Volume 646 Week 70 - Tuesday 18 March 2008 
Volume 646 Week 70 - Tuesday 18 March 2008 
[Volume:646;Page:14951] 
Tuesday 18 March 2008 
Madam Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Motions 
Tibet—Protests 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 I move  
That this House express its deep concern at reports of violence and riots in Tibet and subsequently elsewhere in China; call on all sides to show restraint; express its strong support for the right of people to protest peacefully; urge the Chinese authorities to react carefully and proportionately to protest; and urge China to engage in meaningful dialogue with representatives of the Tibetan people in order to achieve a lasting resolution of problems in Tibet 
. 
As members know the subject of Tibet has been very much in the headlines in recent days. The New Zealand Government is deeply concerned at the violence there and we are monitoring the situation closely. We have urged all involved to exercise restraint. We want to see an end to the violence. Although the latest reports from Lhasa indicate that the city is calm this does not necessarily mean the situation has been resolved. In New Zealand we respect the right of people to protest peacefully. We have urged the Chinese authorities to react carefully and proportionately to protest both in the handling of events as they arise and in the dealing with them in legal terms afterwards. The New Zealand Government has also long urged China to engage in meaningful dialogue with representatives of the Tibetan people. In our view this remains the best way to achieving a lasting resolution to problems in Tibet. 
The New Zealand Government’s views on this matter have been conveyed to the Chinese authorities. There was contact with those authorities over the weekend involving the New Zealand Ambassador to China Tony Brown. There was subsequent engagement yesterday with both the Chinese Ministry of Foreign Affairs and the Chinese Ambassador here in New Zealand. It is my expectation that dialogue will continue through diplomatic channels. I am advised that the Chinese authorities have formally confirmed that they have taken note of the New Zealand Government’s concerns about the situation in Tibet. I welcome that advice and also China’s readiness to talk to us about developments. 
We have made New Zealand’s position very clear and will continue to do so. I am advised that the approach the New Zealand Government has taken is very much in keeping with that of other Governments that have expressed concern about developments in Tibet. It is my intention to raise these issues with the Chinese leadership when I next meet with it. If everything goes according to plan in relation to the proposed free-trade agreement that will be next month in Beijing. As members know human rights issues including those concerning Tibet are a regular feature of my discussions with Chinese leaders as they are of discussions at the ministerial and official level. 
This year is an important year for China as it prepares to host the Olympic Games. We have seen the enormous effort that has been put into preparations and we hope the games will be a success. It is no surprise that the issues that are now arising in respect of Tibet have focused international attention on China. The court of world opinion will judge how China manages these issues and any others that arise in coming months. The New Zealand Government very much hopes that China can demonstrate calm leadership befitting a country of its size and growing international role. 
In conclusion I advise that the Ministry of Foreign Affairs and Trade has been aware of five New Zealanders in Tibet. All were understood to be planning to leave Tibet and at least one has already left. 
JOHN KEY (Leader of the Opposition) 
: 
 On behalf of the National Party I join the Government in voicing concern at the violence and loss of life in Tibet over recent days. Although the official reports are not yet clear as to the level of casualties or indeed the precise origins of some of the conflict what is clear is that the Chinese Government has engaged in a substantial imposition of military force in Tibet on a scale and in a manner that is unacceptable to the vast majority of New Zealanders. In supporting this motion today I want to make it very clear that the National Party supports the right of the citizens of Tibet to peaceful protest and calls upon the Government of China to respect that right. 
It has been a matter of some comment that these unfortunate events occur as New Zealand concludes negotiations for a free-trade arrangement with China. The National Party supports those negotiations as it supports free-trade negotiations generally because they can only advance New Zealand’s interests as a small nation very dependent on its capacity to trade. Nothing we have seen in Tibet in recent days affects that bipartisan support for the free-trade agreement but neither do the free-trade agreement negotiations affect our right—indeed our obligation—to speak up when we see a small group of people who are substantially unable to defend themselves treated in a manner that we find by our standards totally reprehensible. 
So today I urge the Chinese Government to heed the expressions of alarm in this country and many others. I urge it to respect the human rights of the citizens of Tibet and I urge it to seek dialogue rather than the imposition of force as the path towards solving the longstanding disputes in Tibet. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 The Prime Minister has clearly set out New Zealand’s position on the emerging situation in Tibet. This is the worst unrest in that region in over 20 years and we have serious concerns about reports of violence looting and loss of life in Tibet. We are concerned that there have also been disturbances in other parts of China. It is imperative for the violence to stop; then it will be possible to find ways to manage and resolve the situation. We have urged China to demonstrate restraint and due care in its handling of the evolving situation in Tibet. Information on what has happened and why is still coming to hand. There are limited sources of information about the situation on the ground. We want to continue to engage China on this front as well as to hear from others about developments. 
We have let China know of our concerns through diplomatic channels and this dialogue will continue. New Zealand is a country that has long engaged China on the question of Tibet. We shared the concerns of the international community about events surrounding the 1959 uprising and its management. We have referred to Tibet many times over the years in United Nations processes and we have directly engaged China on the Tibet issue through bilateral channels since we established relations in 1972. We have long called for dialogue between the Chinese authorities and the representatives of the Tibetan people to discuss the problems of Tibet. Such dialogue is the best way to try to find an acceptable and lasting way forward. 
The Dalai Lama has visited this country four times and in his capacity as a spiritual leader he has met parliamentary figures here. My predecessor met him; I myself have met him. As I have told my Chinese counterpart as a Westminster democracy we do take the opportunity of people visiting our shores to meet them to hear their perspectives and to share our own. We know that China is sensitive about the Tibet issue; we listen to the Chinese perspectives just as we listen to other points of view. The consistent approach of successive Governments has been to take an interest in developments in Tibet and to engage the Chinese on this issue and the human rights situation there. 
We know there are a few New Zealanders in Tibet and we are pleased that they are safe and making plans to leave the region. We hope their departure will be smooth and safe. 
Some people have been calling for the Government to abandon its wish to sign a free-trade agreement with China because of the developments in Tibet. That is a matter for the Minister of Trade and for the Government to address. It is a case that economically speaking is for the proponents of such a free-trade agreement to make out but a unilateral trade boycott of China would be futile and not help any people. Political posturing over human rights issues would be no more sensible than past examples such as rushing to judgment in the 1980s only to have to rue such rash behaviour in the following years. I have to say that unilaterally abandoning trade and commerce with China over the Tibet issue will not advance New Zealand’s interests. We would lose our standing in that important and growing market at a time when there are growing concerns about the world economy. Any opportunities we forgo will be quickly taken up by others in our place. 
So let us talk with China about the situation let us get the facts let us register our concerns—as we have been doing—and let us contribute through our dialogue and good sense to efforts that might have a real chance of bringing about a resolution rather than our placating our temporary social consciences. 
KEITH LOCKE (Green) 
: 
 The Green Party will be supporting this motion although we would have liked it to be much stronger and to clearly take the side of the Tibetan people against their Chinese oppressors. 
The Green Party is concerned at our Government’s double standard. When the Burmese military suppressed Buddhist protests last year the Prime Minister said it was “simply unacceptable for peaceful protesters to be shot beaten or arrested.” But when it is the Chinese Government doing the same thing in Lhasa she simply calls on both sides to “show restraint” and calls for the authorities to act “carefully and proportionately”. We want the Prime Minister to speak the truth about the causes of the protests in Lhasa and other cities—that is the 50 years of denial of the rights of the Tibetan people and the ruthless suppression of any dissent. This is the Tibetan people’s hour of need; thousands of Tibetans are being rounded up for exercising their basic right to protest. Today the Tibetan people need a fearless public advocate not those who will mince words. 
New Zealand may be a small country but as we have seen on nuclear issues what we say does have an impact when it is clear and unequivocal. So far we have been weaker than other States. The French Foreign Minister Bernard Kouchner has talked about “strong condemnation” coming from all the members of the European Council. New Zealand’s foreign policy is at a crossroads. Do we support a people whose human rights are being crushed by a dictatorial State or do we go soft in the interests of a preferential trade deal? In the 1980s we were labelled the mouse that roared when we stood up against the nuclear policies of the United States; are we now the mouse that only squeaks when the Tibetan people cry out for help against the Chinese superpower? Should we not show at least some of the bravery of those Tibetan monks who went out into the streets last week knowing that their probable fate would be years in a Chinese prison? 
This is not the time for wishy-washy words of diplomatic-speak; it is a time for clear passionate support for the Tibetan people. We must support the Dalai Lama’s efforts to achieve genuine autonomy for the Tibetan people within China not the fake autonomy we see now where Chinese settlers are pouring into Tibet and controlling its economic political and cultural life. The anger of Tibetan protesters last week was fully understandable. It was an explosion of pent-up resentment at decades of the denial of their national rights of the swamping of their culture. 
The Green Party believes we cannot separate the oppression of the Tibetan people from the preferential trade agreement New Zealand is about to sign with China. The low Chinese wages that will make it difficult for New Zealand firms to compete with Chinese firms under a free-trade agreement are the result at least in part of the lack of human rights—and labour rights in particular—of the Chinese people and the Tibetan people. Human rights should also be a factor in which countries we choose to have a preferential trade agreement with. Eyebrows would be raised if we entered such a preferential agreement with Robert Mugabe or the Burmese junta. I think in the light of the events in Tibet it would be wise to postpone the signing of any free-trade agreement until at least after the Olympics Games to give room for the New Zealand Government to engage in a public debate on the role of human rights—and particularly what is happening in Tibet—in our going ahead with such an agreement. It would allow a spotlight to be put on Tibet in the lead-up to the Olympic Games and during those games. 
It is great to read in the Christchurch  
Press  
this morning that Mark Todd who has two Olympic gold medals has said that he may well protest in some form if he is selected for the Olympic team. I am sure it would be a very dignified protest that he would carry out. There is in New Zealand a huge reservoir of support for the Tibetan people and I think the Government and many parties in this House are misjudging that support by using vague words and not talking openly directly and in a condemnatory fashion about what is happening in Tibet today. We owe it to the Tibetan people to do more than this motion does. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Three years ago in July 2005 when the chairman of China’s National People’s Congress arrived here at Parliament he did so by first snubbing the official powhiri that had been arranged in his honour. The explanation put forward by the then adviser to the Prime Minister Mike Munro was that the presence of the Tibetan flag being proudly flown by a lone protester would cause gross offence to the Chinese visitors. Unsaid was the fact that the decision to boycott our traditional protocols the powhiri to welcome Wu Bangguo to Aotearoa might also cause gross offence to the tangata whenua. Unsaid was the fact that the refusal to recognise the Tibetan flag might also cause gross offence to the people of Tibet. It is a matter of priorities. 
Today we are uniting as a House to express our concern about the fatal riots that have taken place in Lhasa. The National Party is alarmed and troubled and the Prime Minister is deeply concerned but do we have the backbone to do more than express our concerns? Do we have the backbone as a Parliament to make a strong statement that challenges China’s crackdown on the demonstration of Tibetan resistance? 
The demonstrations taking place now in Lhasa have been led by Buddhist monks and supported by crowds of everyday citizens. The results have been devastating. BBC sources report that at least 80 corpses have been counted while China suggests the death toll is but 10. This is not a guerrilla war a battle of terrorists. This is an action of peaceful defiance supported by the international leader of peace the Dalai Lama; the man who won the 1989 Nobel Peace Prize has now become a figure of public attack from Chinese authorities. The Dalai Lama has spoken out loudly and consistently calling for an inquiry into what he describes as cultural genocide and a rule of terror. 
What is the nature of the action that the Chinese authorities are seeking to suppress? The Dalai Lama’s command to the people has been “to address the long-simmering resentment of the Tibetan people through dialogue”. Dialogue—it is hardly the battle term for a premeditated all-out assault. 
What we do now in Aotearoa will be critical to how this dialogue evolves. Do we ignore the analysis of the Dalai Lama—that this is a cultural genocide? Do we support the Chinese officials’ declaration in calling for a people’s war? We are in the unique position to exert pressure. The world is watching us as our nation negotiates a free-trade agreement with China. We can use this bargaining power to advance the path of peace that our nation is known for. We must stand tall in promoting the peaceful resistance that was taken in 1835 by Moriori in the Chatham Islands; in 1881 when the people of Taranaki refused to fight at Parihaka instead drawing on peaceful traditions of passive resistance; the international reputation we gained when former Prime Minister David Lange stood against nuclear ships in the 1980s; the protests against nuclear testing at Mururoa in 1985; and the 1996 case taken to the World Court at The Hague. We must use this history and this tradition of the non-violent resolution of conflict to our greatest influence. 
We in the Maori Party bring the attention of the House to the call for fair trade not free trade and for ethical investment where human rights are not sacrificed for commercial imperatives. Aotearoa sits at the crossroads in the way in which we approach this trade deal with China. We have always considered the essential value of Treaty of Waitangi principles in the negotiation and confirmation of any trade agreement. Such principles may lead us logically to ask what the impacts are on New Zealand workers and businesses. Are the workers overseas exploited to benefit the New Zealand economy? Are there impacts on indigenous peoples among trading partners? 
The point is that at this fragile state of play we need to consider the wider human-rights context in which the trading partners are negotiating. Is the goal for a lucrative trade deal with China worth selling our soul for? We must speak out about the brutal people’s war which the Chinese authorities are promoting as necessary to “expose the hideous face of the Dalai clique to broad daylight.” When this so-called hideous face was last in Aotearoa in June of last year he was welcomed with a powhiri befitting the most distinguished of visitors. He did not choose to drive past to snub the mana whenua as they laid the foundations for his korero in the Vector Arena in Auckland. He responded to our welcome with true humility. In fact his graciousness was even present on the steps of Parliament when he responded to my colleague Hone Harawira’s spontaneous haka with characteristic warmth and delight. 
The message of His Holiness in his visit last year was one of compassion. When he was asked: “How do we stop abuse and violence?” his response was startling in its simplicity. He said: “One random act of kindness at a time.” The violence and riots that are being committed against people of prayer people of discipline and people of tradition concern us all. The free-trade agreement offers us an excellent opportunity to challenge the Chinese Government’s human rights record. We must build on the platform of peace that the people of Aotearoa are so proud of. We must take bold steps to demonstrate our support for the rights of the Tibetan people to self-determination. We must be brave on the world stage in calling on the Chinese authorities to engage in peaceful and meaningful dialogue that will ensure the protection of Tibetan culture. The Maori Party calls on this Parliament to demonstrate one random act of courage today by speaking out against the violence that began in Tibet’s main city Lhasa. We cannot be mute while the world watches on. Thank you. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 United Future joins with other parties in strongly condemning the actions of the Chinese Government and the People’s Liberation Army in quelling the protests in Tibet and Southern China. The right to political protest is a crucial plank of the right to freedom of speech and to see that suppressed through violent means indicates to the world that China has a long way to go before fully deserving the respect of the international community it so desperately seeks. 
At times like this United Future would expect to join all parties in strongly condemning the Chinese Government’s violent response to protests in Tibet. However it is sadly obvious that the Labour Government has bigger fish to fry than to uphold an oppressed people’s political freedoms and fundamental human rights. Worse still it appears to the world that New Zealand’s timid response has simply been bought by Chinese yuan. The response of the Government has been to stall saying that more information is needed. It is thinking that hopefully the situation will blow over and that maybe if the People’s Liberation Army can crush the dissension quickly enough it might be able to sneak over to Beijing sign on the dotted line and still gain the plaudits of being the first country to sign a bilateral free-trade agreement with China. How much is it to buy New Zealand’s moral conscience? It seems to be about $2 billion in real GDP terms if the Ministry of Foreign Affairs and Trade has its figures right. 
New Zealand has a fine history of standing up for what we know is morally right. Let us take for instance the anti-apartheid movement the antinuclear stance or our annual commitment to refugees. However this Government seems reluctant to use its privileged relationship with China to express New Zealand’s outrage. Although United Future does not argue that we should cut off our nose to spite our face a free-trade agreement is a two-way street. At present the Government makes it seem as though China is doing us a favour but it must be remembered that China stands to increase its GDP by US$14.7 billion through this agreement. New Zealand is thus in a strong bargaining position—stronger in fact than most other nations. 
So we believe that it is up to this Government to strongly voice our nation’s concern. As a proud New Zealander the very least I would expect is for the Prime Minister to summon the Chinese Ambassador and in no uncertain terms express our nation’s disappointment and disapproval—or are we so subservient in this relationship that we cannot even do that? 
United Future leader Peter Dunne hosted the Dalai Lama last year—an honour made strange by the fact that the Prime Minister refused to meet with the Tibetan leader. At the same time not a lot was really made of this fact. Maybe now we are truly seeing which side of the fence this Government sits on. With our Government continuing to abdicate its responsibility in this regard it will now sadly be up to individuals and in particular athletes to voice our nation’s concerns. 
Although it is too late to question whether China should ever have been granted the Olympic Games the upcoming event is the obvious opportunity for New Zealand along with the rest of the international community to make a stand. The Olympic Charter states that any form of discrimination with regard to a country or a person on grounds of race religion politics gender or otherwise is incompatible with belonging to the Olympic movement. The charter states: “Blending sport with culture and education Olympism seeks to create a way of life based on the joy found in effort the educational values of good example and respect for universal fundamental ethical principles.” The events in Tibet and countless other human rights violations in China not only now but historically have made a mockery of these words and ideals. I truly hope that New Zealand athletes are given the option and the opportunity to make peaceful protests if they so wish and that the New Zealand Olympic Committee backs them to do so in what I am sure will be challenging circumstances. 
RODNEY HIDE (Leader—ACT) 
: 
 On behalf of the ACT party I rise to support the Prime Minister’s statement today. I also join with the Green Party United Future and the Maori Party in saying that ACT wishes the condemnation would grow stronger. We wish that we—as a Parliament and as a country—and our Government would stand up for human rights everywhere particularly against Governments that are so keen to suppress them with such uncalled for violence. But we disagree with the Maori Party the Green Party and United Future that we should somehow de-link the free-trade agreement and use the Olympics to make something of a political statement. 
I leave the House with this thought. Far more has been done for human rights in China with China opening its borders up to the world than by it keeping itself closed. As the Chinese people see the world around them unfiltered by their Government they actually gain an appreciation of human rights and the virtues of democracy. That is the charge that New Zealand should lead with free trade contact and sporting contact with the Chinese people. We should bear in mind that it is not the Chinese people who are actually committing these atrocities; it is the Chinese State Government. The interactions with trade and sport reach across to the people of China. 
So yes let us condemn these atrocities and stand up for the human rights of the Tibetan people—and indeed the Chinese people who are so oppressed—but let us see that with free trade and with sporting contact we are in fact advancing the cause of human rights everywhere. Thank you. 
Hon JIM ANDERTON (Leader—Progressive) 
: 
 I will give just a brief response from the Progressive Party. I think the House does not need to think very long or hard to understand that during the Cultural Revolution when China was more isolated than in any other time in recent history things got worse for the Chinese people not better and worse for others around them not better. It is by opening up the Chinese economy and society to contact with other nations whether be through the Olympic Games or through free-trade agreements that we will make the most advances in relation to China joining the Western World in terms of democratic processes and so on. So I think the Prime Minister the Minister of Foreign Affairs and the Minister of Trade in leading that engagement are doing the work that all New Zealanders would want them to do and I can only applaud them for it. 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 In reply I say that the Government appreciates the support of other parties for the motion I have moved today but we do distance ourselves from some of the intemperate comments that have been made. I would like to agree strongly with the statement introduced into the debate by Rodney Hide that supporting the opening up of China and its engagement in the international community is probably the most powerful thing we can do to support change in China for the medium and long term. China has an authoritarian political system. It is my hope that in my lifetime that will change because China will be drawn into the world community and its people will be able to travel be educated offshore and see more of the rights that we are able to enjoy in countries like ours. 
New Zealand Governments will always uphold the right of peaceful protest. We will never uphold any right to violent protest. Regardless of whether the protest in Tibet was peaceful or violent the Chinese authorities should react proportionately to that and they should resolve to enter into dialogue with the representatives of the Tibetan people including the Dalai Lama. It is my understanding on advice from the Ministry of Foreign Affairs and Trade that the reaction of the New Zealand Government to what has happened in Tibet is at the upper end of reactions from Governments around the world. That is what New Zealanders would expect of us and it is consistent with New Zealand’s being prepared to raise human rights issues with the Chinese leadership and officialdom on a very regular basis. 
Motion agreed to. 
Voting 
Correction 
Madam SPEAKER 
: Last Thursday when the House was considering the Building Amendment Bill the result of the vote on the question that the bill be now read a third time was incorrectly announced as Ayes 71 Noes 50. The correct result is Ayes 70 Noes 51. 
Speaker’s Rulings 
Personal Reflections and Unparliamentary Language—Privilege 
Madam SPEAKER 
: On Thursday last week the Hon Bill English raised a point of order about an expression used by the Minister of Health in reply to a supplementary question from the Hon Tony Ryall. I have reviewed the  
Hansard 
 and the expression used was “he should exercise his privileges”—the freedom of speech—“only in exceptional circumstances not to protect his cronies.” Mr English suggested to me that such a remark was unparliamentary and that for a member to suggest that another member had used privilege to further his own self-interest was offensive to the House as a whole. 
I have given some thought as to whether the remark contravenes Standing Order 116 on personal reflections. It is this Standing Order that establishes the context for unparliamentary expressions. Words used robustly in debate but which do not impugn the honour of a member will not be ruled out of order—Speaker’s ruling 39/4. Similarly contestable statements will not automatically be ruled out. Questions for oral answer is a time of particularly robust exchanges in the House. Members’ freedom of speech should not be curtailed unless members’ remarks are offensive on the face of it or strongly insulting. 
The words used by the Minister of Health were in effect a contestable statement. The Minister was questioning Mr Ryall’s evaluation of the public interest in the context of disclosing matter that is the subject of a restraining order. So in that context the words were not contrary to Standing Order 116. 
Questions to Ministers 
Economy—Statement 
1. JOHN KEY (Leader of the Opposition) 
 to the  
Prime Minister 
: Does she stand by her statement yesterday in relation to the economic downturn: “Basically the New Zealand economy has held up pretty well”; if so why? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 Yes; because I believe that to be true. 
John Key 
: Well does the Prime Minister then agree with Michael Cullen’s assessment today that a recession cannot be ruled out as the New Zealand economy struggles against weak housing markets a drought the international credit crunch and various other factors; and how does she reconcile that frank and stark statement by the Minister of Finance that New Zealand might be heading for a recession with her own comments that everything is holding up just hunky-dory thanks very much? 
Rt Hon HELEN CLARK 
: I think it is important to quote people accurately so I will quote the Minister of Finance who said: “it would be foolish to rule out the possibility that there could be two successive quarters of very small negative growth at some point in the next year or so.” That would not detract from the Treasury advice we are getting that the economy will continue to grow over whole year cycles. 
John Key 
: Why if a recession cannot be ruled out did the Prime Minister say yesterday that her Government “is not planning to change its policy settings” in the face of a worsening economy; and does she not think that New Zealanders who are reeling from very high petrol prices very high mortgage rates and very high food prices and who are generally struggling to make ends meet deserve a break from the massively increasing spending budgets that her Government keeps rolling out? 
Rt Hon HELEN CLARK 
: Again I think it is important to quote people accurately. What I said at my press conference yesterday was that the Government was not planning to change its economic policy on the back of one front-page article quoting one economist of the Bank of New Zealand that happened to appear in the  
Dominion Post  
a couple of days ago. If the Leader of the Opposition knows how to reduce oil prices if he wants to reduce international dairy prices and if he has an answer to the US credit crunch we are all ears. But I note that today National could not even tell people what its policy was on KiwiSaver let alone any of those things. 
Rt Hon Winston Peters 
: Given the fact that we remain an export-dependent economy with our primary products holding up and with the recent initiative that the Government has announced with regard to research and development to invest further in these industries when will the Government address the highly inflated dollar held up by the settings behind the Reserve Bank of New Zealand Act? 
Rt Hon HELEN CLARK 
: The Reserve Bank of course has not actually lifted the official cash rate for some time. But banks themselves are lifting their rates because they are experiencing the flow-on effects of the credit crunch from offshore. 
John Key 
: Is it not just the case that Michael Cullen is quite prepared to admit that there might be a recession—[ 
Interruption 
]; well it might be funny for Michael Cullen but it is not funny for New Zealanders; I can assure him that they are really struggling out there—but is not prepared to do anything about it in terms of reining in waste or reining in Government spending and that there is one reason for that which is that her Government is locked and loaded in a programme of large spending in a desperate attempt to buy a fourth term and it will not work? 
Rt Hon HELEN CLARK 
: I do recall when a previous Government ran into some economic heavy weather—1998. That Government’s response was to cut New Zealand superannuation and sell one of the jewels in the crown of the State-owned enterprises which was Contact Energy. I can assure members that the Labour-led Government’s response to international market volatility will not be to sell State-owned enterprises and it will not be to cut the pension. On the contrary—on 1 April New Zealand superannuation goes up and it goes up by $34 more than it would have if National’s policy had stayed in place. 
Jeanette Fitzsimons 
: When the Prime Minister said at her post-Cabinet press conference yesterday that New Zealanders would not want to lose the perceived benefits to the economy of the China trade deal over human rights issues was she aware of the Television New Zealand (TVNZ) poll showing only 39 percent of New Zealanders were of that view and will she apologise to the other 61 percent whom she has accused of believing that growing New Zealand’s GDP is more important than torture and human rights abuses in other countries? 
Rt Hon HELEN CLARK 
: For every poll the member quotes I can quote another. I can quote the poll that the Minister of Trade has referred to today which was taken around the same time period as the Television One poll and asked: “Do you generally approve or not approve of a free-trade agreement with China?”. The result was that 44 percent said yes they did generally approve of it and 35 percent said no. 
John Key 
: Can the Prime Minister not understand that New Zealanders are not expecting miracles from the Labour Government—they have long since given up waiting for those—and all they want is a fair go; they are sick of seeing their money wasted on a massive build-up in the bureaucracy and they are sick of seeing a Government that puts pressure on interest rates; all they want is enough money to be able to pay the mortgage pay for a block of cheese and fill up the car but sadly they will have to wait a long time under a Labour Government to be able to afford to do that? 
Rt Hon HELEN CLARK 
: What New Zealanders want is prudent economic management. If this Government had followed Mr Key’s advice 16 months ago and cut taxes by $11.5 billion we would be heading for Crown debt of 50 percent right now. That is why we would never follow his advice. 
Rt Hon Winston Peters 
: Given that there is about a 24 percent spread between those two polls—which would be the kind of result in any self-respecting democracy that would bring the polling industry to meet and examine its methodology in order to ensure there is some sort of science about this rather than the viewing of entrails which seems to be the case with the TVNZ poll—when will she join New Zealand First’s demand that there be no polls 28 days out from the election so the people of this country can make up their minds without—[ 
Interruption 
] Before the election. It will not matter in that member’s case before or after. 
Madam SPEAKER 
: The question is very very wide of the original question. Although polls were raised in a supplementary question they were specific to a free-trade agreement which was within the context of the economy not generally. 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. With respect what New Zealanders think about the free-trade agreement with China is a rather important political matter. I do not think there is any politician in this House who would dispute it. All I am saying is that if we are going to have polls on what the people think let us employ some science behind this not a bunch of people who arrogantly say: “That pollster is wrong; I am right.” and never bother to meet and sort out their methodology which I advocate TVNZ does. 
Madam SPEAKER 
: That is a matter for another question. 
John Key 
: Well if New Zealanders want prudent economic management as the Prime Minister has just pointed out in her answer why does her Government not start delivering it instead of increasing expenditure by 30 percent more in its last Budget despite the fact that Michael Cullen knew because Treasury had told him it would increase interest rates it would keep them up higher for longer and it would keep the exchange rate higher for longer—although her colleagues might laugh in the face of New Zealanders they are not laughing out there in “mortgage belt New Zealand” right now? 
Rt Hon HELEN CLARK 
: Prudent economic management has delivered for New Zealand the longest run of economic growth since the Second World War. Prudent economic management has delivered the lowest unemployment rate in around 25 years. I hate to think what Kiwis would be paying for their mortgage rates now if that member—that gambler—had ever got his hands on the economic tiller. 
John Key 
: Well what confidence can the New Zealand public have in her Government when her Government cannot even get the numbers right—like today when it had to admit there was $600 million more revenue than it announced last week? 
Rt Hon HELEN CLARK 
: The only person disappointed that there is $600 million more in the coffers is the Leader of the Opposition because it does not suit his doom and gloom scenario. 
John Key 
: Well are the facts of life not that her Government will miraculously find another $600 million—or maybe it will be $1 billion—a few weeks before the election just like it did last time because that is the way the books are run under a Labour Government? 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. I just want to make a point here to do with the format of questions because you have given an indication that questions should begin with a questioning word for a start. Mr Key gets about $100000 more than most backbenchers and a car and everything else that goes with it and at this point in time he cannot surely get away with saying “well” at the front of every question. I am asking you to uphold some rules here because at a certain point those backbenchers will think that if he can get away with it then why cannot they have his job and do the same thing because they can do it just as well. 
Madam SPEAKER 
: It is a timely reminder. I hate to remind the member that he started a question today with “given”. I did not intervene at that point because this sometimes happens. However it is a timely reminder that questions should be questions. 
Hon Dr Michael Cullen 
: Does the Prime Minister draw the conclusion from slash-and-burn calls arising out of the international credit crunch that Roger Douglas is not merely out of the box but now running National Party policy? 
Madam SPEAKER 
: Yes the—[ 
Interruption 
] If that member interrupts me one more time when I am reflecting on a ruling then I will be asking him to leave the Chamber. The member will please be seated. Often it is very difficult for me to hear exactly what is happening because members are interjecting. Therefore I must reflect upon what I think has been said. I say to Dr Nick Smith that that is what I was doing. Would the member please repeat the question so that we can hear it and then I can make a ruling. 
Hon Dr Michael Cullen 
: Does the Prime Minister draw the conclusion from calls for slash-and-burn policies based on an international credit crunch that Roger Douglas is not merely out of his box but now running National Party policy? 
Madam SPEAKER 
: No that has no ministerial responsibility. 
KiwiSaver—Reports 
2.  
CHARLES CHAUVEL (Labour) 
 to the  
Minister of Finance 
: What reports has he received on the success of the Government’s KiwiSaver scheme? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 A KiwiSaver evaluation report released last Thursday shows that KiwiSaver is attracting members from across age groups ethnicities and income brackets and KiwiSavers are expected to become even more diverse as more of them join the scheme through automatic enrolment when they start a new job. The numbers are now rapidly approaching 500000 and the latest surveys show a significant increase in the membership of work-based superannuation schemes. 
Charles Chauvel 
: Has the Minister seen any reports on policies to alter the Government’s KiwiSaver scheme? 
Hon Dr MICHAEL CULLEN 
: Yes. I have seen a report that Mr Bill English was today to outline his party’s stance on the future of the Government’s KiwiSaver scheme in a speech to the superannuation conference. In the end the speech turned out to be all flop and no flip at least as yet but members should continue to watch this space. 
Charles Chauvel 
: What reports has the Minister received on support for KiwiSaver? 
Hon Dr MICHAEL CULLEN 
: The latest report I have is that as of Monday 495000 New Zealanders have signed up to KiwiSaver. The 500000 mark will be reached either just before Easter or just after Easter. I have also seen a report that over 100000 young people have joined KiwiSaver despite the Leader of the Opposition’s confident predictions that they would not join it. But then of course he has invested in Merrill Lynch shares. We have not seen a clear policy from National. What we know is that it voted against the KiwiSaver scheme 40 times. 
Health Minister—Confidence 
3.  
JOHN KEY (Leader of the Opposition) 
 to the  
Prime Minister 
: Does she have confidence in the Minister of Health? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 Yes. 
John Key 
: What confidence can the public have in a report that fails to address many of the critical questions including that of the actual appointment of Mr Hausmann by Annette King despite his clear and substantial conflicts of interest as well as all those of the actions of the district health board executives in silencing the whistleblower and their actions in allowing Hausmann to help write not just the tender documents but also the relevant board papers? 
Rt Hon HELEN CLARK 
: The report found that the board had inadequate systems for the management of conflicts of interest. The report also found that there was a seriously eroded and dysfunctional relationship between board and management. I believe that the Minister acted appropriately. 
John Key 
: What does the Prime Minister say to Deborah Houston the Hawke’s Bay whistleblower who became aware of serious conflicts of interest who followed due process only to find that her professionalism was rewarded by the loss of her job and who now finds out that these matters have been completely ignored by the report? 
Rt Hon HELEN CLARK 
: I do not believe there is any evidence to suggest that she lost her job because of whistle-blowing. 
John Key 
: Why did the report ignore issues around the whistleblower when the Prime Minister herself last year said in relation to the treatment of the whistleblower that “any issue around that could be looked at as well.”? 
Rt Hon HELEN CLARK 
: I repeat: I do not believe there is any evidence that the whistleblower lost her job because of whistle-blowing. 
John Key 
: Should the House have as much confidence in this report as it did in the Ingram report into Taito Phillip Field; and is it not a hallmark of the Prime Minister’s Government that she commissions reports to find out things she wants to hear and conveniently leaves a whole lot of other stuff unanswered unless people keep digging? 
Rt Hon HELEN CLARK 
: No but it is a hallmark of the Opposition that it attacks every independent report commissioned by the Government. 
National Certificate of Educational Achievement System—Confidence 
4.  
DAIL JONES (NZ First) 
 to the  
Minister of Education 
: Does he have confidence in the National Certificate of Educational Achievement system; if so why? 
Hon CHRIS CARTER (Minister of Education) 
: 
 Yes; because the National Certificate of Educational Achievement (NCEA) is a world-class qualification system that challenges students recognises their achievement and is proven to prepare students well for life once they leave school. The New Zealand Qualifications Authority is continuing to improve NCEA to make it as effective a measurement tool of student success as possible. According to Business New Zealand’s chief executive Phil O’Reilly NCEA is a very good system that gives employers news they can use by showing the areas a student does well in. 
Dail Jones 
: What confidence can the Minister have in the NCEA system when the deputy chief executive of the qualifications authority Bali Haque in a statement dated March 2008 refers to problems such as “Teachers did not mark to the national standards for the internals.” and further that there will be a need to “Contact schools through our School Relationship Managers and discuss the assessment practices in the subjects for which they were outliers and provide advice guidance and monitoring if appropriate.” which indicates that there are problems within the NCEA system that this Minister does not appear to recognise? 
Hon CHRIS CARTER 
: What I recognise is that NCEA is getting better all the time as we refine it. I would like to quote Roger Moses principal of Wellington College and a former NCEA critic who said just yesterday that monitoring shows that the New Zealand Qualifications Authority is becoming far more rigorous in addressing issues of credibility with external assessment. Principals involved in this process—and I have a large list of them here—are being very positive about the process of looking at the system and making sure it is working properly. The data the member quoted is actually about improving the system. 
Hon Marian Hobbs 
: What reports has the Minister seen about the reaction of secondary school principals to the New Zealand Qualifications Authority’s initial analysis of 2006 NCEA results? 
Hon CHRIS CARTER 
: I have already quoted Roger Moses and his positive comments including a comment that it is a heck of a lot better than it was some years ago. Arthur Graves chair of the Secondary Principals Council whom I met this morning said that people need not be alarmed by the information that the member has just quoted and that this is just an honest in-house analysis of raw data and Peter Gall the Secondary Principals Association president said that students do better in work marked at school because they are more relaxed and have more time: “It’s a no-brainer.” 
Dail Jones 
: What steps does the Minister intends to take with regard to the list of 63 schools that independent research has indicated have been “relatively generous” with their internal assessments of the NCEA system in one or more subjects and perhaps more important with regard to the fact that 61 schools had teachers who gave lower grades than examiners which might have had an effect on some students being unable to enter university; and is the Minister still confident that the NCEA system is working satisfactorily? 
Hon CHRIS CARTER 
: I am confident that it is working well and so are professionals like school principals who are involved in the process. The Government has taken lots of steps to improve NCEA. We have introduced Excellence and Merit standards to NCEA certificates from 2007 we are introducing Excellence and Merit standards at subject level from this year and we have taken a whole lot of other steps including an extensive resourcing for moderating and checking that exams being marked internally are being done properly. The member has quoted raw data from an initial study that is in its very early stages. I say again that school principals who are involved at the coalface of this process are very positive about NCEA including some who were critical in the beginning. 
Anne Tolley 
: Is it not all a bit “Mickey Mouse” when most of the 124 schools named in the New Zealand Qualifications Authority study knew nothing until the media contacted them; and should not schools expect that in the light of such an explosive report they would at least get a heads-up from the ministry? 
Hon CHRIS CARTER 
: I cannot comment on that because I am not sure whether it is even correct. I can say that school principals who have been interviewed in the media in the last 24 hours—a wide range of them including some who were critics of the system at its beginning—have been very positive about what is happening. I would like to assure the House that the so-called study the member has just quoted is in fact looking at raw data from right at the beginning of a process to look at the 2006 results. We do not know what will come out of that but I am certain though that we will see NCEA an exam system that is world-class improving all the time. 
Hawke’s Bay District Health Board—Appointments 
5.  
Hon TONY RYALL (National—Bay of Plenty) 
 to the  
Minister of Health 
: Why did the Government appoint Peter Hausmann to the Hawke’s Bay District Health Board? 
Hon DAVID CUNLIFFE (Minister of Health) 
: 
 Mr Hausmann was appointed to fill a vacancy at the Hawke’s Bay District Health Board in 2005. The Ministry of Health had identified that the board was quite clearly lacking experience in financial and business areas. It was noted that Mr Hausmann had significant health sector knowledge together with commercial communications and technology experience. Potential conflicts of interest were identified in a Cabinet paper which has been made publicly available. Once appointed those conflicts were a matter for the appointee and the board chair to manage. 
Hon Tony Ryall 
: Why on earth would a Minister appoint someone to a district health board when knowing full well that that person was going to bid for multimillion-dollar contracts with that same district health board? 
Hon DAVID CUNLIFFE 
: There is nothing new about the management of conflicts of interest in the health sector or any other sector provided that good governance processes are used. The only political interference in this process has been from the National Party leaking under privilege drafts of a confidential report. 
Jill Pettis 
: What does the report on the Hawke’s Bay District Health Board identify as the key failings in managing conflicts of interest in terms of Mr Hausmann? 
Hon DAVID CUNLIFFE 
: The report clearly states that Mr Hausmann could have done more to manage his own conflicts of interest adequately. However the report also states: “Consistent with good practice the Chair knowing of Peter Hausmann’s closer involvement in the initiative”—community services—“from his December 2004 meetings with HCNZ should have ensured that Peter Hausmann made more complete disclosure …”. 
Barbara Stewart 
: Can the Minister give us any indication of when the people of Hawke’s Bay can expect to have a properly appointed functional district health board that is getting on with the job of looking after their health; if not why not? 
Hon DAVID CUNLIFFE 
: The first task of the new commissioner and his deputy is to stabilise the situation to ensure the sustainable delivery of first-class health services to the bay. It is for the interests of the people of Hawke’s Bay that these actions have been taken. The member will also be reassured to know that the Government has no intention of delaying fresh elections any longer than is necessary. 
Sue Kedgley 
: Is he prepared to act decisively and as part of tightening the rules around conflicts of interest in district health boards to make it a rule that no district health board member should be permitted to enter into business relations with a district health board that the member sits on when he or she stands to gain a personal financial benefit; if not why not? 
Hon DAVID CUNLIFFE 
: The independent review report received yesterday makes a number of far-reaching recommendations not only for the Hawke’s Bay District Health Board but for district health boards nationwide. I have already committed publicly to ensuring through the commissioner that the Hawke’s Bay recommendations are fully implemented and I now reaffirm my commitment and reassurance to the House that all of the nationwide recommendations will be actively pursued. 
Hon Tony Ryall 
: Would this Minister consider appointing a chief executive of a large-scale health provider to the board of a district health board with which that person intends to negotiate multimillion-dollar contracts and why? 
Hon DAVID CUNLIFFE 
: I say again there is nothing particularly unique about conflicts of interest existing; what is critical is how they are managed. It is conceivable that someone with considerable expertise may provide a useful role on a board provided that the rigour of that conflict management is adequate. What stands out in Hawke’s Bay is that from the chair on down that board could not manage conflicts of interest out of a paper bag. 
Rt Hon Winston Peters 
: Can the Minister confirm the veracity of the story that a $50 million contract was in question; who was it who put that issue—in terms of the amount—into the debate; and has that amount been substantiated or has Parliament received an apology from the perpetrator of that rumour? 
Hon DAVID CUNLIFFE 
: To the best of my recollection the figure of $50 million was used by the Opposition. It is clearly incorrect. I have had no apology for that misinformation nor for the string of misinformation that the Opposition has repeatedly put about on this issue over the last month. What is refreshing is finally to have the work of an independent expert review panel that is shedding some light on these matters because as we know sunshine is the best disinfectant. 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. I asked a serious question about an allegation that a $50 million contract was involved in respect of this health board. That allegation was put up by a member of this Parliament and sustained day in day out. I think I am entitled to hear whether there is any truth to that story presented by way of inferential questioning in Parliament and not to hear that shouting from a bunch of backbenchers who have found that their man at the front is a straw man after all. 
Madam SPEAKER 
: Would the Minister please address the question. 
Hon DAVID CUNLIFFE 
: There is no truth to the allegation that there was a $50 million contract. No apology has been received from the Opposition as to that misinformation nor the other misinformation. 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. You would have heard Nick Smith shouting out the moment the Minister sought to answer that question “Well how much was it?”. What he is actually saying of course is that his colleague did not give a damn what it was and made an allegation to see if it stuck. But the fact is he should be stopped from that objective so I want to hear the answer. 
Madam SPEAKER 
: I think there was an interjection but the answer could be heard. We will have it one last time for the member. 
Hon DAVID CUNLIFFE 
: I am happy to repeat the answer. To the best of my information the figure of $50 million is completely incorrect. It is an example of the perpetual misinformation the Opposition has been spinning for its mates and no apology has been received for it or for the Opposition’s other litany of half-truths. 
Hon Tony Ryall 
: Does the Minister not realise that New Zealanders will see this report for the cynical diversion it is because it does not deal with Annette King’s appointment it does not deal with the appalling treatment of the whistleblower and it does not deal with the deceitful collusion of the district health board’s senior management? 
Hon DAVID CUNLIFFE 
: It seems that the Opposition calls something a whitewash when its members do not like what they hear. The member impugns the reputation of some of the most senior and well-respected peer chairs and chief executives in the health sector. I am sure they will not forget that if he should ever chance to work on this side of the House. 
Hon Tony Ryall 
: Why is this report silent on the role of the district health board’s senior management in colluding with Mr Hausmann by allowing him to make significant changes to the request for proposal tender documents something which even the Minister’s own hand-picked panel said was unusual? 
Hon DAVID CUNLIFFE 
: In the first place I did not pick the members of that panel—the Director-General of Health did. Secondly the board has only one employee technically and its job is to manage that employee—that is the chief executive. The report concludes on page 86: “a number of failings alleged against management are ultimately the responsibility of the Board.” 
Hon Tony Ryall 
: Would the Minister explain why material from version one states: “The panel concluded that (a) Peter Hausmann failed to disclose his interest properly; (b) Peter Hausmann’s disclosures to the board and to the chair about this involvement with the Wellcare initiative were inadequate and at times factually incorrect.” yet in the final version that was all watered down to being everybody else’s fault? 
Hon DAVID CUNLIFFE 
: When the member repeats these allegations in the House and fails to do so outside the House it is no wonder that the journalists around the building are calling him a mouse. I wonder whether Mr Ryall understands the difference between a final and a draft. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. 
Madam SPEAKER 
: This will be heard in silence or members will be leaving. 
Gerry Brownlee 
: We know that earlier today you ruled about what was appropriate and what was not appropriate with regard to what members say or do not say in this House. The Minister surely should not keep on trying to do that over the course of this particular answer when there is such a clear question before him. Madam Speaker I implore you to please listen to the Minister and to make the judgment as to whether he is actually addressing the question asked of him. 
Madam SPEAKER 
: The Minister was not addressing the question. He was prefacing his answer with a lot of comments. Would the Minister please just address the question. 
Hon DAVID CUNLIFFE 
: Yes Madam Speaker. I quote from the report at page 8: “[The panel] wishes to record that there has been no pressure placed on it outside submissions by parties to amend its report to support any particular view. In particular it has not received any request or suggestion to do so from the Ministry of Health or the Minister (past and present). The Panel has been particularly careful to make its findings independently of the Ministry of Health and the Minister.” 
Hon Tony Ryall 
: Does the Minister not realise that what the public want to know is not what is in the report but what is not in the report and why because just like the Ingram report this report is yet another Labour diversion from the murky dealings of its own cronies; and is that not the reason why the Auditor-General should provide a full and independent inquiry into this matter? 
Hon DAVID CUNLIFFE 
: The member should be very careful what he wishes for because I imagine that some of my colleagues will be interested to talk about other things that are not in that report and that member will look like he is clutching at rather crooked straws. 
Hon Darren Hughes 
: I seek leave to table a document to show that the lead panel member Ian Wilson was appointed to chair the MidCentral Health crown health enterprise by the National Government was appointed to chair the MidCentral District Health Board by the Labour Government— 
Document not tabled. 
Air New Zealand—Pay Disparities 
6.  
Dr PITA SHARPLES (Co-Leader—Maori Party) 
 to the  
Minister of Labour 
: Has he received any reports explaining the gross pay disparities between Air New Zealand staff based in China and in New Zealand disparities which have led former member Tuariki Delamere to describe the situation as a “flying sweat shop”? 
Hon TREVOR MALLARD (Minister of Labour) 
: 
 I have not yet received a report from the Department of Labour. 
Dr Pita Sharples 
: Is he aware that the Shanghai-based Chinese cabin crew members were paid approximately $NZ3.75 an hour; and would he agree with the Maritime Union general secretary Trevor Hanson that this is a blatant attack on workers; if not why not? 
Hon TREVOR MALLARD 
: I have seen media reports to that effect. 
H V Ross Robertson 
: Can the Minister tell the House whether he has seen any other reports on wage gaps? 
Hon TREVOR MALLARD 
: Yes I have. I have seen a report saying: “We would love to see wages drop.” I have seen subsequent reports explaining that away as firstly light-handed then that person saying he wanted Australian wages to drop later saying it did not count because it was said at a café and then saying he had not finished his thought. When none of those things worked efforts were made to bully the reporter and bully the editor: bully the editor into sacking the reporter. Pressure was put on APN for a clarification and when the report was all read in the end it confirmed that John Key had said that. 
Keith Locke 
: Does the Minister think that this example of free trade between Chinese and New Zealand labour within Air New Zealand is an indicator of the savings that may be made by other employers in construction manufacturing or the service industry who currently reserve their employment for hard-working Kiwi residents? 
Hon Dr Michael Cullen 
: According to what’s done in Shanghai yes. 
Hon TREVOR MALLARD 
: I think there is not a plan to take on the process that the Deputy Prime Minister has suggested but as the member is aware the Ministry of Foreign Affairs and Trade website does have the Government framework for incorporating labour-related issues into our free-trade agreements and I think the member would be a lot better informed if he read it. 
Dr Pita Sharples 
: Has the Minister read the information from the Service and Food Workers Union that Air New Zealand has offered less money to union workers than it paid to other workers who are doing the same work; and what role can he play in advising Air New Zealand of its obligations to be a good employer? 
Hon TREVOR MALLARD 
: No I have not seen that report but there are clear processes to follow if the union believes that the airline has breached the Employment Relations Act. 
Sue Bradford 
: Does the Minister think it would be ethical and legal for fishing boats operating within New Zealand waters to pay their crew Chinese wages that are well below our minimum wage; if not why is it acceptable for a company in which the Government has a majority shareholding to pay its Chinese air crew substantially less than their New Zealand colleagues are paid and well below our minimum wage? 
Hon TREVOR MALLARD 
: There is a fundamental gap in the member’s logic. Air New Zealand does not employ these people. 
Peter Brown 
: Noting those answers and the remarks attributed to the Minister in the media can I take it he could well be recommending to his Government colleagues that ambassadors high commissioners and other people on Government service working overseas will have their wages and salaries tagged to those paid in the local communities or local countries that they are in; or will he insist that they work on the pay scale as determined by New Zealand? 
Hon TREVOR MALLARD 
: I am tempted to recommend to the Minister of Foreign Affairs that Keith Locke be appointed to India as a third secretary paid at local rates. 
Dr Pita Sharples 
: Does the Minister agree with the sentiments expressed in yesterday’s  
Sydney Morning Herald 
 which describes Air New Zealand’s attitude as disgusting in paying more than 30 Chinese workers less than their New Zealand counterparts are paid particularly as it is 76 percent owned by the Government; and what impact does he think this scandal may have on the Government’s negotiations for a free-trade agreement with China? 
Hon TREVOR MALLARD 
: In response to the second part of the question nil and to the first part of the question it just shows that the  
Sydney Morning Herald 
 is ill-informed as was Ms Bradford with her earlier supplementary question. 
Sustainable Pastoral and Food Innovation Initiative—Investment 
7.  
Hon BILL ENGLISH (Deputy Leader—National) 
 to the  
Minister of Agriculture 
: Does he stand by his statement to the Cabinet business committee in relation to the sustainable pastoral and food innovation initiative that “The proposal is for the Government to make $85 million to $100 million per annum available to invest over 10 to 15 years.”? 
Hon JIM ANDERTON (Minister of Agriculture) 
: 
 Yes officials advised the Government that in order to make a substantial step change in the economic performance of our food and pastoral sectors and for New Zealand Fast Forward to be truly transformative an investment of between $85 million and $100 million each year would be required. This is the target expenditure of the fund. However as I said on the day of the launch: “You are probably going to start off with somewhere between $20 million and $30 million each year and you are going to work your way up over time to about $100 million each year.” That level of Government funding will of course be matched by the private sector meaning that the total amounts invested will be between $40 million and $60 million in the early years rising to $200 million each year. No one in his or her right mind would think that one could pump $100 million to $200 million overnight into the science system with it all being well used. Capacity and capability will have to be built over time and that is exactly what will be done. 
Hon Bill English 
: Why did the Minister produce as back-up for his admission that there would be only $20 million or $30 million in the early years a table—published oddly enough on the Progressive party website—that overlooks the fact that the investment funds will be taxed and there will be about a 4 percent to 5 percent administration cost and therefore his table is obviously wrong? 
Hon JIM ANDERTON 
: As leader of the Progressive party I am proud to put on our website the policy of this Government for innovation in the science sector unlike the National Party which could not put up its policy because it has not got one. The leader of the National Party having made a complete botch of his response to this fund then refused to be interviewed about it on Radio New Zealand National and we have now the spokesperson on finance putting a spin on the story and digging the hole even deeper. I welcome him to keep on digging. 
Dr Ashraf Choudhary 
: What reports has the Minister seen regarding the sustainable pastoral and food innovation initiative New Zealand Fast Forward? 
Hon JIM ANDERTON 
: I have seen a report from the leader of the National Party saying: “I think it’s a gimmick really. I mean they’re putting up a large capital amount $700 million but realistically that’s not what’s going to be spent on science R and D. It will only be the income they can earn off it.”—wrong! The Fast Forward discussion document the associated Cabinet paper the Government press releases and indeed the announcements of the Prime Minister Mr Hodgson and myself all made very clear that the capital sum plus interest would all be expended. Everyone with the meanest of intelligence understood that except the Leader of the Opposition and the Opposition spokesperson on finance. 
Hon Bill English 
: Can the Minister confirm that both the private sector participants and officials have not been able to confirm his position and that maybe they are confused because he has made ridiculous claims such as his claim on Radio New Zealand National that the private industry will contribute “$1000 million”? 
Hon JIM ANDERTON 
: This fund over its lifetime will attract roughly $1 billion of New Zealand Government funding. The primary sector industries are pledged to match that. I have to say that already they are almost well up to speed for the annual amount required for that. The only person who seems to doubt this is Mr Key who says we do not need the fund. The chief executive of the largest Crown research institute in agriculture Mr West said on the same day that this fund stands in stark contrast to what has been going on in New Zealand formerly that it is long overdue and very welcome. Whom would this House prefer to believe Mr Key’s stupidity on this or the leader of AgResearch Andy West? I know where I stand on that. 
Dr Ashraf Choudhary 
: What further reports has the Minister seen regarding science investment in New Zealand? 
Hon JIM ANDERTON 
: I have volumes of them but I will pick just one. I have seen a report that quotes the Leader of the Opposition John Key as saying: “Our big question is why the Government allowed the Kyoto liability to grow to a billion dollars and do no research on it um on climate change science R and D I mean they have done very little in this area.” On the contrary this Government has invested $6.5 million in the Pastoral Greenhouse Gas Research Consortium over the last 5 years and committed a further $12.5 million over the next 5 years. In addition as part of the plan of action on sustainable land management and climate change it has committed a further $65 million over 5 years to the agricultural sector’s climate change provisions. The leader of the National Party knows nothing of all this. He puts his foot in his mouth every time he is asked about it and that is why he is now forbidden to make any comments on this and he is not here today to do it either. 
Hon Bill English 
: Does the Minister realise that shouting about it will not change the facts which are that the Government has no idea where and how it will invest this money that the figures it has published leave out tax and administration costs that officials are engaged in a serious argument over who will actually control it and that he does not have commitments from the private sector for anything like the $1 billion that he is ridiculously claiming here? 
Hon JIM ANDERTON 
: I can advise the House that the Government has specific commitments from industry in this country for the amount of money that is needed over the lifetime of this fund. If the National Party wanted to make even the most modest of inquiries into that they would find out the truth. Members will want to compare that with the National Party’s entire contribution to this whole issue of climate change and research when the only thing it has actually done is drive a tractor up the steps of Parliament in protest and in denial of climate change itself. 
Hon Bill English 
: Can the Minister confirm that those people who have read the Cabinet paper have never seen so much waffle about next to nothing and that this is just another initiative like the proposal to buy back Toll Rail that involves the Labour Government pledging $1.5 billion of taxpayers’ money in a fortnight to unwise decisions in order to try to get itself re-elected? 
Hon JIM ANDERTON 
: Is it not interesting that the party that proposes itself as representing the rural sector is in opposition to Fonterra the largest company—a rural company—in New Zealand which praises this policy and is committed to it. Zespri the largest horticultural company in New Zealand praises this policy and is committed to it. Dairy New Zealand which represents the largest industry in New Zealand is totally committed to it. PGG Wrightson which is a private-sector company that invests all over the world in agriculture is totally supportive of the policy. John Luxton said he welcomes the initiative. He described it as being “significant for the dairy industry”. I never thought I would see the day! But we still have some Luddites left over on that side of the House. Not even John Luxton is on their side and when one does not have John Luxton on one’s side on this issue one is in real trouble. 
Hawke’s Bay District Health Board—Conflicts of Interest Report 
8.  
LESLEY SOPER (Labour) 
 to the  
Minister of Health 
: What are the main findings of the Director-General of Health’s report into alleged conflicts of interest at the Hawke’s Bay District Health Board? 
Hon DAVID CUNLIFFE (Minister of Health) 
: 
 The independent panel found that the board’s handling of conflicts of interest in general could not pass even the most basic thresholds of good governance. Secondly it found that conflicts of interest were wide ranging and poorly handled. The panel was particularly critical of the previous chair Kevin Atkinson and also a longstanding board member Peter Dunkerley in that regard. Thirdly the panel found that Mr Hausmann could have done a better job of managing his conflicts of interest. Fourthly the panel found that a seriously eroded and dysfunctional relationship existed between the board and management and it was readily apparent that it could not be resolved without external input. In short as the independent panel chair has said the board was approaching a railway crossing whose lights were flashing but was carrying on anyway. 
Prison—Inmates 
9.  
SIMON POWER (National—Rangitikei) 
 to the  
Minister of Corrections 
: Does he agree with corrections assistant general manager Bryan McMurray that “people don’t go to prison to be punished”; if so why? 
Hon PHIL GOFF (Minister of Corrections) 
: 
 No; imprisonment serves a variety of purposes: to keep society safe from serious offenders the deprivation of freedom as a punishment for crimes committed and exposure to programmes to help stop reoffending. 
Simon Power 
: Does the Minister stand by the statement of his predecessor in July last year that the ability of inmates to continue to send threatening mail to victims from behind bars is “untenable”; and can he confirm that since corrections said it would monitor all of inmate Glen Goldberg’s mail from last April that inmate has reportedly continued to send threatening mail to at least two of his previous victims? 
Hon PHIL GOFF 
: Yes; the corrections department has monitored Mr Goldberg’s correspondence out of prison since April last year. Goldberg has also been sentenced to 20 months’ imprisonment for his offence in sending out that correspondence and given the high risk that he presents to society I would expect he would serve every month of that time. The member will also be aware of—and has agreed to support—legislation that is currently before this Parliament that would widen the powers of the Department of Corrections in terms of scrutinising all correspondence that goes out of prisons. 
Simon Power 
: Can the Minister confirm that in January this year Detective Dave Pizzini received a letter from Goldberg that threatened one of his victims who had already moved to Australia to escape his harassment stating that when he got out he “will be picking up a piece when I get to Brisbane” and signed the “Grim Reaper”—forcing her to move yet again and to change her name because corrections has been unable to stop this correspondence? 
Hon PHIL GOFF 
: Let— 
Hon Dr Nick Smith 
: Just hopeless. 
Hon PHIL GOFF 
: That member as a former Minister of Corrections—“corruptions” was actually closer to the point—had one-third of all inmates in prison actively taking drugs while he had the portfolio. He made excuses that the fences were not there to keep the prisoners in but were there to just slow them down as they escaped. That member would do well to shut up when I am answering a question from his colleague. I will now answer the question. Firstly I will say again what I have just told the member. Goldberg has been convicted for what he has done—for the sort of language that he used and the threats that he issued in that correspondence. Secondly he will stay in prison because he constitutes a risk. Unlike what occurred in the old days of the former National Government a prisoner does not get out automatically whether or not he or she is a risk to society. Thirdly I have to say that although we can stop Goldberg from directly communicating we cannot stop him talking to third parties who might then communicate on his behalf. If the member has any suggestions in that regard I would like to listen to them. 
Hon David Benson-Pope 
: What progress has been made towards strengthening prison security in order to keep the public safe from serious offenders? 
Hon PHIL GOFF 
: I mentioned that as one of the core purposes of imprisonment and I am very proud to say that escapes to date in the last financial year from prisons were one-sixth of the level that pertained at the end of the failed last National Government’s term of office one decade ago. I tell the member that far from well over 100 prisoners escaping each year that number has been reduced to 20. And most of those were not active break-outs; they were walk-aways from work parties. 
Madam SPEAKER 
: Members are becoming far too rowdy. It is almost impossible to hear. 
Simon Power 
: Why should victims believe Mr McMurray’s claim that the department would take “appropriate action” if they came forward in cases such as this one yet in April last year staff saw “no cause for concern” upon the interception of police scene photos that Goldberg sent to one of his victims relating to her partner’s sudden death when that victim had already received over 200 letters from him since he was jailed in 2004 had a protection order against him and had asked the prison to stop him sending mail to her? 
Hon PHIL GOFF 
: I repeat again that this man has been convicted for behaviour that is absolutely intolerable. The system has come down hard on him and will remain hard on him. That man while presenting that form of behaviour and threat will not get released from prison. If he engages in such behaviour through a third party and there is evidence to convict him again he will be convicted again and he will stay indefinitely in jail if that behaviour persists. We can stop him. We can stop him by scrutinising every aspect of the correspondence that he sends out. We can do that actually under the existing law. What we cannot do is to stop him communicating to another person who communicates to another person outside and who can send correspondence in that way. The assurance I can give to that member is that whenever an inmate behaves in a grossly unacceptable way like this the system will beat him. But let me tell that member as well that I can table half a dozen different examples of people doing the same thing when his Government was in power. 
Simon Power 
: Does he stand by the statement of Public Prisons Service northern regional manager Warren Cummings that prior to last April: “There was nothing in the prisoner’s list of convictions that would have provided us with reasonable grounds to monitor his correspondence as a matter of course.” when over nearly 20 years this inmate had amassed 191 convictions for harassment and threats? 
Hon PHIL GOFF 
: I am sure the regional manager was not setting out publicly to mislead people. The fact is that this inmate has a track record. It has caught up with him; he has been convicted. He will continue to be punished and he will be punished as long as that behaviour persists—if he is able to persist in it by new and inventive means that the Department of Corrections has not yet found a way to stop. 
Simon Power 
: Why does the Parliament have to wait for a law change to stop cases such as this when section 107 of the Corrections Act already enables prison staff to open an inmate’s mail where there are reasonable grounds to suspect that the mail may be threatening; and in the instance outlined by the Minister relating to passing that correspondence to other inmates has the Minister given any thought to instructing his department to take away the pen and paper from the inmate? 
Hon PHIL GOFF 
: I do not know what it is about the previous answers that the member has not understood. Firstly I have told the member already that under the existing legislation the department has that power where there is reasonable cause to suspect there is such behaviour and it is using that power. Secondly when there has been evidence of the inmate doing that he has been taken to a court and convicted and punished and he will continue to be punished for it. Thirdly as I understand it the letters that have gone out can go by third-party means and not necessarily in his handwriting by his pen and paper. 
Ron Mark 
: Putting this particular case to one side is the real problem not that all too often when inmates break the law they are dealt with internally by the Department of Corrections through internal disciplinary processes and are rarely brought before the courts and sentenced by the judiciary and that when they are they most often get a concurrent sentence which is served at the same time as the sentence they are already serving; if that is a fair assessment of the current situation would the Minister support New Zealand First’s view that we need to pass legislation to make it mandatory that prisoners who break the law whilst inside prison be charged in a District Court and that their sentences not be served concurrently but that they be cumulative? 
Hon PHIL GOFF 
: When an inmate commits a serious offence that inmate will be charged will be brought before a court and if the evidence stacks up will be convicted. Unless the inmate is serving a life sentence if he or she offends in a serious way—as Goldberg did—the sentence will not be concurrent but will be in addition to the existing sentence. Goldberg’s sentence is certainly that. 
Schoolchildren—Universal Scholarship 
10.  
RODNEY HIDE (Leader—ACT) 
 to the  
Minister of Education 
: Does he agree that a scholarship for every child as outlined in my speech to the ACT party conference on Saturday would increase choice allow greater diversity and flexibility and improve educational achievement; if not why not? 
Hon CHRIS CARTER (Minister of Education) 
: 
 No but I do agree with the member’s opening statement in his speech that education is the key to our long-term prosperity. What I do not agree with is his plan to introduce an education voucher scheme under a new name. Such a scheme would just create winner schools and loser schools and do nothing to improve overall educational outcomes. Although I disagree with ACT’s voucher plan I congratulate the party on at least coming up with a policy. That is more than we can say about the National Party. 
Rodney Hide 
: Does the Minister think it is right and fair that families that take responsibility for their children’s education and send their children to an independent school have to pay twice for that privilege once through their taxes and again through their school fees; if so why? 
Hon CHRIS CARTER 
: I thought the ACT party stood for choice. Parents do have the choice to send their children to a quality State school or to a private school. The plan by ACT to have a voucher system would simply perpetuate the inequalities we had under bulk funding which saw the development of winner schools and loser schools. 
Dianne Yates 
: What reports has the Minister seen about the impact of voucher-style education systems? 
Hon CHRIS CARTER 
: I am aware of research by the New Zealand Council for Educational Research entitled  
Can Vouchers Deliver Better Education? 
 which reviews international studies for their relevance to New Zealand. It concludes: “Competition for students by schools does not improve quality achievement or access. Such schemes favour a minority at the expense of the majority. Competition among schools is hardest on those serving lower socio-economic communities and in fact depresses overall educational levels.” These outcomes would never be acceptable to a Labour-led Government and I would welcome Roger Douglas’ and indeed National’s education spokesperson Anne Tolley’s campaigning on just such a policy. 
Rodney Hide 
: Does the Minister feel so strongly against giving parents a choice of school including independent schools that he would resign as Minister of Education if that were a condition of support from MMP parties for a future Government? 
Hon CHRIS CARTER 
: I think the likelihood of Labour going into coalition with ACT is nil especially with the addition of Roger Douglas to its party list. 
Home Building Costs—Increase 
11.  
Hon Dr NICK SMITH (National—Nelson) 
 to the  
Minister for Building and Construction 
: What responsibility does the Government accept for the fact that the cost of building a home has increased from $232000 to $422000 over the past 7 years? 
Hon SHANE JONES (Minister for Building and Construction) 
: 
 I am advised that although people are paying more to build houses they are getting more in terms of size quality and confidence in the asset they are investing in. I am further advised that the principal drivers of housing costs are land scarcity labour rates and materials. 
Hon Dr Nick Smith 
: Why will the Minister’s Government not accept responsibility for this $190000 increase in the cost to build a home when last week’s joint report by the five Government departments concluded that Resource Management Act and Building Act changes by this Government have significantly contributed to the increase in costs? 
Hon SHANE JONES 
: We have heard on numerous occasions from Dr Smith that he wishes to go back and reinvent what Parliamentarian Lee introduced. This is the report and I point out to the Minister that not only am I not responsible for the Resource Management Act but that only a tiny fraction—less than 1.5 percent—of this supposed cost increase relates directly to a building consent. 
Sue Moroney 
: What action has the Government taken to address the failings brought about by the 1992 deregulation of the building industry? 
Hon SHANE JONES 
: The Government has announced a comprehensive work programme to look at improving housing affordability prospects. This includes looking at introducing more flexibility into the building consent process beginning with simplifying designs and building consent processes for starter homes and looking at improving productivity in the sector. 
Gordon Copeland 
: Does the Minister agree that the so-called development levies now charged by local councils are in reality a new home infrastructure charge which can add many thousands of dollars to a new home and that those levies should go once the Securities (Local Authority Exemption) Amendment Bill—now No. 2 on the Order Paper—is passed thereby giving councils the ability to go back to the traditional financing of infrastructure through debt securities? 
Hon SHANE JONES 
: The member no doubt knows that the levies he refers to do not fall under the Building Act; they are imposed by local authorities which have discretion under local government legislation to identify what levy is appropriate to maintain their ability to meet the cost of infrastructure development as housing projects are established. 
Hon Dr Nick Smith 
: Should this Parliament not hold Clayton Cosgrove responsible for the bureaucratic nightmare of the new Building Act when he arrogantly dismissed the concerns of industry of councils and of other parties in this Parliament and when now even the Government’s own advisers conclude that that new Act has resulted in a marked decline in productivity in the building sector and has contributed to the crisis that we now have over home affordability? 
Hon SHANE JONES 
: Of course what Mr Cosgrove had to deal with was the abject failure of National’s policies in liberating liberalising and opening up the building sector and allowing the cowboys and far too much activity to go unmonitored and unchecked. Not only has he introduced a set of additional reforms but those reforms are now being embraced by a wider number of councils which realise there is scope for them to improve their act. 
Hon Dr Nick Smith 
: Does the Minister still think the building consent process is going “swimmingly well” when under the new Act councils have had to increase their fees by over 50 percent when the paper work required for getting a building consent has grown tenfold when there are huge delays all over New Zealand in getting even the most minor of building consents and when even his own department acknowledges that there has been a significant drop in building productivity as a consequence of his Government’s Building Act? 
Hon SHANE JONES 
: It really does lower the standards of the House when Dr Smith stands up and wildly tosses around figures as he did last week quoting 30 40 and 50-page documents—a 300-page document comes to mind in relation to some of his wilder gestures—when in actual fact he referred to the Rodney District Council. I have its document and that document is 11 pages long. The number is inversely related to the man’s ability to get it right. 
Hon Dr Nick Smith 
: I seek the leave of the House to table the 110-page Rodney District Council building consent application package. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? Yes there is objection. 
Hon Dr Nick Smith 
: Will the Government be introducing amendments before the election to fix the mess that has been made to the Building Act and the Resource Management Act noting that the following key finding in the report released last week by the five departments was that the most likely way to achieve long-term reductions in housing costs was to focus on streamlining the Resource Management and Building Acts—almost word for word what John Key has been saying for over a year—or will New Zealanders have to wait— 
Hon Ruth Dyson 
: At least they don’t change their minds every 5 minutes like he does. 
Hon Dr Nick Smith 
: I will ask the question again. 
Madam SPEAKER 
: Will the member just continue. 
Hon Dr Nick Smith 
: Will the Government be introducing amendments before the election to fix the mess it has made to the Building Act and Resource Management Act noting that the key finding in last week’s report was that the most likely way to achieve long-term reductions in housing costs was to focus on streamlining the Resource Management and Building Acts—ironically what John Key has been calling for for over a year—or will New Zealanders have to wait for a change in Government to have these important statutes fixed? 
Hon SHANE JONES 
: Flowing from the report that the member refers to a number of pieces of work are under way not the least of which is work looking at whether it is relevant in terms of urban boundaries as an impediment to land supply. We are doing work and I hope soon to be able to speak more publicly about it in relation to adding flexibility and greater simplicity to the building consent process. Those ideas are not John Key’s; his ideas are made up as he tacks in the wind. 
Hon Dr Nick Smith 
: Does the Minister not see a rich irony in that he is now promising to introduce flexibility and streamlining of the Building and Resource Management Acts when for the last 8 years the Government has been removing flexibility making building more constrained and adding huge compliance costs—is there not a great irony that the Government has been swimming in one direction for 8 years and then suddenly has had a road to Damascus conversion 6 months out from the election? 
Hon SHANE JONES 
: There is no irony in the fact that local government performances are improving. They are becoming accredited despite the best efforts of Dr Smith in Nelson and builders are becoming licensed. No systems are static; they are dynamic and can always be improved. 
Hon Dr Nick Smith 
: I have here the conclusions of the cross-departmental report which concludes that the most important thing we need to do— 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? 
Hon Dr Nick Smith 
: I have not got to the point of seeking leave Madam Speaker. 
Madam SPEAKER 
: When a member seeks leave in relation to documents could he or she please do it succinctly—not only this member but other members as well. 
Hon Dr Nick Smith 
: I seek leave to table that report which concludes that reform of the Building Act and the Resource Management Act is the key reform required— 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Disabled Youth—Transition to Adulthood 
12.  
LYNNE PILLAY (Labour—Waitakere) 
 to the  
Minister for Disability Issues 
: What has the Government done to improve the transition for young disabled people with high needs into adulthood? 
Hon RUTH DYSON (Minister for Disability Issues) 
: 
 Under the Labour-led Government things have changed dramatically and positively for young disabled people. This year there has been significant growth in transition services. There are now 65 organisations across the country supporting young disabled people to move from school to adulthood and recently I announced a change in the age at which very high-needs students are eligible for transition services funding. Disabled students will now be able to choose to leave school at an age that is appropriate to their own circumstances. 
Lynne Pillay 
: How has the Government enhanced the opportunities for young disabled New Zealanders to move into work? 
Hon RUTH DYSON 
: Through Working New Zealand the Government has fundamentally changed the way we work with people to support them into paid work. These changes recognise that most people want to work and with the right support they can. Under Pathways to Inclusion funding 9000 disabled people are placed into open paid employment over 20000 disabled people receive a vocational service and 3.5 million hours of community participation services are funded each financial year and this year we are on track to exceed those figures. This is all part of Labour’s long-term commitment to build an inclusive society. 
Amended answers to Oral Questions 
Question No. 12 to Minister 12 March 
Hon MARYAN STREET (Minister of Housing) 
: 
 In response to a supplementary question on Wednesday 12 March I said: “… some 94 or 95 percent of State house tenants are on income-related rentals.” The correct figure is 91 percent. 
Urgent Debates Declined 
National Certificate of Educational Achievement—Report on First Analysis of Marking 
Madam SPEAKER 
: I have received a letter from Dail Jones seeking to debate under Standing Order 380 the report on the results of the first analysis of schools’ National Certificate of Educational Achievement marking. This is a particular case of recent occurrence involving ministerial responsibility. However there needs to be an element of urgency for the business of the House to be set aside. There will be other parliamentary opportunities to consider the results. The financial review of the New Zealand Qualifications Authority is currently before the Education and Science Committee. The application is therefore declined. 
Tibet—Protests 
Madam SPEAKER 
: I have also received a letter from Keith Locke seeking to debate under Standing Order 380 what New Zealand’s response should be to China’s crackdown on the demonstrators in Tibet over the last few days. Although there is no ministerial responsibility for the recent protests there is ministerial responsibility for New Zealand’s response. The making of a ministerial announcement does not of itself justify the setting aside of the business of the House. There must be an element of urgency for the matter to take precedence over other business of the House. Furthermore the House has today already had an opportunity to discuss the issue. The application is therefore declined. 
Urgent Debates 
Hawke’s Bay District Health Board—Conflicts of Interest Report 
Madam SPEAKER 
: I have received a letter from the Hon Tony Ryall seeking to debate under Standing Order 380 the reports of conflicts of interest and other matters at the Hawke’s Bay District Health Board. This is a particular case of recent occurrence involving ministerial responsibility. The report relates to important aspects of health sector governance that are of considerable public interest. I accept that it requires the urgent attention of the House. 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 I move  
That the House take note of a matter of urgent public importance 
. That urgent business is the release of this report which says more about nothing than anything else that could be published through the Ministry of Health. This report is more noticeable for what it does not say than for what it does say. This report which has taken 8 months to produce has failed to answer some of the key questions that New Zealanders have about this whole sorry affair in Hawke’s Bay. There is absolutely no canvassing of the issues around the appointment of Mr Hausmann to the board. There is no canvassing around the issues of the whistleblower’s concerns. There is no canvassing of the issues about the involvement of management in making documents available to Mr Hausmann. This report is a whitewash. It is part of a diversion by the Labour Government to draw attention away from the involvement of its cronies in what has gone on in Hawke’s Bay. 
This report does not address the key issues that the inquiry team should have dealt with. When this report does go through the issues involving Mr Hausmann it mitigates every single one of them with an excuse. It talks about Mr Hausmann’s poor declarations of interest and then says it is because he received minimal induction and training when he joined the board. It talks about his failure to declare changes of interests but then it says that he was inexperienced; it was his first public sector role. It talks about his poorly managed conflicts of interests in communications with management but the report states that that just reflected the poor environment within the board. The report talks about his poor handling of situations but it goes on to say that the managing of conflicts of interest is difficult and it compares him with everybody else. 
Further Hausmann failed to declare his Wellcare Education Ltd contracts early and there were excuses—“Oh it’s just a new board member. He was inexperienced.” The board strongly protested Hausmann’s failure to declare the Wellcare contract early and said that well the contract was of a relatively small value. It was $1.2 million—and the report said that it was of relatively small value. Then it says that Hausmann broke his promise not to become involved in Wellcare price negotiations—wait for it—and the report says that he strictly did not because he was involved on the Healthcare New Zealand side and not the district health board side. The report goes on to talk about Hausmann’s inadequate management of the Wellcare contract and says further that other problems at the district health board were a lot worse. 
This report does not highlight the fact that Mr Hausmann was sent 2½ months before any other potential bidder a copy of the request for proposal documents apparently to remove intellectual property belonging to Healthcare New Zealand. But if we read those attachments it is clear that rather than removing anything quite a lot was added and what was added was to the advantage of Healthcare New Zealand. One of the key points added was the provision that whoever got that contract should have a strong infrastructure in Hawke’s Bay. Lo and behold how many companies had a strong infrastructure in Hawke’s Bay? That again is brushed over by this report. 
But what is worse about this report is the fact that it is so silent on the key issues of concern to New Zealanders. Why did Annette King appoint Peter Hausmann to the board of the Hawke’s Bay District Health Board when she knew that he was intending to bid for multimillion-dollar contracts with that company? Why did Annette King offer that job to him when she knew he was going to bid for multimillion-dollar contracts involving that company? What is worse the Government in the House today after this report said that it would probably reappoint him. That is what Minister Cunliffe said. I asked him whether he in the future would appoint to a district health board a chief executive of a large provider who wanted to bid for multimillion-dollar contracts with that district health board and he did not say no. He did not say no. 
Hon David Cunliffe 
: I raise a point of order Madam Speaker. I do not recall being asked whether I would reappoint Mr Hausmann. If I was asked I certainly would not have confirmed that I would have. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: That is a matter of debate. 
Hon TONY RYALL 
: Let us allow the question in the House to stand because that is what I asked him. I asked the Minister if he had the opportunity to appoint the chief executive of a large provider to the board of a district health board and that provider was to negotiate to get multimillion-dollar contracts whether the Minister would do it and why and he said that he would look at it. That tells us that this Government has learnt nothing. There is nothing in the report about why Annette King appointed Peter Hausmann to the district health board. Why on earth would a Minister do that? Why would a Minister insert Mr Hausmann into what was always going to be a difficult position? Why would the Minister do that? She has never answered that question. 
Secondly there is not a word about the appalling treatment of the whistleblower Deborah Houston throughout this whole affair. This brave woman who saw the emails and raised the matter with the board was subsequently bullied by senior staff at that district health board had her conversations taped without her knowledge and lost her job. There is not a word about that in this report—not a word. 
Hon Member 
: And she was taped. 
Hon TONY RYALL 
: She was taped she was bullied and she lost her job and not a word of it is in this report. She is the woman who started all this and the board turned away from her concerns even though the Prime Minister said that they could be looked at because they were part of the terms of reference—that third reference—that stated “any other relevant parts”. 
The third important feature that does not feature in this report is the involvement of management in the making available of documents to Mr Hausmann ahead of any other bidder. I will just remind members what happened. It has been revealed through emails that were recovered in London through forensic computer analysis that Mr Hausmann sought a copy of the request for proposal and then received it from the chief executive on the chief executive’s instruction. Mr Hausmann made changes to that request for proposal he sent those documents back to the district health board and on the instruction of the chief executive the board accepted virtually every one of those changes. Those changes subsequently made it into the final request for proposal that went out to tender. There is not a word in this report about the involvement of management in making those documents available. In fact in this report it is stated that dealing with the request for proposal was not Mr Hausmann’s responsibility. So instead of dealing with why management made those documents available to Mr Hausmann there is not one mention about that in this report. 
That is really surprising because if it were all open and above board about the sending of these documents to Mr Hausmann why did we not get the return emails in the Official Information Act request? Why did it take a forensic analysis in London to uncover those emails? I ask the Minister why if it were all open and above board the information was not released in the original Official Information Act request and why it took a forensic analysis in London to get that information. That tells us all about what was going on at the Hawke’s Bay District Health Board. 
So we end up with this report which is a whitewash. It is typical “Labour Party 101”—Labour shooting as many people as it can to divert attention from the real issues behind this Hawke’s Bay District Health Board report. First why did Annette King appoint someone to that district health board who was going to bid for multimillion-dollar contracts? Secondly why did the report not deal with the concerns of the whistleblower. Thirdly why did it not look at the involvement of management in this? In front of the Health Committee last week the Auditor-General’s representative confirmed that the management of conflicts of interest is also the responsibility of the management of a district health board. It is also the responsibility of a district health board yet we did not see any of that in this report. None of that is in this report. 
Why is there no investigation by that panel of what happened to Deborah Houston? Members will recall that this woman had her conversations taped without her knowledge. 
Hon David Cunliffe 
: By her—she signed the settlement. 
Hon TONY RYALL 
: The Minister says to look at what she signed. Well let us look at what she signed. Does that signature say that she was not bullied by senior management at the district health board? Does it say that she does not believe her job was done away with because of what she said? No it does not. That letter from Deborah Houston states that she accepted there was a restructure and that it was not related to her whistle-blowing. But does she state in that document that she did not lose her job because of her whistle-blowing? Not at all—and the Government has been misrepresenting what that woman has been saying and I think it is appalling that it has done that. 
The fact is that this report is a whitewash. It is a diversion away from the real issues. What this Government should have done and what it had the opportunity to do was to get into what has gone wrong here. Over the weeks ahead we will see that the problems at the Hawke’s Bay District Health Board are happening elsewhere around the country. This Government has appointed to district health boards people who have all sorts of conflicts of interests that the House will be interested in—all sorts of conflicts of interest—and the way they are being dealt with is not appropriate in the views of not only this panel but also the Auditor-General. If we look at the Auckland District Health Board and at the poor handling of conflicts of interest there and if we look at other issues at other district health boards around the country then we will see those issues there as well. 
So very serious issues are associated with this report but what worries me is that the Government on reading this report has not even learnt the lessons. When I asked the Minister whether he would appoint a chief executive of a large player to a district health board when he would be bidding for multimillion-dollar contracts I ask members whether he said no. 
Hon Members 
: No. 
Hon TONY RYALL 
: No; he said that it all depended on how it was all happening—da-de-da-de-da. He basically said that yes he would. That shows that despite the report of the Auditor-General on the Diagnostic Medlab case and despite the report of this panel—the chairman of which is a Labour appointee—panel members are raising concerns this Minister because he values this report has not taken any account of. 
Over the weeks ahead Parliament will want the Minister to explain why this version varies and is so different from what was originally thought. Who got to the members of the panel why did they change their minds what evidence was there and why will they not provide the arguments for what they changed? This Parliament and the public want the full story and there is no full story in this report. This report is more noticeable for what is not in it than for what is in it. The Minister has been giving instructions to that panel through his comments in the House over the last few weeks. He has been shouting out his views in the House over the last few weeks on what should and should not be covered in this report and members of that panel would have heard what he was saying. They knew that the Government would not want them to look at the appointment process. They knew that the Government would not want them to look at the Deborah Houston issue because it got too close to home. They knew that the Government would not want them to look at the behaviour of the management of the Hawke’s Bay District Health Board because of what was going on there. 
This Government has failed in its responsibility to answer any of the basic questions. It is “Labour 101”; it is like the Ingram report all over again. This report will be found to be wanting and not to have canvassed the issues that matter to New Zealanders but in 7 to 9 months’ time New Zealanders will have their opportunity to tell this Government that it has manufactured what it has put in this report. The Government has manufactured its activities in relation to the Hawke’s Bay District Health Board and New Zealanders want to know the full story. That is why we think the Auditor-General needs to step in and provide a truly independent report on this issue. 
Hon DAVID CUNLIFFE (Minister of Health) 
: 
 I agree with something the member Tony Ryall said. The New Zealand public wants to know why. But they do not want to know why he is impugning an independent review panel led by a man who has been appointed to boards by both the National Party and the Labour Party. They do not want to know about the process for appointing Mr Hausmann because that went through the standard Cabinet process. Two years ago those papers were sent to the National Party and the  
Dominion Post 
. There is nothing new in that. The public do not want to know about the whistleblower because that is old news. The whistleblower has taken a personal grievance and a settlement has been reached. That is done and dusted. 
Mr Ryall wants it both ways but he cannot have it. The public do not want to know what sleazy tactics the National Party is using to undermine a hard-working very popular former Minister of Health Annette King and to attack her family in the most disgusting way by circulating rumours around the Hawke’s Bay. That is not worthy of a Government-in-waiting and it proves the kind of people we are dealing with over there. I could say plenty about them—believe me I am tempted—but I will not. 
The public want to know why but not in respect of allegations of a whitewash because if this is a whitewash then it is a 200-page whitewash put together at the cost of hundreds of thousands of dollars of taxpayers’ money and with the best due diligence we could find. They do not want to know whether I set it up because I clearly did not. I have not even met the members of the panel. They confirmed yesterday that they have never met me or spoken to me about it. Nor has the director-general briefed me. So let us clear that rubbish out of the way. 
What does the public want to know “why” about? I think they want to know why in the face of overwhelming evidence of potential malpractice and bad governance at the Hawke’s Bay District Health Board the National Party is still defending it. I think they want to know why that member Mr Ryall is a lion roaring in the Chamber but will not even squeak like a mouse outside it. They want to know why Mr Foss and Mr Tremain have suddenly fallen silent. These members are unwilling now to risk what is left of their reputations on clutching at crooked straws. 
Let me give members two theories of why. The first is that the National Party is playing partisan politics. They do not really care about the people of the Hawke’s Bay and their health services; they want to get at Annette King. Why? Because she is a tremendously successful former Minister of Health and they want to take her down with parliamentary crossfire. I do not think that is fair to the people we are here to help—the people of Hawke’s Bay. It does not even do justice to the National Party which was once a serious party. More important—and I think here we are at the heart of the issue—what is going on here is that the scab has been lifted on a nasty little nest—[ 
Interruption 
] 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Interjections must be short. 
Hon DAVID CUNLIFFE 
: I raise a point of order Madam Speaker. It would be nice to be heard on this matter. This is a serious point. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: I ask the member to keep the interjections short and brief not a barrage. I ask for that of both sides. 
Hon DAVID CUNLIFFE 
: This report has lifted the lid on a nasty little nest of self-perpetuating provincial elites who have been propping each other up and either through ignorance or malpractice slipping each other cosy contracts without proper governance protections and doing it time and time again. They do not like it; the elites of the bay do not like having the same standards applied to them as to anyone else or to any other Crown entity anywhere in New Zealand. But should these standards not be applied to the bay—is that what the board is saying? Is Hawke’s Bay special? 
Close to $400 million a year of taxpayers’ scarce resources is going towards the health care of the people of Hawke’s Bay and the board does not expect the same standards of governance that anybody else has to stand by because it is special. Board members think they should not have to declare their conflicts on a transaction-by-transaction basis. The board thinks it should not have to update its conflicts register like everybody else. It thinks it should not have to have a governance manual or to follow it. It thinks its chairman should not have to manage conflicts when declared. Oh no—the board is above all that. It matters not that the board just happens to include a member who is the chairman of a national chain of pharmacies who owned four pharmacies in the region who just happened to stand to lose throughput because of the actions of the board who just happened to participate in the discussion and then who just happened to send emails to no fewer than three layers of management. Even if the board was going to try to tip the playing field it should have been a bit more careful than that. The board member sent emails to three layers of management to remind them not to open any more pharmacies anywhere near the ones board members already owned. 
How bad does it have to get before the National Party discovers some principles and says that enough is enough? Why does it take this sad state of affairs to call time out and for National members to realise that the game is up that they cannot use this nasty little nest as a way of getting at Annette King and her husband and that what is being applied here is the disinfectant of publicity to a very unseemly situation indeed? 
Let me briefly remind the House that in taking the difficult decision to end this sorry mess I gave the board notice that I would take into account three key sets of issues. The first was the burgeoning and rapidly deteriorating financial deficit. This is a board that around a year ago said it thought it could balance its budget. Then the chairman was quoted in the  
Dominion Post  
as saying that it never really meant to but only said that to get the budget signed by the Minister. And it expects me to keep it on? Is that OK? This is a board that according to that august rag  
Hawke’s Bay Today 
 tried to tell the people of Hawke’s Bay that when it sold Napier Hospital—and it is a very sensitive matter in the bay; I know that—it was going to have to use the proceeds to pay its operating deficits even though the previous Minister had told it not to and even though it knows it is against ministry guidelines. How bad does it have to get before Tony Ryall discovers principles? 
But if that was not enough there was a second group of issues around normal governance practices about a dysfunctional relationship on the board between certain board members and between the board and management. Speaking of management I ask what the independent report states. It does not matter what I say; it does not matter what Opposition members say. What do the independent experts—the jury of the board’s peers—say? They say on page 86: “a number of failings alleged against management are ultimately the responsibility of the Board.” 
Here is a board that blames everybody else except itself. Members should have seen board members lined up there on the radio this morning and on the TV last night like folks out of Jurassic Park saying that nothing is wrong. Nothing is wrong? It is OK to spend capital on an operating deficit? It is OK to cut some deals with one’s mates without good governance? It is OK not to declare conflicts of interest? It is OK to have a cushy deal for the pharmacies owned by board members and then charge a surcharge to the people of Hawke’s Bay? That is OK? 
The third set of issues we looked at was the bizarre relationship between this board and the Crown. This is a board that thinks the normal means of communication with its Minister is to issue a press release or leak to a journalist and that the normal means of communication is through the pages of  
Hawke’s Bay Today  
and the 
 Dominion Post 
. I am sorry; that is not how we do business with every other board in the country. Just because these self-perpetuating elite of the good burghers of Hawke’s Bay think they are special I am sorry but that does not mean they are. 
Those were the three sets of reasons why I took advice on a very tough decision. I made it for good principled reasons not because I thought—as Tony Ryall suggests—that Peter Hausmann was a saint and everybody else was bad. I did not even try to establish who on that board was right and who was wrong. Why not? Because that is the job of the independent panel of peers of the board—the independent experts. That was the judgment that came down yesterday. What I said was: “Time out. It does not matter to the public who paid the $400 million who is right and who is wrong. You’re all out because the level of dysfunction and distrust is intolerable. If half or a tenth of the smoke that is swirling around you lot is right then that is intolerable too.” I find it absolutely fascinating that despite the independence of the process which frankly was the best independent process—oh good there Mr Ryall goes. He is out of here; I would be too if I was in his shoes. How interesting there is not point of order on it. Here it comes. 
Hon Bill English 
: I raise a point of order Madam Speaker. You know what point of order I am going to make. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Yes. 
Hon DAVID CUNLIFFE 
: So do I and I apologise. We have heard a lot about his claims to date. We have heard that Mr Hausmann could indeed have done more to manage his conflicts. Yes he declared conflicts of interest before he was appointed. He had to. Do members know why? Because in December 2004 he presented to the chairman Kevin Atkinson and the chief executive officer Chris Clarke and I am told that the next day he had dinner with them at Craggy Range Winery. I understand that at that meeting the chairman told the chief executive to “get on with it” and scope out the request for proposal. That is the same chairman Kevin Atkinson who then tried to take a High Court injunction to prevent this report seeing the light of day. 
Sue Moroney 
: Why? 
Hon DAVID CUNLIFFE 
: Because he failed to declare to the board what he knew at Craggy Range Winery. He failed to declare what he knew about Mr Hausmann. He put all the blame on Mr Hausmann and Mr Clarke and bore none of it on his own two shoulders. What sort of leadership was that? He was popular; at the previous election he was the second-highest-polling candidate. Do members know who the highest polling candidate was? It was Peter Dunkerley the “fantastic pharmacist”. We have already heard about him have we not? What does this prove? It proves that the good people of Hawke’s Bay can only react to the truth as they are told it. 
Therefore it cannot be the case that good governance is some kind of popularity contest. Someone has to make the tough calls and fortunately or unfortunately the buck has now stopped on my desk. As Minister I will not preside over a system of bad governance poor stewardship of public funds internecine warfare on a Crown entity board and a septic dysfunctional relationship with a chief executive that has resulted in stress leave and a management team that is at the point of walking. I say that is enough already; it is over. 
Well it is kind of over because in the course of this process we have some recommendations to attend to. The commissioner will have to attend to some work on the Hawke’s Bay District Health Board and I expect that to be done fully—I am sure he will do so. The Ministry of Health has work to do in making sure that we do not have a recurrence of this at any other district health board and I will expect every district health board in the country to read this report and report to me through the ministry as to what they are doing about it. I will be checking up that they do—members had better believe that. 
There is something else. When we make a decision like this people write and tell us and our local colleagues things and I think there is probably more to come out here—not necessarily of a different nature but perhaps more evidence that what we have here is a self-perpetuating nest of cosy interests that are not used to the disinfectant of sunshine being shone on them the same way it is in every other Crown entity board in the country. 
I am sick and tired of Mr Ryall’s pomposity. I am sick and tired of him using privilege to leak drafts that are bound by confidentiality. I challenge Mr Ryall to tell us where he got them from or I challenge him to use them outside the House. He will not and everybody knows that he will not because he is not prepared to stand by this outside of privilege. Is that not interesting? That is what the National Party has come to: the defence of its mates and to hell with the consequences. 
The Hawke’s Bay District Health Board was not a good board. I am very sad about that. I wish I had not had to make the decision I made. There was too much conflict and too much dysfunction. Yesterday’s report amply proves that. It is not for me to take a position on who was right and who was wrong but I repeat that the level of dysfunction bad practice and cronyism was such that should not exist on this or any other board in New Zealand. I stand by the decision that I made. 
Hon BILL ENGLISH (Deputy Leader—National) 
: 
 The Minister David Cunliffe’s speech is an indictment on the whole district health board process if he wants it read that way. He has talked about how the board was open to cronyism conflicts of interest and poor governance. Who appointed the Government appointees to the Hawke’s Bay District Health Board? 
Chris Tremain 
: Annette. 
Hon BILL ENGLISH 
: It was Annette King in this case. Who has been running the show in such a way that the Minister feels he is compelled to sack the board? 
Hon David Cunliffe 
: Kevin Atkinson. 
Hon BILL ENGLISH 
: Well the Minister cannot have it both ways. This is a fundamental problem for the Government. It still cannot decide whether district health boards are accountable to the people or to the Government. Actually they are accountable to the Government when it wants good news and they are accountable to someone else when the Government does not want anything to do with them. I thought the Minister laid out a lot of the weaknesses of the model he is overseeing. I ask the Minister: if there are conflicts of interest on this board then what about all the other boards? 
Labour has a track record of being very weak about conflicts of interest and that is exactly what happened in this case. If the Minister and the Government are right why did the Hawke’s Bay District Health Board not proceed with the contract? Why was this multimillion-dollar contract cancelled? It was cancelled because it was tainted and this report shows how it was tainted. If the contract had been let any other tenderer who read this report would have had very strong legal grounds for overturning that contract. That is absolutely correct. 
The Minister is going on as if this report clears the Government the process and the participants. It does not. It confirms that a conflict of interest eventuated and that someone who was a tenderer acted in ways that compromised the tender process and that therefore the tender would not have stood up to legal scrutiny. 
Chris Tremain 
: And it confirms the board was right. 
Hon BILL ENGLISH 
: And it confirms the board was right to abandon the contract. That is absolutely right and I am very disappointed that the reviewers did not go over that. They did not cover the board’s decision to can the contract just as they did not cover all the other things that mattered that my colleague has talked about such as why the Minister appointed this guy Mr Hausmann in the first place—I will come back to that—and why the management and its behaviour was not covered. From what we know of the management’s behaviour there are indications that it tried to undermine the inquiry by for instance deleting emails. Is that the standard the Minister now accepts as appropriate? Is that the management that should continue to run the Hawke’s Bay District Health Board when in the face of an inquiry they deleted source material? Why did the Minister not answer that question? 
This report does not cover most of the substantial issues. It does what the Government wanted it to do—that is find out whether the board’s conflict of interest processes are up to scratch. It found that they are not. What does that tell us about every district health board in New Zealand? There is no sector where conflicts of interest matter more because of the intertwining of the public and private health system because of the hundreds of millions of dollars of public money involved in all sorts of contracts and because in many provincial cities this is by far the largest employer and everybody knows somebody who is involved in something with the district health board. 
The report concludes one thing the Minister did not refer to and that is that the district health board processes for managing conflicts of interest are not up to standard. We know that because this is not the first major contract that has been cancelled. The Government blames the boards when it is the Government’s process that makes it not work. I remind members of the Auckland Diagnostic Medlab contract—what a debacle that was. That was knocked over on exactly the same grounds as this one except in that case the Government decided to attack the board member and excuse the board. That was because it thought the board member was a National supporter. This time Government members have decided—as the Minister has made quite clear—that because they think the chairman is a National supporter they will attack the board and not the individual. Where is the principle in that? 
We have a district health board system where conflicts of interest are rife; every board will have on it people who are conflicted. The Government has appointed a lot of those people and some of them have been elected and this document tells us we have reason to believe none of them are managing it well. We also have a track record of contracts that have got into difficulty. The other example related to this is the role of Ken Douglas on the Capital and Coast District Health Board in its discussions about community health service contracts with the same company as the one involved in this. 
Let us step back just a bit and think about the common sense of the Government and the previous Minister of Health Annette King. Let us just think this through. Peter Hausmann who runs a large and successful health care provider in New Zealand starts a discussion with Hawke’s Bay District Health Board for what would be easily a $50 million contract—10 years of community health services in Hawke’s Bay must be worth hundreds of millions. He starts those discussions it is known to the Government that those discussions have started and what does it do? Annette King appoints Peter Hausmann to the board. That is the mistake that was made. Why would a Minister of Health appoint the chief executive of one of the largest private providers in New Zealand to the board he is beginning to negotiate with about a large-scale contract? That question has never been answered. Why would the Minister appoint Peter Hausmann to the Hawke’s Bay District Health Board when he had already started negotiations about a major multimillion-dollar contract for public money? Annette King has not answered that question David Cunliffe has not answered that question and the inquiry does not answer that question. In fact the inquiry outlines more reasons why Mr Hausmann should not have been appointed. For instance Peter Hausmann had never been on a public board and the report rightly says that people who have been chief executives in private companies operate differently. They act as if they own the company. Public sector boards are quite different. So why did Annette King appoint him? That has never been answered. Why did she appoint two directors of Healthcare New Zealand to two lower North Island boards—one to Capital and Coast and one to Hawke’s Bay? That question has never been answered. 
That is why National is going to persist in obtaining a broader independent inquiry into these circumstances: the involvement of the Minister’s husband the deal that was done with the whistleblower the activities of the management and the fact that no one has answered the question of why that person was appointed. It is in Annette King’s interest that that is all cleared up because everyone in Wellington knows that the little circle of Doug Catley Annette King and Ken Douglas have been mates for years—years. Imagine if a National Minister had done this. He or she would have had to resign because that man over there would have been absolutely outraged by it. 
Cronyism connections looking after one’s mates—this situation is dense with all of those things. Unfortunately for the people concerned this report does not deal with the issues and does not clear away all the questions. It answers one question only: do district health boards manage conflicts of interest well? The answer in this report is no and that is a huge problem for the Government. What is it doing about all the other conflicts that are being acted out every day as we speak in district health boards right across the country? 
The Minister is telling us that he has learnt nothing. All he cares about is whether Government members have nailed a chairman whom they think does not vote for them. That is the only conclusion that Labour has and that is the one its members seem to be very happy about. There is a lot more at stake than that and that is why the public regard the Government as past it—because its members are too arrogant to understand what this means to the public health of New Zealanders. The Minister has confirmed today that he will do nothing about it. 
BARBARA STEWART (NZ First) 
: 
 On behalf of New Zealand First I am delighted to speak in this debate. The Hawke’s Bay District Health Board got a very unhealthy report—a report that we do not want to see repeated in any other district health board in the country. New Zealand First members do not think it is a whitewash; the problem has been explored and recommendations have actually arisen from this particular report. All in all the report did show that the Minister’s decision to sack the board was warranted. We know that that was very drastic action and we were all quite surprised at that action but such actions are never ever taken lightly. The board was obviously not functioning. Cronyism conflicts of interest and financial debt cannot be tolerated by any board and district health boards in particular cannot operate in that manner. It is a prescription for disaster and we all know that there is a huge challenge ahead to get this board back on track. 
The report found that the board had failed at a very basic level of management—its management of commercial contracts. It was so amazing that this basic element could not be carried out correctly by a board. I was shocked that it was not even totally explored. We know that the review panel found a culture of mistrust and dysfunction between the board and senior management and this is always a very significant road block to any performance of any board. There was also the fact that there were no basic procedures for the conflict-of-interest management we had all heard about and we heard that those conflicts had been wide-ranging. We all know even here in this Parliament that any conflicts of interest have to be disclosed. Why the members of this board thought they could get away without disclosing them will never cease to amaze most of us. 
We all know that if we have inadequate systems they need to be identified and some recommendations and actions taken to correct them. In New Zealand First we are very pleased to hear that some action will be taken to ensure that the recommendations are implemented district health board - wide right throughout New Zealand. There is no doubt as the Minister has pointed out that other district health boards can learn very valuable lessons from this debacle we have had. 
Of course there will need to be follow-up and the board will need to be monitored to ensure that the recommendations are followed through. When we consider it we realise that it shows the inadequate level of training that board members actually have when they come on to a board and that needs to be rectified. One cannot afford to have friends in this particular role; it has to be managed according to the rules and it has to be absolutely straight. These are very serious issues for a board to work through because basically this is not the way to do business. 
I think we have to be very aware that this entire fiasco will have had a significant cost to the public health system and the people of Hawke’s Bay. It is timely now as the Minister said today in question time to ensure that elections are held as soon as possible so that the people of Hawke’s Bay can have a properly appointed functional district health board that gets on with the job of looking after the region’s health. It is important too I believe to ensure that the people of Hawke’s Bay can have confidence in their district health board. At this particular level to have these types of allegations will result in a fair degree of mistrust. So New Zealand First believes that now that the report has come out into the open and that recommendations have been made it is timely to move on and to ensure that the recommendations are acted upon quite quickly. 
I was very interested to hear that the Opposition has promised that this questioning and debate will continue ad nauseam; we have already had an awful lot of time devoted to this particular issue. The Minister is leading from the front on this issue and I think it is important that he is. We hold him responsible for looking over the health system and it is important that he does lead on this issue. 
In New Zealand First we believe it is timely now for the people of Hawke’s Bay and their district health board to get on and do the job we expect them to do. Health dollars are scarce and they must be used according to the rules. There are no exceptions. If they are not being used appropriately then something needs to be done. It is a sorry state of affairs that needs correcting and it is only now after this report that there is an opportunity to do so. We hope that this whole fiasco is over and we do not want to see it repeated in other district health boards around the country. 
SUE KEDGLEY (Green) 
: 
 The revelations of systemic conflicts of interest in the Hawke’s Bay District Health Board undermine confidence not just in that district health board but in the operation of all district health boards in New Zealand. One cannot help but wonder. Actually I find the levels of conflict of interest that have been identified in this report and in other allegations in recent times to be frankly mind-boggling. One would have to ask whether some members seek to be appointed or elected to district health boards to advance their own business interests rather than to represent the local community and the public interest of New Zealand. 
I think that the Minister has spent a lot of time blaming the board in conflict. He has been blaming individuals and the chair and various people on the district health board of Hawke’s Bay. Tony Ryall has been blaming the problem on various other people. So we have a great war of words over who is to blame and allegations have been flying left right and centre. But it seems to me that the fundamental question is about why we are allowing board members to sit on a board and be able to enter into a business relationship with the district health board they sit on when they stand to gain a personal financial benefit. It is not just a matter of having a conflict of interest register or various procedures to identify the conflict of interest; if there were a simple rule that said that this was not allowed and that no board members shall be allowed to enter into a business relationship with a district health board they sit on where they stand to gain a personal financial benefit then that simple rule would have resolved most or many of the problems that have been identified in the report on conflicts of interest. I think that is the wonder: why do we not have any such rule? In relation to Local Government New Zealand people are not able to stand for their local regional councils if they are perceived to have a conflict of interest—if for example they are staff members. Why is it that we allow any number of persons to stand for or be appointed to district health boards when they have obvious manifest conflicts of interest? There should be a rule that prohibits that. 
I cannot understand why someone who was the managing director of one of the largest private health providers in New Zealand was appointed by the then Minister of Health Annette King to the Hawke’s Bay District Health Board. It is incomprehensible. Did the Minister have a private agenda to encourage the contracting out the privatisation of health services in New Zealand? Why otherwise would she have appointed such a person to the Hawke’s Bay District Health Board? Why would Ken Douglas be appointed to the Capital and Coast District Health Board when he is also a director of Healthcare New Zealand which I believe is the largest private health-care provider in New Zealand? There are manifest and obvious conflicts of interest and if a Minister is going to appoint such a person to a district health board then it is almost inevitable that these sorts of conflicts of interest and issues will arise. 
I believe that once we have got past the blame game that seems to be taking place in this House today we need to get to the heart of the matter and really it is up to the Minister. If he says he really wants to take decisive action and wants to learn from this horrific saga it is up to him to show leadership and to pass a rule that says that it will be illegal for any persons for any board members to ever enter into business relationships with district health boards they sit on where they stand to gain a personal financial benefit. Until such a rule is passed we will not know whether this is just the tip of the iceberg. Was this just one isolated incident? Actually we know that it was not because of what happened in Auckland. We had an appalling saga in Auckland with a laboratory contract which ended up under judicial review because somebody who was a board member had used his involvement his participation on the board to advance his own interests. In that case the person was trying to get a laboratory contract for his business. In this case a pharmacist was allegedly trying to gain benefit for his business and also in this case Mr Hausmann got on to the district health board and immediately started to bid for a substantial contract with that board. It is all well and good for the Minister to blame the chair or to blame this person and that but the Government who appointed Mr Hausmann to that situation is in large measure responsible. It also shows that in the absence of any of these rules such conflicts of interest are almost inevitable. 
It does seem odd to us that the report has acknowledged the serious conflict of interest Mr Hausmann had in the Wellcare contract but then has failed to condemn this behaviour more vigorously. Instead the report has just made some passing remarks to the effect that the conflict could have been declared earlier on in the piece. There seems to be no denial that Mr Hausmann sought to amend and influence the contract that he was then going to bid on and that seems to me to be profoundly unethical—well possibly more than simply unethical. It does surprise me that the report did not condemn that particular behaviour more vigorously. 
I do not believe that these two reports will bring a close to this sorry saga. I believe that too many questions are swirling around this whole incident. For that reason the Green Party will support calls for a further investigation of the whole issue by the Auditor-General because otherwise I think this incident will drag on and remain a source of conflict tension unhappiness and distress for the people of Hawke’s Bay and will stand in the way of restoring confidence in the Hawke’s Bay District Health Board. 
As I said this has not just undermined confidence in the Hawke’s Bay District Health Board; I believe that it has undermined confidence in the operation of all district health boards in New Zealand. I think that many people will be questioning the boards of their areas and wondering whether what happened in Auckland and Hawke’s Bay could be happening in their particular areas. As someone has alluded to there were concerns at the Capital and Coast District Health Board when there was a move to contract out some of the services and there was concern that a board member was somehow involved in or participating in or had a potential conflict of interest in that contract. So we see this happening around New Zealand not just in Hawke’s Bay. 
There is only one way to solve this problem and that is to tighten the rules surrounding conflict of interest; they are woefully inadequate. It is simply not good enough just to declare a conflict of interest at the beginning of a board meeting or to have a register of conflict of interest and then basically to leave it up to individual boards to monitor it as they will. That is not good enough. There needs to be tight rules and above all as I have said there needs to be a specific rule that says one cannot be a board member and seek to gain a personal benefit through a business relationship with the district health board one sits on. If this rule were in place maybe many of these people—like Mr Hausmann—would not want to put themselves on to a district health board. I think that would be a good thing because we cannot allow this rather horrific saga to be repeated. Thank you. 
Hon TARIANA TURIA (Co-Leader—Maori Party) 
: 
 Tena koe Mr Assistant Speaker. It is a matter of considerable concern to all of us in this House that a report into the capacity of the Hawke’s Bay District Health Board has revealed a culture of mistrust and dysfunction between the board and management. We have learnt from the Director-General of Health Stephen McKernan that if the chair had applied common sense and good practice the matters at the heart of this whole issue might well have been avoided. Well frankly that remains to be seen. 
Major questions that must be asked arise from this whole report. One of them has to be why Peter Hausmann was appointed by this Government to the Hawke’s Bay District Health Board. People in the community have asked that question given that there was knowledge of his business interests and of the likelihood of a conflict of interests and in particular it was known that he was a potential contractor for services from the board. To say that he was appointed because of the skills and expertise that he would bring to it simply does not make sense. Other business people who are not as implicated in the business of health as he is might also have been excellent in that role. So what was the role of the management in the contractual agreements in light of the allegations that are being made? 
Five years ago all sorts of crisis and scandal were directed at another body in the Hawke’s Bay a Maori health provider. The Hawke’s Bay District Health Board ordered an urgent investigation into the trust after claims of mismanagement. The headlines screamed accusations of nepotism and the wolves were quick to call for immediate statutory management for the future of the Maori health provider—a provider that had been running successfully for more than a decade. The audit looked into allegations of the employment of family members—this was a hapu provider—the use of trust vehicles and a range of other practices considered outside the organisation’s contract. Yet a couple of years later when these conflicts of interest arise between two commercial initiatives—between the Hawke’s Bay District Health Board and a board member—suddenly it appears that conflict of interest is not such a biggie at all. A double standard is operating here. The simplest test of governance that we would have expected to operate at the level of the district health board has failed yet the same board had been quick to judge a Maori health provider caught under the same slur of judgment. 
We know that for far too many of these appointments cronyism has been seen as part and parcel of their practice. Cronyism is in fact the norm. We know that Ministers also alter reports. Ministers cannot deny that. They can deny all they want that they do not interfere in these so-called independent reports but it is simply part of the convention of this place. So the comments made by the board chair Kevin Atkinson that the final report reeks of political interference or that irrelevant matters are being submerged under a smokescreen are actually not too far— 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. I ask you to consider that an implication has been made to which I take personal exception and it is contrary to what I have said publicly and in this House. I confirm again that I had no input into the report. I did not see either the draft or the final report before the day it was released and I was not briefed on its contents. I ask the member to accept that assurance. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I thank the Minister. That is not actually a point of order but the point is made. 
Hon TARIANA TURIA 
: The comments made by board chair Kevin Atkinson that the final report reeks of political interference or that irrelevant matters have been submerged under a smokescreen are probably not too far from the truth. 
I want to make some comments about that person. It is far too common a practice for people to come to this House to denigrate and insult individuals: to name and blame them for various issues that need to be attended to. Mr Atkinson has been the latest victim of this approach yet he is in fact the very same man who was appointed not very long ago by this same Government to be the chair of this board after being elected by his community. So is the Government admitting its error in appointing him—its misjudgment? The House exists in the dubious privilege of being able to slam individuals who are unable to defend their honour in the debating chamber. 
The fundamental issue for this House and the Minister of Health to deal with is that if the relationship was as dysfunctional as the report lays out why were the issues not identified earlier? Why were the checks and balances not in place to ensure that the competing business priorities of two of the members of the board came to attention earlier? The competition between Mr Hausmann and the pharmacy interests should have come to the attention of the board long before it came to the attention of the Ministry of Health. What this matter really highlights is the issue of the appropriateness of people involved in health sector business also being involved at the governance and management levels. 
We know that Maori are pilloried over and over again with spurious claims being made of nepotism and conflict of interest. We in the Maori Party actually know that the strengths of whanaungatanga can work really well to provide a solid foundation for business success. We have only to cast our memories back to the crisis hyped up around Te Wananga o Aotearoa to know that Maori organisations often come under a great deal of scrutiny when family members are involved—and particularly scrutiny by this House. In actual fact whanaungatanga or kinship—the extended family linkages in Maori society—is not a point of conflict; it is a point of difference. If we look at family relationships more broadly in many ways we see that keeping business within the family has been so successful that it places families on the  
National Business Review 
 rich list. Of the 187 entries in the 2004 list 47 were in fact family affairs. There is the Goodman family the Fletchers and of course many others. 
The point is all about being transparent coming up clean and ensuring that mandated checks and balances can be adequately enforced. We are the last party to claim that relationships and connections cannot be used to the benefit of a business. The key issue must be the way that they are managed and the way that the technical and ethical issues and the public perception are organised. The general feeling is that in this case it was not good practice. The Maori Party agrees with the Greens that anyone with business interests should not be allowed to be on any district health board. This is a sector in which the nation needs to be able to trust for the good health of the people that we have standards and practices that are transparent and prevent people from getting a competitive advantage. The Maori Party also supports an inquiry being made into the Hawke’s Bay District Health Board by the Auditor-General. Kia ora. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I advise the House that the next speaker will have 5 minutes. For the benefit of the speaker I will ring the bell with 1 minute remaining. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I rise on behalf of United Future to talk about the report from the independent review of the Hawke’s Bay District Health Board following the Minister’s decision to remove the board from office some weeks ago. Although we would all love to know who was right and who was wrong in the many conflicts the board was needing to give leadership on the question that this review panel needed to answer was whether the board was able to chart a course through those conflicts and challenges before it or whether it was so dysfunctional that the Minister David Cunliffe had no choice but to take the action he did. 
Since the report there have been questions about the integrity of the panel conducting the review. That is now a line that the Opposition is running—so much so that the panel has felt the need to refer to its independence and impartiality at the end of its report. Early drafts of any report can look very different from the final wording. One does not need to spend very long on a select committee to know that. The sinister innuendo now floating around this parliamentary ether is that pressure from Government quarters has been brought to bear on the panel. Those inferences are not just an attack on the Government but more important an attack on the integrity of some very credible experts who made up the review panel. 
The conflicts and financial challenges facing this district health board are currently and remain the concern of a commissioner. Beyond resolving those conflicts and challenges the greater need is for the tone that underpins the working environment existing between staff management and governance at Hawke’s Bay District Health Board to be seriously considered. When an essential community provider is characterised by suspicion manipulation cronyism gossip and a complete disregard for good process and practice then systemic collapse is inevitable. 
United Future sees that the way forward needs to involve establishing a measurable list of criteria outlining those ingredients needing to be in place before an election can be held to ensure that any future board inherits a workable proposition. It is not necessarily about resolving every challenge that faces the current district health board; it is actually about establishing a sustainable and positive working relationship so that Hawke’s Bay people can be confident that this disruption both to the day-to-day work of their health authority and to democratic outcomes can have no part in the future of their health services. United Future urges the Government to move forward from this report and to make sure that every support is given to the commissioner to put in place all that needs to be put in place so that a democratic election can be held and Hawke’s Bay can enjoy being led by a proper health board that is democratically elected. 
HEATHER ROY (Deputy Leader—ACT) 
: 
 The review panel’s report into the conflict of interest allegations at Hawke’s Bay District Health Board was exactly as predicted and expected. The report—strangely enough—contains absolutely no mention whatsoever of the then Minister of Health Annette King when Peter Hausmann was appointed to the board. That was an integral part of the problem making it surprising that no reference was made to it at all. The report is also surprisingly short on mention of the role of the Hawke’s Bay District Health Board management because we know that it played quite a part in this conflict of interest situation. The report strongly and sweepingly criticises other board members; it strongly criticises Peter Hausmann’s involvement. What the report does not mention is whether the appointment process that Mr Hausmann underwent when Ms King appointed him to the board was adequate or inadequate or whether it was done appropriately. 
The review panel was in many ways hamstrung from commenting properly on this issue and we have no idea whether we have got to the bottom of this situation. The panel was prevented from looking into every area that should have been looked into because of the narrowness of its brief. The report itself actually raises many more questions—questions that have been asked in this Parliament but not answered—than it answers. The only fair way to deal with the conflict of interest allegations levelled at the board is to immediately hand the entire process over to the Auditor-General for a truly independent review—and by truly independent I mean that no stone should be left unturned. The independent review should go back to early 2005 when Annette King first approached Peter Hausmann to join the board and it should go right through to when the current Minister of Health prematurely sacked the board before the review had any hope of getting out. 
Good people’s reputations are at risk here. In fact it may already be too late—they have already been besmirched I think. The truth must be brought to light. That in itself is reason enough for an independent review to be done by the Auditor-General. If the Minister of Health were really at all interested in not just taking his information from Rick Barker—who is whispering across to him now—from Peter Hausmann or from Chris Clarke but were interested in taking his information across the board then we might actually get a glimmer of the true situation here. 
When did this Minister of Health—who launched in this Parliament such vicious attacks on the board and said what a terrible job it was doing saying that it was not managing the financial constraints properly and not doing this and not doing that—make any attempt to go to Hawke’s Bay to see the board? I asked that question in Parliament and what was the answer? Never; he made no attempt at all. He is an “I’m running the show.” hands-off Minister. Why is that? It is because it is actually much easier to sit in one’s chair or to stand over there on that side of the House and launch attacks on people than to go and find out the truth for oneself. The Minister does not bother about talking to the board. He thinks it is much easier to sit here in Wellington stab people in the back from a distance and not look them in the eye or be interested in hearing their side of the argument and that is reprehensible. The Minister is guilty of ministerial misconduct and should be held responsible for that. 
The Minister’s one-eyed comments today in this House just show where he truly lies. He is pleased that this report has been released now because he can stand up and launch a vitriolic attack unheeded on the board. He will not mention the management—it was not part of this inquiry; the management has been left alone. He can now launch as vitriolic an attack as he wants to on the board without having to worry about the constraints of what the review panel might have or might not have looked into. If the Minister were truly interested in the truth he would pass this on to be reviewed by the Auditor-General. 
In closing the sad thing is that this whole fiasco has diverted the public’s attention away from the real issue: the access the public has to health care in New Zealand. The three deaths that the Hawke’s Bay District Health Board was happy to talk about because those people were not getting proper access to tertiary care at Capital and Coast District Health Board have been lost in this whole mix. I raised those issues in this House and they have now been lost in the whole mix. The Minister is so pleased that this inquiry has gone on and on and has been raised in Parliament because he does not have to deal with the real issue facing New Zealand’s health sector: the lack of access to proper care. 
Hon RICK BARKER (Minister of Internal Affairs) 
: 
 The report of the Director-General of Health on the subject of conflicts of interest and other matters of the Hawke’s Bay District Health Board shines a torch into the gloom of the district health board. The report is enlightening; it says succinctly and clearly that the board had substantial problems—and I agree with Tony Ryall when he says there is much more that could have been said—but the torch beam we see shows something that is seriously concerning. The report without saying who was right or who was wrong says the board was seriously eroded that dysfunctional relationships had existed for some time between the board and management and that these would not have been resolved without external input. This debate about the Hawke’s Bay District Health Board is not about democracy; it is about competence. This debate is about the competence of the board to serve the people of Hawke’s Bay—the patients who seek its care—and the board failed them in a number of areas. It failed in managing its relationship with staff. It failed in managing conflicts of interest. It failed in managing its governance responsibility. It failed in managing its relationship with the ministry and the Minister. 
The report notes with great particularity that the board had no clear consistent policy of managing conflicts of interest. Instead the board applied varying standards in how it dealt with these conflicts of interest and these standards were applied differently depending on the board member. The report clearly sets out the three components in managing conflicts of interest—that is legal requirements ethical requirements and good practice requirements. The board failed to induct adequately its members; the members did not know what was expected of them. Where conflicts of interest were known the board thought that simply declaring the interest was sufficient. The report makes very clear that declaration of a conflict of interest is not sufficient; it is but a start. There had to be then a process of managing that conflict of interest that is legal ethical and subject to good practice. This board failed to manage known conflicts of interest. 
Mr Atkinson has made much of the fact that he did not know the extent of Mr Hausmann’s supposed conflict of interest. I think that is simply not true. I have information from notes written by Ken Douglas who attended a meeting on 16 December 2004. Ken Douglas attended a meeting at Craggy Range Winery which is well known in Hawke’s Bay. At that meeting were Doug Catley Peter Hausmann and himself as well as Kevin Atkinson and Chris Clarke. The meeting discussed the possibility of working with the Hawke’s Bay District Health Board on a private-public partnership. The board had for some time been considering such an approach to create transparency and so on. Both Atkinson and Clarke according to Douglas were effusive in their response to the concept and mentioned the significance of the savings and benefits that were possible. 
Ken Douglas remembers specifically that he raised concerns about Healthcare New Zealand’s intellectual property—for example innovative ideas and solutions—being protected by a request for proposal process due to what had happened to Healthcare New Zealand when it was working with Capital and Coast District Health Board. Capital and Coast District Health Board has set out now for we have the document what was happening and its intellectual ideas were stolen. So in December 2004 the chairman of the Hawke’s Bay District Health Board Kevin Atkinson knew of the proposal. It required the chief executives of both of them to work on the request for proposal process and required them to bring it to fruition. The board chair has latterly said he knew nothing about it. But this report clearly shows that at a meeting at Craggy Range Winery he knew exactly what it was. The report correctly identifies that Kevin Atkinson knowing that had a responsibility to ensure that the conflicts of interest were correctly managed. 
But there are other conflicts of interest that were referred to in the report which the National Party has not mentioned at all. The first is to do with Mr Peter Dunkerley who owned pharmacies in Hawke’s Bay but continued to participate in discussions with the board about decisions where his interests and his family’s interests were directly affected. He chose not to exclude himself from the meetings and the chair did not require him to leave the meeting. That is contrary to legislative requirements and he failed to meet all of the other tests of ethical requirements and good practice requirements. A board member with a conflict of interest should have disclosed if that is what the law requires; and if the person was going to participate the law requires that that be subject to a decision of the board. The board’s minutes require it. It must outline the reasons for giving such a waiver. On no occasion was that done. The board failed its legal requirements. The chair failed to make sure they were employed and everybody knows that that is wrong. It is plain wrong to continue to participate in those decisions when one’s personal interests and family interests are at stake. 
It was not just on one issue; it was on community pharmacy interests which involved millions of dollars. It was in the interests of opening up pharmacies to competition. Again that was contrary to the interests of Peter Dunkerley and his family’s interest and his financial interests but he still participated in that decision as well. Peter Dunkerley’s participation has been discussed as a potential involvement for the benefit of the companies in which he had interests. The report states he did not disclose the full nature of his interest so as to enable the board to assess the position with adequate information. He did not manage his interests sufficiently. The panel states that on a number of occasions the minutes record where Peter Dunkerley had disclosable interests but they were not disclosed. That is a complete failure. I would like to know how many other examples are going to come to light. The panel notes that Mr Dunkerley is but one example. 
But let us turn to another area where there are conflicts of interest. There was the recent decision by the Hawke’s Bay District Health Board to award $600000 uncontested to Royston Hospital. Again this is instructive because this is a board that has lodged complaints against a member for failing to disclose his conflicts of interest and failing to manage them. This is how this board did it. The minutes of the audit finance committee meeting on 19 December 2007 demonstrate the board’s cavalier approach to managing conflicts of interest. 
The House needs to remember that these were people who were very sensitive to this. The board itself chose not to endorse the minutes of the independent people there; it chose to doctor the minutes. But even the doctored minutes show that things were wrong. At that meeting Peter Dunkerley declared he had some shares in Wakefield and that it might be appropriate for him not to sit in on the discussion. Does the register show these interests I ask the Opposition? The audit and finance committee then decided that Peter Dunkerley’s shares were not material contrary to the advice of the probity people. The chair of the district health board— 
Dr the Hon Lockwood Smith 
: Who wrote this? 
Hon RICK BARKER 
: —it is in the minutes. I will table them shortly. The board advised Kevin Atkinson that he had a conflict of interest because his brother worked at Royston Hospital. That was overlooked. The board knew that Diana Kirton another member of the committee had a conflict of interest because her brother had shares and worked at Royston Hospital. Three board members had a conflict of interest because of their connections with Royston Hospital. None of those three members left the meeting. All three participated in the debate. In fact the chair of the district health board shaped the debate and said contrary to management advice that the $2.4 million should be contracted out $600000 of this a quarter of the contract should be given to Royston Hospital uncontested. That was contrary to the advice of the staff contrary to the probity advice but these conflicted people still participated in the decision. They did not put this money up for tender to ensure that the public of Hawke’s Bay can be guaranteed that it received best value for money. That was the appropriate process to follow. That was the advice of management and the board discarded it. 
The chair of the committee a man who sent an email saying he would not sign a confidentiality agreement because it would constrain his ability to leak to the National Party said latterly that the work had to go to Royston Hospital or else the money made available from the Ministry of Health would be lost and the operation capacity would not be available. That is simply not true. That is justification after the fact. The fact is there are lots of seedy things around this. 
The report goes on to other issues about Royston Hospital. I have been told that there are long waiting lists around failure that in fact people are being funnelled into Royston Hospital despite the fact there is capacity at the district health board. I have also heard murmurings that clinicians have been given priority in performing private operations at Royston Hospital in preference to their responsibilities to the district health board. I do not know whether this is true but I look forward to the new independent commissioner who has no personal or family interest in Royston Hospital looking into the interests and the relationship between Royston Hospital and the board. 
But there is another small matter. It concerns a protected disclosure that the National Party knows about but will not mention and that relates to Diana Kirton who was said to have been conflicted in her dealing with a contract concerning the Spring Hill trust. This has been investigated by PricewaterhouseCoopers. Its report clearly states that the handling of the conflict of interest was not in accordance with the committee’s standing orders. It stated that the recommendations agreed to by the committee had been pre-prepared by the conflicted member in advance of the meeting. It stated there was clear evidence showing procedural errors by the conflicted member but it fell short of the high threshold of serious wrongdoing under the Protected Disclosures Act. 
So we have conflicts of interest around the Spring Hill trust conflicts of interest around the Royston Hospital conflicts of interest around pharmacies. There is a hugely conflicted board involved. This board has to go—of that there is no doubt. The interests of the people of Hawke’s Bay have to come first not the interests of conflicted members their families and their personal and private interests. 
HEATHER ROY (Deputy Leader—ACT) 
: 
 I seek leave of the House to table the minutes of the audit and finance committee meeting on 15 December showing that none of those members voted. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Is there any objection to that course of action being taken? There is. 
Hon RICK BARKER (Minister of Internal Affairs) 
: 
 I seek leave to table the minutes of the audit and finance committee meeting on 19 December 2007 of the Hawke’s Bay District Health Board. 
Document by leave laid on the Table of the House. 
The debate having concluded the motion lapsed. 
Financial Review Debate 
In Committee 
Treasury 
Financial Statements of the Government of New Zealand for the year ended 30 June 2007 
The CHAIRPERSON (Hon Marian Hobbs) 
: Will members please turn to the report of the Finance and Expenditure Committee on the annual financial statements of the Government. The question is that the report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2007 be noted. I note that this report also relates to the Finance and Expenditure Committee’s financial review of Treasury so the performance in the 2006-07 financial year and the current operations of Treasury may also be debated. 
Hon BILL ENGLISH (Deputy Leader—National) 
: 
 It is part of the New Zealand way of life that when New Zealanders face economic uncertainty they look to their Government not necessarily to take that uncertainty away but to show a path through it. New Zealanders know that we have a small open economy and that making a living in the world is difficult at times. But what did they find out today? They found out today that in the face of growing uncertainty in the world economy and in our own economy this Government has no idea what it is doing—no idea what it is doing. 
Dr Cullen should be here to tell us who is right. Was Dr Cullen right when he said there could be a recession given the drought the international financial turmoil the credit squeeze the housing market coming off its peak and of course the squeeze on New Zealanders’ incomes? He said he would not rule out a recession. That is Dr Cullen’s assessment. He is not basing that on some kind of secret advice; he is basing it on what he sees in the media. I hope Dr Cullen is wrong actually; I hope we do not have a recession. At the moment although New Zealanders are facing uncertainty about a whole lot of things and although their household budgets are under severe pressure they do have job security. But a further downturn in the economy would undermine that job security push up unemployment and create real problems for households already under pressure. But it is Dr Cullen’s assessment that there could be a recession. 
Helen Clark’s assessment is completely different from that. She says there is no problem and she does not expect there will be negative growth saying: “The Treasury advice we are getting is that the economy will continue to grow …”. So which is it? Does the Government have a view about where the economy is going? Well it does; it has two views. The Prime Minister and the Minister of Finance have quite divergent views about where the economy is going. That means that we cannot expect the Government to put together the kind of Budget that will be suitable for the times and that New Zealanders cannot expect this Labour Government to show a path through these times of growing economic uncertainty. Dr Cullen says one thing; Helen Clark says another. Well we know for sure that Helen Clark says another thing because she is just out of touch. She is completely out of touch with the pressures that New Zealanders are facing every day in their household budgets from high interest rates high inflation dropping house values and growing uncertainty about their economic prospects. 
Dr Cullen looks at the environment and today he lost his apple. Instead of showing New Zealanders that he had a plan and a pathway to get through this economic uncertainty he has just given up. He has just said that there will be a recession. Now Labour’s tactic is to blame everybody else and to say that this is all to do with the world and with other things that are going on—that it is nothing to do with the Government. Well I want to say this to Labour: after a Government has spent 8 years claiming credit for every fraction of economic growth the public will not buy the argument that that Government has absolutely no responsibility when the situation turns on us. Having claimed credit for every single new job Labour will have to take the hit for every single job that is lost. Having claimed the credit for every dollar that has been put into people’s pockets Labour will have to take the blame for every dollar that interest rates are taking out of them. 
Hon David Carter 
: That’s right. 
Hon BILL ENGLISH 
: Absolutely. That is where the New Zealand people are: if the Government took the credit it has to take the blame. I would say to Labour members that they often lacked modesty. They often claimed credit for where the economy was going when that had absolutely nothing to do with them. 
The chickens have come home to roost the day of reckoning is at hand and the Government is all over the place. Helen Clark has never understood the economy; she does not understand what is happening to New Zealand households. Dr Cullen does understand it but he has given up and shown no sense of direction gravitas or seriousness about getting us through this situation. 
CHARLES CHAUVEL (Labour) 
: 
 I am delighted to follow the previous speaker Bill English from the National Party on this question. He spoke about the New Zealand way of life in a tough economic time. He talked about New Zealanders looking for leadership. Well that is exactly what New Zealanders have had over the last 9 years from this Helen Clark and Michael Cullen - led Government. One look at the record lets us see that this Government just needs to keep the course steady keep the achievements clocking up that we have kept on clocking up over the last 9 years and New Zealanders will get exactly the leadership from the Government in economic terms that the deputy leader of the National Party talked about. 
We have had the longest period of economic expansion in this country in 30 years. Average growth rates since 1999 have been faster on average than those in Europe Japan the US and the UK. Company tax returns are evidence that recent profit growth has averaged over 20 percent per year. New Zealand has consistently rated highly in international comparisons of openness competitiveness and the ease of doing business. Again this year despite the attempts by members opposite to talk the New Zealand economy down which is what they always do we were rated second in the world in this area. Those are fantastic achievements. They have built a base that we should be very proud of and the fundamentals that those achievements demonstrate are very sound which means that New Zealand is securely placed going forward even though times are looking darker on an international basis. 
Since 1999 New Zealand’s annual economic growth has averaged 3.6 percent. That is well above the OECD average of 2.5 percent. As a result of that the New Zealand economy today is around a third larger than it was in 1999. Real household incomes are 25 percent higher than they were when this Government took office. That has enabled this Government to do great things with the wealth that has been created. It has created 370000 new jobs reduced unemployment to its lowest level ever and extended targeted tax relief through Working for Families so that many of our families on low and middle incomes with children do not pay any tax whatsoever. That is a fantastic record. The Government has made student loans interest-free in order to ensure that Kiwis can pay off their loans sooner start a family sooner buy a house sooner and keep their skills here in New Zealand. It has invested in infrastructure and accelerated New Zealand’s largest-ever road building programme reviewed business tax and made payments into the New Zealand Superannuation Fund. 
That is the record. When New Zealanders look for leadership—the leadership that the deputy leader of the National Party referred to—that is what they will look at to reassure themselves that going forward the economy is in good hands and the country has good management. They can be satisfied that not only has the cake grown over the last 9 years but that it has been cut fairly and cut in a way that meets the basic New Zealand cry for social justice. 
Mr English talked about views that he tried to claim Dr Cullen and Helen Clark were at odds over. Well why do we not look at the two sets of views that manifest themselves not even from two people on the Opposition benches but from one person the leader of the National Party? We have all heard about John Key’s big flip-flops. On Iraq in September 2003 he said that New Zealand was “missing in action” during the invasion of Iraq; in July 2007 he said “we wouldn’t have sent troops to Iraq”. On climate change John Key said in May 2005 it was “a complete and utter hoax.” yet in November 2006 he said “I firmly believe in climate change and always have.” With regard to student loans in November 2005 he said interest-free loans were unaffordable and an irresponsible cost to the country. Do members know what John Key said in January 2008? He said “We will keep interest-free student loans for tertiary students.” The nuclear-free policy the antinuclear legislation was bad news for economic growth and for our job market according to John Key in October 2003 but in September 2007 he said National was going to stick with the antinuclear legislation. 
So I do not want to hear from Bill English that there are two views from two different leaders in the Labour Government on this side of the Chamber. There are two views from the one person who supposedly leads the National Party on the other side. In June 2006 John Key went on to say the building of affordable housing at Hobsonville was economic vandalism but in February 2008 he said he was in favour of the affordable housing that we might build there. 
That is the record of the member opposite and it needs to be contrasted with the great record over here of the Government. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 The Labour list member Charles Chauvel who has just resumed his seat said in response to the challenge from my colleague Bill English about what the Government has to do in this time of real economic uncertainty—and I think I quote him correctly—“We have just got to keep the course steady.” Is that what the member said—“We have just got to keep the course steady.”? Well where has the course taken us so far? I will tell the Committee where it has taken us so far. It has taken us to a place that a few years ago we used to make jokes about—Tasmania. I bet Doug Woolerton can remember that. We used to make jokes about the standard of living in Tasmania. The joke is now on us. Tasmania has gone way ahead of us in terms of its standard of living. That is what “keeping the course steady” has done to Kiwis; it has taken us under a Labour Government to a standard of living way below that of Tasmania. The joke is now on New Zealand. 
I am now going to talk about the period under review—which is a bit of a novelty because Labour members did not even bother talking about it—and that is the last financial year. One of the damning indictments on the Labour Government in that period is its performance on productivity growth in this country. That is what the standard of living is determined by; without productivity growth we will not get an increasing standard of living. The Labour Government in that last period just like in all periods under it squandered so much opportunity. 
What has happened in terms of this country’s productivity? During the 1990s—and I have here the latest statistics which were released on 13 March—growth in our labour productivity was up between 2.5 and 3 percent. It was between 2.5 and 2.8 percent a year. What happened under Labour? It collapsed. The headline says “Labour productivity growth subdued since 2000”. That is when Labour came in. Since then our productivity growth has declined to just 1.1 percent which is less than half what it was in the 1990s. In the year under review labour productivity growth declined to 0.5 percent—almost nil. Multi-factor productivity growth which is equally important if not more important shows the same pattern. In fact in the year under review multi-factor productivity growth under this Labour Government was negative—minus 0.6 percent. 
It is no wonder our standard of living has fallen below that of Tasmania. When we do not have productivity growth we do not get wage growth without inflation. It is the most fundamental economic issue. If Labour thinks more of the same will deliver for New Zealanders it is wrong wrong wrong. Labour so far has delivered a lower standard of living relative to that of the rest of the world because it has collapsed productivity growth. 
We should not be surprised by that. Anyone who has been involved in business knows that under this Labour Government the tentacles of Government regulation now reach down to every aspect of business. It is fascinating to watch members of this Parliament coming to terms with the Electoral Finance Act because it is regulatory legislation. Members all around this Parliament are trying to make their way through the minefield of electoral legislation and regulation. I know that members on that side of the Chamber do not know what the hell to do in response. What I say to them is welcome to what they have done to other businesses welcome to what they have done to the housing and construction business welcome to what they have done to any developmental business. That is the kind of regulatory minefield that businesses have had to try to find their way through since 2000 since Labour introduced the Building Act and the Local Government Act and changed the Land Transport Act. All those pieces of legislation have added more regulation just like the Electoral Finance Act does. I say to those Labour members: “Welcome to the real world. The regulations that you have imposed on yourselves you’re struggling to comply with.” That is the problem: regulations are crippling this country. More of the same will see New Zealand go further and further down the tubes. 
Under the years of this Labour Government there has been a period of golden international economic weather. Since the Asian crisis of 1998 there has been a remarkable international economic environment. Labour has been happy to claim the credit for that. Let it now cope with the negative consequences of its poor management. 
R DOUG WOOLERTON (NZ First) 
: 
 In speaking to the financial review debate I would like to say that I rise not to berate the Government but rather to appeal to the Government. I think it is reasonably well known now and if it is not it soon will be that we will— 
Phil Heatley 
: Are you appealing for a job? Do you want a bauble? 
R DOUG WOOLERTON 
: OK. If we want to be technically correct I appeal to my colleagues in the Labour-led Government— 
Phil Heatley 
: For a job. 
R DOUG WOOLERTON 
: No we have got jobs sorted out. We are OK. I will be here for far longer than that member is likely to be happy with I can assure him of that. 
I think it is well known that New Zealand First is opposed to asset sales and particularly the sale of strategic assets. Unfortunately we have the first situation with Auckland airport. When that company was listed on the stock exchange the shares were sold to mum and dad shareholders at our insistence. It appears now that the Canadian pension fund is going to get a big chunk of that airport. I say to people and I caution people from my own former industry of dairy farming that if that can happen to Auckland airport how would they ever imagine that they were going to hold the shares of Fonterra within New Zealand ownership let alone farmer ownership—if the Government were to put that great company on the stock market? The answer of course is that they could not. 
Now sadly we have the situation where the sale of Auckland airport to a large degree—40 percent I am told by Mr Carter and that is correct—will be in the hands of the veto held by the two Ministers in charge who I understand are the Hon David Parker and the Hon Clayton Cosgrove. We appeal to those Ministers because we do believe that we cannot have a period of continued prosperity while the major economy in the world namely America is going pear-shaped. It is a time for us to be careful. I am not saying we are going into a recession. I am not saying that anything is going to happen. I am saying that any prudent person would be careful. We in New Zealand First believe that we need the income streams from these companies such as Auckland airport to bolster our own economy not to bolster the Canadian economy and in particular the Canadian pension fund. 
That is one area where we appeal to the Minister to turn down the application. We know there will be a judicial review; we know about all of those things. But if the Government is serious about having strategic assets in New Zealand hands we plead with it to turn down the application for the Canadian pension fund to buy those shares. 
Likewise we have a situation with a little company down in South Canterbury called New Zealand Dairies Ltd where a Russian company called Nutritek put in money. That move was voted on by the board and sadly those who wanted to go to the bank were overruled and the majority of the board in that case wanted to go to the Russian company. 
Hon David Carter 
: The KGB took over. 
R DOUG WOOLERTON 
: Those Russians could well have KGB members amongst them because if anyone knows anything about Russia at the moment then they would know they are all over the show. But we would just say that the farmers in that area are now relying on another two Ministers in one case the common Minister the Hon David Parker and the Hon Dr Michael Cullen to veto that application for Nutritek to take a controlling interest in New Zealand Dairies Ltd. If it were just that company then that would be bad enough. But I put to the Ministers this question and this is what they must answer. If they give permission for Nutritek to take a majority shareholding— 
Hon David Carter 
: Xenophobia is alive and well. 
R DOUG WOOLERTON 
: —it is not xenophobic at all—in this company then how will they stop any other overseas investor buying and controlling other parts of our dairy industry? They cannot. 
TIM GROSER (National) 
: 
 Central to the political challenge that we will have to front up to at the end of this year is the underlying Crown debt/revenue position. What is the real extent of the fiscal envelope available for different mixes of expenditure and taxation policies? That will be a major backdrop for political debate later this year if that is not already the case. Against the background of that observation I would like to compare and contrast—if we go back to school—the statement in the financial review of Treasury with the farce that unveiled itself today over the statement issued by the Secretary to Treasury and the Commissioner of Inland Revenue. 
If we go back to the statement in the financial review of Treasury we see an admission that Treasury has made a mistake. It states: “The financial statements of the Government show that the OBERAC”—which is one of the technical measures we can use—“was $0.5 billion larger than forecast at the time of the 2007 Budget.” Stripped of the official language what Treasury is saying or what we are recording as members of Parliament is that Treasury screwed up and the operating balance is actually larger than it estimated. The question would then arise as to what the consequences of that screw-up were for Treasury. What was the reaction of Dr Michael Cullen the great helmsman to that mistake? Well it was absolutely nothing. Members should just park that on the shelf for a minute. 
Last week Michael Cullen was the happiest man in New Zealand politics because finally he had discovered—or thought he had discovered—a deficit. This is not a minor point. This is actually a fundamental point because right throughout the golden years that Bill English our deputy leader has been talking about in the course of this debate—when so much wind was in the sails of the Labour Government and it had so many obvious soft choices to make and it usually made the wrong ones—Dr Cullen the great surplus denier was trying to deny the basis for a consolidation of taxation policy and for a systematic process of putting in place incentives that would build on the economic growth low unemployment and lower inflation that Labour had inherited from the previous Government. That is the underlying politics of this situation. But because Dr Michael Cullen the great surplus denier did not want to go there the mistakes that Treasury was making in underestimating the surplus were actually very welcome to the Minister. 
Today we saw an extraordinary statement from two of our top public servants. What had happened was that although last week Dr Cullen was the happiest man in politics because he thought he had discovered a deficit for the first time—he had been searching for a deficit for 8½ years and finally under this operating balance before gains and losses measure he thought he had found one—Treasury told him today it was sorry but it had screwed up. It was actually a very minor error of exactly the same magnitude as is contained in the document before us today but crucially it was a mistake that went against the political interests of this Government and this Minister. 
And boy did Treasury pay for that error! Talleyrand the great cynic but master of politics once said “It was worse than a crime; it was a blunder.” This small technical blunder elicited today at I think around 11 a.m. an extraordinary press statement from two of our most senior public servants. Members should listen to this; it is an abject apology made in public. “I regret any error in the Financial Statements and I am taking this matter very seriously” Mr Whitehead said. Not to be outdone by his colleague the Commissioner of Inland Revenue added that this “was a human error but a bad one. It should not have happened and I have apologised to the Minister of Revenue and the Minister of Finance.” To add to this a commission of inquiry has been set up would you believe. A commission of inquiry has been set up to investigate a technical accounting mistake as if this is the Spanish Inquisition. We can infer from this that Dr Michael Cullen must have been stamping his little feet in absolute and total fury at this accounting change. What is more it is totally unnecessary. 
Reports noted. 
Parliamentary Service 
Report noted. 
Ministry of Agriculture and Forestry 
Hon DAVID CARTER (National) 
: 
 When the Primary Production Committee examined the Ministry of Agriculture and Forestry for 2006-07 I must say that I felt some sympathy for the officials who came before it because this committee has a very large workload at the moment. It has a huge number of important discussion documents out there none of which are being brought to fruition and this fault lies with none other than the Minister himself. Mr Anderton is a person who when he got the job clearly had no interest in or knowledge of this sector and he has failed to grasp the serious situation it is in. We had that explained to us recently whereby the sheep and beef industry in this country—a $5 billion industry—is under peril. A rescue plan has been proposed by Alliance Meats based in Southland but before that plan could be presented to the Minister in detail he was suggesting that any support for such a plan would be a subsidy. Such a notion is absolutely rubbish and for the Minister to stand by and do nothing when this industry is in such significantly poor shape is frankly totally irresponsible. 
The issue that came to the fore during our examination was the emissions trading scheme legislation the Climate Change (Emissions Trading and Renewable Preference) Bill which has now been introduced to Parliament and is before the Finance and Expenditure Committee. What surprised the committee members was the fact that the Ministry of Agriculture and Forestry appeared to have done very little work around the economic impact of this legislation on New Zealand agriculture. 
Subsequent to our examination I received a huge raft of official papers via the Official Information Act that show that the Ministry of Agriculture and Forestry has been working very consistently and is well aware of the economic impact of this legislation on New Zealand agriculture. For instance the papers declare that should the emissions trading scheme be enacted as proposed it will lead to an 80 percent drop in profitability of our sheep and beef farms. Those farms are making nothing now. To further impose this sort of cost which looks as if it will not be imposed on any other farmer in the world will make sure that that industry does not survive in this country. Further the papers reveal that there is a distinct likelihood that production will leave New Zealand to move offshore. The first question I ask the Minister is what good that will be for New Zealand agriculture. If he will not answer I will tell the Committee that it will be of no use at all. 
The second point noted in these papers is that if production leaves New Zealand it will actually end up in countries that are less efficient from a global point of view and from a carbon emission point of view. In actual fact the environment will be worse off by sending this sort of production offshore. That was certainly the big issue. It comes after a history of inaction and stupidity by the Labour Government around this issue. The Government ratified Kyoto then proposed a “fart tax”—and we all know how successful that was. It then proposed a carbon tax and had to back away from that. It now has the emissions trading scheme before the select committee which I will accept is the best option we have. But to impose restrictions on agriculture well ahead of any of our trading partners has the potential to be absolute economic suicide. 
The final issue I will touch on is a conference held in November last year which was Mr Anderton’s big initiative—$1 million was spent on a conference. It would attract hundreds of farmers so Mr Anderton said. I am aware of about half a dozen farmers who managed to pay the $800 to attend. That was typical of this Minister of Agriculture. He is huge on the rhetoric as we saw in the Chamber today but very very poor on delivering the substance. [ 
Interruption 
] I say to Sue Moroney that if she bothered to get out of Wellington and go around the farmers of New Zealand she would quickly realise that Mr Anderton is held in very very poor regard. He is a person who goes up and down the country promising the earth and delivering very very little. 
The latest example we have had is the research and development fund that he announced the other day—$700 million which he says will grow to $2 billion in 2 years. In the next breath he said that we will be spending capital and interest. What we did find out after we had had the razzmatazz with the launch of the programme is that there will not be $100 million available next year for research and development; there will actually be only $20 million. This is an industry that seriously needs research particularly if we are going to impose an emissions trading scheme on the country. I say to Mr Anderton and to other Labour members who think $20 million will be enough next year that it simply will not be enough. 
Dr ASHRAF CHOUDHARY (Labour) 
: 
 Is it not incredible that we have not heard a word from Mr David Carter about what National will do about innovation and about research and development in agriculture? It is unbelievable. It is unbelievable that we have four farmers here—Nathan Guy Phil Heatley David Carter and the member who has just left the Chamber Eric Roy—who are members of the Primary Production Committee but they have not said a word about research and development in agriculture. What are they going to do? Their leader has said that the Fast Forward programme is a gimmick. Here we are; we have put in $700 million which will be doubled by private industry. It is not before time that we have put in so much money as a capital fund. The generation of the income from that will be invested in agricultural research and development. 
I am getting a whole lot of calls from my scientific colleagues. They are asking what has gone wrong with the National Party which is supposed to be farmer friendly. What is it doing? It is opposing this research and development fund that we are putting in. Is it not incredible? The whole industry is saying how delighted it is with this money being put into the sector. This is a country that takes pride in research and development in agriculture. It is for the future of this place that we have to make sure we keep ahead of the rest of the world and make sure we have innovation. Over all these years we have had innovation in dairy production animal production and the wool industry. In all those sectors we have been a leader in the world. We have to make sure that this money is invested in future research and development and that our scientists are kept in this country to work for us and for the farmers. And here we have our four members of the Primary Production Committee who oppose this investment. 
I am really totally disappointed that David Carter has spoken out the way he has in relation to the investment we have made and that the Leader of the Opposition has said that it is a gimmick. It is unbelievable that our farmer friends across the other side of the Chamber are actually opposing the money invested in this industry. But I am really very sad. I am sad for those guys when they go back to their constituents. What will they tell the farmers among their constituents about what National is doing? I know that the calls I am getting now will be the calls those members will get from the science community and from Crown research institutes asking what is going on in the National Party and why it is actually opposing this investment in this industry. Where are the alternatives? Can we hear from the National Party about the alternatives to what we have done? What is the National Party going to do? How much money will it put into this sector? 
The number of initiatives that this Government is taking is incredible. Let us look at the whole sustainability issue covering land and water action. This country has recently gone through a bit of a drought—whether it is the Waikato area or in the south where the select committee has been in recent times. Of course I understand that the drought has broken in the south now. The horticultural industry in this country particularly on the East Coast is dependent on irrigation and in some of the areas we have to provide better irrigation. The water sources have to be managed better. Here we have some of the water action in place so that farmers in the future can benefit from it. Of course we have to provide sustainability in the whole farming system because this country as I said earlier is based on the future of agriculture particularly in the area of dairy production. Fonterra has done very well in terms of the export of dairy products. Clearly there are issues to do with the dairy quota that we are looking at now. It has to be streamlined. There is also the whole climate change issue. We heard earlier from my colleague who was talking about climate change. Again this country is the leader in providing innovation in agriculture. 
NATHAN GUY (National) 
:  
Wow! Gosh was not that a stupid address from the member Ashraf Choudhary? That member has been sitting in this Government over the last 8 years and I ask him why under his stewardship in the Primary Production Committee the number of employees in the Ministry of Agriculture and Forestry has gone up from 1200 employees in 2003 to 1650 employees. Why cannot that member tell us the reason for the increase? When that member came into Parliament 15 employees in the Ministry of Agriculture and Forestry were earning over $100000 and now there are 160 earning that amount. Why has this bloated bureaucracy suddenly arisen under Labour? I say to that member’s colleague whom he is in coalition with— 
Sitting suspended from 6 p.m. to 7.30 p.m. 
NATHAN GUY 
: I think it is appropriate to start from where I concluded at the dinner break. We were talking about the Ministry of Agriculture and Forestry and in particular I wish to talk about how this bulging bureaucracy has grown under Labour. The example I gave is that in 2003 the ministry employed 1200 workers but that number exploded to 1650 in 2007 and 2008. We still do not know what the productivity level of the Ministry of Agriculture and Forestry is because that is not measured. 
Under Labour government bureaucracy has grown 50 percent in the last 7 years. The salaries in the public sector are also ballooning and outstripping the private sector. The important point for Minister Goff to realise is that when Labour came into office in—when was it—1999 2000 there were 15 staff in the Ministry of Agriculture and Forestry earning over $100000. Now the salaries in the public sector are outstripping the private sector and there are 160 employees in the ministry earning over $100000. That is an increase of 967 percent I say to Minister Goff. 
We know that agriculture is the engine room of the economy; 50 percent of export earnings comes from the primary production sector as does 10 percent of our total GDP. I thought it was interesting to touch on the fact that much of New Zealand is under a drought. That is causing a lot of issues for the primary production sector right across the country. The Minister of Agriculture and Minister of Forestry likes to be seen getting about talking about the drought and to be seen doing something. For those who are interested on Friday he was over in the Wairarapa. The headline in the  
Wairarapa Times-Age 
 that greeted the drought-stricken farmers in the Wairarapa was “Drought ‘not the end of the world’ says Anderton”. 
I cannot believe that the Minister of Agriculture and Minister of Forestry would turn up to a drought-prone area like the Wairarapa and say that. The Wairarapa has suffered a compounded effect because it had a drought over the last 12 months then a very very dry and tough winter and now another drought is compounding it and the Minister is turning up in places like the Wairarapa and saying that the drought is not the end of the world. I just cannot believe that. I have had several emails from that core constituency group who are so perturbed that the Minister is turning up all around the country and saying that the drought is not that terrible. 
I ask the Minister of Agriculture and Minister of Forestry what he is doing to help this sector. What is the Minister doing to roll out infrastructure like broadband so that these rural communities can connect with the rest of the world? What is the Minister doing to reduce tax so that these people are not suffocated by high taxation? What is the Minister doing to try to remove all the red tape and bureaucracy facing our primary production sector? I tell the Committee and the listeners out there that the answer is zippity doo da. The Minister is turning up and speaking to all these forums about the drought but he cannot wield any weight in Cabinet and cannot produce— 
Hon Darren Hughes 
: Any rain. Yes I know he is a major failure. 
NATHAN GUY 
: That is right; he cannot produce any rain. He cannot do anything actually to help the primary production sector apart from turning up and having an absolute talkfest. What the Minister should do is reduce tax. I seek leave to table the front page of the  
Wairarapa Times-Age 
. 
The CHAIRPERSON (H V Ross Robertson) 
: Is there any objection to that course of action being taken? There is objection. 
Hon DARREN HUGHES (Deputy Leader of the House) 
: 
 I seek leave to table a speech from John Key where he says that public service numbers will be frozen at the same number that they are at under the Labour Government. 
Document not tabled. 
Report noted. 
Ministry of Defence and the New Zealand Defence Force 
RON MARK (NZ First) 
: 
 That about sums it up does it not? The National Party has 48 members in the House and a leader who claims to be the Leader of the Opposition and who collects $100000 a year plus a limousine—more than other leaders in the House—and those members cannot put up a speaker on what they so often tell people is a very important issue to their party. The reason I said “that about sums it up” is that when it comes to defence matters it is New Zealand First that the public is listening to on these matters—not Mr Mapp or any of those other members. 
What is even more appalling is that New Zealand First enjoys a proxy seat on the Foreign Affairs Defence and Trade Committee but with no voting rights no ability to sit on the committee on anything other than defence and no ability to contribute to discussion that might require deliberation. That was vetoed of course by Mr Murray McCully and Mr Wayne Mapp at the Business Committee. But then I guess we do not have to turn up to that meeting to get the oil because we know what is going on in defence. 
I want to raise a couple of issues. When going through the report from the Foreign Affairs Defence and Trade Committee I see that a number of issues were canvassed such as housing for defence force personnel and some comments were made on Project Protector helicopters personnel and remuneration. The personnel remuneration and housing issues have concerned New Zealand First for many many years. I ask the Committee to cast its mind back to when Jenny Shipley was the Prime Minister. New Zealand First lobbied strongly for a pay rise for defence force personnel. Her answer was “But Ron they get free dental care.” That about summed it up from the National Party. 
We continued to lobby the new Labour Government and eventually after 12 months it moved and gave four pay rises in small increments over a 5-year period. We said it was not enough. We have consistently said that we need to stem the outflow of highly trained competent personnel in a very tight and competitive labour market. They need a substantive pay rise. We have consistently fought for that for the 12 years that I have been in this House. I ask the Minister whether he would care to make a few comments as to where we stand on that issue because as we know from the reports in the newspapers we are losing naval personnel—particularly marine engineers who are very important to the navy. In fact our ability to put to sea is restricted if we do not have the numbers and I understand that currently only a third of those offered the lump-sum payment to sign on again took up the option. 
We in New Zealand First are worried. We have consistently asked for and called for a pay rise for defence force personnel. We worry not only about the lives of everyday service personnel and their ability to meet the needs of their families in a very tight labour market and a very tight economic situation where the cost of living for average households is consistently going up—look at the petrol prices look at the grocery bills look at getting a house in the New Zealand market—we worry also about their morale and we worry about how they see themselves. We need to understand that defence force personnel do not like being treated as beneficiaries. They joined to serve their nation not to dip into social development funding like some sort of a beneficiary and to be told that they should be happy that they can get the accommodation supplement the emergency benefit or draw down on the social services that are available to all other New Zealanders. They actually have a greater degree of pride than that. 
One of the disappointing comments that came out of the Shipley-led National Government at the time was when it said that they can go to Work and Income for assistance. Defence personnel are not beneficiaries and they should not be treated as such. They should receive a pay and salary remuneration package equivalent to that of the police and nurses and we in New Zealand First are watching what is happening with the primary teachers because we understand they are going to get a very good settlement as well. [ 
Interruption 
] I am sorry the primary teachers already have that. We understand that the New Zealand Educational Institute is about to get a very good settlement. 
That brings us right back to the point New Zealand First has been making for years. Defence force personnel are in a unique situation that disadvantages them severely. They do not have a union; they have a Chief of Defence Force who is meant to advocate for them but he is constrained by the Act to take into consideration the interests of the taxpayer and that handicaps his ability to lobby for his troops. 
Hon PHIL GOFF (Minister of Defence) 
: 
 Mr Chairman I agree with Mr Mark’s first remark that when you called the vote there was absolute silence on the National benches—absolute silence. Not a single person on the National benches had the interest in the Defence Force to stand up and debate it. I am not surprised because in the 9 years that National last had in Government it ran down the armed forces’ equipment to the point that they were required to operate with obsolete equipment at times putting their members’ safety at risk because of it. In every year of the previous National Government’s term in office it ran down the New Zealand Defence Force. The numbers fell year after year after year. 
Mr Bennett can nod his head in the negative all he likes; he is obviously ignorant of that fact. “Noddy” is about the best description we could give him now. I ask members to look at him there; he is nodding from one side to the other. 
That is a bit like the National Party—a flip to the left a flop to the right. Finally National came up with a defence policy. It was called “We will support the air combat wing”. It condemned the Government for the dismantlement of the air combat wing. National members said we would be left defenceless and that we would be bludging off our mates. Then what happened last year the financial year under review? National members flip-flopped. Suddenly they say that it is OK to disband the air combat wing. It is a bit like interest-free loans for students. They said that they would fight that change with every bone in their bodies but suddenly they say it is a good thing to have those interest-free loans. It is the same thing in defence. They have nothing to say about defence. They have contributed nothing to defence. 
I pay tribute to my colleague Ron Mark who takes a real interest in this area and I thank him for that. He actually took the time to come up with me last year to Afghanistan to see our men and women on the ground doing the job that they are doing and it is a fantastic job they are doing as well. 
Let me for a moment pay tribute to the men and women in the Defence Force. Today the latest rotation—44 men and women mainly Territorials—left for the Solomon Islands. We have had members of the Territorial Force doing that job for the last several rotations and they perform to the highest level. They perform to the highest level and that should give us confidence in what they are doing. 
Let me say something about the people in Afghanistan. Two weeks ago Governor Sarabi of the Bamian Province was here. She spoke with the highest praise not simply for the professionalism of our forces and the fact that New Zealand had sent our forces there to protect her people but also for the fact that our soldiers airmen and naval personnel treat her people with respect. That is the thing we celebrate about members of the New Zealand Defence Force. They go in they work effectively as peacekeepers they treat people with respect and they get that respect back. That is why we can look at Bamian and agree with the United Nations the United States and other forces serving in Afghanistan that we have a model provincial reconstruction team in Afghanistan. 
I want to say something too about the men—I think they were all men—who served in the Lebanon dismantling cluster munitions. They dismantled 1800 cluster munitions making that territory safe for the children and civilians who live in that part of southern Lebanon. Again I am very proud of and grateful for their contribution in that regard. 
As for Timor-Leste I am going to Timor on Easter Monday. I will be paying tribute to the men and women who are serving there. Again they are serving with real professionalism and again making a difference to the lives of the people in that country by helping to maintain stability and security in a situation that would otherwise become tragic if New Zealand Australia and those other countries that have participated did not play their part. 
I finish on the question of pay rises that Ron Mark has raised with me. He understands that there is a remuneration review. I am expecting the results of that remuneration review and I am expecting that the pay round following it will take into account the recommendations that have been made. In every year but one this Labour-led Government has increased the pay of the men and women in the New Zealand Defence Force. Under the previous National Government year after year they went without. Let me say again that National would again slash the real wages of our people in the Defence Force because it has never cared about them. All rhetoric no action and no substance—that is National. 
Report noted. 
Department of Corrections 
SIMON POWER (National—Rangitikei) 
: 
 The year 2006-07 was an unmitigated and absolute disaster for the Department of Corrections. [ 
Interruption 
] I think the Minister of Corrections should hear me out before he laughs. The year 2006-07 was of course the year in which the Liam Ashley tragedy occurred and the year in which the murder of Karl Kuchenbecker by Graeme Burton occurred. If by no other measure those two events alone made the year in review a disastrous year for the Department of Corrections. I will come back to both those incidents shortly. 
We know that in the year under review we found out that the four new prisons being built by this Government would cost $1.2 billion as opposed to the original quote of $400 million which was given to a select committee in 2002. Even with the extra beds factored into that increase we know that the prisons came at a cost of $1 million per bed. We know too that no pricing or quotes were done that no “target output costs”—the phrase used these days—were taken. 
We know that a system called a collaborative working arrangement was used to design and build those prisons and that meant that in the case of the Spring Hill prison it was not until 20 months after the earthworks had begun that the department had even the foggiest idea what it would cost to complete that prison. In the end it cost about $380 million. When we questioned the chief executive officer of the department during the financial review we asked him whether if collaborative working arrangements were an effective method of building prisons they would also be used for the extensive maintenance programme that the department must undertake in over half the prisons. He replied that no that particular system would not be used for those particular works. If nothing else that tells members how effective those arrangements were. 
We know that when the financial review occurred the muster of people in our prisons was about 8200. It would be interesting to know whether the Government’s major initiative in the year in review—the Effective Interventions package—is actually working. Its stated aim was to reduce the prison population—not to keep the public safe. Reducing the prison population was the single aim of that particular package. It is nice to see that finally the Department of Corrections is involved in the forecasting of muster arrangements. Up until now of course it has been done by the Ministry of Justice which got it wrong every single year. 
We know that in respect of the bureaucracy of the Department of Corrections interesting trends have emerged. When I first started in this portfolio some 2½ years ago two or three people were involved in the PR and communications side of the department. There are now 15.3 equivalent full-time staff involved in that particular work. That tells us that this period has been particularly appalling for this department which has struggled to keep its head above water. 
We will now hear hopefully from Mr Goff who is the sixth Minister of Corrections since this Government took power in 2000. If nothing else that tells us what disastrous management this Government has had in place in respect of this portfolio. The last Minister of Corrections in the financial year under review had the portfolio stripped from him following a series of debacles and upsets that culminated in a suspended prison officer touring the world with the Minister as part of a rugby tour. 
The last 12 months for this department have been an absolute disaster. No other department or ministry has had such an appalling 12 months; 12 months that needlessly resulted in the death of young Liam Ashley and needlessly resulted in bungles that saw the probation service the Department of Corrections the Parole Board and the police all involved in an almost comic—if it was not so tragic—series of events that saw Mr Burton at large for several days before any real action was taken by the probation service the department or the police. 
In short the year ahead for this department looks slightly brighter only because it is likely to have a National Minister running it following the general election later this year. One thing is for sure: we cannot afford to take on a seventh or an eighth Labour Minister of Corrections who would continue this shambles. 
Hon PHIL GOFF (Minister of Corrections) 
: 
 I cannot let that rubbish go unaddressed. That member Simon Power has a reputation across New Zealand amongst the management and the staff of the Department of Corrections. They say to me that they do a tough job. They tell me they are at the end of the justice pipeline. They have to deal with the worst people in society and they have to work under conditions that are sometimes threatening because they deal with psychopaths and with people who have deep-rooted problems and who are a risk to their fellow people. They say: “We do a good job overall. Sometimes we make mistakes and when we do we apologise. But why is it that Mr Power continually runs us down?”. That is what the men and women who serve in the department say. Why is it that he can never find something positive to say about those hard-working individuals who work in an environment that Mr Power or any of his colleagues on the National benches would not want to spend 10 minutes in? 
I challenge Mr Power to say just one thing that is positive about the New Zealand men and women who work in this department instead of constantly denigrating them. They have had a gutsful of him. They do not trust what would happen if there were a National Government because National’s answer would be privatisation. National’s answer would be to run down the service like it did during all of its years in Government. 
Mr Power talks about an unmitigated disaster. I will tell him some of the facts of this unmitigated disaster. When Nick Smith and Tony Ryall were Ministers of Corrections and Justice respectively the level of escapes from New Zealand prisons was running at 100-plus a year. Mr Power said that the primary role of prisons was to keep New Zealanders safe. But after 8 or 9 years of a National Government the level of escapes over that period averaged over 100. What are those levels now? They are running at 20—a sixth of where they were. That is because of the investment of this Labour Government in keeping New Zealanders safe by proper staffing by proper training and by ensuring that there were actually fences around the prisons. That might sound quite astounding and people might say: “Fences around prisons? Of course there are fences around prisons.” 
Let us take the example of the prison near Mr Power’s electorate. It had a No. 6 wire fence around it—a farm fence. People from the local population used to bring drugs and they would pass them through the window to the inmates. 
Hon Clayton Cosgrove 
: No! 
Hon PHIL GOFF 
: I am not joking. That is what it was like under a National Government. They did not give a damn about safety. They did not give a damn about the fact that a third of all inmates tested positive for drug use. They went into prison because they had abused drugs and alcohol but they found more drugs and alcohol in the prisons under a National Government than they had access to outside. 
When did Mr Power say in his comments that the Government had done a great job by reducing positive testing for drugs in prisons by two-thirds? Could he not find it in himself to say something to acknowledge the positive work that the men and women in the Department of Corrections have done in that regard? Mr Power could you not own up for once and say: “I’m critical of the Department of Corrections today but I acknowledge that the National Government failed completely?”. Could you not have done that? That would have given you some credibility instead of constantly criticising and never acknowledging what has happened. You talk about keeping New Zealanders safe and you talk about the Government being soft on law and order. 
Chris Tremain 
: I raise a point of order Mr Chairperson. The Minister is a very senior Minister in the Government and he keeps referring to the front-bench member as “you” which includes you Mr Chairperson in the debate. I would like you to bring him to order on that point please. 
The CHAIRPERSON (H V Ross Robertson) 
: Yes I am aware of that. I know he was directing his comments at Mr Power but the member is right. Members cannot bring the Chair into the debate. 
Hon PHIL GOFF 
: I would not dream of it Mr Chairman. 
Mr Power could have acknowledged that because there is tougher legislation and because there are probably 1500 to 2000 additional front-line police in the community we are locking up more of the bad guys. We have a higher rate of resolution of crimes we are getting people before the courts and the Sentencing Act means that people who commit dreadful crimes face longer sentences. Once under a National Government a person served 7 years for murder. They got 7 years for murder under National in the 1970s. Those same people who commit the worst crimes are serving 30 years for murder. William Bell for example is serving 30 years because this Government had the guts that the National Government never had to do something about those who were a threat to our society. 
We have created 2300 additional beds. I do not want to keep having to lock up more and more New Zealanders. That is why a Labour Government is working at the fence at the top of the cliff in prevention and it is not just dealing with the problem after it arises. We have put a lot more people in jail because unfortunately those people offended in a way whereby that was the only option available to them. Mr Power you talk about Effective Interventions. 
Christopher Finlayson 
: You! 
Hon PHIL GOFF 
: That is quite within the Standing Orders. The member has just turned up in this House; he would not know what was in the Standing Orders. The Effective Interventions programme was aimed at keeping people out of prison if they could be dealt with alternatively and could face sanctions in the community so that they could keep working and keep paying taxes but would not constitute a threat to society and therefore lose an element of their freedom. 
That means I say to Mr Power—and he should listen to this—that the current level of the prison population is exactly on track according to the 2006 forecasts. In fact we have 100 fewer people in prison today than we had this time last year. That is a good thing. Nevertheless we have created four new prisons. They are good-quality prisons. They have proper security. We have arrangements whereby people can work in those prisons rather than be idle. I think it is a great thing that more than half of our sentenced prisoners now have to work in prison. Well they do not have to; they choose to work there because they do not like idleness. They want to gain work skills and work habits and that is what we are providing. 
So let me just sum up. Mr Power says that the Department of Corrections has been a disaster. It is a disaster that sees one-sixth of the level of escapes that occurred under a National Government; one-third of the level of people abusing drugs in prison that occurred under a National Government; a doubling in the drug and alcohol units in prisons—and I pay tribute to Damien O’Connor for that achievement—new special treatment units the first of which I opened at Waikeria just 2 weeks ago to deal with the problems of those serious offenders who will be released at some point and who are a risk to the community and to lower that risk; drug and alcohol programmes that work; and sex offending programmes like Kia Marama and Te Piriti that are the best in the world and that have the lowest rate of reoffending in the world. 
Despite that track record Mr Power did not have it in him to acknowledge one good thing that the Department of Corrections staff and management in New Zealand are doing. I pay tribute to those staff members for doing a difficult job with very difficult people in a place most members in this House would not want to go near. They deserve better than the constant denigration they get from Mr Power and the National Party. They know the track record of the previous National Government which failed utterly to deal properly with incarceration in its 9 years. They can see the massive progress that this Labour-led Government has made in the last 9 years. 
Report noted. 
Ministry of Justice 
SIMON POWER (National—Rangitikei) 
: 
 It is nice to see Damien O’Connor in the chair. It takes me back to years gone by and I look forward to getting answers to some of the questions in the appropriation financial review of the Ministry of Justice. Several issues need to be debated in respect of this financial year in review. I have no doubt that my colleague Mr Finlayson will cover many of those issues in his contribution. 
I ask the Minister a serious question: why is it that the Ministry of Justice is no longer the lead law reform agency in this country? Why is it that all of the law reform work that has been done by this Government in the last 12 to 18 months has been done by the Law Commission? Why is it that the Law Commission has at its fingertips a work programme that frankly would rival most departments under this particular Government yet the work output from the Ministry of Justice just seems to have come to a halt? Why is it that law reform is being led by the Law Commission and not the Ministry of Justice? I would appreciate an answer from the Minister because this is a serious decision. 
What leads the Minister of Justice to make the decision about referring work to the Law Commission and not to the Ministry of Justice? The Hon Clayton Cosgrove has done his best; he has sent them a couple of bones—real estate work and the JPs’ amendment bill. He has done his best to keep them busy but he is only one man. This ministry is a behemoth of an organisation with something like 2500 employees washing around in there yet it is Geoffrey Palmer and his colleagues who seem to be doing all the work. 
The extraordinary thing about this set-up is that as well as all these people at the Ministry of Justice who are doing their best to write the legislation that Mr Cosgrove has sent to select committees this ministry has seen 400 consultants and contractors paid more than $10000 in the year in review. So not only is this ministry not actually doing any law reform work any more because it is all done by the Law Commission but also it has taken on 400 consultants and contractors each of whom has been paid more than $10000 in the year in review. We have to ask ourselves what they are all doing. If most of the hard work for law reform is going to the Law Commission and if we have taken on 400 consultants and contractors who have been paid $10000 or more to deal with outsourcing the tricky stuff what is it that officials at the Ministry of Justice have done in the year in review? I think that the New Zealand public is entitled to know that answer. 
If Geoffrey Palmer and his crew are going to write legislation table reports and on the whole make useful suggestions for law reform—and I certainly do not begrudge the commission the quality of its work; I think that on the whole it is very good—the question is why is it doing it and why is the ministry itself not doing it? We know that the ministry will also be facing a forecast of $800 million in unpaid fines in the year ahead. What has it done in the year in review to reduce those outstanding fines? 
What has the ministry done in the year in review to make sure that reparation in the sum of about $80 million has made its way to the victims of crime? The Minister of Justice has told us that this is the year—forget about the last 8 years—in which the Government is going to do something about victims. We should not worry about the last 8 years—they were the years of the criminal; this is the year of the victim. What we need to know today from the Minister in the chair the Hon Damien O’Connor is what will be done to get those reparation payments to victims. What will be done to get the $800 million forecast in unpaid fines to be paid by those who owe it? More important what does the Ministry of Justice do? 
CHRISTOPHER FINLAYSON (National) 
: 
 What does the Ministry of Justice do? Although with a Minister of the calibre of this one in the chair the Hon Damien O’Connor we will not get any answers we will certainly be asking the questions. The Ministry of Justice plays a fundamental role in maintaining the rule of law in this country. It is extremely important that we have a civil and criminal justice system that works adequately. Much of the work that this ministry does is not simply party political; it is black-letter law and it is of fundamental importance. 
It goes without saying that this ministry has failed in relation to the electoral finance legislation but if we look at some of the other work that it is doing we see that its record is very poor indeed. The Ministry of Justice is a very large department that is soon to move to a splendid new building on Kate Sheppard Place. As Mr Power has observed it is employing increasing numbers of consultants and civil servants but its work product as identified by the Justice and Electoral Committee is very poor indeed and I intend to look at a number of those issues right now. 
I think it is rare when one goes through this bundle of reports of select committees to see a report that is more critical—and bipartisanly more critical—than the report on the Ministry of Justice. Let us look at few issues. The first is court workloads. The reality of the matter is that we have courtrooms in this country designed for a population of about 3.5 million people and there are now about 4.3 million. Some courtrooms in this country are bursting to overflowing. Let me tell the Committee that just last week in Auckland a judge was available to hear a case lawyers were ready to argue it but there was no courtroom because the High Court in Auckland was full to overflowing. As the select committee’s report says providing court services is fundamental to the ministry’s rule. Good services provided in a professional and timely way are vital in ensuring that justice is accessible to all. It is simply unacceptable that we have a situation like we had in Auckland last week where courtroom facilities are now so poor in the High Court in Auckland that a certain case could not be dealt with. 
Time and time again when we deal with some of these black-letter non-party political questions we are fobbed off by the Ministry of Justice. What about electronic filing? Every country has it but we do not have it. That is a question I have been asking for some time. What about the Court of Appeal? Why has the Court of Appeal not got a permanent presence in Auckland to serve the Auckland people? It does not mean appointing any more judges; all it means is finding a building and putting a courtroom in it in order to service for example the commercial community in Auckland. These fundamental issues are not being looked at. 
Let us look at the Law Commission because the reality of the matter is that the Law Commission has had to take over the law reform responsibilities of the Ministry of Justice. What we have with Sir Geoffrey is some kind of latter-day Cardinal Richelieu doing an enormous amount of work behind the scenes because the ministry is simply not up to it. The role of the ministry is to peer review the work of the Law Commission to ensure that the work product is acceptable. I take issue with just one thing that my learned friend Mr Power said. Some of the work product of the Law Commission is not all that flash and it requires the ministry to take a good look at it. There is an argument that sedition laws should not have been passed in the way that they were but rather that they should have been part of a comprehensive criminal law reform. The Minister should look at the exposure draft of the Law Commission on the proposed law of limitation which we have been waiting for years for. He will find it to be a very poor piece of work. 
Just to show the failure of the ministry we should look at the final point that was raised by the Justice and Electoral Committee which concerned the Evidence Act. The Evidence Act was enacted on 1 August 2007 and there have been no Orders in Council yet under section 51. This was a report that the select committee made following hearings on 15 and 22 November. The ministry said this was an issue that was actively under consideration but we have almost come to the end of March and we still have no Orders in Council under section 51 so foreign practitioners cannot be deemed to be people whose advice will be subject to legal professional privilege—a very real practical problem for the New Zealand legal profession. 
LYNNE PILLAY (Labour—Waitakere) 
: 
 It is a pleasure to stand and talk in this debate about the wonderful ministries and in this case I will talk about the Ministry of Justice and acknowledge all of the good work the ministry does. I will in particular talk about victims’ rights because I was really heartened to see the Government’s response to the select committee’s inquiry into victims’ rights. There were some fantastic recommendations from the hard-working Ministry of Justice. 
Christopher Finlayson 
: I think you’ll find that they’re not. 
LYNNE PILLAY 
: In fact despite the denigration from the opposite side of the Chamber I have to say that I believe that the Ministry of Justice must be one of the hardest-working—if not the hardest-working—ministries in this Government. I am very proud to work with the ministry and I am very proud of the work it puts out. We all know that much of the work—usually not supported by National—is very good and is very much valued by this Government. Today we are here to celebrate—and I do mean celebrate—the response into the inquiry into victims’ rights because it shows that this Government listens. This Government listened and it acted. 
What did victims tell us when they came to the select committee? It was not the putting the offenders away and throwing away the key model. They said it was about being treated with dignity getting support having accountability in the system and coordination so that victims knew what was there to support them and how the systems worked so they were not lost in the courts system. They said they generally wanted more support. 
This Government listened and we see victims as our top priority. I noticed that the members on the other side of the House did not speak on victims’ rights. Why is that? When the Justice and Electoral Committee was selected out of every select committee in this Parliament to go to Victoria and look at victims’ rights did the National members go? No they did not. What did they do? They were too lazy to go. They spat the dummy and they thought: “Oh we might get some political mileage out of this. They are actually looking at electoral law reform too. My goodness we don’t want to be anywhere near that.” So as Hone Harawira said the minute they knew that electoral reform was on the agenda we did not see them for dust. They took off like scalded cats. So it meant that the hard-working other members of the committee had to go. The hard-working members and staff of the committee went to Victoria and looked at what they are doing there. 
The people in Victoria acknowledged New Zealand; they said that our Victims’ Rights Act inspired them. They said that our restorative justice programmes are leading edge; they had looked at those and actually done some more work on them—they created a victims’ charter. We the hard-working members—not the lazy ones who stayed home—the Green members the Labour members and the Maori Party member for half the time thought we would sit and listen. We thought: “Boy there’s some good stuff we can do for victims in New Zealand and we want to look after them.” The people in Victoria talked about the charter an 0800 phone line to really expand that and give support to victims and a coordinating agency so that when victims needed support and information and needed to know how the systems worked for them they could actually get all that information through a website and an 0800 phone line. So we were really pleased. We also visited the neighbourhood justice centre. I would have thought that someone from the legal profession like Mr Finlayson would be slightly interested in that. But no he was too lazy and had to stay home. It was a very very fruitful visit. It was very very good. I am so proud that this Government has picked up the recommendations. 
Christopher Finlayson 
: A lightweight agenda for a lightweight chair. 
LYNNE PILLAY 
: The member calls me a lightweight. I think that to call me lightweight could possibly be flattering. But I say to Mr Finlayson that I do not think given some members on the opposite side of the Chamber that we should be talking about size. 
When the committee came back we found that this Government listened. Who were at the select committee flip-flopping and saying “Us too!”? Who said they thought it was good wanted to be onside and wanted a unanimous recommendation? The National members did. They did not know what we were talking about—they had never been there and did not know—but by hokey finger up they saw it was a winner and that they would be in on it. That is what National did. The National members did not have the courage to say that their party could not in good faith support these recommendations because they did not know what we were talking about because they were not working on it. No they actually said: “Gee this is a winner.” 
It was like KiwiSaver early childhood education and like everything else that Labour does. National members just said they would pretend that they supported it and thought it was a good idea. That is what they did. But it does not matter—we are not small-minded and petty in the Labour Party; we are visionary. We are looking towards our future and we said that at least we had National onside. They did not contribute anything but we put the recommendation back to the Minister. The hard-working ministry officials prepared an excellent report and our excellent Minister said: “Yes we are going to go with that.” We will make this country even better for victims; we will make sure that they are supported and coordinated. We will support the wonderful Victims Support Agency. We will support the non-government sector by giving it more funding for essential services. What is more—and I heard the Opposition members talk about it—we will get the great Law Commission to do some work for us. We already provide compensation through the Accident Compensation Corporation but we want to look at further compensation for victims. We see that as very valuable work for the Law Commission to do. 
So that is what they did. I am a little bit proud of myself and my select committee colleagues—not the National Party ones but Nandor Tanczos from the Green Party and my hard-working Labour colleagues—because we did work on that and then those recommendations were picked up on by a wonderful Government that looks towards our future. If people want to freeload like the National Party and ride along on our coat-tails I say: “Welcome aboard.” They are welcome aboard although they did not do the hard yards they did not do the work but victims in this country will be better off. However National members did not have the courage to say— 
The CHAIRPERSON (H V Ross Robertson) 
: Order! 
LYNNE PILLAY 
: —that they had not helped. Thank you Mr Chair. Victims in this country are far better off because— 
Christopher Finlayson 
: I raise a point of order Mr Chairperson. The member cannot accuse people of a lack of courage. I ignored it the first time knowing her limitations but she is repeating it like a litany and it should stop. 
The CHAIRPERSON (H V Ross Robertson) 
: Thank you. I did call the member to order and members should realise that the use of the word “courage” is a personal reflection under Standing Order 116 and is not permitted. The member will desist. 
LYNNE PILLAY 
: Thank you Mr Chairperson. I promise not to use that word but I will say that those members are lazy. Those members were too lazy to go to Melbourne to look at the projects. I think the National Party might have had a conference on or something else and as we know it has to try to cajole its people to go to them because they are so jolly boring. So those members stayed back but I know the hard-working members who went and looked and listened. We came back with excellent recommendations that this great Government has taken up. I am really proud and again I cannot do more than praise the Ministry of Justice. It has always provided the best advice possible and the best support. I am proud to acknowledge the ministry today in the Chamber. 
Report noted. 
New Zealand Police 
CHESTER BORROWS (National—Whanganui) 
: 
 I rise to speak on the 2006-07 financial review of the New Zealand Police and to reflect on what a torrid year the police have had. It has been a year with its ups and its downs but overall I believe that the police have done a fantastic job in looking after our safety and well-being and protecting life and property within New Zealand. 
One of the highs for instance was the resignation finally of Clint Rickards when he came to understand what the rest of New Zealand understood which was that he had to go. The work done by the police in Operation Austin saw several hearings go before the High Court and a number of varied decisions came out of that. The public unfortunately felt hoodwinked by the rule of law that did not allow them to understand just how many charges there were and just how many trials there would be. Mr Rickards after maintaining his salary for 3 years while he was suspended and after maintaining other fringe benefits such as the use of a vehicle finally came to the conclusion when he saw the evidence that the police had that it was pointless for him to maintain his innocence. He knew that he was due to face charges before the tribunal he knew that police Commissioner Howard Broad had to prove only one of those charges for Rickards to be dismissed and he knew that if he appealed he would be paying for it out of his own pocket and not out of the taxpayer’s pocket. I congratulate the members of the police who worked on that inquiry on coming to the conclusion that they did. I only wish that the jury had seen the matter in the same way. 
Another point that drew a lot of flak through the year was the execution of the Operation Eight search warrants in respect of terrorist-type crimes occurring around the country. A number of members of the public and political parties were very quick to oppose the police and their operations. The fact is they were acting on information that they had. The protocols around obtaining search warrants and listing the various crimes suspected meant that the police had to include the Terrorism Suppression Act in their affidavit for a search warrant. When news of that got out the brown stuff hit the fan and the police came under enormous pressure. I look forward to seeing the continuation of those prosecutions and where they end up. 
In the last 12 months we have seen the release of the Bazley report with its 48 recommendations about the future conduct of the police. We have since seen a response from the police and the release of a code of conduct but it is disappointing to note the lack of references within it to sexual behaviour bearing in mind that the whole reason for the Bazley inquiry which led to the report was sexual misconduct within the police. I look forward to seeing the police address that issue in due course. 
We also saw other debacles. These incidents have been disappointing to say the least. One was the issuing and distribution of stab-resistant body armour. These stab-resistant vests were supposed to have been allocated over 3 years ago. Initially there were problems with the fabric. The fabric chosen was disintegrating in the sunlight. So they changed the fabric. Then someone had the bright idea—“bright” being ironic—that it would be really good to make these stab-resistant vests fluorescent. The only problem with that is that if one is hiding in the shadows trying to catch the baddies one is a pretty easy target. So they decided to change the colour and to go back to blue. Then they realised they had the design wrong. The police needed to be able to hang stuff off the bottom of the vests like a duty belt. So they had to change the design of it. Then they let out the contract and in spite of the contractors offering to do the measuring for another $300000 the police decided that they would save money by doing the measuring themselves that it would not be a problem at all. Unfortunately they stuffed that up as well. Now millions of dollars worth of undersized vests that cannot be allocated to anybody are stored under the Police College at Porirua. The police then found that the design of the vests was such that the shirts that were worn under them were too hot. Staff were refusing to wear the vests because of the state they left them in. The police then had to let a contract for 35000 moisture-wicking breathable shirts. 
Later on we saw a debacle over recruiting standards. Pressure came on the police to describe the standard of recruits coming into the Police College bearing in mind the standard of graduating constables and the feedback that Opposition members were getting about those constables when they ended up on the street. A report was issued by the head of the human resources department within the police and he said there was not a problem. He had done some tests and everything was fine. Then a conflicting report from Senior Sergeant Saunders of the Police College found that all the protocols and systems that had been used by Mr Annan in deciding that the recruits were well and truly up to standard were completely and fundamentally flawed. Eventually there was a discussion around that. Mr Saunders was on leave for some time because of the pressure that was being brought to bear on him for raising the point and criticising the police. Eventually with a third inquiry having been contracted by the Minister of Police there has been some sort of resolution. 
Finally of course there was the problem around Mr Burton and his arrest. Whereas the police did an excellent job in making the arrest we found from the report that was released just a few weeks ago that the warrant for Burton’s arrest had lain undisturbed for 2 weeks over the Christmas period of 2006 because no one took ownership of the fact that there was a warrant to arrest him and thus the public was placed in further danger. National members also asked questions—and we have never really had this matter substantiated by the Minister—around the request for the assistance of the police surveillance squad to locate and arrest Burton. That assistance was withheld and the allegation there was that the squad was not available because its members were on leave and the police were not prepared to pay them a standby allowance. 
Later on in the year in September 2007 we saw the announcement that the Organised Crime Agency would form part of the police and that the Serious Fraud Office would be moved within the police yet 2 weeks before that the Serious Fraud Office had no idea that that was planned. The police still cannot tell us how it is going to work. The Government cannot tell us what powers that office will take with it into the police or exactly how it will operate. 
The National Party thankfully has released policy in respect of the police. In November it released information to the effect that should there be a favourable report it will promote the carriage and use of Tasers by the police as the situation requires. We are still waiting for that report to be released. We also announced that DNA testing will be in the same form as fingerprinting and photographing and will be carried out every time somebody is arrested. We look forward to being in Government and seeing how that works. It will add to the crime library and collection of DNA samplings and we look forward to a quick resolution of crimes as a result. We have indicated that we will roll back the bail laws that were implemented in October that see more serious offenders being released on bail rather than remanded in custody. Our final plank in respect of police policy running into this election is that the police will be able to issue short-term protection orders for the protection of women and family members who have been abused by their spouses. The interesting thing about three of those things is that as soon as we announced the measures in respect of Tasers DNA testing and short-term protection orders the Minister having said that National had no ideas in respect of law and order and policing said: “Oh yeah. We’ll do that too.” Thank you Mr Chairperson. 
Hon DAMIEN O’CONNOR (Minister of Tourism) 
: 
 I would like to acknowledge the wonderful work that the police do. I acknowledge the member Mr Borrows who has just spoken. He referred to the fantastic job that the police have done and I think he made a very good speech except for the last part where he put forward a proposition that we had followed some of National’s ideas or policy. We have yet to see any policy or ideas from National so we would never be following them. In fact a number of wonderful initiatives have been put in place this year and through a difficult period for the police I would have to say; it has not always been easy. These initiatives have been put in place over a period where we have seen a reduction in crime. We have seen one particular area—violent crime—stubbornly stuck I guess at too high a level but there has been a zero-tolerance approach to domestic violence. What that has done is to expose more trouble in the homes around this country and the police have acted on it immediately and I think that is to be applauded. It is not an easy area for police work. 
The drug and alcohol-fuelled violence and crime around this country is also a challenging area and we have to continue to work on that. That is why this Government has committed as part of the confidence and supply agreement with New Zealand First to 1000 more police on the beat. We are halfway towards that target and I think that is a wonderful achievement. It is not that we have just put those police on the beat in dilapidated facilities; we have committed also to a building programme which has seen major police stations built in places like Manukau and on the North Shore. It is not happening in only the big places because new police stations have been built in small places like Tokomaru Bay and Masterton. Those people have appreciated this Government’s commitment. 
I would just like to put on record that the Government is committed to reducing crime over time with its Effective Interventions programme which is a whole-of-justice approach. We are catching the people because the police are far more effective. We are processing them through the courts in a more efficient way and we now have more options for dealing with those offenders such as more sentencing options more treatment options and better rehabilitation facilities. So I would just like to put on record that across the whole of the justice sector including the police this Government has made a significant contribution to progress in this country through a long-term reduction in crime and repeat offending. 
Report noted. 
Ministry of Transport 
Hon MAURICE WILLIAMSON (National—Pakuranga) 
: 
 I will speak to page 415 and subsequent pages of the report which contain the financial review of the Ministry of Transport. But I will cover only some stuff on page 422 of that report because we get only a 5-minute call and I want to focus on one issue. 
The issue is that during the financial year of 2006-07 the Government’s land transport funding agency Land Transport New Zealand finished the year with $224 million of money unspent. Here is the first question for members of this Committee. Is there any member who represents an area that does not need any more infrastructure like roads public transport or anything else? I ask members who think it is all finished and done with to put their hands up. Well there is the first question answered—not one hand went up. 
Members should remember that the Government is actually pilfering around $600 million of the petrol tax to start with. Yes it has a proposal for hypothecation but that is not until the next financial year. In the financial year we are reviewing $600 million was siphoned off to start with so that was gone and not spent on roads or public transport. But then Land Transport New Zealand with all the money that it still took from the motorist even after that money was pilfered could not spend it. I have to say that there is a very good reason that a Government department may not be able to spend its money: there are no projects left to do. I want to know from anybody whether that is the case in roading. Is there a single area of this country that does not advocate that it is coming apart at the seams? Dianne Yates will tell us about how wonderful things are in the Waikato I am sure. 
Dianne Yates 
: That’s true. 
Hon MAURICE WILLIAMSON 
: Well let me tell her that every one of the measures of transport congestion delays and so on has shown that it has got worse in the Waikato and its council and regional council said exactly that when they came to the Transport and Industrial Relations Committee and they were angry as. Bob Clarkson and his team from Tauranga will tell members about what is happening with traffic congestion. Let us try the question as though we are on  
Who Wants To Be A Millionaire 
—there are four options when answering the question. The question is: has congestion got better or worse under Labour? 
Hon Members 
: Worse! 
Hon MAURICE WILLIAMSON 
: No I will give members options A B C and D. Option A is that it has got worse option B is that it has got better option C is that it has not changed and option D is to phone a friend because we do not know. 
Hon Members 
: A! 
Hon MAURICE WILLIAMSON 
: A lot of people are calling out “A”. I am happy to bet my salary—I will put my entire annual salary up against the Minister’s and I will fund it—and survey 1000 people chosen at random and ask them that question. I ask members to guess what the answer is. 
Dr Richard Worth 
: A. 
Hon MAURICE WILLIAMSON 
: Correct. Everyone is correct. Congestion has got worse. Members should ask the people who are in Auckland’s traffic. They will still by the way be in drive-time congestion—it is only 20 to 9; it will not finish for another half an hour to an hour. 
Land Transport New Zealand could not even spend the money it received. That is actually an outrage and a national disgrace. There should not be a member of this Committee who is happy that the petrol tax the road-user charges and the motor vehicle registration were taken from the motorists then about $600 million was siphoned off to the consolidated fund and Land Transport New Zealand could not spend what was left. 
If members read page 422 they will see that I asked questions of the chief executive of the Ministry of Transport around what I think is good practice for any business. I put to him the scenario that there were several branches of a company and they had all been given their budget for the year and then as the year began to unfold it was clear they were not going to be able to fulfil their obligations but another branch said: “Oh please please give us the money and we can be cut loose and get going.” I asked Alan Thompson whether that process is monitored and whether the ministry month by month sees whether in fact each of the regions is meeting its targets and Transit is meeting its targets. He said basically and members will be able to read it: “That’s not our role. That is not the role of the Ministry of Transport.” 
The Ministry of Transport is the key adviser to the Minister of Transport. The Ministry of Transport should be coming into the Minister’s office weekly and saying to the Minister: “Minister there’s $224 million of unspent money here. We should be doing something.”—and he says that that is not its role. It is an absolute and utter disgrace. Members of this Committee should be outraged and the Minister should be ashamed that that is what happened. 
Hon DAMIEN O’CONNOR (Minister of Tourism) 
: 
 I have to stand up and challenge that outrageous speech made by a member who should know better. 
Hon Maurice Williamson 
: Read the page. 
Hon DAMIEN O’CONNOR 
: I have read the page I say to Mr Williamson. I think the member is quite right. There was $224 million unspent and that goes against the traditions of previous National Governments and indeed some Labour Governments. If there was any unspent money when getting towards the end of the year what happened was that officials ran around the country throwing money at contractors willy-nilly without any idea what effect that would have on the infrastructure of this country. 
Hon Maurice Williamson 
: But they said it wasn’t their role. 
Hon DAMIEN O’CONNOR 
: I applaud the Ministry of Transport for not spending that money. The reason it could not spend it is that contractors up and down this country are flat out trying to spend the money that this Government has committed to transport infrastructure in this country. They cannot find the workers— 
Hon Maurice Williamson 
: The member is digging a hole for himself. 
Hon DAMIEN O’CONNOR 
: If the member wants to run around the country and ask 1000 people anything every one of those 1000 people will say they have never seen so many roadworks going on up and down the country. 
I applaud the Ministry of Transport for not throwing away $224 million because it chose to spend money in a considered careful and strategic way. The only thing truthful in that member’s speech was the fact that next year this Government will spend more than the total taxes taken from road-user charges and excise taxes back on the roads of this country. 
Hon David Parker 
: The first time. 
Hon DAMIEN O’CONNOR 
: It is the first time ever absolutely. More money will be spent on land transport—roads public transport and total infrastructure including encouragement to get more freight off the roads on to ships and indeed on to the rails. 
I think Land Transport New Zealand should be applauded for the work it has done. It has geared up the contracting industry in this country to next year hopefully spend more money than has ever been spent on transport infrastructure in this country and that is something we are also proud of. 
Report noted. 
Ministry of Economic Development 
Dr RICHARD WORTH (National) 
: 
 It is a privilege to speak on this Appropriation (2006/07 Financial Review) Bill. I am speaking about the Ministry of Economic Development with particular reference to schedule 2 which shows a shocking overexpenditure in non-departmental output expenses so we should not take too seriously the comments of the previous speaker. 
This is a very challenging time for New Zealand. The Government has run out of luck and it is crippled by its ideological commitment to policies that are simply not grounded in reality. Interest rates under Labour are at a 10-year high. We have the second-highest interest rates in the whole of the OECD. The Reserve Bank confirmed only a couple of weeks ago that interest rates will be staying higher for longer and that food petrol and electricity prices will be going higher this year. 
The Reserve Bank said that Government spending has been growing twice as fast as the economy. Last year every time the bank raised interest rates it said that loose Government spending was a factor. Look at how it is hitting New Zealanders. The average floating mortgage rate was 7.04 percent in December 1999. In December 2007 it was 10.44 percent. That is another $133 a week on mortgage payments on a $250000 mortgage. 
Economic development covers a very wide sweep of activity. Of course the role of a Government may be interventionist or it may be facilitative. It may be concerned in that latter case with setting the frameworks. 
I was interested that at the financial review of the New Zealand Trade and Enterprise entity held before the Commerce Committee the chairman of the New Zealand Trade and Enterprise structure spoke about tough international trading conditions high energy prices skill shortages and a flat and competitive domestic market combined with things like high exchange rates and high interest rates. He made the point so easy to make that we are in a challenging environment. We need skill and competence to be brought to the table. But sadly this Government is dominated by policy writers and analysts. 
The figures that have emerged in the last few days are sobering to put it at its lowest level. Treasury reports show that between 2000 and 2006 employment in Government departments that mainly provide services grew by 34 percent while employment in policy departments including the Ministry of Economic Development grew by 72 percent. That is a stupendous increase. To get a picture of the whole State sector we need to look at survey data from the quarterly employment survey which shows that since 2000 the number of bureaucrats has grown from 26200 to 36000. In addition Treasury reports show that between 2000 and 2006 personnel costs for Government departments that mainly provide services grew by 69 percent while in policy departments these costs grew by 142 percent. 
I would like to make three short comments about New Zealand Trade and Enterprise that directly arise from this bill. It is time that New Zealand Trade and Enterprise focused on proper systems of measurement so that it can truly determine what gains spring from its activities. Second there are highly complex funding systems within New Zealand Trade and Enterprise—in fact they are labyrinthine. They need to be simplified so that those who can access those funds can do so with a degree of confidence that the system will not be bogged down in bureaucratic red tape. Third New Zealand Trade and Enterprise needs to focus more on the less critical aspects of its activity and move away from those activities. 
We are witnesses at the moment to an extremely disturbing set of events in the financial sector. These events are both bizarre and worrying. They touch on finance and investment company collapses. 
Report noted. 
Ministry of Maori Development 
Hon TAU HENARE (National) 
: 
 This past year has been an appalling one for not only the Minister of Maori Affairs but also unfortunately Te Puni Kokiri. I do not particularly blame the staff of Te Puni Kokiri; I blame the Minister who—just as a point of reference—is not even in the Chamber tonight to hear the debate on the financial review of his own department. 
Hon Rick Barker 
: I raise a point of order Mr Chairperson— 
The CHAIRPERSON (Hon Clem Simich) 
: The member is quite right. There are to be no further references like that I say to the member. 
Hon TAU HENARE 
: During this past year we saw the manoeuvring of the Minister of Maori Affairs into a mode of spin. It has been a year of spin. We have talked about the Maori Potential Fund. The Minister talked about 410 investments having been made through the Maori Potential Fund. Do members know what that Maori Potential Fund was? It was nothing more than trying to choose winners. It was trying to give money away to things like rugby football when that should have been funded by the New Zealand Rugby Union. But Te Puni Kokiri thought that it had better do it. 
It was there the little Maori Potential Fund and it gave money to the National Institute of Water and Atmospheric Research of all things. We would have thought that somebody in the Ministry for the Environment or maybe somewhere else would give money to the National Institute of Water and Atmospheric Research for its purposes. But no Parekura Horomia in his capacity as the Minister of Maori Affairs thought that it would be a good idea for Te Puni Kokiri to fund those sorts of things. 
In the last year the ministry discontinued the use of memorandums of understanding between other Government agencies and that really really worried us here in National. Te Puni Kokiri and the Minister said basically that it is there for one thing and for one thing only—that is if memorandums of understanding were carried out with other Government agencies then that would limit its effectiveness in influencing policy directions. I mean what a have! This ministry has now become the Minister’s own slush fund. 
Hon Georgina te Heuheu 
: To win its re-election. 
Hon TAU HENARE 
: It is not about winning the election for Labour; it is about securing the Minister’s seat up on the East Coast. 
John Hayes 
: Well he’s not going to be able to. 
Hon TAU HENARE 
: But he will not be able to—absolutely. I hear that there is a person who is— 
Hon Member 
: Foxy. 
Hon TAU HENARE 
: Well yes he could be a fox but he will give Parekura Horomia a good run for his money. One of the other issues raised by the Maori Affairs Committee was staff overseas travel. Normally Te Puni Kokiri’s travel expenditure is relatively low but this year or the year we are talking about the general manager of the Maori Trust Office was overseas more times than not for one reason or another. 
Hon Georgina te Heuheu 
: More than the Minister even. 
Hon TAU HENARE 
: More times than the Minister was. So all in all Te Puni Kokiri is a department that should have shown more initiative within our community rather than being established this year or during the last financial year as some sort of community bank that Maori organisations could go to in order to get a few dollars. 
For Otago Maori rugby to get a few dollars the people involved should have gone to the Otago Rugby Football Union. But no Te Puni Kokiri had to fund initiatives like that. It gave little dollars here and there just to keep the natives happy. That is all it was; it was just to keep the boys and girls in the community happy with a few dollars so that they could work on their community projects. What a shame really that other ministries did not pick up on this and fund those organisations as they should have been funded rather than in a piecemeal manner. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Tena koe Mr Chairperson. At the start of this month a  
Marae 
 DigiPoll of over 1000 Maori voters revealed that if the opportunity arose over 40 percent of those surveyed would transform into “Mozzies”—Maori living in Australia—yet not one headline not one letter to the editor not one talkback show raged in response. It was not breaking news; it merely confirmed the study released last year that revealed that at least 100000 Maori are living across the Ditch. My point is that it should have been breaking news. Last year’s study funded by Te Puni Kokiri stated that Maori believed they were pushed out of home because of prejudice and social dysfunction and they were pulled to Australia by higher wages and better employment options. Now having been faced with the glaring push and pull factors one would think that Te Puni Kokiri would be doing all it could to retain Maori in this land. 
According to its annual report the purpose of the Maori Potential Fund is “to make outcomes-based investments that realise Maori potential by enabling improved life quality for Maori”. That would be beautiful if it actually meant something. The financial review told us that the ministry had dropped the use of memoranda of understanding to “lessen the perception that monitoring agreements are focussed on compliance”. We are told that for a similar reason Te Puni Kokiri will not publicise or publish the work it carries out with other Government agencies as this may limit its effectiveness. Yet again this appears to be another case of this Government undermining the role of the Public Service by being unprepared to stand by the professional free frank advice offered by the ministry staff. Yet again this Minister is undermining the capacity of the staff in his ministry to advise the Government by making them politically compliant. The picture is hardly better when we look at individual sectors and votes of Government. In response to the concerns of the Maori Affairs Committee about a key priority for Maori housing and homeownership Te Puni Kokiri told us that it was not in a position to comment and to allay our fears. No comment is supposedly acceptable. 
Our focus turned to international and indigenous rights. One of the most significant developments in the last 20 years and more was the remarkable event that occurred last September when some 143 countries signed the United Nations Declaration on the Rights of Indigenous Peoples. Despite widespread international criticism of the contradictory and reprehensible position of the New Zealand Government we were one of the four countries to vote against it. So we asked the Ministry of Maori Development how it could justify such a hostile position. The ministry officials told the select committee that their official advice was to tell the Minister to abstain even though “the principles of the declaration were right”. That is what they said. The Maori Party believes that the advice given to Te Puni Kokiri in advising the Minister to abstain was woefully inadequate and the fact that the Ministry of Maori Development undertook neither any leadership nor consultation with Maori was disturbing. 
What does the ministry do? Well the financial review confirmed that it has dished up some 410 investments in Maori potential—grants for rugby and stuff—that the select committee questioned as having been made on an ad hoc basis. We learnt also that nearly half of the overseas travel allowance for Te Puni Kokiri in the 2006-07 year was spent on one staff member the general manager of the Maori Trust Office. It is the same office we are reminded that is seeking to dip into the pockets of Maori Trust shareholders to the tune of $35 million. 
Finally the financial review made the interesting observation that Te Puni Kokiri had decided to defer its formal feedback survey of stakeholders during 2006-07. If the views of the participants of the  
Marae  
DigiPoll survey that asked who would go to Australia were anything to go by then it was probably the best decision they made. It would appear that the only thing this Government is doing in realising Maori potential is in its wretched belief that the only news is no news and that it is better to be silent and abstain than to publish and remove all doubt. Thank you Mr Chairman. 
LOUISA WALL (Labour) 
: 
 Kia ora Mr Chair. I rise to speak about the Maori Affairs Committee’s financial review of the 2006-07 performance and current operations of Te Puni Kokiri the Ministry of Maori Development. The review found that Te Puni Kokiri was financially a good performer with an unqualified audit opinion. 
I note that Te Puni Kokiri describes its purpose as “realising Maori potential.” What does that mean? Firstly it means working with Maori to identify the areas of potential that Maori have based on their natural resource bases—that is cultural te reo me tikanga Maori economic and forestry and fisheries assets to name a few. As part of realising Maori potential kaupapa Te Puni Kokiri published last year in  
Nga Kaihanga Hou 
 the results of analysis it undertook looking to the future to understand what opportunities and indeed what challenges might exist for Maori. The insights contained in that work were drawn from exploration and linked to known demographic scientific political and attitudinal trends. 
Nga 
Kaihanga Hou 
 identified key drivers that will influence the way Maori participate in the economy leading to the year 2030. We know that the Maori asset base is growing. In 2003 the Maori asset base was estimated to be $9 billion. This has since been updated and as of 2005-06 is now estimated to be $16.5 billion. There continues to be an increasing level of Maori economic contribution to the national economy. Labour celebrates this yet there is more good news. Between 2002 and 2007 there was a net gain of 26500 jobs. That is something to celebrate—Maori working and participating in New Zealand’s economy. This is coupled with the steady reduction in Maori unemployment. 
However the current challenge is positioning Maori with the qualification base and skills to ensure optimal employment and work choice in the future. Te Puni Kokiri has played a key role in providing policy advice in Maori education. This advice has culminated in the release of a draft Maori education strategy Ka Hikitia: Managing for Success which is a broad-reaching draft 5-year strategy aiming to transform and change the education sector ensuring that Maori are able to enjoy education success as Maori. 
Te Puni Kokiri’s principal focus in Maori cultural development over the period of review was on Treaty settlements including a portfolio of work around broad issues associated with enhancing the Crown-Maori relationship; and on promoting Maori language and broadcasting principally through the drivers of the Maori Language Strategy and Maori Broadcasting and e-Media strategy. The results of the Maori Language Survey 2006 were published and showed significant gains in the proficiency and use of the Maori language since 2001. In particular there was an overall increase in speaking and listening proficiency—8 percent and 9 percent increases respectively—and gains in terms of Maori language use in whanau and community settings. Maori Language Week 2007 received considerable recognition with daily coverage and items on Television New Zealand TV3 Maori Television Radio New Zealand and iwi radio and in print media. Several hundred organisations organised or participated in events to celebrate Maori Language Week. 
Te Puni Kokiri has supported the Minister of Maori Affairs with four bills before the House. They are significant pieces of work and Maori have been consulted extensively during this process in the last financial year. Kia ora Mr Chair. 
Report noted. 
Ministry of Education 
ALLAN PEACHEY (National—Tamaki) 
: 
 It was H G Wells who said many years ago that civilisation is a race between catastrophe and education. For too many of our children in this country today the race is leading to catastrophe. How can it be that a country of the wealth and background of New Zealand is still reporting to its Parliament that something like a quarter to a third of our children are not learning to read write and do mathematics to a level sufficiently high enough to let them function as reasonable sensible thoughtful adults and to take their place as contributing members in a market-driven modern world economy? That is what is happening in the New Zealand education system now. What we get from the Minister is a whole pile of platitudes excuses and reliance on ideologies that we know do not work. That is the point of this financial review. The ideologies of the Government mean that it has demonstrated that it is not capable of getting to grips with the issue of why so many of our children are not learning. 
One of the things the ministry said to us in the select committee as part of the review was that yes there is a shortage of teachers in South Auckland where some of our poorest children and the children who are in most urgent need of top-quality teaching are but we should not worry because there are spare teachers in the South Island. The bit that is missing of course is that those teachers are in the South Island; they are not where the demand is. 
I have to ask the question of how many of our children in New Zealand schools are currently being taught by teachers who are not in command of the language of instruction. Language is the great skill that a good schoolteacher has to communicate with children of all backgrounds abilities and interests. Time and time again school principals are telling us that they are not able to hire teachers with that ability. 
When we look at the secondary sector we see that secondary teaching is no longer getting its share of the top graduates: those men and women who will bring intellectual rigour to the curriculum and to assessment. They are no longer being attracted in sufficient numbers into secondary school teaching. What we have instead—and this is the failure of the Minister his predecessors and that Government—is an uncontrolled growth in bureaucracy: the Ministry of Education the New Zealand Qualifications Authority the Teachers Council and the Education Review Office. More and more taxpayers’ money is being spent on pointless bureaucracy because that Government does not get it that children learn in classrooms and in positive relationships with their teachers. No child whom I know ever learnt to read write or count in the office of a bureaucracy. No child has ever learnt in the office of a bureaucracy. Yet this Government’s only answer to the critical problems facing our education system is to hire more bureaucrats and get bigger offices then try to regulate the initiative the sense of responsibility and the ambition out of schoolteachers school principals and boards of trustees. The desperate call of the children and their parents in this country must be to get that money out of the bureaucracy into schools and to teachers to give them a fair chance at developing the programmes and teaching that are required to ensure that not just some of our children but every single child has the opportunity to learn. At the moment because of the policies of that Government and because of its obsession with bureaucracy centralised control and strangling initiative too many of our children are not getting the opportunity they need. 
Hon CHRIS CARTER (Minister of Education) 
: 
 The previous speaker Mr Peachey—who is a great advocate of bulk funding which I will talk about in a minute—opened his speech with a quote from H G Wells. I was reminded that H G Wells’ most famous book was  
The War of the Worlds. 
 There are two different worlds that we are talking about here. There is the world of the Labour Government which sees education as critical to the fulfilment of individual potential and to the establishment of a society a culture and a population that is well-educated. Then there is a world like Mr Peachey’s which sees winners and losers which has bulk-funded schools that are in competition with each other. That is an education system that is not collaborative not cooperative and does not interest itself in the realisation of the potential of all individuals. 
He challenged the Government as to what it has done with education. I tell the Chamber and anybody who is listening that this Labour Government has invested an extra $5 billion into education—not $1 billion not $2 billion but an extra $5 billion. Mr Peachey also made reference to staffing. He talked about bureaucrats. I would like to talk about the 5000 extra teachers above what was required by roll growth that the Government has employed in the last 8 years. 
In the last 2 years we have brought in 20 free hours of early childhood education. That is the greatest revolution in early childhood education that has ever occurred in our country. It allows every 3 and 4-year-old access to quality early childhood education so that they are set on the path to become a learner for life. It is about creating opportunity and quality for the individual and the whole of society. 
We have also opened 36 new schools and 1500 new classrooms have been built under this Government. 
Bob Clarkson 
: Some of them are leaky! 
Hon CHRIS CARTER 
: I think it was the member for Tauranga who called out that some of them are leaky. I say to that member that yes four of them are. Why are they leaky? Because a National Government deregulated the building code and those four schools got leaky buildings—as did thousands of New Zealanders. I tell Mr Clarkson to hang his head in shame as it was his Government that created leaky buildings and it is my Government that has been fixing them up. 
Let us get back to education. We have not only employed 5000 extra teachers but also invested an extra $90 million in new building opportunities for early childhood education centres. Just last week I was with the Prime Minister opening a new expanded Tongan early childhood education centre in Mangere. We have invested $90 million since the year 2000 just in buildings for early childhood education. Remember that an extra $5 billion has been invested in education by this Labour Government. We have also had an amazing range of things from laptops for teachers to expanding information and communications technology in schools. As I have said we have the 20 free hours’ early childhood education. 
Just 2 weeks ago I tabled in the House 46 different initiatives in education that the Labour Government has carried out since we came in. We have resourced education like it has never been resourced before and why have we done that? Because we believe that education is the ladder that will allow every young person in New Zealand to lift his or her potential. We also know that investing in education is about investing in the future of our country. In a few minutes’ time my colleague Marian Hobbs will talk about Schools Plus the revolutionary new programme that we are introducing into secondary education. The programme will create new pathways for young learners who currently are not succeeding as well as they could in the education system and will make sure that no young person under the age of 18 leaves our education system without the skills to contribute to our society and to realise his or her own potential. 
Education is about investment. It is about investment in the individual and in our society. I repeat that no Government in the history of New Zealand has contributed more to education than our Government has with its extra $5 billion. We heard a comment from Mr Peachey about employing bureaucrats. I tell members that we have just signed off the salary settlement for teachers. Mr Peachey used to be a teacher. He believes in bulk funding of course. There is $1.4 billion set aside for teachers’ salaries over the next 4 years. We know that the best resource we can give to New Zealand’s children is quality teachers and to do that we have to pay them well. This Labour Government is committed to making sure that we have a well-resourced well-educated well-motivated teaching service. 
Hon MARIAN HOBBS (Labour—Wellington Central) 
: 
 As I begin speaking to this financial review I want to recount a story. It was the day after the 1996 general election and I had the option of taking up my appointment as principal of Wellington Girls’ College or taking up my seat here in the House. As I walked down the corridor the Prime Minister asked me whether I had made the right decision. When I review what this Government has done in education I know that by being a member of this Government I have achieved far more for education than I might have done if I had spent 12 years as principal of Wellington Girls’ College. We have been delivering policies that make a real difference in education. 
For instance we have delivered 20 hours’ free early childhood education. From July 2006 to July 2007 there were 20000 more enrolments in early childhood education. [ 
Interruption 
] If those members opposite who were diplomats and who have not necessarily worked in education think that that is making no difference to children’s learning and to where society is going then they do not understand the absolute importance of early childhood education in setting up the base for kids to be able to read to write and to be numerate. 
We are building a platform for the future. We want our students to stay at school. We noted what a report from the Education and Science Committee said. Finally a new system was put in place to find out where our truants were. It replaced the old brown cards and those of us who have worked in schools know that the brown cards very rarely followed the students from school to school; they stayed in offices. We did not know where students were. This Government put a wonderful scheme in place; when it first came out it frightened the pants off Opposition members because they came to know the real number of kids who were truanting. Now we know and now the work is happening to get them in school. 
There are several ways to improve the chances for our children. I refer to a great piece of work called Staying at School which is a collection of case studies on how schools are supporting their students to stay. I will give the Committee two examples. Some of the members will know Queen Charlotte College in Picton in the Sounds. It is up against Marlborough Boys’ College and Marlborough Girls’ College two traditional schools. Queen Charlotte College is the only coed school in the area. Sometimes people make sure their kids go to the boys’ and girls’ colleges to avoid their going to Queen Charlotte College. However it is a brilliant school that works really hard at meeting the needs of kids. 
Here is Queen Charlotte College student Melissa in year 12: “In year 9 and 10 I wasn’t into school. I was bottom of the class and I didn’t want to go to uni—I thought it would be too hard. Then in Year 10 I started talking to Ms Wood and researching what I wanted to do.” This is a kid like many of the kids that members in the Chamber understand and know. “Horses are a passion for me so I’m doing equine studies unit standards by correspondence through Telford Rural Polytechnic. The school pays for it with STAR funding. I’ve done lots of standards some even at level 4. I feel pretty good about that. It’s easier studying something I really love. In the future”—and this is a kid who wanted to leave school—“I want to do Equine Studies at Massey in Palmerston North then work in a breeding facility. I’d like to travel and get experience.” This is a kid who without this sort of innovation without this sort of work in schools and without Secondary Tertiary Alignment Resource (STAR) would be a statistic of non-achievement. This is a kid who now has a future. This is Gateway; this is positive. 
We go to the North Island to Havelock North High School. “I go out each Thursday and learn about hairdressing by doing workplace training at Andrea’s Hair Design in Havelock. I also complete theory units at school which are assessed by the Hairdressing Industry Training Organisation. Now I’ve been offered a part-time job and at the start of next year I’ll begin my hairdressing apprenticeship which is for three years. I think it’s really good that the school organises these types of opportunities for us. It’s a lot easier to achieve these things having the school’s help behind you. They’ve been very supportive and encouraging … We’re 7th form now and you’ve got to know what you want to do. So this programme gives you a good heads up on the options.” This is the kind of difference this Government has made. This is building for the future. 
So we come to Schools Plus. What problem was this Government trying to address there? We cannot build our country’s future on low skill and low wages. That is why we need change in education and a quantum leap upwards. At present almost 30 percent of young people leave school before they turn 17 and 40 percent do not achieve a National Certificate of Educational Achievement level 2 qualification. This Government has achieved a buoyant economy and a strong labour market and unemployment is right down. We therefore need people out there to have the skills to go on. So in February 2007 almost 1 year ago the Secretary for Education was asked to develop a plan for all young people to achieve their potential through education. The Opposition thought this was forcing kids to stay at school. It is not. It is using the school like a base rather like in those two studies of Havelock North High School and Queen Charlotte College I have just given members. It is schools being a base to get kids out there in apprenticeships building on the skills they have building on the strengths that every child has within him or her finding that strength finding that ability and building on it and finding courses. The schools of the future will be the base from which young people begin Youth Apprenticeships obtain work skills and continue with study. We will make significant new investments. 
In education we have been delivering policies that make a real difference: free early childhood education a revised curriculum and truancy. But we are about constant improvement; we are not resting on our laurels and that is why we have 4000 to 5000 more teachers beyond what is required by roll growth we have rebuilt schools and we now are planning for the future with Schools Plus. 
I end by making this comment. This morning I was listening to a discussion from the building industry. People were stating that because the Australians pay higher wages they are probably likely to pinch apprentices from New Zealand—particularly building apprentices. There has been a centre-right Government in Australia. How many building apprentices are in training in that country of so many million more people than us? There are 2000. How many do we have in a country with one-quarter of the population? We have 4500 people in building apprenticeships. That is about building for the future. That is about building an economy. That is where we want to go and that is what we are about. 
Report noted. 
Ministry of Health 
Dr JONATHAN COLEMAN (National—Northcote) 
: 
 It is very timely that we are having this financial review of the Ministry of Health today because yesterday we had a report released into the public domain commissioned by the Ministry of Health into the goings on at Hawke’s Bay District Health Board. We had an urgent debate about that same report today where we were treated to frankly a histrionic display by the Minister vainly trying to justify his actions and the position that he has taken. There is no question that the actions the Minister has taken in sacking that district health board will mean there will not be much of a vote for Labour in the Hawke’s Bay this coming election. If people like Rick Barker think they are coming back to Parliament as constituency MPs although I do not think even the Hon Rick Barker would be that—[ 
Interruption 
]—optimistic that would be right. 
The interesting thing about this report is not what it says but rather what it leaves out and there are some glaring omissions. The key thing we have to ask when we read that report is why on earth the former Minister of Health Annette King appointed Peter Hausmann to the Hawke’s Bay District Health Board in the first place. This is a man who had been extensively tied up with business interests and doing work for the Hawke’s Bay District Health Board since 2003. So if the Minister could not see a conflict of interest on the horizon goodness knows what it would have taken to draw that to her attention. But you see in this report there is absolutely no mention of why Annette King appointed Peter Hausmann to the district health board. 
The other interesting point is that there is absolutely no comment on management’s conduct and performance—no mention at all. We have to ask why that is. Why was the focus so intensively on the board’s performance rather than on that of management? When we look at who was involved in senior management there and trace some of the connections back maybe the answer starts to become a bit more apparent. The chief executive officer of Hawke’s Bay District Health Board one Chris Clarke was a long-term employee of the Prime Minister working as a special adviser in her office. Then of course the chief operating officer was Mr Ray Lind who is married to the now former Minister of Health Annette King. So members can see that there were some people in senior management roles there who had very very senior Labour connections and that there may well have been a vested interest for the Government to look after those people. This is a clear case where the cronies at Hawke’s Bay District Health Board were in senior management rather than on the board itself. 
But a lot of other issues are not covered in this report. Quite crucially there is the question of what happened to the deleted emails. Why is there is no mention of the treatment of the whistleblower who actually brought these severe conflicts of interest to light? There was talk previously in the leaked draft report of the taping of conversations by Ray Lind—that is not covered at all. Of course there is nothing about any disclosures that Mr Hausmann made prior to his appointment; they are not covered. 
This report says that Mr Hausmann was pretty severely conflicted and that should have been quite evident to any Minister of Health who appointed him. We have a situation here where things really do stink at the Hawke’s Bay District Health Board. The Government’s reaction has been to sack the board. That has been very unpopular. National does not believe it goes to the root of the problem. We believe it is a cover-up for some of the things that went on behind the scenes that have not been addressed in this report. 
We know about this type of report because there was one last year; it is very much like the Ingram report. The terms of reference are framed so tightly that the inquiry can never actually answer the crucial questions that the public deserve to get answers to. That is a real problem and I think it is going to hang around this Government right through to the election. 
When we look at what else is happening in health when we look at the stories we have heard at the Health Committee—stories of Wanganui Hospital where the surgeon Roman Hasil was appointed who was not qualified to do the work he was doing and ended up maiming 26 women in Wanganui and stories of what has happened at the Waitemata District Health Board where patients are lying on stretchers in corridors and people cannot get into the accident and emergency department—we know that this Government cannot deliver on health. It has had 9 years now and quite frankly if it cannot fix it after 9 years we know that it never will. The Government has doubled spending from $6 billion to $12 billion a year but things are getting worse not better. 
I was at Waitemata District Health Board yesterday for a meeting and I thought I would call in. What did I find? I found someone sitting on a trolley in the waiting room. 
BARBARA STEWART (NZ First) 
: 
 On behalf of New Zealand First I am very pleased to talk on the Appropriation (2006/07 Financial Review) Bill. When the committee examined the reports we saw that some good work had been done in the health system. Some good work was under way but in some areas more needed to be done. I am the very first to admit that the health sector has a huge job on its hands. 
Action is overdue on maternity services. We are in the middle of a baby boom; it is very obvious right around the country. It is totally irresponsible to ignore this boom or to hope it will go away because it will not. Services need to be right in this area; the cost is far too great if they are not. We are currently short of about 200 midwives and the likelihood that we can fill that number of vacancies is extremely remote. The Minister has to be proactive and investigate ways in which the workforce can be increased and that does not mean importing huge numbers of people from overseas like seasonal workers to gain experience in hospitals and learn on our mothers and babies. We want more than that. We need to encourage some of the midwives that have left the service to return or else to talk to New Zealand general practitioners to find out how many of them are willing to resume providing maternity services in order to alleviate this ongoing shortage of midwives. Another alternative would be to follow the recommendations of the New Zealand Medical Association that primary maternity services be contracted to primary health organisations so that general practitioners can again become involved and provide mothers with continuity of care with their general practitioners and their practice nurses. 
This also raises the whole issue of staff shortages. Right across this area staff shortages need to be addressed. In most medical fields there are huge staff shortages and the job cannot be done on a sustainable basis. We know that in the short term locums are flown around the country and even across from Australia. This type of service is expensive and although it fills an immediate short-term gap it does have a serious downside apart from the huge cost to the health system. Patients cannot be guaranteed to see the same doctor twice and that can be really upsetting for most people. New Zealanders need certainty about their health care and medical students should be encouraged to work off their student loans right here in New Zealand. The fact that many of them head off overseas for better money to pay back those loans just exacerbates the problem. It is a shame to export our First World medical people. Although additional places have been made available in medical schools—a measure that New Zealand First applauds—we need to ensure that these students stay in New Zealand if the workforce problem is ever to be sorted. 
We need to attract some of these people back to New Zealand. A number of doctors who are interested in nuclear medicine have contacted me and they say they would come back to New Zealand instantly if this branch of medicine were available here. The purchase of a publicly funded PET scanner would be an incentive for some of those doctors to return but at this point in time there is absolutely nothing here in New Zealand for them. We train them here in New Zealand but we cannot attract them back unless our equipment catches up with that of the rest of the world. A PET scanner has many medical uses for heart patients as well as for cancer patients. Our patients would have more and better treatment options if we had one of these pieces of equipment. There are staff who are interested in this field of medicine and want to return to New Zealand and quite frankly it is time we had this valuable piece of equipment. We are being left behind by most other countries because of bureaucratic dithering over cost. The matter needs to be sorted out by the Minister very very promptly. We all know that prompt access to cancer treatments and services is absolutely essential. Patients need certainty of care in this very important area. It is a serious disease and we need to act in relation to it. So in New Zealand First we are looking to see what will happen with the purchase of this equipment. 
JO GOODHEW (National—Aoraki) 
: 
 Is this not timely? Here we are in the financial review debate and I just wonder how the Government members feel when the Opposition gets this wonderful opportunity to hammer home the message that we heard last week from John Key the Leader of the Opposition about the ever-growing State sector—the bureaucracy—that bogs down the spending of New Zealand taxpayers’ money. When the Health Committee did the financial review for the Ministry of Health interestingly we cut straight to the chase in the report. If members view the report at page 184 they will see not just that there are 806 fulltime equivalent staff in the core ministry and a further 457 fulltime equivalents in eight other business units but that this particular ministry has grown since 2002 in terms of the number of staff earning over $100000. The number of staff earning over $100000 a year has grown from 94 to—wait for it. Maybe it is a 50 percent increase. No it is more than a 100 percent increase. There are 194 people within the Ministry of Health who are earning over the magic figure of $100000. 
We have heard from John Key that that is the fastest-growing part of our economy. New Zealanders have welcomed the news that the National Party will cap that bureaucracy. We will simply not let it grow at that pace. The National Party has reassured the people of New Zealand not to fall for the abysmal statements we heard before the last election. We have reassured them so they do not fall for the scaremongering reports that National will cut the number of nurses doctors and teachers. It is absolute and utter rubbish. We have said we will grow front-line services. [ 
Interruption 
] And those folk over there will grow bureaucracy. The people of New Zealand certainly have come to understand that. 
In the financial review for 2005/06 the ministry was asked to review the Ageing in Place strategy and look at the acuity of older people who were going into aged residential care to see whether it had increased—in other words to see whether the people going into aged residential care were requiring on average much more care. Well we waited with bated breath to hear from the ministry what it had found out in the ensuing year then we worked out what those bureaucrats had been doing—big fat nothing absolutely nothing. They took no notice of the Health Committee—no notice whatsoever. They ignored our recommendation and that is absolutely scandalous. So we got the opportunity to tick them off somewhat. It is absolutely reprehensible that they did not follow the Health Committee’s recommendation. They were told that that was unacceptable. We reiterated that they need to get on with that recommendation and to do so soon. Maybe these bureaucrats are so busy piling on pile on pile their reports that they cannot see the wood for the trees and there are certainly plenty of trees in those reports. 
The bureaucracy is growing but so too is the unease of the New Zealand public. They are really wondering whether their taxpayer dollars that have been put into health—and we know there has been a significant increase in funding from $6 billion to $11 billion—have been well spent under this Labour Government. They do not have confidence that those taxpayer dollars have been well spent when they hear about continual problems with district health board after district health board. 
I ask Government members to please tell me what the difference is between the Hawke’s Bay District Health Board the troubled Capital and Coast District Health Board and the Southland District Health Board which is sharing services with the Otago District Health Board because it is having difficulty in attracting staff. They have so many vacancies down there. If members ask what the difference is between the Hawke’s Bay District Health Board and the Whanganui District Health Board I can tell them one very big difference. The people of Hawke’s Bay trusted their district health board; the people of Whanganui appear not to have done so. It comes back to asking the people of New Zealand whether they trust the Labour Government to spend their taxpayer dollars well. Certainly the message that I am getting loud and clear over and over again is that the public of New Zealand are not convinced that their money is spent wisely. They will do much better under a National Government later this year. 
Hon DAMIEN O’CONNOR (Associate Minister of Health) 
: 
 I will take the opportunity to speak on this area of health where this Government is very proud of its record. Since coming into power in 1999 as one speaker said we have doubled the amount of money going into health to almost $12 billion and yes there has been an increase in the number of people overseeing that expenditure in the ministry—and so there should be too because we expect that they will monitor that money very carefully. 
I refer to the Health Committee report and I acknowledge the good work done by the committee and by people like Barbara Stewart who have very carefully gone through and scrutinised this expenditure assisted the ministry and come up with a very very good report. Barbara Stewart referred to the workforce and of course that is very important to the whole health sector—to have people with the skills to do what is needed when it is needed. We came in to Government off the back of inadequate hopeless and useless workforce planning. Nothing was in place. We saw the rundown in specialists across the board in all areas of skill needs and we have had to boost and fund that area of training to ensure that we have the people on the ground for that. 
I refer to the Hawke’s Bay District Health Board. All I will say to members is for them to read the report and just wait and see; I think things will become clear and evident before too long. 
I must refer to a number of areas of success in the health system. In the area of primary health we have put our money where our mouth is. Everyone knows that prevention is better than cure. We have spent literally hundreds of millions of dollars in this area and 94 percent of the New Zealand population is now enrolled in a primary health organisation. When such organisations work properly—and some still have to work through a number of issues—they take a holistic approach to the primary area of prevention and care for people before they become unwell or ill. Seventy percent of children under 6 years of age are now receiving free standard consultations from practices participating in either the zero fees for under-sixes initiative or the very low-cost access initiative. This means that parents can go and get help when they need it for their children which prevents the very quick escalation of medical problems with children in particular. 
A member spoke about the area of cancer control which is a very difficult and challenging area. We have put in place a comprehensive plan—the Cancer Control Strategy Action Plan—that runs from 2005 through to 2010 and we are monitoring the progress of that plan all the time. It is a very very difficult area. We have put over $83 million of new funding into cancer control since the release of that plan and we are spending an additional $85 million at least in extra funding for hospital cancer treatment. Still more needs to be done because with the evolution of technology and new drugs there will always be pressure in this area. But I think we have taken a fair and responsible attitude across the continuum of cancer care and I applaud all those people who are involved. We are right at the early stages now. We have a substantive plan in the preventive area through the Healthy Eating - Healthy Action programme—good nutrition and healthy activity—to try to reduce over time the incidence of cancer in this country. 
But we have not forgotten about the difficult area of palliative care where for example we have seen the development of a national programme of training rotations for palliative medical registrars. There has never previously been a pathway into the speciality area before. That is huge progress in the area of care for those who are facing the challenges of cancer. 
We have innovative community carer support and treatment services. I was privileged enough to launch one of those services down on the West Coast in my home patch. There are two others in west Auckland and Rotorua. This service is where all the players involved in cancer care and treatment come together through community support managed by the primary health organisation to provide the support for those who need it. A young guy with children who was living down in Ross on the West Coast spoke evangelically—with such passion—for the level of care he had received through this new initiative. We will roll these initiatives out across the country as we learn best practice and how best to help the people who are facing these challenges. 
I take the opportunity to mention mental health where we have made huge progress. We have spent an additional $600 million in the area of mental health. I think we have done an amazing job in shifting people’s attitudes towards mental health. That is aside from increasing the workforce in this area by training people in the area of alcohol and drug addiction treatment and across the whole spectrum of mental health. I would like to acknowledge the Like Minds Like Mine programme which is now going into its fourth stage. One does not often get the chance to do this but I would like to acknowledge John Kirwan. He should be thanked up and down this country for fronting up in that campaign and assisting to change the attitude of the vast majority of New Zealanders towards those with mental health challenges. In my home patch a guy named Les Warren is someone who also fronted those ads. He is an ordinary guy an ordinary Kiwi who was prepared to front up and say “I have a problem that I live with in the community and with the good assistance of my family and those around me I can live a relatively normal life.” That is huge progress for a large number of New Zealanders who are challenged by mental health issues. 
I could go on and on. I acknowledge all of those people who work in the health system; it is challenging and there is never enough money because of the costs of technology the demands and the locations. I acknowledge the nurses the general practitioners the specialists and those people who are carers up and down this country. Finally I acknowledge the patients who are New Zealanders who face challenges all of the time. 
It is very important that I acknowledge the three Ministers: Annette King Pete Hodgson and now David Cunliffe who I think have done a remarkable job to get the funding put in place the strategies and programmes and move forward the health system in this country in quantum leaps from where we took it up in 1999 after it had been neglected for 9 years under a National Government. If National ever gets close to managing the health system again that is exactly where it will be again. Thank you Mr Chairman. 
LESLEY SOPER (Labour) 
: 
 It is like being pelted with popcorn to listen to members from the National benches speak in what is meant to be the debate on the financial review of the Ministry of Health. It was quite refreshing to hear Barbara Stewart of New Zealand First actually refer to the Ministry of Health financial review. One would have thought from listening to the National members that they had no idea at all that there was any need to mention quality health services whatsoever. 
Insubstantial stuff has been coming from members on the other side of the Chamber and that is absolutely typical of them. There was no concentration on quality health services and no compliments were given to our excellent health services and ministry staff. There were no compliments given to our clinicians—the doctors—or to the nurses support staff deliverers of Healthy Eating - Healthy Action programmes or deliverers of the enormously successful “Get Checked” Diabetes Aotearoa programme which now covers 80000 people. That is quite typical of a party that not very long ago was promising to remove the cap on doctors’ fees. All we got from National was insubstantial popcorn negativity. National members droned on and on. The two speakers between them could not even agree on the amount of extra funding that the Labour Government has put into health. 
Hon Mark Burton 
: They’ve lost count. 
LESLEY SOPER 
: That is right. They have lost count so they made the figure up—as they usually do. Let us agree that there has been an extra $5 billion put into health by this Government. 
Let us also get some facts on the table about the one thing that National members seem to be trying to concentrate on. They just do not seem to have any new material so they keep going on about the old story of a bloated bureaucracy. Well let us look at the basic facts. In 1999 which we all sadly remember was the last year of a failed National Government management and administration staff made up 19 percent of the health workforce. 
Hon Mark Burton 
: Nineteen percent? 
LESLEY SOPER 
: Nineteen percent. And as of 31 December 2007—and there has not been a big change through to March 2008—what percentage do management and administration staff make up of the health workforce today? Well let us look at that—it is 19 percent of the health workforce. Well well! 
Another little fact that we should get on the table is the increased number of doctors and nurses. In 1999 under the little-lamented National Government doctors and nurses made up 52 percent of the health workforce but today they make up 56 percent of the health workforce. What does that actually mean in terms of numbers? Let us look at one number quoted this year by the Medical Council. Its data shows that the number of active doctors in New Zealand under the Labour-led Government has increased from 8615 to 9547 in the last year. National members will see that in both absolute and relative terms we are doing quite well on the workforce figures. There are some other little factors. In November 2007 an extra 40 young doctors graduated from medical school which is an increased investment under the Labour-led Government. Forty extra people will also start to train as medical students this year. Well well! How very interesting that is. 
Along with the thousands of extra doctors and nurses who have been employed in our system what do we have under the Labour-led Government? The National Party speakers ask where the money that we have invested has gone. Let us look at things like the fact that over a million New Zealanders now get cheaper trips to the doctor and cheaper prescriptions under the Labour-led Government. We have had the roll-out of primary health organisations which has delivered for many people a 50 percent reduction in the cost of a doctor’s visit and also means there is no charge for doctors’ visits for thousands and thousands of children aged under 6. This Government had a commitment to deliver that policy with our coalition partners as an outcome. 
That is the sort of success that this Government has delivered and which the National Party knows nothing about. No one told National there would be days like this with a successful Labour Government actually delivering successful outcomes in health. But National does not want to admit that Labour has delivered those outcomes. 
Report noted. 
Ministry for the Environment 
JACQUI DEAN (National—Otago) 
: 
 I rise to speak to the 2006-07 performance of the Ministry for the Environment. The first thing we need to note is that New Zealand is not being well served by the ministry. I will confine my comments mainly to the issue of water. 
I believe that New Zealand is at a bit of a crossing point in terms of water quality. The Ministry for the Environment is failing on a number of fronts regarding water in New Zealand and the first front that the ministry is failing on concerns water quality. The Labour-led Government says it is very proud of its achievements yet the reality presents a somewhat different picture. We know that under the stewardship of the Labour Government water quality has declined continues to decline and will continue to decline for up to the next 20 or 30 years. The response to that from the Ministry for the Environment is at best feeble. 
The other great concern about water relates to the issue of water allocation. Of course water allocation is most pertinent to those of us— 
The CHAIRPERSON (Hon Clem Simich) 
: I am sorry to interrupt the member but the time has come for me to report progress. 
Progress reported. 
Report adopted. 
The House adjourned at 9.56 p.m.