Groser Tim: Estimates Debate — In Committee 
Groser Tim: Estimates Debate — In Committee 
[Volume:665;Page:12779] 
Hon TIM GROSER (Minister of Trade) 
: 
 I will take a call on behalf of my colleague the Hon Murray McCully. I will focus not on foreign policy issues but on the budgetary control and efficiency measures that we are seeking to introduce into the Ministry of Foreign Affairs and Trade and the administration of our overseas development assistance. I know that it is a shock for some members opposite who have been used to truckloads of money pouring in through the front door to the point where core Government expenditure went from $32 billion in 2000 to $60 billion in 2009 but we are determined to get on top of this problem. 
The New Zealand public have gone through difficult times—including an anaemic 0.9 percent average growth rate in each of the last 3 years of Labour’s run in office which is one-third the level of economic growth in Australia—and we are determined to avoid a situation where more money is considered to be the answer to all problems. We have seen that once we get to that critical point that Greece Spain and other countries have got to it is an extremely hard road back. The Ministry of Foreign Affairs and Trade is no exception to this. Actually I think that it has come off relatively lightly in terms of expenditure control in the course of our first 14 or 15 months in office. The budget of the Ministry of Foreign Affairs and Trade has grown from approximately $439 million in 2009-10 to approximately $500 million in the 2010-11 allocation. The aid expenditure increases are quite considerable. They have gone from $498 million back in 2008-09 to an allocation this year 2010-11 of $525 million. That is in excess of $1 billion and I think it is a fairly generous allocation to the ministry. Having said that this Government is determined to ensure that we conduct a value-for-money exercise on the ministry as with all Government agencies because we are using other people’s money. That is called taxpayers’ money and we are determined that people get value for money out of their expenditure. 
With the situation in respect of aid for example where we have reintegrated the aid administration into the Ministry of Foreign Affairs and Trade—where it should have been all along; the idea that one could completely divorce foreign policy conclusions from aid considerations was always a fantasy—we have insisted that the administration costs be cut by 12 percent over the next few years and we are on a course of action to ensure that aid effectiveness is absolutely at the forefront of the ministry’s responsibilities. We are trying to refocus on sustainable economic development. This is the absolute key particularly in the Pacific region where the bulk of our money is spent. We are trying to refocus on that objective. 
I should also say that part of that process is to now turn the attention to adaptation and mitigation in the context of climate change. If I momentarily put on my other hat as the international negotiations Minister on climate change we are doing this in good faith. I was recently in the Maldives at a meeting of climate change Ministers. I met there the Samoan Minister responsible for climate change issues. I had met him at a previous meeting of the progressive group of countries. On behalf of the Samoan Government he put to me a very interesting proposal to use coconut husks as the input to a biofuels industry in the context of renewable energy and we were able to take that forward. There were also very interesting discussions with the young and extraordinarily able President of the Maldives. We are moving on a variety of fronts to refocus the aid. The Minister will be assisted by an independent and voluntary advisory group so we will ensure that we hear and listen to outside views as we move forward. 
Within the Ministry of Foreign Affairs and Trade in terms of its administration of public monies we are similarly ensuring that we will get value for money. We are doing this in a variety of ways. First of all in respect of integrated planning we have conducted the first phase of what will be an ongoing exercise. Under the title “New Zealand Inc. Strategy” we are attempting to try to join the dots of agencies that generally have worked pretty well together but not in all cases. We are trying to make it more systematic. We will be ensuring that the agencies’ chief executives are responsible for drawing up long-range country strategies and I hope that we will be able to reassure the New Zealand public in the months to come that they have achieved greater value for money from the obviously quite high expenses incurred in having our overseas diplomats represented in some 39 or 40 countries. 
We are also trialling a hubs and spokes model in terms of reducing back-office costs. We will run that out in Europe in the first instance which will be totally consistent with this Government’s insistence on cutting back back-office expenses and putting more in in terms of what the front shop operates at. I think that that will also lead in due course to improved effectiveness. There are a variety of other measures that we are putting in place to try to ensure that we get value for money out of the $1 billion - plus that this ministry is responsible for in all of its operation’s aid and otherwise. I am very confident that when we go to the people of New Zealand to seek their support for another term that on this front as on the fronts of all Government expenditure we will be able to look them in the eye and say: “You got value for money out of this Government.” 
Vote agreed to.