Volume 663 Week 43 - Wednesday 26 May 2010 
Volume 663 Week 43 - Wednesday 26 May 2010 
[Volume:663;Page:11287] 
Wednesday 26 May 2010 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Visitors 
Australia—Scrutiny of Legislation Committee Queensland Legislative Assembly 
Mr SPEAKER 
: I have much pleasure in informing the House that the Scrutiny of Legislation Committee of the Legislative Assembly of Queensland led by Mrs Jo-Ann Miller MP is present in the gallery. I am sure members would wish that the committee be welcomed. 
Business of the House 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 Following agreement in the Business Committee yesterday I seek leave for the two notices of motion relating to the appointment of auditors for the Office of the Ombudsmen and the Parliamentary Commissioner for the Environment to be taken together for the purpose of debate with the questions put separately at the conclusion of that debate. 
Mr SPEAKER 
: Is there any objection to that course of action? There is none. 
Carter Observatory Act Repeal Bill 
Procedure 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I seek leave for the third reading of the Carter Observatory Act Repeal Bill to be taken forthwith when it comes up on the House programme. 
Mr SPEAKER 
: Is there any objection to that course being followed? There is none. 
Amended answers to Oral Questions 
Question No. 10 to Minister 25 May 
Hon PHIL HEATLEY (Minister of Housing) 
: 
 I seek leave to correct the income-related rents figure I gave in question No. 10 yesterday. 
Mr SPEAKER 
: Leave is sought to correct an answer given yesterday. Is there any objection to that course of action? There is no objection. 
Hon PHIL HEATLEY 
: The figure I should have used was $560 million not $650 million. 
Questions to Ministers 
Budget 2010—Tax Changes 
1. 
SIMON BRIDGES (National—Tauranga) 
 to the  
Minister of Revenue 
: What reports has he received on the tax changes announced in the Budget? 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I have received a remarkably positive level of feedback from the Budget tax changes. People have even stopped me in the street to congratulate the Government on the Budget because it provides real tax cuts for all New Zealanders. A person on the average wage of around $50000 gets a $29 per week tax cut. Even after the increase in GST is taken into account that person is more than $15 a week better off if he or she is paying an average rent or mortgage. The reduction in the top tax rate means that many high school teachers nurses and police no longer pay a higher rate than wealthy individuals who are able to structure their tax affairs and effectively select the tax rate they want. I have also received positive reaction from the Tax Working Group including organisations like Deloitte which said this Budget was a series of steps in the right direction and KPMG which said that it was a smart but bold approach and even the Institute of Chartered Accountants said that it was almost like taking white rabbits out of a hat. 
Simon Bridges 
: How does the package increase fairness? 
Mr SPEAKER 
: Before I call the Minister because of a particularly loud interjection from my left I could not hear that question. I ask Simon Bridges to repeat it. 
Simon Bridges 
: How does the package increase fairness? 
Hon PETER DUNNE 
: It does so in about five ways. Firstly it gives more New Zealanders more of a chance to determine how they spend the money that they earn. Secondly it ensures that those on higher incomes pay their fair share of tax through the alignment of the trust and top personal rates to overcome avoidance. Thirdly the new amount of money voted in Inland Revenue for audit purposes will ensure a return over the next 4 years of some $750 million. The changes in the property sector are about fairness. Finally we have also removed the ability for people with rental losses to use those losses to access Working for Families. Overall it is a fair and good Budget. 
Simon Bridges 
: What is the Government looking to do to assist businesses with the implementation of the GST increase from 1 October? 
Hon PETER DUNNE 
: I announced on Friday the establishment of a GST advisory panel to help businesses implement the GST increase. That panel will act as a conduit between businesses and the Government. There will be a dedicated website a special 0800 number to deal with queries etc. There are also measures passed in the post-Budget legislation providing for the remission of late filing penalties and the use of money interest where this is reasonably attributed to the rise in the GST rate. There are also some other transitional measures that will be positive for business. 
Stuart Nash 
: Has the Minister received a call from the chief executive of Telecom Paul Reynolds thanking him for his $344000-per-year tax cut? 
Hon PETER DUNNE 
: No I have not for the simple reason that I think Dr Reynolds is probably far more focused on trying to make sure Telecom provides a quality service to New Zealanders rather than worrying about the gripes from the Opposition. 
Kiwibank—Privatisation 
2. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Finance 
: Did he seek advice on any potential damage to Kiwibank’s brand and customer goodwill resulting from its possible privatisation before he told a meeting of business people on Friday that he might consider a partial privatisation of Kiwibank? 
Hon SIMON POWER (Associate Minister of Finance) 
 on behalf of the  
Minister of Finance 
: No. 
Dr Russel Norman 
: Has the Government done any analysis of the cost of lost goodwill and damage to the business model of Kiwibank if it were privatised in light of the fact that 700000 New Zealanders signed up to Kiwibank on the basis that it is 100 percent New Zealand - owned; if so what has that analysis shown? 
Hon SIMON POWER 
: No. 
Dr Russel Norman 
: Does he accept that Kiwibank’s brand is built on its ownership by the New Zealand public and further that any suggestion that the bank may be privatised and inevitably sold to overseas owners is highly damaging to Kiwibank’s brand and value to the Government? 
Hon SIMON POWER 
: Kiwibank’s brand is built on a range of things including some of the matters that the member raised in his question. 
Chris Tremain 
: What measures has the Government been taking to support the growth of Kiwibank? 
Hon SIMON POWER 
: The Government has continued the expansion of Kiwibank by allowing Kiwibank to retain all of its earnings for future expansion and not requiring it to pay a dividend to the Government. Over the past 2 years I am advised this has allowed the bank to increase its equity base by over $100 million. As a result Kiwibank’s lending has expanded by over $4 billion during this period. 
Dr Russel Norman 
: Was it fiscally responsible for the Minister of Finance to make casual comments about privatising Kiwibank or partially privatising Kiwibank without first checking to see what damage such comments might cause? 
Hon SIMON POWER 
: All of the Minister’s comments are fiscally prudent. [ 
Interruption 
] 
Mr SPEAKER 
: I say to the Hon David Cunliffe that he should control himself. I have called Dr Russel Norman. 
Dr Russel Norman 
: In light of the potential damage to Kiwibank will the Minister guarantee in this House today that the Government however much longer it remains in power—whether or not it is the Government after the next election—will make no moves to privatise Kiwibank? 
Hon SIMON POWER 
: The member is getting well ahead of himself. Government policy is that there will be no asset sales in this term of office and if the policy changes the Government will say so and campaign on the issue at the 2011 election. 
Kiwibank—Privatisation 
3. 
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: Do his answers to question for oral answer No. 1 yesterday mean that he has ruled out ever initiating the privatisation of Kiwibank? 
Hon JOHN KEY (Prime Minister) 
: 
 My answers to question No. 1 yesterday mean that the Government has given no consideration to selling Kiwibank. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. If I had asked the Prime Minister whether he had given any consideration that answer would have been totally appropriate. I asked whether he has ruled it out which is a yes or no answer. It might be “No we haven’t ruled it out because we haven’t considered it— 
Mr SPEAKER 
: No no. The point of order was fair enough but the question the Prime Minister was asked was: “Do his answers to question for oral answer No. 1 yesterday mean”—that he has ruled out something. The member has asked the Prime Minister what he meant in his answers and the Prime Minister has told the honourable member what he meant by his answers. 
Hon Phil Goff 
: Why will the Prime Minister not be honest and up front with New Zealanders about what he really wants to do in regard to privatising Kiwibank? 
Mr SPEAKER 
: Forgive me; I do not like interfering in questions. But one must not imply that the Prime Minister might not have been honest. I invite the member to reword his question. 
Hon Phil Goff 
: Why will the Prime Minister not be up front with New Zealanders and simply tell them whether he wants to privatise Kiwibank? 
Hon JOHN KEY 
: Because no consideration has been given to selling any assets yet. But if I ever do get around to selling $9.5 billion worth as that member did I will let the public know. 
Hon Phil Goff 
: Does the Prime Minister agree with the departing chief executive officer of Kiwibank Sam Knowles that it is important that Kiwibank remains in New Zealand ownership? 
Hon JOHN KEY 
: I think that a number of factors make Kiwibank successful. One of them has been the implied Government guarantee from the New Zealand Government. 
Hon Phil Goff 
: Will the Prime Minister rule out privatising Meridian Energy? 
Hon JOHN KEY 
: No consideration has been given to selling any State-owned enterprises yet. 
Hon Phil Goff 
: Will the Prime Minister rule out privatising Mighty River Power? 
Hon JOHN KEY 
: My last answer suffices for this question—and for any others they want to go through. But I can assure the member I will not be selling the companies on the very long list I have here because they have already been sold by the member previously. 
Hon Phil Goff 
: Is the Prime Minister then prepared to rule out privatising Genesis Energy? 
Hon JOHN KEY 
: My previous answer stands. 
Hon Phil Goff 
: Has the Prime Minister ever discussed with members of the National Party business people or anybody else his preference for privatising State-owned companies? 
Hon JOHN KEY 
: In my 8 years in politics people have raised that question with me all the time. I say the same thing that I will say to that member: I am not ideologically opposed to asset sales but this Government has not considered them at this time. 
Budget 2010—Investment in Schools 
4. 
LOUISE UPSTON (National—Taupo) 
 to the  
Minister of Education 
: What investment has the Government made in Budget 2010 to build new schools and modernise others? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 Great news! Budget 2010 provides $349.3 million in new operating and capital funding over 4 years for school property. This includes funding for building new schools and improving existing school buildings and comes on top of Government funding of more than $500 million as part of Budget 2009. 
Louise Upston 
: What does Budget 2010 do to combat the problem of leaky buildings in schools? 
Hon ANNE TOLLEY 
: In 2010-11 $82 million will be spent on remedial work on leaky school buildings—$82 million. The Budget also provides $22 million over 2 years to help ensure that these repairs are progressed quickly and to survey high-risk buildings so that we can get a good handle on what work is left to do. The problem of leaky buildings has been well known for nearly a decade but I was aghast to find how little work the previous Government did to get repairs started in the schooling sector. This Government will not be sitting on its hands while children sit in classrooms with water dripping on to their books. 
Hon Darren Hughes 
: Will Waikanae on the Kapiti coast be one of the sites where property is purchased for a new primary school as a result of Budget 2010? 
Hon ANNE TOLLEY 
: The local member for the Otaki electorate is working very hard with me on the issues in Otaki. I will be keeping him informed. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. I asked the Minister a non-political question about a town not very far from here where there is population pressure. In my view it needs a new primary school. I asked her about the Budget. I did not need to hear what conversation she is alleging she is having with one of her colleagues; I am just interested to know whether Waikanae might get a new primary school. 
Mr SPEAKER 
: Under the circumstances I invite the member to repeat his question so that everyone can hear it again. 
Hon Darren Hughes 
: Will Waikanae on the Kapiti coast be one of the sites where property is purchased for an additional primary school as a result of the money she announced in Budget 2010? 
Hon ANNE TOLLEY 
: As I said in answer to that question the local member for the Otaki electorate has been working very hard on behalf of his electorate. He and I will be making any announcements there might need to be made about school property in the future. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. It might be that you ask Mr Hughes to ask his question again and we get third time lucky. It was a very simple question. In the end there are a range of answers but they go to “Yes” “No” or “I don’t know”. That one did not seem to go to any of those. 
Hon Rodney Hide 
: I have to say that that answer was perfectly in order. The Minister was asked about a school in Waikanae. The Minister replied that she is in discussions with the local MP as would be appropriate and that the deliberations are ongoing and an announcement will be made in the short future. I cannot see how one could give a fuller answer ahead of a Government announcement. I know that it irks— 
Mr SPEAKER 
: The member has done very well up until now. Does the Leader of the House wish to add to this consideration? No. In fairness to members it is an interesting point. It was a very direct question but in fairness I think the Minister said that the matter was under consideration and an announcement would be made when a decision was made. One cannot insist on a more precise answer than that. 
Louise Upston 
: Why has the Government allocated funding towards the removal of surplus school property? 
Hon ANNE TOLLEY 
: The Government has set aside $40 million over the next 4 years to reduce surplus school property. The first target will be the removal of unsightly buildings from vacant school sites. These vacant buildings often attract vandalism and antisocial behaviour causing much unnecessary distress to local communities. Their removal stops this and at the same time allows the Crown to save money through reduced maintenance and security costs. 
Long-term Fiscal Track—Sustainability 
5. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Does he consider the long-term fiscal track to be sustainable; if not what options is he considering to rectify this? 
Hon STEVEN JOYCE (Associate Minister of Finance) 
 on behalf of the  
Minister of Finance 
: Yes provided that we maintain the fiscal discipline set out in last week’s Budget. The most important feature of making the fiscal track sustainable is that we do not get overwhelmed by rising debt and finance costs as threatened to be the case 2 years ago. Last week’s Budget showed that net debt is now contained peaking at a low level of 27 percent of GDP in 2014-15 and falling steadily after that. 
Hon David Cunliffe 
: Will he further strengthen the Government’s net assets by supporting the growth of Kiwibank which is currently valued at around twice the assets the Government has already committed to it? 
Hon STEVEN JOYCE 
: The Government makes a number of decisions from time to time on investing in State-owned enterprises and also in other Government assets such as infrastructure and a range of other things. It will make those decisions from time to time as required. 
Amy Adams 
: What steps has the Government taken to ensure the long-term viability of its finances and the continued delivery of New Zealand Superannuation? 
Hon STEVEN JOYCE 
: Our commitment to New Zealand Superannuation is absolute. All Budget projections include the funding of superannuation from age 65 at 66 percent of the average wage. To guarantee that this is affordable we have had to make responsible decisions in each of the past two Budgets. We stopped the rampant growth in Government expenditure and reprioritised where needed lived within a reduced new spending allowance and improved the tax system to boost growth. The upshot is that we have debt under control so that future taxpayers can breathe easier. 
Hon David Cunliffe 
: Will his consideration of Kiwibank’s capital injection proposal take full account of the business case that the departing chief executive officer Sam Knowles today described as “compelling”? 
Hon STEVEN JOYCE 
: As the member will be aware the Government receives a fair number of business cases that are regularly described as compelling. It assesses them all and prioritises them accordingly. 
Amy Adams 
: What is the single biggest risk to the Government’s ability to support vulnerable New Zealanders? 
Hon STEVEN JOYCE 
: The single biggest risk to the Government’s ability to deliver quality public services and maintain entitlements such as New Zealand Superannuation and Working for Families would be out-of-control debt. That is why we have rejected a range of poorly thought-out expenditure ideas including borrowing $2 billion a year to gamble on world sharemarkets continuing the rapid expansion of the Public Service and extending benefits to people with spouses in work. Those suggestions combined with others that would push up debt come from the other side of the House. 
Hon David Cunliffe 
: Why is he considering privatising Kiwibank when its benefit is obvious to the 700000 Kiwis who have chosen to make it their bank or does that not count with a National Government that is intent on selling off the family silver to pay for upper-income tax cuts that the country cannot afford? 
Hon STEVEN JOYCE 
: The Government has given no consideration to the privatisation of Kiwibank. 
Hon David Cunliffe 
: Does he agree that Kiwibank benefits all New Zealanders by putting competitive pressure on the big four Aussie banks and by expanding credit faster than our external debt which he described as our largest single vulnerability? 
Hon STEVEN JOYCE 
: Kiwibank certainly makes a contribution to the Government’s assets as do a huge range of State-owned enterprises in their various forms of business. 
Hon David Cunliffe 
: I seek leave to table a transcript of a tape of the Minister at a National Party conference setting out his intentions to privatise State assets. 
Mr SPEAKER 
: Members are at liberty to seek leave to table any document that is not readily available to members of the House. Leave is sought to table that document. Is there any objection? There is objection. 
Treaty of Waitangi Settlements—Disposal of Surplus Assets by Tertiary Institutions 
6. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
 to the  
Minister for Tertiary Education 
: Me aro nga kuratini ki ehea ture i mua i te whakapau i nga rawa e kore nei e hiahiatia kia ahei ai ratou ki te pupuri tonu i aua rawa; no te Karauna nga rawa ko ratou nga kaitiaki ke hei whakahoki atu ki nga iwi mo nga kereme whakataunga i te Tiriti o Waitangi? 
[ 
What procedures do tertiary education institutions have to comply with before disposing of any assets that are surplus to their needs to ensure that those Crown-owned assets managed by them but no longer needed are able to be retained as part of the redress options for Treaty of Waitangi settlement claims for iwi? 
]  
Hon STEVEN JOYCE (Minister for Tertiary Education) 
: 
 If a tertiary institution wants to dispose of surplus land that is in Crown title then Maori interests in that land are considered through the existing protection mechanism and site of significance processes. If all Treaty settlements in the area have been completed then it is considered through a right of first refusal process. These processes are managed by the Office of Treaty Settlements and are unchanged by the new policy regarding Crown assets in the tertiary sector. If a tertiary education institution wants to dispose of surplus land that it owns it does not need to go through these processes but it must honour any right of first refusal on the title of the land. 
Hone Harawira 
: Tena koe Mr Speaker. Which tertiary institutions have assets that have been identified as suitable to go on the for sale list and what consultation has been undertaken with iwi about those assets? 
Hon STEVEN JOYCE 
: It is up to the institutions themselves to manage their assets so there is no actual for sale list. I am advised however that the Universal College of Learning and Massey University have identified surplus Crown assets and are going through the disposal process. This disposal process includes consultation with iwi as I stated in my answer to the primary question over their interest in the land. 
Hone Harawira 
: What consultation has been undertaken between the Crown and iwi about the plan recently agreed to by Cabinet to make it easier for tertiary institutions to sell their Crown-owned assets; and if none has been undertaken how will iwi become involved in this process? 
Hon STEVEN JOYCE 
: The policy changes recently agreed to by Cabinet are to provide certainty to the institution in terms of the process for Government decision-making not to make it easier. The policy change also clarifies the financial split that would take place between the Crown and the institution of any sale proceeds. We made these changes because previously such land disposals had been administered by the Government in an ad hoc way. As outlined in the answer to the primary question all existing consultation processes with iwi regarding land disposals remain unchanged. 
Hon Maryan Street 
: Given his recent influence over Tuhoe negotiations can he advise the House of the state of play of Te Tau Ihu Treaty settlement negotiations in so far as they impact upon land and properties currently occupied by the Nelson Marlborough Institute of Technology? 
Hon STEVEN JOYCE 
: I reject the assertion made by the member at the outset of her question. 
Hon Rodney Hide 
: I raise a point of order Mr Speaker. I know that we have some leniency now about using a “why” “what” or “how” word to start a question and I accept your ruling on that. But it gets very tough when a member in asking a question makes a controversial statement beginning with “given that” that involves a Minister and then asks a question that puts the controversial statement into the  
Hansard 
. 
Hon Darren Hughes 
: Just for the flow of the House’s business it might be easier if my colleague restated the question without the original assertion and the Minister could answer it. 
Mr SPEAKER 
: Nice try! I apologise to the House that I was perhaps remiss there. What we saw happen though which is not a bad remedy was the Minister flatly reject the assertion that the member had made and give no further answer. Under those circumstances I will not allow the member to repeat the question. When members make that kind of statement the penalty is that either I intervene or they do not have their question answered. In this case the member did not get her question answered and that is where it remains. 
Prime Minister—Conflicts of Interest and Blind Trusts 
7. 
Hon PETE HODGSON (Labour—Dunedin North) 
 to the  
Prime Minister 
: Does he stand by his statement to the  
New Zealand Herald 
 last year that he has put certain assets into a blind trust that is “so blind I haven’t a clue what’s in it”? 
Hon JOHN KEY (Prime Minister) 
: 
 Yes. 
Hon Pete Hodgson 
: Can he confirm that that means he cannot have a conflict of interest regarding those assets because he does not know and cannot know whether he still owns those assets? 
Hon JOHN KEY 
: That would be my interpretation of it yes. 
Emissions Trading Scheme—Costs to Consumers 
8. 
JACQUI DEAN (National—Waitaki) 
 to the  
Minister for Climate Change Issues 
: What are the impacts of the changes this Government has made to the emissions trading scheme on costs for consumers? 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 This Government amended the emissions trading scheme to halve the impacts on consumers by requiring only one unit for every 2 tonnes of emissions for the transport and electricity sectors and by putting a cap of $25 per tonne on the price. This reduced the cost per household from $330 a year to $165 a year or $3.17 per week to be precise. 
Jacqui Dean 
: Which officials were responsible for calculating the $165-per-year or $3-per-week cost of the emissions trading scheme for the average household? 
Hon Dr NICK SMITH 
: The figure was produced by the emissions trading group of officials in Treasury. The methodology was included in the original regulatory impact statement on the legislation. The analysis is based on a household using 8000 kilowatt hours of power and driving 28000 kilometres per year and on a power price increase of 1c per kilowatt hour and a petrol price increase of 3c per litre. 
John Boscawen 
: Does the Government’s forecast of the increased value of electricity generation assets of $821 million shown on page 136 of the Budget document include the windfall profits to energy companies like Mercury Energy which announced yesterday a 3.3 percent increase from 1 July on account of the emissions trading scheme; if not why not and if so how much of that $800 million - plus is due to those windfall profits? 
Hon Dr NICK SMITH 
: The increase announced yesterday by Mercury Energy was 3 percent which is less than the 5 percent that the Government has indicated to consumers will be the cost of the emissions trading scheme. No the change in valuation is not a reflection of the emissions trading scheme. It is quite complex having both the emissions trading scheme and the complexities of the electricity market to determine the exact impacts. I note that neither Genesis nor Meridian Energy is planning to increase its price in the short-term. The Government will be watching the power companies closely and if we believe that they are unfairly putting up prices as a consequence of the emissions trading scheme we reserve the right to have some form of inquiry. 
Jacqui Dean 
: What reports has he received of the price impacts on consumers of other countries’ emissions trading schemes noting claims that New Zealand’s emissions trading scheme is leading the world and is the most expensive? 
Hon Dr NICK SMITH 
: Twenty-nine of the 38 countries with Kyoto Protocol commitments have an emissions trading scheme. I am advised that the power price increases range from between 23 percent and 33 percent. A specific report in 2008 on the European emissions trading scheme put the price impact at between €10 and €12 per megawatt hour which would relate in New Zealand terms to between 1.8c and 2.2c per kilowatt hour—that is more than double ours. The 5-percent increase imposed by our amended emissions trading scheme is very modest and is far from world leading. 
John Boscawen 
: Does he agree with his colleague the Minister of Agriculture that under current Government policy the cost of the emissions trading scheme for the average dairy farmer will be $3900 per annum for the period 1 July 2010 to 31 December 2012 $7800 per annum for the period 1 January 2013 to 31 December 2014 and $10200 per annum from 1 January 2015 as calculated by Meat and Wool New Zealand; if not why not? 
Hon Dr NICK SMITH 
: I think the member is being quite misleading— 
Mr SPEAKER 
: The member asked him whether he agreed with the Minister of Agriculture and some figures used by the Minister of Agriculture as I understood the question. The answer should not start with: “The member is being misleading” because the member has not alleged anything; he has asked the Minister whether he agrees with some figures someone else has used. 
Hon Dr NICK SMITH 
: No I do not accept the accuracy of those figures for a very simple reason: this Government has made it plain that we will not be proceeding with the step-up in the emissions trading scheme in 2013 or with the addition of additional sectors unless there is progress by our key trading partners. So the figures the member is using for 2013 and beyond are quite misleading. 
Jacqui Dean 
: Has the Minister received any advice on the price impacts for households of adopting a 40 percent emissions target by 2020? 
Hon Dr NICK SMITH 
: I have seen economic analysis that shows that to meet that sort of reduction in emissions the price of carbon would need in New Zealand to be $500 per tonne. This would involve the cost being 40 times what our emissions trading scheme would cost or $120 a week. It beggars belief that some members are complaining about the power price increase of our very modest emissions trading scheme while at the same time they are promising a 40 percent reduction in emissions by 2020. Members opposite should reflect on those contradictory messages. 
Mining in Conservation Areas—Submissions on Minerals Stocktake Discussion Document 
9. 
CATHERINE DELAHUNTY (Green) 
 to the  
Minister of Energy and Resources 
: How many submissions on the Government’s proposal  
Maximising our Mineral Potential: Stocktake of Schedule 4 of the Crown Minerals Act and beyond 
 have been received by the Ministry of Economic Development? 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 As at 5 p.m. last night there were approximately 35000. 
Catherine Delahunty 
: When he said on  
Morning Report 
 today that he did not have to consult was he not aware of the Crown Minerals Act which requires him to consult on changes to schedule 4? 
Hon GERRY BROWNLEE 
: The member needs to understand that I was saying we did not need to consult in this fashion. We have chosen to have a dialogue with New Zealanders and New Zealanders have responded. 
Catherine Delahunty 
: What is his response to 59 percent of New Zealanders who believe that the Government has already made up its mind and is simply going through the motions; and has he heard the saying “When you are in a hole stop digging.”? 
Hon GERRY BROWNLEE 
: There are two questions there Madam Speaker. To answer the second part first I say that if one is in a hole and one is getting a good mineral deposit one should keep going. To the first part I simply say wait and see. 
Mr SPEAKER 
: I assure the honourable Minister that I have not had a sex-change operation. 
Hon GERRY BROWNLEE 
: I would expect not; there would have been a statement to Parliament surely. 
Mr SPEAKER 
: It is just that I am not Madam Speaker. 
Mining in Conservation Areas—Submissions on Minerals Stocktake Discussion Document 
10. 
Hon DAVID PARKER (Labour) 
 to the  
Minister of Energy and Resources 
: How many submissions has the Ministry of Economic Development received so far on the stocktake of schedule 4 of the Crown Minerals Act and how many oppose mining on schedule 4 land? 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 Probably by now there are a few more than 35000. As to how many are in favour of mining as opposed to not opening up schedule 4 to further investigation I cannot give that answer; I have not asked for that information yet. I have steadfastly said we will do a proper analysis and then when we have done that we will make some decisions. 
Hon David Parker 
: Has the Minister seen the submission from Newmont Waihi Gold the largest mining company in the Coromandel headed “Leave schedule 4 alone”; and can he now confirm that the Government will not remove any Coromandel land from schedule 4 protection? 
Hon GERRY BROWNLEE 
: I have not had the opportunity to consider in full the submission from Newmont Waihi Gold but I have asked my office for a brief analysis of it. It appears that the mining company is asking the same as the Government: to take a little more time over the decision. We say we want New Zealanders to express a view. We will listen to New Zealanders and not mining companies. That company I point out is the only one that has a prospecting licence over that area at the moment. I assume the company would relinquish it. 
Hon David Parker 
: To clarify is the Government going to ignore the 35000 submissions opposed to mining in national parks or is he going to back down? 
Hon GERRY BROWNLEE 
: I can assure members that a good number of those 35000 submissions have been delivered to my office so it has been impossible to ignore them. 
Hon David Parker 
: If 35000 submissions and 40000 marchers opposed to mining in national parks are not enough how many would be? 
Hon GERRY BROWNLEE 
: I am not sure. Tens of thousands of people marched on Parliament to protest against Labour’s foreshore and seabed legislation but Labour did not listen to them. 
Hon David Parker 
: Where will this end given that his plan started with 467000 hectares then it was 7000 hectares and now it has been leaked to the media today that it is 3500 hectares and why does he not just acknowledge that national parks are too precious to mine? 
Hon GERRY BROWNLEE 
: The very interesting thing is that the only proposal for any activity in national parks is in Paparoa which the member now accuses us of leaking to the media. I think that like everybody else he should just wait and see. 
Hon David Parker 
: What other failed plans does he intend to pursue to create his economic step change when the cycleway did not do it the Job Summit did not do it the Budget did not do it and his plan to mine national parks just will not fly? 
Hon GERRY BROWNLEE 
: I have to ask what universe the member is living in. What planet is he walking on? If he had listened to even a little bit of the Budget last week he would have got a slight sense that this Government has a very good grip on what is required for the New Zealand economy. If he wants any further proof he should look at the latest polling which indicates that New Zealanders saw that Budget as being a clear blueprint from this Government for a better future. 
Hon David Parker 
: I seek leave to table the submission from Newmont Waihi Gold titled “Leave schedule 4 alone says mining company”. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Border Control—Productivity and Security 
11. 
JONATHAN YOUNG (National—New Plymouth) 
 to the  
Minister of Customs 
: What commitment has the Government made to improve productivity and security at the border? 
Hon MAURICE WILLIAMSON (Minister of Customs) 
: 
 Budget 2010 provides $75.9 million in capital expenditure over the next 4 years for a joint-venture border management system between the Customs Service and the Ministry of Agriculture and Forestry. The new system will bring processes together providing improved security and productivity at New Zealand’s borders. Modernising the ageing border management computer system will also deliver significant benefits for industry and travellers. Budget 2010 also provides $5.9 million of capital funding to the Customs Service over the next 2 years to fight the illicit drug trade through enhanced tracking and surveillance equipment. 
Jonathan Young 
: What reports has he received on seizures of pure methamphetamine at the border? 
Hon MAURICE WILLIAMSON 
: Last week customs discovered 8.175 kilograms of pure methamphetamine worth at least $6 million on the street in the luggage of a tour group arriving at Auckland Airport. The best coverage I have seen of this was in as Paul Holmes would refer to it the “Royal New Zealand Herald” which covered it well. This is the single biggest— 
Hon Members 
: The “Royal New Zealand Herald”? 
Hon MAURICE WILLIAMSON 
: That is what Paul Holmes called it so I will call it the “Royal New Zealand Herald”. This is the biggest single bust of pure methamphetamine at the border so far this year and is one of the biggest ever made. As a result seven Taiwanese people were arrested and have been charged with importing a class A controlled drug. This seizure is an outstanding example of the vigilance expertise and experience of our front-line customs officers. 
Education Minister—Undertakings 
12. 
Hon TREVOR MALLARD (Labour—Hutt South) 
 to the  
Minister of Education 
: Does she stand by all undertakings she has made as Minister of Education? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 I have made a number of undertakings since I became the Minister of Education. I always make these in good faith and follow them through. 
Sue Moroney 
: Why then did she state yesterday that participation in early childhood education had increased by less than 1 percent in the last 5 years when Ministry of Education figures show that 16389 more children were participating in 2009 than the 164521 children participating in 2005 which is a 10 percent increase; did she get the decimal point in the wrong place? 
Hon ANNE TOLLEY 
: I do not know where the member got those figures from. I am looking at some figures in front of me that show that in 2005 54224 children attended early childhood education and the cost of that was $462 million. In 2009 52296 children attended—a drop of 1928—and that cost $1.13 million. That is three times the amount and we lost 2000-odd children. That is a difference of considerable concern to this Government. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. This is a serious attempt to be helpful. I think a million and a billion were mixed up in there somewhere. 
Mr SPEAKER 
: I am sure the Minister meant a billion. 
Sue Moroney 
: I seek leave to table a document from the Ministry of Education the annual education report of July 2009 showing a 10 percent increase in participation between 2005 and 2009. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Colin King 
: What undertakings has she made to the compulsory school sector about increasing funding for the front line? 
Hon ANNE TOLLEY 
: I undertook to do my best to get more resources to the front lines of the compulsory school sector. I am happy to say that despite a very tight fiscal environment this Government has delivered on that with a 4 percent increase in the operations grant. 
Sue Moroney 
: Does she stand by her statement yesterday to the House that estimates by early childhood education providers that the costs to parents of her funding cuts could be as high as $60 per week were “pretty poor maths”? 
Hon ANNE TOLLEY 
: In fact what I said to the House was that the member’s maths was pretty poor. 
Sue Moroney 
: Can she confirm that the subsidy for a 2-year-old at a centre with 100 percent qualified staff will drop by $1.51 per hour and can she calculate the approximate cost of this funding cut for one child who accesses 40 hours of that early childhood education service; how are the Minister’s numeracy standards today? 
Hon ANNE TOLLEY 
: As I explained yesterday this Government is in the position of having to fund three times the amount for early childhood education for very little increase in participation. We have set a target of 80 percent qualified teachers and we have removed the extra incentives to pay for more than 80 percent qualified teachers. That is a change to the subsidy to early childhood services. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Again that was a pretty direct question. I think that although there was a little bit around it it asked the Minister to multiply $1.51 by 40. 
Mr SPEAKER 
: I accept the member’s point that the question started out as a very blunt question but at the end of it a gratuitous comment was added about how the Minister’s maths is today. If members want the Speaker to help them get an answer to a question they must cut out gratuitous remarks. 
Hon Trevor Mallard 
: Does the Minister stand by her commitment not to introduce bulk funding? 
Hon ANNE TOLLEY 
: Yes. 
Hon Trevor Mallard 
: Is the ability to reduce the number of staff in schools below that of the staffing schedule as outlined in her Budget papers a feature of bulk funding? 
Hon ANNE TOLLEY 
: No. I presume that the member is referring to the flexibility that we are trying to build into school funding and the ability for schools to get all the resources that they are entitled to by allowing them at the end of the year to convert into cash any staffing entitlement that they have not used up during the year. Schools have reacted with great delight to the ability to do that. 
Hon Trevor Mallard 
: Is the ability for schools to take cash instead of replacing buildings as she announced in her Budget papers a feature of bulk funding? 
Hon ANNE TOLLEY 
: Not in my book no. Again it is to try to give schools the flexibility to use their funds in the way that they see fit. This Government trusts schools and boards of trustees to make good decisions for their children. 
Hon Trevor Mallard 
: What features of bulk funding are now not part of the school funding system? 
Hon ANNE TOLLEY 
: I have no responsibility for the Labour Party’s policies. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. The question was what features of bulk funding are now not part of the school funding system. The fact— 
Hon ANNE TOLLEY 
: Speaking to the point of order. 
Mr SPEAKER 
: I will hear the Minister. [ 
Interruption 
] I apologise to the Minister. A point of order is being heard. 
Hon ANNE TOLLEY 
: The member started on this track of questioning by asking me to confirm that I had ruled out bulk funding. Therefore it is not part of my policy or this Government’s policy so it must be part of Labour’s policy if its members continue to ask questions on it. 
Mr SPEAKER 
: No we will not get into that. [ 
Interruption 
] There will be silence. I think the Minister’s explanation is not unreasonable. Since she did tell the House that bulk funding was not part of her Government’s policy she cannot really tell the House what features of her current policy are not part of bulk funding. She has no view of a bulk-funding policy. Although I accept the answer was a little unusual I do not think it was totally outside the bounds of the Standing Orders. 
Hon Trevor Mallard 
: Does she understand the features of bulk funding; if so what features of bulk funding are now not part of the school funding system? 
Hon ANNE TOLLEY 
: I repeat that this Government has no policy on bulk funding. 
Mr SPEAKER 
: That was not the question. 
Hon Gerry Brownlee 
: I raise a point of order Mr Speaker. The point of question time is to question Ministers about Government policy so asking a Minister to speculate about a policy the Government does not have is completely unreasonable. 
Mr SPEAKER 
: I will hear the Hon Trevor Mallard because it is an interesting point that has been raised. 
Hon Trevor Mallard 
: I think all I was doing was asking the Minister to differentiate between the Government’s policy and bulk funding and going back a step it was a question of whether she understood the features that were the differences. If she does then it is not a hard question to answer. 
Hon Gerry Brownlee 
: The Minister answers to the House for her policy not for policies that have been rejected by New Zealanders. The Minister has made it very clear that it is not one of her policies so what on earth would she be comparing it with if not the Labour Party policy? 
Mr SPEAKER 
: No no; we have gone far enough. It is an interesting issue that has been raised actually. That is why I let the points of order go on. As the Leader of the House pointed out question time is about holding the Government to account over the Government’s policies. If the Minister had introduced bulk funding in one of her answers the member would have been absolutely at liberty to question her about that what she understands by it etc. But if I recollect correctly the flow of questions—I stand to be corrected here—I believe that it was one of the questioners who introduced the issue of bulk funding. The Minister has denied that the Government has any involvement with that policy. Therefore asking her whether she understands that policy is not actually strictly relevant to holding the executive to account. I have to agree with the honourable Leader of the House on this occasion that it is not reasonable for me to ask the Minister to answer that question any further. If the Minister had introduced the notion of bulk funding in her answer there would be no problem but given the way that it was introduced I believe that I cannot ask the Minister to answer that any further. [ 
Interruption 
] I ask the visitor in the gallery to desist immediately or he will be removed. I apologise to the House for this intrusion on the business of the House. 
Budget Debate 
Debate resumed from 25 May on the Appropriation (2010/11 Estimates) Bill. 
Hon KATE WILKINSON (Minister of Labour) 
: 
 Budget 2010 is a great Budget. History will show that it is one of the best Budgets that this country has seen. What a great Budget. Labour took us from the best of times to the worst of times leading us into one of the worst recessions in history and we are now leading New Zealand out of it. This Government is focused on growing the economic pie and providing the right incentives for New Zealand families to get ahead. We want a bigger pie so everyone will get a bigger piece. Labour seems to be stuck firm and fast in the politics of envy. All Labour members do is pick and pick at the same old pie complaining that no one trusts them to slice it any more. Well they are right. 
This Budget focuses on lifting long-term economic growth to create jobs boost incomes raise living standards and help Kiwi families get ahead. It keeps us on track to reverse the deficit and get the books back into surplus notwithstanding the legacy left by Labour which squandered some of the best opportunities that this country has seen. 
The Minister of Finance has pulled off a huge coup with this Budget as has been shown by the huge levels of support from both the public and political commentators. I think we would struggle to count how many column inches and sound bites have been filled with praise and compliments for the decisive and courageous direction this Budget sets for the New Zealand economy. There is one quote that appeals to me. It is feedback from the  
New Zealand Herald 
 and it states: “The worst bit about the Budget was listening to Mr Goff respond to it in Parliament.” I think that probably says it all. Let us look at more quotes. The  
Dominion Post 
 editorial states under the heading “Bold step towards a better economy”: “Without changes to make it a more attractive destination for investment and skilled workers New Zealand was facing a further slip down world economic tables. Mr English has made a promising start to arresting the trend.” 
That is one quote; we have others that I would like to put on the  
Hansard 
 record. Bernard Hickey states: “This is the most comprehensive and coherent reform of New Zealand’s taxation system in more than 25 years. It goes a long way to tilting the economy back towards productive investment and away from property investment … Overall I’d give it 8.5 out of 10.” That is not the only one though. Another states: “Today’s Budget is a major step in the long-term aim of reversing this resource drain with the added hope that some of our best and brightest and wealthiest will consider a return home.” 
This is a great Budget. It has seen the biggest tax reform in 25 years. It delivers on four objectives. It rewards effort and helps families get ahead—something Labour does not know much about. It helps us attract and retain skilled people in New Zealand—something Labour did not know much about. It encourages savings and productive investment—something Labour did not know much about. It discourages excessive borrowing consumption and property speculation—something Labour does not know much about. 
This Budget makes the tax system fairer. It strengthens the tax rules about property investment and it gives the Inland Revenue Department extra resources for enforcement. If we look at the Budget we can see that it is a good Budget for New Zealanders. We can look at some examples. Let us take a family with a couple of children earning $76000 a year. They receive Working for Families and pay $300 a week in mortgage repayments which do not incur GST. After the tax package they will get a household tax cut of about $46 a week. They may pay an extra $21 a week in GST but they will be $25 a week better off. They will be $25 a week better off under National than they would ever be under Labour. 
Let us take an average income earner on $50000 a year. He works as a plumber and earns the average wage. He pays $120 a week in rent and saves $50 a week towards a deposit on his first home. After his tax package he will get a $29 tax cut. He will pay $13 more in GST but he will be actually $16 a week better off. Even retired couples receiving superannuation who have no other investments but who own their own homes will get a tax cut of $12 a week after the tax package. They will have a $10 a week increase in New Zealand superannuation but will pay possibly $11 extra in GST. Overall national superannuitants—retired couples—will be $11 a week better off. 
The Labour Party is a party of envy. Its members say that this Budget is just a Budget for National’s rich mates. Well I say that for some who are wealthy this is probably not the best Budget they have seen. If a couple is on a high income and has several investment properties and is claiming depreciation on those investment properties to be offset against their income tax the chances are that after this tax package they will pay more in income tax not less. So it is fallacious for Labour members to suggest that this tax package is for the rich and not for the many. 
All manner of avenues have been used in the past to avoid paying tax— 
Hon Dr Wayne Mapp 
: We’ve closed those avenues. 
Hon KATE WILKINSON 
: —and we are closing them. That should be good. That is great. It should be great news even to those on the other side to those on the Opposition benches. But no they still whinge and moan and complain. 
This is now a fairer tax system. There is a fairer tax system in place to ensure that property investors and landlords are not writing off their tax obligations through depreciation so that they may also put some money into other productive assets and ventures. New Zealanders deserve a Government that wants them to be successful. We are aspirational for New Zealanders; we want them to get ahead. They now have a Government that wants New Zealanders to be successful. 
This Budget sets the Government in a direction that provides the right incentives for people to work hard and to stay working here in New Zealand. Workers will now have more money in their pockets and National trusts them with money in their own pockets because we want to give them incentives to spend and use their money and to save and invest their money as they see fit. We trust them to spend their own money. 
Hon Member 
: That’s radical! 
Hon KATE WILKINSON 
: I know. It is a radical thought that we might trust New Zealanders to spend their own money! 
Hon Darren Hughes 
: You’re still taxing 30 percent. If tax is a problem get rid of the lot. 
Hon KATE WILKINSON 
: This Budget is not just about tax cuts; it is not just about tax cuts. 
Although the average wage earner will be about $15 a week better off and the average family will be about $25 a week better off this Budget is about spending money where we think it matters so that we can have a productive New Zealand. We are spending $321 million on science over 4 years—$321 million; that reflects the faith and confidence we have in the science industry in New Zealand. We will spend $2.1 billion on health for front-line health priorities over the next 4 years. There will be an extra $512 million in 2010-11. We are spending more and more on health because that is important to us and to New Zealanders. We are spending $1.4 billion extra for better schooling and early childhood education over 4 years. Education is important to us the National Government and to New Zealanders. We are spending $1.45 billion in 2010-11 on infrastructure projects: to upgrade rail to upgrade the wider network and to lift prison capacity. We are even spending money on conservation on cycleways and on camping grounds. This is a great great Budget. 
Hon ANNETTE KING (Deputy Leader—Labour) 
: 
 It is hard to believe that a mere 18 months after the 2008 election people are asking where the fresh start is that they were promised by John Key—“Where is the fresh start?”. What is fresh about this Government other than its leader the front man—you know the one with the flash suit and the smile that is reminiscent of a rat with a gold tooth? After 18 months we have not had a fresh start; after 18 months we have had a false start. In fact the Government’s entire agenda is based on falsehoods. 
I listened yesterday to the Minister for Social Development and Employment who said that there was a real buzz around this Budget. I say yes I agree with that Minister: there is a whiff of something very stale about this Government and about this Budget but the buzz she can hear is the buzz of bluebottles as they rush around this Budget. 
I have to tell members opposite that increasingly New Zealanders are sick of the political sideshows from this Government. There is Rodney Hide with his latest travel itinerary flags on bridges toy tossing by Tariana Turia and bottom pinching by Richard Worth. New Zealanders have had enough of the political grandstanding and sideshows from this Government. Kiwis want a Government that focuses on the issues that matter to them—that focuses on the issues that matter to them. Photo opportunities appearing on television in America globetrotting and cocktail parties are not substitutes for real leadership. They are not substitutes for real leadership for real policy or a plan for the future. 
This Government has no plan. This Government floats from cloud cuckoo-land to cloud cuckoo-land. The Prime Minister’s views depend on who spoke to him last. Someone said to him: “Let’s have a Job Summit.” He thought that was a very good idea and that it would be a step change for New Zealand. I have to tell Mr Key that it was not a step change but a step back. If we look at this Budget we see that the big losers in New Zealand are the unemployed—young people Maori Pacific Islanders and Asian people. It is a roll-call of shame for the Government. The people who are unemployed now will continue to be unemployed. 
The ASSISTANT SPEAKER (Eric Roy) 
: I am sorry to interrupt the member. I have indicated to the member Paul Quinn that he must contain himself. He is not sitting in his own seat. If he persists I will ask him to go back to his own seat. 
Hon ANNETTE KING 
: In Bill English’s own Budget documents he is planning on 60000 people to still be on the unemployment benefit in 4 years’ time. The equivalent of a city almost the size of Palmerston North will still be on the unemployment benefit in 4 years’ time. If members opposite do not believe me they should read their own Budget documents. The Government is budgeting for 145000 New Zealanders to be out of work—unemployed—in 4 years’ time. Members opposite might not know this but that is double the number of people on the unemployment benefit that National inherited when we left Government. In 4 years’ time there will still be double the number of people on the unemployment benefit than there were then. What does National think about that? It thinks that this major social and economic problem is just collateral damage to its Budget—just collateral damage. 
When I look at what the Minister for Social Development and Employment said I am appalled. She said she was excited because 12000 young New Zealanders would get short-term Job Ops jobs for 6 months over the next year. Do members opposite know how many young people under 25 years of age are unemployed today? 
Louise Upston 
: Do you prefer zero? Twelve thousand is a pretty strong number in my book. 
Hon ANNETTE KING 
: I tell that member that there are 60000 young people unemployed in New Zealand. She thinks it is 12000. No wonder National cannot get its Budget figures right. There are 60000 young people unemployed at this moment and National has promised 12000 Job Ops jobs over the next year. Job Ops jobs last 6 months and the Minister said that they are not designed to give young people a permanent job. At the same time all sorts of funding for training are being reduced. Tertiary education is being reduced. National is even cutting employment assistance for those in New Zealand who are disabled. If members look in the Budget document they will see that the disabled have had their training opportunities and employment assistance cut in this Budget. The much-vaunted Youth Guarantee which was promised at the election will give 4000 places to young people up to 2011. That is National’s commitment to those people in New Zealand who do not have a job. 
New Zealanders were promised a Budget that would deliver to all families but I tell members opposite that 170000 children in this country will live in poverty in inadequate housing and with insufficient food and heating because of this Budget. No attempt has been made to deal with children who live in poverty and the Government opposite should be ashamed. People in New Zealand are worried sick about the struggle that they know is ahead of them: the struggle to get bread on the table to pay their school fees and to pay their power bills. And yes on the front page of the  
Dominion Post 
 today a power company is confirming what we knew was right. Power bills will go up by $5 a week and gas bills by $1.75 a month. It might not be much to members of Parliament on their salaries but $5 a week means that the extra $4.17 that people have after the increase in tax cuts and after the hike in GST is gone in one fell swoop. 
New Zealanders were told that the Budget was about making them work harder save more and spend less and that they were to step up once they got this big payout from the tax cuts as they would have more money in their pockets. Well most New Zealanders—the first 3 million taxpayers in this country—will have on average $4.17 extra a week and John Key will have $218 a week. That tells us the fairness of this Budget. I do not always agree with Richard Long but I certainly agreed with his column yesterday in the  
Dominion Post 
 when he said: “… in our low-wage economy three-quarters of the workforce are going to be left clutching just a handful of extra dollars. Most of this will go on living essentials price rises and buying the kids a new pair of shoes.” 
Only about 18 months ago John Key asked the public whether they felt better-off. Well New Zealanders after two Budgets from this Government are asking that question. After two Budgets and two tax cuts New Zealanders are asking themselves whether they feel better off. We have a GST increase and interest rates are going up; do they feel better off? Inflation is set to skyrocket to 6 percent next year; do they feel better off? Wage increases are at their lowest level in a decade; do they feel better off? There are higher-wage jobs better jobs and more opportunities in Australia; do they feel better off? With cuts to health care and cuts in education for preschoolers—cuts cuts cuts—do New Zealanders feel better off? Bill English said that the recession is over. Well I ask New Zealanders whether they feel better off and no they do not. It might have been a good question to ask 18 months ago I say to Mr Key when New Zealanders were in a much better position than they are in today but I do not think Mr Key will enjoy the answer. Millions of New Zealanders those who are on low and modest incomes do not feel better off they will not feel better off and this time next year I predict many of them will be in a far worse position than they are in today. 
This Government is asking too much of too many low and middle income earning Kiwis. It is asking them to carry the burden for the high-income earners on their shoulders and at the same time it is putting a burden of debt on the same people as it borrows to pay for tax cuts—borrows to pay for tax cuts to give to those who have the most. At the same time to rub salt into the wound the Government is now saying that it will sell State assets to help pay for those tax cuts. It will sell Kiwibank—there is no doubt about it. This Budget is a very big disappointment for a party and a Government that promised a turbo-charged approach to governance in this country. What we are seeing is a false start. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 The Maori population is a young population with the median age barely reaching 23 years compared with the median age of 36.4 years in the total population. Putting it another way some 34 percent of the Maori population is under the age of 15. This demographic profile brings with it a special set of priorities which we looked for in the Budget announcement made on Thursday. When we consider the disproportionately low median income—in mid-2008 it was $500 per week compared with $530 for the total population—we see that it provides a particular context for this debate. In the health arena an additional $51 million was allocated to meet the pressure of the Very Low Cost Access programme and other primary health care services. Why is this important? A Very Low Cost Access payment is intended to support practices that maintain very low fees—practices that typically serve high-need communities. On top of this we would expect that the $1.4 billion extra funding for district health boards would also include interventions that reduce health inequalities. 
When constituents walk in my door the two biggest issues that they seek help with are health or education. In education I think that one of the unsung good-news stories of this year’s Budget has been the injection of another $1.9 billion over 4 years including a 4 percent increase in operational funding for schools. The challenge however is to look past the generalities and see what support is available to meet the areas of highest need and greatest demand. Therefore I am pleased that an additional $91.8 million is being invested in early childhood education participation for families in the areas that are under-represented. The focus is on ensuring that the families in most need have access to these services. The $91 million has been earmarked for Maori Pasifika and low-income areas out of the total investment of $107 million. 
A lot has been said about what could at the very least be described as a contentious decision in this year’s Budget about early childhood education but if there is any doubt as to the value of investment being allocated to Maori participation this week’s report from the Education Review Office proved without doubt how vital it is to support and promote early childhood education opportunities for Maori. The  
Success for Maori Children in Early Childhood Services 
 which was released on Monday reported that nearly two-thirds of early childhood teachers were not focused on helping Maori to become “competent and confident learners” and more than half of the services were failing to respond adequately to the expectations of whanau Maori. One of the most pragmatic findings was that playgroups playcentres kindergartens and other services were failing to set Maori education in a Maori context. It is not breaking news but all the research tells us that children are taught best when the context makes sense to them. For tamariki Maori that context is one that responds to them as Maori. 
The Education Review Office report concluded that centres could do some key things to increase the responsiveness of their service to whanau. They could look at the way in which they consulted whanau they could ensure that they incorporated Maori perspectives into education they could provide more professional development for educators and managers in working with Maori and they could evaluate the impact of their programmes for Maori. 
I come back to my starting point of the way in which the Budget responds to the particular and unique needs of the Maori population. While I am talking about the education sector I will also draw attention to the additional $48 million going into Youth Guarantee which will raise the number of places available next year from 2000 to 2500. Another $8.4 million is going towards helping kura retain their secondary school students. Another $12.6 million will help Maori medium schools to develop tools to assess the progress of their students. These are all important initiatives that will help to ensure that rangatahi Maori are participating achieving and succeeding in school. They will help to pave the way for future employment and further educational opportunities and in that respect will help to build a stronger workforce to face our future. 
Another key initiative that was introduced in Budget 2010 was the investment of $91 million for a new quality services fund for non-governmental organisations. This is an important mechanism to support our community groups to help to enhance their capacity and capability and to respond to the unique needs of communities across the country. 
Finally I will make some comments about what we may call the unfailing test of a civilisation—that is how we treat our most vulnerable our young and our old. Part of the Budget package includes increases of 2.02 percent for all main benefits for New Zealand superannuation for veterans pensions and for the CPI-adjusted Government Superannuation Fund. That is important of course in that it helps to provide immediate compensation for the rise in GST but for those who receive superannuation or a veterans pension there will also be a tax cut on top of the compensation for GST thereby increasing their after-tax income quite considerably. 
Although such a lot has been said about GST and tax cuts I received an email yesterday that brought everything back into perspective about Budget 2010. Moyra Bramley responding to one of the releases we issued on Budget day shared some of her own unique brand of wisdom to guide our thinking about the difference that Budget day makes. She said: “I understand the reasoning behind the increase in GST and accept we all have to tighten our belts for the sake of those who have no jobs no fathers or mothers to raise the kids and although it’s going to be hard there is a way to better the lot of those who will be affected most. If you have a plot of land and most do wherever they are living then plant some vegetables. Take cooking lessons and learn to make meals out of nothing. Nourishing meals do not need expensive cuts or expensive ingredients. Op shops have awesome clothing for a few dollars for everyone of all sizes. Shoes at $2 per pair. So it is just a matter of reprioritising where your money gives you the best value. But in this country no one should go hungry or without clothing if they spend their benefits wisely and most of all stop smoking and drinking. Buy food for your babies instead. I am so pleased I taught my kids to cook at an early age even my boys and now they have no problem stretching the dollar.” 
I chose to quote extensively from Moyra’s passage to us because so often the greatest advice comes not from the experts and the purchase advisers but from those wise souls all around us who have been through it and are still going through it. The reality is that there will always be those who say that there is not enough in the Government’s Budget for them. My brief overview of some of the essentials of Budget 2010 proves without doubt that there are some great initiatives included in this year’s approach which really focuses on those most in need. But there is also the evergreen message that ultimately no matter how great our wealth the biggest difference made can be in making the most of our resources and investing in the value of collective responsibility. It is all about whanau ora. 
Hon PHIL HEATLEY (Minister of Fisheries and Aquaculture) 
: 
 Last year National was very focused on getting the Government’s finances under control as I think the public experienced. The recession was deepening during that period and people were threatened with losing their jobs. It was a very difficult time for New Zealanders and their families. This year of course we are squarely focused on the economy and building the recovery. As Bill English has often said the recession did not begin after we came into Government. It was in New Zealand well ahead of the rest of the world. In fact we had been in recession for some time; it just did not show up until the rest of the world came under pressure. 
The Government had a number of approaches during the last year following the last Budget. One of them was a big focus on reining in Government spending where there was no gain and where there was not a dollar of value for every dollar spent. We also looked at ways in which we could curb regulation so the Building Amendment Act was passed and the Resource Management Act was fixed as well to a very high level. Now we focus on more specific Resource Management Act reforms. Last and most important was the fiscal stimulus package that we introduced in the last Budget. Members will recall that about half a billion dollars was put in as a capital injection to housing roading and education. The thought behind that was quite simple. We wanted to spend some money in the economy but we wanted to spend it on capital items—infrastructure—not operating items. It was essentially an infrastructure package. 
We looked at housing roading and education and decided we wanted to inject capital into those areas. We also wanted to do work that was urgent and that had been on the Government’s books collecting dust for a decade. So the Minister of Transport the Minister of Education and the Minister of Housing dusted off all the plans for the roads the houses and the schools that could have been upgraded in the last decade. They asked themselves whether they were still good ideas whether it was worth injecting capital into those projects—those schools those roads or those Housing New Zealand estates. If so they asked whether they were already consented because they wanted the fiscal stimulus package to have immediate effect so it would be good if the consents were already there. They also determined whether a workforce would benefit from those construction projects. It worked very very well. The fiscal stimulus package put about $124.5 million into the State housing sector. We have upgraded about 11000 State houses over the last 16 to 18 months. That was the plan and it is trucking well on its way to completion on 30 June of this year. So 11000 houses have been painted been insulated top and bottom had clean heating installed had the kitchen renovated or had the bathroom renovated. That type of essential work has been done. It was a boost package during the recession. 
We focused on upgrades as opposed to new buildings because we did not need consents for a lot of the upgrade work. The $120 million fiscal stimulus could be virtually immediate because we did not have to go through that consenting process. Also a large number of houses were uninsulated and were in a serious state of disrepair. There were 940 healthy housing upgrades and added on to the programme that was already planned to increase the number of State houses 87 new homes were built as part of the jobs and growth package. It was important that we built new homes rather than bought existing ones. The main reason for that is that it meant people were employed. I can say that Housing New Zealand Corporation going forward now has a preference to either build its own homes on land that it owns or lease homes that are newly built on new sections. The reason is that in both those cases that increases housing supply while only purchasing houses which might happen on occasion does not increase housing supply. It is a very significant stimulus package which of course ends on 30 June. 
This year we are focused squarely on the economy—and on some other things. First of all this Budget will put economic growth at centre stage. Its overriding aim is to tilt the economy towards people working harder and longer investing more energy into their work and getting the rewards for that. So it is an economy that will be tilted towards work saving and investment and also towards exports. It will be tilted away from what was the case which was a lot of borrowing and spending. We are moving away from spending and towards saving. We are moving towards making sure that people are incentivised to work rather than not work. And so it goes. 
Secondly our major tax-reform package features across-the-board tax cuts that help families get ahead. That is where the reward is for work. Thirdly the Budget shows an improved fiscal outlook where both Crown debt and budget deficits are better than forecast. Last year there was not good news. This year it is still tough looking ahead but there has certainly been an improvement and we want to do better still. 
Finally the Government and the Minister of Finance have been very very strict with Ministers to make sure that we keep within our $1.1 billion allocation for new spending to make sure that we are not increasing spending just for the sake of it but that every extra dollar that we spend is a dollar’s worth of investment. The Minister of Finance has asked Government departments and all agencies to do more with what they have. That is a very significant shift from the previous Government’s approach. We are making sure that we test every programme before it is re-funded or gets a boost in funding. So Government departments and agencies will receive little or no new money for the next few years unless they are in the area of health which receives the biggest slice of new money—an extra $2.1 billion over the next 4 years including $512 million in the next financial year. As we have heard from the Minister of Education Anne Tolley schooling and early childhood education will also receive an extra $1.4 billion over the next 4 years including $417 million in the next financial year. Those are very significant investments. 
I have to say that one of the investments that we are most pleased with in the last couple of years has been the Housing Innovation Fund. I acknowledge members across the House who began that fund originally with about $12 million. Much of that money went into the development of housing organisations. We have switched the fund around a bit. We have increased it from $12 million to $20 million and we have said that the money has to be spent on building or purchasing houses. No longer can the money be spent on the development of plans organisations or that type of thing—what people call capacity building. It must be spent on capital expenditure. That is a change that we made as well as the funding boost. The Housing Innovation Fund has been extended again this year by another $20 million. Of that $16 million will be spent on grants or loans to support social and affordable housing and $4 million will be spent to meet the cost of interest-free loans that are provided to community housing providers. The Maori demonstration projects and partnerships will continue also this coming financial year. So far in the current year that has resulted in 96 new housing units and not all the announcements are finished yet. 
I can say that the New Zealand Housing Foundation has been allocated $3 million which goes towards its $12 million project for 30 affordable homeownership opportunities in Auckland. We have attributed $3 million out of a total of $12 million. That shows members how we can leverage input from the private sector or other housing providers. The Salvation Army received $2 million for 15 new rental properties. Other trusts such as Habitat for Humanity the Monte Cecilia Housing Trust and Queenstown Lakes Community Housing Trust received money through the Housing Innovation Fund. I am delighted to extend that fund into the next financial year. 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 We can tell when Ministers are enjoying their portfolio responsibilities and their job by the energy and the passion with which they make a contribution to this House. That Minister Phil Heatley did not have any. He has clearly got over his excitement his little puppy-dog love that he used to have for his ministerial portfolio. That was a tragic contribution to this debate. 
I am very pleased to be able to support the amendment that has been moved by the Labour leader Phil Goff. The amendment is: “That all the words after the word ‘That’ be omitted and the following words substituted: ‘this House has no confidence in the National Government led by John Key which has blatantly broken its clear promise not to raise the Goods and Services Tax has pushed up other taxes and increased prices when working people have had their lowest wage rises in more than a decade has failed to implement a plan for jobs lacks any vision for a smart high skill high tech and high wage economy has cut services and assistance to the most needy in our community and has rewarded the most wealthy at the expense of middle and low income New Zealanders.’ ” Given the 100 percent truth in that amendment it is not surprising that the Minister lacked any commitment and any passion in his contribution. 
This has been a Budget of broken promises. John Key himself personally looked straight down at the camera and promised New Zealand that we would not face an increase in GST. This Budget broke that promise. GST is going up. That is the first of the three broken promises contained in this Budget. 
The second was as clear and as personal a commitment from John Key: that National would not borrow to fund tax cuts. That promise was repeated after the election—it would not be borrowing to fund tax cuts. In fact that is the reason that it had to cancel its tax cuts under urgency having previously put them through under urgency because it was not going to borrow to fund tax cuts. This Budget has broken that promise as well. This Budget sees borrowing to fund tax cuts not for low and middle income earners alone but for the people who least need a tax cut the people who are getting more in tax cuts than many people earn over the whole year working full-time. Some people are getting more in a tax cut than other fellow citizens earn working full-time. How can that be fair and how can borrowing to fund those tax cuts be justified? 
The third broken promise in this Budget was that National would not cut the number of public servants would not cut front-line health services and would not cut the level of Government support that people were getting. Every day we have more examples of front-line health service cuts and of cuts in Public Service jobs. 
The National Government has been portraying this Budget as a great fiscally neutral responsible tax-switch Budget. Well actually it has been properly described as a tax swindle. It is making it harder for good hard-working New Zealanders—not the sort that Mr Key dismissed as being just jealous of the important people the rich people—who are on low or middle incomes to get ahead with their lives. It has also been noted that the real winners out of this Budget are the people who are on the highest incomes. I have nothing against people who have a very high income. I say: “Good on them.” But they are not the people who deserve and who need the biggest support from Government particularly in these tough times. They are not finding it hard to pay the power bill every week and they are not shocked when they learn that the power bill is going up. People on very high incomes can manage very well. They do not get to the checkout counter every week or fortnight and hope they have enough money in their bank account to pay their grocery bill. The people who do are now getting more anxious that they will not be able to afford the power increase and that they will get to the checkout with their groceries for their families and not have enough money in their account to pay the bill. 
Those people are as important to our country to our economy and to our society as the people on the highest incomes; they should have got more out of this Budget to get them through the hard times. In fact they will lose out of this Budget—that is another broken promise. Do members remember that John Key started off by saying that all New Zealanders would be better off under this Budget? Then he toned it down a bit and said that most New Zealanders would be better off. Then he toned it down again and said that no New Zealanders would be worse off. Every time he has talked about the Budget his expectations have got lower. But he was still wrong even when he made his lowest prediction because some people are worse off. 
Inflation is running at nearly 6 percent. It will destroy most of the tax cuts and that means that New Zealanders will face an increase of 2.5 percent in their GST with no compensation. Again people were promised by John Key that if GST went up they would be compensated. He did not tell them though that they would face a nearly 6 percent inflation rate as well as the GST increase. If we take an average family with two children and give the income earners in that family a wage increase they will be $55 a week worse off after GST inflation and the increases in early childhood education charges. 
The Minister of Education could not work out those early childhood education charges. She was asked to multiply $1.51 by 40 and let the House know what increase in early childhood education charges that family would face if the increase was passed on from their early childhood education centre. I know that the family is facing an increase of $1.51 an hour multiplied by however many hours their child is in early childhood education; that is the additional charge that family will have to face. I am sure that my colleague Sue Moroney will be asking the Minister to have another go at that question: $1.51 times 40. Perhaps Aaron Gilmore might be able to spend some time this afternoon with his calculator and the Minister of Education explaining how that increase will make families worse off. 
As a result of the Budget we have also seen future health cuts that will make the health cuts of the last 18 months pale into insignificance. As you know very well from your own electorate Mr Assistant Speaker Roy these health cuts have not been fair on individuals and they have not been necessary. In fact they have been cruel. They have targeted the most vulnerable members in our society: people who are frail and elderly often living at home on their own and people who have been getting $20 or $30 a week in home support help have now had that cut because the Minister of Health has told the district health boards that their cuts are not strong enough. He asked them to keep cutting until they got their budget back on track before 30 June this year. 
The Budget that has been presented in this House halves the budget increase for district health boards. They do not know how they will survive and I am certain that older people and more vulnerable people in particular will be feeling the weight of those health cuts. There is effectively a $300 million hole in the health budget. That is how much extra they needed on top of what the Minister of Health announced on Budget day in order to just stand still. They needed that not in order to expand services not in order to give wage increases and not in order to make better sooner and more convenient health services available; that is how much they needed to stand still. That is the hole in the health budget. 
CHRIS TREMAIN (National—Napier) 
: 
 We know that New Zealanders have received a Budget really well when the Leader of the Opposition comes into the House for question time the very first day after the Budget and asks not one question to hold this Government to account on the Budget. We know it has been even better received when he comes into the House for question time on the second day after the Budget and cannot ask a question about the Budget to hold us to account. Literally hundreds of decisions have been made in relation to this Budget but the Leader of the Opposition cannot come into this House and ask one question to hold this Government to account. The Opposition is in tatters. 
We know as well that it has been a successful Budget when the Greens with two questions to ask day after day come into the House but do not ask one question about the environment or one question about the railways. It must be a Budget well received by New Zealanders. Where are the Greens holding this Government to account about their core policies? They are nowhere to be seen. They have asked nothing about the environment and nothing about public transport. They have not asked questions on the things they should be asking about. This Opposition is in tatters—in absolute tatters—if its members cannot come into this House and hold this Government to account. The Opposition is an absolute shambles. 
That aside we really know that the Budget has been successful when we go back to our electorates in this wonderful country—back to Tauranga to Auckland to the West Coast and to Christchurch. We listen to the people out there who are the real people in this country and who make the calls. There is no greater test than being on the Saturday morning sports field when the mums and the dads the granddads the grandmums the coaches and the volunteers are out there and talking to them about the Budget. I can tell members that the feeling on the sideline in Hawke’s Bay last weekend was absolutely fantastic. Heaps of people remarked to me about how they felt the Budget was a real step forward and had the right incentives in place. They said that it helped hard-working Kiwis in our country. 
One dad and his son from the Pan Pac Forest Products mill cutting room came up to me and said: “That’s a damn good Budget Chris. We’re really pleased with the way it went because it is out there and rewarding guys like us for getting out there and working hard.” The son had just bought a home. He said the Budget provisions would make his mortgage payments a bit easier and that he would save money. I was proud of what he said. I asked them what they thought about the top tax rate coming down. Do members know what they said? They said that if the company does not make any money they do not have jobs. 
People out there get that. We need companies and businesses doing well in this economy. We need the incentives to go ahead; that is really important. Hard-working Kiwis get that. They know that someone has to risk capital to start and to build companies. Outside the Wellington political beltway people in the provinces know that companies not Governments provide jobs. 
Hon Member 
: What! 
CHRIS TREMAIN 
: I know; it is hard to believe. They know that if companies are making money their jobs are secure. They know that if the company they work for is growing they deserve a slice of the action through improved wages and conditions. They deserve it so they are getting in behind this Budget and that is absolutely fantastic. 
Bill English’s Budget 2010 will be pivotal to this country’s future. The projections give Kiwis a slice of the action: 3 percent growth for 4 years running 170000 new jobs projected over the next 4 years and improved family income of $7000 over the next 4 years. I think that is absolutely fantastic and that is why those guys on the sideline back in Hawke’s Bay are proud of us and are supporting this Budget. 
Much has been made of the Australian comparison. They fact is that Australia got to its position by outgrowing us. In the late 1950s we had similar comparative wages to Australia. But over a 40-year period it has outgrown us by just a smidgen just a percent each and every year. That has delivered the situation in which we find ourselves today. The key message here is that growth really does matter. This Budget is about helping to tip the scales in order to achieve stronger growth and to get us on the long road towards wages that are comparable to our neighbour’s. Let us make no mistake: that is a focus for this Government. However we are realistic about the time frame over which it will be achievable. 
In fact as one commentator said the 2010 Budget has turned the tax disadvantage for workers between New Zealand and Aussie on its head. Previously the tax incentives to work in Australia versus New Zealand favoured Australia by up to $200000. Now from a tax perspective they favour New Zealand for wages of more than $50000. That is an absolutely sensational turn-round but I agree that it will not fix the wage issue immediately. That is a long-term project. Only the growth of our economy incrementally year in year out over a long-term period will fix those comparative wage levels. 
This Budget is pivotal in doing that. It provides incentives to get out there and work hard which tips the economy in favour of the productive sector. These are the drivers of growth. If we are to get wages sorted out then that is what we have to do. This Budget contains huge incentives to get ahead. Seventy-three percent of Kiwis will now face a marginal tax rate of no higher than 17.5 percent. In the mighty Hawke’s Bay closer to 80 percent of people will face a marginal tax rate of no higher than 17.5 percent and their average tax rate will be even lower. A full-time worker without children who earns a bit over the minimum wage of $15 per hour in the last 2.5 years has had his or her average wage rate drop from 19.1 percent to 12.5 percent. If that is not an incentive to get out there and work and to help the economy to grow then I do not know what is. 
We should not underestimate how incentives to get out there and work hard will drive growth in the economy. Labour members do not get it that if we incentivise people to go and do stuff they will work harder and that will drive growth. We are incentivising not only companies but also workers to get out there and do it. 
Simon Bridges 
: This is radical! 
CHRIS TREMAIN 
: I know that it is radical stuff! If we have a motivated workforce—members should listen to this—then growing businesses is a whole heap easier. Growing businesses need people to do overtime but when the marginal tax rate is too high people just say: “Well actually I can’t be bothered.” This Budget provides an incentive to get ahead and it provides it to the workers of this country which is really really important. Unless we have the workers on side companies cannot grow on their own. It is a double-edged sword; we need companies and workers going hard at it if we are going to lift wages. 
The Budget also tips the economy in favour of the productive sector and that is something I want to focus on now. A company tax rate of 28 percent gives our companies a 4-year head start on Australian businesses. The removal of depreciation claims on residential and commercial real estate properties sharpens the focus on where to invest and starts to tip economic decisions in favour of the productive economy and away from property investment. This does not mean that property prices will dive. Clearly if immigration and growth projections play out the demand for property will remain strong and will ensure that property prices remain buoyant. This Budget is pivotal to winding up this economy to grow. Over the next 3 years we have projected growth of 3 percent 170000 extra jobs and an improvement in family incomes of $7000. That is absolutely fantastic. 
In addition to those projections we have a strong focus on getting this country back to Budget surplus. Other speakers have focused on that today. There is a strong focus on keeping expenditure under control. I will give the example of one small statistic from this year; it is in only the small print. In terms of Government departments coming to the Government for new expenditure bids there were 714 bids under the previous Government. Can members guess how many bids there were under this Government? There were 30 bids. There has been a total change in culture out there. Government departments are driving lower expenditure and better efficiencies in their departments and that is absolutely fantastic. There is also a strong focus on getting our balance sheet under control which is absolutely sensational. 
All that aside I am absolutely excited that this Budget puts incentives out there for companies to grow and for workers to get in behind those companies to take this economy forward. It is a pivotal time. I am absolutely pleased with what Bill English has done; it has been sensational. I support this Budget. Thank you. 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
: 
 If Chris Tremain truly believed what he said then why are Maori constituents in his electorate not going up to him in droves patting him on the back and saying that this is a great Budget? I will tell members why they are not doing that. It is because 73 percent of people in the member’s electorate earn under $40000 and they will not benefit from any of the tax cuts he has talked about. National’s Budget will hurt Maori it will hurt low-income whanau it will hurt families with children and it will hurt young people. 
This is indeed a Budget of broken promises. It is not a Budget that delivers to the vast majority of people in Hauraki-Waikato where 73 percent of people earn under $40000. It is much the same in many of the Maori electorates. There are high rates of non-participation of young children in early childhood education. Youth unemployment has increased; 16000 young people are unemployed and that is tragic. Maori unemployment in general has increased. In 2008 when Labour was in Government that number stood at 11700. Now in 2010 22800 Maori are unemployed. It is double the amount. So something is not happening with this Government to ensure that unemployment does not keep increasing yet Government members say that this is a good Budget. 
The Government is struggling to deliver to the communities that I represent on the issues that really matter on the bread and butter issues that help whanau sustain themselves. A good job access to affordable health care affordable housing and a good education are reasonable expectations in a caring and responsible society. The Budget has failed many in my electorate on all those fronts. Those people want to make a good go of it; instead when looking for a job they are confronted with an employment market that can hire and fire in a 90-day period without warning without reason and without care. Tikaokao McClutchey on the East Coast was released from her job within the 90-day period without warning and without notice. She was gone just like that within the 90-day period. People want certainty and protection in the labour market and slowly but surely this Government is chipping chipping chipping away at the rights of those people who are hungry to work and want a job. 
This Budget proposes tax cuts that will see greater gains for those on incomes above $70000. Sadly many of those people are not Maori. In fact a good majority of them are not Maori. So how can members opposite propose that this is a good Budget when so many Maori are affected negatively by its consequences? How many in Hauraki-Waikato will benefit from this round of tax cuts? It will be very very few. Instead as I have said approximately 73 percent of earners in Hauraki-Waikato will see little or no benefit at all from the tax cuts that will take effect. They will be net losers. In fact let us look at the figures. In Hauraki-Waikato the median income is $22000. After the tax cut is calculated minus the accident compensation costs and inflation one ends up with a net loss of $11.65. Members opposite say that this is a great Budget. I say that it is not. They should look at the figures which speak for themselves. To top that off an increase in GST will hurt those same people and whanau who will pay extra for the basics: for their kai their power their petrol school costs for their kids bus or train fares rental payments and mortgage payments. The Government has done a good job of creating an illusion. It is giving with one hand and taking with the other and that is the swindle. Whanau in Hauraki-Waikato did not vote for giving tax cuts to high-income earners without taking into account the consequent effects in health education housing and employment. They did not vote for increases to GST that will hurt them in the pocket but they got them. 
The Maori Party has a lot of explaining to do. In fact the Maori Party members cannot stomach the debate and that is why they cannot be here to listen. Hone Harawira needs to know that it is no good speaking out if one’s actions do not follow one’s words. At the end of the day the Maori Party voted for these tax cuts for the GST increases and for this Budget. It did not have the mandate to do that but it did. I bet that every Maori who voted for the party did not vote for the tax cut package or the GST increases that have been delivered. They will hurt in the pocket and the Maori Party knows it. The party has a lot of explaining to do. Why is that? Hone Harawira tells us that its poor list of achievements shows too many gains to give everything away now. It might happen on 1 October! The Maori Party says that its achievement on the foreshore and seabed issue—the repeal of that Act—is one such reason. What is it to be replaced with? It will be in public ownership. The Maori Party says that its achievements on getting the Government to support the Declaration on the Rights of Indigenous Peoples is a gain but it means nothing—especially to Tuhoe. I say: “Go and ask them.” The Whanau Ora initiative was proposed as a saviour to all the ills within many Maori communities. Well it was supported in part—and funded only in part—by the Government. That was far short of the expectation raised by the Maori Party out there in many Maori communities. A measly $134 million over 4 years for Whanau Ora for only 20 providers will fall well short of the expectation that has been created in a number of communities. The GST increase as I have said before was not voted for by any of the Maori Party’s constituents. In fact the Maori Party wanted a GST decrease yet that will not be delivered because its mates in the National Government will not listen to anything the Maori Party has to say. Yet the party is still prepared to prop up the National Government and its Budget which does not deliver at all to Maori constituents. 
In my electorate the constituents who voted for the Maori Party have been sadly let down and had the wool pulled over their eyes. No one is talking about the Budget with the same fervent glow as members on the other side of the House; Maori know that they will be hit in the pocket and slapped in the face. What about leadership on the real issues that affect Maori? Making sure that our kids get a good start in life is absolutely necessary. The Government has chosen to cut funding for teachers in early childhood education centres. That will seriously affect the ongoing quality of teaching in those centres which are charged with making a difference to the lives of our children. I heard a member from the Maori Party promote the gains in Youth Guarantee but I say there is too little funding for the large number of young people who are currently unemployed and who want to go into the workforce. That is not enough of a gain. Those people want a real job and a real wage. They do not want to be part of a training-go-round scenario. There is nothing in the Budget on Modern Apprenticeships training or increasing investment in that area where young people increasingly want to take up the option to earn while they learn. What about supporting single parents? There is nothing in the Budget to ensure that those with children who are unsupported by a partner have access to the training incentive allowance to enable them to take up study beyond level 4. There is nothing whatsoever for them. 
The Budget is a sad indictment on the direction in which this Government is going. Constituents in Hauraki-Waikato want a fair go. They want to work but do not like being kicked in the guts. They want a good education to get ahead but increasing fees may prevent that. They want a good quality of life but the cost of living through increased GST will hurt them. They want to build a strong whanau strong marae and strong communities but not at the expense of creating winners and losers through contracting rounds. This Budget has broken promises and it does not care for the many at all; instead it cares for the few. It is not the kind of Budget that I would stand up in front of my electorate and promote. I am sure that many members on the other side of the House would not go into many Maori communities and promote the Budget in the same way that they do in this House. They know it just does not hit the mark at all. 
Finally I say to the Maori Party that it has a lot of explaining to do. I wait for 2011 to roll on because the shallow and hollow gains that the Maori Party thinks it has achieved will all be undone by a Budget like this. The Budget continues to undermine vulnerable and needy families and low-income families. More important it undermines the majority of Maori who want to get ahead want a job want to make a go of it and look to the future. They know that the Maori Party has let them down badly. 
PAUL QUINN (National) 
: 
 I seek leave to table a graph that was prepared by that eminent researcher and political scientist David Farrier which shows the change in the average tax rates between 2008 and 2010. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. The member said David “Farrier”; does he mean David Farrar? 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: People know what it is. Is there any objection to that course of action? There is objection. 
SIMON BRIDGES (National—Tauranga) 
: 
 I did not want to start this way but I have to say after listening to Nanaia Mahuta and her comment that the Maori Party is “shallow and hollow” that all the speeches from Labour members have been shallow and hollow. They have been shallow and hollow because Labour members were wrong-footed on this Budget. They thought this was going to be a Budget for the “rich fat cats” as they put it— 
Brendon Burns 
: Ha ha! 
SIMON BRIDGES 
: —like Brendon Burns the socialist vintner from Marlborough. They thought they were getting one thing but they got something altogether different. When we look in this Budget document at the average tax rates we clearly see that this Budget has been for the many not the few. This is a Budget where people who earn up to $48000 a year which does not make them wealthy by any stretch will have a top tax rate of 17.5 percent but their average tax rate—their effective tax rate if you like—is around 15 percent. Effectively that rate on $48000 has been halved from what we had a couple of years ago. We saw last Thursday a Budget from a National-led Government that delivers for the many not the few. Frankly that is what frustrates and demoralises the Labour Party so much. 
Often things are said in this House insincerely. They are said flippantly and the like but I come to this House to say sincerely that last Thursday Budget day in this House was the proudest day I have had as a National member of Parliament since I have had the privilege to serve the people of Tauranga. I was extremely proud to hear Bill English the Minister of Finance then John Key and his words that we got a Budget for the many. I felt we delivered on things we had promised in the election like tax cuts and a better brighter future for the people of this country. It was very good to see that and it was something I stood proudly in applause of on Thursday. 
Hon Lianne Dalziel 
: You can’t say you delivered on your promises; name one. 
SIMON BRIDGES 
: I accept that the Labour Party would like to say there is some controversy around this Budget but we heard from Chris Tremain and I heard back in my electorate that it is clear this Budget is very popular. People know that we are putting incentives in place and we are doing the right things for the right reasons. We are getting it right for the long-term prosperity and future of this country. 
I want to talk about two significant things in the Budget. The first is the tighter control on Government expenditure and finances and the second is tax reform. Chris Tremain gave the example of sports fields. The day after the Budget on Friday I was back in my electorate—and I thank the whip for that leave—for a number of meetings that I had to attend to that had been longstanding commitments. I spoke to a retirement village about the Budget. I hope the people in the retirement village will not mind me characterising the retirement village this way but it was not a top-end one. In the spectrum of retirement villages it was somewhere in the middle. I am a politician but I think I did a pretty straight fair job on what the Budget contains and where it is going. Two things were clear to me from listening to those seniors in my electorate. They were not wealthy people; I emphasise that. They were genuinely concerned about how debt rose under the previous Labour Government. They were concerned about public debt and the country’s debt which I will come back to. They were glad to know that this Government has a plan of action to make sure we do not get the kind of “Greekonomics” that were practised by members on the other side of the House. They were glad to know that and they were genuinely thankful. 
They were also pleased—and this is something Labour would like to see as controversial—that GST went up. The reason for that is that they remember and they know from their own lives and lifestyles and their household budgets that we cannot just go out and spend spend spend and consume consume consume. They really did think that we were doing the right things with our tax package system to get incentives in place. They were as I say pleased about GST. They did not think the rise would injuriously affect them because they know how to be careful with their pay packets and they thought we were doing the right things for the right reason. I explained the numbers in relation to superannuation and the tax cuts for them. They were glad to know that as a result of the Budget they will be about $560 a year better off. They were glad to hear that. 
There is a huge amount in this Budget and the details are excellent. Let me deal with a couple of the four primary objectives that the Budget had. One is reforming the tax system and the other is getting the Government’s finances under control. In some ways the finances of the Government and in fact the country paint what could be seen as a worrying picture. We know that debt in this country around the year 2000 was a bit under $100 billion. Today as I understand it it is $168 billion. By 2014 it will be $250 billion or thereabouts. That is easy to say but they are staggering figures. We are dealing with sharply rising debt in this country. This Government is doing something about that. We will not pull the rug out from under people’s feet. Bill English and the Prime Minister were very careful with the last Budget to make sure we kept entitlements going without raising those debt levels. Now as we go forward we are taking firm control of the Government’s finances. We are working within tight restraints. 
There is more spending in health education and science and that is good to see but we want to get better value from our public services. We are being much more careful with how we spend the people of New Zealand’s money. That is something that Labour members would be quite astute to realise. When we hear them talking in this debate they do not seem to realise that. Every dollar of tax is taken from people who have worked hard for that money. That is a fundamental difference between this party and that party— 
Brendon Burns 
: No it’s not. 
SIMON BRIDGES 
: Labour members are saying they do not want tight control. They want to borrow spend and hope. That is those members across from us. 
I will quickly talk about tax—$15 billion over 4 years. It is the most significant package of tax changes in the last 25 years. Labour members’ position on that is again frankly perplexing. They are all over the show. Perhaps that is why as Chris Tremain has said they have been so quiet when it comes to question time in the House following the Budget. Can the next speaker tell me what Labour’s position is on GST? Labour members drove around Tauranga and a whole lot of cities saying “Axe the Tax”. Now we hear in an appalling display by Phil Goff on  
Q+A 
 that most probably Labour would keep GST where it is. We do not know what Labour’s position is on income tax but I would like to know. On this side of the House we are very clear: tax cuts for the many. Two-thirds of the costs of tax cuts went to those on incomes below $48000 a year. That means that 73 percent of income earners will have a top statutory or income tax rate of 17.5 percent or less. Those are powerful figures. 
I will just finish on this. When Labour members get up and say that someone on $80000 or $90000 a year is a rich person or a fat cat— 
Hon Lianne Dalziel 
: We didn’t say that. 
SIMON BRIDGES 
: Well Labour members say they did not say that but they want those people to pay more tax. Let me tell members that members on this side of the House want to do something to ensure that people stay in this country and do not go overseas so they can earn and prosper here. This is a great Budget. It makes me proud. 
DARIEN FENTON (Labour) 
: 
 I am pleased to support the amendment proposed by our Labour leader Phil Goff as outlined on the Order Paper. I can tell the previous speaker Simon Bridges that over the last week since the Budget was announced Labour MPs have been out there talking to a lot of people in the community. It is fair to say that people are absolutely underwhelmed by this Budget. They are underwhelmed and they are deeply concerned. 
John Key called the increase in GST in the tax package a tax switch but for middle and low income earners it is a tax swindle. The truth is that most New Zealanders’ tax cuts will be wiped out by inflation of nearly 6 percent and most Kiwis will not be compensated for the GST rise that this Government has introduced. The Government knows that. That is based on their own numbers but they are not admitting it. They are not fronting up to the New Zealand public. They need to start telling the truth about this Budget. 
On the North Shore where I work—people have a view that it is a very affluent area—I came across a family with two young kids. Even after the wage increases factored in for the next year they will end up being $55 a week worse off after the GST increase and the cuts to early childhood education. 
The tax cuts are not only a tax swindle but also unfair. They fail John Key’s fairness test because one-third goes to the top 5 percent and 15 percent goes to the top 1 percent. The people in the middle and at the bottom are going backwards under this Budget and the people on the bottom—people on unemployment benefits and on the minimum wage—will get a pay cut. But of course that has happened before. In the next year as inflation goes up to record levels and with it the cost of food petrol power childcare and accident compensation levies we will see just how awful the swindle is. 
This is also a Budget of broken promises. John Key told New Zealand that he would not raise taxes. He was unequivocal about that. He stated: “National is not going to be raising GST. National wants to cut taxes not raise taxes … If National was to do a half-decent job it wouldn’t need to either raise GST or raise taxes.” 
Hon Lianne Dalziel 
: Well they can’t be doing a half-decent job then. 
DARIEN FENTON 
: No that is true. National is not doing a decent job and John Key has broken that promise. 
The second part of the broken promise is that the tax cuts are funded by borrow and hope—debt that will mount up for the families of today and tomorrow. We will all pay for this Budget for years to come. 
Another broken promise in this Budget is the promise not to cut public services. There are cuts in this Budget all right. The Budget is $300 million short in health. There is $400 million coming out of early childhood education. There are cuts to housing cuts to other parts of education and cuts to funding for non-governmental organisations and of course there is the gutting of the accident compensation scheme. I want to know who voted for those cuts in the last election because National was not up front about those. 
I met Mr John McGill of Northcote this week who is in his 80s. He has had his home care cut to half an hour a week even though he has recently had cataracts removed from his eyes. He also has a shoulder injury which the Accident Compensation Corporation is refusing to treat because it is age-related. Cuts to home care is another broken promise and people are being affected by those things right across the country. 
National said that it would not increase taxes but for a particular group of workers not only will they have to pay extra GST but also their tax has been increased. I am talking about workers who are made redundant through no fault of their own and who are lucky enough to have redundancy compensation in their employment agreement unlike the many that National refused to support a couple of weeks ago when it would not agree to having minimum redundancy notice and pay. 
Until this Budget if workers were made redundant from their job—and that happened to tens of thousands of Kiwi workers last year—they got a 6 percent rebate on the tax on their redundancy payment. That rebate was based on a flat rate of 6c in the dollar for redundancy pay of up to $60000. It meant for example that if a worker was paid $20000 in redundancy pay then he or she was entitled to a flat rate rebate of 6c in the dollar which came out as a $1200 rebate. That rebate has been cut by this Budget. 
The reason redundancy payments were treated differently is that they are there to compensate for lost earnings until a worker can find a new job. But because redundancy payments can be large one-off payments they can push the annual earnings of workers into a higher tax bracket meaning that those workers end up paying more tax than they should. That is unfair and it is not the intention of the income tax system. But the National Government is so mean that it will raise taxes for redundant workers who get compensation. 
Paul Quinn 
: Oh mummy mummy mummy! 
DARIEN FENTON 
: That is what the Government is doing I say to Mr Quinn. He can make silly noises but he should go and talk to workers who have been made redundant in the area where he works. 
Until 1992 the tax rate on redundancy payments was 5 percent. The previous National Government upped that rate and in 2007 Labour changed the situation so that it was much fairer for workers who get redundancy compensation. Of course National voted against that—[ 
Interruption 
]; listen to National members braying—without ever admitting that it just does not believe in fairness for workers. 
As I have said redundancy payments are different. They should not be taxed. The Government should not be increasing tax on redundancy payments. That is really really mean and I want to know exactly why the Government has proposed it. It is a shameful and sneaky tax increase. It is a mean little part of the Budget but I am not surprised. The National Government is not interested in Kiwi workers. It does not care about what happens to them when they lose their jobs. 
Hon Lianne Dalziel 
: I thought we were catching up with Australia. 
DARIEN FENTON 
: Well that is true. But Australia has redundancy compensation and fair tax—that is interesting. 
This is a Budget of lost opportunities. The Government’s tax cuts will make it harder for Kiwis to get ahead. The Budget fails to deliver on better jobs and better wages. 
One thing that the Budget did was to dump the Skills Strategy. There is nothing in this Budget about jobs and skills. 
There is absolutely nothing in the Budget to address the wages problem. We have a wages problem not a tax problem. Fiddling with the tax system will not improve our wages. Even the increase in the number of placements in the Job Ops scheme in the Budget was just a drop in the bucket. We are talking about 60000 young people who are out of work and we will have a few thousand job opportunities which have a little barb attached to them as well. Until now a job could not be accepted under the scheme if the employment agreement attached to the job contained a 90-day employment trial provision. Paula Bennett and Kate Wilkinson came to this House and said that the Government would not have the 90-day trial provision in the Job Ops scheme because those jobs were on fixed-term contracts and that would not be fair. But now those Ministers have changed their minds. In a move that is completely unfair to young job seekers the Government will open up the 90-day trial period to jobs under the Job Ops scheme. That is unbelievable. 
Let us tell the truth about the Job Ops scheme. It is a scheme through which people get 6 months’ temporary employment. I do not know how many of those people get permanent jobs—I suspect it is very few—and now under the Government’s change to Job Ops those workers will be at risk of having even less than 90 days’ employment. This is a taxpayer-subsidised scheme. Taxpayers subsidise employers through it so there should be a high level of scrutiny over the way that workers are treated particularly young workers who are in their first employment opportunity. 
I am very disappointed with the move to open up the 90-day trial period to jobs in the Job Ops scheme. I want to know why the Minister has changed her mind and I will certainly be asking about that. I suspect that the Government is readying itself to open up the 90-day trial period to all workers. I think we will see that happen. But this move does not make sense. It is completely unfair. The jobs are for 6 months only. The change is highly suspect and I am deeply worried about vulnerable young workers. They will be going into this scheme without knowing their rights and they will be getting dumped in less than 90 days while the taxpayer is subsidising the employer. 
Hard-working Kiwis will be worse off under this Budget. I say that is a shame. 
Hon GEORGINA TE HEUHEU (Minister for Courts) 
: 
 The true measure of Bill English and John Key’s Budget 2010 will be realised slightly further down the track although some of it is coming to fruition now. It will be realised when we register 3 percent growth over the next 4 years when the 175000 jobs that Treasury is forecasting start to come on stream and when the public continues to feel the absolute benefits of better more efficient public services rather than having to look at the bloated public service that was the legacy of the party opposite when it was in Government. 
It will be realised when our best and brightest decide to stay at home and contribute to our growing economy and when those who are now overseas look back at New Zealand—and I am sure some of them are already making plans to move back now—and decide to bring their skills back home. A whole lot of other things will flow from last week’s Budget in the next year and in the years after. Why would that not be the case? Because this Budget was a Budget for the long term. National managed the country through the recession and we have come out the other side in a pretty good state and we are predicting obviously better things in the years to follow. 
Talking about the party opposite I think the most immediate measure of the success of Bill English’s Budget was demonstrated by the deafening silence on the Opposition benches on Tuesday at the start of this sitting week when question time opened. It must be absolutely unheard of at question time when most of the focus is on this House for members on the other side of the House to be absolutely silent. There were no questions about the Budget. Members opposite were wasting time on other things. There was a deafening silence with no questions and no comment about the Budget. Their heads were down. 
Even when members on our side of the House were asking questions about the Budget we got an absolutely free run. Nobody from the other side interrupted our questioners on the Budget. Nobody on the other side of the House had the guts or the wherewithal to challenge the questions that were put to our finance Minister and our Prime Minister by members on this side of the House. That must be an absolute record. There was not a peep out of them and not a bang but an absolute whimper. It was pathetic—and as I said earlier why would that not be the case? The members opposite had nothing to say. Did we wrap up quite early last Friday afternoon on the Budget debate? I think we did and that is also unheard of. They ran out of steam. They did not know what to say. The support from outside— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. There appears to be a little bit of confusion about the topic. I have been listening for some time and I think the member has just clarified it. I think she thought the Budget debate concluded last Friday. She is actually speaking in it and maybe if that could be drawn to her attention we might have something relevant. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I listened to the words quite clearly and the member has completely misunderstood the speech. The Hon Georgina te Heuheu was referring to the debate on the tax legislation. That is how I understood it. 
Hon Trevor Mallard 
: She said “Budget debate”. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I am on my feet. This is not a matter for an exchange at this point between the member and me. The member is perfectly entitled to speak in this debate in the manner she wishes to. It is a debate. 
Hon GEORGINA TE HEUHEU 
: Yes of course we are still in the debate but last Friday was the ideal opportunity for the Opposition to really if it had any real challenge— 
Hon Trevor Mallard 
: It was a tax bill. 
Hon GEORGINA TE HEUHEU 
: What is the difference? In the end it is all part of the Budget. 
I thank the Hon Trevor Mallard for mentioning the tax bill. The tax bill a key component of last week’s Budget is the most comprehensive tax package in 25 years. National delivered that and we delivered it on the back of a recession. Members on that side of the House were in Government for 10 years and they gave a measly tax break in their last year. Now they cannot stand to hear about where they fell short in the 10 years they were in Government. 
Another measure of the success of Bill English’s Budget is some of the feedback that has come back to us. There are comments on John Key’s Facebook page: “The Budget is a good move. It will help undo some of the damage Helen Clark did to our economy while she was in charge.” and “I like the shift away from income taxes towards flat consumption taxes. This is a great start and a brave one—well done Prime Minister. This is what New Zealand put you in office to do.” There is feedback on Bill English’s Facebook page: “Keep up the good work Bill. The budget that you have produced will move New Zealand forward and was long overdue. Appreciate all the hard work you do.” and “Wish I had the chance to shake your hand and thank you in person for your fantastic navigation through the tough times. But take this cyber thank you in lieu.” 
We are truly heartened by and grateful for the support New Zealanders gave us as we managed our country through the recession. It was not easy and it was harder for some sections of the community than others. But we truly appreciate the support we have had. We appreciate the support now. We think we signalled fairly to the New Zealand public and we laid some groundwork for the Budget. The sign that people appreciate that is now coming back to us in the form of support for the Budget. I am very proud to be part of a team led by John Key and Bill English who have looked to the long term who have put economic growth at the heart of our Budget and who are genuinely truly committed to getting New Zealand performing in a way that New Zealanders deserve and in a way that guarantees New Zealanders long-term prosperity. 
I want to turn to two or three areas that are directly my responsibility. I will say a little about our priorities for Maori and what the Budget has delivered for Maori. There is $4.5 million to grow Maori productivity and stimulate export growth and to support Maori innovation. There is $3 million over 3 years to invest in skills training and money to support Maori innovation in science. There is money to support Maori tourism and of course there is money for Whanau Ora. 
Those initiatives are about a Government saying that it supports and recognises the growing role that Maori are playing and will continue to play in the New Zealand economy. We need Maori to play that role. We need Maori to be investing to be developing their skills and to be making that contribution to the economy. Maori are stepping up to do that and with this kind of backing they will gear up even more to do so. 
I mentioned Whanau Ora. Again we are a Government that is willing to try something new. During the previous 10 years more than 50 percent of Maori boys achieved less than level 1 of the National Certificate of Educational Achievement and that says something about the slackness and lack of activity in the previous 10 years. That is not good enough from the point of view of a Government that wants to achieve real growth for New Zealanders. Whanau Ora is something new something different. It is a challenge and it is bold but that is what it is all about. It is about backing New Zealanders to back themselves. That is what Whanau Ora essentially is—helping families to strengthen their own position; their own growth and movement forward. 
I come to Pacific people where the same things apply. In 25 years one in every two babies will be brown—Maori or Pacific—and that has a huge impact on our plans to grow the economy. We want Pacific people to be skilled and educated. We want better outcomes for Pacific children in primary schools and better participation by young Pacific children in early childhood education—and there is more money in Vote Education to ensure that that is a priority—and better literacy and numeracy skills. 
The money allocated for those things will have a direct impact on the ability of Pacific children to do well at school and eventually find long-term permanent employment. The Government’s priorities for Pacific people are to lift incomes and standards of living and to make progress in Auckland and we have allocated new money to promote Pacific culture and language because Pacific culture and language underpins economic growth and enhances Pacific peoples’ position in our community. 
Hon LUAMANUVAO WINNIE LABAN (Labour—Mana) 
: 
 Kia ora talofa lava and warm Pacific greetings. I welcome the opportunity to contribute to this Budget debate and to offer some substance to the previous speaker the Minister of Pacific Island Affairs—to offer some facts versus her fiction. 
This Budget sets out clearly the Government’s economic direction for the next year and it clearly demonstrates whom and what this Government values. I had hoped to see a Budget that was fair to all New Zealanders; a Budget for the many and not for the few. But we have an unfair Budget a Budget for the “me” not the “we” and a Budget that is not fair for Pacific Island New Zealanders. It is a Budget that is not fair for elderly New Zealanders and a Budget that is unfair for most of the people in my Mana electorate. 
This Budget will hit Pacific Island people hard after what has already been a very difficult 18 months for Pacific families. The lion’s share of the tax cuts go to the wealthy at the top; for the rest the much more modest cuts will very quickly be swallowed up by the increase in GST and the highest inflation rate in decades. This is not good news for Pacific people whose average wage is $24000. The majority will feel themselves going backwards. By the Government’s own figures a family with two young children on an average income will be $55 worse off once GST inflation and cuts to early childhood education subsidies are factored in. On top of this the Budget has left a $1.2 billion hole in health funding over 4 years. This will mean reduced services for those in need and that will also hit our Pacific community hard. 
As well as this Budget’s general bad news for our Pacific communities what was truly offensive in Bill English’s Budget speech was his boast that New Zealand’s unemployment rate at about 6 percent was good news. I ask who it is good news for; it is not good news for Pacific Island New Zealanders. The unemployment rate for Pacific Islanders is more than double Bill’s “good news” rate of 6 percent. In the last 18 months under National the Pacific Island unemployment rate has shot up to 14.4 percent. This has undone all Labour’s good work during the last 9 years. Labour reduced the unemployment rate for Pacific people from 15 percent in 1999 when we took office to 6.3 percent in 2008. But in 18 months National has undone a decade of progress. If John Key really wanted to help Pacific Islanders in New Zealand to advance he would have focused on growing jobs for those who are out of work and on growing their incomes instead of robbing them through GST to help fund tax cuts for his rich mates. 
The only extra funding for the Pacific community in this Budget is now under question. It has been given to a private company that nobody in the Pacific community knows about nor whether the company has a track record of job upskilling job placement or creating jobs. Is this money for John Key’s rich Pacific mates? This Budget is unfair for Pacific Island New Zealanders. 
I turn to the people of Mana. By the time inflation GST increases and the increased costs for childcare are passed on most families in Mana will be worse off under National’s tax swindle. This Budget means that low and middle income earners in Porirua City and on the Kapiti coast will be significantly out of pocket at the end of the day. The many families in Mana with two young kids who will end up $55 per week worse off after GST inflation and early childhood charges are all taken into account. If they are renting the problem only gets worse. Property tax changes will result in higher rents. Infometrics predicts that rental inflation will be at 5 percent by March next year and will increase beyond that. How can these families possibly afford this? The reality is that people on very high incomes are much better off following Thursday’s Budget and people on average incomes are worse off. 
This year accident compensation premiums have gone up health services have been cut and now GST is being increased as are childcare costs. It is simply not fair that the majority of New Zealanders are paying for the tax cuts of a few people on very high incomes. To add salt to the wound in Mana it seems there is a drop of more than 80 percent in State housing acquisition and maintenance. Over $20 million will be lost with the demise of the Healthy Housing programme and the acquisition of new State housing units has fallen dramatically. Mana is an area that relies heavily on State housing. Of the 10000 people on the waiting list nationwide nearly 500 are in Porirua; that is one in twenty. To know that new units and further improvements to make houses warm and healthy will not go ahead will cause great concern and stress. With rents set to rise we should be supporting families into affordable accommodation rather than shutting them out. 
People who are already struggling will continue to struggle following the Budget. Labour strongly opposes the increase in GST the cuts to health services the cuts to State housing acquisitions and the increase in childcare costs for parents. In Kapiti people are losing their employment with local businesses. Last week over 50 jobs were lost when a call centre in Paraparaumu signalled it was relocating to the Philippines. In Porirua unemployment statistics have gone up by 500. 
Families in Porirua City and on the Kapiti coast realise that although National has offered them tax cuts price increases mean they will be no better off. The real winners in John Key’s Budget are the very highest earners because most New Zealanders’ tax cuts will be wiped out by inflation before they even get to the checkout. This is based on the Government’s own numbers. Inflation of nearly 6 percent will destroy most of the tax cuts and Kiwis will not be compensated for the GST rise. To fund these tax cuts National has massively increased borrowing. The Government will have to borrow an extra $1 billion over the next 3 years. This Budget is unfair for most of the people of my Mana electorate. 
I want to quickly talk about the elderly. In the last 2 weeks the first five of 19 Grey Power meetings were hosted around New Zealand. There is increasing concern about what is happening. Since we announced the investigation into aged care last month we have been inundated with calls of support from people of all ages from around the country. The sheer number of people attending the first five meetings further reinforces the pain and what is going on. The biggest concern coming through is the Government’s cutting of health funding to which several district health boards have responded by cutting home help for the elderly. We are hearing some horror stories. I am very worried about the standard of care some of our most vulnerable elderly are receiving in aged-care facilities and the way the Government is targeting the elderly and reducing access to vital support. Just this week we saw that MidCentral District Health Board is looking at cutting its overnight district nursing service. This will hit our elderly the hardest. People who have blocked catheters or oxygen supply break downs and patients lying in pain are among those who could suffer. The board is considering laying off 5.5 jobs. The most significant change will be dropping the 11 p.m. to 8 a.m. night shift. This feature is unique to New Zealand and it is important that the elderly even if they are unwell are supported as much as possible to stay in their own homes. This is too big an issue to ignore. Clearly there are deep-seated problems in this sector and we want greater scrutiny and accountability. 
The Budget is unfair for elderly New Zealanders. It is unfair for Pacific Island New Zealanders and for most of the people in my electorate of Mana. I had hoped to see a Budget that was fair to all New Zealanders that would lead us to a brighter future and that was for the many not the few but I was very disappointed with what Bill English and John Key dished up on Budget day. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Before I call the next speaker I want to apologise to the Hon Georgina te Heuheu. I think I omitted to ring the bell at 8 minutes. I want to assure the member that she got a full 10 minutes. I must have been distracted by her interesting fact about one in two births being Maori or Pacific Island. I was thinking about what New Zealand would look like after that. I was away in my own thoughts which were provoked by the member. 
Hon Dr JONATHAN COLEMAN (Minister of Immigration) 
: 
 Listening to the contribution of the previous speaker Winnie Laban—and she is a very fine well-meaning member—emphasised for me the real gulf between Labour and the National-led Government on issues relating to the economy and the future direction of New Zealand. I do not know what sort of unpatriotic groupthink is pervading the Labour Party research unit but just because Labour keeps on telling New Zealanders that the Budget is unfair—and it keeps on repeating that over and over—does not make it so. 
In this Budget we saw the Prime Minister and the Minister of Finance lay out a very clear vision and direction for New Zealand. It is about growing the economy addressing wasteful public expenditure and growing opportunities for the Pacific Island people of the Mana electorate. It is about growing employment and growing jobs. We have seen a clearly articulated pattern and a clear plan. We know how that plan will bring down levels of debt. It will grow and stimulate the economy over time because more New Zealanders will have more money in their pockets to put back into the economy to grow it. 
Quite frankly this Budget has gone down excellently out in the electorate. No matter how often Labour members say it is unfair or how much they bully elderly people into thinking they will be worse off— 
Grant Robertson 
: That’s ridiculous. 
Hon Dr JONATHAN COLEMAN 
: —it does not make it so; we can see the raw nerve that that comment has struck. 
Iain Lees-Galloway 
: You degrade yourself when you do that. 
Hon Dr JONATHAN COLEMAN 
: See? It has happened. As soon as we push the button we get that reaction. 
If we look at it we see that the vast majority of New Zealanders will be better off. To say that people on average incomes will not benefit is frankly not the case at all as 73 percent of New Zealanders will be paying no more than 17.5 percent as their marginal tax rate. Two-thirds of the cost of tax cuts will go to people earning $48000 or less. When we listen to the arguments of members opposite we see they were pretty well summed up in Vernon Small’s column on Monday I think when he said there is no logic to the Labour Party’s argument. Its argument is all predicated on next year’s 5.9 percent rise in inflation which drops off soon after. Labour is trying to tell New Zealand that the benefits of those tax cuts will be eroded but they will not be. Labour is using false premises to try to scare the people of New Zealand into turning away from this plan. 
The real problem is that absolutely no plan is coming from that side of the House. The member for Mana said that Phil Goff opposed the rise in GST but I do not know if that is the case because— 
Sue Moroney 
: It is. 
Hon Dr JONATHAN COLEMAN 
: That member says that Phil Goff opposes it but will she support the repeal of the increase of GST? Quite honestly if we gave that member a truth serum drug she would tell us that she does not know. That is the essential problem that Labour has. The Labour Party has no plan for how it will progress the economy. 
Those members are burnt out. They had 9 years. They were completely out of ideas. Quite frankly I think that the dirty secret of the Labour members is that they actually quite like it over there in Opposition because they are out of ideas. They do not know how they will go forward. There are major questions over their leadership. Phil Goff has a real problem. He is out there trying to connect with the electorate. He is going around in the “Axe the Tax” bus trying to connect with ordinary working people. Well he has bigger problems than that because much much closer to home even within the beltway he has issues of recognition. The Leader of the Opposition was in Copperfields cafe yesterday. He took his sandwich up to the counter and asked the young man there who presumably is one of his core constituents to put it on his account. The young man asked which account that would be and Phil Goff said: “Goff—G-o-f-f.” The whole point is that if Phil Goff cannot increase his influence his levels of recognition in the hundred yards from here to Copperfields then I ask how on earth he will make any impact in Northcote or in Hawke’s Bay. How on earth will he connect with the people of Mana who Winnie Laban tells us are so unhappy? 
I do not know whether they are really so unhappy with the Budget; I think they think that John Key is doing a fantastic job as Prime Minister. The vast majority of working people in New Zealand are so grateful that Helen Clark has taken off to the United Nations and they do not have to see her on the television each night lecturing them on how to live their lives. 
One of the other great fallacies that Labour members have come up with is about health care. It is very interesting. Winnie Laban the member for Mana was saying that there had been cuts to home help. Well what happened when Pete Hodgson was the Minister of Health? He wrote to the people of Wanganui and said that he would not cut their home-care funding; he would be reprioritising it. When a National Government increases funding to health and makes some reprioritisations within that funding according to those guys in Labour it is a cut. When Labour members want to do exactly the same thing it is some sort of reprioritisation! The actual fact is that more money is now being spent in health than ever before—$512 million over 4 years. There is more elective— 
Iain Lees-Galloway 
: Why is my electorate looking at five front-line services—five front-line services are going? 
Hon Dr JONATHAN COLEMAN 
: Well with regard to that member’s electorate—the electorate of Palmerston North—I tell him that if is lucky he may be on the list for Labour next time because there is a real chance that he will not be back as the member for Palmerston North. 
Iain Lees-Galloway 
: Not if National keeps cutting our health services. 
Hon Dr JONATHAN COLEMAN 
: There have not been cuts in Palmerston North—there have not. You see this is another thing. Labour members have this mantra. They think that if they bully and scare elderly people by saying that their home help and their health services are to be cut it will miraculously come true. Well I can tell those members that we were left with one massive problem in health by the previous Labour Government on its way out. There were massive deficits across the district health boards. We have had to come in look at it sensibly put the focus on moving the services to the front line and get more for the money that is being spent. Last year we had a record increase in elective surgery. Of course when Labour was in charge of it it was culling decent hard-working New Zealanders from surgery lists. People can see that we have had to do a heck of a lot of work. 
Getting back to this GST argument which is that we do not know whether members opposite would reverse the GST increase— 
Grant Robertson 
: Oh you wouldn’t want to debate policy Jonathan! 
Hon Dr JONATHAN COLEMAN 
: I tell the member that this is policy. Grant Robertson will not be able get up and say that Labour will reverse the GST increase. I think that he will be standing up to speak soon and I challenge him to tell people what Labour will do should it ever get back into Government. He is the young up-and-coming high-flyer. I think that he could well be negotiating in the back room— 
Hon Georgina te Heuheu 
: Who was that? 
Hon Dr JONATHAN COLEMAN 
: Grant Robertson. He is the pin-up boy of the left. I could see him with maybe Jacinda Ardern plotting a bit of a move. I do not know how electable they would truly be but I think we need to know what those members think. 
People know what the New Zealand Government thinks and what our plan is for the economy. John Key is quite clear about where he wants to take this country but that group over there does not have any concept at all about what it would do. I can tell members that the raise in tax on consumption is very very popular. The reason the raise in GST is popular is that everyone pays it and everyone is being compensated for that rise in GST. 
Moana Mackey 
: Go and talk to someone on less than the average wage. 
Hon Dr JONATHAN COLEMAN 
: Actually they are no worse off. People on less than the average wage are no worse off. 
Moana Mackey 
: Yes they are. 
Hon Dr JONATHAN COLEMAN 
: No they are not actually. More important they are not voting for Labour. We cannot have this bunch of ex - civil servants and political career lackeys doing voodoo hotpot economics to try to make this look wrong because frankly it works very very well. 
Moana Mackey 
: Don’t say that about Treasury. 
Hon Dr JONATHAN COLEMAN 
: No Treasury was fully supportive. But I think that the members opposite need to metaphorically take the truth serum stop the personal attacks get up and tell us what their plans for the New Zealand economy are. The truth is that Labour does not have a plan for the New Zealand economy. Its plan is to borrow more and more money. 
Bill English has done a great job of bringing down debt as a proportion of GDP. We are looking at being in surplus in 3 or 4 years. The forecasts are improving all the time. We will have a ratio of about 26 percent debt to GDP. If we take the advice of Labour members we will be there with the UK with a ratio of 80 percent debt to GDP. I tell those members that if they really let Grant Robertson run loose as the Minister of Finance then we may even be in the Greek situation—a ratio of 125 percent debt to GDP. We need to make the New Zealand public aware of what could happen if the public ever let Labour members back on to the Treasury benches. That would be very very bad for New Zealand. Thank you. 
COLIN KING (National—Kaikoura) 
: 
 It is a pleasure to follow my colleague Dr Jonathan Coleman the Minister of Immigration and an Associate Minister of Health. When Bill English finished reading the 2010 Budget speech which had the theme of building the recovery the Leader of the Opposition got to his feet and moved an amendment to the motion. I make it very clear to the House that members on this side of the House do not support that amendment to the motion. The Leader of the Opposition made the statement that he believed that the Government had failed to implement a plan for jobs and that it lacked any vision for developing a smart highly skilled high-technology and high-wage economy. That is as far from the truth as we could possibly get. To the contrary of what he said this Government is all about creating the necessary environment to effect the step change that this nation needs. We need to have a first-class economy that will provide the citizens of New Zealand with jobs and careers that are highly skilled high-tech and high-waged because that is what the hard-working citizens of New Zealand deserve. 
When we look at the Leader of the Opposition’s speech we see that it failed to resonate with New Zealand in much the way that the tired previous Labour Government failed to resonate with the citizens of New Zealand leading up to the last general election. That Government lacked the inspiration that New Zealanders require. At a quick glance we see that the speech made by the Leader of the Opposition failed in one very important area. It is an area that I will take the House through because I believe that it is a centrepiece of the 2010 Budget along with the tax provisions. The Leader of the Opposition failed to refer to the contribution that science will be able to make. When we look at the speech of the Leader of the Opposition we see that it made accusations that were unable to be substantiated. Effectively the speech was very much like Labour was before it went into Opposition: it lacked fresh thinking and there was no evidence of that coming. 
I will take the House through Budget 2010 and show how it contributes enormously to taking New Zealand forward in the field of research science and technology. 
Simon Bridges 
: What will it mean to the average sheep shearer Colin? 
COLIN KING 
: It will mean enormous stuff because it will put the sheep industry back on the map. It will put the sheep industry back on the map. But before we go into that I say that if we look at the Budget we see that it contributed $321 million of new and reprioritised funding over 4 years. That will contribute enormously to an improvement in research. It covers all industry including agriculture and it is designed to lift the spending on science and on research and development to some $750 million a year. It covers all of those industries. Added to that is the increased spending included for the operating initiatives in research science and technology amounting to $40 million in the current year moving up to $64 million in the year 2011-12 and to $80 million in 2012-13 and going out to a whopping $82 million in 2013-14. 
We know that we got it right on this side of the House when we get a thumbs up from people who give third-party endorsement and people who have integrity. I am referring to Sam Robinson the chair of AgResearch who was formerly also the chair of the Richmond meat company. He is somebody who stands out in the agricultural sector for his integrity his contributions and his leadership. “A combination of the Budget-day encouragement for private investment and a new focus by Crown research institutes has been greeted as a great advance for science development and a wealthier New Zealand” That is a quote from a report of his press release. It goes on to state “Robinson said that as a farmer and citizen he agreed strongly with English’s conclusions. ‘As a director of AgResearch I say that the reform we’re seeing is about making New Zealand more competitive and productive and science is a big part of that.’ ” What a wonderful endorsement of the Budget from someone as eminent as him. Government funding for science and research in New Zealand has closed the gap between New Zealand and the average for OECD countries but business funding was well below the OECD average. “This Budget is about fixing that and it’s pretty good I’m heartened by it.” Those were the comments of Sam Robinson. 
Sam Robinson said that he especially liked the setting up of the Rutherford Discovery Fellowships with $25 million to be allocated over 4 years to encourage science excellence and train and retain world-class scientists in New Zealand. “I think that’s really smart because business doesn’t run without world class science.” he said. I would like to highlight to those members over there that in that particular quote Sam Robinson was talking about where this Budget is being directed by allowing those scientists to keep more of the smart money that they earn. As the  
Sunday Star-Times 
 said effectively we need the rich more than they need us. I think to myself that that quote highlights why we do: we want to retain that intellectual property and those smarts. 
The Budget confirmed $45 million worth of contributions over 4 years for the Global Research Alliance on Agricultural Greenhouse Gases. It is an initiative in which about 30 countries are involved and it is aimed at reducing methane emissions from farmed animals. I like this quote from Sam Robinson: “One of the great unknowns is how the rumens work and they are the engine room of the NZ economy. Some of our best scientists are trying to understand it and you need to understand it before you can get solutions.” 
The Budget also provided additional capital funding of $6.7 million and operational funding of $14.3 million over 4 years to develop and improve joint border management systems and to replace ageing border clearance systems run by the Ministry of Agriculture and Forestry and the Customs Service. On top of that another $200 million is to be rolled out for ultra-fast broadband on top of the $200 million that was rolled out last year under Budget 2009. 
It is also wonderful to see that the Primary Growth Partnership has commissioned a number of projects. Three primary sector organisations will receive $20 million over the next 5 to 7 years and that relationship between the Government and industry partners was announced in Budget 2009 with the industry funding and the value of the partnership expected to exceed $45 million. It is a wonderful endorsement that we see this Government so focused on making sure that there is a step change in this country’s economy. 
I finish off with another contribution by Merino New Zealand. Merino New Zealand and the Government Primary Growth Partnership have announced a $36 million 5-year initiative designed to amplify the momentum and economic returns already evidenced in New Zealand’s fine wool sector. What does the chair John Nichol acknowledge? He acknowledges the role of the Government. The process has been robust and at times demanding but it has forced us to further raise the bar in our thinking regarding sector innovation integration and the particular value capture to farmers and the broader economy of New Zealand. 
But the comment that I really do like which really reinforces that Budget 2010 is squarely focused on making a step change and creating an innovative society was the comment by John Brakenridge the chief executive of Merino New Zealand. He referred to the new Primary Growth Partnership as the start of the great New Zealand sheep revolution one that will once again have sheep as the mainstay of our economy but in a lot more market-driven manner than the situation described by the former clichés. 
The New Zealand sheep industry will also be very proud and positive about this Budget as are the rest of New Zealanders and we have put science at the very centre of the Budget. I do not have the time to keep on elaborating about it but it is an absolute pleasure to speak on this Budget. It is a stunner. 
MOANA MACKEY (Labour) 
: 
 It is a little bit difficult to sit here and be lectured on science and research and development funding by National members because National when it first came into Government cut the programmes that the previous Labour Government had put in place and sent us with one swift sign of the pen down to the bottom of the OECD when it came to investment and research and development. In one move New Zealand went straight to the bottom of the OECD. I note that with National’s much-lauded new grants for business Fisher and Paykel Healthcare has said that it will be getting a couple of million dollars out of those grants but that is only half as much as it would have got out of Labour’s research and development tax credits. 
The other important thing about Labour’s research and development tax credits was the fact that small businesses were eligible—small businesses. Under National’s programme small businesses miss out. In fact small businesses get only a paltry few crumbs from that research and development package despite the fact that they are some of our most innovative companies and despite the fact that they are the very ones who cannot afford to invest in research and development so need that extra assistance. But the National Government has said no; it has said that it will cut small businesses out of those grants entirely and they will not be eligible for any of those research and development benefits. 
National members have also gone on about their Primary Growth Partnership which is a ghost of a policy because no money has ever been allocated out of it. There was $700 million sitting in a bank account for Labour’s Fast Forward Fund to fund agricultural and horticultural science. It was sitting there ready to go but National transferred it back into the consolidated account and said sorry to the science community. National was going to put it in a place that so far—as far as we are aware—does not even exist. So I say to National members that they may want to be very careful. 
National has renamed a few of Labour’s policies as its own and “reprioritisation” is the new catchword after National was caught out calling a “cut” a “change”. It now calls a cut a “reprioritisation”. National has brought back some of the policies it cut out of last year’s Budget and it is now trying to claim them as great new brilliant ideas. But—and there is a theme of broken promises in this Budget; this is a Budget of broken promises—where is the money it promised to Crown research institutes? It promised them $350 million so where is it this year? Oh the National members have all gone quiet now. But that is another broken promise in this year’s Budget. 
I come to Jonathan Coleman and I say to that member that the only way Iain Lees-Galloway would lose his seat in Palmerston North would be if Jonathan Coleman became his campaign manager. That is the only way he would lose that seat. Jonathan Coleman spent 8 minutes personally attacking every single member on this side of the House but when one person interjected on something to do with policy he told us not to get personal. The Hon Jonathan Coleman said that Labour was bullying elderly people because we had been sticking up for them while the National Government had been cutting their home help. He said we were bullying them. 
Hon Dr Jonathan Coleman 
: Yep—bullying and scaring. 
MOANA MACKEY 
: Oh bullying and scaring them! So we have been bullying those people down in Southland who have had their home care cut by raising that in the House and holding the Minister of Health to account? It says a lot for the National Government that advocacy equals bullying in its view. I say to Jonathan Coleman that we will not stop raising issues about cuts in front-line services—another broken Budget promise. 
Melissa Lee 
: Twist the truth! 
MOANA MACKEY 
: Well I challenge that member to go down to Southland and tell those elderly people who have had their home care cut that they are twisting the truth. 
Melissa Lee 
: Scaring the public! 
MOANA MACKEY 
: I say to Miss Lee that we do not need to scare the public. We do not need to scare the public because they know that the cuts are there. They are feeling them when they get a phone call from a district health board which they do not realise is an assessment and then get told that their home help will be cut. Thirty dollars a week is not a lot to members on the opposite side of the House—it is not a lot to them—but it is to those elderly people when they get that home help for only 1½ or maybe 2 hours a week. Labour will defend those public services that the National Government seems so intent on cutting. 
I will talk about housing in this Budget. Members might ask why I would talk about housing in this Budget because there is no housing in this Budget and that is true. After this year’s Budget there will be even less housing in New Zealand particularly Housing New Zealand Corporation housing. I want to take members back to the time after the election and to the glorious spectacle that was the Minister of Housing Phil Heatley. He was quite a flamboyant Minister. He would get up he would wave his arm around and he would dance. His colleagues would all cheer and clap as he went on about how much more State housing National would build how much it cared about State house tenants how National members cared more about State house tenants than did Labour members how he was the man for State house tenants and how he was going to fix everything. Well Phil Heatley sat there like a broken man during the Budget statement slinking further and further down into his seat because he knew that this Budget was bad for housing. More than 80 percent of the housing budget from last year has been cut from this year’s Budget. 
Worse than that the Minister went on radio this week and said that if the Housing New Zealand Corporation wants to build more State houses—and I remind members that nearly 11000 families are waiting on Housing New Zealand Corporation waiting lists around the country—it will have to fund that out of existing baseline funding. It will have to make savings elsewhere within its organisation. So basically the word to Housing New Zealand Corporation staff is “Bring a pen from home because the stationery budget is cut and we need to build a few more houses.” What makes it so offensive is that this Minister sat idly by while the Housing New Zealand Corporation paid consultants $600 an hour to develop a business case—just a business case—that cost $11 million. 
What was that business case for? It was for a computer upgrade when a consultancy report that the Housing New Zealand Corporation itself had commissioned had told the corporation that it did not need an upgrade. The corporation’s own report told it that the existing system was fit for purpose. The system was developed so that it could be continually upgraded as things changed; upgrades can be made to the existing Rentel system. The Finance One system was upgraded a couple of years ago so I do not know why the corporation is doing that again. The fact is that the Housing New Zealand Corporation is about to spend $50 million and that is if we believe that that is all it will cost because it first said that the business case would cost $6 million. Then we discovered it would cost $11 million and now some inside information has told us that it will actually cost more than $20 million. 
How does that sit alongside a Budget that has cut money for housing when that Minister of Housing has refused to do anything about that? He has refused to step in to say that the upgrade is a waste of public money; he has refused even to ask any questions about it. Do members know what he has said? He has said that it is a matter for the Housing New Zealand Corporation board. Why do we even have a Minister of Housing if the Housing New Zealand Corporation board is able to throw away money like that—money that should be spent on our most vulnerable families? That money should be spent on building on upgrading and on maintaining State houses. 
Labour did a good job in its 9 years in Government. We had a deficit of 14000 State houses that the previous National Government had sold. We had to build more houses during one of the biggest housing booms we have ever had in this country. It was not easy but we stuck to our promise and we did what we could in that respect. But now we see that there are huge cuts in housing. 
We asked the Minister whether he had had any advice on the impact of the increases in GST inflation and rents coming out of this Budget on the demand for State housing and whether he had even bothered to ask whether the demand for State housing would get worse. No he had not even bothered to ask that. He is not concerned about what that means to the most vulnerable families. 
Infometrics has said that rents will go up by up to 8 percent the Property Investors Federation predicts that rents will go up by up to 6.5 percent—and that is the landlords’ group. We know that 30 percent of New Zealand households pay rent and of that 30 percent a full 50 percent have combined household incomes of under $50000—that is household incomes of under $50000. But these are the people who are getting nothing out of this year’s Budget. What paltry gains they will make in tax cuts they will lose in GST increases in inflation increases and in rent increases—doubly over. Those are the people who will be the most impacted upon. 
I will talk briefly about affordable housing. We have been promised the National Government’s grand Gateway Housing scheme for two Budgets now—two Budgets. Where is it? There is nothing again for affordable housing. There is nothing to address the housing pressures particularly in Auckland. In Manurewa the electorate my colleague George Hawkins comes from one house is being built for every 14 households that are moving to that area. There was nothing in the Budget for them. In fact throwing more GST on to the costs of building a house will not help to alleviate housing pressures in Auckland. This Minister of Housing has no plan for affordable housing. He has no plan for dealing with homelessness around the country and in Auckland. There is absolutely nothing about that. 
We can see that more families will move into that very sad situation as a result of this Budget but the Minister has had nothing to say about that. His press release basically just lauded the fact that he did not lose the Housing Innovation Fund—that he did not lose that particular fund. Then he went on to talk about three policies two of which were Labour Party policies that he adopted when he became a Minister—and we say congratulations; we are happy that he did that—and one that was about letting State house tenants buy their own homes. But in 1 year only 17 people have been able to do that which is why we have said that it is a cruel hoax. Fewer people will be able to do that now with the increases in GST in inflation and in rent; this Budget is incredibly bad for housing. 
DAVID CLENDON (Green) 
: 
 Kia ora koutou. The Budget is very much a document about money. It is a very practical document. But it is also a way in which a Government can express its vision. It can share its vision for this country by the way in which it assigns funding. Each Budget has its own unique character; something that defines and differentiates it from other years. This year’s Budget clearly will enter the record as the inequality Budget—a singular statement that it is OK to transfer wealth from the least well off to the most well off. That is a very unfortunate vision for the Government to have. It is not the vision that we have heard being spoken of but we must go by what people do rather than by what they say. 
We are told that this Budget is about improving growth and improving the country’s economic performance but it is very hard to see anywhere in this Budget any net benefit for the small and medium sized enterprises that are the heart and soul of this country’s economy. They always have been and we can expect that they always will be. The big headline treat on offer—the lollies as it were—for business is the cut in the tax rate for companies and for high-income earners. But as any hard-working small-business owner knows in order to pay tax a business must first make a profit. That has been very difficult for many of our smaller businesses to do over the last year or two. There is not a great deal in this Budget that will help them to achieve that profit and start to pay any tax at all. 
The figures tell us that the tax cut will leave on average about $365 million a year in the pocket of businesses. On the face of it that is a good thing. But we have heard less about the fact that the rise in other costs will quickly erode the value of that tax cut. In fact that erosion has already begun. The rise in the accident compensation work levy will come out at about $150 million a year; something like 40 percent of the tax cut will be gone before businesses even see it. That 40 percent increase in the accident compensation levy was based on the back of an entirely bogus so-called accident compensation scheme crisis which was manufactured by the Minister for ACC over the last year. The increase in GST will hurt business and we know this. There will be a one-off cost to all retailers and particularly to our smaller retailers. There will be the one-off cost of changing computer systems and relabelling but also ongoing consumer resistance as retailers will need to renegotiate. Reassessing pricing points for various products means that either businesses will lose because they will be unable to absorb the cost or consumers will lose because retailers will feel obliged to put up their ticket prices. A recent survey of over 400 retailers revealed that more than 80 percent of them expect the rise in GST to be bad for business. 
We know that small and medium sized enterprises had no opportunity to comment on or to inform the Minister of Finance or the Government of the potential effects of GST because we asked the Minister that question. He confessed that prior to making decisions about GST there was no consultation with small business there was no acknowledgment and no opportunity for them to say their piece or to influence that decision. 
This is very much a business as usual Budget. It tweaks here and there it changes things around the margin but it completely misses the point that business as usual is not an option given the changes in the national and international context in which our business people must operate and will operate in into the future. The market nationally and internationally is crying out for products that deal with the very new challenges we face such as the challenges of climate change and peak oil. There is also the challenge of the changing preferences and expectations of consumers both here and overseas and in particular in the high-end consumer markets—those who have disposable income and those who have choices about where they spend their consumer dollar. That is the way of the future for New Zealand and there is very little in this Budget that will in any way fulfil the vision of building an economy and a business sector that can meet these new needs. We know that there is a demand for safe food for organic food and for novel fibres. We know this because some of our small-business owners and not-so-small business owners are already endeavouring to meet that demand. 
One of the keys to unlocking the potential in our economy is in research and development to find new products new materials and new processes that are resource-efficient environmentally benign or that enhance the environment and meet the demands of socially responsible consumers. In New Zealand as elsewhere consumers are becoming more socially and environmentally conscious. Research undertaken in New Zealand tells us that over one-third of consumers now look at the environmental and social characteristics of a product before they purchase that product and that number has been growing demonstrably over time. The research that has been carried out over the last decade or so tells us that. 
The so-called Lifestyles of Health and Sustainability—LOHAS; there is even an acronym for these people—is a market place for consumers in North America Japan and Germany and indeed here in New Zealand. This is the growing market for New Zealand - manufactured and designed products. Nothing in this Budget contributes or supports the businesses and the innovation that might help to meet this growing demand.  
Small to medium sized enterprises in New Zealand the small and creative businesses that have historically been the producers of ideas and innovation will look in vain for any real assistance in this Budget. A significant chunk of the increased funding for research in there the so-called new funding of $321 million was in fact stolen from environmental research—reprioritisation I believe is the phrase that has been used. We are already under-investing in environmental research. We were embarrassed when we produced our first state of the environment report in 1999 that the most common phrase in that report was “We don’t have the information. We don’t know.” By the time of the second environmental report in 2007 the situation had not improved. This country lives and dies by its green brand its “100% Pure New Zealand” brand; that is what our economy rests on. If we do not do the basic environmental research and monitoring we will lose the integrity of that brand and our markets will diminish accordingly.  
To suggest that new research funding is supporting business endeavours when in fact a large chunk of it is removed from a key area of Government activity is a sham. In any case the research funding that has become available is very much targeted to the large companies—those with a track record in research and those with a large spend already. I do not think those companies ought not to be supported but relatively small amounts of money could be disbursed to small growing businesses. We see the voucher system proposed as being overly bureaucratic and difficult; most businesses will look at it and think the opportunity cost of applying for those small amounts of funding simply will not be worth the candle. The likelihood is that it will be underutilised.  
This is a time when the Government should be investing as it never has been investing before and supporting companies that want to break into new products new markets and innovations. The Government should know this because in a matter of weeks of National being elected to Government the Prime Minister was written a letter by some of New Zealand’s most successful and well-known business people. They were pleading with him to grab the vision of green technology and of new technologies that will deal into the future with the very real problems that are faced locally and internationally. They were people like Phillip Mills who took a successful local business and turned it into a larger and very successful international business; people like Geoff Ross who developed 42 Below from very humble beginnings; people like Jeremy Moon who saw the opportunity in the research around fibres and turned that into a multimillion dollar international business; people like those running Ecostore—a gentleman and his wife started making soap by hand at Mangawhai and they now have their product in every supermarket in the country and are exporting to the US and the UK.  
These success stories were in part built on support from the previous Government through funding streams to support non-governmental organisations and to support environmental development agencies in large ways and small. There was active support from the Government to enable these companies to grow to fill the gap and critically to assure them they were actually supported by this Government. The challenge for this Government now is to demonstrate that it has some vision and to model best practice around Government procurement and around its own actions; not to talk about supporting business and critically small business but to actually put the policy settings there to put the funding there and to provide the practical assistance that will grow our small companies grow our economy and really give us some genuine growth and some genuine prosperity which this country needs—growth that is sustainable growth that meets the needs of current demands. Kia ora koutou. 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 I am very proud and privileged to serve in this John Key - led Government and to stand up to support this Budget. It is a fantastic Budget from a Government that is determined to help New Zealand grow faster. It is a Budget for building a brighter future. It is a Budget that delivers the statistic the Opposition does not like to hear—170000 new jobs over the next 4 years. 
I welcome unexpectedly the contribution of the previous speaker David Clendon about businesses because I think that far too little is spoken about businesses in this House. Last week and the week before I was privileged to attend and speak at two award ceremonies: the New Zealand Hi-Tech Awards and the Wellington Gold Awards. Both ceremonies were full of entrepreneurs innovators and ideas people. Being at both events reminded me of why we do what we do. It reminded me once again of how jobs are created and growth is achieved. 
Governments do not create many jobs. We can help a little in the short term with the initiatives we have such as Job Ops and Community Max but Governments cannot hold up the sky. Ultimately jobs are created by businesses and not just any businesses but businesses where we have a competitive advantage in this country to create ongoing jobs and wealth. New Zealand is a small country at the bottom of the world. Just about everybody who is here has ancestors who came here and survived on their wits and their ingenuity. As a country we traded to get ahead. We are a nation of traders. 
The previous Labour Government forgot that. It thought that New Zealand could grow and grow by increasing the size of the public sector and that the traders would look after themselves. The Government sector the services sector and the household sector all grew and grew while the people who traded went backwards and when the global recession came so came the financial reckoning. As a country we were up the proverbial without a paddle. 
Warren Buffet has a saying about recessions: when the tide goes out we see who is swimming naked. As a country we surely were. Suddenly at the apex of the biggest Government spending boom in this country companies and people had stopped paying taxes and we inherited a huge fiscal hole and a decade of deficits. We had to act and we did last year with a very careful Budget. It was done carefully and well. As a result we had a milder recession in this country than most countries and we have borrowed one of the least amounts of additional funding for stimulus packages. And Labour criticised us. Then we set to work to help the economy grow faster and to encourage our traders so they trade more goods they trade more food they trade more resources and they trade more bits and bytes. 
How do we do that? We do that by building a tax system that encourages initiative and rewards hard work. It is done by reforming regulations and ensuring the country’s laws give more people more room to do more things to encourage industries to grow and add more jobs. It is done by unlocking responsible mining opportunities for jobs unlocking irrigation opportunities for jobs and unlocking more aquaculture space. All those things are challenging to do but we are determined to do them and in so doing get New Zealand to grow faster. 
Meanwhile Labour is in the rut that it led New Zealand into. Labour members lecture the Government about creating more jobs but they did nothing to tackle any of these issues. On tax they are even worse. They remain completely in denial about the impact their 39c envy tax had on New Zealand. They made everybody pay it if they earned more than 60K a year. The Labour Government started a raft of tax avoidance a flight of skilled workers across the Tasman and it removed any incentive for people to better themselves and get ahead. It choked growth in the tradable sector and New Zealanders know it. A majority of New Zealanders know that that tax should go and that is what has happened. 
What are Labour members saying now? Have they seen the error of their ways? No. They say they would keep the GST increase and put the envy tax back on. They have not learnt a thing. It strangled growth in the productive sector it created massive incentives for people to spend their time avoiding it and it sent record numbers of Kiwis overseas but they say they would bring it back. 
What do Labour members say about Government expenditure? Surely they would support the Government’s reasonable efforts to stop the growth in Government spending in the face of the world economic recession. Have they seen that uncontrolled increases in Government spending have to stop? No they have not. They have criticised every single Government move to curb spending every decision to stop low-quality spending and every move to put fiscal discipline back in the Public Service. They oppose every move to cap the massive rise in the size of the core Public Service that happened under their watch. They oppose it all. They still bleat on about Labour programmes that we had to stop a year and a half ago. 
The only conclusion we can come to about Labour members and spending is that they have not learnt a thing. Controlling public sector spending is one of the key ways in which the Government can help to get the tradable sector to grow. Uncontrolled public spending means more borrowing borrowing means higher interest rates than we would have otherwise and higher interest rates make it harder for firms to invest and raises the cost of living. 
Higher than necessary interest rates from higher than reasonable public spending means something else too: it means higher exchange rates. So here is the irony. The Labour Party decided last year that exchange rates were too high. It declared that it would break the consensus on monetary policy which is a bit like breaking the consensus on gravity. It does not know what else to do but it is raging against high exchange rates. What is the main lever that Governments have to achieve sustainable interest rates? It is Government spending. That is right. If we keep spending under control we keep interest rates on a lower track less money flows in and over time the exchange rate is lower and more sustainable. That is how one does it. So that is the irony. The party that is the last of the big spenders rails against the exchange rate yet wants to turbocharge Government spending and increase our debt again. 
God forbid that Labour gets back in charge of Treasury with David Cunliffe as the finance spokesman. That is the Labour Party—it has not learnt a thing. Labour members still think that losing the 2008 election was a cruel hoax. One would think that they would be over it a bit by now. They have not woken up to the stifling effect they had on the New Zealand economy. 
This Budget does four crucial things. Firstly it rebalances our economy for growth and it encourages more money into savings and investment and less into property and consumption. That is the first and very important thing it does. Secondly it lowers tax rates to encourage more people to work hard and get ahead. It lowers the marginal tax rates. Seventy-six percent of New Zealanders now have a marginal tax rate of 17.5 percent. It lowers the top marginal tax rate—and that is important—to keep more skilled workers in New Zealand. 
Thirdly it keeps Government debt under control and puts more of the money that we do have into health and education. It emphatically does that. The health budget from next year from 1 July until 30 June will be $13.6 billion. That is the highest health budget ever but also the highest ever percentage of New Zealand’s GDP to be spent on health. Yet members opposite say that it is a cut. That just goes to show that they cannot count. We have also invested a huge amount in education. Health and education have been the big beneficiaries in spending in this Budget and that is what spending on core public services is all about. 
Finally the fourth and most important thing that this Budget does is invest in and encourage sectors that will help New Zealand grow faster like the science sector the transport sector the communications sector and the tourism sector. Extra money has gone into tourism marketing. The Budget also signals other things we are putting effort into such as reducing regulations providing more opportunities to private businesses and putting more resources into aquaculture. These are the things we need in order to get New Zealand to grow faster. 
It is so important that this country grows faster because unless we get a faster growth rate we cannot afford all the things that members opposite rail on about at all times. But no matter how fast the country grows we cannot afford undisciplined public expenditure and that is what members opposite have to offer. This Budget is a fantastic Budget for its time. It has been acknowledged by New Zealanders to be a good Budget for this country. I am obviously happy to support it and I commend it to the House. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I am not convinced that the National Party has fully come to grips with the fact that it is in Government. After listening to the speakers from the Government benches this afternoon one would think they were still in Opposition. They do not have the ability to talk about the Budget which we are supposed to be debating this afternoon. Mr Joyce has just spent 6 or 7 minutes of his speech talking about the previous Labour Government. He tried to create a mythology as to what the Labour Party is all about. He could not tell us what the National Party believes in or what it has in the way of a plan for New Zealand because there is no plan. Instead he spent the bulk of his speech talking about the Labour Party and what it did when it was in Government before 2008. 
Hon Dr Jonathan Coleman 
: Was he right? Yes. 
IAIN LEES-GALLOWAY 
: Jonathan Coleman lowered himself to personal abuse in his speech. He looked along the ranks of the Opposition benches to see who was here and thought that he would have a crack. For most of his speech he talked about Phil Goff. Then he had a go at my colleague Grant Robertson. Then he had a go at me. He reckoned that I did not have a chance of winning my electorate. I can tell the House that my first decision for the campaign at the next election will be to make sure that I do not employ Jonathan Coleman as my campaign manager. I will not have “The Maestro” in charge of my campaign—that is for sure. Melissa Lee tried that and look where it got her. 
Then we heard from Colin King. To be honest I do not think any of us was quite sure what Colin King was on about because he put us all to sleep. Paul Quinn did his best to stay awake and to look enthusiastic. A couple of things caught my attention when Colin King was talking. He went on about what a wonderful thing this Government was doing for research and development. It is part of the big swindle that this Budget is about. In the last Budget the Government took away the Fast Forward Fund and everything that Labour was doing in that regard. Then a year later it said that we could have maybe half of it back. That was the National Government’s big investment in research and development. The only other thing in Colin King’s speech that caught my attention was the great New Zealand sheep revolution. There is a great movie called  
Black Sheep 
 which is about genetically engineered sheep that try to take over the farm and turn into “weresheep”. That was the vision I had of the great sheep revolution rising up against this Government. 
It is no surprise whatsoever that this Government does not want to talk about this Budget because this Budget of broken promises whacks just about everybody in New Zealand. It whacks low-income earners it whacks Maori and it whacks the unemployed. It absolutely wallops most people in this country. The biggest swindle in this Budget is that the people who are getting absolutely thumped are middle-income hard-working New Zealand families. This Government is trying to tell them that they will get something fantastic out of the miserly tax cuts they will receive. It has given a little with one hand but it takes so much more away with the other. It is fine for the few who are wealthy who are doing fine and who are getting by OK because they get to feast at the tax cut table. They get the bulk of the tax cuts. 
Simon Bridges 
: And what will you do with your tax cut? 
IAIN LEES-GALLOWAY 
: The member asks what I will get in the way of tax cuts. It will be the same as the members gets. 
Hon Trevor Mallard 
: No no he gets more than you do. 
IAIN LEES-GALLOWAY 
: Does he get more? OK. 
Hon Trevor Mallard 
: It’s private income. 
IAIN LEES-GALLOWAY 
: Yes of course. The thing is that the member would agree that he was doing just fine before the Budget and he will be doing a whole lot better after it courtesy of what this Government is doing. It gives with one hand and it takes away with the other. 
It is fine for those who are feasting at the table but all the people who could really do with a tax cut—the battlers the workers and the families—get to do is gather the crumbs from underneath Bill English’s seat. The truth is that the Government does not want most hard-working families to have even the scraps. That is the truth. What has the Government done? It has increased GST so that it can take some of that back. GST applies to everybody. Everybody will have to pay more GST but if some people already have a lamb dinner in front of them and somebody plonked down a roast chicken those people would not be too concerned if Bill English came along and nicked off with a leg or wing. That is not so much of a problem. On the other hand if all they get is the crumbs if all they get is a couple of peas off Gerry Brownlee’s plate and somebody comes along and takes those peas away— 
Grant Robertson 
: Gerry probably wouldn’t drop much. 
IAIN LEES-GALLOWAY 
: That is true. If all they get is the crumbs and that is taken away it is a really big deal. That is what the Government is doing to working families. It is giving with one hand and taking away far more with the other. 
The Government tells people to not be jealous if they feel that it does not seem quite right that those who are already well-off get much more. It is not just GST increases that will obliterate the miserly tax cuts that hard-working Kiwis will receive. High inflation high mortgage rates increased rents and hikes in accident compensation levies will each take a little bit more out of the back pocket each week. Kiwi families will find they are far worse off as a result of this Budget. When we take all of that into consideration it quickly becomes obvious just how much of a swindle this Budget is. Heaven forbid that people would be foolish enough to have children! Kiwi families who have children particularly young children will see that tax cut whipped away in one go. Families who have children in early childhood education will see the entire tax cut pretty much whipped away. 
It is another one of the Government’s broken promises. It said it would not fiddle with the 20 free hours early childhood education scheme but it has cut over $250 million worth. That will result in higher costs for working families with young children. Depending on what types of services their kids are in—an education centre kindy or kohanga reo—the increased cost will vary but they are looking at $23 to $31 a week. That is the whole tax cut wiped out in one go. Never mind inflation GST and everything else that will be added on. That is it; it is all gone in one go. From the Government’s point of view this is about quantity and not quality. It wants to diminish the quality of early childhood education. It is dumbing down our children and dumbing down their opportunities in the future. I tell members that that is not good enough for my kids and it is not good enough for anybody else’s kids either. 
This is not happening just in education but also in health. People in my electorate are asking me what on earth is going on in the health sector. Tony Ryall stood up the other day and told the House that the health budget is larger than it has ever been. He said there is more money in health than ever. Yet in my electorate the district health board is looking at cutting district nursing services particularly those that provide palliative care to people who want to die with dignity in their own homes. Those services are being cut. It is looking at cutting sexual health services and diabetes services. The public health services are going to be cut. Rehabilitation services will be cut. 
I get emails and letters every day and at my last count before I came down to the House I had a dozen today from concerned constituents asking what on earth this Government is doing to our health sector. They ask what is going on in their hospital. What really is going on? Cuts in services are going on. When we bury down and look at the supposed increases in funding that this Government is giving us we see that it has increased health’s budget a bit but it needed to increase health’s budget by 5 percent just to stand still. Before 2008 the Labour Government made sure the increases were enough to cover at the very least the current services if not increase them. This Government has given at best a 3.5 percent increase. That is not enough for the health sector to stand still and that is why this Budget will deliver cuts to front-line services. That is another broken promise from National. 
This Budget is quite simply an unfair swindle that hammers hard-working Kiwi families in the back pocket then tries to pull the wool over their eyes and tell them they will be better off. I tell the Government that the people are wise to what it is doing. People are figuring out what this Government is doing and that will burn this Government in the long run. 
Hon JUDITH COLLINS (Minister of Police) 
: 
 I do not know where the previous speaker Iain Lees-Galloway has been spending his time because certainly where I spend my time in Papakura people are very happy. In fact they are extraordinarily happy that we have such a fantastic Government. I have to say this Budget is the best I have ever remembered. It is certainly the best Budget I have seen in my 8 years in Parliament which frankly is not saying much—apart from last year’s Budget which was pretty good too. But this is a Budget of aspiration it is a Budget that is fair and it is a Budget that starts to give people back more of their own money so they can make decisions. The member who has just resumed his seat asked what is happening in health. I can tell him what is happening. We have an awful lot of elective surgery going on. 
Hon Member 
: Cuts. 
Hon JUDITH COLLINS 
: The only cuts going on are the surgery cuts because people are actually getting their surgery nowadays. In the area served by the Counties Manukau District Health Board—in my region—we now have the most fantastic amount of elective surgery and an awful lot of that has to do with the leadership the Hon Tony Ryall is showing in the health sector. He is demanding that we get the surgery that the front-line services get the support they need and that we have fewer and fewer reports—unlike under the last Labour Government; it used to talk about how it was going to help health so it had a lot of reports. That is about all the health sector got. It did not get the surgery but it got the reports. An awful lot of money was invested into all sorts of long-winded reports that nobody read but it made Labour feel as though it was helping someone. It was helping its mates not the people who paid the bills. 
This Budget delivers the most extensive rework and readjustment of the tax system that anybody can remember in 45 years. It is the most fantastic rejig of the system. In the run-up to this Budget Labour members spent all their time saying that the Government would just give tax cuts to the rich. Nobody remembered to tell Labour that the really rich people in this country do not pay much tax. They certainly never paid at the top end of the tax system. I recall seeing an article just the other day from Sam Morgan a very rich New Zealander who skited that he did not pay any tax. That was of course under the previous regime. He will certainly be paying a little bit more GST now and that is one way of getting the tax. One person in Papakura who wrote to me was upset with the Budget and said he was not going to vote National any more. The reason is that he has 10 residential properties that he leases out. He is obviously affected by the Working for Families rort that we sorted out. He is not going to vote for us any more because he would rather vote for some other party that will let him rort the Working for Families system. I think we can probably do without the vote from someone like that. I think we would be very proud to be a party that actually starts to even up the tax system because if there was ever a rort it was that sort of rort where people could have multiple residential properties and then turn round and claim a Working for Families tax credit. That system was supposed to be set up to help hard-working Kiwis with young children trying to get ahead. Instead it was being rorted by people like that and frankly he knows what he can do. 
Labour members have been talking about lots of slogans tonight. I heard the previous speaker talk about personal abuse and then he delivered a whole lot of personal abuse at my colleagues on this side. I have to say that is not a very good thing for a new member in this House to learn. It is much better to stick to the issues. We are seeing some very sensible Government spending. Every big Government department has to look at how it spends it money and that is not just for my departments of corrections police and veterans affairs. We all have to do that and there is a reason: other than in forestry money really does not grow on trees. Someone has to pay for Government spending it all has to be paid by taxpayers and they should be able to know that we are spending their money wisely in their best interests and in the very best way we can. There will always be circumstances where we think we need to trial something and see how that works. It may not work out but it is very important that everybody in the Public Service is focused on trying to get the best value for taxpayers and understands that although the Budget helps to deliver this money none of it comes unless we have the taxpayer paying it. That is why we need the economy to grow. 
When we look at the growth measures in the Budget we see the work on research science and development and the huge input into trying to grow our science sector. For years and years we saw big input into the arts and I think that was probably a good thing but unfortunately there was not the same emphasis on the science sector. A country like New Zealand and an economy like ours built on agriculture and all the other things that spin off from that should have been investing better in the sciences yet for years we were not. That is being turned round under this Budget. What we are seeing as well is some extremely good work in social development—getting people back into work making sure that it is worth people’s while to work. That is one of the great things about the tax cuts. They are not just for the rich not at all like Labour said they were going to be but actually right across the spectrum so that every working New Zealander will have a chance to save some more money and have an incentive to earn some more money. Many of us know of instances where people have said that there is no point going for a higher-paying job because they would lose their Working for Families credit or it would all go in tax because they would shift into a higher tax rate. Under this Budget we have lots of police officers corrections officers and nurses now getting a reasonable tax rate rather than being called “the rich” because they earn over $70000 and therefore having to pay that extraordinarily high rate of tax that Labour thought we should have—the envy tax. We think it is very important to trust Kiwis give them back some more of their money let them keep it and then let them make decisions. No wonder people could not save under the previous Government their money was all going in tax. Was the Government saving then? No. An awful lot of low-value high-paid spending was going on. 
It is extremely important that we always keep a focus on what is productive. I will talk a little bit about an innovation in corrections that my colleague the Hon Dr Pita Sharples is bringing in. It is the Whare Oranga Ake which is all about looking at rehabilitation and reintegration particularly in a Maori context. Obviously there will be a focus on trying to deal with the massive recidivism that we have in our prisons particularly with regard to Maori offending. That is important because if we could start to bring Maori offending down to the same levels as the rest of the community we would not need all the prisons we currently have. That is one of the things we are trying to do here. Unfortunately Labour and particularly the Hon Clayton Cosgrove called it a separate Maori justice system when it is not that at all. What it is actually doing is trying to look at what might work. Dr Sharples has funding under this Budget—and I am very proud to be able to support him in that—to start two of those units so we can see whether they can make a positive difference. If they are a positive force I hope that all parties in this House will see the value of that innovation. 
We are continuing with our commitment to have 600 extra police by the end of next year. We now have about 350 extra police on the beat in front-line roles since we became the Government. Many of those have gone into the Counties-Manukau area. Last year my opponent Mr Cosgrove said that having extra police in Counties-Manukau was an ill-thought-out scheme. He should go and tell that to the people of Counties-Manukau. I quite enjoy going around Manurewa Papakura and other areas in Counties-Manukau in my patch and saying to people when they talk about how they feel so much safer now that Labour members would not agree with that because they did not think we should be able to have 300 extra police on the beat in Counties-Manukau. It is making a huge difference and I am extremely pleased with the way in which the police have taken up the challenge as well to modernise the way they do policing to look at alternative dispute resolution and to trial different ways of doing things. They have that extra support in terms of people but also in terms of the almost $200 million extra that we gave them in last year’s Budget—which by the way has been characterised by Labour as a $20 million loss; only Labour maths could do that. They are doing some very innovative work. I am extraordinarily proud of the work that they and the Department of Corrections are doing. The Department of Veterans Affairs is a great little organisation which is working very well with the Ministry of Defence. I am very pleased with that. 
We have also by the way—I will just finish on this—kept the Serious Fraud Office which the previous Labour Government was going to get rid of. It had legislation about to go through its third reading before thankfully the people of New Zealand voted in a National-led Government. 
Hon CHRIS CARTER (Labour—Te Atatu) 
: 
 I rise to criticise this Budget. Listening to the previous speaker the Hon Judith Collins I thought that she seemed to spend more time talking about her opponent Mr Clayton Cosgrove than she did about the details in the Budget. 
It was very interesting to hear that member talk about the importance of science and research. I could not help thinking as she was trumpeting the miserly amount that was in the Budget for that area that it was a belated recognition that science and innovation are the only ways that we will lift New Zealand industries to make them even more competitive internationally. The $750 million in the Fast Forward Fund was the very first thing the National Government cut when it was elected to Government. So much for the Government’s commitment to science! The 10 to 15 percent tax credit that companies could get for research and development was gone as well of course. A little bit of it has come back but it is nothing compared to what the previous Labour Government had in place. 
Today we heard in question time the Minister of Education trumpeting extra spending for education. She was skiting about a 4 percent increase in the operations grant. I have to say that in 2008 when I was the Minister of Education there was a 5 percent operations grant increase. What they did not get then and what they are getting now is death by a thousand cuts. 
Let us just review some of the programmes in education that have been cut putting aside that skiting about the 4 percent. We could talk about the $400 million that has been plucked out of early childhood education. The Minister of Police gave a speech a couple of minutes ago crowing about the extra police officers. She did not mention that the Labour-led Government over 9 years put in 2000 extra police officers. Police officers of course are not the only answer to crime; we have to address the causes of crime. Almost all of the young men who are in our jails would have had a bad educational start right from the beginning. In Counties-Manukau which the previous speaker was talking about only 23 percent of preschoolers go to early childhood education. That might involve one afternoon a week for an hour at the local church hall so the quality of education of even those 23 percent who are attending early childhood education before they enter primary education is of very variable quality. 
The National-led Government has cut out $400 million from the early childhood education budget. That was the very thing that would address a lifetime of crime—getting those kids off to a good start so that they have educational success and so that they are literate and skilled. Every profile of young and not-so-young people in jail shows the vast majority had a very poor education. Many of them are illiterate or only semi-literate. The failure in the education system is partly to blame for a lifetime of crime. That failure is compounded by poor homes poor nutrition and bad life experiences. Those are all cumulative things that are hard to deal with. They are not solved by a few extra police officers; they are solved by investing in quality social services and in quality education. 
Four hundred million dollars has been taken out of early childhood education. I recall the last election campaign in 2008 where the then Opposition spokesperson on education fronted up at many meetings with me for the New Zealand Educational Institute and she talked about the failure of 20 percent of our students—actually it is about 18 percent and falling. It is about a good start and about programmes in schools that address literacy not all the nonsense about national standards. How will a national standard catch a kid who is failing? Where are the extra resources in education that will lift a child who is failing in literacy or numeracy? Already in schools— 
Hon Georgina te Heuheu 
: Leave them to fail that’s what that Government did. 
Hon CHRIS CARTER 
: I can hear the Associate Minister of Maori Affairs going on about education failure. She of all people should know that far too many young Maori in our country are not succeeding in education. If we went into any school any kura or any kohanga reo in this country and asked the teachers there to tell us which kids are not succeeding instantly they would be able to tell us. They have already identified them. They already know who those children are. A national standard will not improve that knowledge; teachers already know. What those teachers need is extra resources for extra staff to work one-on-one in small groups to lift those children up. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Hon CHRIS CARTER 
: I am sorry that I have only about 5 minutes remaining. I would like about 25 minutes because I have a lot to say tonight. I have had about 1½ hours to reflect on my first 5-minute contribution before dinner. 
I was inspired by the member who spoke before me Judith Collins the Minister of Police. I know she said a lot about my colleague Clayton Cosgrove because she has a special affection for him but also she made reference to many interesting points that are very good points to rebut. One of them was her comment that her Government has a commitment to science. I mulled over the irony of that statement because I was talking about education before the dinner break. One of the first things that the Minister’s colleague Mrs Tolley did as Minister of Education was to get rid of the science advisers in schools. Science it seems for the Minister of Education at least does not count. Science advisers physical education advisers and music advisers are all out. Mrs Tolley argued in this House that she wanted school advisers to focus just on numeracy and literacy because we were failing in those. Strangely enough she is not too good in numeracy herself. She got her figures wrong yesterday and had to apologise. 
In the OECD rankings of the developed countries—the so-called PISA or Programme for International Student Assessment scores—we come first in the English-speaking world. Our schools are very successful internationally. New Zealand teachers are first-rate educators and New Zealand learners in our schools are doing very well. So why should we have these national standards? I talked a little bit about them before. On the issue of science advisers we have heard about the Government’s commitment to science. Science advisers and physical education advisers are out and art is out—it does not count. We will not have a test we are told for national standards. Australia the UK and the US have tests and they are getting rid of them now. Half of the primary schools in Britain are on strike over doing tests because as the educators there quite rightly say those tests are a farce. They actually hinder education; they do not help it. 
Mrs Tolley has come up with what she calls OTJ—objective teacher judgment. It seems now that our new national standards—which we have spent millions developing and for which teachers have been forced to attend numerous professional development courses—have boiled down to objective teacher judgment. In other words a teacher sitting in his or her classroom doing the school report will decide whether a child is a pass a fail or average. There will be no moderation between classrooms in a school. There will be no moderation between schools in Auckland. There will be no moderation between schools in Auckland and Otago. There will be absolutely no criteria for comparing a teacher in a classroom in west Auckland who says that Judith Collins aged 7 has passed. There will be absolutely no comparative objective comparison between one classroom and another. It is to be objective teacher judgment. What a farce! All of the money that has been spent to justify a slogan that was used in an election campaign by National and the $250 that every school has had to find to cover a reliever for a teacher who is obliged to go to a professional development course on national standards boils down to objective teacher judgment. What a joke! 
I hope that viewers who are watching Parliament tonight had a chance to see TV3’s news tonight. In the first item we heard about the Highwater incident when John Key said he did not own a vineyard but was caught on tape saying that he did. I guess in a way that summarises this Budget. It is all about spin. It is all about delusion. My colleague Jim Anderton earlier in the Budget debate described it as not the Robin Hood Budget—Robin Hood took from the rich and gave to the poor—but the Sheriff of Nottingham Budget: the Budget that takes from the poor and the middle class and gives to the rich. 
It is an illusion to say that it is a fair Budget. It is an illusion to say it is a progressive Budget. It is an illusion to say that it is a Budget for New Zealand and an investment for the future. Judith Collins talked about National finally—finally—recognising that science and innovation and investment in research are really important. I remind viewers listeners and colleagues here in the Chamber that $750 million for the Fast Forward Fund was done away with as soon as National was elected to office. The tax credit for research and development of 10 to 15 percent was done away with. This Budget is not an investment for New Zealand’s future. It is about trying to buy votes and it will not work. 
SHANE ARDERN (National—Taranaki - King Country) 
: 
 It is my pleasure to rise in support of the motion moved by the Minister of Finance and to totally oppose the amendment moved by the Leader of the Opposition the Hon Phil Goff that states that he has no confidence in the National Government and in this Budget. Let me tell members why that is the case. Everybody in the community has had a view on this Budget. Based on recent responses about 85 percent of people support the content of the Budget and the direction of the Government. 
Hon John Carter 
: They think it’s fair. 
SHANE ARDERN 
: They think it is the best Budget there has been for a long time. I guess that probably explains why we are on this side of the House and Labour is on the other side of the House. Over 9 long years in Government Labour never realised what it would take to turn round the New Zealand economy and capture the opportunities that were there for us in huge abundance. In a time when the economic circumstances were better than what we have seen in a generation Labour squandered enormous opportunities. 
I will tell the House what the National Government will do. First of all there is $14.3 billion worth of tax cuts for middle income New Zealanders for hard-working mums and dads up and down this country who just want a fair go so that they can compete with their Australian cousins compete in the businesses they run and compete internationally. The previous Labour Government never understood that. So that is the first thing this Budget does. 
A typical two-child family with a household income of $76000—we would hardly call them rich by today’s standards—will be $25-a-week better off once this Budget comes into effect. It is the biggest tax reform we have seen in this country in a quarter of a century. In 9 years of the Labour Government what did we get? We got a health system that was crumbling. The waiting lists for elective surgery were getting longer and longer. What do we have after two Budgets from the National Government? We have more operations than we have ever had before. We have better health outcomes: more faster and sooner front-line health services than we have ever seen in the history of New Zealand. What do we have in education? 
Hon Ruth Dyson 
: That’s not true. 
SHANE ARDERN 
: We have better faster and higher standards in education. Members opposite bay and say “That’s not true.” I ask them which parts of it are not true. They should stand up and tell us which parts are not true. Every single bit of that statement is a fact. 
The Taranaki - King Country electorate—I am sure people will be interested to hear—despite the fact that it has a farming background is a low socio-economic area. It has a large number of small towns with decile 1 2 and 3 schools and there are very long distances to travel for core health services. It is a low-decile and low-socio-economic area. The people companies firms businesses and mum and dad operators in that electorate will benefit more substantially from these Budget initiatives than the initiatives of the previous Labour Government in the last 9 years. All of this comes at the time of what has been described as a worldwide economic crisis. I have not used that term; in fact I think it is probably overstated but that is what the economic markets are saying and that is what the commentators who are apparently more knowledgable than us on these issues are saying. In this economic crisis the National Government has been able to deliver the greatest tax reforms we have seen in 25 years. 
I will tell the House what else is in this Budget for people. First of all we see that our superannuation payments have gone up. How long ago is it since that happened under a Labour Government? We would have expected that Labour would be very conscious of what is happening with elderly folk in New Zealand because elderly folk are one of its core constituency groups. But what did Labour do? It loaded on to the elderly more and more costs more and more inflation worse health-care worse education for their grandchildren and layers and layers of cost. But this Government under this Budget for the first time in many many years is now able to turn round the great ship of New Zealand in a more economic direction and start to stimulate the growth jobs and opportunities that we so desperately need. 
I say to the House that on looking at the reaction from Labour members throughout this debate I see that I would not want to be where they are. It is so much nicer on this side of the House and we will be here for a long time because of the outcomes of this Budget. So those members opposite should suck it in and get used to being in Opposition. It is a great place to be if members are Labour members. They are better in Opposition than they ever were in Government—and they were no good in Government either. They should get used to it. This Budget will do more for mums and dads and for “Joe Hard-Worker” than anything that happened under the previous Labour Government. 
Let us look at what is happening in regard to research and development in the agricultural sector in its primary partnerships. For a start an announcement has been made that $36.15 million will be expended on Merino New Zealand’s fine wools programme which it has been promoting for some time. The expenditure will allow it to develop markets and to do genetic work to improve the meat yield or meat quality from merino sheep. I say to Mr Assistant Speaker Roy that he is in a very good position to know how important that is to the New Zealand economy. It is one slight success story on what has been a pretty dull horizon for the wool industry. But now that industry has stepped forward and will take full advantage of the money that has been made available by the Government to help them in that research programme. 
The forestry sector is another sector that has been on the back foot for a long time. Forestry in New Zealand has been in decline for about the last 7 years. There have been fewer plantings in the forestry sector for the last 7 years. But what has happened in the last 2 years? Suddenly we are starting to see investment flow into that sector. 
Hon Steve Chadwick 
: How happy are farmers at the moment? 
SHANE ARDERN 
: The member from Rotorua is baying from the other side of the House. I say to her that Rotorua is one of the biggest forestry areas in the country. She should have a look at what has been announced in the Budget for the forestry sector: a $5.5 million programme to develop better harvesting technologies. Why would we want to invest in that? Firstly it makes forestry more efficient and therefore more competitive internationally. Secondly there is far less environmental impact when we develop that type of technology. We would think that the former member for Rotorua would be quite keen on some of that stuff and that she would give a more passionate speech in support of it than I am giving. But no the role of Opposition is always to oppose. It does not matter how good something is; members opposite will no doubt oppose it. The Primary Growth Partnership between the Government and the forestry sector will bring about substantial development in that regard. 
There are a number of other initiatives. It was announced today that a number of people in the agricultural and primary industry sector are making very loud noises in regard to what they may do. They have not said exactly what they will do but they are working closely with the National Government in regard to what will be spent on research and development. If we are to get New Zealand up and running then it will be the agricultural sector once again that achieves that. New Zealand is an exporter of protein and has three sources: fish meat and dairy products. The dairy industry is growing year on year. It is strong and the tax initiatives announced in the Budget will help that industry. 
The Budget will equally help other industries. The Government’s work towards aquaculture—and the future legislation that will potentially come to this House in that area—can be only positive for New Zealand. Meat and wool particularly with the announcements today have a bright future as well. 
I totally support this Budget. It is a substantial step forward for New Zealand and it is something I am very proud to be associated with tonight. 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 After 18 months of being in Government I think that the tide is now turning for National as people see that this Budget was a defining one for this Government. Whether or not National members like it the true nature of the National Government has been revealed for all New Zealanders to see. It is about big business. Those members have no concern whatsoever about ordinary working New Zealanders. 
I rise to support the amendment moved by the Hon Phil Goff the leader of the Labour Opposition: “That all the words after the word ‘That’ be omitted and the following words substituted: ‘this House has no confidence in the National Government led by John Key which has blatantly broken its clear promise not to raise the Goods and Services Tax has pushed up prices when working people have had their lowest wage rises in more than a decade has failed to implement a plan for jobs lacks any vision for a smart high-skill high-tech and high-wage economy has cut services and assistance to the most needy in our community and has rewarded the most wealthy at the expense of middle and low income New Zealanders.’ ” That says it all for this particular Government and its second Budget. 
There is a well-known truism in the Pacific Island community that when people are given authority and use that authority to gratify their pride or vain ambition then exercise control dominion or compulsion upon the people to cover up their mistakes nothing good comes of it and the people end up suffering. 
Before the general election Mr John Key looked down the lens of a TV camera and when asked by a reporter promised that if he were in Government there would be no GST increase. He broke that promise when last Thursday his Government under his leadership announced that the GST rate would increase by 20 percent going from 12.5 percent to 15 percent effective from 1 October. This Prime Minister has broken his pre-election promise to all the ordinary families who voted for him who thought that as he had been raised in a State home he would somehow understand the struggles of ordinary Kiwis and empathise with them. Never did those middle New Zealanders imagine that the smile of the Prime Minister would somehow trap them into facing a GST increase which has effectively increased the cost of living for all struggling Kiwi families. The GST increase will mean price increases for food power petrol phones rates school uniforms early childhood education fees and much much more all because that man the Prime Minister and his Government broke their pre-election promise that they would not raise GST. 
His Government has since attempted to pacify the people who supported him—the same people who are now angry about the rising cost of living—by restructuring the tax system and producing tax cuts that will give more money to those who earn significantly higher incomes. These tax cuts come at a cost to the whole nation of about $17.8 billion which must be paid for in the years to come. The Prime Minister said that tax cuts and an increase to GST is called a tax switch and that it will be cost neutral. But for low and middle income earners it is a tax swindle. This Budget hurts the most vulnerable groups in our communities right across New Zealand. It hurts low-income groups especially people on fixed incomes. It hurts solo parents and their children it hurts workers on the minimum wage it hurts the disability community and it will hurt the elderly young people and those on invalids benefits. The 81 percent of people in Mangere earning $40000 or less a year have been swindled by the Government’s tax package because they will actually be worse off under this Budget. It is a tax swindle because someone in Mangere on the median wage of $20600 may on the one hand get a tax cut of about $9 a week but after the increases in the cost of living and accident compensation costs are factored in that person will be worse off by $11 a week. 
I blame the Prime Minister Mr Key for the suffering that many in my community will continue to feel under his Government. He is the leader and it is his Government that is responsible. He broke his promise on GST and attempted to hide his mistake by introducing a tax swindle by manipulating an appeal to the desperation that many families face with low incomes rising prices and the genuine desire of all families to get ahead and make ends meet. There is no future for ordinary working families under this Government. There is no future under this Prime Minister for the communities he once called the underclass. 
Where is the future for children in Manukau where since December 2008 nine early childhood centres have closed? Where is the future for the children in Mangere where there have been five early childhood centres closed since National came into power? Where is the future for the children of Mangere families when parents could face costs of up to $20 or $40 a week more per child for early childhood education? Some centres estimate that the real cost could be up to $60 per week per child. Last Friday the Kiwicare Preschool of Tennessee Avenue in Mangere which the Prime Minister opened last year sent a letter to its staff stating that it will have to review its staff numbers due to cuts from this Government. Where is the future for these workers who will possibly be laid off and their lives added to the pile of discarded unemployed workers who still number above the Australian unemployment figures? There is no future for the people of Mangere under this Government. 
I note that leading up to the Budget and even today the Minister of Customs has been crowing loudly about the wonderful work of customs officers at our borders. Labour supports the work and commitment of our customs and border officers and the significant number of narcotic interventions that we have heard so much about in recent days. We have not heard so much about how the Government rushed the SmartGate electronic passport control system into New Zealand’s airports against the advice of three Government departments. The House has not heard that despite warnings from the Department of Labour Treasury and the State Services Commission the Minister of Customs approved the purchase of SmartGate. The three departments had serious concerns about whether the SmartGate system offered value for money and was the best technology to meet the future challenges of border control. I suspect that the Minister of Customs may have wanted to do the right thing follow the official advice and put up SmartGate for a public tender process but it seems that that advice was ignored because Prime Minister John Key asked officers to give highest priority to advancing the integration of trans-Tasman border clearance. Official documents show that despite reservations about SmartGate its purchase and implementation were rushed so that John Key could announce its introduction at a meeting with the Australian Prime Minister last August. 
I have the same concerns about the way that this Government has approved $4.8 million to a little unknown private company called the Pacific Economic Development Agency Ltd. There is widespread concern about it from the Pacific Island community from Invercargill to Kaikohe and from Taranaki to Gisborne. Last week the company’s register showed that there were two original shareholders but as of this week there is only one shareholder and one director. Labour asked the Minister of Pacific Island Affairs whether the funds underwent a public tender process before being approved for a private company. Only yesterday we finally got an answer and we heard it on  
Morning Report 
. The answer she gave sparks more questions. Why did the Minister not undertake a rigorous tender process? Why was the money not given to the Pacific Business Trust which has a long and strong track record in the community? Where did this money come from? Who were the people who lobbied the Minister so that she would approve this money without it going through a public tender process? Was she bullied by the Minister of Finance or the Prime Minister into making this decision? Those questions need to be answered because that $4.8 million is public money. We of the Pacific community want to know what outcomes will be achieved from this $4.8 million. It is appalling that on  
Morning Report 
 yesterday after announcing that she was supporting this group with $4.8 million she revealed that she does not really know too much about what this company will provide. We demand those answers. 
CHESTER BORROWS (National—Whanganui) 
: 
 What a wonderful week it has been to be in Government! It is wonderful to feel the euphoria after a fantastic Budget has been released to the public and it is wonderful to see the way in which it has been received around the country. It is great to walk down the street and have people come up and say: “Gee you know John Key is doing a wonderful job. He is doing a fantastic job.” We have heard that phrase right across the country from people who have worked for years and years without any show of understanding of the pressures on them in making ends meet. They have worked hard backed themselves and made a success of themselves and they never received the time of day from the previous Government. I am so pleased to be part of a Government that recognises that people across the board need some sort of tax relief. 
The left continually associates wealth with callousness and cynicism. We continually hear those members say that those who succeed only got there on the backs of the people they employed and that it is time those people received a break. It is interesting to look across the House and listen to those members’ speeches. I have to congratulate the member who has just resumed his seat Su’a William Sio. That was the most ably read speech out of the Labour Party media unit I have heard for some time. I believe he did that incredibly well. It is a shame he could not remember the lines himself and deliver it with a little more passion but there we go. 
The trouble with the other side of the House is it believes absolutely and fundamentally that it has to keep its supporters poor and pissed off so they do not have to ever look to themselves to stand up under the pressures and the struggles. It was interesting to hear the member who has just resumed his seat talk about the history of our Prime Minister John Key. He said in a scoffing sort of way that Mr Key believes he understands the struggle of the working class because of his upbringing. The problem with the Labour Party is it has never understood the aspirations of the working class. It has never for a moment understood the aspirations of the people who support it when times are tough. When people manage to stand up overcome their struggles and do better for their children they recognise that they will never get better under a Government that comes from the left. 
Who does the left call wealthy? Apparently it is anyone who earns over $70000 a year. We know that 75 percent of those who earn over $70000 earn less than $100000 a year and who are they? They are the detectives the ward managers—the people we used to call sisters—the assistant principals and some of the teachers. They are working for that level of pay and members on the other side of the House—the previous Government—want to tax them at 39c in the dollar. They want to grab every cent they can from those people and they rubbish their aspirations to get on and do better. That is not on. Labour is not the party of aspiration because it continually slags off anybody who achieves who works hard or who experiences success. 
I was in Nelson on the weekend visiting my family. My dad and mum are 85 and 78. Dad is pretty crook; he is not keeping too well. They still manage to tick over by growing a few veges. They live pretty frugally and all the rest of it. They voted Labour all their lives until one day they woke up and realised they were not getting ahead. Even as pensioners existing on the pension they found it a struggle and they were kept where they were. 
I had a great conversation with my mum on the weekend. She was so pleased she voted National in the last couple of elections and she will for the foreseeable future because she knows that under National people are being encouraged. For instance I look at my cousins who earn an average wage of about $50000 per year. They are now paying half the tax they paid 2 years ago. A number of members on this side of the House have kids who are in their 20s and want to save up and buy a house. Those are the sorts of people who want to get on. They want to get their ducks in a row and have the hallmark of success in this country by owning a little plot of ground for themselves. They want to put a house on it and raise a family. That is what they aspire to. They hold good and wholesome values. They are being encouraged to do that under this Government whereas in the past they were seen to be people who were too wealthy for their own good and who were to be knocked as hard as Labour possibly could. 
Let us look at who else has been saying a bit about the last Budget. There are those huge apologists for National like Vernon Small who stood up and stated: “English can also take a bow for keeping a rein on spending”. Well good on him. I must admit that I never expected to read that from him. Then there is that other huge advocate for the National Party the  
Dominion Post  
whose editorial of 21 May stated: “the Budget is a coherent document that should encourage saving and investment and discourage consumption and speculative investment in property.” It was great to see some moves being made to pull back those people who are making the sly best of good times by hiding income in property investment and in trusts. 
A hell of a lot of us have worked for wages all our lives. We are completely frustrated when people who are employed by a family trust send their kids off to university and their kids can get a student allowance and all the rest of it while people on middle incomes working for wages working say as a Government servant and working damned hard cannot do that. I am pleased to see that this Government has been able to tighten a loophole on that. It surprises me that members opposite who had 9 long years in which to close that loophole and who hate everything that those people stand for never ever had the foresight to do that very simple thing. 
It was wonderful to be in this House last Thursday to hear the Minister of Finance deliver his Budget and to hear the speech that was delivered by the Prime Minister after it. The Budget was a celebration of all that Kiwis aspire to. It was a celebration of 18 months of a successful Government in this country and we can see the reception it has received. 
It was sad to look at the reception on the other side of the House. As we looked along the faces on the front and middle benches on the other side of the House what did we see? We saw some members who thought: “Well I have been here for a few years and I was really hoping I would be able to beat the hell out of the Government on this because we promised that the Government would put up a Budget that would encourage only the wealthy. And here we are absolutely stuffed because 75 percent of wage earners in this country now pay only 17.5 percent tax in the dollar.” That is the top rate and members opposite were thinking: “I do not know whether I can stand another 18 years of this in Opposition.” because that is what they will be relegated to and they know it. 
It will be very very interesting to see who chucks in the towel over the next few months. As we lead up to an election year next year which members on this side of the House are all looking forward to it will be incredibly interesting to see which members will throw in the towel and say that they have had enough. I reckon we can speculate as to whom those members will be. Some members are looking forward to the next election about as willingly openly and keenly as they are looking forward to the release of the expenses budget for the Labour Ministers who were in Government just a few months ago. We are looking forward to that. 
The New Zealand public are looking forward to another 20 years under a National Government knowing that they can achieve the aspirations that they have held for so long. Those people who were oppressed under the left are looking forward to standing up with their chins out and their chests out and achieving under a National Government. Thank you. 
Hon STEVE CHADWICK (Labour) 
: 
 We allowed Chester Borrows the member opposite who has just resumed his seat to walk along the sunny side of the street for a wee while. But we have been out there walking the streets. We are in Opposition we are out there walking the streets and we are hearing some very interesting things coming out of the shadows on the street. People are now coming up to us saying: “We thought that it was a bit of a jammy Budget. It was pretty good. It was spread around tax cuts tax cuts tax cuts.” which is all that National knows to do as a way forward to an aspirational future. But now not even 1 week later people are saying: “Hang on a minute. I have got out the calculator and it does not quite work out. It will all be wiped out by inflation increases. My little bit of jam will have a bit of bread splattered on it and it will be wiped out on the bench before us.” 
Also on the dark side of the street which we remember on this side of the House people are already starting to see that there could be asset sales. Only 1 day after the Budget after the Government had had its day in the sunshine Bill English came out and said that the Government was now getting geared up for asset sales with Kiwibank being the first off the rank. Then the Prime Minister told Government members not to do that. He told them not to get too keen or carried away and not to bask in the sun for too long and get too puffed up. That is especially good advice when we hear Chester Borrows say that he thinks this National Government will be in for 20 years; I think that 20 years is more than the world could bear of a conservative Government that has no plan and no economic strategy other than tax cuts tax cuts and tax cuts. 
I am very pleased that the Minister for Senior Citizens is in the House today. 
Hon Ruth Dyson 
: Who? 
Hon STEVE CHADWICK 
: Mr John Carter who is sitting next to the whip. We have been at a Grey Power meeting in Rotorua today. It was a big Grey Power meeting and we were very very positively received. The senior citizens passed a resolution unanimously—not one vote against it—that they are adamantly opposed to asset sales. The Government needs to hear that message after its members have walked along the sunny side of the street because the storm clouds are brewing. 
The senior citizens also realised that this sale is a direct attack on Kiwi wealth. It is a direct attack on the Kiwi dream that we all as Kiwis want to be proud of. They were most unhappy today. This Budget is a bit of a case of “test it and see”. It is wait and see. By this time next year—which interestingly enough is when the Rugby World Cup is coming up—everybody who goes to the supermarket will start to realise what the impact of these tax cuts on their back pocket will be. They will see that the price of bread goes up the price of milk goes up and the price of cheese goes up. In fact a lot of people got only the price of a litre of milk in their tax cuts and they will realise that that has been wiped out by inflation. 
So it is a bit of a wait-and-see Budget. You know people will wait and see. But I believe that by this time next year those who have done their reckoning will also realise that any gain will be wiped out. But worst of all this is a Budget of broken promises. I think New Zealanders are starting to see that with this smile-and-wave Prime Minister. His front-bench Ministers are doing the damage as he goes around the country smiling and waving. He has broken promise after promise. 
He said he would not borrow for tax cuts. He said: “I would never borrow for tax cuts.” Well what is $1 billion? What is $240 million this year to pay for the tax cuts that were given on the one hand? He also said that GST would not rise. Well it has risen. The senior citizens at the Grey Power meeting today got that message about broken promises. He also said there would be caps on public services and he has already broken that promise with several cuts to public services. They are front-line cuts; they are not just managers. I will get on to that matter in a minute. 
Also I say to Mr John Carter at the Grey Power meeting today senior citizens heard that rates rebates have been cut by $58 million and they were most unhappy about that. This is an interesting one: they also learnt that senior citizens’ ability to borrow a student loan has gone. Many of them really enjoyed keeping intellectually engaged and now they cannot afford to do that any longer. We also learnt that there is no contract in Rotorua for elder abuse and Age Concern is very very worried about that. I ask what the Minister for Senior Citizens has done about that. Elder abuse contracts need to be given around the country. These seniors are very very worried about what this Government is doing. 
I will talk about the impact from the cradle to the grave. I feel that what the Government has done with young families is very very sad. We believe in education and we believe in skills development and a skills strategy which was missing from this Budget. But it is the impact of the cuts of $250 million on our early childhood education with the 20 free hours policy for parents that is most cruel for families. An average family with two young children—and the member opposite talked about them having aspiration and hoping that they get into their own home—will benefit from this only initially and then will be $55 a week worse off— 
Hon Nanaia Mahuta 
: How much? 
Hon STEVE CHADWICK 
: Families will be $55 a week worse off if their children are in early childhood education. It is quality early childhood education; it is the building blocks for kids going to school ready to learn rather than this aspirational drive that the Government had on numeracy and literacy. Why was the first rung of the ladder taken away from young parents who were trying to get on in society by cutting $250 million out of quality teacher-led 20 free hours’ early childhood education? I think that is an indictment on how the Government values children and families. It is a disgrace and parents are out there now working it out on their little reckoner on this Budget and saying they will be $55 a week worse off. Early childhood education is the beginning building block for children to learn and get on in this society. 
So where will the money come from? This huge cut to early childhood education funding means that parents will have to pay for it. They will have to meet the shortfall themselves from their own back pocket as well as meet the shortfall on the food they need to put on the table to grow healthy children and keep them well and engaged in learning. So I feel that that is absolutely appalling. 
I remember when we brought in the measure that teachers before children in early childcare had to be qualified and we were not popular for that. But I congratulate Trevor Mallard on saying that children are our most vulnerable and therefore deserve the best in front of them. Every teacher in front of them in early childhood education knows that parents will pay for it—$55 a week—and when members go out there and meet young parents in their constituency they will realise that this was an appalling cut. 
I will say a bit about arts. I am the arts culture and heritage spokesperson and I hear Government members asking what we did for 9 long years. Well Helen Clark led a cultural recovery in the arts and Chris Finlayson is really now at the stage of palliative care for the arts. There is nothing new no new ideas. He has taken a little bit of money from NZ on Air and the Film Commission and put that over to save the Film Archive. Great! But that is not new money. That is money taken off the creative industry to prop up the Film Archive. It should have been new money because those are New Zealand stories that we must keep in safekeeping for our children and our grandchildren. 
The other thing that he has done for the arts—and there has been no crowing about the arts—is to bring in $5 million. Where has it come from? It has not come from an increase in baseline funding but from lotteries. So he has $5 million from lotteries which is a bit of a creative switch across to disburse to the creative community and that is the only funding that the arts culture and heritage budget got. I do thank the Minister which is not common for the $100000 for the protection of Pukaki a taonga that is of special heritage value to us in Te Arawa. 
It is a difficult Budget it is one that will tell its story next year and I think then the chickens will come home to roost. 
Hon JOHN CARTER (Minister of Civil Defence) 
: 
 I move  
That this debate be now adjourned. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Motion agreed to. 
Carter Observatory Act Repeal Bill 
In Committee 
Part 1 Preliminary provisions 
Hon Dr WAYNE MAPP (Minister of Research Science and Technology) 
: 
 The reason I am taking this initial call is that I am very conscious that the Education and Science Committee reported back to the House that it had received three submissions on the Carter Observatory Act Repeal Bill and also that it did not consider it necessary to make amendments to it. The issues have been well canvassed in the first and second reading and I understand that with the leave of the House we may be able to proceed directly to the third reading after the Committee of the whole House. I am sure the people of Wellington will be looking forward to our expediting the business through the Committee of the whole House and through the third reading. Thank you. 
DAVID SHEARER (Labour—Mt Albert) 
: 
 It is with great pleasure that I rise again to speak on the Carter Observatory Act Repeal Bill. As members have said before it has meandered its way through our Parliament for a number of years and we hope tonight to put it to bed so to speak so that we can all move on. As we know the practical work has been ongoing. The Carter Observatory effectively is already being operated by the Wellington City Council so in many ways we are simply rubber-stamping a situation that is already in existence. 
The bill as we have canvassed many times before is a sensible one. In today’s world the idea of a national observatory as set up under the 1938 Carter Observatory Act is pretty much a thing of the past. Most of the functions of what we might call a national observatory have been moved to the Mount John Observatory down in Canterbury and I know that the University of Canterbury is very willing and eager to allow other universities and other academic institutions to use that facility and that is very welcome. That means that the Carter Observatory now has more of a tourist and visitor focus rather than a highly scientific role. That does not mean that it does not have a scientific function. It has an incredibly important role in providing visitors students and others who are involved in science with a place within the Wellington region to examine the stars and to ask those most basic of questions: who are we how did we get here and what is the nature of the universe? Those questions have been occupying the minds of the human species for time immemorial. 
The transference of the Carter Observatory happened with the agreement of both sides of the House and the Wellington City Council as well. In 2008 the Government of the day the Labour Government put more than $2 million into the upkeep of the Carter Observatory. The Wellington City Council I understand spent about $1.4 million on the observatory. My understanding is that as a result of a shortfall Nathan Guy through the Lotteries Commission put another $600000 into making the observatory a real feature of Wellington City and the Wellington region as a whole. 
The Education and Science Committee canvassed the various arguments and aspects as Colin King knows. Under the leadership of Allan Peachey we talked about the bill at some length. We invited submissions. We received three. The submissioners wanted to make sure that what we were doing was both robust and the right way to proceed. I do not think we have any qualms that that is not the case. We are moving in the right direction and those submissions as I recall backed the move and our recommendations that it go forward. 
It has been a long journey for this bill. I am pleased that it has got to the stage where we might see it properly put to bed tonight—see it go through its third reading and be finished. I think that the original recommendations that Dr Bessell set out in his report were basically the right ones although I think he actually wanted to maintain the idea of a national observatory. We have moved beyond that. We felt that a national observatory in the form of the Carter Observatory was not the right way to go. 
KELVIN DAVIS (Labour) 
: 
 Labour supports the Carter Observatory Act Repeal Bill. We agree with dissolving the observatory and moving all of the functions and the assets over to the Wellington City Council. The report by Michael Bessell in 2005 said that the Carter Observatory was unable to fulfil the functions of a national observatory because of resourcing issues. It has now become more of an educational and tourism facility. I saw on the news tonight David Perks of Positively Wellington Tourism the Wellington tourism board standing outside of the Carter Observatory as they were celebrating Wellington being named the most popular winter destination. The Carter Observatory will complement that and other facilities such as Te Papa and Zealandia: The Karori Sanctuary Experience. This has become a good asset for Wellington City in terms of supporting the tourism industry here. It also provides a fantastic educational facility for school groups to come down to the observatory. It provides lesson plans for teachers and it provides support for them. So this is a good bill. 
I will talk about the facilities. There are a number of conference rooms so that groups can have meetings for up to 100 people. There are various-sized rooms. But there is a point and it is the one Te Ururoa Flavell raised last night. We accept that the observatory is transferred to the Wellington City Council. The question I have and I wonder how well it was considered is the role that local iwi play whether they have any role at all and whether there was any consideration given to the needs of the local iwi. They may have a role to play they may benefit in some way from the observatory. There are at least half-a-dozen tribes in the area: Ngati Toa Rangatira Taranaki Whanui Te Atiawa Ngati Tama Ngati Ruanui and Ngati Mutunga. I wonder whether any of the members of those tribes were involved in this decision or had any input whatsoever. It would be good to think that they in some way benefited from this facility that is on their land and in their city. 
In terms of the observatory moving to an education and tourism facility I believe that it is a good idea. I do not think in a city such as Wellington that having an observatory with all the lights and everything around makes for the best conditions for an observatory to flourish. If we look overseas we see that there is an observatory stuck on the top of the highest mountain in Hawaii. It is away from all the cities and lights so that it gets a clear view of the night skies. The Wellington skies particularly on a day like this are not the best for viewing the night skies. There would be a number of nights during the year when it would be difficult for people using telescopes to get a clear view of the skies. So as I have said dissolving the Carter Observatory board and transferring the assets of the Carter Observatory to the Wellington City Council is a good idea. 
I do think we need to consider the fact that iwi probably have not had a big say in this decision. It does not look like they are going to really benefit in any sort of way through having this facility in Wellington City. 
Jo Goodhew 
: There’s really not much to be said is there? 
KELVIN DAVIS 
: It is difficult to have much to say because we do— 
Hon Member 
: Don’t waste the precious energy. 
KELVIN DAVIS 
: They are telling me not to waste the precious time. I say OK. Labour supports this bill. Thank you. 
STUART NASH (Labour) 
: 
 This bill is the end of an era. I ask whether members know that the Carter Observatory Act Repeal Bill repeals an Act the Carter Observatory Act that was put together in 1938. Can members imagine what life was like in 1938? We did not have people like those characters whinging and complaining because the people of New Zealand had just voted in a Labour Government. Mickey Joseph Savage was standing here advocating for the people of New Zealand. We had Peter Fraser and Walter Nash. They were building a new society. They were building a better New Zealand. 
I ask whether members can imagine those great men of New Zealand those great men of the Labour movement who would have wandered up that hill and cut that ribbon. It would have been a proud moment. They would have looked over Wellington and they would never have imagined a day when a National Government would sit on that side of the House and give tax breaks to the wealthiest and nothing to the underprivileged—the underprivileged whom the 1938 Labour Government devoted its life to uplifting. Boy did they do that! 
Jo Goodhew 
: I raise a point of order Mr Chairperson. 
The CHAIRPERSON (Eric Roy) 
: I think I can anticipate what it might be—relevance is it? 
Jo Goodhew 
: Yes. 
The CHAIRPERSON (Eric Roy) 
: Well—[ 
Interruption 
] I am on my feet. I say to the member that this debate is about the Part 1 clauses: “Purposes” “Interpretation” and “Act binds the Crown”. The member should draw back the debate to those matters. 
STUART NASH 
: Talking of drawing back here we are in 2010. It is nearly 80 years since the Act that we are now repealing was established—nearly 80 years. A lot has happened up at that observatory in 80 years. I ask whether members can imagine the first day man walked on the moon in 1969. People would have gathered at that observatory and celebrated that milestone. The milestones that have occurred in Wellington since that observatory has been around have been numerous—they have been numerous. I can imagine the vision that these men and women of the Labour movement had in mind when they opened the observatory. It would have been world leading and now here we are repealing the Act. 
But I am not against this bill because this is one of those unusual bills where everyone is in agreement and everyone is going to win. The people of Wellington will win because now the young men and women of Wellington—and probably from all around New Zealand—can go to this icon on the hill look at it and understand science. They can see where science developed and started and they too can develop a passion for science. Maybe they can come into this Chamber and with that passion for science they have developed ratchet up the research and development spend and move this country forward. That is what I am hoping and that is what I am sure will happen. 
Tourism is another one of our great earners and this will be great for tourism in Wellington. I heard on the news tonight that Wellington was voted by people as the best place to go in winter. Obviously they had not been to Napier because at the moment in Napier it is very fine. People are outside in T-shirts drinking wine; it is pouring down with rain here. How can they vote Wellington as the best place to go in winter if they have never been to Napier? It is beyond me. 
With regard to the observatory one of the other things I like about this legislation is that we are not destroying our heritage. That is what we have done too much of in the past. Those National guys are dismantling our heritage brick by brick. This legislation allows our heritage to remain. An icon sits upon that hill. Generations of people have walked past it to Parliament they have dreamt they have developed a passion for science and for politics they have come to Wellington and they have known the observatory. I am pleased that it will still be there. It is a wonderful asset to the people of Wellington; it is a great asset to New Zealand. 
The important thing is we are not losing. As my colleague Moana Mackey said last night there is now a national observatory in Whakatane believe it or not. Of all places there is a national observatory in Whakatane so we can still study the stars. We are in a unique position here because there is very little pollution in our night skies—or at least there was not until those members did whatever they wanted to do. 
This is one of those great pieces of legislation. My colleague Grant Robertson is rapt with this bill. Grant Robertson is the member of Parliament for Wellington Central and he is rapt with this bill because it adds to the cultural heritage of this city. Grant is the associate spokesperson—or he might even be the spokesperson—on arts culture and heritage. This just adds another jewel to his portfolio crown. It is fantastic legislation because of that as it allows this tourism venture to remain. 
Kelvin Davis another colleague is the spokesperson on tourism. Who is the spokesperson on tourism on the Government side of the Chamber? I cannot remember; it must be Aaron Gilmore. Kelvin Davis knows the value of this legislation because again from a tourism perspective it just adds one more jewel to the crown of New Zealand tourism. When people come to Wellington they can go to Te Papa they can come to Parliament and have a tour and they can see the photos of the great people of New Zealand politics like Fraser Savage Nash and Clark. 
COLIN KING (National—Kaikoura) 
: 
 I move  
That the question be now put 
. 
Motion agreed to. 
Part 1 agreed to. 
Part 2 Repeal and related matters 
The CHAIRPERSON (Eric Roy) 
: The debate includes debate on the schedule. 
MOANA MACKEY (Labour) 
: 
 I was very disappointed that I did not get to take a call on Part 1 of this very important legislation the Carter Observatory Act Repeal Bill. 
Hon Member 
: So were we. 
MOANA MACKEY 
: I look forward to Mr Peachey’s contribution. He gave a very good contribution in the first reading of this bill and I look forward to his contribution in the Committee stage. If he takes this legislation seriously then he should be prepared to get on his pins and contribute particularly as he is chair of the Education and Science Committee. This part of the process is to look at what the select committee did and to challenge whether any changes truly needed to be made. The select committee came back and said— 
Jo Goodhew 
: It didn’t. 
MOANA MACKEY 
: I ask Mrs Goodhew to calm down. It is called democracy. I know she may not like it but the fact is that we need to go through this process. Part 2 deals with the repeal of the Carter Observatory Act and the transfer of property and liabilities to the Wellington City Council. It really must be put on record the gratitude that this Chamber has both for the original donation of the Carter Observatory and also to the Wellington City Council when it stepped in to provide a lifeline for this national treasure. We should not be in any doubt that the ratepayers of Wellington have had to pick this up and the rest of the country can very very rightly feel pleased that they were prepared to do that. If they had not then we may have been in a position of not having a national observatory and also not having an excellent resource for education an excellent resource for teaching and an excellent resource for the promotion of science in the Wellington area. I have visited the Carter Observatory on many occasions and have very much enjoyed it. It is with a tinge of sadness that we say goodbye to our national observatory but we look forward to its future. 
The Carter Observatory board needs to go through a number of processes in order to transfer its assets and liabilities across to the Wellington City Council. It will be very interesting to see what comes out of the final report of the board in particular because the Carter Observatory has played a very extensive role in education in this country—far more I think than most members would actually be aware of. It is New Zealand Qualifications Authority accredited and it assisted in providing curriculum support for schools. Given that we have lost our science advisers in schools that support is even more critical for groups such as the Carter Observatory— 
Hon Judith Collins 
: Science teachers. 
MOANA MACKEY 
: They are science advisers I say to Mrs Collins. 
Hon Judith Collins 
: What about science teachers? Why don’t they advise? 
MOANA MACKEY 
: Why are science teachers not advisers? I think that question sums up National’s attitude towards science. In primary schools we have relied on science advisers because most primary school teachers do not have a degree in science. 
Jo Goodhew 
: Point of order. 
MOANA MACKEY 
: I am responding to an interjection. If Mrs Collins does not want me to go off track then she should not interject. We have a point of order Mr Chairperson. 
Jo Goodhew 
: I raise a point of order Mr Chairperson. I ask that you rule on relevance. I cannot find that issue. I have looked for it; it is not in Part 2. 
The CHAIRPERSON (Eric Roy) 
: I was indicating to the member that she was straying outside the debate. The member should desist from responding to irrelevant interjections. Let us contain ourselves to clauses 6 to 12 in Part 2 and the schedule. 
Hon Judith Collins 
: Just get some science teachers. 
MOANA MACKEY 
: I am enjoying this display of ignorance about science in our education system. 
I hope that in that final report we will see some explanation about the role that the Carter Observatory has been carrying out and how it intends to continue to carry it out. With the loss of science advisers who advise our primary school teachers on the science curriculum—because primary school teachers do not have science degrees by and large—it is more important that places like the Carter Observatory are able to come in. I hope that when the final report is prepared and presented we are able to get access to it. The report is submitted to the Minister in charge and I sincerely hope that if in that report the observatory has concerns about gaps that need to be filled with the loss of the national observatory as it becomes a tourism and educational facility the Minister will be able to take those concerns on board and will be able to guarantee that any gaps will be plugged. That is why that final report under clause 10 of this bill is so important. 
It will also be interesting to see the board’s activities and the areas it has been involved in because science seems to fly below the radar a little bit in this country. Members will be most interested to see the kinds of areas that the Carter Observatory has been getting involved in—and they are many and varied. It is a private tertiary provider; again not a lot of people know that but the observatory should be acknowledged for the work it has done in that area. 
SUE KEDGLEY (Green) 
: 
 Part 2 of the Carter Observatory Act Repeal Bill states that on and from the day the bill comes into force the property and all rights of the Carter Observatory board vest in the Wellington City Council. We have heard a lot of people including me extolling the Carter Observatory. It is a fantastic tourism centre a fantastic education centre and a great asset to Wellington. I congratulate the Wellington City Council on stepping in and coming to the rescue of the Carter Observatory. However we have not discussed the lack of resources that essentially led to the demise of the Carter Observatory as our national observatory. 
A few years ago in 2005 an astronomer and Australian professor Mike Bessell of the Australian National University was commissioned by the Ministry of Research Science and Technology to review the Carter Observatory. It is very interesting to read some of the conclusions that he came to. He said that the main reason the Carter Observatory failed in its role as the national observatory of New Zealand was the lack of adequate financial resources. He said that there is general agreement in the astronomical community that the main reason is the lack of resourcing. He went on to compare the observatory with those in other countries. He said that unlike other observatories overseas like those of Australia and other nations we have a much smaller percentage of research and development funding available for astronomical research in New Zealand. It is tragic that the loss of our national observatory is due to a lack of funding that we are giving to astronomy and to science generally in New Zealand. 
He also pointed out that virtually no science centre or planetarium in the world is able to sustain its operation solely through gate takings and that a proportion of the running costs in every planetarium or science centre in the world is provided by local or national government. Although it is very well for us to wax eloquent about the Carter Observatory what we are doing in this part of the bill is transferring what was once a wonderful national observatory into what is now a tourism centre and an education centre. Yes it is a great planetarium a great education centre and a great tourism asset but the truth is that the demise of our national observatory is because of a lack of funding. The Wellington City Council has committed funding for the next 10 years but I ask what will happen after that. 
It is sad that we do not have a national observatory to replace this national observatory. There is speculation that possibly it could be the University of Canterbury’s Mount John Observatory or that the university’s physics and astronomy department could become a centre of excellence but basically unless we provide proper funding—and I am glad to see that the Minister of Research Science and Technology is here—we will not have a national observatory or centre of excellence for astronomy in New Zealand. That is an indictment on New Zealand and on our commitment to science. 
We need to remember as we sit here waxing eloquent about the Carter Observatory that in this bill we are presiding over the loss of our national observatory. We are probably one of the only developed nations that does not have a national observatory and according to research that has come about because we have not provided enough financial resources to fund astronomical research or a national observatory. Thank you very much. 
ALLAN PEACHEY (National—Tamaki) 
: 
 I move  
That the question be now put 
. 
Motion agreed to. 
Part 2 agreed to. 
Schedule agreed to.  
Clause 1 agreed to.  
Clause 2 agreed to.  
Bill reported without amendment. 
Report adopted. 
Third Reading 
Hon Dr WAYNE MAPP (Minister of Research Science and Technology) 
: 
 I move  
That the Carter Observatory Act Repeal Bill be now read a third time 
. I have listened with interest to the contributions on this bill in the House tonight including those from members of the Education and Science Committee. I know that many of those members will take a call during its third reading. I acknowledge the work of the select committee which sought submissions on the bill. The select committee received submissions from the Wellington City Council the Carter Observatory and indeed the Stardome Observatory and Planetarium in Auckland. The officials of course did an excellent job in advising the committee. Everyone was supportive of the bill. Indeed everyone is looking forward to it passing into law. 
The general point has been made that in 1938—under a Labour Government I might note—the Carter Observatory was established as a national observatory. At that time that was appropriate. I remember going up to the observatory when I was a student in Wellington many years ago. At that time it was noticeably—and this was many years ago now—in a careworn state. The reason was that by then—and we are talking about the 1970s—astronomical research in New Zealand had already effectively transferred to the Mount John Observatory with a number of participating universities involved. At that time the most sophisticated instrument in New Zealand was the 1-metre telescope at Mount John. Today primarily as a result of collaboration between the University of Canterbury and Japan the principal instrument there is the 2-metre telescope which is primarily involved in searching for extrasolar planets and indeed has been very successful in that regard using microlensing techniques. 
Sue Kedgley observed that New Zealand does not have a specific allocation of money for a national observatory. That is because our funding system through the Foundation for Research Science and Technology universities and international collaborations effectively achieves that purpose. We now have a fine collection of instruments suitable for a country of our size at Mount John. In addition the University of Canterbury collaborates with the Southern African Large Telescope—or SALT—in South Africa. Last year and indeed this year the Government is partnering with the Australian Government to establish in New Zealand the Square Kilometre Array or SKA which is about radio astronomy. If the two countries are successful it will be a hugely important initiative. It is a global science project. We are in a science competition if you will with South Africa primarily and a decision on where it will be built will be made in 2012. In fact I am going to the Netherlands next month to assist Senator Carr in the joint Australia - New Zealand presentation to advance our case in that regard. The New Zealand Government is committed to funding it. I mention those issues to demonstrate that under successive Governments from both sides of the House there has been a commitment—appropriate to the size of New Zealand—to astronomy both radio and optical. But astronomy is no longer appropriate for the Carter Observatory given the nature of the instruments there and indeed its location in a city. 
As I indicated in my speech during the bill’s second reading I had the pleasure along with a number of colleagues to go to what was effectively the reopening of the Carter Observatory. The Wellington City Council and the Carter Observatory have done an excellent job in refurbishing and restoring the facility—not just the instruments but also the displays libraries buildings and so forth. It will perform an important educational role for people both young and old and in addition a tourism role. The refurbishment involved a contribution of $2 million from the Government to enable it to take place and the Wellington City Council is committed to annual expense of $300000 to enable the facility to continue in operation because as has been reasonably noted an observatory cannot be run just with donations and whatever payments people make. It requires the commitment of society for societal good and benefit to ensure that these kinds of public-good facilities exist. 
The Carter Observatory is part and parcel of the cultural and intellectual life of Wellington. As I noted earlier in the proceedings on this bill Wellington can justifiably make claim to being one of the finest small cities on the planet in large part because of the richness of its cultural and intellectual life and the commitment of the city council led very ably by Mayor Prendergast—and in relation to the Carter Observatory by Alick Shaw—to promote the life of Wellington. I was not surprised to read that Wellington is the best city to visit in New Zealand in the winter. I guess that in winter people concentrate on the intellectual side of life rather than perhaps the sporting side—on the observatory the art galleries the museum and so forth. 
Hon Tony Ryall 
: They can play sport in Wellington. 
Hon Dr WAYNE MAPP 
: Yes they can play sport in Wellington; that is true. There is an excellent stadium down here as well. 
It is with real pleasure to speak as Minister of Research Science and Technology on the transfer of the observatory from the Government to Wellington City. I say also as Minister that the Government has put a particular emphasis on science and we made it a particular priority in the Budget. I have heard the various comments from Opposition members in regard to that. They make various claims that Labour would have done more and so forth. They seem to have forgotten a few things. One there was a global recession; two their initiatives were not perhaps as well targeted as they could have been; and three there is also a question of taking the science system along with the funding. I think one of the important initiatives and I understand one that is well accepted by the Opposition is the innovative creation of the position of Chief Science Adviser to the Prime Minister. That has been a real fillip to the science community generally and has helped put a substantial level of shape around science policy for New Zealand. 
In closing it is a real privilege to be present in the House some 72 years after the initial establishment of the Carter Observatory. The House has recognised that Wellington is no longer suitable for a national observatory and that the responsibility for the Carter Observatory should be transferred from the Crown to the Wellington City Council. 
DAVID SHEARER (Labour—Mt Albert) 
: 
 It is very good that we are able to move so quickly tonight to get the Carter Observatory Act Repeal Bill through the House. I think that a number of people from the Carter Observatory are possibly watching this debate wondering why we use this arcane method of getting something as simple and bipartisan as this bill through the House and wondering why it is taking such a long time. I am beginning to learn the way of Parliament. 
The Carter Observatory opened in 1938 as the Minister has just said. In 1977 it was made a national observatory. In many ways many of the scientists of the time believed that the observatory was already the national observatory even before it was formalised. It has had a pretty mixed time since then. There have been some disagreements within the management of the observatory. There were some problems in respect of the funding of the observatory and I want to come back to that. It was something that Sue Kedgley raised and it has led us to believe today that the Carter Observatory serves best as a visitor and tourist asset to the city of Wellington rather than as a national observatory. 
Many of the scientific functions have moved the Mount John Observatory which is administered largely by Canterbury University but as the Minister said in collaboration with a number of other universities throughout the world—in particular a number of US universities. It is very heartening to see that New Zealand is continuing that. I think that this is part of the bipartisan nature of science in this country and it is reflected in the Square Kilometre Array. We are putting forward a bid to take that project on with Australia. The New Zealand astronomical community will certainly get a real boost if we find we have won that when the announcement is made in 2012. 
When we look back on the Carter Observatory I think we can learn a few lessons about the way it has proceeded over time. One of the lessons is about funding and Sue Kedgley spoke up about that before. We cannot do science without funding. The Government needed to put $2 million into the Carter Observatory. The Wellington City Council put $1.4 million in and is looking to put in another $300000 a year to ensure the upkeep. That is quite an expensive commitment to take on yet the observatory is a real treasure. As an aside I mention one part of the treasure which is the fantastic library that the Carter Observatory has. That has not come up in the discussion but is an asset to the Wellington City Council. 
The funding issue is a real and pertinent one and the Minister just mentioned the amount of funding the Government is putting forward as part of its science package in the Budget. It was the third-largest commitment after health and education in terms of new money—$56 million. Nobody will scoff at that but it is a lot less than would have happened if the 15 percent tax credit had been left in place. But let us look at that $56 million because in a sense about 7 and a bit percent of the actual science budget is new money. If we take into account the inflation rate of 5.9 percent suddenly that 7 percent starts to look a little bit weak. 
If we talk to any scientist in this country any scientist at all about the amount of money that is being put in he or she will tell us that the inflation rate for science is actually quite a lot higher than our domestic inflation rate for the simple reason that we have to import most of our equipment from overseas. Suddenly that third-largest amount of money that is being poured into the science community through the Budget is starting to look rather pathetic. It is certainly pathetic in terms of the amount of money that would have gone in as part of the tax credits and the amount of money that would have stimulated businesses as an incentive—an incentive rather than a handout a grant—to increase their own commitment to research and development. 
Let us talk about another issue in terms of funding. Today we had a remarkable announcement which we have been waiting for for a long time. It was that the Primary Growth Partnership finally has agreed to fund three projects—finally. The Minister of Agriculture the Hon David Carter who happens to be in the House at the moment said he makes no apology for the delay in the delivery of the Primary Growth Partnership. My feeling is that he should apologise. He should apologise to the scientists who have been sitting there for 18 months unfunded waiting for money to be able to fund science. 
Hon David Carter 
: We announced it in September last year—6 months. The member doesn’t know what he’s talking about. 
DAVID SHEARER 
: Not only that but the business community was waiting for the Government to make its announcement so it could pledge its half of the deal as well. They have been sitting around wasting time. I say to Mr Carter that it is actually about 18 months because if we look at when the Fast Forward fund was demolished at the end of 2008 and at where we are now—I think it is May 2010—we see that we will not get any money out of the door before June or July. So it is probably closer to 20 months that have been wasted. 
Members should think about that happening in any other sector. What would have happened in the health sector or in policing? What if suddenly the police were left bereft of $60 million that they were not able to use for 18 months? Members can imagine the outcry if that had happened. But the science sector can be quietly pushed aside and discarded simply because the Minister of Research Science and Technology has not been able to push the thing through as fast as he said he could. 
The Fast Forward fund was already in place. It was already set up; the money was already in the account— 
Hon David Carter 
: Recklessly spraying money around. 
DAVID SHEARER 
: The money was in the account I say to Mr Carter; I have seen the books. The money was there and it was hauled out and put into some other trite scheme that this Government is trying to run through with the last Budget. 
We could have had $1 billion in place with that amount matched by business—that is $2 billion worth of funding going into our primary produce. Instead we allowed that to fall over. That is a real shame. I think that in 2011 when we have a change of Government we will look at making sure that continuity is maintained. I believe as I said when I opened this discussion on the Carter Observatory that bipartisanship is an important aspect of science. 
I raise one other issue in terms of science. One of the things that Labour did during its 9 years in Government was support the science sector in schools. The Carter Observatory as many people have quite rightly noted is now part of the science curriculum of many Wellington schools. What this National Government has done with its national standards is focus its attention on maths and English and discard science. Science advisers have been half-funded compared with what they were before. If members ask secondary teachers—Mr Peachey for example was a teacher and I was a secondary teacher for some time—they will say that having science support backing them up is an incredibly important means of keeping them up to date and giving them the enthusiasm to ensure that science is well taught and to ensure that the enthusiasm of students is carried forward. 
That has now gone. So what have we got? We have a Carter Observatory one of whose failings we know was the fact that it did not have enough money. Yet the Government has underfunded science in comparison with what was there—half of what it promised in 2008 and half of what the Labour Government already had in place. It has crashed the Fast Forward fund and put in the Primary Growth Partnership which has yet to deliver. Not one dollar has gone out yet. We have approved three projects and they are good projects I admit. They are very good projects. That Primary Growth Partnership is only now starting to work 20 months afterwards. We have seen science teaching being left out in the cold. 
ALLAN PEACHEY (National—Tamaki) 
: 
 The third reading of the Carter Observatory Act Repeal Bill marks the final stage in a legislative process of transferring the assets of the Carter Observatory Board to the Wellington City Council. The council has actually managed the observatory since 2007. 
The decision to transfer the assets from the board to the council was made by the previous Labour Government. However it has fallen to this National Government to oversee the legislative process and it has been a pleasure to do that. The first reading debate was an interesting one certainly marked on this side of the House by passion enthusiasm and insights into how children learn. I was very pleased that members opposite were able to take the opportunity to maybe learn a little bit during that debate. The Education and Science Committee deliberations were interesting marked by cooperation enthusiasm and a desire to get the job done. So we have come to this point where tonight we will pass this bill and the formal transfer will take place. 
I found it interesting that the previous Labour speaker David Shearer decided that this was an appropriate time to raise a whole pile of other agendas and it amazes me how short some of the Opposition members’ memories are concerning the opportunities that Labour had when it was in Government for 9 years to do some of the things that its members now talk about doing. I tell Labour members that talk is cheap. I would have much preferred it—and I think it would have been a far more grateful attitude on the part of Labour—if its members had taken the opportunity to reflect on the work that the Carter Observatory has done in the past and on what that observatory has meant to generations of children who have learnt about the moon the stars the Earth and the universe. It is nothing to do with money in children’s eyes; they have just bright eyes and enthusiasm. 
I commend the bill to the House and urge its rapid passage. I express the hope and the confidence that the Carter Observatory will build on its glorious past and continue to make a very fine contribution to the city of Wellington and to the country of New Zealand. 
MOANA MACKEY (Labour) 
: 
 I think the member who has just resumed his seat Mr Peachey might have forgotten his own contribution in the first reading debate of the Carter Observatory Act Repeal Bill when he went off on quite a tangent about the evils of socialism. His face was twitching. I think my colleague David Shearer’s talking about science in relation to the Carter Observatory is perhaps slightly less of a long bow to draw than that member’s speech about his continued belief that the Cold War is ongoing that the Iron Curtain never came down and that members on this side of the House are all reds under the bed waiting to tear this country apart. With the greatest of respect I disagree wholeheartedly with his speech. I point out that it was the Minister of Research Science and Technology who decided to make grandiose statements about science in his speech and he must expect that members on this side will respond to those comments. 
It is very nice to be here finally at the third reading of this bill. As has been said in the first and second reading debates we must first give a thank you to Mr Charles Rooking Carter who gifted his estate to the Royal Society of New Zealand for the establishment of an astronomical observatory. Without that extraordinary act of generosity we would not be here tonight and we would not have had the benefit of the observatory in its function as astronomical observatory since the 1930s and in its function as national observatory since 1977. The second thank you must go to the Wellington City Council for the role it has played in stepping in to ensure the ongoing survival of the Carter Observatory both in its former state and in its new exciting future as an educational and tourism facility. We should also thank the officials who worked on this bill and of course the submitters albeit a small number who took the time to submit on this legislation. 
One of the good things that has come up during this debate has been a discussion and an ability to inform members about the various roles the observatory has held. Even though its research capacity and involvement has been diminishing over a number of years—and I agree with the comments of Sue Kedgley that this is not an area into which New Zealand puts a lot of research money compared with other countries—it is certainly important that its role in an education capacity continues. In my Committee stage speech I referred to the loss of the science advisers in schools because the Carter Observatory has played a very important role in supplementing the curriculum. Members can go online and have a look at its website. It provides an enormous number of resources for teachers and an enormous amount of support for the New Zealand curriculum. That is very important because the National Government last year cut funding for advisers in primary schools including science advisers and that will have a huge impact on the teaching of science in New Zealand. 
It was interesting that during my Committee stage speech the Hon Judith Collins was interjecting and asking what science teachers are. I thought that that summed up the attitude of the National Party on the whole problem. Ms Collins asked what science teachers are if they are not science advisers. A Cabinet Minister does not understand the role of a science adviser in advising primary school teachers—some of whom may have degrees in science but I bet that pretty much all of them do not; they have degrees in primary school teaching—and that they need that sort of curriculum support to be able to deliver science education at the very time when we need to be grabbing students. That is the time when we need to provide lessons that appeal to a young person’s natural sense of curiosity about the world around them. Science advisers in New Zealand have played an enormous role; then in last year’s Budget their funding went. And—do members know—so have they. They have all gone. They have been picked up by other countries because they are enormously valuable in the education system. 
That will have an impact on the teaching of science at primary school where we need to grab young people get them interested in science and make sure that the curriculum is appropriate for the teaching of science particularly for teachers who do not have a background in science. We require our primary school teachers to teach across an enormous array of subjects in which they may not have a specialty. That is where those science advisers were so important. Thank goodness we still have the Carter Observatory working in an educational role and being able to provide some of that support which the Government cut in last year’s Budget. I was really disappointed to hear Minister Collins make those comments unless she was expecting high school teachers of science on top of everything else they have to do to go down to primary schools and assist primary school teachers in the teaching of science. Maybe that is National’s grand plan in education; I am not sure. The reality is that it will have a detrimental impact. Thank goodness we still have the Carter Observatory here to carry out at least some of that role. That is on top of its role as a private tertiary education provider because it is accredited by the New Zealand Qualifications Authority which is another thing not many people knew about the Carter Observatory. 
It was interesting that during his third reading speech the Minister of Research Science and Technology decided to go on the attack about his record in the area of research science and technology. As my colleague David Shearer quite rightly pointed out compared with what National promised before the last election the Government has fallen woefully short—another broken promise—in this year’s Budget in terms of funding particularly for the Crown research institutes. They were promised core funding which they have yet to receive. More important funding for science in this country under the National Government is roughly half what it was when Labour left Government. 
Hon Dr Nick Smith 
: Rubbish. 
MOANA MACKEY 
: It is true I say to Dr Smith. It is true. 
Hon Dr Nick Smith 
: You had 9 years. 
MOANA MACKEY 
: To Dr Smith getting rid of the research and development tax credit was not a cut it was a change. To Dr Smith getting rid of the $700-million Fast Forward fund was a reprioritisation not a cut. The fact is that the sector knows it was a cut. Some parts of what the Government has put in place are good and there are some parts that I agree with but overall it is woefully inadequate for the needs of our country if we want to grow our economy. 
One of the biggest concerns is how the Government has absolutely shut out small business. It has said to small businesses it will not back them when it comes to innovation. Labour’s research and development tax credit did not do that. Of course the grant system National has developed is only for large companies. Even Fisher and Paykel Healthcare which expects to get a couple of million dollars out of the National Government’s grant system said that was half what it would have got out of Labour’s research and development tax credit. Some of our most innovative companies are small and they are the very ones that cannot afford to invest in research and development. They are the very ones that need that assistance to be able to move into that area. National has said those small businesses are not eligible for that assistance and that is absolutely crazy. Small businesses are eligible only for a tiny part of the package—absolute crumbs. If we are serious about innovation in this country why are we shutting some of the most innovative companies out of getting any kind of assistance at all? 
David Shearer 
: There’s no incentive. 
MOANA MACKEY 
: There is no incentive. The other interesting thing is that Dr Mapp used to talk about why he got rid of the previous Labour Government’s research and development tax credit. He always said that it was because companies were not doing new research. They would just reclassify their spending. He had talked to an accountant who told him—I think it was an accountant? 
Hon Dr Wayne Mapp 
: Accountants. 
MOANA MACKEY 
: Oh it is plural now. It was not plural last year. Clearly he has found another unnamed unknown accountant to add to his list of people he has talked to about this issue. That accountant had said to him that companies were busy restructuring everything so that they could rort that research and development tax credit of Labour’s. This Government has no trust in scientists. That is the other thing. It thinks that scientists will just rort every system out there. So why have we put in place a system for grants that those companies do not have to spend on new research and development—not even on new research and development? Not only did the Government say grants do not have to be spent on new research and development but also it has not even said they have to be spent on research and development. In fact the Prime Minister said the Government just trusts scientists to spend the funding on research and development-ish stuff. Under Labour’s tax credit we had put in place a system to say that we wanted expenditure to be on new research and development because we had learnt from the Australian experience that we had to put certain safeguards in place. The tax credit was for new research and development. Dr Mapp could not possibly have told us that none of the applications were for new research and technology because the Government cut the scheme before the first applications came in at the end of the financial year. How he somehow knew that all of the applications would be for old research and development activity I am not sure. 
The reality is that this is a bad Budget for science. I think the Minister should not have taken the opportunity to brag about something that he should not be bragging about. While I am on my feet the other thing I ask is why the Minister of Research Science and Technology is not in charge of the Primary Growth Partnership. What kind of message does it send to the science community when the Minister of Research Science and Technology—albeit he does not have— 
Hon David Carter 
: Because it comes out of the MAF Budget. 
MOANA MACKEY 
: I know that it is being done under the Ministry of Agriculture and Fisheries but why is the Minister of Research Science and Technology not taking charge of it and showing leadership in the science community. I know that David Carter needs things to do other than steal members’ bills on animal welfare off backbenchers but the fact is that this should be led by the Minister of Research Science and Technology. It should send a strong message that this Government values science but this Government does not. 
COLIN KING (National—Kaikoura) 
: 
 It is a pleasure indeed to take a brief call during the third reading of the Carter Observatory Act Repeal Bill. Matters have been very well canvassed on the virtues of the observatory its history and things like that. 
In Wellington it is important that the Carter Observatory remains in that space of importance as an educational tool and as a tourist attraction. It would be a shame if after all the efforts and history of the observatory which has been running since 1938 it was to slowly but quietly slip under the radar screen because we would lose the piece of history it has contributed to Wellington and to New Zealand. 
I certainly encourage everyone to get on the cable car trolley up to the Wellington Botanic Gardens and become familiar with that piece of history known as the Carter Observatory. We should keep it there for education and for tourism. When the ladies are in Wellington they should think seriously about whether shopping would be better than a trip up to the Carter Observatory. 
Let us look where we have gone. Back nearly 100 years ago the observatory fulfilled a function. Science has moved on but science still remains very much a centrepiece of education. On that basis it gives me great pleasure to commend this bill to the House. 
SUE KEDGLEY (Green) 
: 
 The Green Party is very happy as is every other party in this House to support the Carter Observatory Act Repeal Bill. The bill has taken years to get through this House and there is no particular explanation as to why that is. I suppose it was just a lack of priority. But finally we are passing this bill tonight. 
Although everyone has been waxing eloquent about the wonderful national Carter Observatory the incredible asset it is to Wellington and the way it generates so much interest among schools as a science and education centre nevertheless the harsh reality is that 72 years after its founding we are presiding over the transformation of a once great national astronomical observatory into a tourism attraction—a tourism attraction—and an education centre. I think it is actually rather sad that today we are losing our national observatory. 
I made the point in the Committee stage about a very interesting report written by the Australian astronomer and professor Professor Mike Bessell in 2005 when he was commissioned to review the Carter Observatory by the Ministry of Research Science and Technology. I will quote from a couple of parts of his report because he points out that “Among all the sciences astronomy has the unique power to reveal the true scope of the outside world. This immense and enduring appeal of astronomy to the public allows it to act as a powerful ‘science magnet’:”. I think that many members have acknowledged the incredible interest of science students in astronomy. The report goes on: “At the elementary school level teachers know that the two scientific topics guaranteed to excite their students are dinosaurs and outer space … The lecturers in these courses know from long experience that a palpable hush falls over the class whenever topics such as black holes the search for other planets Earth-crossing asteroids or the origin and fate of the universe are brought up.” The report points out that “Astronomy among all sciences has the highest relative participation by non- professionals.” The report also points out that for that reason astronomical research is increasing in other countries such as in Europe the United States of America Canada and Australia so it is rather tragic that here in New Zealand we are going in the opposite direction and closing our national observatory. 
As the professor pointed out in his report and as two other reports also pointed out basically the observatory is closing for the key reason of the lack of adequate financial resources. His report talked about the way the Carter Observatory has languished over the years through lack of funding and about the fact that we have a much much smaller percentage of research and development funding available for astronomical research in New Zealand. It is extraordinary that we have such a tiny percentage of funding available for astronomical research; that is a bit of an indictment. The report talks about the fact that the funding through the Marsden Fund is simply not adequate to sustain a national observatory. For that reason and really for that reason alone we are presiding here today over the demise of a once great national observatory that has been around for 72 years. 
As I also pointed out in my speech during the Committee stage I am concerned about the continued funding and viability of the Carter Observatory even in its new guise as a tourism attraction and as an education centre. I pointed out that the professor in his report emphasised that no planetarium or science centre in the world can survive through gate takings alone; they have to be supported by local or central Government funding. That is my worry. To be sure the Wellington City Council has stepped into the breach—a breach that I guess has been caused really by central government because successive Governments have failed to provide the funding that is needed to sustain a national observatory. Now the Wellington City Council has stepped into the breach but it has guaranteed funding for only the next 10 years. So I question what will happen after that. 
Yes it is wonderful to have this science centre and yes it has been recently refurbished and it reopened just over a month ago. It is a fantastic centre; it is a great tourist asset to Wellington. We hope that it will very much continue to attract visitors. Wayne Mapp talked about a survey today that shows that Wellington is the No. 1 winter destination for tourists in New Zealand. That is largely because of all the interesting things such as the Carter Observatory and the many other assets we have here in Wellington. But it is a worry whether the Wellington City Council will provide the funding to keep the observatory as a genuine educational centre and as a world-class tourism asset. Those are the concerns that the Green Party has as we support this bill today and as we preside over the demise of our once great national observatory. Thank you. 
JOHN BOSCAWEN (ACT) 
: 
 Thank you Mr Assistant Speaker— 
Chris Hipkins 
: Here comes a speech on the ETS. 
JOHN BOSCAWEN 
: I will speak on this bill. I had not been intending to speak but I mentioned to that member’s colleague David Shearer that the speech he gave earlier this evening gave me the inspiration to speak on this bill the Carter Observatory Act Repeal Bill. 
Hon Member 
: I don’t believe it. 
JOHN BOSCAWEN 
: That is right; Mr Shearer gave me the inspiration to rise to my feet to speak on the Carter Observatory Act Repeal Bill. 
It was interesting that Mr Allan Peachey my local MP castigated Mr Shearer. He made the point—and I thought quite fairly—that the Labour Government had been in power for 9 years so of course it had had a lot of time to address some of the issues that Mr Shearer raised. But having said that Mr Peachey had been critical of Mr Shearer’s speech I have to say that I thought Mr Shearer raised some very good points—points just recently picked up by Sue Kedgley. Mr Shearer talked about the budget for research and development and Labour’s Fast Forward Fund. He talked about the Government’s commitment to put an extra $56 million a year into science and technology and he talked about the cost of running an observatory. 
Well I am sure that this has not missed the attention of any member of Parliament but in the last 24 hours two power retailers have announced increases to the price of electricity as a consequence of the emissions trading scheme from 1 July. As a consequence Mr Shearer’s points were very well made. Electricity will cost more and every individual every business every entity in the country will pay more for their electricity and it will cost more to run the Carter Observatory. As Sue Kedgley said we have to be concerned about falling budgets so I guess that this is an own goal. Certainly the announcement that was made yesterday by Mercury Energy to put up the price of electricity by 3.3 percent is essentially a hidden profit for the Government. So I guess it is an ill wind that blows no good. 
There are the Government’s three main generators including Mighty River Power which generates electricity on the Waikato River. It does not make any carbon emissions so it does not incur any emissions cost as a consequence of its generation of electricity on the Waikato River. However it has said that it will increase the wholesale price of electricity because Genesis Energy will pay for those emissions and will force up the wholesale price. As a consequence Mercury Energy can go out to its customers try to keep a straight face and say “Look we’re going to be incurring a higher wholesale price for the cost of electricity and we’re going to pass it on to you.” Of course that simply results in a windfall gain for the Government. 
I find it very interesting that the figure the Government put up for the revenue it will earn from the emissions trading scheme is $350 million and that it ignores those same hidden profits—those windfall profits. As owner of Mighty River Power— 
Sue Kedgley 
: Come on back to the bill. 
JOHN BOSCAWEN 
: I am addressing the issue that Miss Kedgley raised. She was concerned about the budget and the cost of operating the Carter Observatory and the investment in science and technology. The member can laugh but I am making the point that electricity is going up from 1 July. All New Zealanders all institutions all museums and all observatories will pay for that. 
Sue Kedgley 
: What’s that got to do with the Carter Observatory? 
JOHN BOSCAWEN 
: I note that Mr Shearer devoted a large part of his speech to the cost of operating observatories and scientific institutions and that member did the same. I am making the point that we incur costs to run these things. In the last 24 hours Mercury Energy announced that it will increase the price of electricity by 3.3 percent and Contact Energy announced that it will increase the price of electricity by 3.2 percent. It is all very well for the Minister for Climate Change Issues to say that that is great news because we had forecasted electricity to go up by 5 percent but it is only going up by 3.3 percent. I say to the Minister that there are 12 more months in this financial year and I am sure by that time we would have had the 5 percent increase. 
Hon Dr Nick Smith 
: You’re a climate change believer now? You’ve changed your tune again. 
JOHN BOSCAWEN 
: The Minister of Research Science and Technology told me that one of the things the scientists at the Carter Observatory follow is the so-called Milankovitch Cycles which Dr Smith might understand a bit about. Dr Mapp told me that the people who believe in those cycles put them as an alternative hypothesis for the changes in global temperature that we have observed. The Assistant Speaker has been very generous and I think I have made my point. The ACT Party will be supporting this bill. Thank you. 
STUART NASH (Labour) 
: 
 Whenever I hear John Boscawen speak the first thing he says is: “I was not going to take a call in this bill but I’ve changed my mind.” I think it would be better for most in the House if he went with his first call on that one. I have heard Mr Boscawen talk about the emissions trading scheme numerous times now. I put a challenge to that member that he put his money where his mouth is. Will he still vote with a Government that will implement an emissions trading scheme? That member has spent many hours of his time researching and debating the emissions trading scheme but what will he do about it? When push comes to shove will he put his money where his mouth is? 
I come back to this bill. I am supporting this bill for very good reasons. It repeals a 1938 bill. As I talked about in the Committee stage I ask members to imagine the time back in 1938 and what days they were then. They were hard days because this country was in the grip of a Depression. They were tough and dreadful days. I tell members to imagine the foresight and the vision of a Government that said that amongst all that misery we needed a beacon of light and a project that would inspire the people of New Zealand. That Government commissioned a bill to build an observatory up there as a beacon for the whole country. The bill we are repealing went through in 1938. The observatory took a few years to build and it was commissioned in 1941. 
Those were dark days as well. It was the middle of World War II and things were not going too well for the Allies. There was Stalingrad and they had been kicked out of Dunkirk. The Germans were on the rampage. Indeed those were dark days for New Zealand. Here we were with this new observatory being commissioned. I ask members to picture the imagery around this. It was an edifice that would have conveyed the image of looking forward looking to the stars looking onwards and looking upwards. This was a great symbol of where the country needed to go. It was truly aspirational as only Labour can be. 
No doubt it was opened by Peter Fraser. He would have been surrounded by the great men and women of the Labour Party who drew this country out of the Depression it was in. Labour created the social service net. 
Chris Hipkins 
: Who was his finance Minister? 
STUART NASH 
: Walter Nash was in Washington as the first overseas ambassador. He would have been there if he could have been there. This was a really uplifting project and it was fantastic. I take my hat off to that visionary Labour Government. Goodness me it achieved so much in so little time. In 1977 the observatory became our national observatory. This bill is the natural conclusion to a process that has been going on for quite a while now. In 2006 the Labour Government gave $2.2 million to provide for more education and tourism opportunities. In 2008 further funds followed to again increase its tourism opportunities. Now this bill is the official transformation from science to tourism. That is now complete. 
In my three periods in this city—first as a student the second as a contractor and now as a member of Parliament in this wonderful House—each time I have walked past that observatory to work or to varsity I looked up and it spoke as a beacon of what the Labour Government in 1938 achieved. It was always looking onwards and upwards. 
Now I come to this century. In a way maybe what is happening tonight is an analogy for research and development in the science sector and for funding in New Zealand under this Government and it saddens me. We all know that Labour set up a $700 million Fast Forward Fund because Labour understood that the only way this country would grow and compete in the globalised world of fast-paced movement was with research and development. We needed a fund and a way to help those businesses that would be the future face of this country. I ask what happened. Those chaps were elected and the fund was ripped away and gutted. We talk about the brain drain. There go all the scientists who would have been working and whom that money would have been spent on. 
My colleague the Hon Pete Hodgson tells a story of a young scientist who came to Parliament to pick up a scholarship. He was headed overseas to do his post-doctoral work. He said to Pete: “With this fund Minister I am really tempted to come back to New Zealand to work in New Zealand because I can now see a future for me as a scientist. I can see a future for research and development. This is the way forward. There is a future for me in this country.” I wonder where he is now. He is probably at Cambridge Oxford the Massachusetts Institute of Technology or Harvard but one thing is for sure: I very much doubt that he is here. Well we know that the first funding that was that Government’s replacement for the Fast Forward Fund was allocated I believe only today. 
David Shearer 
: Not even allocated just approved. 
STUART NASH 
: It was not even allocated just announced. This Government has ripped $700 million out of the research and development sector and what did it replace it with? It replaced it with the $190 million Primary Growth Partnership—$190 million. And it took it 18 months to do that. It is a disgrace. 
I will tell members an interesting story. I was in a tax debate just a couple of days ago—last week or whenever it was—and one of my colleagues threw a question across the House. My colleague asked what was in the Budget to drive research and development and what was in the Budget to drive innovation. Do members know what the Minister of Research Science and Technology said? Tax cuts. He said it was tax cuts. I could not believe that. The Minister of Research Science and Technology said that it was tax cuts. I expected him to yell across the floor that the Government would activate the productive economy in this country by providing funding to the research and development sector. He would have been a lone voice amongst his colleagues because of course the Minister has his PhD. Dr Nick Smith also has a PhD. He understands the value of science. He understands the value of innovation and research. Two Ministers sitting across the House at the moment have PhDs. Did they stand up in a Cabinet meeting and say that we need more money to grow the productive economy and that the only way we will do that is through research development and innovation? Did they? 
Hon Members 
: No. 
STUART NASH 
: No they did not. I thought they might have but the reason I know they did not is that the Minister for Research Science and Technology said that the way to grow the productive economy was through tax cuts. I could see my colleague David Shearer who has done a lot of work on this and a lot of research and who knows what every country around the world is doing in this area—I saw his shoulders drop because Dr Wayne Mapp was an ally of his. David Shearer said to me that Wayne Mapp would stand up for their sector. He said he knew that he would because he has a PhD and he understands the sector. David slumped back in his chair with his shoulders dropped because he knew that the one person whom he thought he could rely on had let him down. 
The Minister said that tax cuts would save this economy. Well all I can say is God help this economy if that is the way it is. That was hugely frustrating no doubt for everyone who operates in the productive economy and who needs just a little bit of incentive to drive growth. They need just a little bit of funding a little bit of support from the Government to drive innovation and to drive research and development so that they can take their products globally so that we can start competing in the global environment. 
Anyway this analogy is saddening but perhaps under this Government our economy will also move from one of scientific endeavour to purely tourism. That is why I say that perhaps this bill tonight under which the Carter Observatory has moved from science to tourism—let us hope that it has not—could be an analogy. I am fearful that in fact this bill is an analogy for the way this economy will go under this Government. But then again my colleague Kelvin Davis would ask how that could be because the Government is going to mine schedule 4 land which is our prime tourism competitive advantage. So I do not know what the hell we will end up with but I do know that this is a good bill. I support it and I commend it to the House. Thank you very much. 
LOUISE UPSTON (National—Taupo) 
: 
 I am very pleased to speak in support of this third and final reading of the Carter Observatory Act Repeal Bill. If people think about this particular bill and have listened to some of the speakers before me they will probably think that those members should visit the Carter Observatory so that they can figure out what planet they are on. Perhaps it is the “Planet of the Apes”; perhaps it is not this planet at all. 
Before I move on to the bill I will address one comment that was made about the current Government’s investment in science. This Government under the fine leadership of Dr Wayne Mapp in the area of science research and technology is putting real money into science. It is not hot air which is perhaps something else members could see if they visited the Carter Observatory. It might be a useful trip for them. If they look upwards they will realise that pennies do not fall from heaven. It is real money that we are looking for. 
If members think about what they might do if they were to go to the Carter Observatory—I have looked at the great information on its website and yes there is a focus on tourism now but a lot of science education goes on there—they will learn about the big bang black holes the Milky Way and the universe. 
Hon Dr Wayne Mapp 
: They’ve suffered a big bang. 
LOUISE UPSTON 
: Yes that is correct. Goodness me those members have fallen into a deep dark black hole. If members went to the Carter Observatory they could look at the Thomas Cooke telescope for star-gazing. I think that perhaps the Opposition needs to do some serious navel-gazing instead. 
Anyway this bill has the support of the House and I am proud to speak in support of it. It is very simple. It repeals the Carter Observatory Act and dissolves the Carter Observatory board. The Wellington City Council is excited about having this asset so that it can use it to promote its beautiful city and wonderful science hand in hand with tourism. Thank you. 
KELVIN DAVIS (Labour) 
: 
 I agree with the previous speaker Louise Upston that the Carter Observatory Act Repeal Bill is a simple bill. Everyone in the House basically agrees with it. But I also take Sue Kedgley’s point that this is a sad day because we are losing a scientific and research asset after it has served New Zealand for 70-odd years. Since 1977 the Carter Observatory has been our national observatory and this is a sad day because we are losing that aspect of it. 
Sue Kedgley is also correct to say that astronomy is one of the subjects in a class that really grabs students’ imaginations. If we go into any class in any school it does not take us long to see the planets lined up in order from Mercury through to Pluto. We can hear people talking about the moon and how the moon moves around Earth about the relationship of the gravity of the sun to all the planets and about how those things all interrelate. We hear kids talking about black holes sunspots and Saturn’s rings. In fact today there was a news report that astronomers have seen a planet that is travelling so close to a particular sun that it will be eaten up over the next 10000000 years. Those are the types of learning situations that children really enjoy. They motivate them and get them into science. It is unfortunate that the observatory is being closed because as Dr Bessell reported there is a lack of resourcing for it. 
A number of people today have brought up the issue of the lack of resourcing for science advisers. As a former principal I can say that in Tai Tokerau in the far north there was a lack of advisers full stop. Science advisers were as scarce as hens’ teeth. Even if when we did find a science adviser that person would have unfortunately a huge geographic area to cover in Tai Tokerau. Advisers had over 100 schools to cover which made it almost impossible for any one school to get a science adviser—and that was when there were more advisers than there are now; before their number was halved. So partly as a result of the lack of advisers science is not a subject that is particularly well taught in schools. 
As a result of that we have students going through into secondary school who are not particularly motivated about science. When they have been taught science it is normally about electronics—putting batteries and bits of wire together—water-based science and those sorts of things. Because students are not learning science well it means that they do not go on to take up science courses at university in the numbers that we would expect. Kaitaia College mentioned to me when I was the principal of Kaitaia Intermediate School that pupils were coming through who were lacking in science skills. Also the focus—and this is moving a bit off the point—of national standards on numeracy and literacy is a disincentive for teachers to teach science because if teachers’ performance is to be measured on the basis of how well their students do in numeracy and literacy then they are best suited to focus on those areas not on teaching science and not on taking their students to the observatory. Instead students should be sitting in classrooms and learning about numeracy and literacy. That is a great disincentive to broadening the curriculum; it does narrow it down. 
It is great though that the observatory has a big focus on supporting teachers. Teachers are able to come in before they bring their classes to the observatory and get a bunch of resources that will help them to plan their units. Science such as astronomy appeals to gifted students. People tend to think that gifted students are the students who achieve really well when in fact gifted students tend to underachieve because their needs are not being met by the school curriculum. Science and astronomy are among the subjects that really help gifted students to get involved in the curriculum. It is the gifted students who will make a big difference in the world. They will become the scientists they will go into the technological courses and they will make the big changes that are really important to the world. 
So we do have to thank Charles Carter who back in the 1930s decided to set up this observatory for astronomy. The observatory has over the years been the basis of research. Amateur astronomers have been able to conduct their own research. I believe it was amateur astronomers who first spotted the Shoemaker-Levy 9 asteroid which people followed through the Internet eventually tracking its path. I think it was the Shoemaker-Levy 9 asteroid that ended up crashing into Jupiter. These are the sorts of experiences that the observatory would get kids to be motivated by and to observe. That is how education outside the classroom really does engage and motivate students into learning. 
As other members have said it is very disappointing that the $750 million research and development Fast Forward Fund was cut. As I have said it is the people who engage in science and technology who will make the breakthrough developments for the world. They are the people who will develop the cures for ailments and diseases. Also as we have heard from Stuart Nash the way to grow the productive economy is through investing in research and development. It is not just through having tax cuts as the only way forward for the country. 
The other aspect of the observatory is the tourism side of things. Tourism is really important to New Zealand’s economy; over $20 billion was brought in through tourism last year. It is great that the observatory complements the tourism scene in Wellington and in fact in all of New Zealand. The observatory adds to Wellington’s attractions such as Te Papa and Zealandia: The Karori Sanctuary Experience. With that I thank you very much. 
JO GOODHEW (National—Rangitata) 
: 
 The Carter Observatory Act Repeal Bill is very good. It should not spend any more time in the House. I am looking forward to the vote. Therefore I commend the bill to the House. 
Bill read a third time. 
Animal Welfare Amendment Bill 
Second Reading 
Debate resumed from 25 May. 
COLIN KING (National—Kaikoura) 
: 
 It is a pleasure to speak during the second reading debate on the Animal Welfare Amendment Bill. This bill improves the structures and therefore the enforcement of laws on the ill-treatment of animals. Essentially this bill is designed to bridge a gap in legislation that resulted in a marked number of animal welfare cases being downgraded to ill-treatment of an animal when far more serious crimes had been committed. 
Section 28A “Reckless ill-treatment of animals” in clause 5 comes into play between the top offence defined in section 28 “wilful ill-treatment of animals” and the lower offence of just ill-treatment of an animal. The Primary Production Committee agreed that adding this tool to the offences against animals would result in more successful prosecutions of such offences. That having been said I must congratulate the Minister of Agriculture David Carter for two reasons: having the wisdom to reprioritise the funding within the Ministry of Agriculture and Forestry’s budget to reinforce the number of animal welfare officers and to strengthen the protection of our domestic animals and farm animals. 
So what does the bill do? It introduces an important category within the Animal Welfare Act one that will result in more successful prosecutions for the ill-treatment of animals. 
Finally I congratulate the Minister of Agriculture David Carter on having the wisdom to make $8.2 million available within the Budget for better animal welfare care. I commend this bill to the House. 
Dr CAM CALDER (National) 
: 
There was movement at the station for the word had passed around 
That the colt from old Regret had got away 
And had joined the wild bush horses—he was worth a thousand pound 
So all the cracks had gathered to the fray. 
All the tried and noted riders from the stations near and far 
Had mustered at the homestead overnight 
For the bushmen love hard riding where the wild bush horses are 
And the stock-horse snuffs the battle with delight. 
We all recognise that poem by “Banjo” Paterson set in the Australian outback: “The Man from Snowy River”. It illustrates with beauty and elegant simplicity how the early development of Australia was driven by the ineluctable working linkage between man and animals. In the early days the Australian economy was based largely on selling wool from the backs of sheep. Those sheep were managed by men on horses with working dogs. 
Hone Harawira 
: This is New Zealand Cam. 
Dr CAM CALDER 
: In New Zealand a similar relationship held true. The working partnership is continued in both countries to this day. Meat and dairy exports underpin our tradable sector. 
Away from the farm the majority of New Zealand homes nurture one or more domestic pets. These pets provide company and affection to people of all ages; they are part of our everyday life. 
Most Kiwis look after their animals extremely well; sadly a small number do not. Very simply we believe that New Zealanders abhor animal cruelty and National in this bill is doing something about it. Thank you. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am very pleased to take a call on the Animal Welfare Amendment Bill. This came before the Primary Production Committee and was a member’s bill but it has been adopted by the Government. I commend the Government for doing that because I do not think there is much that New Zealanders abhor more than cruelty to animals. 
This bill follows on from a number of high-profile cases that have seen appalling cruelty to animals— 
Hone Harawira 
: Cruelty to children cruelty to women? 
BRENDON BURNS 
: Yes cruelty to animals. I am not supporting cruelty to humans either but we are dealing with animals in this particular bill. We had a number of appalling cases which saw such things as a drunken man taking the head off a family kitten in front of his family. We also had the awful instance of a man feeding five kittens to his pit bull terrier and watching the animal while it killed them. 
That sort of treatment of animals is reprehensible and the fines and measures available to the courts are not of sufficient quantity or size to provide a deterrent message not just to people who engage in wilful ill-treatment but also to those who recklessly ill-treat animals. A new offence is added via the bill in respect of reckless ill-treatment. There is a definition around wilful ill-treatment currently in the law for those who have set out deliberately to ill-treat or maim an animal. But there is an issue around reckless ill-treatment whereby effectively animals are abandoned—left without food and left without shelter—by people who do not give a stuff about the animals for which they supposedly have care and responsibility. That is why as well as increasing the penalties for wilful ill-treatment this bill introduces penalties for neglect and ill-treatment which in the past have not been subject to such penalties. 
The bill also enables the courts to order the forfeiture of animals owned by someone who has been convicted of a serious offence against an animal. In the select committee deliberation we also recommended that anybody who takes back animals or starts to look after animals again when they have been subject to a penalty and a disqualification relating to the ownership of animals can then face the same penalty all over again for taking on animals after that person has been told that he or she is not allowed to do that. 
As mentioned the bill was subject to considerable submissions from animal welfare agencies—the SPCA amongst a number of others. One of the more curious submissions came from the New Zealand Pork Industry Board. I had to say to the representative of the board that I found it a little bizarre for that industry to be submitting in support of the bill given that in the eyes of many New Zealanders the pork industry is an industry that raises a number of questions regarding its approach to animal welfare. For the Pork Industry Board to say it was shocked by some of the incidents of animal cruelty that it had seen reported was a little strange given that for many New Zealanders the issue of animal welfare was most brought into highlight by the  
Sunday 
 documentary last year in relation to the continued retention of sows in sow crates. So that was a rather odd submission to be made. None the less there were a number of other submissions. 
Debate interrupted. 
The House adjourned at 10 p.m.