the cost of running the tertiary education system has gone from about $40 million a year when he took over to $140 million this last financial year. What does $140 million worth of bureaucrats and paper achieve for the tertiary education system? The answer is nothing that matters. It makes the Minister feel good. It makes him feel like he has achieved something. But what does it do for the students out there? It does virtually nothing. The result of the sum total of several hundred million dollars spent on running this tertiary education system has been the cancellation of a number of qualifications no one was doing. That is what has happened. That is the result of the big strategic decision he made and he could have done it in a week with half a dozen bureaucrats at a cost of about $140000 instead of $140 million. 
So I ask this Minister to get up to apologise to the taxpayers of New Zealand and to acknowledge that he has wasted the time energy and initiative of so many people with a genuine interest in education by pursuing a dream that could never come to fruition. I have to say that I among others felt some relief when Dr Cullen took over the portfolio although he has been in charge of it for a while now and I am disappointed with what he produced today. He is talking about the plan taking 2 years to implement. The bits of it that make some sense—a common sense to everyone—actually used to be in the system years ago until this Minister came along. 
I would also like the Minister to tell us what initiatives he will take in education because—like the rest of the Government—he thinks he knows it all. He thinks the job has been done. He has got nothing new to offer to children in New Zealand. He will oversee some of the initiatives that Trevor Mallard put in place. Some of those initiatives had some merit such as the literacy and numeracy project. But I want to know what he will do to generate a sense of urgency about what we can do for our young children. 
I also want him to explain the ridiculous answers he has been giving in the House about the SchoolSmart website. The Government is spending millions putting Tana Umaga on TV to try to get parents interested in education. They get to find out what Tana thinks—and that is fine—but they do not get to find out any useful information about what they can do to make decisions for their children. They do not get the information that is available to the Minister about their child’s school. Is that not a disgrace? 
The Minister of Education runs a website containing performance information about schools—information that is well presented and in context. It contains a range of data painting a complex picture about a school. The Minister can see it the ministry can see it and the Education Review Office can see it. They all use that information to make decisions about which schools are at risk. The teachers can see it the principal can see it and the advisory services can see it. In short everyone in education who is a bureaucrat and who has no particular interest in any particular child is allowed to see the information about school performance. But parents are not allowed to see it unless they go to the principal’s office and sit there and watch the principal tap it out on the keyboard because as the Minister said that is the right context. Apparently this information about schools is too dangerous for parents to look at from the safety of their own homes. The whole world is going digital with real-time Internet access to everything. We spend millions teaching our children that that is where the world is going but we will not make a publicly funded publicly owned website available to the parents. 
I would like the Minister to tell us how much he has spent on assembling that information. It is actually a useful initiative. It is not the answer to everything but it does bring together a range of performance information about schools in a way that no Government has been able to before. It does not create league tables. The Minister gets up and rants on about how all we are trying to do is “tear down the social democratic school system”. Was that not a revealing remark? Who says the school system is a social democratic one? That is a Government that believes it now owns runs and defines our school system. It is precisely when we get that kind of arrogance in a Minister who is running our school system that parents need access to the objective data about the performance of their child’s school because I say to the Minister not every parent is a social democrat. Not every parent believes that schools are there as an expression of Labour Party values. In fact almost all parents believe that schools are there to teach our children to become competent citizens based on the values that we have as parents and communities not the values that the Minister has as a component in a Labour Party machine that is getting more and more tired by the day. 
I want the Minister to explain to the Committee why we should appropriate public money so that it can be spent on a social democratic school system. Because that is the first time I have ever heard a Minister claim New Zealand’s school system as an arm of his or her own ideological views. What a disgrace! It is no wonder he does not want parents to know what is going on. The Minister says that access to this website means there will be league tables and that that is privatisation. What a load of nonsense! The website does not create league tables. It presents information about one school measured against anonymous similar schools. What could be more harmless than that? It does not compare one school with another. 
I tell the Minister that what does lead to comparisons of one school with another which he does not like is when he releases public information about school performance—and he has to when I ask him to. I can put that information into league tables if I want to. They will be messy they will be contradictory and they will present data out of context but the media have an endless appetite for them. So he is releasing information that achieves exactly what he does not want—that is league tables—and he is hiding from parents readily accessible good-quality contextual information that is not about league tables but that informs a parent about his or her school compared with a range of similar schools. So the Minister needs to get with it. 
This is the digital age; we are teaching our children about information technology. The Minister can tell us why that information is all there—all public information publicly funded—but parents can get it only if they hop in their horse and cart drive off to school and make an appointment with the principal. Can members imagine if banks said: “You can’t look at your bank statement unless you make an appointment with the bank manager.” Does the Minister not know that parents in the comfort of their own homes can have access to all sorts of information on the Internet? Is he not aware of that? Why does he think he can stand in the way of low-cost high-quality technology that will make that information available? The Minister is trying to hold back the tide. The information exists; it is public information—and parents could access it if he just decided to let them have it. 
ALLAN PEACHEY (National—Tamaki) 
: 
 New Zealand is a small nation competing with other nations to find its place in a globalised market-driven knowledge-based economy. There is one way and one way only that we can find our place in that world and that is through the initiative and hard work of our people. It is through the ability of our people to read to write to do maths and science and to use technology—not 80 percent of our people not some of our people but all of them. Yet the Education Review Office has reported to the Government that up to 20 percent of New Zealand children—that is 153000 children in the review office’s words are not experiencing success at school. 
I invite the Minister to take a call and explain to the Committee whether he accepts that 20 percent figure. Does he have confidence in the Education Review Office or does he not? I invite the Minister not to fudge around the issue. I do not want to know how many children are in reading recovery; all I want to know is whether he accepts what the Education Review Office has reported to him—that up to 20 percent of New Zealand children are not experiencing success at school. 
I invite the Minister also to explain to us how it can be that a physics teacher with two degrees including a masters degree in physics and with a recognised English teacher-training qualification is being told he cannot teach in New Zealand. As a former school principal I know how hard it is to staff a school—how difficult it is particularly in subjects like physics to find teachers who first know their subject know it backwards and have a passion for it that they can share with youngsters and second can actually communicate in the language of instruction. But Morrinsville College has found one. So why has the college found that the bureaucracy has said: “Oh we don't recognise that training programme.”? Those bureaucrats have probably never employed a teacher or sat—as many principals do—and agonised and worried about who is the best person for the job the person who is best able to teach those youngsters what they need to know in order to take their place in the New Zealand economy. 
The losers are the young men and women who are suddenly in the middle of this year going to be without an outstanding schoolteacher. I invite the Minister to take a call and explain how that can be. In fact I will go further. I invite the Minister also to tell this Committee why the Government does not have confidence in the judgment of principals. Why does this Government seems unable to accept the judgment of a school principal that a particular teacher who is well qualified with two university degrees and a recognised teacher-training qualification will not be able to teach in New Zealand? 
I invite the Minister to consider the reality of what it means to schools when they attract good teachers from overseas in the expectation that those teachers will earn maybe $50000 only to find that a bureaucratic decision has been made that those teachers will be paid $26000. A man has uprooted his family and his children and has come to New Zealand to start a career but we have insulted that man—a man with a masters degree in physics—by telling him that we will pay him only $26000 a year. I ask the Minister to explain to this Committee and to explain to the young men and women of Morrinsville College why they are likely to lose their science teacher their physics teacher. Why are they likely to lose a great teacher? 
Hon STEVE MAHAREY (Minister of Education) 
: 
 That seems to be the contribution from the National Party. I will begin with Mr Peachey’s contribution because it is good to see him. The other day we shared a platform together at Rangitoto College which of course was Mr Peachey’s school. I had not been there before and I thought it was a fantastic school. I say to the member that we might disagree on politics in here but that school is a credit to him even apart from the physical presence of the island and so on. The pupils and teachers I met in getting around the school certainly stood him well and I thought I should pass on to him my observations from that day. 
The member touched on two questions. Let me start with the case of the physics teacher. As the member will know of course that is a New Zealand Teachers Council registration issue not a New Zealand Qualifications Authority issue. It is a matter of whether we can register the particular teacher and I certainly take a personal interest in those kinds of issues. I hope that will help to set the member’s mind at rest a little. I too am concerned when we are trying to recruit a large number of teachers over the next few years because of changes in policy. We will need more teachers in front of kids throughout the country and when we are trying to emphasise areas like science we certainly want well-qualified teachers—and this person seems to be one. So I have asked for a particular look at that teacher. The issue is a Teachers Council registration issue and I think that is appropriate. 
I understand the argument being made in relation to the question of trusting the judgment of the school but the member must think about what it would be like if the situation were transposed. We are talking about an issue of professional status. It would be a little like saying: “Why don’t we trust local city doctors to hire a doctor?”. We would not do that; the Medical Council of New Zealand has to register the doctor. We would make the same argument with engineers psychologists or whatever. I am totally committed to the professionalisation of teachers. That means that there needs to be a professional body that registers them and that is what we will try to do. I think the member makes a good point but if we can support each other through the process of trying to make sure that that person can be registered we can probably have him back in that school and I hope we can do that. 
In relation to the 20 percent figure the Education Review Office has tried to clarify the matter. It was raised in the context of a select committee discussion. What the office has tried to argue is that like most countries we share—and I do not like this word—the notion of “tail” which the underachieving group that we are all concerned about. The office estimates that across different subjects maths English and so on there are about 20 percent of young New Zealanders spread across our schools—which is the interesting part of our debate here in New Zealand—who are in one subject or another probably not doing as well as they should be. They are not illiterate as originally I heard the member suggest in the House but they are in a situation where they are not really up to where they ought to be for their age group. That is a big challenge for us because we are not talking about a particular section of the community lumped into one area of the country; we are talking about a situation where we seem to have that underachievement across our schools and I think it is right that we identify that. I think it is right that we do something about it. 
I do not accept that that is an issue where we should start to say to ourselves that it is somehow to be explained as a revelation. It has always been the case of course that we have had young people in our schools who are not achieving to the level they ought to for their age group. The question is: what do we do about it? And that is what I am committed to. That is why I think it is good that the Education Review Office has raised this debate and that is why it is good that we are talking to schools and asking them what they are doing about underachievement—just as we would ask them about gifted children and so on. So that is what I understand them to mean. It is not a case of 20 percent—as one group we can point out—who are illiterate innumerate and unable to do x y and z. Young people are experiencing underachievement in different subjects. We need to do something about it to fix the problem. 
Let me go back to Mr English for a moment. It is always interesting to start a debate with somebody who on the whole is basically angry deep down. He will have to deal with that in any way he wants to as time goes by. He is still a young man; he has a chance to do that. It is interesting to listen to Mr English get up and accuse everybody else of failure when this is a man who ran the health system in the 1990s and was a Minister of Finance in the National Government during a time of recession and crippling performance in our economy. This is a man who was the education person in the National Party when that party was about as popular as a pork chop in a synagogue. That was about the state of things—I am sure Mr Peachey would agree. Mr English was extraordinarily unpopular. 
Darren Hughes 
: How did he go as a leader? 
Hon STEVE MAHAREY 
: I will come back to the leadership in a moment. I know that he has been going around telling people what will happen in the National Party. [ 
Interruption 
] I am starting on him because he started on me so I am replying to that. He has been going around talking about education and saying that he will not change National Party policy. This means that bulk funding and performance pay are still on the website as National Party policy. 
I come back to the leadership issue as my colleague over here prompts me. Mr English is a man who wants to talk about failure. He was the leader of the National Party but he is not now. I call that failure. He asked me to talk about the tertiary education sector and I list the following things. Will National Party members change the Gateway programme? It is a staggering success and we introduced it. Will they change the Modern Apprenticeships programme? I introduced that and it is staggering success. They will not change that either. Will they change the industry training policy? It is a staggering success. No they will not change that either. Will they change the Performance-based Research Fund? We introduced that. Will they change it? No they will not change that either. Will they take out the centres of research excellence? We introduced those. No they will not change those either. Will they change the regulation of student fees? No they will not change that either. They say they will let it all go but they will not do that. 
Will National members change the loan scheme that we have put in place? No they will not change that. They will even leave the interest-free loans alone. Will they carry on with allowances? We made changes to them. Will they change them? No they will not change them either. Will they change the amalgamation of colleges of education with universities? No they will not change that either. Will they change the charters and profiles we have put in place? No they will not change that either. Will they change the emphasis on quality? Will they change the emphasis that comes through from the Tertiary Education Commission to have a strategic investment? No they will not. All of these things have been put in place and we are now on to the next bit. I say to the member that I will put my record next to his record of failure any day of the week. His record is one of failure and mine is one of success. 
I move on to schools. The member did not talk much about schools. He spent most of his time on one very very small amount of policy called SchoolSmart but he did not talk much at all about schools apart from that. I notice that he did not make his routine attack on the National Certificate of Educational Achievement (NCEA). I know that Mr English does not support NCEA. He is obviously opposed to standards-based assessment. If he is not opposed to it then he spent the whole summer on it after saying he would leave the issue alone. One person wrote to me and stated that Mr English has put out 13 different releases after saying he was going to leave the issue alone over summer. NCEA performed very well. Karen Sewell the acting chief executive of the New Zealand Qualifications Authority is a wonderful person. 
Hon Bill English 
: So why are you doing a review? 
Hon STEVE MAHAREY 
: We are doing a review because we promised to do one. For those at home I point out that Mr English is interjecting about why we should do a review. We promised to improve the NCEA. We promised to make sure it is something that all New Zealanders can rely on—that it is a blue-chip system of assessment. I know that Mr English disagrees with this and is against standards-based assessment but we agree with it. We think that this year the NCEA did a good job. We think the teachers worked extraordinarily hard. We know that Mr McCully and Mr English have consistently undermined the professional standing of Karen Sewell but we happen to think she did a great job. We respect what she has done over the summer period. 
We have laid a good foundation for NCEA and scholarship. They are doing well and now we will review them and carry on reviewing them until they are absolutely perfect. We will have the best assessment system this country has ever seen because that is what our kids deserve that is what our parents want that is what our employers need and that is what we are going to have. I will not allow someone who disagrees with standards-based assessment to get in the way of it by this constant whingeing and carping. Mr English is the only critic of NCEA that I can find left in the country. Everybody else is now committed to make sure this thing works. I think the National Party should take Mr English aside and say to him: “For goodness’ sake if you have a good idea let’s hear it but if you haven’t let us get on and make sure this thing works.”. That is where I think we are at with that kind of debate. Apart from that I did not see anything else raised by Mr English. This leads me back to saying— 
Hon Bill English 
: What about SchoolSmart? 
Hon STEVE MAHAREY 
: I have touched on SchoolSmart and I have given all the answers I am that I am going to which is that SchoolSmart is accessible to parents. They just go along to the school and they can talk about it or schools themselves can make it available to parents. I know that Mr English wants to do this in a different way but that is the way schools want it done that is the way I believe it should be done and that is the way parents want it done. I have consulted the New Zealand School Trustees Association and it wants it done exactly that way. We are all happy but the lone critic is not. So the lone critic can carry on being the lone critic. As long as he is the education spokesperson for the National Party he will be one of the many reasons why the National Party will never return to Government. No one wants someone who is as isolated as he is in the education debate trying to lead that kind of debate. 
I will close by saying that I inherited from Trevor Mallard an outstanding education portfolio. Over the last little while I have travelled and I have talked to a large number of people in schools and to virtually every stakeholder group right across the country. I am going to many conferences at the present time and I am talking to groups of people who are absolutely committed to being part of a world-class education system. That is what I am going to emphasise for the next 3 years. We have a fantastic system and we intend to make it even better. 
Report noted. 
New Zealand Police 
CHESTER BORROWS (National—Whanganui) 
: 
 I rise to speak in respect of the appropriation for the New Zealand Police. It is with some degree of frustration that I note the level of confidence has continued to fall in respect of the police especially after the assertions made by the Minister of Police that she would work tirelessly to pull confidence in the organisation back up. It is an organisation in which I worked for many years and I still hold a great deal of regard for it. 
I certainly wish my two wing mates from previous years Howard Broad and Rob Pope the warmest congratulations on their new positions as commissioner and deputy commissioner respectively. I was pleased to be able to write to tell them that at least the decision in respect of their appointments was one that I agreed with the Minister on more than 100 percent. I believe that with the background those two men have particularly as former detectives they will focus intently on raising the public level of confidence in the police and on the police’s ability to respond and react to prevent crime investigate crime in a timely manner and protect life and property. 
It is a worry that although reported crime may be down overall the most prominent reason for the lessening in reported crime is the level of confidence that New Zealanders have in the ability of the police to investigate reported crime with any hope of success. It is a shame that within the last couple of years we have seen such a large number of high-profile incidents where the police have been hampered for one reason or another from investigating them in a timely manner. There were problems around the communications centre which we hope have now been fixed or are on the road to being fixed. The truth is of course that the police were asking for further resources for the communications centre for some time before they ever saw any progress in relation to that. 
People have a perception about crime. When I campaigned at the last election it was a shame to knock on doors on a sunny Saturday afternoon and hear pensioners unlock three or four locks before they could open the door to speak to me. They were trapped inside their homes by fear. I honestly believe they do not need to be in fear. I think as many New Zealanders do that the media have some part to play in response to that situation. 
I look forward to seeing the Government come through with its 1250 new police. I do note with some degree of humour that during the campaign when we were talking about increasing police numbers we were told quite emphatically by the then Minister of Police and by local members of Parliament there was no need to increase numbers and the police were completely resourced along the lines they needed to be. But after the pre-election pledges made by the National Party and by New Zealand First the Government came up with a figure of 250 more community police. Community police definitely have their role especially in building confidence in the police but it was not really until after the election and the confidence and supply agreement was made that 1000 new police were added to the figure of 250. 
Even then there seemed to be some conflict over the pages of the songbook various members of the Government were singing from because the member Ron Mark told us there were to be 1000 new front-line police and the Minister of Police told staff at the Nelson Police Station the figure would be 1000 new police including non-sworn as well as sworn officers. She repeated that statement in the House a few days later but about a week after that it was conceded there would be 1000 front-line police plus support staff. As a former police officer I am pleased to see that occur because I believe that the number of front-line staff has been reduced by attrition over time and the police’s ability to respond to incidents has been marginalised even in my own area. 
When I was a police officer working in the Wanganui electorate the Wanganui Police Station had a sergeant and five officers working 24 hours a day on successive shifts. What happened of course was that the number was reduced by attrition. Now we have ended up with the situation where there is a sergeant and two officers working on some days and I wonder how on earth they can respond—especially at a time when ambulance officers and firefighters who are the emergency service back-ups for the police in various situations are not available either because their numbers have been reduced by attrition as well. In Wanganui City we have lost six police officers and we look forward to seeing them replaced in due course if it happens. 
Hon ANNETTE KING (Minister of Police) 
: 
 Can I thank the member for Whanganui for his contribution in the financial review of Vote Police and—as he knows—I have already congratulated the new Commissioner of Police Howard Broad. I was interested to learn that the member was in the same wing as both Rob Pope and Howard Broad and certainly I can be assured of his support for both those two men in their future roles. 
I begin by thanking the retired Commissioner of Police Rob Robinson who picked up the role at a very difficult time soon after we became the Government when he needed to address a number of issues. In particular issues of a historic nature had arisen and I will not say any more about those at this point but there were also a number of issues arising from the Martin review of the late 1990s which saw police resources being removed as the police were asked to pay for the INCIS mistake of the previous National Government. I know that Chester Borrows would have been at the sharp end of those cuts in police numbers back in the 1990s. 
I want to say how pleased I am to have the new Commissioner of Police Howard Broad in place. I think he will make a very fine commissioner. He has a background of 30 years of policing including community policing and of being the district commander in Auckland where he has had a lot of experience in terms of front-line policing but also his very reasoned approach to strategy and policy will I think be very good going forward. 
Rob Pope also has 30 years of experience with the police. I assume that Chester Borrows if he had stayed in the force would have had 30 years of experience now as well. So the member brings to this House those years that he has had in the force and I was pleased to see today that he was agreeing with comments I was making. Doing that probably got him into trouble with his front bench but I believe he will perform in an honest manner in this House with the knowledge of policing he has. But I think that Rob Pope who has 30 years’ experience of policing has spent many years in the Criminal Investigation Bureau and who is now responsible for operational matters will be a good fit with our new commissioner as will Lyn Provost who has been reappointed. Lyn Provost’s responsibilities are in the area of resources. I would also like to put on record my thanks to acting commissioner Steve Long who retires on 7 April for a very fine police career and for carrying us through the last few months after Rob Robinson retired. 
The member expressed a little sorrow I think that I have not managed to bring police confidence back up to high levels in the 5 months I have been in the job. I assure the member that I am working very hard on that matter. I am spending my time out on the front line working with police— 
Hon Trevor Mallard 
: And loving it. 
Hon ANNETTE KING 
: —and loving it—and the main thing the police do need is the support and at times the accolades they deserve for the job they do on behalf of New Zealanders day and night. One of the things that really gets to them is to hear only the whingeing and moaning about what they do. They ask where the thanks and the gratitude are for a job most of us would not want to do because it is a difficult and hard job. I want to put on record my thanks for the work the New Zealand Police do. We have one of the finest police forces in the world. We are the envy of many countries because of the integrity of our police and because we are a country that is pretty much free of corruption within our police—something that even across the Tasman they sometimes have struggled with. So I want to encourage our police. I want to help in terms of the confidence that they need to engender in the public and I think they are well on the way to doing that. 
I am very pleased to work with New Zealand First in relation to the 1000 extra sworn police and I need to say to the member for Whanganui that there was no dispute between New Zealand First and the Government around the numbers of new police. What we had to work out was what would support 1000 sworn police because—as the member will know—when we bring in extra police but we do not back them up with non-sworn police we put huge pressure on those on the front line. If we do not give them cars accommodation or even handcuffs we put huge pressure on the police to be able to perform. One of the big problems in the early 1990s when John Banks became the Minister of Police was that he brought in extra police all right but none of the resources to go with the police to enable them to carry out their role—and the police lived with that situation for years trying to overcome that shortfall in financing. 
So I am pleased to say that through the good work of New Zealand First members who have worked with the Government in a very constructive manner we will have 1000 more sworn police in New Zealand plus 250 non-sworn police to back them up and I can assure the member that that will happen. That promise was made; that promise will be undertaken. 
In conclusion I say that I am very pleased with the work of the New Zealand Police but they can always do better. They can always do better and they want to do better. Of course we would want to have as little crime as possible but what really concerns me when I look at crime statistics is that the big increase in violent crime is coming from family violence—domestic violence. That is an issue for all of us to face. Judge Boshier said that this is a scourge of our society that requires the response of the whole community. It does not require a police officer outside the door of every home; it requires the collective responsibility of New Zealanders. This is a crime that we do not have to have. It is happening in our homes and to our families and there needs to be a greater response from all of us. I support the work of the police. They are doing very good work with other agencies in addressing family violence. 
I do not have time now to go through all the work that is being done in an area like Counties-Manukau but the police are really working hard there knowing that family violence is one of the biggest issues they have in terms of reported crime. 
So I thank the member for his contribution and I am very pleased with the work the Law and Order Committee did in terms of its financial review of Vote Police. 
Report noted. 
Ministry of Economic Development 
GORDON COPELAND (United Future) 
: 
 I shall take a call on the Ministry of Economic Development but in relation to one specific aspect of the ministry’s wide-ranging interests and that is to do with energy. Although the Finance and Expenditure Committee reported on the Ministry of Economic Development—in fact I thought it was the Commerce Committee but I stand corrected on that if that is the case—one of the things that the Commerce Committee also covered was a review of the various State-owned enterprises. It is very important to draw to the House’s attention some very serious situations that have arisen around the upgrading of the transmission grid in this country. I refer particularly to the 400-kilovolt line that was planned originally by Transpower between Whakamara and Otahuhu. As members will be aware that line was announced by Transpower last year. Subsequently in about April of last year the then Minister of Energy the Hon Trevor Mallard who is the Minister now in the chair asked the Electricity Commission to look again at what Transpower was proposing to do. 
I draw to the attention of the Committee the exchange between myself and the Chairman of the Electricity Commission Roy Hemmingway about the 400-kilovolt line when he came along to the Commerce Committee. I started off by asking him whether he felt that the responsibilities between himself on the one hand and Transpower on the other were sufficiently defined because Transpower had said that it was conscious there was an overlap and it was worried about that. Roy Hemmingway replied—and I want to read these remarks into the  
Hansard 
 as I think they are very important—“I think they are. We have a set of rules which defines the relationship. We”—that is the commission—“have a responsibility in respect of approving grid upgrades to ensure that they are the least-cost approach to the job. That’s what we are required to do.” I then responded to him by saying that I was concerned that in April 2005 the Minister of Energy asked the commission to consult members of the public about the transmission upgrade whereas in the normal course of things was it not Transpower’s responsibility to do that. 
Roy Hemmingway’s response was as follows: “Yes I do believe that it was Transpower’s responsibility to fully develop alternatives to its own proposals to have those costed and to have consulted the public on them. They didn’t do that.” That was a very important comment because it suggested that Transpower was not following through on its obligations. In respect of whether Transpower was following through on its obligations his response was: “Well they didn’t with respect to the 400-kilovolt line from Whakamaru to Otahuhu.” I must say that I was stunned with those responses. It is the first time since I have been at Parliament that we have had the head of the Electricity Commission make such damning comments about one of our largest State-owned enterprises—a State-owned enterprise I might say that has no fewer than 156 staff who are paid more than $100000 19 staff who are paid more than $200000 and eight staff who are paid more than $330000 a year. I have chosen that figure because that is more than the Prime Minister is paid. Yet the Electricity Commission through its chair is saying that Transpower failed to do its job correctly and that is a very very serious situation that has arisen. Therefore we are now reliant on the Electricity Commission getting it right and getting it right quickly because it is quite clear from the evidence presented to us that that 400-kilovolt line needs to be built and functioning no later than 2010 which is now only about 4 years away. 
I might add that if United Future had its way we would completely change the whole thrust of Transpower. We would give it a very simple objective in life and that would be to get electricity from A to B at the lowest possible cost to the consumer over time. We would have it do that by way of borrowing funds over a 30 or 40 year period because the grid actually lasts for a period of 30 to 40 years and therefore it is sensible to take the cost right over the whole period of time to keep that cost as low as possible to electricity consumers. It gets even worse in that the Commerce Commission has also as one knows been dabbling with taking price control over Transpower. We have some real problems with that State-owned enterprise. 
Hon TREVOR MALLARD (Minister for Economic Development) 
: 
 For reasons that I am happy to explain to the member later and that have to do with State-owned enterprise energy portfolios which I have now delegated to the Hon Mark Burton it would be inappropriate for me to comment to the Committee on the matters that he has raised. 
Report noted. 
Ministry of Health 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 For the benefit of those who are tuning in to this debate I will explain that we are looking at the financial performance of the Ministry of Health. This debate gives Parliament an opportunity to review the performance of not only the Government but also the ministry in the last 12 months. 
Over the last few weeks in Parliament the National Party has demonstrated some of the incredible pressures being borne by the public health system in New Zealand and that despite $4 billion of extra money the services in our hospitals are still wanting. We have demonstrated through answers to written questions that fewer New Zealanders are receiving elective surgery today than there were 5 years ago and that fewer New Zealanders are receiving surgery full stop than there were 5 years ago. This country should not be proud of that state of affairs. After 6 years of the stewardship of Annette King as the Minister of Health $4 billion of extra public funding and huge pay increases for people who deserve them what do we have? 
After 6 years of Annette King as the Minister of Health and an extra $4 billion in funding what does her colleague the current Minister the Hon Pete Hodgson say about her performance as Minister of Health with a mark out of 10? Five-and-a-half. What did Annette King say to Pete Hodgson when he rated her performance in the health portfolio as being five-and-a half out of 10? I have seen the Minister’s face every time— 
Hon Maurice Williamson 
: What was the raw mark before scaling? 
Hon TONY RYALL 
: That is a very good question. What do New Zealanders receive from that $4 billion of extra money? Fewer elective surgeries and fewer surgeries altogether. 
We will also hear today from other members of the National Party health team what the district health boards are saying about that. I will be interested in the comments of the Minister in the chair Pete Hodgson about the sort of reception he receives in the boardrooms of district health boards in New Zealand because I can tell him about what we hear as we go around the district health boards. District health board after district health board is saying that a person has to be more sick today than he or she had to be 5 years ago in order to get an operation. District health board after district health board is saying that despite $4 billion of extra money in order for people to get an operation today they have to be more sick than they had to be 5 years ago. 
I would like the Minister in the chair to take a call and explain how it can be that after all that money fewer elective procedures and fewer surgeries are being carried out. Fewer individuals are receiving surgery overall than received it 5 years ago. We will get a line about out-patient operations and all that stuff. I think the Minister will be surprised to hear how few of those he can add to the total when the figures come along in July 2006. 
We will also hear from the National Party health team about how the Government has been underfunding the investment in pharmaceuticals in this country in the last 4 or 5 years. 
Hon Annette King 
: That’s a laugh. 
Hon TONY RYALL 
: Annette King says that is a laugh. Well Pete Hodgson has rated pharmaceutical policy under that Minister at 5½ out of 10—that is what he said. That is how highly the Minister in the chair rates Annette King’s performance as former Minister of Health. We will hear from Dr Jackie Blue. She will talk about the fact that per head of population the funding spent on pharmaceuticals in this country after inflation has dropped in every one of the last 4 years. That is why Annette King receives a 5½ from Pete Hodgson on that issue. 
We will hear from Jonathan Coleman who humiliated Mr Hodgson in the House over the cardiac waiting list at Auckland City Hospital. Mr Hodgson got up and said people were actually getting angioplasties done by Waitemata District Health Board. Then the next day he came back and said angioplasties were not done by Waitemata District Health Board. 
We will hear from Jo Goodhew about the parlous state of workforce training in this country and about the fact that there simply are not enough doctors and nurses. She will talk about the fact that this Government is wasting taxpayers’ money by sending staff from 10 district health boards to London. 
BARBARA STEWART (NZ First) 
: 
 On behalf of New Zealand First I rise to speak to the 2004-05 financial reviews and in particular the Ministry of Health financial review. 
The area of health that New Zealand First wants to see progressed is children’s health. We know that health outcomes are a defining feature of our First World status and that any decline affects our quality of life. New Zealand First believes in and will actively work towards the objective of having free health-care for all under-6-year-olds. In 1997 this initiative was implemented but with escalating costs the initiative was gradually whittled away basically to the detriment of our children. Today’s primary health organisations have a policy of part charges for medical visits and prescriptions for children but sometimes even these charges are too high for parents. 
It is absolutely essential that we provide our very youngest citizens with certainty about health care and ensure timely access to all health-care services. We believe that an emphasis on preventive measures at an early age ensures that later problems like hearing problems and sight problems that eventuate and reduce educational achievement do not go undetected and of course an increased amount of investment is required at this later stage. I recently read a report that states that a 1 percent increase in overall literacy results in a 1.8 percent increase in GDP. When we relate this to educational achievement—and health is usually a factor in this—we see that these figures cannot be ignored. We say that investment in this area will definitely produce very worthwhile results for New Zealand. 
Last year Minister King spoke of many advances that were to be made in the area of oral health for primary school children. Indications were given in this House that a number of positive issues relating to oral health-care were to be worked on and fixed. This was repeated again prior to the election. To date unfortunately I have heard of very little action and the questions remain around oral health-care. I have heard of some advances to be fair but there is still quite a lot that needs to be done in this area. 
The facilities and services review was carried out on school dental services and the final report commenting on this is not easy to find on the Ministry of Health website—if it is even there. We all know that dental decay is on the increase and although each district health board has its own oral health service—which was repeated in a written answer I received from the Minister—we know that adequate resourcing for this essential service is absolutely paramount. The possibility of having local super-clinics and the increasing reliance on mobile clinics appears to be the best way of managing this scarce resource that is absolutely essential for the well-being of our nation’s children. Perhaps sharing resources between district health boards in order to provide an effective service and ensure that children can actually be seen within a specified time frame is one of the changes that must be managed in order for this service to survive and flourish—because we do want to see it flourish. Good oral health is absolutely essential for the well-being and overall health of every child. 
The final area of health care in which we are looking for action is the Government’s intentions regarding the changes to maternity services. The latest addition to the voices calling for change is the Health and Disability Commissioner who has reported on another avoidable death. The public has a right to know as soon as possible exactly what the Minister intends to do to improve the current system. The proposed alternative that we have heard about—the setting up of a database of maternal and prenatal deaths—provides nothing in the way of reassurance for pregnant women or even for those contemplating pregnancy. I say to the Minister in the chair the Hon Pete Hodgson that it is obvious to all New Zealanders that changes are necessary to ensure that women have access to the best possible medical care while they are pregnant and when giving birth. 
Dr JONATHAN COLEMAN (National—Northcote) 
: 
 We hear that people are becoming sicker kids are becoming fatter diabetes is on the rise and obesity is at epidemic levels. We also hear the Minister in the chair the Hon Pete Hodgson has given his ministry a rating of 5½ out of 10 and we hear that $4 billion more than previously has been spent on health over the term of the Labour Government. I want the Minister to get up and take a call to answer one question: where has all the money gone? What has the $4 billion been spent on? What do we have to show for it? I can say now there is nothing to show for it. We are becoming sicker as a country and it is becoming harder to get an operation than previously. The health service is absolutely decaying. 
There is one place where we can say the health money is going. It is going into bureaucracy. There are 12000 hospital beds in New Zealand and there are 12000 bureaucrats to fill them. That is just outrageous but it is absolutely true. I was stunned when I heard that statistic. When I came into this Parliament I had heard that Mr Hodgson was a competent Minister. I had heard that he would do good things in health. Then I picked up my copy of  
New Zealand Doctor 
 and I saw that he rates himself as being only 5½ out of 10. He says he does not feel confident in the health portfolio and he does not even feel that he can get to grips with the ministry. Frankly if that is how the Minister feels about health in this country and about the health service what do the public think? 
I want the Minister in the chair to take a call to admit that and to explain why despite the lies that Labour tells the people of New Zealand we do not have a health service in this country that is free at the point of delivery. The Minister has to get up and admit to that. People are falling through the cracks of the health service. The fact is that people in this country need to have private health insurance. We have heard that time and time again. If someone goes to a hospital anywhere in New Zealand to have a cataract fixed a joint replaced or an ear nose or throat operation he or she will not get it. I was talking to an orthopaedic surgeon on Friday. He said North Shore Hospital does not have waiting lists. Why is that? It is because the hospital will not let anybody on to them. That is the actual truth. 
We have heard time and time again that if people do get on to a waiting list they have to be sicker than ever before. All the district health boards including Capital and Coast District Health Board are saying that. We had the board’s surgical services manager poor lady in front of us at the Health Committee last week. She went through a range of specialties under questioning in which one has to be sicker than ever before in order to get an operation—ear nose and throat surgery orthopaedics gynaecology and eye operations. I asked her whether one had to be sicker than ever before in order to get an operation in New Zealand and she said yes one does. That was a confession that the health service is failing New Zealanders. 
I ask the Minister Pete Hodgson what he will do about that. Frankly we see no evidence that under Labour the health system is providing the services people need. Would any member want to be a heart surgery patient in Auckland? Four years ago there were 800 heart operations done in Auckland; this year there will be 400. Frankly the message is that one has to be sicker than ever before in order to be operated on. The Minister has to tell us where all the money has gone. The Minister owes the people an explanation of that. 
People come to my constituency office every day and talk about the operations they cannot have done under the Labour Government. 
Hon Tony Ryall 
: Tell us about them. 
Dr JONATHAN COLEMAN 
: Look the situation is just appalling. I had a letter the other day from a World War II veteran who had served his country. He needs to have a cataract operation and cannot get it. That man has paid taxes all his life and people are having a whip-round at the RSA so that he can have his operation. Frankly I think that is disgusting. Another constituent a lady has a broken thumb. The Accident Compensation Corporation will not cover her surgery costs and North Shore Hospital will not even see her so that lady can no longer use her hand. She is left in limbo because she cannot afford to have private insurance cover. That lady used to be a Labour voter and she tells me she will never vote for Labour again. That is the case with a growing number of people out there. Labour has sold its voters the big lie that the health service is free at the point of delivery. We know that that is not the case. The Minister knows it as well and Labour members know it. 
The Labour MPs must be ashamed at what they have done to the health service. They must be ashamed that people in this country cannot get operations. Under this Government operations that people need will not be done. That is a failure. 
Dr JACKIE BLUE (National) 
: 
 It is the responsibility of Governments to strive to provide the best health care for their citizens. Sadly I say that this Labour Government is failing its citizens. I add too how disappointed and stunned I am at the poor performance of the Minister Pete Hodgson. But my sadness is balanced by the fact that I am part of a wonderful health team: the marvellous Hon Tony Ryall—what a great leader—Dr Jonathan Coleman and Jo Goodhew. What a great team I am with! 
The House has heard from some of my colleagues already and will hear from Jo Goodhew about the deficiencies in the health system. But the real scandal is in pharmaceuticals and in the 5½ out of 10 performance of Pharmac. That is really bad. Pharmaceuticals and prescription medicines play a vital role in the prevention amelioration and treatment of disease and disability and are an essential tool for improving health outcomes for New Zealanders. With Vote Health now at almost a massive $10 billion one would expect that the spend on pharmaceuticals would have increased proportionately over the last 3 to 4 years. My colleagues will be aghast—absolutely shocked—when I say that that has not been the case. 
Hon Maurice Williamson 
: No! What’s happened? 
Dr JACKIE BLUE 
: I will tell the member. Rather than the per capita pharmaceutical spend increasing it has flatlined. I ask my colleagues to look at the graph I am holding up. Spending has flatlined. The graph is like an ECG of a cardiac arrest; spending is as dead as a dodo after 1 2 3 4 years—dreadful. Even Pharmac admitted during a recent Health Committee hearing that population funding for pharmaceuticals has not kept pace with inflation. At the same committee hearing Pharmac said that New Zealanders had access to more drugs than Australians. That claim was repeated—parroted—by Mr Hodgson in the House but it did not make sense to me because as members have just seen from the flatlining graph spending has— 
Hon Maurice Williamson 
: Show it again. 
Dr JACKIE BLUE 
: I will show the member. Spending has flatlined. It is as dead as a dodo—nothing has happened there over the last 4 years. 
So what was Pharmac’s claim all about? It took the research medicines industry to expose the truth. It found that Pharmac’s data contained numerous omissions and errors and astonishingly included items that were not medicines. My colleagues will be interested to know that Pharmac counted items such as condoms and bandages as medicines. But that outrageous lie was exposed. 
Australians have more access to medicines. For example they have extra medicines for the treatment of Alzheimer’s disease. They have five new medicines to treat HIV four new biological medicines five new cancer treatments and new medicines for heart failure treatment. Organ transplant recipients have new medicines and new medicines are available for the treatment of atopic dermatitis. New Zealanders are being short-changed not just by the number of medicines available but also by the fact that what is available is more restricted. 
But there is more. Proud of its lack of spending over the years on pharmaceuticals Pharmac went even further and underspent its budget by $25 million in the financial year ending 2002 by $3 million in 2003 and by $8 million in 2004. Clearly embarrassed by its legacy of underspending it underspent by only half a million dollars in the year ending 2005. Pharmac has its priorities all wrong. Access to medicines will improve the health of New Zealanders. Pharmac’s miserly attitude does a huge disservice to all New Zealanders. 
Before I conclude I want to ask the Minister of Health two questions and I hope he takes a call and answers them. The first concerns Herceptin funding. Will the Minister ensure that district health boards have enough money in their cancer budgets to agree to fund Herceptin when they are asked to do so? The second question concerns women who have to start Herceptin now and cannot wait until later in the year when it might be approved and who are prepared to look at paying for the drug—they are struggling raising mortgages and fund-raising; $70000 is a lot of money but some are getting there. Will the Minister allow them to have the drug administered in a public hospital which will save them up to almost $50000? The basic cost of Herceptin is $70000 and for women to have the drug administered and to be monitored in a private hospital can cost anything up to $30000 or $40000. 
JO GOODHEW (National—Aoraki) 
: 
 What exactly is the state of the health system? We have heard that it got 5½ out of 10. What is the level of confidence in the new Minister? 
Lindsay Tisch 
: Good question. What’s the answer? 
JO GOODHEW 
: Well I can tell the member. As a former health professional I have been talking to other health professionals and they are very very concerned. They have diminishing confidence in the new Minister of Health. They have described what is going on as “shifting the deckchairs on the  
Titanic 
”. Why is that? I have posed a question to a number of groups in my electorate when talking about health. I have asked them whether knowing we had spent $6 billion on health some 6 years ago and $10 billion on health more recently they would say we were any better off. Resoundingly they shake their heads in disbelief. They cannot believe we have spent an extra $4 billion when they can see no benefit. People are outraged. They say that they are in fact worse off. 
When I thought about my opportunity to speak here this afternoon I thought about what is happening in health. I looked at press releases such as “Pathology services at risk” “Canterbury DHB failing to meet demand” “Wellingtonians have to be sicker to get operations” “Financial crisis at Capital and Coast DHB” “Hodgson needs to wake up”—we are looking forward to that—and “Dramatic decline in heart surgery in Auckland”. Another release reads: “Labour cannot ignore call to review maternity services”—and boy have we seen the headlines about that one. Others read: “Labour’s head in sand on GP crisis” and I wish to speak a bit more about that in a moment; “Pharmac advice leaves Health Minister red-faced” as we have heard; “Labour irresponsible over BreastScreen”; “Patients counted but no surgery” what another scandal that one was; and “Smaller DHBs”—and I am in the area of one of them—“struggle for viability under population-based funding”. I thought to myself that if those statements appeared over 6 months then that would be fine; the Opposition would be exposing them. But it was not over 6 months; those are just 2 weeks’ worth. It is absolutely horrifying. 
I wish to comment on the two further areas of aged care and general practitioners. First I will deal with aged care. Last year Sherrill Dackers on behalf of rural women of New Zealand and 18000 others petitioned Parliament to take urgent action to guarantee the provision of home-based care services for rural communities by paying travel costs and travel time for home-care workers who are required to travel more than 15 kilometres return to care for their clients. Those petitioners have exposed a problem that has been building over the years. The problem means those who are home-care workers in rural areas are doing it for the love of it. I understand some home-care workers are being paid no more than $1.52 an hour. That is absolutely criminal. 
Some of the first letters I wrote as an MP were to the Minister of Health. They were about home-care workers who were having problems making ends meet. I got a very reassuring answer that it was intended that the home-based support services price increase in 2005-06 be targeted to address travel costs for workers. Has that happened? No it has not happened. I still receive phone calls about the problem and I am still making representations on the part of those same people. Aged-care services are grossly underfunded. We are undervaluing these very important members of our society. 
The next thing I want to touch on is general practitioners. The crisis there has not arrived overnight. Over the past years we have heard only rhetoric about this growing problem that is now described as a crisis. General practitioners are overworked underpaid and ageing. That sounds pretty grotty does it not? Hundreds are planning to quit yet the Minister of Health says that general practitioners’ profits are soaring and their training courses over subscribed. That does not sound like a very comforting thought does it? Yet general practitioner discontent appears to be reaching fever pitch. Last year we heard that about a third of general practitioners were planning to leave and their average age is 48 years. 
Hon PETE HODGSON (Minister of Health) 
: 
 I would like to thank Barbara Stewart for her contribution. I freely acknowledge that in its confidence and supply agreement New Zealand First states its interest in both ends of life in terms of the availability and affordability of health care and it hopes this would be free for children under 6. I acknowledge the member’s ongoing attention to the health of older people to the roll-out of the positive-ageing strategy and to what we need to do to improve home-based support services and so on. I thank her for her interest in those matters. Embraced in that is her interest in maternity services and the Government enjoys her support as it seeks to improve linkages between midwives and primary health organisations and as it seeks to improve data sets still further and introduce a mentoring system for new midwives and so on. 
I give a quick little reminder to the member that my predecessor the Hon Annette King indicated in the election campaign a bunch of moves we will be making in the area of child health and she will have some familiarity with those. They include a newborn hearing screening programme to be rolled out in the course of this term of Government; improved child and adolescent oral health-care especially a bunch of capital investments to be made there; improved child and adolescent mental health services where often there is a shortage of adequate health workers; the preschool wellness check and so on. I enjoyed the contribution from the member and thank her for her support. 
All of the other speakers came from the National Party and it was a bit strange. Mr Ryall who is the nominal health spokesperson began more as a sort of master of ceremonies than delivering a speech. He talked about what would follow about what this person would say what another colleague would say and that verily they would have yet another colleague who would get up and make his or her contribution. Mr Ryall gave us an idea of what we would hear in the future then sat down having said only one other thing and I took significant exception to what that was. It was his assertion that fewer New Zealanders are receiving surgery and elective surgery. Such assertions are wrong. They are simply at variance with the facts. I enjoin the member to try to pay attention to his own credibility and to his own reputation by making sure that he sticks to the facts at least on occasion because from time to time facts ought to get in the way of a good story. It is not OK to say that fewer New Zealanders overall are receiving surgery than was the case 5 years ago. That simply is not true. 
The rest of it seemed like a sort of sixth-form cabaret actually. It was a sort of sing-songy roll-out of some pre-arranged positioning that had been carefully rehearsed in the lobby complete with graphs that could not be seen on radio and complete with what were clearly some well-worked-out lines about the “5½ out of 10” theme. “We’ll play that one at the Minister!” they said to themselves excitedly and breathlessly before they came into the Chamber. I say to members of the National Party health team that they should put in some more practice during their lunchtime because it was not an auspicious beginning. They need to try harder. Let us hear what my view is of Annette King because one of those cabaret players asked me to say what it was. [ 
Interruption 
] 
The CHAIRPERSON (Ann Hartley) 
: The member cannot do that; he knows he cannot barrage like that. 
Hon PETE HODGSON 
: I would say uncomplicatedly that Annette King was a hugely successful Minister of Health. She held the health portfolio for 6 years. I do not know of another person who has held that portfolio for 6 years in my adult life; it certainly did not happen in the 1990s. The National Government managed to get through five Ministers of Health in that time. A quarter of its caucus was at one time the Minister of Health and another third of its members were Associate Ministers of Health. We had Ministers Upton Shipley Creech Birch and English and Associate Ministers of Health all over the place since when members opposite have quickened their pace. They have had more health spokespeople in 6 years in Opposition than I can name. They have about five now. 
That is what the National Party is like on health. Its members keep passing the parcel because they cannot get a grip on it and the reason they cannot get a grip on it is that they do not think as strongly as we do on public health. They do not think of the importance of primary health care. They did not mention the following areas. In all of the time they took did we hear anything about mental health? Not a word! Did we hear anything about Maori health? Not a word! Did we hear anything about the Pacific Island communities? Did we hear anything about the determinants of health? We heard nothing. All we got was niggle and scratch about pharmaceutical numbers versus Australia. As if it matters! What matters about that debate is that the Australians spend twice as much as us per head so even if they are doing a little more than us or a little less—Pharmac versus the Researched Medicines Industry Association debate—they are paying twice the amount. We did not hear about that from the National Party. There was an awful lot we did not hear. 
One thing came from Dr Coleman that I would strongly endorse and I thank him for it. He said that obesity is an epidemic and I say to that gentleman: “Right on!”. For the 20 or 30 minutes members opposite had to put their finger on something that matters in health only one of their members did so. That was a rare moment. The next time we have a financial review those members should practise more during the lunch hour. 
Report noted. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Ministry of Transport 
Hon MAURICE WILLIAMSON (National—Pakuranga) 
: 
 I tell the Committee that tonight I intend to focus specifically on the issue of funding for roads. I want to use a couple of Government pieces of advice to see whether I can convince the Minister—and I am not try to be smart-alecky rude or nasty—that in fact road funding needs to be put onto a more consistent ongoing basis with some longevity that the industry can work towards. 
Dr Michael Cullen makes the claim that at present the Government with its couple of one-off announcements for Wellington and with the announcements for Auckland Waikato—yet to come I think—and Tauranga and the Bay of Plenty is currently spending about all the petrol tax at any rate. I think he is right and I will try to be as fair and balanced as I can. The National Party has for some time believed that in order to provide some certainty for the contracting industry we should take all of the petrol tax that is collected: approximately $1200 million rather than approximately half a million dollars with the other half a million dollars being put into the consolidated account. 
Those are just rough numbers but there is a difference. If Dr Michael Cullen is right in saying the Government currently spends about $1200 million on roading which is money from the consolidated account why is there a need for the change if the amount of money is the same? The reason is that it provides some certainty for the industry and for road-building contractors in the future. They will know as the money is collected that it will go towards the National Land Transport Programme and work its way through to the National Land Transport Fund so it can be spent. All that money will be required over the coming years and I think the Minister is very aware of that in terms of an infrastructure deficit that has accumulated over decades. I am very happy to openly admit now there is an infrastructure deficit—and I know my colleague Tau Henare has admitted that on his radio show—so I will say again that I think we have underfunded roading in this country for decades. 
If one looks at the figures one sees they show that back in the 1980s there was a massive funding drop. When the new Labour Government came in in 1984 the funding dropped from about 1.3 percent of GDP down to under 1 percent and it has stayed there. But anywhere else in the OECD the average has been about 1.3 percent. For those countries we would aspire to be like such as Australia and certainly its eastern states—New South Wales and Victoria—the percentage is about 1.5 to 1.6 or in fact 1.8 when one adds private sector spending to the percentage. So even if we were to move all the petrol tax over and according to Dr Cullen we are spending a similar amount to that right now it will not be enough and extra money will need to be spent. 
In the two 5-minute calls that I will take I want to draw attention to some advice that I think Ministers in this Government should be very wary of with regard to how the current amount of money—and it is not enough—is being spent. The first issue I want to refer to is a Treasury report marked “In confidence” and dated 28 June 2005 so it certainly comes into the period we are considering. The report is to the Minister of Finance and I am happy to table the report or give a copy to members if they would like to see it. This is not the National Party’s view but that of Treasury analysts who state in section 20 of the report on page 8: “Insufficient infrastructure may constrain productivity growth. Treasury’s report on New Zealand economic growth argues that infrastructure is a facilitator of economic activity. If investment in infrastructure fails to respond to a growing economy then bottlenecks result.” We agree with that. I think no one here in this Committee except maybe the Greens would fail to agree with that. 
The report goes on to state: “A recent internal Treasury project examines the questions of whether from a national welfare perspective expenditure on roads is sufficient.” The report then gets to be really interesting: “Transfund conducts comprehensive cost-benefit analysis of potential projects and generally rejects projects that have rates of return less than 55 to 60 percent.” I repeat: “and generally rejects projects that have rates of return less than 55 to 60 percent.” The report goes on to state: “The methods Transfund uses to conduct the cost-benefit analysis appear to be sound”—so that is good news; they appear to be sound—“and may in fact be underestimating the return from proposed projects.” Again that is something really worthwhile to focus on. They appear to be sound methodologies but they may actually be underestimating the value of these roads. The report then states: “This suggests substantial road infrastructure underinvestment.” 
That comes from Treasury not the National Party and I remind the Minister that we are not having a smack at him. The Treasury report states: “New Zealand seems to be passing up road investments that would earn a very high return”. I will repeat some of that because it is good: “New Zealand seems to be passing up road investments that would earn a very high return (certainly much higher than the return earned by marginal investments in the private sector). Insufficient road investment may be a bottleneck constraining overall productivity although we don’t know just how big the problem is or how much the aggregated productivity would be if these constraints were eliminated.” I say that every member of this House should read that report because I think that nails it in a nutshell from one side. 
I will tell the Minister why I am concerned about the one-offs and the bits and pieces—we will fund this and we will give a bit to that so Wellington will get a chunk of this and then it will get that and we will do the Waikato next and we have done the Bay of Plenty and so on. It is because the incoming Treasury briefing to the Minister of Finance is almost the complete antithesis of what I have just read out. On page 16 it states: “Any further investment in the short term is likely to result in cost escalation rather than improved transport outcomes. … Since 2004 there has been a move away from the benefit-cost approach for determining funding priorities as a consequence of the New Zealand Transport Strategy”—so that the New Zealand land transport strategy that was brought in a few years ago has a consequence and we have moved away from that approach—“as well as a number of regional transport packages. There is a danger that this had led to some projects that have relatively low BCRs”—benefit-cost ratios—“being funded.” So there is the Treasury warning. 
Hon Mark Gosche 
: It may be underfunding. 
Hon MAURICE WILLIAMSON 
: Mr Gosche can get all excited over there on the Government benches if he wants. 
Hon Mark Gosche 
: They are the roads you did not build. 
Hon MAURICE WILLIAMSON 
: But let me tell members that that is the Treasury briefing of 2005. 
Mr Gosche has gone back to saying those are the roads that we did not build. Let us get something clear about the time frames. The National Party went out of office last century. Labour has been the Government ever since and to keep going on about it all being National’s fault belies the argument about how quickly one could actually build the roads. In Melbourne for example the ConnectEast road—a 39 kilometre 3-lane either way roading project is to be built by the private sector in 3 years flat. So if in fact it was all our fault and the problem goes back into the 1990s—and let us go with that—who has been the Government for the last 6½ years heading on to 7 years? 
David Bennett 
: Nobody knows. 
Hon MAURICE WILLIAMSON 
: That is a good answer: “Nobody knows.” One can keep going back into history saying it is all National’s fault for only so long. I know that is the trick of a new Government and is probably even the trick of a Government that is just moving into its second term. But by the time a Government is starting into its third term the public says: “Hang on.” 
This Treasury document states—and again I say it is not a National Party document although it is in a lovely blue colour and I commend Treasury for sticking with true-blue colours; that is great—“There is a danger this has led to some projects that have relatively low BCRs being funded. We would recommend that all land transport funding should be based on a rigorous nationally consistent and transparent allocation framework rather than targeted to specific regions or modes.” 
I tell the Minister that in reviewing the whole issue of transport and road funding we should look at both of those articles from the Treasury because both of them are right. One we are significantly underfunding roading. Not only will the amount of money that comes from the petrol tax be required but so will a big chunk more. Two it is unlikely that that money will come from Government coffers—very unlikely. It would probably be unlikely to come from Government coffers if National was in Government. So the money will have to come either from debt or private sector funding and every member of this Committee knows that. Yet where are the private sector road ventures in this country? There is not a mutter or a murmur of such ventures—not one. 
I will not hear the argument that no private sector road venture is economic here. I have heard that argument before. In Britain the Labour Government ran that argument. It said there was no room for private roads in Britain. Two weeks ago I drove up and down on the M6 toll road in Birmingham. It is a fantastic 27-mile long road that Tony Blair—Tau Henare’s friend—and the Labour Government built. They said it had worked out so well that they had the appetite to build a whole lot more private roading. But that does not happen here. 
Hon PETE HODGSON (Acting Minister of Transport) 
: 
 The last few remarks of Maurice Williamson were not as well put together as his earlier remarks which I thought were very helpful and contributed very usefully to the debate. The member said he wanted to talk about funding for roads. Land Transport is about a lot more than roads but I will respond on the topic he has raised because that is the fair thing to do. Although the national land transport strategy is about much more than roads we can talk about roads for a while. I thought the member made a pretty good point. He has witnessed when he was Minister and subsequently—during the course of this Government—lots of changes of plans delays advancements things coming on and off the schedule money being put in by Governments though it needs to be said that that has happened more since the change of Government than before. As he pointed out there has been a bunch of regional joint official group projects—in Auckland initially then in Wellington a couple of times in the Bay of Plenty and soon to be announced in Waikato. All of those things are true. The Government has continued to put more money into the National Land Transport Fund by capital injection. Maurice Williamson has argued that we simply need to shift all of the money that is nominally put across to the consolidated account to the National Land Transport Fund in order to give certainty. 
It is not a bad argument. I say to the member that the Government is currently looking not at doing what he suggests—I say straight up—but at ensuring that we can get a higher level of certainty especially in the next few years. Certainty in years 9 and 10 will always be a challenge. Certainty in the first several years is certainly a possibility. 
I need to point out to the member that because oil is experiencing a very significant increase in demand and because it will soon at some stage—in some year some decade—show a maxing out of supply we will see the price of petrol go up. In the event of us not being able to shift adequately or quickly enough to for example biofuels or other forms of motive power we will see the use of motor cars drop. Indeed technology already allows for the use of motor car revenue to drop so he does not have a panacea. If members can imagine in 3 years from now the importation of second-hand hybrids into this country or the very significant increase in the sale of new hybrids they will begin to see that the certainty that the member is seeking is actually quite elusive. He is a smart enough guy and he has been— 
Hon Maurice Williamson 
: We need to go to direct charter. 
Hon PETE HODGSON 
: He has already got an answer to that. I am just saying that the position that was put up by the member does not provide all of the certainty that he and I would wish it to. 
I want to take issue with the member on the great thing of the benefit-cost ratio. I say to him that if a person wipes himself or herself out as he or she approaches a bridge in Southland—as a relative of mine tragically did—or if that happens twice then there will be a new approach to that bridge. It may be—not in the case that I mentioned—that both of those people had been drinking. It would still count and that bridge would still be realigned because of those two lost lives when a word in the publican’s ear might have done the job. That is where a benefit-cost ratio falls down. One cannot get killed on an Auckland motorway when traffic is snarled up. It is not going fast enough. That is why during the 1990s when the National Government paid undue attention to a benefit-cost ratio it ended up putting its investment in the wrong place—I say that assertively. 
I quote an email I received not so long ago from a board member of Transit. This board member extolled the virtues of the “new” approach which is more holistic where more factors have to be taken into account and where a bit of lateral thinking has to take place. Transit had made a very good decision by its standards and decided that it had done a very good job. The board member’s email said that in the days of the benefit-cost ratio he would roll up for a meeting have a look at the page of projects for that month work his way down the page because it is ranked from the highest benefit-cost ratio to the lowest draw a line when Transit ran out of money for that month—which he said was never far enough down the page—and pick up his brain at the door on the way out. That is not good decision-making. I say to the member that I understand his attachment to benefit-cost ratios. We still use them to an extent. It is a good methodology but like all methodologies it is a good servant and a bad master. 
Report noted. 
Ministry of Maori Development 
Hon TAU HENARE (National) 
: 
 It gives me pleasure to speak in the financial review debate of the Ministry of Maori Development. This report is the second draft that has been released. I want to give my thanks to the Chief Executive of Te Puni Kokiri Leith Comer for turning up and giving his dissertation to the Maori Affairs Committee. 
When one moves through the report one sees that Te Puni Kokiri appears to have moved its focus and resources away from its monitoring role. The Ministry of Maori Development Act states specifically that the role of the Ministry of Maori Development is to monitor other Government agencies. 
Hon Maurice Williamson 
: Really? 
Hon TAU HENARE 
: Well that is what the select committee said. It believes that the Act is there to direct rather than merely to guide the Minister. 
The fact of the matter is that Parekura Horomia has been a Minister for 6 years. [ 
Interruption 
] It is far too long. In that time he has received a salary of between $160000 and $180000 a year. Over a million dollars of public money has been paid to a Minister who has not brought one piece of legislation to the House and if he has it has been an omnibus clean-up bill or whatever one calls it—not one thing. But he parades himself around this nation saying that he and his Government have been the ones who have cut unemployment. I have to tell him that it is not the Government who cuts unemployment; it is the employers out there who in good times make sure that they do the employing. Nobody in the Government— 
Hon David Benson-Pope 
: Why did it not happen under National then? 
Hon TAU HENARE 
: Quite frankly we did not sit on our bums doing nothing. We put in place all the things that were necessary for the community to survive. 
The report says it is a crying shame that Te Puni Kokiri is not being allowed to do its business. We can all blame the chief executive Leith Comer. That is the easy option. But who is the patsy in all of this? It is Parekura Horomia who has not done a damn thing in 6 years. He took over from one of the hardest-working Ministers of Maori Affairs. That is right—it was Dover Samuels. Do members remember him? He was the Minister of Maori Affairs for about 5 seconds. 
Hon Maurice Williamson 
: What about the one before him? He was great. 
Hon TAU HENARE 
: He was great. But this Minister has sat in his seat for 6 long years—and where are we now? We are still at the bottom of the totem pole. The Minister looks at me incredulously because he does not really understand what a totem pole is. The fact of the matter is that nothing has happened. [ 
Interruption 
] 
I raise a point of order Mr Chairperson. I take great offence at the words muttered by Shane Jones and I respectfully ask you to direct him to withdraw and apologise. 
The CHAIRPERSON (H V Ross Robertson) 
: I am sorry but I did not hear what the honourable member said. If the member is taking offence under a personal reflection that was implied by the member then I ask the member to desist and withdraw. 
Shane Jones 
: They were Maori words. Perhaps we should provide a translation first. 
Hon TAU HENARE 
: Speaking to the point of order Mr Chairman I do not see anything in the Standing Orders that says there should be a translation. If I have taken offence then that is it and you are bound to ask the member to withdraw and apologise. 
The CHAIRPERSON (H V Ross Robertson) 
: This is a personal reflection. It is covered by Standing Order 116 and it depends on what has actually been said. Offensive references to a member’s private affairs or personal reflections on things like character are totally out of order and they should be withdrawn and apologised for. If that is in fact what has happened then I ask the member to withdraw and desist. 
Shane Jones 
: I withdraw and apologise. 
Hon TAU HENARE 
: It is a fact that I released this report early and I want to apologise again to the members of the select committee for doing so. But it was watered down a wee bit by the Labour Party which did not really want to sign up to a hard-nosed report and to go that extra mile. For that I do not apologise. 
It is a good report. It puts the Minister on notice and hopefully he will find the decency to get up and actually have a go at reading the report. I wonder whether he has even read the report; I doubt it very much. The first time he saw the report was probably when he got out of his seat tonight. 
Hon PAREKURA HOROMIA (Minister of Maori Affairs) 
: 
 I laboured tediously over the report and I did so when the report was rightfully released not when some fools tried to accelerate some of the nonsense that was pushed out of the Maori Affairs Committee. I am sure that if we were on another journey the Ministry of Maori Affairs’ financial results would not be before this Committee tonight. 
I want to be quite clear in relation to what the Act states so that we can put this right tonight—properly. Although the Act makes the ministry responsible for a monitoring and liaising role it does not provide any powers to carry out that role; nor does it specify how the role should be carried out. This Government and the ministry carried it out well. [ 
Interruption 
] That is right. Leith Comer and his committee carried it out well. I commend the Ministry of Maori Affairs for the effort it put in over that period of time. 
I remind my friend Tau Henare a former Minister of Maori Affairs—whom I used to go fishing with on Thursday nights because he was so out of work that he did not know what to do; he used to get senior public servants from ministries to go fishing with him and he was so hopeless that he never caught anything—of his time as Minister. This guy thinks he knows better as to what is good for Maori and what is bad for them. In his time and on his watch 48000 Maori were unemployed; on my watch there are now 16000. That is the result of great support from the Ministry of Maori Affairs—Te Puni Kokiri—and hard effort from this Government. When Tau was last a Minister his Government froze the minimum wage. 
The CHAIRPERSON (H V Ross Robertson) 
: The member will use the member’s full name. 
Hon PAREKURA HOROMIA 
: When Mr Tau Henare— 
Hon Maurice Williamson 
: The Hon Tau Henare to you Charlie. 
The CHAIRPERSON (H V Ross Robertson) 
: I heard that. The member will stand withdraw and apologise. 
Hon Maurice Williamson 
: I withdraw and apologise. 
Hon PAREKURA HOROMIA 
: When the Hon Tau Henare was representing a seat he was the real Maori spokesman for the National Party—and I know he is putting in every effort to become so again and quite rightly I say to Mr Tisch. There are two Maori members from that party and he should be the spokesperson. That is what he is really up to and it is important that members recognise that. 
When he was the Minister of Maori Affairs his Government froze the minimum wage. On my watch it has increased six times. Members should read about Working for Families. I am happy to say that we have increased incomes for everyone. It is not about wealth for the greedy; it is about recognising the needy—and Mr Henare certainly knows that. That is dead right. I am really happy that 20500 Maoris are in industry training. I am not happy that violence still continues in households in both Maoridom and Pakehadom. We will try to do something about that. 
Hon Tau Henare 
: When are you going to start? 
Hon PAREKURA HOROMIA 
: I am sad to see that Tau has changed his tune now that he is back in this House. Almost 9 years ago to the day on 8 May 1997 he said in this House: “I finish by saying that we stand here today with a great opportunity to work together for our people not only as Maori people but as a nation. What is good for Maori must be good for the nation.” I ask Tau what has changed. 
Hon Tau Henare 
: Nothing. 
Hon PAREKURA HOROMIA 
: That is right. The member’s priorities changed. The Hon Tau Henare should be National’s Maori spokesperson so that he can put on the table the platitudes and the negativity that his party tries to imbue—from Orewa to down here. 
The Ministry of Maori Affairs has done well. I tell members that the next 5 to 10 years will be the most prolific time for Maoridom—and this Government has helped that. This Minister of Maori Affairs has done well even if only he says that. 
Hon Tau Henare 
: The Minister told me that he is going to retire. 
Hon PAREKURA HOROMIA 
: I remind Mr Henare—and I do not wish to call him anything that is not accepted in this House apart from reminding him who he is—that the  
New Zealand Herald 
 states: “Henare takes back ‘liar’ comment”. The member needs to take it back because he knows that it is a fib. It is the same as what he did to Tony Blair. 
The CHAIRPERSON (H V Ross Robertson) 
: I caution the member that firstly he is out of his time and secondly the use of the word “fib” is not permitted in the Chamber. 
Lindsay Tisch 
: I raise a point of order Mr Chairperson. I think the Minister was actually going for a second 5-minute call because he was in full swing. We are quite happy that the Minister take the other 5-minute call which he is entitled to. I see that he is still sitting there and is keen to finish his speech. 
The CHAIRPERSON (H V Ross Robertson) 
: It is up to the Minister whether he would like to take another call. 
Lindsay Tisch 
: I am inviting the Minister Parekura Horomia to take a call. 
Hon PAREKURA HOROMIA 
: Members have heard enough. 
Report noted. 
Ministry of Justice 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 The consideration of the estimates and financial reviews in the Committee of the whole House has traditionally been regarded as the time dedicated to holding the Government to account. And what better day to hold the Government to account for the work of the Ministry of Justice than today—a day on which the nation is reeling from the damning  
Report of the Special Rapporteur on the Situation of Human Rights and Fundamental Freedoms of Indigenous People 
 presented to the United Nations by Rodolfo Stavenhagen. I urge the Minister of Justice to spend his adjournment time in looking over that report and in considering how he may implement the many recommendations in terms of both policy formulation and practice. 
The special rapporteur considers that New Zealand’s human rights legislation does not provide sufficient protection mechanisms regarding the collective rights of Maori that emanate from article 2 of Te Tiriti o Waitangi—in other words our tino rangatiratanga. The Maori Party has made approaches to the Auditor-General and the Human Rights Commission regarding the Foreshore and Seabed Act and the response in our view was inadequate. The report of the special rapporteur supports our view. He also considers that the underlying legal and political fragility of Maori rights translates into a human rights protection gap that seems not to be sufficiently covered by existing legislation. 
The legal and political fragility of Maori was brought home to us most vividly this morning with reports of our car-koi allegedly breaking the law. We were advised by members of the car-koi that yesterday two of their cars one with Mr Hone Harawira’s face featured on it and another with a Maori Party flag flying from the window were followed through the fine town of Tokoroa a haven for Maori Party activity. When apprehended the car driver was charged with unreasonable use of a warning device. Cars were sounding their horns in support in a celebration of democracy. The alleged offence incurred an infringement fee of $1000 for one driver and $750 for the other. The offences included driving in a manner likely to annoy other people. Well although I cannot see it I suppose the dial of Mr Harawira has the potential to annoy other people who may envy those incredible good looks but it does seem bizarre to me that the only cars pulled out of the line of cars travelling that road were those identified with the Maori Party insignia. 
The legal and political fragility of our people—as proven in Tokoroa—is seen day after day in the courts of this land. It is little wonder that the special rapporteur also became aware of it. As the House was told earlier today the United Nations special rapporteur’s report found: “The inherent rights of Maori were not constitutionally recognized…”. For that reason the report of the United Nations included a very strong recommendation about the urgent need for constitutional reform in order to regulate clearly the relationship between the Government and Maori people on the basis of the Treaty of Waitangi and the internationally recognised rights of all people to self-determination. The special rapporteur recommends that the Treaty of Waitangi should be entrenched constitutionally. He also recommends that the MMP electoral system should be constitutionally entrenched to guarantee adequate representation of Maori in the legislature and at regional and local government levels. 
That is a key recommendation for the Minister of Justice and it could hardly have had better timing than the very start of the Maori electoral option campaign. We are greatly heartened by reports from political analysts that the political landscape will change dramatically through the proactive decisions of large numbers of young Maori who are enrolling to vote. We know that the numbers of Maori seats in this House could be increased to 13 if all tangata whenua enrolled on the Maori roll. 
This is the most exciting opportunity for tangata whenua to increase our influence in the political decision-making of this nation. The independent Maori political voice is a means to achieving tino rangatiratanga—that is a degree of self-determination consistent with Te Tiriti o Waitangi. The independent Maori political voice in this House has created a wave of interest for many Maori people to participate as equals. Is that not worth sounding our horns for? 
Hon MARK BURTON (Minister of Justice) 
: 
 I am pleased to take a brief call. I think this has been a week in which we can take some sadness at the performance of the National Party when it comes to the Maori electoral option. I was not planning on taking a call on this but frankly I was appalled at the failure to rise to the challenge of leadership shown by Dr Brash in terms of the Maori electoral option. 
Monday was an opportunity for members of this House regardless of their party political persuasion to participate in encouraging New Zealanders to get on to an electoral roll. I do not care what roll it is frankly. As Minister of Justice I could not care less which roll people get on to. I absolutely passionately care that all New Zealanders take the opportunity to get on to an electoral roll to make that decision for themselves and to participate. I suggest that every member of this Parliament should share that passionate commitment. To have the leader of the National Party—a party that once I think could pride itself on its commitment to our democracy—trying to score cheap political points on a Sunday afternoon when not much else seemed to be happening around the press gallery was disappointing. So yet again predictably I suppose he trotted out the stir up—the “pick off the nasty scab”—of the issue of race relations and one or two people bought into it. But I was disappointed and somewhat surprised that even Dr Brash would sink to that because this is an opportunity to say to young New Zealanders in particular: “Get on a roll participate and make your choice—whether it is the Maori roll or the general roll.” While we are about it I tell any New Zealander who is of a mind to—because we are focusing on electoral rolls—to get on a roll and be a participant in our democracy. That is what this is about. But instead of that we saw this cheap tacky attempt to score a political point off the back of the same tired old prejudiced and divisive process. 
Judith Collins 
: What’s that got to do with the review? 
Hon MARK BURTON 
: Well does not that sum it up? That member is sitting opposite on the front bench posing as a wannabe and asking what this has got to do with the review. What has this got to do with our democracy? It is about encouraging people to participate and to be part of it. Instead we hear unsubstantiated criticism and accusation. We heard Dr Brash say that there are people out there trying to force people on to the Maori roll—and this was on the day before the process even started. The day before the start of the face-to-face campaign to get young New Zealanders on to the electoral rolls Dr Brash told the media that people were out there trying to corrupt the process bending the system and trying to force others on to the Maori roll. 
What was the truth of the matter? No one was out there doing anything. It was the day before the campaign had even started. Does not that sum up the sad tired state that that National Party has got itself into? Its members are waging nasty silly little campaigns trying to stir up prejudice and ill behaviour between New Zealanders instead of showing some leadership showing some style and encouraging our people to get on to the electoral rolls and participate in the process. 
Well on this occasion I have to say that I share the view of Tariana Turia who said that if this was the sort of behaviour the National Party was going to demonstrate it might have to think again about ever having any friends in this place. I think she is right and I welcome that insight. I say to those members opposite that they might be new but they had better get used to the seats they are sitting in because on the basis of this sort of behaviour they will be there for a very very long time. 
Judith Collins 
: What has that got to do with the financial review? 
Hon MARK BURTON 
: This has everything to do— 
Judith Collins 
: You don’t know your portfolio. That’s why you’re talking— 
Hon MARK BURTON 
: Oh look! The member sits there talking about my portfolios. The member has not made a useful contribution to the House. She is another muckraker. All that member has brought to this House is disrepute mud-slinging and character assassination. I suggest to that member that she try to make some useful contribution to this Parliament. 
Report noted. 
Department of Internal Affairs 
PETER BROWN (Deputy Leader—NZ First) 
: 
 It with some regret that I rise to speak on this because I would dearly love to get involved in transport issues. I read the financial review of the Department of Internal Affairs—the report by the Government Administration Committee—and I recognise that some good points were made about the department. I will put them on the  
Hansard 
 record: “For the 2004/05 financial year the Office of the Auditor-General issued an unqualified audit opinion on the financial statements of the department. For 2004/05 the department received an ‘excellent’ rating for its financial control systems and its financial management control environment.” That is high praise indeed. The report goes on to explain—and I welcome this because not many people understand it—why a passport has increased in cost from $71 to $150. A reasonable explanation is given in this report. 
What concerns me is an issue that the Government Administration Committee did not pick up and that the Minister—and I have to say the Minister before him—failed to address: the reappointment of the Film and Literature Board of Review. Currently eight of the nine members are out of time not only by a day or a month but by nearly 2 years. That is more than an oversight—that is a reflection on the competence or the genuineness of the Minister and the ministry. I say to the Minister that this issue should have been addressed months ago. 
What this country needs—because it is a very important board which does not get into the limelight—is a board made up of decent law-abiding stable people who understand the ill effects on young people or on those with impressionable minds who get access to what I would call “garbage” movies. I understand that a number of people have put their names forward to the Minister and the ministry to serve on this board and not one of them—if my current information is correct—has received a personal acknowledgment. The Minister is on record as saying that members will be appointed by April but judging by the way these boards have been appointed in the past he does not have a dog’s show. In previous times the ministry has sent out quite a comprehensive document to those who are interested or who have put their names forward to serve on this board. But thus far the current applicants have received nothing—not a single word acknowledgment or indication that they may or may not be considered. 
The Minister might ask why this is so important. Well we were told in the media only this morning or maybe yesterday morning that the rate of violence in this country is up. We were told by the Minister of Police this afternoon that the rate of violence has gone up principally because of domestic violence in this country. In my hand I have a number of censors’ reports on DVDs and VHSs that are readily available to people over the age of 18. I have not read these reports; they are sickening. I have glanced through some areas and without exception they portray incidents and events that dehumanise and degrade women and revolting scenarios. They are absolutely revolting. And these are getting past the censor. Frankly the members of the Film and Literature Board of Review know that their time is up and they are not showing the right amount of initiative. I seek leave to table a dozen or so censors’ reports on these DVDs and VHSs that have been released and that people over the age of 18 can get. 
Documents by leave laid on the Table of the House. 
Hon RICK BARKER (Minister of Internal Affairs) 
: 
 I think the points raised by Peter Brown require a response. Mr Brown correctly said that the appointment of the Film and Literature Board of Review was overdue and I accept that. It has not been because of oversight or slovenly action; a sequence of events has brought this about. 
Firstly a review of the legislation was considered by Parliament in 2005. Whilst that Parliament was considering that legislation the then Minister of Internal Affairs felt it was inappropriate to change the board at that time. Once the legislation had been through we were then within the shadow of the 2005 election and the Minister—quite correctly I believe—said that because the election was so imminent it would be inappropriate for him to appoint the incoming board. So we held it off until after the election. After the election there was a process of consultation and things were held up by the Christmas break but the process is almost complete. I did say to Mr Brown that we hope to have the matter concluded by April and I am still hopeful of that. 
The issue here is about what is objectionable and what is not. I say to Mr Brown who has been to see me on this issue that I accept the passion of his advocacy on these issues. I do not doubt for one moment his sincerity whatsoever. But the point I have made to the member on a couple of occasions is that despite the fact I am the Minister responsible for the portfolio I do not consider myself particularly expert in making these decisions. I want to consider that we have a process that is robust but I have also to accept my personal limitations. 
There is a range of factors here. First let us accept that the standards of what are acceptable and objectionable today differ from those when I was growing up in the 1960s. Things have moved on and they will continue to move on. Second when one is making judgments about things one’s relative age comes into it. It has always been accepted that young people have a love of the new and that old people have a fear of the new. So there is tension in society between the attitude of the younger generation and that of the older generation. I can see this when I go to films with my daughter. Some of the films I do not particularly like but she says to me: “Don’t be silly that was just make-believe. Don’t be daft about these things.” I feel a bit uncomfortable about this so I have to accept the limitations of my perspective on life because of the situation I am in. 
We have to find the best people that we think we can. But more important we have to have a robust process and make sure it is well founded. I have been through the Office of Film and Literature Classification carefully and I have spoken to all the staff. I have found that one of the processes they use is to invite members of the public to come and review a film before it is given a classification. The censor then sets out what issues are to be considered and invites the public to make its determination on what classification the film should have. I think this is a very interesting process and is one I was unaware of before. I have said to the board that I want to go along and observe indirectly for myself—I have offered Mr Peter Brown the same opportunity and I would offer other members of the House the opportunity to go too—because I think it is important to try to figure out whether this process has got it right and just to be convinced that there is a process. 
I cannot allow my own personal views to cloud what others see because the other fundamental point we need to make here is that we are in a democracy. One of the fundamental tenets of a democracy is freedom of speech and freedom of expression. It is wrong for us to curtail other people’s rights and freedom of speech and their freedom to see what they choose to see—but of course there are exceptions. The exceptions are when the film is about exploitation degradation humiliation and all of those things. We have to set a line at which point we say we will not go across but we have to be very careful I say to Mr Brown when we set that line because if we allow the line to be moved vicariously and at the will of an individual we will then cut away from people their rights of freedom of speech and freedom of expression. We should always defend those rights because it is absolutely fundamental to a democracy that people have freedom of speech and freedom of expression. 
I make the other point to Mr Brown that I think he should congratulate the Department of Internal Affairs on the excellent work it has been doing on catching people who are forwarding objectionable material on the Internet. 
Report noted. 
Ministry of Social Development 
JUDITH COLLINS (National—Clevedon) 
: 
 I will stick pretty much to the report itself because I think this is far too important a time to ignore—as the Hon Mark Burton did—the actual report and to talk instead about all sorts of extraneous matters. I want to draw the Committee’s attention to some of the issues raised by the Social Services Committee which is I must say a very happy committee. The members get along very well and we deal with the issues. 
The first issue is early intervention. Quite a lot has been said about early intervention programmes and I think most members in this House would agree that early intervention for children who are at risk is a very important concept that we all want to support. A problem with early intervention has always been getting any evidence as to what sort of early intervention works—evidence about when how and for which families; particularly for which children. The Social Services Committee has been very much concerning itself with the issue. We asked the Ministry of Social Development about the matter and we found that programmes such as Family Start Strengthening Families and Early Start have been funded. Of course Family Start was begun by National when it was last in Government and the Labour Government has since taken that programme over—and good on the Government for admitting that it is a good programme. But in addition to that it is very important that those programmes with large amounts of money flowing through them get to the people who need them. 
I have been very concerned to find out about a situation in Invercargill where a Family Start programme seems to have been hijacked and taken over by a small trust. The main people in the trust are all family members two of whom are very connected to and part of the Southland District Health Board. Why the Minister and the ministry should have been alerted to that situation was the fact that Barnardos lost the programme contract to that group. Most of us will have seen the work of Barnardos over the years and will have realised that that organisation has provided particularly good assistance in that area so that should have been a warning bell to the Minister and the ministry. Unfortunately that does not seem to have happened so we are asking questions about the $3.6 million of funding for that programme and what has happened to it. 
We are also interested in the debt management situation of beneficiaries. This Government—or any Government really—is not doing anyone any favours by allowing beneficiaries to run up huge amounts of debt that is owed to the very people who pay them the benefit. At the moment the debt owed to the Ministry of Social Development is $316.7 million. That money is owed by 186000 people or 49 percent of all beneficiaries. That is a shocking figure. It indicates to me and to other members of the committee that something is very wrong in the way that the debt situation is being administered because we are not getting a reduction in those figures despite all the programmes we have been told about. 
Another area of great concern is the numbers of people on the sickness benefit and invalids benefit and the fact that those numbers have continued to grow under this Government. In the last year 73813 working-age adults received an invalids benefit and 46067 received a sickness benefit. That is an awful lot of people who are too sick to work—and it is an awful lot of people who are too sick to work despite the large increases of funding that have gone into the health budget. Again that indicates something that is of real concern to me and to other members of the committee. 
I was very concerned to see that the ministry tried to excuse the increase simply by saying that the increase was not as much as it had been the year before. Frankly that answer is not good enough when there are jobs around and when large amounts of money are being spent on health. We expect that people are not necessarily getting sicker and that people are getting into work wherever it is available. There is a great deal of concern amongst some members of the committee myself included that the sickness benefit and invalids benefit have been used as a way of “parking” people who are not easily employed or who do not want to be employed. That is a real shame because some people are very genuinely on either the sickness benefit or the invalids benefit and it is very important that those people should not feel that their honesty is being compromised by the comments I am making. 
We also note that employment figures have certainly increased. That is a very good sign and we are very pleased about that. However we were somewhat concerned when the ministry assured those of us on the committee that as long as 2 percent growth is sustained in the economy the current system will remain viable. We were very concerned because we are not seeing much growth in the economy and we cannot go around congratulating ourselves on employment figures all the time if the unemployment rate suddenly starts to rise. Some of us are certainly concerned that this Government does not have adequate answers on that issue. 
What we have heard talked about as the great answer to beneficiary numbers is something called the single core benefit. Many of us on the committee have some grave doubts about just how that single core benefit will deliver a better system for beneficiaries—or in fact for the taxpayer because it is very much a mutual situation. We have said that we would like to know how the pilot programme has resulted in considerable reductions in the staff the resources and the time spent on the administration of the benefits system because that system was first wheeled out by the Hon Michael Cullen when he was Minister of Social Welfare back in 1989. It was to be the new cure-all and it was going to be wonderful—and I can see that some members of the Committee who were there at the time are nodding. Then it was wheeled out again I recall from memory in about 2000 by the Hon Steve Maharey and it was to be the wonderful new scheme. And it came out again last year after Don Brash’s Orewa speech on welfare. It popped up again but now it seems to be suddenly fading a weeny bit and some of us on the select committee feel that that may be because it is not quite the cure-all it was promoted to be. 
I will certainly ask more questions about the single core benefit and about what it is delivering because I think many of us would agree that it is great to get people who can work into work. But it is also very important that we do not just kid ourselves that if we shove together all the numbers of people on the unemployment benefit sickness benefit invalids benefit and domestic purposes benefit it will suddenly turn them all into one and hide growing increases in unemployment figures or in the number of those on the sickness benefit and invalids benefit. So we will be very interested to watch that situation. I see the select committee has in fact indicated that its members want to keep that system under very close review and I can promise the Committee of the whole House that we will be doing exactly that. 
SUE BRADFORD (Green) 
: 
 As one might expect when dealing with one of the largest-spending Government departments the financial review of the Ministry of Social Development has as usual highlighted a number of difficult issues. The most urgent area of concern right now for the Green Party is the fact that just after the review process was completed the longstanding special benefit was abolished. As of 3 days ago on 1 April it has been replaced by the temporary additional support benefit otherwise known as “TAS”. This is no April Fool’s joke much as I would like it to be. I asked questions during the select committee review to try to find out more about how the department envisages the temporary additional support would actually work in terms of helping all those who will miss out now that the special benefit has been terminated. The answers we got then and continue to get do not in any way allay my fears that in fact what will happen constitutes a major benefit cut. 
Labour MPs should be very worried about what they are allowing to occur under their noses and I do acknowledge those MPs on the select committee who expressed their concerns about what is happening here. Up until now the special benefit has provided a third-tier level of last-ditch assistance for people for whom the gap between their income and the necessities of life is too big to bridge in any other way. Unfortunately because the 1991 benefit cuts were never restored and because income support and wages have been kept deliberately low since then anyway far too many beneficiaries and even some low-wage employed workers have needed the discretion offered by the special benefit just to survive. However from last weekend we will have the temporary additional support benefit instead. 
There is no discretion. The formula used is fixed and inflexible. Case officers appear to be left with no capacity to take cognisance of peoples’ actual or individual circumstances no matter how desperate they might be. The expenses that will be taken into account when calculating the temporary additional support benefit are extremely limited and even when they are allowed in most cases there are limits which means the beneficiary pays the rest of the gap no matter how badly off he or she is or how high the costs are. The people likely to be most adversely impacted are single people and couples who do not have children but who do have particular health and disability expenses. 
The maximum levels of payment are reduced. On top of that the temporary additional support benefit is as the name states a very temporary payment of 13 weeks and there are huge issues about what will happen for people once their time limit is up even if they get the help they need in the first place and even if there is a system where they are constantly turned round through review after review at each 13-week point. How long will that go on for? 
The current Minister and his predecessor the Hon Steve Maharey have reassured us over and over again that no one will lose out in the shift from the special benefit to the temporary additional support benefit. However that assurance applies only to people who are already getting the special benefit what is colloquially called “grandparenting”. For people who are in need of help for the first time or who have been out of the benefit system for even a short while only the new rules will apply as far as I can ascertain. 
As the Wellington People’s Centre stated in a report on the impact of those changes that it released just last Friday the new system will mean by its estimate that when the provisions are fully enforced the cut will affect over 50000 beneficiaries and other people on low incomes. The Wellington People’s Centre estimates that: “The axing of the special benefit will take $50 million out of the pockets of the poorest families in its first year of operation.” This saving is then being passed on in fact to some of our better-off families through the extension at the upper-income end of Working for Families as was discussed in the House earlier this afternoon. 
Is it fair that beneficiaries are losing out while higher-income people get more—and this on top of the fact that Working for Families discriminates against beneficiaries anyway through the in-work payment? Is this about social justice? Is this helping the 20 percent of our country’s children who are still living in poverty a vast number of whom are disproportionately in sole parent families and in Maori and Pasifika families? I think not. It is a total disgrace. Unlike the benefit cuts in 1991 which so many of us fought against openly even some Labour MPs if I remember rightly these new cuts are happening off the radar. 
The absurdly complex nature of New Zealand’s ramshackle benefit system is allowing that covert slashing of hardship assistance to happen and I call on Labour MPs and the Minister to look into the realities of what this will mean. Any members with a social conscience should be helping us to persuade the Minister that he must act quickly to ensure that real discretion is retained in the system for all beneficiaries who need it not just some of them and that tens of thousands of people will not be left in an even worse situation than they would be under the rules pertaining up until 4 days ago. 
A second major area of concern highlighted by the review process has been a big question for us about where the ministry is going with its work on moving towards what it has been calling now the single core benefit. The select committee was told that the ministry expected the single core benefit to be available from 2007. However there are still many questions about how precisely this will work about the extent to which it will really get rid of the current complexity of arrangements—up to 35 different income support arrangements—and whether it will mean the de facto cutting of benefits for some categories of beneficiaries. 
While the ministry keeps saying that no one will be disadvantaged a statement by the Minister in this week’s  
Jobs Letter 
 that: “We are not prepared to say ‘Well sorry no one will be worse off.’ ” and the projected impact of the loss of the special benefit do not give me any confidence that the planned new benefit system will maintain even modest benefit levels at the current rates. Again I think that the people who will most likely be adversely affected are those with disabilities and on invalids benefits who are more likely to be dragged down to unemployment benefit levels rather than having the reverse occur. 
Recent concerns raised by people in the blind community are the first signs of what may well happen. It is a great pity that those with profound impairment should have to be like the canaries in the mine when it comes to predicting this particular future. I am glad that I was not the only committee member who stated a hope that no one in need would be disadvantaged under the projected new single core benefit system but how all this will work and when remains a somewhat dubious and dangerous mystery. 
Finally a third area of this review I would like to briefly touch on tonight is around the supposed devolution of part of what was formally the Community Employment Group into the Ministry of Social Development following the Community Employment Group’s demise in 2004-05. At that time we were told that some of the community-based economic development function of the Community Employment Group would be placed into the Ministry of Social Development. As a number of us feared at the time it appears that in fact no such function has been transferred. What is left is a programme that is about working with local industry to address skill shortages and something else called Enterprising Communities which provides funding. That sounds interesting and possibly useful but I do not think that many groups working at grass roots level—at least the ones I worked with—know about it. I hope that the department will note the committee’s recommendation that any funding available through that Enterprising Communities scheme should be distributed in a transparent manner and in a way that organisations should know that it exists. 
However no matter what value either the Enterprising Communities scheme or the industry partnership programme may have neither can substitute for the loss of a genuine community economic development function within the Government—a loss that will only become fully felt and understood when unemployment starts seriously rising again which it inevitably will. 
The Green Party remains committed to working with groups in the community economic sector to try to ensure that one day we will once again have a viable community economic development function within government as we should if we are to hold our head high in communities around the world that work in this area and Governments in places like Canada which have made tremendous steps forward. We have now fallen even further behind which is a real disgrace. I hope that some of us here in this House will one day work together to restore a community economic development function to government. 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 First of all before I go into the detail of some of the comments that have been raised as part of the financial review I would like to acknowledge the highly professional and successful efforts of the staff of the Ministry of Social Development. I guess it is a testimony to their professionalism that the chief executive Peter Hughes and one of his senior managers Mr Craig are here this evening. No one should be surprised at the commitment those senior managers put into delivering absolutely critical outcomes for our community. 
I also want to thank the front-line staff of Work and Income and the ministry in general for their professionalism and their dedication to the people of this country. Whether they be in family and community services in policy areas or in management the commitment to reintegration of previously separate Government functions has been extraordinary. It is because of the professional thorough and cost-effective way that the Ministry of Social Policy and Work and Income has been reintegrated that Cabinet has made such a positive decision in respect of the further reintegration of Child Youth and Family Services with the ministry. I am sure we can all look forward to the successes that will flow from that decision and the same sorts of savings in efficiency—but certainly not in funding because that was never intended as part of the decision. 
I think also that management is reflected in the most successful delivery in all sorts of areas that we have seen in recent times—some have been announced; some are in policy development. I refer in particular to the concept and development of the new service model the extraordinarily extensive work in benefit reform that previous speakers have referred to—and as in the case of Ms Bradford they will clearly be involved in some of that policy development—and most important in the Working for Families package which was so well received last year and over the last weekend by so many members of our community. I will come back to that in a little while. 
I would like first of all though to go to the questions about early interventions that were raised by the National Party speaker. The ministry began work on early interventions in 2004-05 and developed a cross-sectoral strategy to improve outcomes for children. Those early intervention programmes are a comprehensive coordinated support system for families and most important the strategies build on other Government initiatives that are simultaneous such as early childhood education and social assistance in health. 
The ministry is currently evaluating the take-up and effectiveness of all those programmes. Some of them have been detailed in the report so I will not waste the House’s time with that. But the key factor is that over 4 years expenditure of $43.7 million has been allocated towards those initiatives. Nothing could state more convincingly or powerfully the commitment of this Government to breaking some of the cycles of violence in our community through early interventions—both early in the age of the problem and early in the life of those involved. 
In terms of the issues raised about debt management it is important to separate the two streams. The first one is recoverable assistance which is loans approved for costs that have to be repaid. These debts have increased—I guess reflecting the increased costs of living and unplanned expenditure. However the second stream overpayments of benefit entitlements and so on has remained stable over the last 4 years and in fact it reduced slightly by about $8 million between 2001 and 2005. 
Policy changes in respect of the Working for Families package will make a huge difference. I think we already acknowledge that in the extraordinary media coverage of families young and old that are responding to the recently discovered reality over the last few days as to what Working for Families means for them. Clearly those initiatives will make absolutely enormous differences to beneficiaries with families by assisting in reducing the demand for that sort of recoverable assistance. 
I would like also to talk more expansively about the comments that were made about growth in sickness and invalids benefits. This is an important focus area through the whole of the OECD. In the last year to December the growth rate of sickness and invalids benefits in this country fell to 2.7 percent. Those benefits grew at a rate of 69 percent and 84 percent respectively under the National Government. That is not to mention that unemployment at the same time in the 1990s grew 11 percent. This Government is getting on top of a trend that was clearly out of control under National. It was the National Government that in 1995 introduced the stress and depression categories so it is pretty rich for those members to criticise as they do the fact that people are succumbing to stress and depression and receive benefits as part of that. 
The thing that saddens me the most about this is the constant attack by the National Party on doctors. Work and Income staff who assess applications for sickness and invalids benefits are absolutely reliant on the professional medical opinion of clinicians. Work and Income staff are not doctors and they operate under strict instructions that it is the role of medical professionals to determine the state of a client’s health as it might relate to that client’s benefit application. While I understand it is not unusual for the National Party and particularly Ms Collins to attack beneficiaries I am rather surprised and disappointed she has taken that attack and extended it to medical practitioners. 
I guess the example of the figures from my own electorate in Dunedin show the clear improvement since Labour took office. Between 1999 and now the total number of people receiving an unemployment benefit in Dunedin has dropped by 4046. That is a 74 percent drop. Between 1999 and 2005 the total number of people on all benefits—unemployment domestic purposes sickness and invalids—dropped also by 33 percent. That is a decrease of one-third—3870 fewer people are receiving benefits. Can I say to the Opposition for whom beneficiaries are such an easy target that behind the statistics—and they are improving all the time under this Government—are the realities of Kiwis getting on with supporting their families working towards their individual goals and making real contributions to our communities and local economies. They are the real success stories that we all should be so proud of. 
In the remaining minutes available to me I would like to spend a little time talking about the Working for Families package. Alongside the other changes that I have alluded to and the matters that are discussed in the financial review—reviewed so positively I must say by the Social Services Committee—the Working for Families package has to be the single greatest support in this country for young men and women especially working people and their children. That package is delivering very welcome targeted tax credits to Kiwi families to help them raise their children. Most people in this House are aware that children deliver extra costs to families and that is why the targeting is so appropriate. 
Around 85000 more families will benefit from the 1 April changes as a result of the family tax relief package and that takes the total to around 350000 families receiving tax relief in 2006. Almost three in every four New Zealand families with dependent children are entitled to family assistance tax credits as from last Saturday. Almost all families with children earning under $70000 per year will become eligible for family tax relief and many families earning between $70000 and $100000 will also be eligible—at much lower levels of course. This package is costing an enormous $1.6 billion over its term and families access their tax credits which is 90 percent of this income through the Inland Revenue Department. 
For example as from last Saturday a family with two children aged 11 and 16 earning $67000 a year and paying say $350 a week on their mortgage will get an extra $68 a week in the hand from their family assistance tax credits. From 1 April next when there is a further increase in family assistance that amount will increase by another $20 to $88 week. Contrast that with across-the-board tax cuts which deliver the highest gains to people with the highest incomes regardless of whether they have children. 
Of course the new in-work payment will be introduced to provide more support to low and middle income working families with dependent children to make work pay. Not many people in our community have any doubt about whose policy is the more desirable in these matters. 
Report noted. 
Department of Corrections 
SIMON POWER (National—Rangitikei) 
: 
 The Law and Order Committee completed its financial review of the Department of Corrections in recent days. Many of the issues that have been raised in recent months were of course omitted from that financial review which covered the period until June 2005. However two or three very serious issues were canvassed during the financial review of the Department of Corrections the most significant of which is the considerable overspend on the regional prisons building programme—so much so that the scale of that overspend and of the mismanagement of funds in relation to that overspend is still unclear. 
In October 2002 the then chief executive of the department told the then members of the Law and Order Committee that the approximate cost of building those prisons would be $400 million. We discovered after Budget 2005 and after a further $140 million was requested by the Minister of Corrections in order to deal with the overspend that in fact the prison building project had had an overrun of $490 million—almost double the original amount budgeted by the department. Only one person in this Chamber can be feeling the pain of that overspend more than the Minister of Corrections. That person is the Minister of Finance who has to continue to find a way to fund the mismanagement of this department. 
I think though that the most astonishing fact about the capital overspend is that under questioning in Parliament the Minister of Corrections the Hon Damien O’Connor assured Parliament in the first instance that the collaborative working arrangements had been signed off at $890 million. He then had to return to the House and state that that was not the case—that the arrangements had not been signed off. I would welcome his taking the opportunity tonight to confirm once and for all that they have finally been signed off and that $890 million most unequivocally is the final sum that will be spent on those four prisons. The Minister has an opportunity to do that tonight. I hope he takes it because the public will be waiting for confirmation that this department finally has its act together and can sign those matters off. 
I have no doubt that my New Zealand First colleague Ron Mark will talk about rehabilitation programmes this evening and well he should. The Department of Corrections rehabilitation programmes are failing dismally not only in terms of those who take some of the courses being more likely to reoffend than those who do not but also more particularly in terms of the uptake of the courses which is far less than satisfactory. The uptake is well away from the numbers the Ombudsman in his report in December 2005 described in gentle terms as being—to paraphrase—hopeless. I think it would be worthwhile for the Minister to assure the House tonight that for the considerable sums of money being spent on those rehabilitation programmes we are seeing those programmes filled and more particularly seeing programmes whose outcomes ensure that the rehabilitation needs of our prisoners are met. 
This department is in a shambles. That is the only word to describe it. The issues I have mentioned are only two or three of the matters that were dealt with in the financial review. The public will be aware that since June 2005 many more issues have been raised about the incompetent way this department is managed and the difficult situation in which it is continually put by the appallingly inaccurate statistics on prison forecasts provided to it by the Ministry of Justice—numbers that continue to be wrong every time the Ministry of Justice provides them. That is one area in which I have sympathy with the Department of Corrections. I will not sit here tonight and let the Minister say that the prison building overspend is due to materials and labour market shortages when of the $140 million recently requested $57 million was for omissions by the department—a fact that had to be dragged out of the chief financial officer in the committee hearings when the summary of proceedings handed to the committee members made no mention of that fact at all. I did not think that was even close to being straight with the committee about where the shortfall of funds had emerged from. I look forward to the Minister’s responses. 
RON MARK (NZ First) 
: 
 I rise on behalf of New Zealand First to speak to the financial review of the Department of Corrections. What an interesting time the Law and Order Committee had! This debate I have to put on the record does the work of that committee no justice whatsoever. We have 4 hours to debate the financial reviews of every Government department. Days and days weeks and months of work by committees all come down to a 5-minute speech. That is pretty pathetic given that we tout ourselves as an institution that promotes transparency. 
In the very little time we have let us hit on the one issue New Zealand First raised. Why did we raise this issue of the rehabilitation programmes and their effectiveness? My antennae went up in 2003-04 in response to a glaring omission in the department’s annual report. No rehabilitation quotient was mentioned in the report at all. Come the next year what did we naturally go looking for? We looked for a rehabilitation quotient. We found what we had known all along what we have known for about the 10 years during which I have been in Parliament and what we have heard from countless corrections officers and from people who work in the field trying to turn people round—like Dr Pita Sharples who has done so for years—that the programmes run by the Department of Corrections do not work. We found that for 13 of the 20 programmes being run at the end of 12 months participants who took part in and actually completed the programme—and that is another story—were more likely to reoffend and more likely to be re-imprisoned than if they had never ever done the course at all. That was the revelation New Zealand First put on the table. It was astounding and actually a breath of fresh air to hear the Chief Executive of the Department of Corrections Mr Barry Matthews say that that was true. 
It is interesting that since we raised that in the select committee discussed it and pointed to the figures two of those— 
The CHAIRPERSON (Hon Clem Simich) 
: I am sorry to interrupt the member but the time for this debate has ended. 
Report noted. 
Clauses 1 to 8 and schedule agreed to.  
Bill reported without amendment. 
Report adopted.