Volume 631 Week 15 - Tuesday 16 May 2006 
Volume 631 Week 15 - Tuesday 16 May 2006 
[Volume:631;Page:3029] 
Tuesday 16 May 2006 
Madam Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Visitors 
Australia—Attorney-General 
Madam SPEAKER 
: I have much pleasure in informing members that the Hon Philip Ruddock Attorney-General of Australia is within the precincts of this Chamber. I am sure that members would wish that he be welcomed and accorded a seat on the left of the Chair. I am sure that members would also welcome his accompanying delegation present in the gallery. 
Hon Philip Ruddock accompanied by the Hon Dr Michael Cullen entered the Chamber and took a seat on the left of the Chair. 
Motions 
Mark Inglis—Conquest of Mount Everest 
Hon TREVOR MALLARD (Minister for Sport and Recreation) 
: 
 I move  
That the House extend its congratulations to Mark Inglis who last night reached the summit of Mount Everest making him the first double amputee to conquer the world’s highest peak. 
Motion agreed to. 
Boating Tragedy—Foveaux Strait 
TARIANA TURIA (Co-Leader—Maori Party) 
: 
 I move  
That this Parliament wishes to join with the people of Bluff and Invercargill in expressing its sorrow at the tragedy that has occurred in Foveaux Strait and in doing so acknowledges the excellent work undertaken by the community and the police and rescue services. 
Motion agreed to. 
Questions to Ministers 
Taxation—Comparative Reports 
1. SHANE JONES (Labour) 
 to the  
Minister of Finance 
: Has he received in the last few days any independent comparative reports on New Zealand’s levels of taxation? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 No I have not received what I would consider to be any independent reports in the last few days. I did receive an OECD report a few weeks ago that based on robust comparative analysis found that New Zealand had the third lowest tax wedge for the average worker in the OECD. 
Shane Jones 
: How can he say he has not received any independent reports in the last few days when the Centre for Independent Studies released a report on Monday? 
Hon Dr MICHAEL CULLEN 
: That report can hardly be called independent when its author is a former press secretary and researcher for the National Party. Indeed I have his card in my hands—Philip Rennie media research assistant to the Leader of the Opposition who at the time was Mr English. 
John Key 
: Can the Minister confirm that according to the Budget Economic and Fiscal Update the operating surplus over the next 3 years will be approximately $13.4 billion that that represents the surplus required to pay for the day-to-day running of the country—actually it does—and that he could have plenty of room for tax cuts if he wished to fund his capital purchases out of some borrowing going forward? 
Hon Dr MICHAEL CULLEN 
: No I certainly cannot confirm that. What I can confirm first of all is that the Government is running quite significant cash deficits over the coming 4 years requiring a significant increase in borrowing. I can also confirm that Mr Rennie’s main comparison is with the United States. The United States is running at the moment a fiscal deficit that is more than three times the size of New Zealand’s GDP. 
Shane Jones 
: Has he seen any other additional reports on the taxation system from similar sources? 
Hon Dr MICHAEL CULLEN 
: Yes I have just seen a report from another former National Party press secretary that presages a forthcoming policy that will make even National’s 2005 tax policy look one-dimensional. This report was headed: “Thanks Don. Now off you go.” 
Economic Growth—Policy 
2.  
Dr DON BRASH (Leader of the Opposition) 
 to the  
Prime Minister 
: Does she stand by her statement that “getting higher levels of sustainable growth is dependent on industry government and other actors all playing their part.”; if so how is her Government planning to achieve that goal? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 Yes. The Government is continually interacting with industry and other actors to that end. 
Dr Don Brash 
: Why did she say that her Government “has not the slightest intention of bringing New Zealand’s tax rates into line with Australia’s”; and how does she expect on that basis to retain our brightest and most skilled people when a Deloitte’s tax expert estimates that following the Australian Budget last week everybody earning less than $182000 per year would pay less tax in Australia than they will in New Zealand with an ever-widening gap between after-tax incomes in Australia and New Zealand as a result? 
Rt Hon HELEN CLARK 
: The reason for not wanting the same tax rates for New Zealand is that tax rates are significantly higher in Australia than they are here. 
Dr Don Brash 
: Is it fair that New Zealanders pay 50 percent more in tax now than they did in 2000 with the Government’s tax revenue rising at twice the rate of inflation over that period; if so why? 
Rt Hon HELEN CLARK 
: The good news about the increased tax take is that a third of it has come from growth in company profits under a Labour Government and another third has come from so many more Kiwis being in work. There are over 300000 more New Zealanders in work under a Labour Government. That does tend to put up the tax take. 
Jeanette Fitzsimons 
: Is Fonterra’s goal of 5 percent per annum increase in dairying in New Zealand part of her ambition for higher levels of sustainable growth; if so does she regard 5 percent per annum growth in methane emissions 5 percent per annum growth in the use of water for irrigation and 5 percent per annum growth in nitrate pollution of waterways as being sustainable? 
Rt Hon HELEN CLARK 
: I would be very happy to see Fonterra growing at 5 percent a year. That of course could be achieved in a number of ways including through Fonterra’s rather successful offshore investments by which it is growing its business quite significantly. 
Dr Don Brash 
: Does she stand by Dr Cullen’s statement last week that Australia would “… sooner or later run out of gas and coal” and can we now take it that waiting for Australia to run out of gas and coal is her Government’s bold strategy for clawing back the gap between after-tax incomes in Australia and New Zealand? 
Rt Hon HELEN CLARK 
: What the member can take from that statement is that this Government will be investing in sustainable economic growth and in the people of New Zealand. 
Sue Bradford 
: Does she see trade unions and environmental organisations as being included in her phrase “other actors”; if so what role does she see them playing; if not why not? 
Rt Hon HELEN CLARK 
: Definitely. I believe that both have a contribution to make towards more sustainable economic growth and indeed the international evidence suggests that high levels of unionisation actually go with higher levels of productivity. 
Dr Don Brash 
: Why should we accept her assurance that New Zealand is on the right path to economic transformation when the IMD competitiveness scoreboard released last week showed that New Zealand has plunged 15 places from 15th to 30th in terms of economic performance? 
Rt Hon HELEN CLARK 
: I suggest the member have a close look at that scoreboard because the New Zealand Government was ranked 6th in the world in its contribution to competitiveness. 
Dr Don Brash 
: What is the Prime Minister’s response to the former New Zealander now living in Sydney who featured on Television One news last night who said that he had no intention of returning to New Zealand in response to the New Zealand Government’s campaign to bring Kiwis home and that his reason for not returning was primarily financial? 
Rt Hon HELEN CLARK 
: My response is to say that through the 1990s the Employment Contracts Act saw wages fail to go up at anything like the level of wages in Australia. My further response is to say that if Dr Brash thinks it is so hot over there he should go and live there. 
National Certificate of Educational Achievement—Variations for School Certificate 
3.  
Hon BRIAN DONNELLY (NZ First) 
 to the  
Minister of Education 
: Were the grade variations for School Certificate in its last 5 years both between subjects and within subjects over consecutive years similar to the grade variations observed thus far within NCEA? 
Hon STEVE MAHAREY (Minister of Education) 
: 
 The answer is yes. Grade variations between subjects were similar between the last 5 years of School Certificate and the results we have seen under the National Certificate of Educational Achievement (NCEA). For example between 2004 and 2005 the median difference in success rates for biology economics English geography mathematics and science for level 1 NCEA was 3 percentage points. In 1999-2000 for the same subjects in School Certificate the variability of results was also 3 percentage points. Information on grade variation within School Certificate subjects is not available. School Certificate was a simple pass/fail exam system and any variation within subjects was therefore hidden. With NCEA we are able to ascertain which particular standards show variability and work on ensuring that they fall within acceptable levels. 
Hon Brian Donnelly 
: Can the Minister confirm that the failure rate for School Certificate horticulture was 63.4 percent in 1997 and 43.1 percent in 1999—over 20 percentage points of difference—and can the Minister confirm which party was leading the Government during this period? 
Hon STEVE MAHAREY 
: Yes I can confirm that those figures are as the member outlined and I can confirm that the National Party was the Government at that time. 
Hon Bill English 
: Can the Minister tell the House why he thinks it is acceptable that the variability in up to 30 percent of the standards sat in 2005 was outside the New Zealand Qualifications Authority’s own benchmark of fairness to students? 
Hon STEVE MAHAREY 
: The member just does not get it does he? We are talking about the variability on essentially one question within a subject. When all of those standards are put together the pass rate is acceptable and the standards are acceptable across that subject. One day the member will get it. 
Hon Brian Donnelly 
: Can the Minister confirm that in 1998 58.9 percent of students failed School Certificate horticulture whereas only 6.3 percent failed Latin and might this indicate that there were large variances between subjects under the old system and can he also confirm that these variances occurred under a National Government? 
Hon STEVE MAHAREY 
: Yes I can confirm that these gross variations were the case and I can confirm that the National Party was the Government at the time. I can further confirm that that is one of the reasons the National Party championed the change to NCEA. 
Hon Brian Donnelly 
: Is it true that the only certain way to ensure there is no variance in grades across year groups is by using norm-referenced statistical scaling and which Government abandoned norm-referenced assessment in favour of standards-based assessment? 
Hon STEVE MAHAREY 
: Yes that is the case and this is why we are continuing to build the robust foundations of NCEA. I can confirm that standards-based assessment was introduced by the National Government and that at the time of its introduction my predecessor who was then Opposition spokesperson on education endorsed that change and Wyatt Creech who was the education Minister welcomed that endorsement and said: “Isn’t it good we have some bipartisanship on something that we ought to share a view on.” 
Hon Brian Donnelly 
: I seek leave of the House to table a paper that shows the fail rates—that is D and E grades—for School Certificate subjects from 1997 to 2001. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Tax Cuts—Treasury Advice 
4.  
JOHN KEY (National—Helensville) 
 to the  
Minister of Finance 
: Did he when deciding there would be no tax cuts in this year’s Budget consider Treasury’s advice that the Government should think about tax reductions as well as new spending when developing Budget initiatives; if not why not? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 Yes. 
John Key 
: When he said last week that Treasury is “out of step with a lot of thinking” was that because Treasury disagrees with him on tax the size of Government the number of bureaucrats the waste in Government expenditure KiwiSaver and the payroll tax or are there any other things he would like to add to his long and growing list of things he is in disagreement and open hostility with Treasury about? 
Hon Dr MICHAEL CULLEN 
: I have a very good relationship with Treasury. However unlike the member opposite I have no intention of being Treasury’s poodle. 
Hon Mark Gosche 
: Has he received any recent reports on the affordability of tax cuts? 
Hon Dr MICHAEL CULLEN 
: Along with a number of reports both oral and written that make it clear that neither the fiscal nor the macroeconomic position would make substantial tax cuts a sensible move in this year’s Budget I have seen a report casting doubt on the affordability of tax cuts. It is headed “Nats rethink tax-cuts policy” and represents either a sudden outbreak of fiscal responsibility or another split between Dr Brash and Mr Key. 
John Key 
: What confidence can the public have that this year’s Budget is not full of just spin and third-grade economic logic when he consistently ignores the advice of Treasury the very people he employs to give him those costings and that advice? 
Hon Dr MICHAEL CULLEN 
: I do not ignore the advice of Treasury at all; indeed in many many respects I happen to agree with Treasury. But I am not going to be Treasury’s poodle or perhaps in these days I should say Treasury’s blue heeler given the desire of those across on that side to become Australia’s mates. 
Gordon Copeland 
: Can the Minister confirm that as part of the Government’s confidence and supply agreement with United Future a discussion document will be developed to assess the impact of income splitting on reducing the tax burden for New Zealand families with dependent children; if so would he consider including in future Budgets constructive initiatives arising from that document? 
Hon Dr MICHAEL CULLEN 
: Yes indeed I can confirm such a document is being prepared; so is a document in relation to business taxation measures in time for implementation in April 2008. That discussion document will be one for serious intelligent discourse. I do not expect the National Party to participate in it. 
John Key 
: Does he still have confidence in the Secretary to the Treasury John Whitehead given that he publicly disagrees with him all the time or is Mr Whitehead likely to find out as the Telecommunications Commissioner Douglas Webb did via the  
Sunday Star-Times 
 last Sunday that he too is surplus to requirements? 
Hon Dr MICHAEL CULLEN 
: I have great confidence in the Secretary to the Treasury. He and I agree on a very very large number of things. But he is the chief executive of Treasury; I am the elected person the Minister of Finance. Clearly Mr Key has no ambition to make any decisions himself—just to be the mouthpiece for Treasury. 
John Key 
: Is it not the case that it is no longer relevant what Treasury thinks about the merits of economic policy because after the disaster of the “chewing gum Budget” last year the Prime Minister has taken control has inserted Heather Simpson to direct the policy work has told him to stop calling his Budgets boring even though they are and has made it clear via the  
Listener 
 that he is now vying with Dover Samuels to be our next Ambassador to Niue? 
Hon Dr MICHAEL CULLEN 
: The Prime Minister is not the person in this House trying to render redundant any MP aged over 60; that role belongs to Mr Key who is trying to kick out the poor man opposite whose only desire in life is to graduate from being a joe to a joey. 
John Key 
: When he reads the Budget on Thursday will he allow Treasury publicly to join the rest of the New Zealand workforce in asking in relation to tax cuts: “Where the bloody hell are they?” 
Hon Dr MICHAEL CULLEN 
: One thing Treasury would tell that member is that an operating balance is not the measure of what can be spent on tax cuts. Treasury would regard Mr Key as thoroughly ignorant and dangerous in that respect and would not support his attempt to delude the public; half of what he mentioned earlier today is booked for transfer to the New Zealand Superannuation Fund alone—and that is the man who convinced Dr Brash to change his mind on the New Zealand Superannuation Fund. 
John Key 
: I seek leave to table the Budget Economic and Fiscal Update which shows quite clearly that the operating surplus over the next 3 years will be around $13.4 billion and that from that sum capital expenditure could be paid which would allow the Government to have tax cuts—if Dr Cullen were not so stuck in the past. 
Hon Dr MICHAEL CULLEN 
: I raise a point of order Madam Speaker. May I suggest that when people seek to table a document they simply state what it is and not draw conclusions. The document has of course already been tabled—it has to be tabled. 
Madam SPEAKER 
: It is a timely reminder that when people are tabling documents they should do it succinctly. The purpose is just to identify what document they are tabling. Is there any objection to the tabling of that document? There is objection. 
Buy Kiwi Made—Reports 
5.  
SUE BRADFORD (Green) 
 to the  
Minister for Economic Development 
: What reports has he received of reaction to the announcement of the $11.5 million Budget allocation for the Buy Kiwi Made initiative? 
Hon TREVOR MALLARD (Minister for Economic Development) 
: 
 The announcement of funding for the Buy Kiwi Made initiative has been well received. I have seen statements welcoming the initiative from local manufacturers business groups and the New Zealand Council of Trade Unions. I was particularly heartened by the comment from Davey Hughes a business person in Levin who welcomed the announcement and urged other businesses to get in behind it. Just because he is the cousin of a leading Labour Party member does not mean that he cannot be a leading business person as well. 
Sue Bradford 
: What other support is the Government giving to the manufacturing sector of New Zealand? 
Hon TREVOR MALLARD 
: I would point out of course that the Buy Kiwi Made initiative is much broader than the manufacturing sector. But the Government is working in partnership with industry leaders manufacturers and unions to develop an industry-wide strategy for manufacturing. The emphasis has been on what industry can do to make sure that it has world-class manufacturers. 
Barbara Stewart 
: Can he confirm that the Buy Kiwi Made initiative is included in the confidence and supply agreement with New Zealand First? 
Hon TREVOR MALLARD 
: Yes I can. 
Sue Bradford 
: Does the Minister agree that it is a sensible economic development policy for New Zealand to ensure that it is not import-dependent especially in a world of pandemics terrorism biosecurity threats and peak oil? 
Hon TREVOR MALLARD 
: Encouraging New Zealanders to support quality local businesses is something all rational New Zealanders support. I note that the only opposition to that has come from ACT and the National Party—which confirms my view. 
Cabinet Documents—State Services Commissioner Inquiry 
6.  
GERRY BROWNLEE (Deputy Leader—National) 
 to the  
Prime Minister 
: Has she her Ministers or staff received any information or advice from the State Services Commissioner since he began his inquiry into the leaking of a confidential Budget-related Cabinet paper to Telecom New Zealand Ltd; if so what was that advice or information? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 As I have said publicly the State Services Commissioner has phoned me twice to advise on process. 
Gerry Brownlee 
: Has the State Services Commissioner advised the Prime Minister or any member of her Government of the name of the person who leaked the confidential Budget-related Cabinet paper to Telecom New Zealand Ltd; if so what specific action has been taken against that person? 
Rt Hon HELEN CLARK 
: To the best of my knowledge he certainly has not advised me and I do not believe that any other Minister has been advised. 
Gerry Brownlee 
: Why when Dr Prebble’s terms of reference expressly state that he is to report to the Prime Minister and the Minister of State Services are the Prime Minister and her Ministers stating they know nothing because they have not asked any questions; and is it really acceptable for a Government that used to wax lyrical about being transparent open and accountable to take that position? 
Rt Hon HELEN CLARK 
: It is simply because the State Services Commissioner has not reported and the Government has no desire to interfere in the process he is undergoing. 
Gerry Brownlee 
: When the State Services Commissioner was publicly stating late last week that he knew who the leaker was and that he would make the announcement sometime this week why did the Prime Minister not think it would be a good idea for either her or her Minister of State Services to pick up the phone and ask him who it was? 
Rt Hon HELEN CLARK 
: Dr Prebble rang me to tell me of the process. I have deemed it inappropriate to get early advice. 
Gerry Brownlee 
: Will the Prime Minister’s Government be cooperating fully with the Securities Commission’s inquiry into the effects of the release of the telecommunications stocktake paper on the markets; if so will she and her Ministers provide written and oral evidence if requested? 
Rt Hon HELEN CLARK 
: I am not aware of any such request but if the Government can help the Securities Commission of course it will. 
Gerry Brownlee 
: Did any person involved in the leak of the Cabinet paper work in a ministerial office? 
Rt Hon HELEN CLARK 
: The member like myself will have to wait for the State Services Commissioner’s report. I do not know. 
Te Puni Kokiri—Monitoring Function 
7.  
Dr PITA SHARPLES (Co-Leader—Maori Party) 
 to the  
Minister of Maori Affairs 
: Ka taea e ia te ripoata nga hua kua puta i nga tirohanga mo nga tari kawanatanga i waihangatia hei mahi ma Te Puni Kokiri meina kare he aha ai? 
[ 
Is he able to report on the results of the monitoring of other Government departments for which Te Puni Kokiri is responsible; if not why not? 
] 
Hon PAREKURA HOROMIA (Minister of Maori Affairs) 
: 
 Te Puni Kokiri does not have responsibility for any other Government departments. Te Puni Kokiri provides an annual report to Parliament on its activities. 
Dr Pita Sharples 
: Kei te whakaae ia ki nga korero i kiia i puta i a Leith Comer i te ra kua pahure ake nei ara “he moumou taima noa iho te titiro i nga tari kawana” a kei te whakaae ano ia ki nga korero o taua tumuaki i te 16 o Maehe o tenei tau ara “kei te hiahia a ia te neke mai i te tunga pirihimana mo nga tari kawana”; a na nga tohutohu a te Kawana ka korero penei te tumuaki a kei te tautoko te Minita i aua tohutohu? 
[An interpretation in English was given to the House.] 
[ 
Would he agree with yesterday’s reported comments attributed to Leith Comer that the auditing and monitoring of other agencies was “a waste of time” and the earlier comments made on 16 March this year by that same chief executive that “he wants to move away from being the policeman of the State sector” or is the chief executive saying this because it is a directive specified by the Government with the Minister’s support? 
] 
Hon PAREKURA HOROMIA 
: I support most of the statements made by my chief executive. Members should be very clear that the statement “a waste of time” was made by the radio presenter not by the chief executive Leith Comer. 
Hon Tau Henare 
: What response does the Minister have to the Maori Affairs Committee statement that section 5 of the Ministry of Maori Development Act does not give Te Puni Kokiri an option as to whether it should undertake a monitoring role but directs it to do so? 
Hon PAREKURA HOROMIA 
: Monitoring is just one function of Te Puni Kokiri. The responsibilities under the Act of the Ministry of Maori Development are quite clear. The key things under the Act that Te Puni Kokiri is responsible for include promoting increases in the levels of achievement attained by Maori in respect of education training and employment health and economic resource development. Te Puni Kokiri will give effect to the strategic outcomes it has stated. That is only one part. 
Hone Harawira 
: He aha te take i whakaae ai te Minita ki te tono a te Kawanatanga kia whakaitingia nga mahi tirotiro a Te Puni Kokiri a e awangawanga ana a ia ki nga mahi a te Kawanatanga kia tohutohu taurekareka ki Te Puni Kokiri kia kaua e totika ona mahi i raro i te ture?  
[An interpretation in English was given to the House.] 
[ 
Why did the Minister agree with the direction determined by his Government that Te Puni Kokiri should downsize its monitoring role; and is he concerned at this belittling illegal action of the Government in forcing Te Puni K 
o 
kiri to ignore its legal responsibilities? 
] 
Hon PAREKURA HOROMIA 
: I am not too sure which world some people have been living in for the past 6 years. It is time for Maori to move forward. There are some people who want them to be stuck in the past. Maori are moving from dependency to development and this Government has done a hang of a lot about that. Since 1992 Te Puni Kokiri has progressively developed its policy-monitoring and operational functions. It has undertaken statistical monitoring agency reviews effectiveness audits and day-to-day monitoring. We are living in a world now where Maori have the lowest unemployment rate in history and that was created by this Government—not like in the 1990s when the National Government did nothing. 
Dr Pita Sharples 
: I raise a point of order Madam Speaker. The Minister did not answer the question. The question asked why he agreed to downsize Te Puni Kokiri’s monitoring role. 
Madam SPEAKER 
: The Minister did address the question as far as I could hear over the barracking. As the member is aware Ministers are not required to directly answer questions to the satisfaction of those who ask them. 
Hon PAREKURA HOROMIA 
: There was no such directive. 
Shane Jones 
: He aha nga oati a Te Puni Kokiri? What is the range of responsibilities of Te Puni Kokiri? [ 
Interruption 
] 
Madam SPEAKER 
: Members know that interjections are permitted but that barracking is not. It was very difficult for me to hear. 
Hon PAREKURA HOROMIA 
: Pursuant to section 5 of the Ministry of Maori Development Act 1991 the responsibilities of the Ministry of Maori Development include promoting increases in the level of achievement attained by Maori in respect of education training and employment health and economic resource development and monitoring and liaising with each department and agency that provides or has a responsibility to provide services to or for Maori for the purpose of ensuring the adequacy of those services within each department. 
Hone Harawira 
: Ka taea ano e Te Puni Kokiri te whakatutuki nga mahi i waihangatia e te ture kia tirohia nga tari kawana kua tohua hei tuku awhina ki te Maori mo te Maori ranei i runga i nga awangawanga a te Maori kahore nga roia o Te Puni Kokiri e matau ana ki Te Reo Maori i whakaaturia tenei ahuatanga i tetahi hui o te Taraipiunara o Waitangi? 
[An interpretation in English was given to the House.] 
[ 
Has Te Puni Kokiri the capacity to undertake its statutory responsibilities to audit and monitor “each department and agency that provides or has a responsibility to provide services to or for Maori” particularly in the light of concerns from Maori at the inability of Te Puni Kokiri’s legal team to understand te reo Maori as demonstrated at a recent hearing of the Waitangi Tribunal? 
] 
Hon PAREKURA HOROMIA 
: There are a lot of people who do understand the Maori language and there are some who cannot. Certainly we will reinvest our resources in three key core areas to help out with that problem. Some people are not as conversant with Maori as my colleague from Te Tai Tokerau is; he is very conversant with it. We will develop and use resources which is rawa; build knowledge and skills which is matauranga; and strengthen leadership and decision making which is whakamana. In those things Maori are not very different from other people in this land and the needs they have. 
Dr Pita Sharples 
: Na i runga i te ahua kahore a Te Puni Kokiri i mahi tonu ana i nga tikanga i waihangatia e te ture; he aha kei te noho tonu ai hei tari Kawanatanga? 
[An interpretation in English was given to the House.] 
[ 
If the Ministry of Maori Affairs is no longer carrying out its statutory responsibilities why should it exist as a Government department? 
] 
Hon PAREKURA HOROMIA 
: E whakaaro ake ano au i rongo i a koe e Pita mo tera korero kare e tika e taea ake ano i konei te korero moumou taima pera tonu mo ratou nga kanohi Maori mo te Tari Maori e tu ake ano a mua ra nga tari Kawanatanga katoa.  
[An interpretation in English was given to the House.] 
[ 
I have considered what I heard Pita say earlier and it is not right to say here that it is a waste of time for Maori for the Ministry of Maori Affairs and for all Government departments to remain in future. 
] 
Hon Maurice Williamson 
: I raise a point of order Madam Speaker. If a Minister can get up and answer a question by saying this is not the right forum and the question should be answered somewhere else and if you think that addresses the question then we could spend the whole day with Ministers saying they will address questions somewhere else. This is Parliament. 
Madam SPEAKER 
: The Minister did address the question. The point that the member has raised is a debatable point. The Minister did respond. It is for others to determine the quality of the answer. 
Question No. 8 to Minister 
Madam SPEAKER 
: I call Katherine Rich—[ 
Interruption 
] The member is entitled to be heard in silence by members of her own party. 
New Zealand Focus Store—Sales Data Hong Kong 
8.  
KATHERINE RICH (National) 
 to the  
Minister for Economic Development 
: Does he stand by the statement made on his behalf by the Hon David Cunliffe that “total sales data are not yet available” for the New Zealand Focus store in Hong Kong 6 months after opening? 
Hon TREVOR MALLARD (Minister for Economic Development) 
: 
 Yes and to explain that is because most of the sales data belongs to Air New Zealand education providers Fisher and Paykel and New Zealand Natural. 
Katherine Rich 
: Will he confirm that the retailers who run that store are required by New Zealand Trade and Enterprise in their contract to provide it with sales reports that break down sales by day by week and by month; and how can he stand in the House and argue that he will withhold that information on the grounds that it may be commercially sensitive when I have asked for total sales not sales by product or individual supplier? 
Hon TREVOR MALLARD 
: Because most of the products sold from that shop are not things that are sold across a counter—things like the supply of New Zealand Natural products the supply of air fares to New Zealand the services of education providers the Fisher and Paykel contracts right up into China—[ 
Interruption 
] I say to Nick Smith that at least I can count unlike him. 
Katherine Rich 
: Why is he standing in the House and giving the impression that something that was launched and promoted as a retail store is now something other than a retail store; and why will he not provide answers to the House on what revenue is generated by that retail store in Hong Kong—is it because the sales are so poor? 
Hon TREVOR MALLARD 
: Anyone who thinks setting up a retail store on its own was the objective of the New Zealand Focus centre has to be stupid. This focus store is bringing people down from China to look at New Zealand products for direct sale to that country. It is a shop front for New Zealand to the extent that I understand at least three other Chinese provinces have said they want to have one of these shops because it is so successful in providing access to New Zealand products. The idea that the New Zealand Government has become involved in street retailing in Hong Kong is just ludicrous. 
Lynne Pillay 
: What reports has he seen in support of the New Zealand Focus centre in Hong Kong? 
Hon TREVOR MALLARD 
: The latest report I have seen is from Malcolm Harris the Chief Operating Officer for Fisher and Paykel who last week said: “We applaud the Government initiative. It’s about time and we hope that they open more.” We know National is out of touch with New Zealand businesses we know it has had its funding cut off—given that Don will be dropped—but it should listen to some of the people who know the way business works as far as exporting from New Zealand is concerned. National might not care about Fisher and Paykel but on this side of the House we do. 
Madam SPEAKER 
: I just remind members to please use the proper titles when they are referring to each other. 
Katherine Rich 
: Given that the New Zealand Focus store has cost New Zealand taxpayers $1.4 million to set up and costs $1.3 million to operate over a year why will he not tell taxpayers what sales are being generated from it in Hong Kong and will he just admit that he will not do so because the sales are so pathetic? 
Hon TREVOR MALLARD 
: The objective of the store was to have not sales from people who go to the store but a net economic benefit to New Zealand of $25 million over 3 years. I have received no advice that that net economic benefit will not be met. 
Mark Blumsky 
: Why did the glowing statement that the Minister just made about Fisher and Paykel not include the fact that the company still cannot demonstrate its gas hobs because in the 6 months since the opening the gas has not been connected to those hobs; is it because he is too embarrassed to share that fact with Fisher and Paykel? 
Hon TREVOR MALLARD 
: I think one of the things that proves is it is not quite as easy to do business in Hong Kong as it is in New Zealand. But the other point I would make to that member is that it is about time he came clean with this House and told it that for the last 3 months he has been acting on behalf of one of the failed bidders into this New Zealand Focus centre. Why does he not just tell the truth and admit he has been attempting to undermine this since one of his mates who tried to get the contract was not good enough to get it? 
Mark Blumsky 
: Does the Minister have confidence in his assessment process used to select the store operator Northeast Wines and Spirits given that it scored the lowest out of all the bids in the category of retail experience when it was contracted to run the retail operation that it scored the lowest out of all the bids in sales team support and that it scored the lowest out of all the bids in import product experience—all categories considered important by retailers if one does not want to open up a retail lemon? 
Hon TREVOR MALLARD 
: I have confidence that the private sector people who were involved in awarding the tender in this did it properly— 
Mark Blumsky 
: I raise a point of order Madam Speaker. 
Hon TREVOR MALLARD 
: The member cannot interrupt at this point. 
Madam SPEAKER 
: Yes the member can interrupt the Minister in answering the question. 
Mark Blumsky 
: I just say that under Standing Order 116 I take incredible offence at the comments made by the Minister regarding his previous answer to the question asked. There is nothing further from the truth. 
Madam SPEAKER 
: Under the Standing Orders the member is meant to raise the matter immediately and he has not. He waited until we moved on to the next supplementary question which he himself asked. But in the circumstances is the member saying he has taken offence at those comments? 
Mark Blumsky 
: Yes Madam Speaker. 
Madam SPEAKER 
: In that case I ask the Minister to withdraw and apologise. But I just remind members that if they take offence please raise the matter immediately. 
Hon TREVOR MALLARD 
: I will leave the House rather than withdraw and apologise for telling the truth about that member who has spent tens of thousands of dollars worth of New Zealand Trade and Enterprise time answering Official Information Act requests— 
Gerry Brownlee 
: I raise a point of order Madam Speaker. 
Hon TREVOR MALLARD 
: I am on a point of order— 
Madam SPEAKER 
: But the Minister is not addressing it. [ 
Interruption 
] I ask both members to please sit down. The Minister was asked to withdraw and apologise. Therefore in response he either withdraws and apologises or himself raises a point of order. If the member wishes to leave the House then that is obviously his choice. 
Hon TREVOR MALLARD 
: I raise a point of order Madam Speaker. I want to make it clear that over the last few months— 
Gerry Brownlee 
: That is not a point of order. We will not respect a point of order going down that track. 
Madam SPEAKER 
: I ask the Minister to address the point of order. 
Hon TREVOR MALLARD 
: I reject the allegations made by that member in his point of order. That member has repeatedly as I said earlier—and I cannot withdraw from telling the truth in this House— 
Madam SPEAKER 
: The Minister has responded. I take it from his comments that he will not withdraw and apologise. Therefore I ask him to leave please. [ 
Interruption 
] The member is out. 
Hon Trevor Mallard withdrew from the Chamber. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. I ask you to reflect on your decision given the last time a member spoke after being asked to leave the Chamber and the warnings you gave the House at that time. The comment made by Mr Mallard when he left was completely unnecessary and was most certainly directed at the Chair. I would think that in the normal course of things he would be named for such an attack. 
Madam SPEAKER 
: Under the circumstances—of course members are normally out until the end of question time—the member will be out until the end of the day. 
Mark Blumsky 
: I seek leave to table the scorecard used by New Zealand Trade and Enterprise to evaluate the competing bids showing Northeast Wines and Spirits to be the lowest in that process. I also note that the other bids were totally blanked out and therefore very much unknown to myself. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Weathertight Homes Resolution Service—Proposed Measures 
9.  
DAVE HEREORA (Labour) 
 to the  
Minister for Building Issues 
: What are the measures proposed to improve the Weathertight Homes Resolution Service? 
Hon CLAYTON COSGROVE (Minister for Building Issues) 
: 
 Following a thorough review the Weathertight Homes Resolution Service will be overhauled to stop gaming of the system to hold building industry professionals to account and to get leaky homes fixed faster. In particular the measures will provide more comprehensive assessment of damage improved information and case management for claimants a broadened definition of damage to include probable as well as actual damage faster and more effective dispute resolution a class action approach to multi-unit claims and a pilot financial assistance scheme targeted to help those in the very worst circumstances. 
Dave Hereora 
: What reports has the Minister seen in reaction to the proposed measures? 
Hon CLAYTON COSGROVE 
: I have seen a number of reports including reports from David Russell of the Consumers Institute who said: “I think it’s a big step in the right direction.”; from Leaky Homes Action Group Chairman John Gray who said: “The review outcomes are very positive for leaky-home owners.”; and from the Registered Master Builders Federation which called the Government’s measures: “A common-sense approach to dealing with how the programme needs to be run.” I have also seen reports that owners were given false information by one individual who in respect of his views on this issue was yesterday named “loser of the week” by the  
Dominion Post 
. That person was the National Party spokesperson on building issues the Hon Dr Nick Smith. 
Hon Dr Nick Smith 
: Does the Minister agree with the statement made by the Prime Minister that the leaky homes problem was “a media beat-up” now that his own ministry states that 15000 homes are affected and that it will cost over $1 billion to fix the problem; and can the Minister also explain how a loan scheme involving only $7 million over 2 years—or less than 1 percent of the problem—will leave homeowners in anything other than the mess they have had from this Government over the last 4 years? 
Hon CLAYTON COSGROVE 
: In relation to the Prime Minister’s comments—which are right—the media tends to beat up issues a lot of the time except that it seems to have got certain things about the Opposition right. I can say that the leaky homes issue was the result of shonky work done by some developers designers builders “subbies” inspectors and others. But they did have help. The deregulation of the building industry the deliberate destruction of the apprenticeship system the introduction of private certification and the allowing of untreated timber framing to be used are all significant factors in this issue. Who legislated for this mess? It was the previous National Government and we are cleaning it up. 
Peter Brown 
: Given the last part of that answer what advice would the Minister give to a person who has bought a home only to find some time later that it has been patched up to disguise a significant weathertightness problem? 
Hon CLAYTON COSGROVE 
: I would invite those people to call on the Weathertight Homes Resolution Service because under that service they will get dedicated case management and beefed-up assessment reports. They will be guided through the system and the existing investigative powers that adjudicators have now will push claims through. I say to the member that many of the people who do not like this move will I suspect be in the legal fraternity because they will not get nearly as much money in the future as they have already received from the victims because the victims will be supported through the assessment process. 
Gordon Copeland 
: How often has it been the case that an amount settled under the Weathertight Homes Resolution Service and a payment made to a house owner has not actually been used to rectify the leak; and in how many of those cases was the house sold subsequently to another individual who then brought another case to the same service in respect of the same leaky home situation? 
Hon CLAYTON COSGROVE 
: I do not have the exact number but I can say to the member that that situation will be remedied too. We will work with local authorities to ensure that that information is put on the land information memorandum. So for instance if a homeowner goes through the Weathertight Homes Resolution Service gains a claim and decides—as is the homeowner’s right—not to fix up a leaky home then the owner will be required to place that information on the land information memorandum so that future purchasers will have full visibility. If future purchasers want to buy the home they will go in with their eyes open. 
Civil Defence and Emergency Management Plan—Confidence 
10.  
Hon Dr NICK SMITH (National—Nelson) 
 to the  
Minister of Civil Defence 
: Why should New Zealanders have confidence in the National Civil Defence and Emergency Management Plan when Canterbury civil defence says it has “big ambiguities big inconsistencies big holes” when Greater Wellington civil defence described the plan as fatally flawed and when Mai Chen’s legal opinion called it “dysfunctional”? 
Hon RICK BARKER (Minister of Civil Defence) 
: 
 Because for the first time we have a national plan and an accompanying guide that has 400 agencies across New Zealand engaged in a coordinated structure for local regional and national support responding to and recovering from a disaster. There can be no doubt that the national plan makes proper provision for management of impacts of disasters at a national level from whatever cause. This is done in both clause 9 and other parts of the plan. While the plan and the guide are robust I have no doubt that they can be improved over time. The fundamental arrangements for responding to disasters are robust. 
Hon Dr Nick Smith 
: What will it take for this Minister to realise that civil defence is not properly prepared for an emergency when we had a botched Auckland civil defence exercise in April the fiasco over communications in respect of the tsunami warning a fortnight ago and this week criticism by Canterbury and Wellington that their plans are fatally flawed and dysfunctional or do we have to have bodies in a real civil emergency before he realises that his civil defence services are not prepared? 
Hon RICK BARKER 
: In respect of the opinions of the Wellington civil defence group those opinions are 9 to 12 months out of date; they were opinions launched at the time the plan was put up for discussion. I had a discussion with the group this morning and its members accepted that the plan is substantially improved and they are comfortable with it. In respect of the exercise in Auckland I would expect that any exercise would identify some inconsistencies. It is very difficult to get things perfect the first time. What I am looking for in civil defence are constant improvements over time and we have achieved that. 
Steve Chadwick 
: Has the Minister seen any reports that support the national plan? 
Hon RICK BARKER 
: Yes I have seen a report that states that the national plan as it stands is an adequate description of the current understanding and arrangements in place for managing national emergencies but there are some areas for improvement that a review will address. However it also states that the plan is definitely an improvement on the situation prior to the adoption of the Civil Defence Emergency Management Act 2002. The report goes on to state that a great deal has been achieved since the new Act was adopted and looks ahead to what can be achieved during the next 2 years that will contribute to a more robust national plan with a formal review in 2 years’ time. That report was from Local Government New Zealand president Basil Morrison. 
Hon Dr Nick Smith 
: Why does the lead story in  
Dominion Post 
 this morning state: “A spokesman for Civil Defence Minister Rick Barker said the minister would not comment on the report.” and why does he bother collecting a $216000 salary a ministerial car and a house if he is not prepared to front up and answer questions about our preparedness for a civil emergency when there are lives at stake? 
Hon RICK BARKER 
: Because I am here today answering questions as I should do and I want to say that this Government has put substantial amounts of money into civil defence. We are going to increase the amount of money for civil defence by about 60 percent with substantial increases in staff. We have overhauled for the first time in 20 years the plans for schools in What’s the Plan Stan? and the week after next we will launch a national campaign of information about civil defence. An enormous amount has been done and that member should respect the effort and work of local civil defence and emergency groups in contributing to the safety of New Zealanders. 
Hon Dr Michael Cullen 
: Are these increases in civil defence staff precisely the kinds of increases in bureaucrats that the National Party spends most days in this House attacking? 
Hon RICK BARKER 
: I can confirm that the National Party has opposed increases in civil servants and Government staff but I can also say that we have identified this increase in staff as a restructuring of civil defence which is quite different from the restructuring we had under a National Government which was chop slash and hack into the civil service of this country. 
Hon Dr Nick Smith 
: Does he stand by his press release of April this year in response to concern from National about the state of preparedness of civil defence when he said: “Never before has Civil Defence in New Zealand had this kind of support from New Zealand’s 86 local councils.” when 19 councils in Wellington and Canterbury describe his plan as dysfunctional fatally flawed and illegal; and is it not the truth that despite the doubling of the budget we have never seen civil defence in such a confused and dysfunctional state? 
Hon RICK BARKER 
: I reject the criticism by that member entirely and I stand by my earlier press release. Yes we have done a great deal and I think if one goes to any civil defence group in New Zealand—and I have been to a number—one will see that they say without equivocation that things are much better than they have been in the past. We have better plans we are better resourced and we will be better in the future. Yes there are some disagreements in some areas and I will do my level best to ensure that those disagreements are resolved in the near future. 
Hon Dr Nick Smith 
: Why has the Minister told the House this afternoon that the concerns of Canterbury and Wellington civil defence were those of 19 months ago and have now been addressed when Canterbury on National Radio yesterday morning and Wellington on National Radio this morning made it abundantly clear that they think we are taking undue risks with our lack of preparedness of civil defence. Why did he mislead the House? 
Hon RICK BARKER 
: I take exception to that member saying I misled the House. 
Madam SPEAKER 
: Is the member asking the member to withdraw and apologise for the comment? 
Hon RICK BARKER 
: Yes I am. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. This is question time and this man is a Minister. He was simply asked why he indicated earlier today in the same set of questions that the positions taken by Canterbury and Wellington were 19 months old; and why when confronted by my colleague Dr Nick Smith in order to acquaint him with the fact that the comments were made yesterday and again this morning has he taken offence? How on earth can he take offence in that regard? This is question time for goodness’ sake! 
Hon Dr Michael Cullen 
: I do not very often agree with the Opposition but in this case it is echoing I think an important point which the Opposition itself often gets confused and that is the difference between misleading and deliberately misleading. The member opposite is allowed to claim that a Minister has misled the House. If we were to raise points of order about misleading questions I would be on my feet after just about every supplementary question in this House. 
Madam SPEAKER 
: Yes. 
Hon RICK BARKER 
: I stand by the comments I made before that the criticism from Wellington was as I understand it from the best advice at least 9 months ago about the draft plan. The subsequent plan that was released makes them feel much more comfortable with the position. In respect of the criticism from Canterbury it is about language. For example the Civil Defence Emergency Management Act uses the word “emergency”; the plan lists “civil defence emergency” and they have said on the basis of that that the plan is fatally flawed. Crown Law opinion disagrees with them emphatically and I am happy to rely on Crown Law opinion. 
Hon Dr Nick Smith 
: Why is he saying there will be no changes in the plan for at least 2 years until it is reviewed when there is widespread concern from councils which say the plan is fatally flawed and dysfunctional; and what on earth are New Zealanders meant to do in the event of a civil emergency in the next 2 years before the plan is fixed? 
Hon RICK BARKER 
: I repeat: the statement about the plan being fatally flawed was by the Wellington council at the time the draft plan was put out. The plan has been updated. The concerns they raised have been addressed and they now find the plan quite satisfactory. In respect of another point of view I go back to it and say that the national plan as it stands is an adequate description of the current understanding of the arrangements that are in place for managing national emergencies. That is the view of the local government group and I support that. That is exactly the case. 
Hon Dr Nick Smith 
: I seek leave of the House to table the transcript of Radio New Zealand this morning from the Wellington civil defence coordinator who in contrast to the Minister’s comments made it absolutely plain that the plan was totally unsatisfactory. 
Document by leave laid on the Table of the House. 
Labour Force—Increased Participation 
11.  
GEORGINA BEYER (Labour) 
 to the  
Minister for Social Development and Employment 
: What reports has he received on increased participation in the labour force? 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 I have seen the household labour force survey for the March 2006 quarter which shows that the Government’s aim of increasing labour market participation is clearly on track. In the March quarter we had the highest-ever recorded rate of labour force participation at 68.5 percent and the highest-ever recorded level of employment with 2.1 million New Zealanders now in work—that is up 23000 this quarter and up 313000 since 1999. That is around 135 additional New Zealanders in work each day every day since 1999. Thirdly we have the lowest level of underemployment—that is people who want to work more hours and are unable to. 
Georgina Beyer 
: What specific changes have occurred with regard to labour market participation? 
Hon DAVID BENSON-POPE 
: Particular highlights of the household labour force survey are that female employment increased at above-average rates and is at a record high; there was a significant shift from part-time to full-time employment; Maori employment is at a record high; and for those aged between 20 and 24 years employment levels rose by 10.3 percent in the last year and the participation rate of that cohort rose sharply to 78.9 percent. 
Georgina Beyer 
: What initiatives has he seen that might put increased participation at risk? 
Hon DAVID BENSON-POPE 
: I have seen a member’s bill in the name of Wayne Mapp that proposes to make the decision to enter employment or change jobs more risky and less secure. In particular for those groups making a decision about whether to enter the labour force for the first time such as youth; or about to return to the labour force for example women; and for groups such as Maori who are disproportionately represented in the numbers of long-term unemployed the prospect of being dismissed within 90 days for no reason whatsoever must be a deterrent to labour force participation. 
Peter Brown 
: Is it not true that young people aged 15 to 19 are overly represented in the unemployment figures and what effect does he believe abolishing the minimum youth wage will have on their employment? 
Hon DAVID BENSON-POPE 
: I do not have any information about the speculative results of such a change. 
Peter Brown 
: I raise a point of order Madam Speaker. I admit there were two parts to the question but I think that at least one part should have been answered: “Is it not true that young people are highly represented in the unemployment figures?”. 
Hon DAVID BENSON-POPE 
: The member will be only too aware of the efforts that Work and Income New Zealand and the Ministry of Social Development generally are making to further increase the participation rates of young people in the workforce. 
Taito Phillip Field—Conflicts of Interest Report 
12.  
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
 to the  
Prime Minister 
: Has Noel Ingram QC received a response from Taito Phillip Field to the draft inquiry report into alleged conflict of interest? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 That is a matter for Mr Ingram QC. He is not directed by me. 
Dr the Hon Lockwood Smith 
: What has the head of her department Mr Maarten Wevers told her about the draft inquiry report and its preliminary findings in the last 3 weeks given that she told Parliament last week that Mr Wevers had inquired about it from time to time? 
Rt Hon HELEN CLARK 
: Nothing. 
Dr the Hon Lockwood Smith 
: Does the Prime Minister expect this House to believe that she has not been briefed at all by her head of department on the potential consequences of the criticisms in the draft Ingram report? 
Rt Hon HELEN CLARK 
: Yes. 
Dr the Hon Lockwood Smith 
: Does she mean then that just as with the billion-dollar Telecom leak she has told her officials she does not want to know the truth? 
Rt Hon HELEN CLARK 
: I believe in giving those who are charged with making inquiries the independence to make them. 
Dr the Hon Lockwood Smith 
: Why does she believe her initial estimate of the time needed for the inquiry 9 working days was so wrong when now almost 8 months have elapsed? 
Rt Hon HELEN CLARK 
: Inquiries must always take the time required to get to the root of the matter. 
Amended Answers to Oral Questions 
Question No. 4 to Minister  11 May  
Hon RUTH DYSON (Associate Minister for Social Development and Employment (CYF)) 
: 
 Last Thursday I gave an incorrect answer to question No. 4 from Dr Pita Sharples. In my answer to the sixth supplementary question I said that children are detained at the facility. For total clarification my answer should be that I am advised that four children had been held for 72 hours in the otherwise empty secure unit at Korowai Manaaki but no children are currently being held there. 
Debate on Crown Entities Public Organisations  and State Enterprises 
In Committee 
The CHAIRPERSON (Ann Hartley) 
: The House is in Committee for the consideration of the performance of Crown entities public organisations and State enterprises. The debate on the performance of Crown entities public organisations and State enterprises is a series of debates on individual financial reviews of Crown entities public organisations and State enterprises as reported by select committees. The debates on the individual financial reviews should be relevant to their performance in the 2004-05 financial year and their current operations. A member may have no more than two calls on each financial review. Three hours is allowed for the debate. At the conclusion of the 3 hours the Chairperson shall report to the House. There is a list of financial reviews available for debate on the Table. I understand that members have indicated the Crown entities public organisations and State enterprises they wish to debate. 
LINDSAY TISCH (Senior Whip—National) 
: 
 I just wish to seek clarification on the two calls that a member can take. If we look at the first number of calls under Dr Cullen as Minister of Finance are we saying that there can be two calls on let us say Air New Zealand and two on the Earthquake Commission or is it two within that whole bracket of entities? 
The CHAIRPERSON (Ann Hartley) 
: Two on each. 
Reserve Bank of New Zealand 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 The commitment that the Governor of the Reserve Bank Dr Alan Bollard makes to New Zealanders in his 2004-05 annual report is that as New Zealand’s central bank the Reserve Bank will do everything in its power to build national and international confidence by promoting the maintenance of a sound and efficient financial system. Yet yesterday a survey by Bloomberg News found that the New Zealand dollar has just been named the worst performer out of 16 major currencies. ANZ National Bank chief economist Cameron Bagrie adds further gloom to doom by stating that people were finding investment opportunities elsewhere and by forecasting the New Zealand dollar would hit below US50c in 2007. 
So let us add it up: the Reserve Bank wants to promote a sound and efficient financial system; the New Zealand dollar has been named the worst performer; and to top it all off the UMR Insight research omnibus survey has identified that the unfavourable rating for the Reserve Bank has increased to 14 percent and 38 percent of all who were surveyed were unsure about or had never heard of the Reserve Bank. One of the key reasons given for the unfavourable stakes was “thinking that the Reserve Bank is out of touch with the people and a general dislike for the policies”. In plain numbers the majority—52 percent—of those surveyed either had never heard of the bank or gave it an unfavourable rating. It is a bit like if we do not know where we are going any road will get us there. As the Government draws up the road map for the Reserve Bank this is an indication that it has lost its economic way. 
One of the comments that absolutely struck home from the UMR Insight survey was the following comment describing the Reserve Bank as being out of touch with the people because it is “concerned only with inflation much too narrow concerned with GDP should be concerned with quality of life should go and measure qualitative rather than quantity.” These are serious issues. They are issues of major concern to all members of this House. What is more they are issues of absolute priority to all people of this nation. As if it could not get any worse in the Reserve Bank’s annual report under “Change with the times” the Reserve Bank states it will “strive to inspire public confidence” yet there is nothing in that report that goes anywhere near responding to the criticism described in the UMR Insight research. 
We are at a critical turning point. We can choose whether to fail or to survive in measuring the economic accomplishment of the nation. The Maori Party is here to tell the nation that GDP will never be enough in making positive advancement as a nation—advancement that is comprehensive sustainable and inclusive. All that GDP has ever intended to do and can do is to report on activity not progress. The Maori Party is committed to a new ideal the genuine progress index which is an innovative new way of sustaining all aspects of our wealth—human and other—through investment. If the Reserve Bank really wants to change with the times it needs to rethink development and prove that economists can be in touch with reality. 
Basically the genuine progress index tracks all flows of income that are not in the cash economy—the widest range of measures that affect the health of the economy. The genuine progress index offers us an exciting alternative to account for the whole value of human social and natural capital alongside standard measures. With the conventional measurement of GDP the assumption is always that more is better. With the genuine progress index we realise the assessment is always value-based and indeed as in the case of pollution ill health crime and clear-felled forests it may be that less is best. 
Tangata whenua have always understood that social economic and environmental prosperity is inextricably linked. In caring for the health of our environment as well as caring for our physical and spiritual health we can achieve an indicator of net advancement and progress—an indicator that expresses the values of Aotearoa including kaupapa Maori and an indicator that is based on the concept that if we preserve and protect our social and environmental assets we will ensure a rich legacy is left for our descendants. 
Our history and our language of communication is embellished with constant reference to sustainable development. The proverb 
 “Toitu te marae a Tane toitu te marae a Tangaroa toitu te iwi.” [ 
As long as the realms of Tane and Tangaroa remain so will the people 
.] emphasises the interdependence people have with natural resources to ensure well-being. Long-term prosperity is dependent on the land and all natural things the protection of the realm of the seas and oceans and the strengthening of the people. The Maori Party will put on record its commitment to measuring quality along with quantity to strive for a quality of life that is good for the economy and to measure real and genuine progress. Not to do so would be to perpetuate financial insecurity a deteriorating environment rising crime and sentencing rates increasing poverty and continuing inequalities. 
Hon Dr Michael Cullen 
: I raise a point of order Madam Chairperson. I am sorry to interrupt the member but this is quite an important point in a debate of this sort. Because it is a time-limited debate the time allocated is proportional to the size of parties. My understanding is that the Maori Party is entitled to only one 5-minute call in the debate so if the member continues to have an additional call he is in fact taking time allocated to another party and subtracting from that party’s entitlement. This is not an open-ended debate where the member can take further calls in that regard. I am sorry to interrupt the member but that is actually quite an important point. 
Dr PITA SHARPLES 
: That is fine. Thank you Madam Chairperson. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 On historical principle I have a great deal of sympathy with some of what the member was saying towards the latter part of his discussion—that is that GDP is not a measure of everything in our society. Indeed I think that those people who tend to talk as if GDP per capita is the only thing that is important are missing many many points. They are missing first of all the point that GDP per capita in itself is not necessarily a very good measure of relative material standards of living because it takes no account of a whole range of costs that may go into that element. For example it is often said that when one goes to the UK £1 is worth $3 but for many things one buys one might as well regard £1 as equal to $1 in terms of what it actually buys such as a cup of coffee or something in a restaurant. The second thing is that GDP cannot possibly measure a whole range of issues around quality of life and style of life and it is often a poor proxy—except in very broad senses—around a range of social indicators such as life expectancy housing quality etc. 
However it is also true to say that over the broad span GDP is a measure of the standard of living as long as the argument is not pressed too far. Our standard of living today is immensely higher than it was 100 or 200 years ago and our GDP per capita is immensely higher than it was then. In traditional pre-European Maori society life expectancy was barely 30 years. That has been well demonstrated by the analysis of remaining skeletal evidence. Now of course life expectancy for Maori is less than it should be because it is less than the general average of the population but it is more than twice what it was under a traditional society and clearly on many other social indices similar points could be made. 
Coming back to the subject of the Reserve Bank I think it is important to recognise that that bank has to some extent a limited brief. First of all it is there to manage the financial system which is not the same as to give the value of the dollar. It is to ensure that the financial system is operating in a prudential fashion. That banks are not likely to fail for example is the most obvious measure of a secure financial system. 
The Reserve Bank’s second role and the one most seen in the public arena is to try to manage monetary policy to underpin low inflation. I am sure the member does not want to go back to the days of high inflation which erratically redistributed wealth and income and which led to enormous uncertainty in many ways. At the moment our inflation rate is something above that target rate—which is another reason why tax cuts are a silly idea at the present time. But more important than that the bank at the moment is in what is called a tightening cycle. It has been raising interest rates. 
Not unnaturally people do not like increases in interest rates. It is not the job of the Reserve Bank to be popular. It is not going out there like Westpac the BNZ or Kiwibank to try to find out whether people like its services because it is a regulator and it is a moderator of interest rates. Those are not two key functions that are necessarily designed to make the Reserve Bank popular. I have always said that the most important reason for giving central banks independence to raise and lower interest rates—apart from the fact that Ministers of Finance do not like doing the election years—is to ask: “Why the hell should the Minister of Finance take the blame and leave it off for reserve banks anyway around the world?” which my good friend Gordon Brown saw instantly as a very good reason for giving the Bank of England operational independence in that matter when Labour became the Government in the UK in 1997. 
The Reserve Bank’s job is also not to try to make the New Zealand dollar higher. Yes the New Zealand dollar in one sense has been underperforming in recent times if we mean by that that the dollar has fallen. But the dollar falling has been good news in recent times for exporters—not bad news. I do wish that our media would stop reporting the dollar as though it were some kind of representation of the male physiognomy; “up” is not good and “down” is not necessarily bad when it comes to the level of the New Zealand dollar. But if we watch television every night we know that it talks as though the New Zealand dollar did well on the days it went up or did badly on the days it went down. But if one were an exporter selling manufactured goods to Australia when the dollar was worth over A90c one was hoping the dollar would have a bad day—and one wanted a lot of bad days in a row—in order to be able to make some profit on one’s bottom line. 
So it is not the job of New Zealand’s Reserve Bank to prop the exchange rate above the rate that is represented either by the market or by the equilibrium rate. In a small economy the real problem is that the New Zealand dollar will be a volatile currency because it has low liquidity in terms of international exposure. 
Report noted. 
Television New Zealand Ltd 
Hon MURRAY McCULLY (National—East Coast Bays) 
: 
 I want to take the opportunity today to speak to the House about the unusual circumstances in which Television New Zealand Ltd (TVNZ) had its annual review completed by the Finance and Expenditure Committee this year and about the unfinished business that lies before that committee having completed the annual review. 
It is widely understood that in the past 12 months TVNZ has been beset by major eruptions. We have seen scandal after scandal culminating in the departure of the company’s chief executive Mr Ian Fraser who made assertions of political interference in the work of the management of that company. That led the Finance and Expenditure Committee to take a most unusual course in relation to the financial review. The select committee decided there should be a conventional financial review by the committee but parallel with that review and subsequent to it a formal inquiry should take place to enable members of Parliament to ask the questions in order to give the public the answers they were due about what had happened in their State broadcaster. 
 It is now a matter of history that as a consequence of the two hearings before the Finance and Expenditure Committee TVNZ ended up before the Privileges Committee of this Parliament. That was the subject of an earlier debate in this House. Suffice it to say that on this occasion TVNZ was handed a very stiff warning by the Privileges Committee and was required to apologise to the House. The director was fined $1000 which was the first time in 103 years that we have seen a fine levied by the Privileges Committee. The committee especially noted the very poor culture that exists in that company. 
I say to the Committee today that this is unfinished business lying before the House and the Finance and Expenditure Committee as we move into the next few weeks. What the Finance and Expenditure Committee and the Privileges Committee did not know when they conducted their reviews was that inside TVNZ were some private emails from Mr Fraser to Mr Boyce which told us two things. First they told us that the then chairman of TVNZ Mr Boyce thought the members of the Finance and Expenditure Committee of this Parliament were “bastards” who were the enemy of TVNZ. We could not possibly underline more graphically the contempt and disdain that senior people in TVNZ have for the select committee process and for the whole process of accountability to this House and to the owners of TVNZ than is evident in that email. 
Second we also know from those emails that Mr Boyce was part of a process of avoiding revelations about what he called the “mid-year stuff” between “yourself and Ann”—Mr Fraser and Dame Ann Hercus—because revealing the truth about that would “be a disaster for everyone”. So in this email we have a chairman of TVNZ telling the departing chief executive that it is his firm intention to go along to a select committee of this Parliament and lie like a flatfish. If the “mid-year stuff” between Mr Fraser and Dame Ann Hercus were to come up Mr Boyce intended to lie. He then proceeded in this email to traverse the lie that he intended to tell the Finance and Expenditure Committee. 
How very very unfortunate for Mr Boyce that those emails should see the light of day. How even more unfortunate for Mr Boyce that the inquiry is still alive before the Finance and Expenditure Committee. I say to Mr Jones the chairman of that committee and to my colleagues who serve on that committee that this is a test for them. This is a test for the Finance and Expenditure Committee that conducts the review of TVNZ. Are they prepared to accept being told by the chairman of TVNZ that they are bastards who are the enemy of the company? And are they prepared to now find out that the chairman intended to and duly did lie to that committee? 
Hon STEVE MAHAREY (Minister of Broadcasting) 
: 
 I will take a short call on Television New Zealand. The financial review for the year is— 
Hon Bill English 
: Another mess. 
Hon STEVE MAHAREY 
: The member Bill English should go and get therapy. He has been such an angry young man for such a long time. He ought to seek help and that is all I am saying. I want to tell listeners at home that we are just trying to get through the insistent yelling of Mr Bill English who needs a bit of counselling. 
Television New Zealand operates in a world where things have changed quite substantially for all public broadcasters all around the world. The issues canvassed by Mr McCully I will leave for the select committee to canvass because they are issues that lie within the purview of the committee and are nothing to do with the financial review. I want to put on the record of the House that the television business is a very difficult business to be in. Not only is it one of high competition with a fragmenting audience but a lot of people out there are seeking to get others involved in radio television newspapers and magazines so the media market is highly competitive. Many people like to compare Television New Zealand’s performance now with its performance in the past but the past is something very different. There were fewer outlets competition was less and people automatically watched Television New Zealand—that is what they did. 
I want to put on the record my thanks to the company for getting through what has been a difficult period where there has been a number of issues around presenters and so on. It has managed to maintain a very good financial performance during that period of time. In fact in comparing Television New Zealand with other public broadcasters around the world one can see that of all public broadcasters the company is holding its audience share which routinely peaks at around 65 percent. It holds the major news share and therefore is still returning a major commercial return to New Zealand and in that sense is more successful than ABC NHK CBC and BBC. Those organisations do not have that kind of audience share and therefore cannot command that kind of share in the market and cannot get that kind of advertising revenue. 
That is an amazing performance when one thinks about the kind of competition that is being undertaken here. New Zealand has the most competitive media market anywhere in the world at this time because of our heavy deregulation in the 1980s. It is the nature of the game. So from a financial point of view we are looking at a year where things have been good for Television New Zealand and it got its share of the market as we had hoped that it would. 
On the other side of the equation we know that the company has also had the operations of the charter to consider. The charter is a new area of work. It takes a while for programmes to be commissioned to be put on the air and then to find out whether they are working. But if we look back over the last little while with the small amount of money that the company has had we have begun to see a change in its behaviour. Whether it be more Pacific Island news being put on during an evening or whether it happens to be a new programme like the  
Frontier of Dreams 
 we are seeing an effort made by Television New Zealand to begin to do things that otherwise it would not do in a commercial environment. It is beginning to change its behaviour. It has a better relationship with the private broadcasters that make many of its programmes. It is attempting to move down that road and I am hoping that what we will see in the immediate future is more of that kind of behaviour. 
This country owns television and radio because they are part of the national infrastructure of any country. Whether it be science schools or whatever we want to have infrastructure that is our own because we want to be able to control those things that matter to this country. That is why we own Television New Zealand and when we look back over the past year we see that this company is seeking to carry out its mandate as a public broadcaster within the constraints that it has on it—for example not getting a great deal of money from the taxpayer. It is expected to generate income from its commercial revenue and it is managing to do that as well. 
As Minister of Broadcasting I want to put on the record my thanks to Television New Zealand for its performance in those areas. As I have said elsewhere on the record I will be pleased to see it out of the news for some of the things that have put it in the news over the last little while and carrying on with an underlying strong performance through this year. 
Report noted. 
Foundation for Research Science and Technology 
Hon BRIAN DONNELLY (NZ First) 
: 
 First I note that the issue that I wanted to address today was in fact the Crown research institutes but the Foundation for Research Science and Technology is so closely linked with Crown research institutes that it does not really matter. In particular I want to talk to the two reviews that were carried out during the 2003-04 financial review period. Being on the same select committee for quite a considerable period of time certainly has one advantage particularly when it comes to the Crown research institutes in the sense that one gets to see the whole lot of them find out what they are doing find out the amazing range of science that is taking place in our Crown research institutes and see how valuable they are to our society. It is also possible to see the changes over time within their practices and what is happening with them. 
I have to say that largely the model has been very successful but there are some issues with it. I want to use the two reports that were done for the New Zealand Pastoral Agriculture Research Institute and for Landcare Research to highlight some of those issues at this particular time. If we refer to the Pastoral Agriculture Research Institute we can see the contribution it makes to our society and our economy. During this particular period of time it employed 950 staff including 640 scientific staff; its total revenue was $133.651 million which compared with $129 million from the year before; and it had 13 subsidiaries operating under it. 
 During the period of review a decision was made in terms of this particular Crown research institute to transform the focus from life sciences to a closer focus on the pastoral sector. The chief executive told us that although statistics show that New Zealand farming has been the most productive sector of any industry in any OECD country in the last 20 years it is increasingly facing challenges from other countries with cheaper and better land and cheaper currency and labour. For example South American countries already produce milk more cheaply than New Zealand does and several other countries are not far behind. That is really a wake-up call to us that we cannot continue to take things for granted in this “backbone of the country” industry. 
Significant restructuring took place during the year in review particularly with the move towards establishing three national research centres in partnerships with other entities. These included an animal health institute in Palmerston North in partnership with Massey University a National Centre for Biosecurity and Infectious Disease in Wallaceville with the Institute of Environmental Science and Research and Biosecurity New Zealand and a National Centre for Reproductive Sciences and Mammalian Genomics in Dunedin in partnership with the University of Otago. So we get some sense of the complexity of the arrangements that are taking place within our society. 
One of the issues in New Zealand is the level of private funding or private investment in science research. Pastoral and agriculture research certainly highlights this because one would consider this as an area where there was a lot of private funding of research. Admittedly our figures are skewed in the sense that we do not have a lot of funding into weapons development as some other nations do. Nevertheless it is a continuing and ongoing problem. AgResearch analysis shows that in 2003-04 the pastoral sector invested approximately $10 million in research and development. This is less than one-fifth of 1 percent of the New Zealand dairy industry’s $5.72 billion in export earnings. Of the $10 million AgResearch received $1.4 million. Only $1.4 million went into the particular entity that focuses on this particular sector. AgResearch considers the lack of investment by the sector in research and development—rather than in dairy processes and proprietary in-house assets—and declining Government funding to be matters of serious concern particularly in view of the challenges facing the sector. New Zealand First has to agree that this is a worrying trend in such an important area of investment. 
It is extremely important to compare the report on AgResearch with that on Landcare Research New Zealand. One of the things I have to note with regard to the Landcare Research report is that it is a model of annual reporting. [ 
Interruption 
] Just by way of explanation for the Minister in the chair Steve Maharey New Zealand First has rolled up its two calls into one. Only one person from New Zealand First will speak in this debate and we want to put our comments all together in a cohesive form. 
Landcare Research specialises in the sustainable management of land resources by optimising primary production enhancing biodiversity and increasing the resource efficiency of businesses in conserving and restoring the natural assets of our communities. I was speaking about reporting processes. Landcare Research was awarded the Institute of Chartered Accountants of New Zealand award for sustainability reporting for its 2003-04 annual report for the fourth consecutive year. It really is a worthwhile model for us to keep a close eye on. In addition Landcare Research also undergoes a performance verification audit based on international standards for the voluntary reporting of the economic environmental and social impact of a company’s performance in accordance with the Global Reporting Initiative guidelines. We were informed that Landcare Research benchmarks itself against companies such as BP and Vodafone. So we have a model of excellence in this particular case and as I said it is certainly worthwhile noting that model of excellence. 
During our review we uncovered an interesting statistic on research output in New Zealand. In July 2004 the  
New Scientist  
reported that New Zealand scientists produced the highest number of refereed publications per million US dollars of research funding at 6.2 papers per million. In the same period Landcare Research claims that it produced 7.3 papers. 
One of the things that comes through is that vulnerability that hangs over all the institutes when priorities change in Government funding—it was certainly expressed by Landcare Research and in fact only one Crown research institute really did not come through with this sense of vulnerability. That vulnerability leaves the institutes rather exposed. We have to note—and we note positively in fact—that the Government introduced in I think last year’s Budget a capability fund of $39 million to smooth over the troughs that occur as a result of the research grants. HortResearch was a classic example of an institute that lost a huge amount of human capacity purely and simply because it did not get research grants from the foundation for a particular year. The question that a Crown research institute has to ask itself is how it holds on to staff in the interim period while it prepares fresh proposals for research in the following year. We make mention that that $39 million is particularly interesting. 
We really want to make another point which Landcare Research highlighted. It is an issue that is invariably brought to our attention. Only one Crown research institute—the Institute of Environmental Science and Research—does not report serious concerns about human capability about scientists and about being able to maintain scientists. We were informed that a critical mass of scientists in New Zealand will be retiring in the next 5 to 10 years. That particular organisation does a huge amount to try to make sure that it can retain the high-quality graduates it has including giving various benefits in addition to base salaries profitsharing from commercial dividends making employer contributions to a superannuation fund and giving bonuses for exceptional performances. It also has a rather innovative scheme whereby it will pay back the student loans of its graduate scientists—scientists coming straight out from universities—up to a maximum of 6 percent per annum. That is another sort of thing it is doing in order to retain staff. 
The Minister has to continue to look at the issue of how we can ensure that we retain the staff of our Crown research institutes so that we can make sure that the model continues to work. It generally is working fairly well but it will not work if we do not have the human beings to make it work. 
Finally I mention the interest that our select committee has in the commercialisation processes of the Crown research institutes. They all do it in a different way. I guess there have been some issues around Industrial Research Ltd and whether it is prudent to be involved as an almost 100 percent investor in high-risk companies. By this particular point in time there should be enough information around regarding best practice so that the notion of best practice when it comes to the commercialisation of intellectual property can be passed on to Crown research institutes so that they can be pretty well informed. 
Hon STEVE MAHAREY (Minister of Research Science and Technology) 
: 
 I will just take a short call on the Foundation for Research Science and Technology as well. First of all I thank the member for his support of the area of science. Science is one of the things that has traditionally received bipartisan—or multipartisan these days—support in this Chamber. But I think that one of the challenges we all have in front of us is to get the message across to New Zealanders—who in general say in surveys that they support science and scientists—that more than support is required. We actually have to apply the knowledge we are producing in this country. If we are keen on making the kind of transformation we are interested in making then it is not just about knowledge being around the place. It is about ensuring that in small businesses in families or in local councils wherever it might be people are making science work for them. That is what we are after these days. 
As the member pointed out one of the things the foundation has been doing this year to try to advance that goal has been to change its behaviour. It has done that in two ways which I will just touch on. One is that we are still working hard on the area of priorities for science. We are a small country; we have 4-point-something million people. We want a wide-ranging commitment to science but of course we do not produce a huge amount of science ourselves in the general scheme of things. Many other countries around the world are interested in this area as well and those countries are producing a great deal of science. We are a small player. 
The key issue for us is whether we are world leaders on the issues that matter most to New Zealand’s development. We have obviously benefited over the years from investment in things like pastoral science. We need to identify what we want to invest in for this century. The foundation has been helping to work on that idea along with the Ministry of Research Science and Technology and it has been talking with people about how it intends to do that. 
That has resulted in the second point I want to raise which is a discussion the foundation has been having with the sector about longer-term funding. It is clear to all people in the Chamber that although there may have been major benefits from Crown research institute reforms in the early 1990s time moves on. The kinds of benefits one gets from that shake-up therefore tend to dissipate. As we go into this century—as the OECD warned us when it came through recently—it is time to rethink the model. We have been doing that and one of the signs of that is we are seeking to have a longer-term funding model for a good deal of science. 
That funding model takes us back to one of the questions raised by the previous speaker Brian Donnelly about how we will retain scientists if their science is being refunded only every 6 months or 1 year—it is very hard to do. It is very hard to persuade young scientists to travel around the world to be a scientist here after getting a PhD somewhere if an American company invites them to America for a 20-year contract while we invite them to a Crown research institute in New Zealand for a 3-year contract. That does not add up for scientists in terms of their career. So the foundation has begun a discussion on the back of new policy about longer-term funding. The capability fund is part of that. It is currently a relatively small part still of Crown research institute funding—about 7 percent—but I intend that figure to carry on rising because we need that kind of stability. 
I stress to those people in the Chamber who may be concerned about this issue from the contestability end that it is not about getting rid of contestability or competition. It is appropriate to have that as part of the balance of funding and we will make sure that there is a balance between longer-term stable funding and shorter-term competitive contestable funding. 
I will make a couple of quick points about the Crown research institutes. There are nine of them. Over the last while I think we have seen them perform well. They have come before the Education and Science Committee which is a great idea. They have great science to talk about; in fact I am sure the select committee almost feels as if it has to toss the members of those institutes out of the room at the end because they are so keen to explain what they are doing with science. 
Certainly I urge people who want to know more about our science to get alongside the Crown research institutes to find out what fantastic things they are doing and planning. They have a great record and they are doing great things but I want them to connect more with the country. That means they need to be talking more—in platforms like the ones they have been invited to this year. The whole job of the Crown research institutes is to create value. That is what they should be doing; they need to be connected to this country and talking the language of creating value. 
Brian Donnelly raised the issue of the one Crown research institute that has had some difficulties this year Industrial Research Ltd. The case of this Crown research institute illustrates why we need to change the model in two senses. Firstly Industrial Research Ltd has drifted away from its original aim probably because it did not have enough stable funding to hold it in a very difficult area—that is small industry does not make an easy customer for a Crown research institute whereas agricultural research applies to the agricultural industry which is a very integrated industry because of cooperatives and so on. It is not the same situation for the thousands of businesses that are out there so Industrial Research Ltd has found over 16 years that that is a difficult thing to relate to. It has drifted away to where it can get that return and as a result it has moved towards more commercialisation. That is the second lesson we have learnt from Industrial Research Ltd: how to commercialise. 
Brian Donnelly said there must be distilled wisdom. There is distilled wisdom but there is still some more of that wisdom to go through Cabinet in order to see the new model for commercialisation. We have said to ourselves that we need to look at how to commercialise in a way that fits New Zealand and fits the different Crown research institute models. We think we have some distilled wisdom and we know that one of the things we should have done with Industrial Research Ltd for example was to ensure that it had a commercial partner earlier in the commercialisation cycle. That is a good example of a different way of doing things and of a lesson being learnt. But we have also learnt some good lessons from Industrial Research Ltd. 
Across the board I want to thank the Crown research institutes and the foundation for what has been a great year. Those people are just stunning in their commitment to what they are doing in science and I want to see them receive the kind of backing from Parliament that will enable them to carry on driving the innovation in this country. I thank them for their work. 
Report noted. 
New Zealand Qualifications Authority 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 I want members to know just how serious the problems are in the New Zealand Qualification Authority which is the organisation that we are debating today. It has responsibility for running the qualifications system for young New Zealanders. That means that for 150000 young New Zealanders every year the question of whether they get a fair go from that qualification system is dependent on the integrity of that organisation’s processes. Some of its processes have integrity; it is able to conduct external exams with a couple of million scripts and it delivers results quite competently. But I have been very disturbed to find in recent weeks that the organisation has almost no intellectual integrity about how it assesses the quality of the way it examines young New Zealanders. 
In the Education and Science Committee we had a discussion with Karen Sewell whose main objective seems to have been to do a quick paint job for Minister Maharey in order to make sure there would be no controversy this year. But the New Zealand Qualifications Authority showed that it has no interest in the technical issues around the soundness of the National Certificate of Educational Achievement (NCEA) examinations. It has no interest in validity and reliability—those things are the currency of educational testing. Not only does the organisation have no interest in those areas but it has no ability to assess whether NCEA examinations are fair to our students. 
I asked Karen Sewell one simple question which was how she could assure parents like me that when a student sits an external exam and does an internal assessment on a related standard—which almost every student does—those assessments have about the same level of difficulty. Well she could not give me that assurance. Worse than that she made it clear that she thought it was a stupid question and that the New Zealand Qualifications Authority has no interest at all in whether the standards of internal assessment are vaguely similar to the standards of external assessment. 
One of the reasons the authority has no interest in this is that almost any cursory analysis tells us that NCEA is still in many respects unfair to our students. I asked her what people she employed who had expertise in assessment. Well in this vast $50 million budget she says there are two of those people. I have asked people in New Zealand universities who are assessment experts about that and they do not recognise any of those people—they say there are none. Professor Hattie whom the Minister is keen to quote when it suits him—and who has done so incorrectly in a way that misled Parliament—told me that when he did the analysis on scholarship which anyone should do in a public examination system no one in the New Zealand Qualifications Authority knew how to carry out this analysis sufficiently so that he could talk to them about it. He told me that he had never been asked to do and no one has done tests of reliability and validity on NCEA levels 1 to 3. 
That is a disgrace. It is a scandal that we are running a national qualification and national examination system that has high stakes for thousands of students and we are served up waffle and pap by the chief executive who leaned across the desk and said: “You can have confidence.” Well I would say to Ms Sewell that I do not have confidence and I am pleased that she is gone. I say to Minister Maharey that the answers to making NCEA work are not political spin; the answers come from hard-headed analysis of the validity and reliability of the exams and that is not getting done. 
We are running national examination systems without expertise in assessment and we are not using the tools that tinpot Australian states apply to their examination systems relentlessly and forever. We do not do that because we are better! The Minister will get up and go on about School Certificate. Who cares about School Certificate? A whole generation of students and parents have passed through the system since then. 
Hon STEVE MAHAREY (Minister of Education) 
: 
 I thought the previous speaker might like to take another call because the issue is an important one. I welcome the fact that the speech was one of the few times I have heard him sustain an argument rather than just criticise so it was good to have the chance to listen to it. 
I want to go back over the year in respect of the New Zealand Qualifications Authority. As a new Minister coming into this portfolio over the last little while I want to thank first of all the board particularlyCatherine Gibson who I think worked very hard over the summer period and Karen Sewell who came from the Education Review Office. I remember meeting with them and saying that the one thing I wanted for this summer was a good exam season. I think of the New Zealand Qualifications Authority as being a bit like the Reserve Bank: there is no point in having a Reserve Bank if it is not blue chip. We rely on it to set the tone for money in this country. We want the same blue-chip feel in respect of the New Zealand Qualifications Authority. It has to be an organisation that teachers parents and students can rely on to tell them that the qualifications our young people are getting are top-notch. That is what it has to be. 
I know that in politics it is always a great thing to be able to get up and slag off public officials who of course cannot answer back because they are required not to. So it is pretty easy to be a bit of a bully-boy and stand up in the Chamber and consistently slag off those people who have to be polite in return. I say to Mr English that that kind of behaviour just ain’t good. It is the kind of behaviour that should really be reserved for slagging off each other. I am happy if he has a go at me because then I can have a go at him. 
I also say to Mr English that I regard Karen Sewell as being an outstanding public servant. She took up the challenge right through the summer of not only trying to make sure we had a good exam season but also every time there were issues getting up and explaining them in public taking questions and making sure we were able to move on. Thankfully there were few problems this summer. We had a system that worked pretty well. During that period Mr English put out something like 13 or 14 attacks including one on Ms Sewell’s integrity. But we came through it pretty well and that is something members should applaud. 
I know that right across the education sector people are sick and tired of the kinds of criticisms that took place over the summer when as Wyatt Creech said when this policy was introduced under the National Government this is the kind of policy that deserves bipartisanship. How else do 14 15 16 or 17-year-old young New Zealanders apply themselves to their exams when one of the leading politicians in the country—the previous leader of the National Party—is consistently preferring norm referencing over standards-based assessment and is slagging off the people who run the exam and undermining every aspect of it without there being any evidence for him to do so? 
I see National people in the Chamber just having a quiet wee think—thoughtful people like Maurice Williamson— 
Darren Hughes 
: Reflective. 
Hon STEVE MAHAREY 
: —reflective people intelligent people like Katherine Rich. I just say to them that they ought to take Mr English aside and tell him to look at all the clippings from principals and teachers from right across the country who are saying they have had enough of this. 
What Mr English did today was I think good because today was an example of his trying to engage with the problem. Let us now look at how going from a good exam season we can improve this system. That is what I want to spend my year doing. But I am very grateful and thankful that over this summer all the hard work of last year paid off that we had a better exam season and that everybody other than Warwick Elley and Bill English agrees the system has improved. 
I think that Warwick Elley is an outstanding New Zealander with an enormous research record. I just happen to think that on this matter he is wrong. His argument was based on looking at one standard within a subject which is like one question within the exam and looking at the variability on that standard. He is condemning the whole system when he should be asking how all the standards added up into the biology exam for example and whether we got reasonable variability across the subject. The answer is that yes we did and that therefore it is fair to the students. Can we do better? I think we can. We have had only 3 years of this examination system. We can do better yet to get our consistency and fairness right. 
But for this year we did pretty well and I want to applaud those young New Zealanders who stepped up and did those exams after an internal assessment season that was busy for them as well. They had more assessments than they have ever had in their lives but they stepped up and did the exams. They are stretched because they are able to move towards excellence and we should remember that the kind of excellence that is built into those exams has never been present in our exams before—never. For example in the area of mathematics there has never within the maths exam been a standard like the standard of excellence that we have now—a standard that seriously stretches the young people who are taking those kinds of exams. This is something we should be applauding amongst our young people. We should be telling them that it was a good thing they did so well this year instead of sending them message after message that somehow on the basis of no evidence at all—just because of political expediency and just because Bill English prefers norm referencing—we are going to end up slagging off the exams those young people took. 
I think that every parent in this Chamber with young people wanted us—on the back of knowing that this year those exams worked for us—to say “Well done!” to those young people. So I say that to them. I thank them for trying so hard and say to them that they are great young New Zealanders. Now they need to step up into the next stage of their assessment which may be to level 2 or 3 or on to their further education after that. I thank those people in the New Zealand Qualifications Authority who worked so hard to get us through the exam season this year. 
We are not finished by any manner of means. No one has to tell us the problems—we will be the first to recognise them. We do not need Bill English to raise them. We will do that. What we want from Bill English is for him to engage with the issues and tell us how we can work together in a bipartisan way to make the New Zealand Qualifications Authority system a blue-chip system that we can all have total trust in because that is what we need in this country. I say to people who are involved in this debate that if they do not want to do that then they should go and do something else. Our young people are far too important to become some kind of football for someone who just wants to take over the leadership of the National Party. 
Report noted. 
DARREN HUGHES (Junior Whip—Labour) 
: 
 Having had a discussion with the senior Opposition whip I seek leave that we debate Housing New Zealand Corporation while Mr Maharey is the Minister in the chair. 
The CHAIRPERSON (Ann Hartley) 
: Leave is sought to do that. Is there any objection? There is not. 
Housing New Zealand Corporation 
Hon DAVID CARTER (National) 
: 
 I acknowledge that on this occasion I am speaking on behalf of Phil Heatley who is ill and I wish him well for a speedy recovery. But speaking as a former spokesperson on housing I also take the opportunity of raising in the Committee today a few very real concerns I have about Housing New Zealand Corporation particularly about the way the bureaucracy of this organisation appears to have become excessively politicised over recent years. I was surprised to hear the Minister of Housing the Hon Chris Carter say in the House only last week that Housing New Zealand Corporation with its 60000-odd houses is in fact the second-biggest asset this Government has. Therefore all New Zealanders should be worried if as I am going to state now the organisation has become highly politicised. 
 We used to have a civil service that was generally taken as being apolitical that was prepared to roll with the Government of the day and that initiated the programmes of those Governments without becoming politicised itself. Yet very questionable actions have occurred recently within Housing New Zealand Corporation and its staff. Concerns have been raised about the way in which contractors for maintenance on Housing New Zealand Corporation stock have been gagged from expressing their concerns to politicians. 
Phil Heatley was able to say in a press release that a conspiracy of silence has engulfed Housing New Zealand Corporation—and that development should worry us. The conspiracy of silence extends from the chair of the board himself through to the chief executive and it has now resulted in Audit New Zealand having to examine the way in which contracts are being awarded by that organisation and more specifically how an instruction came which was known about by the chief executive of that organisation that attempted to gag people who were concerned about the improper way in which contracts were being organised. 
We know that the organisation is in a mess—it is in a complete and utter shambles—and that is because of the policies of the Government. It is largely because of the policies of the Minister who is now in the chair Mr Maharey about whom John Tamihere was absolutely correct. While we have people living in State houses who are earning $100000 or more it seems incredible to me that Mr Maharey and Chris Carter can take satisfaction from the fact that 12000 people are waiting for those particular houses. Labour members come into the Chamber and invariably say that it is all the fault of the National Party. They have been in Government for 7 long years and it is time they accepted that their housing policy is a mess. 
I will finish by mentioning one very worrying incident that absolutely proves my point about the politicisation of Housing New Zealand Corporation. During the last election an absolutely outrageously incorrect letter went from many Labour politicians direct to Housing New Zealand Corporation tenants stating that if National were elected they would be kicked out of their houses. It was absolute rubbish but the point is how Labour members such as Ruth Dyson Dianne Yates and David Benson-Pope to name but three ever got hold of the names of Housing New Zealand Corporation tenants to be able to write to them directly. The only answer is that some mole in Housing New Zealand Corporation was prepared to supply private information to the Labour Party so that it could write those threatening incorrect letters to tenants. 
It is very worrying when Housing New Zealand Corporation has become as politicised as that. [ 
Interruption 
] Darren Hughes laughs. He scoffs. He does not think it is important to have a civil service that is apolitical. He might not think that but I can tell him that many many New Zealanders do. I say to Darren Hughes that this issue is a very serious one for New Zealanders. Labour MPs should not use Housing New Zealand Corporation to obtain information that is private and confidential to that organisation. 
Hon STEVE MAHAREY (Minister of Education) 
: 
 I rise to take a call on behalf of the Minister of Housing Mr Chris Carter and to follow on from I think the former spokesperson on finance for the National Party who is the former spokesperson on housing but I am afraid I have no idea what he does now. I assume he does nothing these days. 
The previous speaker canvassed broadly the issues of the housing policies we have but let me say to him that in 1999 we inherited the virtual destruction of State housing by his National Government in the 1990s. And it did that intentionally. National introduced the accommodation supplement earlier in the 1990s for the express reason of allowing it to destroy the tradition of State housing in this country and it set about it with alacrity. It was I think near a crime for National members to have done what they did but let me tell members what they did. They sold 13000 State houses they built none they had no stock developing around the country but on top of that they sold the most desirable houses to people who were largely speculators who were able to on-sell those houses. They put people who were paying above-market rents into those houses because anybody under that Government could get into those houses. They did not have to be poor or needy. Mr Heatley comes into the Chamber and accuses us of all kinds of things. He forgets that the only people who ever got into a State house when they did not need it financially got there under the National Party. That is why those members are sitting over there. 
The National Government’s policy left us at the end of the 1990s with 13000 good houses sold. Stock that was hard to rent and often unhealthy was kept in stock because the Government could not sell it. Speculators owned the houses. The accommodation supplement rose towards something like $1 billion being paid out as a kind of supplementary minimum price to ensure that the landlords of the country were able to rent their houses. That is what the genius David Carter tells us was a housing policy in the 1990s and somehow that allows him to come in here and criticise a Government that has rebuilt those houses and that has had to try to find houses in places like Auckland where National allowed for none to be built. 
In Northland we were watching people burn down their houses and children die because of the policies of that man. Yet he has the cheek to come in here and tell us about housing! I think the best thing David Carter could do is leave the House and go and do whatever he used to do formerly because he is wasting his time trying to make a contribution to this debate. 
I thank Housing New Zealand which I was the Minister of for a short period of time. It has I think formed itself from being what was essentially a rental agency under the National Government into an organisation now that has public service as its goal; that has what is called social housing—that means that people who are needy get houses—as its goal. The Housing New Zealand people care intensely about that. They now have a housing strategy that covers the building of houses of trying to be innovative in those houses of trying to make sure the rents are right and of being innovative and working with third-party organisations. They have great policy building up and they have a real sense of dedication to the task before them. 
If that is called politicisation as the previous speaker likes to say then I guess one could tell progressive people anywhere in the country that they are being politicised. Housing New Zealand believes in the project of housing New Zealanders not quitting the stock to rich speculators who on-sell it so that they can make a few dollars off the back of the National Party’s policy. Housing New Zealand has a true commitment to housing people in this country to being innovative to doing things differently and to making sure we have people in good healthy houses so that they can live good decent lives. That is a mission worth being part of. 
I thank Housing New Zealand for that and all the people who have supported this kind of policy and I thank David Carter for going back to doing whatever it is he does. 
Report noted. 
Transit New Zealand 
Hon MAURICE WILLIAMSON (National—Pakuranga) 
: 
 I am delighted to take a call about an organisation that I now think is appallingly dysfunctional and actually now needs to be completely overhauled by the new Minister Annette King. I am of course referring to Transit New Zealand. I can back up my claim because of the number of huge volumes that Transit has released starting with this plan in my hand which came out at the end of July last year—about 9 months ago. Transit issued this huge thick glossy document with tables charts and graphs and stuck on the front of it a 10c sticker that states: “This document does not include the funding for the State highways from the extra $500 million from the Government announced last week.” 
 So Transit produced a huge document like that. The Government had put out a press release just the week before that said the Government had found $500 million extra for roading. I guess everyone was quite excited about that. The money just fell from the sky. There was no rigorous process. Dr Cullen announced that day that he had found $500 million and it was all going to roading. I guess I was quite pleased as I thought the money was going to a good cause. And then the update came in August. Members will again remember this. It was another big thick glossy document with again a lot of charts and pictures and some new time lines for a whole lot of projects. 
Members of this House will understand that Transit sets the agenda with these State highway forecasts and communities up and down the country pore over them with great aplomb and then say: “Excellent so that’s where we are on the 10-year programme.” I think every member of this House would expect that if a 10-year plan were to change between July and the August update projects would be moved maybe 3 or 6 months. There might be a bit of slippage. If a bridge was due to be started next April the date might be moved to June. Everyone could live with that. 
But what did the document do? It actually did very little because between the August one and this big thick one—this is the mother of all documents which Transit issued in February—was a complete reversal of a whole lot of stuff that had come out in the August document. Again I say to the Minister in the chair the Hon Harry Duynhoven that it is fine if a community sees a 3-month slippage in the latest February update. 
But I will give some examples because there are some doozies. When the August update came out the Taupo eastern arterial was scheduled to start in 2007-08. By my calculation that is next year because we are in 2006. The Mayor of Taupo the Taupo District Council and a whole lot of the developers who were going to plan a whole lot of property around that said that 2007-08 for the Taupo eastern arterial was great. That was August. In February the document came out and they must have spent some time going through and through it but they could not find the project. Oh no. The start date of the Taupo eastern arterial had not slipped by a few months; it had gone from the 10-year plan. It is not in the years out to 2015 in the latest plan. 
We then saw some lovely sophistry from Mark Burton the member for Taupo—the headline on the front page of his local newspaper stated: “MP: Bypass delay is not acceptable”. He is a Minister in the Government. We asked Transit when it came before the select committee for the financial review whether it had alerted the Minister of Transport that this is the document it would have to put out based on the funding shortfall it had now identified and what the Minister had said he would do about it. Rick van Barneveld told us that Transit had alerted the Minister of Transport in November last year that there was going to be this problem. It had discussed it with the Minister—and the Minister of Finance—right through to December. Transit executives then went away on the Christmas break and got no assurances from the Government at all that the problem would be fixed. 
When all hell broke loose on the day that this report was released the Acting Minister of Finance Trevor Mallard within 1 hour said: “Don’t worry. All that stuff that Transit has put out is not valid any more because we will find the $685 million shortfall that was identified.” 
I say to this Committee that is an appalling way to do business. Transit is dysfunctional and admits it. I want to quote from the log of an interview with the chief executive of Transit Mr van Barneveld by Sean Plunket. I think it is a classic. Sean Plunket said to Mr van Barneveld: “But surely you knew that the $685 million shortfall wouldn’t be tolerated?”. Mr van Barneveld said: “Well no. We have to go on planning it because no Minister would give us an indication that they would plug the gap.” Yet the Minister said so an hour after the release of this document. But the doozy of this interview is that Mr van Barneveld said: “Well I look forward to working with Transit’s board and the Minister to understand the certainty of funding and then to reflect that very quickly to the community in New Zealand who are concerned about the timing of our projects so we can get on and do this quickly.” 
I think that Sean Plunket felt like I did—I do not actually know what that means. So he asked: “You don’t sound like you think the Government’s assurance of money in the bank are here?”. Mr van Barneveld said: “I don’t think it’s appropriate for me to comment on that.” Sean Plunket then interrupted and said: “I think it’s entirely appropriate because it would seem that you’re the chief executive of Transit and you are responsible for putting out the sort of projections and draft plans that have caused so much controversy here Mr Barneveld. So I am just wondering whether or not you can tell us if you have anything more from the Government that would back up their claims this morning that they are going to make good the shortfall of $685 million that caused the problem in the first place.” Mr van Barneveld the chief executive of Transit said—and this is a classic—“I’ve only heard that advice this morning as you did on the radio.” Now how can Transit run a Government entity like the State highway roading business when its board members know there is a $685 million shortfall? 
They published an appallingly hopeless document that has so many mistakes. My favourite—not the Taupo eastern arterial actually—is Kopu Bridge which was scheduled for 2008-09 at best then slipped to 2010-11 and is now sitting at 2014-15 in the plan for the start of the project. Yet Rick van Barneveld said to Sean Plunket that he had only heard about it as Sean Plunket had on the radio that morning. Thank goodness that the chief executive of Transit was not having a shower when that news was on because he would have carried on labouring under the impression that he had a $685 million shortfall. 
I say to this Minister and to the Minister of Finance that in Thursday’s Budget where everyone truly believes that the $685 million will be in there to make up the shortfall that was identified in this last round that is not even getting us back to where we need to be. When the Government crows that it has fixed the gap and has taken the $685 million back and has plugged the hole let me make it clear that that is not even starting to address the shortfall of those projects. 
I move to Transit’s dysfunctional nature in another area which is to do with its pseudo-economic development role. Transit says that there are two ways of dealing with roading. Either when there is economic development and growth we say that if that is the level of growth we had better get on and build these roads to cope. Or we can take the Transit dog in the manger attitude—that is the level of economic growth we see happening in Warkworth Taupo or Queenstown and in every case we will race off to the court to block the project. Yes the territorial local authority the regional council the community and business want the project and all the consents have been done for it to happen. Then the politicised body that Transit has become—with the president of the Labour Party Mike Williams and John Wright a former Alliance MP—has now taken it totally under its wing to decide that it will determine where economic growth will occur. 
That is not Transit’s role. I say that to Transit today. Its role is to provide the State highway network. At the select committee Transit said that it did not want traffic flowing on to its roads. I say to Transit that they are not Transit’s roads. Those roads are owned by the people who pay petrol tax and road-user charges to fund the building of those roads. I have never seen a more dysfunctional body which puts out document after document. Then when we get to the doozy of them all the Government says that it is all the National Party’s fault. 
Hon HARRY DUYNHOVEN (Minister for Transport Safety) 
: 
 I thank Mr Williamson for his entertainment for the last little while but I say to members that we should get some facts in the way of a wonderfully entertaining story. Firstly in August 2005 there was the Transit 10-year forecast revision. This was a relatively new process that had not previously occurred in the National Government’s time. For many years when National was in Government we actually found out each year what projects were on. So we had the amazing spectacle of roads being begun but not the connecting roads to make them work which were added in the following year. 
In August 2005 the 10-year forecast showed that there were problems. Those problems revolved around two things. The first was the rapidly increasing cost of roading construction due to a number of factors but most instructively the cost increases in oil etc. The second was a reduction in the expected revenue increase which resulted in 2005 in a 10-year programme being put out and then in February 2006 a revised programme being put out. That programme showed that there were problems and this is where the member has an element of truth—and every good story has to have an element of truth. What was quite clear was that the reduction—not actually a reduction but a reduced increase—meant that there was about a $35 million shortfall to begin with. The increase was not as major as we had expected in roading revenues and at the same time a very substantial increase in the costs of construction resulted in the fact that many projects could not begin. No one is more aware of this than myself having been battered about by the New Plymouth District Council and others over the Bell Block bypass. What we had was a number of projects around the country that could not be begun because of existing projects. Unlike the previous Government we want to continue them in their entirety and actually get them completed. So those existing projects were not only proceeding very well but because we had a very good summer construction period which was longer than usual a lot more money than expected was being spent on constructing those major projects particularly in Auckland but in other parts of the country ahead of time. It was important to do that to try to make some gains. 
So I say to the previous speaker a former transport Minister who incidentally is the second-longest-serving transport Minister during my lifetime that if there is a problem with roading infrastructure perhaps he should look in the mirror and take some of the blame for those problems himself. Certainly successive Governments until Labour came to power in 1999 did not do a lot of roading construction work and certainly we had a problem with infrastructure not being kept up with not just in roading but in all areas of the economy. 
Labour has moved rapidly to fix that and in fact some of the problems are due to the fact that we stretched the construction industry. The roading construction industry regularly brought to us problems over training problems over the licences for operators of machines. We moved to address that. The Hon Mark Gosche when he was Minister was I think the first to move to address some of those issues and the Hon Pete Hodgson and I moved to address the remainder in terms of drivers’ licences training schemes for those driving road-making machinery etc. Those were issues that we addressed to try to ease the constraints that the road construction industry had. So it is a bit rich for National who did virtually nothing for years and years when it was in Government to then come back and say when we are building more roads than has been done in generations that there is a huge problem and everything is disastrous. It is not. 
Further I say to the Hon Maurice Williamson that both Dr Cullen and Mr Parker who was by that time the Minister—in February 2005—said that yes there was a shortfall and that that matter would be addressed. I take them at their word on that. I have every confidence that it will be and I am sure that members of Parliament will see that those projects that people expect to be constructed in the time frames will get back on schedule or very much approaching it. Just to take my own favourite the Bell Block bypass I say to members that it was originally scheduled in the very first 10-year plan to be built in the years 2011 to 2013. That project has begun. Unfortunately it was one of the ones that began early and then had to be stopped because soon after it had begun a major archaeological site was found. We will see I hope progress on that in the very near future. 
Report noted. 
New Zealand Venture Investment Fund Ltd 
KATHERINE RICH (National) 
: 
 One of the first points I would like to make is to express disappointment that the Education and Science Committee did not look at the New Zealand Venture Investment Fund Ltd in greater detail. I am holding the committee’s report and I am sad to say it is just a pro forma report of some four lines. I think it would have been important for the select committee to have a serious look at the fund because since it was established in 2002 a lot of water has gone under the bridge. I think it would have been an opportunity for members to ask some questions about progress. Economists seldom agree on many things but one of the things they do agree on is the role that innovation plays in the economic growth of any country. In fact some of the academic literature suggests that as much as 90 percent of a country’s economic growth could be attributed to technical change technology development and innovation. So a subject area of this nature I think is one that is vitally important and one that perhaps should have been looked at in more detail. 
The fund was set up in 2002 and it seeks to place about $100 million into commercial projects so that we can do a better job as a country of commercialising the technologies that come out of our Crown research institutes and universities and that come as a result of the work of inventors and entrepreneurs. The aim of the fund is to leverage additional funding from the private sector and I understand the aim is to ensure that private sector dollars match State sector dollars 2:1. So I am interested in the fact that the capital committed so far is some $60 million yet the amount invested through the programme—the Venture Investment Fund plus the private sector funding—is $86.7 million. So that is not even close to doubling the amount put in by the fund. The Venture Investment Fund funds other venture capital funds so the aim is to ensure that the organisation manages taxpayer funding and gives it to fund managers who will do a good job. 
One of the things I am keen about when it comes to venture capital is that it does give us a greater opportunity to commercialise the outputs of research that is generated here. It allows Kiwis to take a greater ownership in some of the technologies that are developed here and it means that overseas companies cannot just sail into town pick the cherries out of the best technologies and sail off again. So I think it gives New Zealanders a better opportunity to ensure that we attempt to commercialise our projects here and take a greater stake in the value that hopefully can be accrued from some of the research that we have made into various technologies. Venture capital is a vital part of the commercialisation process but $100 million in my view is very much a drop in the ocean. It is a very small amount of money. If we look at the amount put into venture capital in this country surely we can see we have to do more to encourage the availability of venture capital so that companies here that do have a bright idea and that have a new innovation as a result of technical and scientific research have the opportunity to commercialise their new products here. 
I understand that there are some successes. In the long term venture capital is a very risky business. Some projects that are funded can take 10 20 and sometimes 30 years before they become commercial successes but one such project I understand is Ectus put together through the University of Waikato. A company was established around a technology and some people there and it has just recently been sold to a Norwegian firm. 
If this country is to make improvements in its economic growth we have to get used to talking about the commercialisation of technology supporting the technologies that are developed here and making sure that we extract as much as we can out of the technologies that we as taxpayers fund through Crown research institutes universities and other areas. 
Hon CLAYTON COSGROVE (Associate Minister of Finance) 
: 
 I will take just a short call in respect of this matter. I want to touch on one of Mrs Rich’s final points and that was the risk associated with venture capital. Of course if one has been in business—and a number of us have—one knows that any venture capital management requires prudent allocation of funds. The New Zealand Venture Investment Fund is a success story built around a Government that says we should back our universities and our Crown research institutes. It is a success story built around the fact that we believe we need to inject technology into our communities and back those institutions. 
The member touched on Ectus and she is right. It was sold to a Norwegian company and very profitably. It is interesting to note that in the 2005-06 year New Zealand Venture Investment Fund received a $1.5 million distribution from fund managers Endeavour-icap. So there are a number of stark examples here of a successful fund. Venture capital is risky it requires prudent commercial judgment—and with risk of course sometimes there can be failure or sometimes there can be delay. Most of that delay I would argue is based around prudential management by the board and those involved. 
I thank the member for her contribution. It was one of the more enlightened contributions this afternoon. My blood pressure did not rise unlike former speakers who have been here. That member generally makes a far better contribution than some of her colleagues. I endorse some of her comments but I remind the Committee that this fund with which the Government is backing our universities and our Crown research institutes and is attempting to inject technology into the market place was set up in 2002. It was formed of course by the current Government. 
I just note for the record that prior to that I cannot recall the party in Government pre-1999 having a policy on venture capital. If it did it was kept so secret that that party was the only one that knew about it because certainly universities did not certainly our Crown research institutes did not and certainly no one in the business community or in our communities knew it existed at all. It may have been a cracker policy but no one knew it existed—because it did not. I commend this organisation to the House. It is building on sound foundations and long may it continue. 
Report noted. 
The CHAIRPERSON (H V Ross Robertson) 
: I understand that the next group of entities that members wish to debate is the State-owned enterprises. There is a considerable number of them. Is it the wish of the Committee that they be taken as one question? The reason for that is to allow a debate covering the financial reviews of all State enterprises. Is there any objection to that course of action being taken? There is not. The question therefore is that the reports on the 2004-05 financial reviews of State enterprises be noted. 
DARREN HUGHES (Junior Whip—Labour) 
: 
 I raise a point of order Mr Chairperson. Thank you for your innovation. Government and Opposition whips have not had a chance to confer on what you have just proposed. When you say State enterprises are you talking about AgriQuality New Zealand through to Transpower New Zealand? 
The CHAIRPERSON (H V Ross Robertson) 
: Yes. 
AgriQuality New Zealand 
Airways Corporation of New Zealand 
Asure New Zealand 
Electricity Corporation of New Zealand 
Genesis Power 
Landcorp Farming 
Meridian Energy 
Meteorological Service of New Zealand 
Mighty River Power 
New Zealand Post 
New Zealand Railways Corporation 
Solid Energy New Zealand 
Timberlands West Coast 
Transpower New Zealand 
Quotable Value 
Transmission Holdings 
CHRIS TREMAIN (National—Napier) 
:  
I rise to speak on the review of State-owned enterprises and particularly about the Genesis Energy review. State-owned enterprises exist to return a dividend to the Government—a dividend to the people of New Zealand—so they are a very important part of the composition of the New Zealand economy. It is very important that they operate effectively in the New Zealand economy because they in turn add to the growth of the economy. 
I was fortunate to be involved with the review of Genesis Energy this year. It was one of the first reviews I have been involved with. I compliment Brian Corban the chairman and Murray Jackson the chief executive of Genesis Energy on their honesty and on the way they presented their review to the Commerce Committee particularly given how difficult it can be when one is before a select committee and has to be a little controversial. Both the chairman and the chief executive officer were prepared to stand up and be counted on the minzone and to criticise the Electricity Commission about where that minzone sat. It is a difficult thing to do. As it turned out they were correct; the minzone was some 15 percent under where they believed it should have been. It was a gutsy call and it was good they were prepared to be heard. 
Energy is a key component a key input to this economy and is critical to the short to medium term outlook of this Government. Genesis Energy is indeed a key player in this. I just want to reflect on where real growth in GDP is. It is forecast at 2.8 percent per annum to 2010. Real growth in GDP per capita is now averaging only about 1.9 percent per annum. These rates of growth right now are well below the averages we have had since 1993. In fact in September as members well know and December we have had rates of growth bordering on a recession so we need to see some upside some going forward. The warning signs are there so it is critical that when we see Dr Cullen’s Budget on Thursday we see key indications about supporting the energy market and where we will go with that. Energy is a key input to our overall economy. 
Just looking specifically at Genesis and its energy review it is New Zealand’s largest retailer with 690000 customers. It is not the largest but is one of the largest generators of electricity with 1640 megawatts of energy multiple generation facilities thermal power in Huntly hydro power in Tongariro and Waikaremoana and a significant ongoing investment now in wind farms in the Wairarapa and Waiuku at Awhitu. Genesis had an operating revenue in the 2004-05 year of $1.495 billion with earnings before tax depreciation and amortisation of $178 million. It is interesting that its net profit after taxation has fallen back from $80.1 million to $70.2 million over that year. 
If we look at that as a straight analysis from an accounting point of view we see that it is a return of only 5.9 percent on average shareholders’ funds. It is a big decision on whether as a Government we take that huge investment some $1.8 billion into this particular company when we are not even getting the return we would get out of a bank at the moment. From a Government point of view while they are a major investor the return on shareholders’ value is not that fantastic. In terms of the Office of the Controller and Auditor-General it has a pretty good report—the rating is “good”. 
I also want to talk about the key inputs of economic growth being energy and two key factors. First is the surety of energy supply and second is the surety of the spot price. As I said previously Genesis expressed concern at the select committee over the operation of the minzone level. It was subsequently proven right which I said earlier. It was proven that the minzone level was 15 percent under where it should be. At that point in time—and members will remember this—everyone was sitting around praying for water to come out of the sky because back in February-March the lake levels were as low as they have been since 1993. We were all sitting there wondering and waiting for the water to come down. But I guess the key point is we did not have the generation capacity to take over from hydro if hydro was not there. That is where the likes of Genesis have come in with some significant investments that it is now making in Huntly. 
The key thing was where the energy spot price got to. It had a major impact on some of the industries in my own area of Hawke’s Bay. I can talk specifically about Pan Pac Forest Products which is Hawke’s Bay’s largest consumer of energy. It consumes 35 percent of Hawke’s Bay energy. 
BRIAN CONNELL (National—Rakaia) 
: 
 I want to take time to talk about the financial review of Meridian Energy. I start by saying that Meridian Energy is the largest electricity generator in New Zealand meeting something like 30 percent of New Zealand’s total electricity requirements. For the financial year under review Meridian Energy made an after-tax profit of $218.2 million which is an increase of $85.3 million on the previous year. I have taken the time to outline those figures because it is clear that Meridian Energy is the major player. In the financial review process one of the key issues that was identified by the chief executive officer was this: “In terms of electricity supply this is the tightest winter New Zealand has ever had.” 
Hon Pete Hodgson 
: Oh rubbish! 
BRIAN CONNELL 
: His remarks—and I hear somebody in the House has already rubbished his remarks again—were not related specifically to storage levels but rather addressed the overall supply and demand balance of our power system. Storage levels as Mr Tremain has already pointed out were low and are still low even after the rain that we have had. But the key issue is that it is our supply and demand of electricity that is under threat. The chief executive of our biggest generator put New Zealand on notice and said that unless we took action we faced blackouts. Blackouts for New Zealand as an investor destination would be an absolute disaster. Whether he is right or wrong when the chief executive of the biggest generating company in the country is saying that there is an issue of confidence. What was the Government’s response? 
Hon Pete Hodgson 
: That is rubbish. 
BRIAN CONNELL 
: Already I hear “Blackout Pete” saying it is rubbish. But that is not the truth of the matter. The Government’s response and that of the Electricity Commission was that Dr Keith Turner the Chief Executive of Meridian Energy was being an alarmist—that he along with other commentators who were saying the same thing were being alarmists. That came from the Minister of Energy whoever that is. Who is the Minister of Energy? 
Hon Member 
: It’s not you buddy! 
BRIAN CONNELL 
: No it is not me I concur with the member on that. I do not know who it is but let us say that— 
Dr Jackie Blue 
: David Parker. 
BRIAN CONNELL 
: Oh it is David Parker. Sorry but I would be forgiven for not knowing because they move the chairs of the  
Titanic 
 around a lot on that side of the House. Remember he was the Minister then he was not and now he is again. So let us get on with the issue. The Electricity Commission also came out and stated that the chief executive was being an alarmist. This is a commission that is so young that it still asks the Government to do up its shoelaces before it will make a decision. Keith Turner on the other hand has been in this industry forever. When he stands up and puts New Zealand on notice we in the National Party take notice. 
Hon Pete Hodgson 
: Will the member take a question? 
BRIAN CONNELL 
: Maui gas is running out—the Minister can take a call when it is his turn but in the interim will he just shut up and let me get on with it. Maui gas is running out because this Government has sat on its hands for so long and did not and will not deal with the Resource Management Act. This country now has electricity generation issues. All the chief executive officers of our major generation companies are in concert when they say that the demand for electricity will be outstripped by demand— 
Hon Clayton Cosgrove 
: Get it right. Take it slowly. 
BRIAN CONNELL 
: The demand for electricity will be outstripped by supply. 
Hon Harry Duynhoven 
: No the other way around. 
BRIAN CONNELL 
: The other way around yes. The supply will be outstripped by demand in the year 2010. The issue is still one of critical importance. That is 3½ years from now. Three and a half years from now we will have a critical lack of capacity. The impact that that will have on this country as an investment destination as I have already said will be huge. The Government simply cannot grasp that the fundamental issue is that we do not have enough generation capacity. 
Hon CLAYTON COSGROVE (Associate Minister of Finance) 
: 
 That was for the benefit of those— 
Eric Roy 
: I raise a point of order Mr Chairperson. I understood that our party was to have three calls on this matter. Does the Minister’s response indicate this is the conclusion of the debate? 
The CHAIRPERSON (H V Ross Robertson) 
: No certainly not. 
Brian Connell 
: I raise a point of order Mr Chairperson. I was seeking another call and it is normal practice in the Chamber that when a speaker seeks another call he or she gets it. 
The CHAIRPERSON (H V Ross Robertson) 
: I understand Mr Connell. You can actually have another call. The calls do not have to be taken together. I have already called the honourable Minister so the reality under the Speakers’ rulings is that he will take precedence in this case. But I have recognised that you do want to take another call. 
Hon CLAYTON COSGROVE 
: For the benefit of those out in the real world who did not know whom that was I will say that was the “bard of Christchurch” Brian Connell. After that speech which was bereft of any detail—he could not get his demand and his supply curves quite right and mixed them up—is it any wonder that he has been dropped not only off the back row in the Chamber but right off the cliff? 
We do not have a blackout power crisis. It may be in Mr Connell’s interest of course to scare the living daylights out of every pensioner in his electorate of Rakaia for his political gain but here is the truth. If Dr Brash and Nick Smith went back to the lake and stood behind the foot-by-foot measure in the same place where they had that infamous photo opportunity then they would be drowning. They would be underwater. Dr Brash is of course drowning—politically that is—but the truth is that Dr Brash and Nick Smith would be underwater. Of course that is a bit like walking the plank. There is not a lot of detail. National will whip an idea out to see whether it flies. It takes a risk and in that case that backfired. 
Now let us look at Genesis Energy—a very very solid performer. I can confirm for the benefit of the National Party that unlike it we have no plans to sell the assets and no plans to sell the State-owned enterprises. Genesis Energy has quite prudently of course as a countermeasure to any blackout—mythical or otherwise—that may occur stockpiled coal at Huntly in order to ensure that New Zealand’s power needs can be met if there is a low flow into the lakes. To that end in 2004-05 the stockpile was running at 780000 tonnes. That is not a bad countermeasure I would say and it will assure ordinary New Zealanders that if there are low lake levels—and there he is Dr Smith the man who if he stood in the lake with Dr Brash at the same place as he did a couple of weeks ago for the photo opportunity would be underwater. Some would say that he may be underwater now given the way he carries on. 
Genesis Energy paid $23 million in dividends to the shareholder the Crown—the custodian of that company on behalf of the taxpayer—which is money that we can use in other areas. That company is also building E3P—a crucial power station next to the Huntly station that will generate I am told 385 megawatts of power through its gas-fired station. That station will be ready by the end of December. That is a massive investment of $530 million and it is all good stuff. 
So I say to the National members as they attempt to scare the living daylights out of every pensioner as I said by saying there will be a mythical blackout that this Government has put in place new hydro generation. This Government through Genesis Energy has got the coal stockpiles under way. We can look at what Keith Turner is doing in respect of the massive wind generation proposals that are being planned for and rolled out. 
Brian Connell 
: You said he was an alarmist. 
Hon CLAYTON COSGROVE 
: No I said you were an alarmist actually. 
The CHAIRPERSON (H V Ross Robertson) 
: Please do not bring the Chairperson into the debate. 
Hon CLAYTON COSGROVE 
: So we have here a Government that went through a low flow and low lake level power crisis some years ago—it inherited a basket case of underfunded State-owned enterprises—and then put in place decent countermeasures. I pay tribute to the boards of Genesis Energy and Meridian Energy— 
Hon Pete Hodgson 
: And Mighty River Power. 
Hon CLAYTON COSGROVE 
:—and Mighty River Power as my colleague Mr Hodgson points out for the solid work they have done in progressing decent countermeasures. 
Again for a bit of historical context I contrast that with the previous Government’s policy which of course brought us to the situation we have now in terms of the “Mad Max” Bradford reforms. Again—and it is a bit like the previous Government’s Crown research institutes policy—no one knows National’s policies on the State-owned enterprises. On some of those enterprises that Government went to the country and said it would sell them then it backed off that because it might have been slightly unpalatable to the country and now no one knows its policy. The best the Opposition could do was to have Dr Nick Smith behind his leader as he walked the plank and beside his leader as he stood at an empty lake—which would have filled up 2 weeks later to a level over Dr Nick Smith’s head so that he would have been floating like a dead carcass on top of the lake along with his leader today. Well we know the status of the dead carcass in political terms. The body bags are out. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 It is little wonder that the electricity industry and the International Energy Agency highlight New Zealand as a country where energy policy is a mess when incompetents like Clayton Cosgrove give speeches like that in this Parliament. Let me tell members a few of the things that have been highlighted both in that report and by Keith Turner whom Mr Cosgrove chose to quote. Let me say exactly what Mr Turner said about the state of our electricity system. He said there are lines in New Zealand that are so poorly maintained we are at risk of being in a Third World situation in respect of electricity supply. The Electricity Commission an agency this Government set up has had to admit it made a mistake of about 180 megawatts in the minzone which amounts to the amount of electricity that would service 120000 households. 
Then there is the complete mess in Government policy. I wonder whether the Minister in the chair Clayton Cosgrove can tell us whether we are going to have a targeted carbon tax for the companies we are talking about. The silence is deafening. The Minister in the chair is not able to tell us even whether a carbon tax will be imposed on those companies. I ask the Minister in the chair how he can possibly get new investment in the electricity sector if he cannot answer even a basic question like that. 
Let us recite what happened. At the Commerce Committee when the representatives of Genesis Energy were before us they told us they were sick of this Government relying on the Huntly power station to bail it out. Pete Hodgson told us in the House 5 years ago that this Government’s energy strategy was to ensure we had more renewable energy. Well do members know that in the brief 6 years of this Government we have trebled the amount of electricity produced from coal? That is what has happened under this Government. 
Hon Pete Hodgson 
: We just switched fuels. 
Hon Dr NICK SMITH 
: Mr Hodgson chips in and says the Government had a strategy to increase the amount of energy produced from renewables—but it has achieved exactly the opposite of that. 
We have had the Energy Efficiency and Conservation Strategy and if ever there was a Government flop it was that strategy. I notice the Green Party is represented in the Chamber; that strategy was its great brainchild. The strategy stated we would achieve a 10 percent gain in efficiency by 2006 and we have actually achieved far less than was achieved in the last 5 years of a National Government. Then the Government has talked about developing an energy strategy. Five or 6 years after Labour has been in Government we are finally to get a strategy out of it! Well I have news for the Government: that strategy will have as much credibility as the energy efficiency strategy of which not a single target has been met— 
Hon Tony Ryall 
: Not a single target? 
Hon Dr NICK SMITH 
:—not a single target. Whether in terms of renewable sources or of efficiencies that strategy was not worth the paper it was written on. This Government has spent $100 million on that strategy yet it is fascinating that under National there was a 0.75 percent improvement in efficiency each year whereas under this Government it has been less than that—only 0.5 percent. That is what the public has received in return for its $100 million. 
In respect of transmission there is huge confusion within the sector as to who is calling the shots: the Commerce Commission Transpower New Zealand or the Electricity Commission. There is huge uncertainty in the sector about the Government’s Kyoto policies. Every single part of those policies is in tatters. There is no policy. How can we possibly expect there to be any investment in new generation when there is a policy shambles the like of which I have not seen in any area as great as that in respect of climate change? The Minister in the chair says wind power is the answer. Well I have news for the Minister: even after the wind farms have been constructed—and two have been cancelled in the last month—the reality is that the amount of energy produced by wind will be less than 1 percent of total generation. And I know that the Minister in the chair knows that Project Aqua and the Dobson River scheme should have gone ahead so that we were not in this difficult situation. 
NANDOR TANCZOS (Green) 
: 
 Dr Smith has been talking about climate change and he is quite right—it probably is the single biggest environmental threat facing humanity today. Carbon dioxide levels in the atmosphere at 380 parts per million are higher now than they have been in the last 650000 years which include five glacial and interglacial ice ages. The West Antarctic ice sheet is breaking up at an unprecedented rate. Arctic sea ice is disappearing and the ocean exposed is absorbing heat and accelerating the process. Glaciers are in retreat around the world. The Gulf Stream the warm current that keeps Western Europe inhabitable has weakened by 30 percent and we are seeing the gradual melting of the tundra in Siberia and northern Canada and the release of thawed methane. 
As Dr Smith noted this weekend the Government’s response to climate change has been pathetic. It has abandoned the only economic mechanism it was prepared to consider in order to reduce greenhouse gas emissions—the carbon charge. It has abandoned the animal emissions levy and it is now presiding over the destruction by Landcorp of 250 square kilometres of forest in order to turn it into a dairy farm. That is an area 40 percent the size of Lake Taupo. 
Members should remember that for every hectare converted from forest to pasture greenhouse gas emissions are increased by about 800 tonnes of carbon dioxide equivalents. So the 25000 hectares we are talking about will contribute 20 million tonnes over the 20 years of the conversion. Unbelievably that is a 1.4 percent increase in our total emissions from this country every year and in 20 years we are talking about a 27 percent increase over our current levels. That is unbelievable—an extraordinary amount. 
Why on earth would a State-owned enterprise be doing that? Landcorp is already the largest farming operation in New Zealand with 1.54 million stock units on 112 farms which total 370000 hectares in size. We have to ask whether this is just one more manifestation of the Government’s absolute obsession with economic growth and damn the environmental consequences. Landcorp of course has an agreement not to acquire any more land unless it sells an equivalent amount but the lease arrangement that relates to that land gives the corporation effective control over a greatly increased area. 
Two subsidiary companies Landcorp Developments and Landcorp Pastoral Ltd will convert 25000 hectares over 20 years. That will involve intensive stocking which is associated with very high nitrogen inputs both as fertiliser and as urine from those animals. It would be nice to see Landcorp lead the nation by example and institute devices to measure contamination by leachates and to see it agree to adjust stocking rates and fertiliser applications if they exceed thresholds. But I fear we are very unlikely to see anything so progressive. On the permeable volcanic soils of the area there is likely to be significant leaching of nitrogen and other nutrients from farms which will perpetuate the problem of nutrient enrichment of lakes and rivers—another significant environmental problem that New Zealand faces today. 
 Sensibly the water use application was denied by Environment Waikato which said that the leachate from the Landcorp property would negate all of the work it is doing to prevent nutrients ending up in streams and lakes through its clean streams initiatives. It is absolutely bizarre that this State-owned enterprise seems to be actively hostile—not just neutral—to any prospects of this country meeting our Kyoto commitments or cleaning up our polluted waterways. It is an absolute disgrace. 
Hon CLAYTON COSGROVE (Associate Minister of Finance) 
: 
 I thank the member for his contribution but I want to take a short call to rebut a couple of the points he made. First in my view Landcorp is one of our premier State-owned enterprises. As a member of the Primary Production Committee some time ago I paid a number of visits to Landcorp facilities and farms along with a couple of other members. It is a premier State-owned enterprise. For instance in the last 2 years it has returned to the Crown a dividend of $36 million. 
I want to touch on a couple of points that Mr Tanczos made in respect of deforestation and the decision on that. The decision was not Landcorp’s. I will give an example of what happened. Landcorp decided to take up a contract offered by Kiwi Forests which was the owner of some land to convert that land for dairy farming. If Landcorp had not taken up the contract it would have been offered to someone else and the land would have been converted for dairy farming anyway. So the decision to deforest the land was not the State-owned enterprise’s. If deforestation would have occurred anyway my view is that the State-owned enterprise should be in there as the superb farmer that it is making money for the Crown. 
I also say that if one looks at the performance of the Landcorp entity one can see that it has performed outstandingly on the back of strong commodity prices. It oversaw the transition of ownership of Molesworth Station to the Department of Conservation. Landcorp continues to farm on that property now despite the dire predictions that I recall came at the time from the Opposition. I think Mr David Carter waxed eloquently at the time making dire predictions about the handover of that land and what it would mean in terms of reducing Landcorp’s ability to farm it. As usual the reality was different from the predictions. Also if one looks at the lambing percentages one can see that they are incredible. They are 135.8 percent which is a record high compared with the previous year’s 127.9 percent. 
Landcorp is a really good solid State-owned enterprise. It is one of our premier State-owned enterprises run by a fine board with a fine chief executive and by a very solid management team. Landcorp also contributes to something that I think is important in the farming sector and in rural industry which is training. It does an impressive amount of training and upskilling which is then re-injected as people pass through that entity and back into the farming communities. 
To conclude I want to touch briefly on a bit of history. Landcorp was previously on the hit list. I recall when Labour came into Government going to a Landcorp dinner and being told it was fantastic that the Labour Government had come in and told Landcorp squarely that it was not for sale. I was told that because Landcorp knew it was not for sale given those parameters it could actually get on and make some money for the taxpayer and improve the State-owned enterprise by doing some long-term planning. Prior to 1999 Landcorp was on the block. Labour defeated the National Party at the election then and put that issue to bed. Not to be outdone a great strategist—probably Murray McCully I suspect—decided to revisit that proposal in 2002 and again in 2005 and to say to the country we should sell off one of our biggest landowners probably to the foreign interests that come in start to subdivide land gobble everything up and then compete with it. 
We say again to Landcorp to the people of this country and to this Parliament that under the stewardship of this Government the Landcorp asset—which is a huge asset in the public mind and in the community context—is not up for grabs. I welcome the next election because I assume the National Party will recycle for the fourth time its failed policy of going to the public and telling them that we should sell Landcorp to foreign interests have it carved up have somebody else come and take over and reduce to zero the dividend that our taxpayers receive through the Crown. 
GORDON COPELAND (United Future) 
: 
 It is very appropriate that I follow on from the remarks just made to us by the Minister in the chair the Hon Clayton Cosgrove because at this point in the debate on the State-owned enterprises I want to talk about the ownership of Genesis Energy Meridian Energy and Mighty River Power. United Future believes that the current view of never selling any of the State-owned enterprises and retaining 100 percent State ownership is a very very deeply flawed policy when looked at from the point of view of determining what will maximise New Zealand’s economic growth and how to take steps to ensure that happens. If the 20th century taught the world one thing very very eloquently it was that Governments are not good at running businesses. Having sat through the committee of inquiry into Television New Zealand (TVNZ) I can tell members New Zealand is no exception to that and we should not think we can do something here that has failed in every other country. 
We have Labour’s view of never selling anything. National has changed its position on the State-owned enterprises because at the last election we were told by Dr Don Brash that it would not sell anything either except for a few small farms and a wee bit of Solid Energy. The ACT party’s view is to sell them all and just go in for straight market economics and so on. United Future has a different position and it is one that I believe is fundamentally sound and the House should look at. United Future’s view is that the partial sale of the State-owned enterprises to mum and dad investors could completely revitalise those businesses lift local savings and investment increase the returns to the Government and relieve the Government of ongoing capital demands. It could also build wealth for many thousands of mum and dad investors and ownership societies. United Future therefore proposes that about 40 percent of the State-owned enterprises should be sold. 
However I say immediately that we propose that that 40 percent be sold to New Zealand mum and dad investors in the various ways in which they invest in shares—through managed funds and superannuation schemes etc. We would put safeguards in place to ensure that no more than say 20 percent—and certainly less than that in the case of TVNZ—of those shares could ever migrate overseas into the hands of non-residents. That would give New Zealand continued majority ownership and control of the State-owned enterprises going forward. That policy is unique to our party and I believe the House should look at it very seriously. 
I can understand that New Zealanders are nervous about selling even 40 percent of the shares in State-owned enterprises. I completely understand that and sympathise with them following the debacle of the 100 percent sales of Air New Zealand and New Zealand Rail which have rightly made Kiwis very nervous about asset sales. But I stress that in both cases those enterprises were sold 100 percent and certainly in the case of New Zealand Rail were sold to asset strippers. We certainly do not suggest we go down that street. Australia for example has its four pillars policy in place which ensures that banks financial institutions and the media remain under Aussie control. The United Future policy represents a Kiwi equivalent of that very wise Australian position. 
We estimate that such a partial sale would release somewhere between $5 billion and $7 billion for reinvestment by the Government in other areas. The reinvestment of those funds would provide a new and an exciting range of opportunities for New Zealand. For example some hundreds of millions of dollars could be invested long term to produce income for universities that would enable them to award scholarships for postgraduate work across a range of high-level scientific and engineering skills. That skill set in and of itself has the potential to significantly lift New Zealand’s economic growth by creating a knowledge-led economy. We cannot have a knowledge-led economy without that really top-end PhD level of scientific input and engineering skill. A similar investment could be made in the top end of medical technology by our major hospitals so that New Zealand could establish and maintain First World status in all major surgical and diagnostic areas. 
The land transport funding problems in Auckland Tauranga Wellington and elsewhere could be overcome by utilising the money realised from the 40 percent sale of the State-owned enterprises thus eliminating congestion and providing the New Zealand economy with a major productivity boost. The drag on our economy at the moment of that congestion is very very material indeed. If any money is left over after that we could use it to repay Government debt although I point out that the Government is now in a net credit rather than a debit situation. In other words our net financial assets now comfortably exceed our net financial liabilities. 
Reports noted.. 
The CHAIRPERSON (H V Ross Robertson) 
: I understand that the next group— 
Eric Roy 
: I raise a point of order Mr Chairperson. I am not sure where you are getting to but I seek leave that the next debate be taken as one question. 
The CHAIRPERSON (H V Ross Robertson) 
: Thank you Mr Roy I was just getting to that. 
Eric Roy 
: I am here to help. 
The CHAIRPERSON (H V Ross Robertson) 
: I know you are. I know that you were a former Assistant Speaker so I know that you are here to help. I understand that the next group of entities that members wish to debate is district health boards. Is it the wish of the Committee that the district health boards and Pharmac be taken as one question? Is there any objection to that course of action? There is none. 
District Health Boards 
Pharmaceutical Management Agency 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 In March the Government required the Director-General of Health to write to eight district health boards around the country to threaten them with an upgraded level of monitoring and the removal of their early payment situation if they did not improve the level of their performance of what are called the elective services patient flow indicators. The ministry’s letter follows the revelation in Parliament that despite apparently billions and billions of dollars being put into the public health system in the last 6 years fewer elective procedures are being performed. That also showed that fewer surgical procedures were being performed compared with 5 years ago. As a result the Ministry of Health wrote to a number of district health boards to threaten them with increased monitoring by the Government and to send a very clear message that their current performance was concerning and that they must move to compliance with those standards. 
That is why we have seen thousands and thousands of New Zealanders culled from waiting lists in the last few months. We already know that about 14000 New Zealanders— 
Anne Tolley 
: Fourteen thousand? 
Hon TONY RYALL 
:—14000—so far this year have been culled from the waiting list to see a specialist. On top of that we know that now almost 9000 New Zealanders have been culled from the waiting list after seeing a specialist and being told by that specialist that they need an operation and would benefit from having such an operation. 
In the district health board considerations that the Health Committee conducted district health board after district health board confessed to the select committee that people have to be sicker today to get an operation than they needed to be 5 years ago. That is what the Auckland District Health Board the Waitamata District Health Board the Counties Manukau District Health Board the Capital and Coast District Health Board and the Canterbury District Health Board said. This paints a picture of an elective services system in crisis. Fewer New Zealanders are getting elective surgery today than were getting it 5 years ago. That is very serious when we consider that the Government has made a huge investment in the health system yet fewer people are getting seen. 
What is frightening in the words of Dr Frizelle a leading cancer specialist in New Zealand is that many people are being dumped off a waiting list and sent home—some to die. On top of that concern salaried medical specialists have described what the Government has under way as dangerous and risky. The Minister of Health Pete Hodgson has not responded to that criticism. Senior medical specialists are saying that the cull the Government has under way directed by these letters that the Minister instructed the Ministry of Health to write is dangerous and risky and using the word of one of New Zealand’s leading cancer specialists frightening. 
We can understand why ordinary New Zealanders are worried about this Government’s handling of the health system. They are worried because there is a major disconnect in the Government’s policy. The Government is saying that it wants to increase access to primary care and to get people who do not go to see general practitioners to see them in order to get care. It is a laudable principle. More people apparently are going to see general practitioners but general practitioners are saying that those people need to go to hospital to get dealt with and to be seen by specialists because they have a secondary need. But when people get there they hit a logjam. 
As the Ministry of Health has said in its own documents the Government’s approach to electives is focused solely on cutting waiting lists not on increasing the number of elective procedures. That is what the Ministry of Health wrote to the Minister of Health. The Government’s elective policy is more about cutting the waiting lists than it is about focusing on additional elective procedures for New Zealanders. 
Dr JONATHAN COLEMAN (National—Northcote) 
: 
 It is a great shame that the Health Committee did not get the opportunity to hear from the Hawke’s Bay District Health Board and that we ended up producing a pro forma report on that district health board. I can tell members that if we had known what we know now about what has been going on in elective surgery in Hawke’s Bay we certainly would have wanted to see that district health board because what has been uncovered there has been just appalling. I can tell members that the National Party health team has really been putting the focus on health. The more focus we put on it the more uncomfortable truths are coming home to roost for this Government. 
Back in February the Minister of Health Pete Hodgson said when he was asked that the mark for anything in health will always be 5½ out of 10. Well if we were to ask the people in Hawke’s Bay now I would say that the Minister would definitely not get his 5½ out of 10 because 5½ is a pass mark and frankly in terms of elective surgery in Hawke’s Bay as around the rest of the country this Government is getting nowhere near a pass mark. 
If one district health board illustrates the sorry state of elective surgery under this Government it is the Hawke’s Bay District Health Board. We have heard that 1800 people just waiting to see a specialist for a first specialist appointment at that district health board have been dumped off the waiting list. Those people have not even seen a specialist. What was the precipitant for that? It was a threat as my colleague Tony Ryall has stated from the Ministry of Health that if the district health board did not come up to scratch and start to meet its target and if it did not comply it would be put under intensive monitoring. That district health board like a number of others received a letter that stated: “I anticipate you will move immediately to tackle the issues that underlie this position. As an indication of the seriousness attached to this matter I must regrettably formally advise you that failure to correct current non-compliance will lead to the ministry reviewing your status on the monitoring and intervention framework.” 
What did that mean? That meant that the management of Hawke’s Bay District Health Board had absolutely no option but to dump 1800 people off the waiting list to see a specialist. Then what happened? The Prime Minister blamed the managers—it was the managers’ fault! What happened next? The Minister of Health said it was an ethical matter—that the doctors general practitioners and surgeons of Hawke’s Bay were acting unethically in removing those people from the waiting list. 
Hon Member 
: What does that mean? 
Dr JONATHAN COLEMAN 
: Yes what does that mean? What does “acting unethically” mean in this context? Really only one person is to blame for this situation and that is the person who has to take the ultimate responsibility—the Minister. People should not blame the general practitioners surgeons and management of Hawke’s Bay District Health Board; they should blame the Minister of Health. Because the sad fact is that the buck stops with him. He has to stand up and take accountability. We in the Health Committee have heard week after week from district health board official after district health board official admitting under questioning that under this Government people have to be sicker than ever to get an operation. It is harder than ever to get an operation now. People cannot just get any old quality-of-life condition fixed—people cannot get their hernias or their varicose veins fixed. A person has to be within sight of the pearly gates before he or she has a real chance of getting on an operating table. That is disgraceful. 
The figures in Hawke’s Bay however—those 1800 people—are just the tip of the iceberg. When we started asking a few other questions we found out that over 8000 patients around the country were in exactly the same situation. The funny thing is that every time we ask how many people have been sent back to their general practitioners without getting a first specialist opinion the number goes up. We thought the number was 8000 until we asked questions in Parliament last week. The Associate Minister said they thought it could be 10000 but that actually it might be as high as 14000. So I would like Minister Hodgson to take a call today to give us the revised figure because I am certain it will be higher. Every time we ask the question the number goes up. In the meantime things are even worse. Another 8100 New Zealanders have been to their hospital have seen their surgeon and have been told they will be having an operation. Then suddenly they are told they are not having the operation any more. That figure gets worse too. Last month we found that 800 more people were in that category—over 10 percent more. So now nearly 9000 people are being told they will have an operation and then are being taken off the list. 
Dr JACKIE BLUE (National) 
: 
 I want to talk about Pharmac and the national medicines strategy. The question I want to ask is why New Zealanders have to wait so long. Over 8 months ago during the election campaign Peter Dunne said he would review the role of Pharmac to ensure not only that pharmaceuticals would be made available at the most competitive price but also that the interests of individual patients would be taken into account when funding decisions were made. Last month it was announced that the long-awaited medicines review was finally under way but that a consultation document would not be available until the end of the year—over a year after Peter Dunne promised it. There is more. It was also announced it would be another year before a final document would be ready. I say to colleagues that it looks as though it will be election year before a final report will be ready. How convenient that is! 
No mention has been made in the national medicines strategy review of a forum where members of the public—ordinary New Zealanders—can express their views face to face. That is an appalling indictment. The main focus of the strategy will be on quality access and the rational use of medicines. I point out that there is an urgent need for an operational review of Pharmac. Applications for funding take far too long to be decided on. The average application in New Zealand takes about 3½ years which compares with 9 to 10 months in Australia. There seems to be no rhyme nor reason as to how drugs are referred from Pharmac’s advisory committee—the Pharmacology and Therapeutics Advisory Committee—to one expert subcommittee or another. Sometimes that advisory committee thinks it has the expertise to make important decisions about complex drugs and complex situations and bypasses the expert committees completely. 
I will take as an example the saga of the diabetic insulin drug Lantus—a very valuable drug according to the medical community. Following an application for funding in July 2004 the drug was assessed as being of only low priority by the advisory committee. Lantus was then referred to the diabetic subcommittee which was fortunate but it took a staggering 10 months to meet. When the subcommittee finally met the expert subcommittee gave the drug a high priority for funding a decision that was completely at odds with the advisory committee’s position. Now 2 years later it is hoped that a decision about Lantus is not far away. Incredibly that rate of progress is considered to be quick by Pharmac’s standards. 
I think Pharmac sometimes thinks it is doing a fabulous job. It is proud of the fact that pharmaceutical spending has flatlined over the last few years. It is proud of the fact that it takes over 3 years to fund drugs. When Pharmac told the Minister of Health that New Zealanders have access to more medicines than Australians do it was very proud of that fact until it was pointed out that that included things like condoms bandages and peak flow meters. What an embarrassing oops! The reality is that New Zealanders are being short-changed on the total number of medicines and also short-changed by the use of special authorities and other rationing mechanisms that mean the number of people who are eligible for drugs is severely restricted. 
I have been led to understand that the Pharmac model has been praised internationally and that countries like Canada are looking at adopting the model at this very moment. I doubt whether they will do so when it is pointed out to them that severely restricting the access to innovative drugs will have a negative impact on health outcomes and also that Pharmac’s preference for being the sole supplier as a means of getting the price lower is risky and eliminates consumer choice. Although that approach has saved money it has prevented patients—consumers—from receiving the treatment they need. 
Pharmac’s approach has produced a rigid divisive silo mentality. Its antagonistic and hostile attitude has meant that a number of pharmaceutical companies have downsized or left the country completely. 
Dr Jonathan Coleman 
: Yes. 
Dr JACKIE BLUE 
: That is right. I say to colleagues that unfortunately tens of millions of research and development dollars are leaving with those companies. 
Dr Jonathan Coleman 
: Out of our economy. 
Dr JACKIE BLUE 
: Yes—overseas. I say to members that research and development money would not only help to fund new drugs and improve people’s access to drugs but would help to retain our doctors and attract them back from overseas. 
Pharmac’s attitude has dumbed down the whole sector. In 2004 only 600 people were working in the pharmaceutical industry in New Zealand—down from 1000 in 1990. Members can compare those numbers with Ireland’s. Ireland which has a similar population to New Zealand has over 12000 people working in the pharmaceutical industry. I ask colleagues whether it is any wonder that New Zealand is considered to be a backwater. 
New Zealanders deserve better than that; they do not deserve only a limited access to the drugs that Pharmac has denied them. Pharmaceuticals and early intervention with drugs can improve outcomes and save lives. Pharmac has been far too Scrooge-like in its whole operation and it needs a complete and an utter review. The national medicines review does not go far enough and it is not happening soon enough. 
Hon Tony Ryall 
: And it doesn’t involve the public. 
Dr JACKIE BLUE 
: It does not involve ordinary New Zealanders who deserve the right to have a face-to-face meeting with Pharmac officials so those officials can see the human toll that denying patients access to drugs has and what that really means to ordinary New Zealanders and their families. 
I will now talk about the district health boards and the waiting lists. I was told of a horrifying story last week. A woman in Waikato who was aged 39 found a breast lump. That is a pretty scary situation for any woman no matter what her age is. She found the breast lump and went the next day to her general practitioner who acknowledged there was a breast lump and also found lymph nodes in the armpit. Naturally the general practitioner wrote an urgent referral to the Waikato District Health Board. One would have expected the lady to be seen quickly and without any problem but she was not seen quickly. In fact she received a letter from the district health board stating it was very sorry but it could not see her for 9 months—a 39-year-old woman with a breast lump! 
Jo Goodhew 
: That’s appalling. 
Dr JACKIE BLUE 
: It is appalling. 
Although the district health board offered that woman a mammogram without a specialist appointment I point out that that is bad practice. I have taught breast medicine over many years and I say that is bad practice. One should never do just a mammogram in the case of a woman who has a breast symptom; a specialist has to do a breast check an ultrasound and a biopsy. That district health board was forced to take short cuts and that is terrible. It was put in the terrible situation of being under-resourced and all it could do was to send the woman back to her general practitioner with a mammogram but without the gold-standard treatment that the woman needed. I say to colleagues that it concerns me that if the woman had decided to go with the mammogram alone the mammogram might have been negative. A percentage of mammograms do not show up cancer. What could have been worse just before Christmas was that the woman would have had her mammogram and been reassured that all was well so she would have gone off on her Christmas holidays thinking all was well. That would have been a worse situation for her to be in than to have had proper treatment. 
The Waikato District Health Board breast surgeon explained when asked why the woman had to wait 9 months that it was short of a doctor at the breast clinic. I understand the lack of resourcing at the breast clinic was the lack of a breast physician. I say to members that I have been lobbying for breast physicians to be in district health boards for years and years. Breast physicians are an important resource and they are not recognised in BreastScreen Aotearoa which is a tragedy. They are cost-effective they can be used in situations like that and they should be in every district health board’s breast clinic. Breast physicians can see women in an efficient and a cost-effective way so I hope the Minister takes up the challenge and looks at district health boards employing breast physicians. 
Fortunately the woman concerned found the money to be seen privately which was good for her. But what would other women do if they did not have the financial resource or the family support to enable them to be seen privately? So I am very concerned about the waiting lists. That woman is just one example but there are many examples of people being culled off waiting lists and being sent back to their general practitioners when they should be seen by specialists. Those New Zealanders have earned the right to be seen by the public health sector within an appropriate time frame and if there is a problem with regard to the workforce or money then it needs to be sorted out here right now. 
I am greatly concerned about how general practitioners in this country are being told how to set their fees. They are being treated like people who cannot manage their own businesses. The Minister seems to be fighting with them all the time. They deserve better treatment than that. General practitioners do a very good job in this country. They are at the coalface for patients managing them and being there for them on a daily basis. General practitioners deserve the right to be listened to and treated with respect. If they feel that patients should be seen by specialists in hospitals then that should be utterly respected. They should not be treated in the way they are at present. General practitioners are being bossed around bullied and fought with. They deserve much much better treatment than that. 
Part of my interest in the health portfolio relates to the non-governmental organisations. Those organisations are quite diverse. They range from Plunket to the Order of St John to health promoters and so on. 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 I am not surprised the Minister of Health has not sought a call in this debate. What would he talk about if he did take a call? Would he talk about his vision for health? Would he talk about his action plan? I will tell members what he would talk about—us. He would talk about the National Party. When he had the opportunity to give his maiden speech as Minister of Health he spent nine out of 10 pages talking about the agenda National has been setting in health and trying to explain why Annette King managed the portfolio so much better than he is. The Minister talks about lying awake at night worrying about the bird flu. I wonder whether he also lies awake and worries about why Annette King managed to have health under control as opposed to how it is going under him—and poll after poll shows that under this Minister health is turning into a disaster. 
How was Annette King able to negotiate with general practitioners and get a successful roll-out of the increased subsidies whereas this Minister is having trouble with significant parts of the general practitioner workforce in getting those through? Why when the waiting lists were growing and growing was Annette King able to be Minister of Health without that being too much of an issue? 
Dr Jonathan Coleman 
: It’s the Kyoto touch. 
Hon TONY RYALL 
: Yes. Why were district health board deficits growing and growing under Annette King without that seeming to be an issue? And why under Annette King was elective surgery going nowhere in this country without anything being said about it? Why is it all turning to custard on Pete Hodgson’s watch? 
I will tell members what it is about. It is about a Minister who thinks he knows everything. That is what is being said in the health sector today. As we travel around the country talking to district health boards community groups and interest groups one message is becoming clear: this Minister of Health thinks he knows everything and dares not take any criticism. We have seen his performance in this Chamber. Could he justify fewer New Zealanders getting elective surgery today than 5 years ago? No he just gives a vein-popping performance which his colleagues have counselled him against. Does he stand up in this Chamber and justify why he has dumped 14000 people from specialists’ waiting lists with another 20000 at risk? Because that is what is at risk. If district health boards are to become compliant as Poutasi wrote to them about in March that is how many people would have to be dumped. 
But do we hear any explanation of that from Mr Hodgson? We hear none at all. I wonder whether he has been to Annette King and asked her how she managed health like she did for 6 years yet in the 6 months he has been in the job it has been nothing but a bad headline with cartoon after cartoon showing him as a Minister who is under pressure and out of control. What is behind it? Maybe the Minister could take a call and tell us whether he has ever gone to Annette King and asked her how she had it under control when under him it is out of control. Let us actually hear from the Minister. Let us see whether he can go 5 minutes talking about his positive plan of action without mentioning the National Party. Whatever his plan of action might be it will be in response to what we are doing because more and more people in the health system realise that this Government’s rhetoric is all it has to offer. 
Where is the real commitment to a strong and growing primary health workforce? Where is the investment in the workforce in this country? Where is the commitment to support private - practice general practitioners? Why is there a breakdown that has resulted in general practitioners issuing for the first time in years a red letter warning their members against the Government’s proposal? Where is his plan of action to provide more elective services for New Zealand? Where is his plan to stop the wasteful duplication and fragmentation in the health system? It is nowhere. I want the Minister to take a call and see whether he can speak for 5 minutes without doing what he did in his maiden speech—that is see whether he can talk the whole time about his plan of action without responding to National’s. 
Hon PETE HODGSON (Minister of Health) 
: 
 I would like to thank Dr Jackie Blue for her contribution on the role of breast physicians. There are some things I would like to understand about that and I wonder whether she and I might not share a conversation in the near future. I would like to understand some of the subtleties better. 
I am so pleased we won the last election. It was fought around whether this country was to go forward with a bunch of tax cuts worth $11 billion over 4 years or whether we were to invest in more services and better education and give more attention to our nation’s infrastructure. It was fought around whether we were to build a nation or whether we were to have tax cuts we could not afford. Members can notice how I can listen—how we all can listen—to 25 minutes of drivel from the National Party without interrupting and how 25 seconds into my speech Tony Ryall has got himself blathering like a Gatling gun. All he can do is try to talk people down. That is the sort of guy he is. Members can notice that the National Party did not speak about mental health or about older New Zealanders wanting to stay longer in their own homes. It did not acknowledge that mental health funding has doubled under this Government. Boy are we proud of that! Boy have we got some way to go yet! But that is really significant progress. 
Members can notice the amount of money that has flowed through district health boards to help older New Zealanders stay in their own homes longer and to go to rest homes later or temporarily or for the most part not at all. That sort of money has doubled since the change of Government. Members can notice how the primary health care strategy will be rolled out one more step on 1 July this year and will be rolled out in its entirety on 1 July next year and how by 1 July this year there will be an investment of $540 million near enough into the primary health care strategy. 
Darren Hughes 
: National says it isn’t enough. 
Hon PETE HODGSON 
: National does not know what to say. National wants to have tax cuts; and if it wants to have tax cuts then it cannot afford a primary health care strategy. The primary health care strategy is the largest single change in the way we have delivered health systems since probably 1950. It is a remarkable change and I want to pay tribute to those very many people in the primary health care sector and the Ministry of Health—policy makers and practitioners alike—who have contributed to the design and roll-out of that remarkable strategy. 
 I wonder why in 25 minutes we did not hear about one new hospital being built even though 22 new hospitals have been built or are in the process of being built. So there is an investment in the infrastructure of this country; but in 25 minutes members opposite could not get anywhere near it. There was no mention of the biggest vaccination programme in New Zealand’s history—not a mention. The number of children dying from meningococcal disease has already dropped by 57 percent and will drop further. That is a remarkable achievement. 
What National did talk about was Pharmac which is an interesting thing to pick on because Pharmac is an exercise in cost-effectiveness. If we had no Pharmac—if we had no reference pricing—there would be an increase in our health budget of $700 million for which we would get nothing. So let us be careful when we start to criticise Pharmac although I think the future for pharmaceutical purchasing will have to change somewhat. I noticed that Tony Ryall in his last 5 minutes which we could have done without spent all of his time as he has in his interjections ever since— 
The CHAIRPERSON (H V Ross Robertson) 
: I am sorry to interrupt the Minister because I am conscious of the time but I remind members on my left to look at Speaker’s ruling 57/3. Running commentaries are out of order. If members want to make a speech they should take a call. 
Hon PETE HODGSON 
: All that Tony Ryall could do was make an ad hominem attack. Has he not got something better to offer than a personal attack? 
Actually there is one point on which I agree with various National Party members—that is we should not be putting people into a booking system for first specialist assessment then not seeing them. We should not do that. The extent to which people are returned to general practitioners represents in my view a failure of the system. I do not think that that should happen. I think 10000 is too many. I think 15000 is too many. We have had that number for years—it is not recent—but what is really interesting is that to offer a bit of perspective 450000 New Zealanders do see a specialist in the public system each year. So 10000 or 15000 people do not and I do not think that that is good enough—I do not think district health boards are managing their front doors well enough—but 10000 or 15000 out of 450000 is not total failure either. It is a few percent and for those 10000 or 15000 New Zealanders I do not think it is at all satisfactory. That is where I agree with National members and that is why the letters have been going out saying: “Please manage your front door better.” 
The same story goes for people who have been put on a booking system for a surgical procedure. We think that 7000 or 8000 is too many but it is also the case that 107000 do get their surgery so there is a bit of perspective. 
What do we know about what National members said that was wrong? Well most of what they said was wrong. They said there are fewer elective procedures—wrong. They said there are fewer surgical procedures—wrong. They said that under Annette King the deficits went up—they went down. Pretty much everything National members had to say that was an apparent fact was wrong. Even the figure of 1800 from Hawke’s Bay was wrong. All of the figures they mentioned that I took note of were wrong. What is more not only were they wrong; they were intended to mislead. It is not OK to intend to mislead; it is a good idea to have some perspective. 
However the most important thing is that 8 months ago New Zealanders made a choice. They made a choice not to have massive tax cuts. For that reason in 2 days’ time the Hon Dr Michael Cullen will announce a further increase in the health budget— 
Hon Tony Ryall 
: No it’s already been announced. 
Hon PETE HODGSON 
: Of course it has. It is $750 million in 1 year. If National had won the election its Budget 2 days from now would have had a total new spend of $800 million—not in health but in everything. In 2 days’ time $750 million extra will go into health through the Labour Government because it can invest. The National Party wanted to give it away in taxes and National members have the gall to sit there and say that things are not good enough. I say to National members that that is a point of view that they will have to reconcile internally because one cannot argue for increased expenditure and for tax cuts. We get to spend money but once around here and that is why winning the last election was so important. 
In 2 days’ time we will have a further investment in our health system. We will be able to deal with the priorities the Government has put into the public arena. I am happy to go through them. We need to get ahead of the curve on chronic disease. Whether it is Healthy Eating - Healthy Action whether it is the Cancer Control Strategy or whether it is further reduction in the prevalence of tobacco smoking or the amount that each smoker smokes all of those things are key to the future of New Zealand’s health. 
We need to make further progress in the health of older people. We need to make further progress especially with funding in that area. We need to make sure that the primary health care strategy is rolled out well over the next 2 years and that the move to a population-based approach in primary health is taken up fully. That will take some years but that has become a priority for this year and for later. And there are a bunch of things we want to do for our children. We do think that neonatal testing for hearing is a good idea. We do think that more attention to child and adolescent mental health is a good idea. National members do not because they chatter right through it. They yell in an effort to try to break up this speech. They just keep doing it. I do not know why they do not get laryngitis but that is what they do. We need to pay more attention to the oral health of our children. The oral health of our children has plateaued. It has stopped getting better. That is not good enough. So we need to make progress— 
Hon Tony Ryall 
: Under Labour. 
Hon PETE HODGSON 
: As it is under Labour I will just say what happened under National. A National Government stopped training dental nurses. I do not know whether anyone can believe that but National stopped training dental nurses. That roughly is the difference between the two parties. It is the difference between investment and disinvestment and I rest my case readily. 
Reports noted. 
Privacy Commissioner 
KEITH LOCKE (Green) 
: 
 I want to address the role of the Privacy Commissioner. The Office of the Privacy Commissioner does extremely important work and in its latest report it refers to this being a dangerous time for privacy: “The potential for unwarranted intrusions into the privacy of individuals is rising rapidly as are the demands of the Office of the Privacy Commissioner. Rapid growth of information technologies means there are ever more means and opportunities by which the right to privacy can be compromised.” 
We have been having discussions in this Parliament about the microchipping of dogs. One issue that has come up in one of the forums hosted by the Privacy Commissioner is the microchipping of people. This was in a paper by University of Otago Professor Paul Roth about workplace privacy issues raised by radio frequency ID technology. He refers to the Mexican Attorney-General microchipping the arms of 160 of his employees with rice-sized radio frequency ID tags as a security measure in terms of access to certain buildings. He goes on to talk about not necessarily the implanting of microchips but their use on cards to track employees in the workplace and the serious privacy problems that ensue. 
It is difficult for workers to control that at all unlike some of the other things the Privacy Commissioner here in New Zealand deals with—for example what is put on our credit records. We can check what is on our Baycorp record. The Privacy Commissioner has set up a whole code in that respect. At least we can find out what is going on and can correct things. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
KEITH LOCKE 
: The Greens are concerned that Governments around the world and employers are picking up the use of intrusive technologies like radio frequency ID chips and other identifying and tracking systems. Recently facial recognition chips have been added to our passports and our Government’s immigration review document projects other biometric identifiers such as fingerprinting and iris recognition systems being brought into use. Such biometric identifiers on passports combined with other personal information are the track the Blair Government is using to bring in British ID cards. The Howard Government is pushing ahead with what is effectively an Australian ID card—one card that can be used to access the full range of Government entitlements and other services. 
Of course all this information links back to Government databases that are extending and being linked up all the time. As the Privacy Commissioner reports the amount of personal information disclosed from one Government database to another went up from 10 million items 3 years ago to 21 million items now. The number of data-matching programmes operating between New Zealand Government departments has more than doubled to 36. 
The privacy of our thoughts and communications is under challenge as never before. Google’s Gmail scans the contents of its subscribers’ emails to enable it individually to customise advertisements. The details of the phone calls and emails of millions of Americans have been illegally recorded by the US National Security Agency as we found out recently. This data-gathering process was helped—unfortunately—by the phone and email information pouring into the United States from the New Zealand satellite communications interception station at Waihopai near Blenheim. In this morning’s  
Dominion Post 
 we read that one local woman’s bank account was emptied after a trojan computer program that monitored her keystrokes was able to steal her passwords. 
The Privacy Commissioner has an important role in monitoring all of this. There are Governments around the world that misuse this technology and we have to prepare for the possibility of our having a worse Government in New Zealand at some point. We have to have systems that will prevent it from misusing its ability to find out about our identities track our movements and communications and put all this information in databases. 
Report noted. 
The CHAIRPERSON (H V Ross Robertson) 
: I understand that members do not wish to debate any other entities. The debate on the performance of Crown entities public organisations and State enterprises has therefore concluded. I shall report the debate to the House. 
Report adopted. 
Social Security (Long-term Residential Care)  Amendment Bill 
First Reading 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 I move  
That the Social Security (Long-term Residential Care) Amendment Bill be now read a first time. 
 At the appropriate time I will move that this bill be referred to the Social Services Committee for consideration and that the committee finally report back the bill to the House on or before 30 September 2006. 
Last year the Social Security (Long-term Residential Care) Amendment Act 2004 made significant changes for people in long-term care. That Act significantly increased the amount of assets that older people in care who have been needs-assessed as requiring care would be able to retain. The Act also clarified the rights and obligations of people in care and put into legislation a number of provisions that had previously been solely administrative. The income and asset-testing regime to which the Act relates is complex. 
As this legislation deals with the entitlement and obligations of the public a high degree of specificity is required around its provisions. Experiencing the operation of the regime under the new legislation has revealed a number of anomalies that the bill I am introducing today seeks to amend. Specifically it inserts a purpose and overview section and it increases the amount of income earned from assets that a couple may retain where one partner is in care. This provision ensures that such a couple is able to retain the same proportion of income from their assets as a couple with both partners in care or single people. 
The bill also ensures that people who are exempt from asset-testing such as people deinstitutionalised from Kimberley and Templeton Hospitals are able to receive a weekly personal allowance. It also allows the Chief Executive of the Ministry of Social Development to carry out a means assessment that considers income only for people who have already been assessed as having assets at or below the $150000 threshold. Without such a provision there is a risk that these people could subsequently become fully liable for their care costs when their income is reviewed annually. This is contrary to Government policy which limits the circumstances under which further reviews of assets will be carried out. 
The legislation also clarifies the discretionary powers of the chief executive over deprivation of income and assets. If it is established that a person has deprived himself or herself of assets or income the assets or income involved may be counted in a means assessment. The provision in the bill allows the chief executive where deprivation has been established to decide whether those assets or incomes should be counted based on the circumstances of the individual. 
The amendments also provide certainty for older people about how much they are required to contribute towards their care costs. The bill clarifies that any needs-assessed resident who is receiving the care he or she needs in a rest home or hospital that has a contract with the district health board for residential care will pay no more than the maximum contribution for contracted care services—that is services set out in the district health board’s contract with the residential care provider. The bill clarifies that the maximum contribution cap applies whether or not the district health board has any liability to pay for the contracted care services provided to that person. If the cost of contracted care services exceeds the maximum contribution at any time the district health board will pay the difference. 
At present 50 percent of a New Zealand private pension can be disregarded in a means assessment whereas 100 percent of overseas private pensions must contribute to care costs. This treatment of overseas private pensions in the income assessment for residential care is unfair. This bill will allow those who receive an overseas private pension to be treated in the same way as someone who receives a New Zealand private pension. 
Two recent decisions of the Social Security Appeal Authority have established that people receiving disability-related care can claim disability allowance for disability-related services that are not supplied by a person’s service provider. Legislative amendments are required to clarify the basis on which the disability allowance is available to people in residential care. They distinguish between people receiving disability-related care and those in age-related care. This distinction is necessary because of the difference in contracting arrangements for services provided for the two groups. 
Funding arrangements for disability-related services for younger people with intellectual physical sensory and psychiatric disabilities do not generally provide for medical costs pharmaceuticals and related services. For this reason the bill clarifies that people in these services who receive the residential support subsidy can now receive disability allowance on the same basis as those in the community. On the other hand contracts with age-related residential care providers are more comprehensive. Under those contracts older people are to be provided with the health and disability-related services that are necessary to meet their assessed care needs. The bill therefore precludes people in these services who receive the residential care subsidy from receiving disability allowance. 
At the appropriate time I will be pleased to move that the Social Security (Long-term Residential Care) Amendment Bill be referred to the Social Services Committee for consideration and that the committee finally report the bill to the House before 30 September 2006. I am delighted to commend the bill to the House. 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 In speaking to the Social Security (Long-term Residential Care) Amendment Bill I have a number of questions and it would be most helpful if the next Government speaker could address them. There are a number of changes in this bill that I think all parties will support. They are consistent with what we understood and voted for previously in the legislation that Ms Dyson brought in. That legislation was obviously full of mistakes and here we have a bill to clarify it. 
But there is one point that we in the National Party Opposition want to challenge the Government on and that is the comment in the explanatory note of the bill that it is current practice that rest home providers charge the same amount to paying residents as they do to subsidised residents. The Government is trying to say in this bill that subsidised and non-subsidised rest home residents currently are charged the same amount in rest homes and that is not true. So whereas the explanatory note of the bill is trying to pretend that that is the case that is not true. I have rung a number of rest homes in the country today and it is clear that there is a difference between what Government subsidised residents are charged and what private paying residents are charged. There is a difference and as a number of rest home providers told me they subsidise the Government subsidised residents with the money that they have charged the private self-funding residents. 
So can members see the issue here? The issue is that in many rest homes Government-subsidised residents are charged about $636 on average each week but private self-funded rest home residents could be paying $100 extra or a bit more. Rest home providers use that extra amount being paid by the private payer to help subsidise overall services that benefit the Government-subsidised resident. But here is the problem. I do not think the Minister even realises this judging by the funny grin on his face. What the Minister does not realise is that he is going to price-fix those private paying residents. The private paying resident in a rest home is not a party to the contract the Government has with either the provider or the subsided resident. That resident is in no way associated with that contract but the Government is saying in this bill that it will regulate across the private contract and the rest home will not be able to charge any more than the Government rate. I do not know whether the Government actually understands the full implications of that and we would like the next Government speaker to address it. Does the Government actually realise that the private patients in rest homes now are paying more than the Government fee and that that surplus is being used to subsidise overall operations? 
Sandra Goudie 
: Helping our older people. 
Hon TONY RYALL 
: It is helping our older people. 
The effect of limiting the private charge is that the services and the viability of the rest homes will be put at risk. I do not think the Government fully appreciates what that will mean. It will mean that innovation will be stifled and even greater financial pressure will be put on the providers of services to some of our most vulnerable older people and that will happen because the whole economics of running a rest home will change. Rest homes are currently operated on the contribution of the private patients and the contribution that comes from the Government for the subsidised patients. If we cut back on one it makes it harder to spread the burden and make the rest homes viable. So this price control of private paying rest home patients will be bad for residential care and at the select committee we will be looking forward to understanding why the Government wants to do that. If the Government undermines the viability of the rest home sector there will be fewer places to deal with the most vulnerable in our community. 
One of the things that we in the National Party are very concerned about as we look out at our responsibilities over the next 20 years as policy makers in this country is the big shortfall there will be in providing rest home facilities. The fact is that the Government cannot shoulder the full cost of providing those services to retired New Zealanders and those who are in a position to make a contribution will have to do so. But we think that for Parliament to pass a law that will regulate what rest homes can charge their private paying patients will undermine viability of rest home care in New Zealand and stifle innovation. 
The Government has accepted I think in its overall changes that rest homes that provide additional services on top of the standard care regime can charge extra. That is why we are seeing around the country that even subsidised Government patients might be paying another $20 or $30 a week to get an en suite or something extra in their rooms. We do not want to change that. We think that is a way to ensure we have innovation and improving quality. But we are quite concerned about the suggestion that the Government regulate across the private contract of the private paying residents because that premium is being used to subsidise the Government-subsidised residents. It would be wrong and it would undermine the viability of rest homes to change that. 
We also want to make sure that the Government takes some time to explain—maybe in this debate—whether any change is proposed to the set-up of what is provided with the new definition in this bill for “contracted care services” in clause 6. What does that mean? There are some changes to contracted care services. We want to know what those changes mean—in particular paragraph (c): “in relation to a particular person the services necessary to meet the person’s assessed long-term residential care needs”. What does it mean to include that in the definition of “contracted care services” and what do the changes to the definition of “cost of contracted care services” mean? We asked for a briefing from the Government today and we were told no we could not have a briefing on this bill. 
Hon David Benson-Pope 
: You should have asked before lunch time. 
Hon TONY RYALL 
: We did ask before lunch time I say to the Minister. 
Hon David Benson-Pope 
: You did not. 
Hon TONY RYALL 
: We did ask before lunch time. We asked for a briefing by 9.30 and we got no—[ 
Interruption 
] Who do I believe? David Benson-Pope or myself? Well frankly I would believe myself hands down against David Benson-Pope. Would we believe David Benson-Pope—a man a prima facie case was found against? 
Hon David Benson-Pope 
: Be careful Tony. 
Hon TONY RYALL 
: You be careful Minister— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! 
Hon TONY RYALL 
: The fact is he cannot say in this House that things happened after midday when they did not. 
So we want a Government member to take the next call and explain to us those key issues. There are many things in this bill that we will support and facilitate the speedy progress of in the select committee. But I think it is clear that the Minister himself does not understand the implication of this. The Government is wrong if it thinks that rest homes currently charge their private paying patients the same level of subsidy that the Government pays. That is what this explanatory note says and it is not true. We want to be assured that the Government knows that is not true and that it knows it is planning to regulate the fees that private patients have negotiated with rest homes. It will have significant implications on the financial viability of a sector that is already under pressure and it will stifle innovation. 
The biggest issue facing Vote Health in the next 20 years is the ageing population and the care of our most vulnerable. We simply cannot expect that Government regulation will provide the places and the care that we need for our elderly. We need a much more imaginative and forward-looking approach in aged care rather than this narrow and managerialistic regulatory approach that the Government is looking at. In the next 6 months the National Party will be launching quite a discussion about how we get the services right and how we make sure that the rest home sector is expanded that home care is expanded and that we have the workforce the beds and the care for our most vulnerable. We do not think that can be done by Government regulating all the costs in rest homes. It will stifle innovation and undermine the financial viability of our rest home sector. 
GEORGINA BEYER (Labour) 
: 
 I am pleased to rise and speak on the first reading of the Social Security (Long-term Residential Care) Amendment Bill. In addressing the question asked by the member who has just resumed his seat I point out that he answered it himself. If he would care to sub himself on to the Social Services Committee I am sure his contribution and particularly the questions he raises will be well traversed there. The Social Services Committee which I am very proud to chair looks forward to receiving this very good legislation. 
This Labour-led Government is committed to providing high-quality affordable care for all older New Zealanders. This is a far cry from the experience in the 1990s under the National Government. Older New Zealanders are a valued and important part of New Zealand families and communities. They deserve certainty about how much they will need to contribute to the cost of their care. It is about investing in New Zealanders—in this particular instance our older New Zealanders. Last year we made significant changes for people in long-term care. Most important was our manifesto commitment to remove asset testing progressively for long-term residential care. We also clarified the rights and obligations of people in care. 
This bill amends a number of anomalies. The changes include treatment of overseas private pensions which will be treated the same as New Zealand private pensions—that is 50 percent of both will be excluded as income when determining how much someone should contribute towards the cost of care. Previously 100 percent of overseas private pensions were treated as income. Also the bill clarifies that the contribution of older people who are assessed as needing long-term residential care indefinitely and who are receiving their care in a facility contracted to a district hospital board will be no more than the maximum weekly contribution which is currently set regionally at between $640 and $740 a week for their care. 
The maximum contribution caps the weekly amount individuals must pay towards their care. The amendment makes it clear that even if people have assets of more than $150000 they will pay no more than the maximum contribution for standard residential care services. Currently around 28000 people are in age-related residential care and the Government invests about $539 million exclusive of GST in their care. In addition the Government is funding district health boards for the impact of income and asset testing changes implemented from 1 July 2005 at a cost of about $93 million exclusive of GST. 
As I mentioned previously in my speech this is about a Labour-led Government investing in New Zealanders—in this particular instance in our older New Zealanders who in their twilight years should be able to enjoy with some security the residential care they need. I will conclude on one historical point by taking us back to asset testing in the 1990s—and this is why I look forward to the National Party’s contribution at the select committee. In 1998 the day before International Day of Older Persons the then Minister of Health Bill English announced he was abandoning the bill that would have abolished asset testing for older people in private and public hospital long-term geriatric care. One has to ask whether the attitude from that party on the other side of the House has changed. I would have to say that it probably has not. 
With the passage of this bill which I hope will come to the Social Services Committee expeditiously we will hear National members explain what their policy on the care of older New Zealanders supposedly is. They have shown little care in the past and some of the disasters they left us with from the 1990s with their policy of integrated care and privatisation of the area have provided this Government with a headache—yet another one from the previous National Government. This Government is only too happy to help rectify the situation because it is a Government that cares that knows and that understands New Zealanders. We will invest in them and we will along with the rest of the nation transform our country into something that we will most definitely be proud of. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I begin by congratulating my excellent colleague the Hon Tony Ryall on such a superb speech. I think he very clearly outlined one of the shortcomings of the Social Security (Long-term Residential Care) Amendment Bill. After all this is meant to be about ensuring the residential care of our mums and dads when they can no longer care for themselves. He raised a very pertinent point about the continued viability of residential care services particularly when by 2020 20 percent of the population will be aged over 65 years. It is an incredible concern for us all. 
In response to Georgina Beyer I note that when the bill was introduced Age Concern urged the Government to be open and honest about what this bill means in terms of what older people can be expected to pay in rest homes and hospitals. Kerry Dalton the chief executive officer of Age Concern says that it potentially gives with one hand and takes away with the other. Of course that non-profit organisation is particularly concerned about the care safety and well-being of our older people and does a lot of work around elder abuse. But I will refer to more of that later. 
Kerry Dalton goes on to say that the changes in asset testing will see more older people qualifying for public funding but what that funding covers may be reduced under this legislation and what was meant to be good news for older people has a hidden sting. The bill brings in a new definition of what public funding covers called “specified care services”. Under the bill the older person is liable to pay for anything outside of specified care services. The $636 limit on what people have to pay also relates only to specified care services. The Hon Tony Ryall raised this point and wanted an explanation from the Minister so he will be looking forward to that explanation—if not from the Minister or the Government benches then in the select committee. 
More comments were made that it was thought that the changes contained in the bill have the potential to put older people at significant risk particularly those on low incomes. They may be in danger of not having essential health and disability needs met because they are unable to pay for them and there is also the risk of financial exploitation. Their understanding is that such things as transport to and from the specialist as well as ambulance costs in certain regions and the cost of customised equipment will be charged for and these are not luxuries. People need these things and should have them regardless of their ability to pay. 
Age Concern is concerned that older people will fall through the cracks between what the provider is funded to deliver and what the person needs. It is a concern. Those people who are paying privately for services are the ones who help to subsidise the Government-subsidised residents and that should not be forgotten. The benefit of that should not be underestimated. In the last 3 or 4 years 30 to 40 providers have gone out of the provision of residential care services. That should send a very strong message to this Government about needing to be very very careful about the policies that are put in place for our older people. 
The price district health boards pay for residential care is determined by the territorial local authority region in which the residential care facility is sited and the level of care provided. Prices paid to providers vary from $556.47 a week GST inclusive for rest home care in the Clutha district to $986.30 per week GST exclusive for hospital level care in the Auckland City area. So any amount any resident pays towards the cost of his or her care is limited to the maximum contribution which is gazetted by the Ministry of Health. The $636 cap is unrealistic and does not reflect the current cost of the provision of aged care. As regional variations currently exist it is the view that the current cap is largely fictional and should be removed in order to provide greater clarity on pricing for residents. The Hon Tony Ryall is absolutely correct when he says that it cripples innovation and stifles investment. People should have the freedom to pay what they want to pay for. If that helps others by creating a subsidy for people who cannot afford the same level of services then surely that is not a bad thing. Surely it would be a good thing to have more services for all those people in residential care even though only some of them may be paying for those services. 
One has to ask whether the Minister really has the health and well-being of our vulnerable people at heart. Age Concern raises that issue and Age Concern as members are aware is very much into the protection of our older people particularly our vulnerable older people. It has put out a very good report on elder care abuse. In that report information is provided on 1288 cases of elder abuse and/or neglect self-neglect or institutional abuse. I think that psychological abuse accounts for 59 percent of that. 
One of the other issues that Age Concern raised was enduring powers of attorney whereby older people because they are vulnerable can be persuaded into undertaking enduring powers of attorney. Now if they can be persuaded into giving other people their enduring powers of attorney then they can also be persuaded into allowing their photographs to be taken and then used for purposes that they are scarcely aware of. This is about elder abuse. If Age Concern is concerned about what can happen to the elderly as a result of some of the provisions of this bill then I think we should be listening to that. 
It is interesting to note that elder abuse has been in the news recently. It is disappointing that this Government—and indeed the Minister for Senior Citizens—has not come out and defended the vulnerable people whose photographs were displayed in the Nurses Organisation magazine in one instance without the permission it would appear of the family. It is quite clear that older people are vulnerable. We need to have their interests at heart. If we do not have their interests at heart how can we be putting policy in place through legislation that will really take care of them and protect them and their future care? I would like to see the Minister come out and support Age Concern and defend our vulnerable older people against elder abuse. Quite clearly those photographs in that magazine are elder abuse and anybody who has seen them will be absolutely appalled. 
If one does not have the concerns of our aged citizens—our vulnerable older people in residential care and home care—at heart how can one possibly put policies in place that will protect their interests? That policy is the exact one that Tony Ryall was referring to in regard to subsidised and non-subsidised paying residents. It is the paying residents who help to subsidise the supports necessary to ensure that our older people are effectively looked after in residential care. That cannot be understated in any way. If we do not allow the innovation and investment in residential care facilities we will not have those beds available in years to come when they will be absolutely critical to supporting our rising older population. I exhort Government members to really give some consideration to the very wise words of the Hon Tony Ryall. Hopefully their minds will be open to what it means for people to have the right to pay for what they want and for the Government not to start interfering with contracts that are essentially between private paying individuals and the service provider. 
In this instance the Government is attempting to interfere in that contract and is intending to interfere in that process. Price fixing should not be a part of this bill and I would exhort the Government to rethink its direction in this regard and spend some considerable time at the select committee. I am sure there will be submissions to the bill on that particular issue exhorting the Government to do that. 
BARBARA STEWART (NZ First) 
: 
 New Zealand First supports this Social Security (Long-Term Residential Care) Amendment Bill) going to the Social Services Committee. We believe that the bill contains some potentially contentious issues. As the Minister said it contains some technical amendments and we know that other substantive amendments will be proposed during the select committee process. It will be absolutely essential to have the input of many submitters into this legislation particularly those involved in private care. It is really important to ensure that this legislation which affects 28000 New Zealanders is as good as it can possibly be. We need to know that the services are right. We know already that the workforce numbers are a challenge and we hope that area will be addressed smartly. 
The bill amends the Social Security Act of 1964 in relation to the income and the asset-testing regime for people requiring long-term residential care. I must admit I was very pleased to hear the Minister state that this bill gives certainty to those requiring residential care particularly in the costing structures. 
Sandra Goudie 
: No not if there are no residential service providers; they will all have left the industry. 
BARBARA STEWART 
: That will be challenging. Many of us here in the House know that the cost of residential care quickly erodes the savings that many people have worked for throughout their lives and carefully put away for their senior years. We have a most interesting argument there and I will be pleased to see submitters’ comments on this aspect. One of the key changes this bill makes is that people who are needs-assessed as requiring long-term residential care indefinitely in a rest home will pay no more than the maximum contribution for care whether or not they are subsidised. Many people will applaud this change and of course we know that rest home providers will have some queries about it. 
The second point worth noting is that people who have assets that are over the applicable assets threshold and receive contracted care services that cost more than the maximum contribution—services they enjoy and have had often for many years—pay only the maximum contribution. The downside of this is that some of these services will be cut which we do not want to see happen because the funder as we note in the legislation is to subsidise them by paying the amount above the maximum contribution. So the funder liability in this bill is interesting. We all want people requiring care to have the best possible care and we do not want the viability of any rest home to be put into question. We know that many rest homes have closed down over the previous few years. We do not want to see any more of them close down particularly in view of our ageing population. 
It is worth noting that residential care providers who have been charging residents with assets over the threshold more than the maximum contribution for the same care provided to subsidised residents are not likely to be happy with these amendments. No doubt the select committee will hear more on this. We will be following that up. New Zealand First believes that this is one of the potentially very contentious matters although we contend that when it comes to this type of care there should be no difference in the type or amount of care people are entitled to receive regardless of whether they pay privately or are State subsidised. 
 We note that although the residential care subsidy is intended to meet all disability costs it is possible that there may be a shortfall in terms of both transport costs and some one-off costs such as dentures glasses and hearing aids that many people in age-related care may require. That is one matter that needs to be addressed and it is one that New Zealand First will be following through very carefully. We are aware too that people receiving a residential care subsidiary for age-related care may not receive a disability allowance because the residential care subsidy is intended to meet their assessed disability-related needs. As I said earlier New Zealand First is concerned about that shortfall. 
We note that the legislation to allow exempted persons to retain a personal allowance expires on 30 June 2006 so it is really essential that legislation be passed quickly to address that matter. When one reads the commentary on the bill it is interesting to see there will be uncertainty as to how assessments of deprivation will be treated if challenged on appeal as the wording of the deprivation provision differs from that of the former provisions interpreted by the courts. We are pleased to see that New Zealand and overseas private pensions and annuities will be treated equitably. The bill provides for overseas private pensions and annuities to be treated in the same way as New Zealand private pensions and annuities. In both cases only 50 percent of a private pension or annuity is to be included as income in a means assessment. 
New Zealand First will support this bill going to the select committee. With this country’s ageing population we believe that the viability of rest homes is absolutely paramount as also is the care of residents in long-term residential care. We want to see the best possible care for the people in residential care facilities and we look forward to ensuring that as we follow the select committee process. 
SUE BRADFORD (Green) 
: 
 This bill which we are debating for the first time in the House tonight highlights for me the shambles that is the Social Security Act 1964. There is very little in this bill that could not and should not have been anticipated when the Social Security (Long-Term Residential Care) Amendment Bill 2004 was being considered by Parliament 2 years ago. What we have in front of us now appears to be largely a series of tidying-up provisions aimed at clarifying and rectifying drafting errors and omissions in that particular legislation. The fact that this bill is before the House at all should be seen as an endorsement of the Green Party policy I have talked about so often in the past—that is that the Social Security Act 1964 should be totally scrapped and rewritten from scratch on principles of sufficiency simplicity and universality. I imagine that the Social Security Act must be one of the most abused amended and unusable pieces of legislation still on this country’s books and I hope Labour is seriously considering a total rewrite as part of its intended major reforms in the welfare area. 
Meanwhile and that said the Green Party will be supporting this latest piece of the jigsaw puzzle—the Social Security (Long-Term Residential Care) Amendment Bill—on the basis that it is a necessary evil. Like the Minister we are keen to ensure that older New Zealanders in poor health are not unfairly disadvantaged as a consequence of the confusion and complexity of the 2004 amendments. As some will be aware it is unusual for the Green Party to support any clause that restricts entitlements to a benefit but we see the restriction on the disability allowance as proposed by clause 4 as fully justifiable. It is not acceptable that people can double-dip—receive payment from two sources for the same expense—and it is bizarre that for almost 2 years the Act has permitted that practice. 
Further a number of amendments deal with the means assessments of older New Zealanders in long-term residential care and although the Green Party supports the total abolition of income and asset testing for long-term residential disability services we supported the 2004 bill on the basis that it was at least a move by Government in the right direction—towards equitability and sufficiency for older New Zealanders with long-term disabilities. However the Government’s insistence on retaining an ameliorated but massively complex income and asset-testing regime means we are back again 2 years later tidying it up. 
We support the inclusion of purpose and overview sections in Part 4 of the Act inserted by clause 5 of the bill but ask why they were not included earlier. The inclusion of purpose and overview sections is as far as I can tell standard practice in legislative drafting. The Green Party likewise supports the other clarifying provisions contained in subpart 2 but most could have and should have been anticipated earlier. None of those changes will impact adversely on older New Zealanders receiving residential disability services. Some are necessary to ensure that such people are treated fairly and therefore we support subpart 2. 
In particular I would briefly like to address clause 12 which restores the discretion that—probably inadvertently—was removed from the deprivation provisions by the 2004 amendments. The provision will make sure that even if a deprivation of income or property is found as a matter of fact the ministry will have discretion as to whether to include the value of the deprivation in the means assessment. That clause is to be commended. It is impossible to legislate or regulate for the whole range of human experience and a discretion such as that is essential to ensure vulnerable people are not being unfairly forced into poverty. It is just a pity the Government could not have acted on the same principle regarding the discretionary special benefit which it has so recently replaced with the highly regulated and inflexible temporary additional support allowance—a move that will increasingly force some of our most vulnerable citizens into even deeper poverty than they suffer already. 
With some reluctance because most of the bill’s provisions should have been addressed legislatively 2 years ago the Green Party will be supporting this bill. I hope for all our sakes but especially for the sake of those people most affected that we get it right this time around. I am also keenly awaiting the day when a progressive Government has the time energy compassion and courage to bring forward a totally new Social Security Act which would transform welfare law in this country into something usable by staff and beneficiaries alike and which would not be fraught with endless and ongoing complications and amendment bills like the one we are dealing with tonight. 
TARIANA TURIA (Co-Leader—Maori Party) 
: 
 Tena koe Mr Speaker; tena tatou te Whare. Te Ao Maori is absolutely rich with allusion and imagery that illustrate the value of our elderly. One pepeha that I am particularly fond of is: ka haere te matatahi; ka noho te matapuputu—youth rushes in where age deliberates. 
And so it is in a spirit of deliberation that I come to this bill. The Maori Party has taken time to deliberate on such an important matter as the capacity to care for our elders. Our elders provide us with our foundation our wisdom and our learning as whanau as communities and as a nation. We must cherish the contribution of those who have been tested through the trials of time and do our utmost to care for them. The care of all our whanau members must surely be at the heart of every decision made in this House as it is in every household of the nation. 
The Maori Party comes to this bill today seeking reassurance that the decisions we will be making on it will enhance the social and cultural wealth of our nation. That must be the test that is applied to every policy initiative before us. The bill deals with the issue of older people requiring indefinite long-term residential care in a rest home or a hospital. Although that is only a small proportion of our elderly population the initiatives will stand to benefit the 2 percent of tangata whenua over 65 years of age who are in rest homes and the 3 percent of tangata whenua over 65 years who are in long-term hospital care. In essence it means that if our pakeke are assessed as requiring indefinite long-term residential care in a rest home or hospital they will pay no more than the maximum contribution for care whether or not they are subsidised. 
Earlier today my colleague Dr Pita Sharples introduced to the House the notion of a genuine progress index. The economic health of the nation is reflected as much in the quality and distribution of economic growth as it is in the value we place on such activity as caring for the elderly the unwell and the disabled. The time and resources that we give to the care of whanau and to strengthening whanau members should be included in a genuine progress index for the positive outcomes they achieve. 
We are of course aware of the political promises and pledge card commitments that provide the politicians with the motive to introduce legislation such as this. The Maori Party is satisfied however that regardless of the political driver the ability of the bill to demonstrate manaakitanga to our elders is worthy of our support. The interpretation of manaakitanga is that of behaviour that acknowledges the mana of others as having equal or greater importance than one’s own. Manaakitanga is demonstrated through the respect of aroha hospitality generosity and mutual respect. The demonstration of manaakitanga elevates the status of all building unity through humility and the act of giving. In simple terms what this means is that the rewards of caring for another such as an older person requiring indefinite long-term residential care is that the act of giving will also reflect well on the person who gives. The qualities of caring kindness and generosity as a means of showing love are valued in high regard. 
Ngapuhi Chief Executive Sonny Tau told of the reflections of a German missionary who was purported to have said some 200 years ago: “These natives are a peculiar people. They don’t measure their wealth by what they own but by what they give away. We must teach them to be mean.” The Maori Party is here today to say that the concept of caring for our elderly is indeed represented by what we give away—the time and resource that we willingly share in protecting our pakeke. 
We cannot afford to be mean as a Government either as we consider the rising demographic with an increasing proportion of people living longer and subsequently likely to require care including residential care. The decisions that are set in policy to address the income and asset testing regime for older people are important ones that we support. The Maori Party is pleased that means testing is to be based on income only and not on a combination of income and the value of a person’s assets. The separation is welcomed by the Maori Party as the current legislation means that many Maori who might be cared for in rest homes could lose what little land assets they might have left. In our view this could lead to dispossession and the likely ownership of Maori land by non-Maori individuals and institutions including the Crown—and the Crown already owns enough Maori land. 
I hope that the select committee will also ensure that the issue of access to elder care takes sufficient account of the issues around work and care for those services provided by elder care nurses. Research carried out by the Wellington and Christchurch city councils a couple of years back found that about one in 10 workers are caregivers to elderly people mostly family members. If we are to be genuine in our commitment to providing a sustainable service for older people the salaries of the more than 25000 staff in rest homes and hospitals across the country would reflect that. 
One of the finalists in the 2005 Roger Awards for the worst multinational corporation operating in New Zealand was Guardian Healthcare an organisation that runs a network of rest homes around the country. Guardian Healthcare which is predicted to achieve a profit of $26 million this year last year offered its staff a pathetic 2 percent pay rise. In dollars and cents what this equated to was virtually the adult minimum wage of $10.25 an hour. How can we guarantee quality of care and sustainable health and well-being for our elderly population if the stories are true and that rest home management is scrimping on the medicine in order to make a profit? We must look again to the real profit as measured in the social health of the nation—the prosperity and progress of our families. 
I am sure that this House is very aware that yesterday was the International Day of Families. It seemed to me absolutely appropriate that on a day that the United Nations has designated as recognising the importance of supporting families a celebration was taking place in Te Arawa of an extremely rare event which was the 100th birthday of kuia Witarina Te Miriarangi Parewahaika Harris. By anybody’s accounting framework this kuia must be assessed as an absolute treasure of the nation. She starred as Princess Miro in the 1928 silent movie  
Under the Southern Cross 
 which was later released as  
The Devil’s Pit 
. She was also a soloist with her renditions of immortal waiata featured on the album  
Ko Ngati Poneke Hoki Matou  
Ngati Poneke Young Maori Club which was recorded in the 1930s. Not content with her artistic and cultural accomplishments her academic and intellectual spirit also impressed frequent visitor Sir Apirana Ngata who recruited her to work in his parliamentary office. 
This endearing kuia has continued to thrive right throughout her life even featuring in a 2004 documentary  
Homegrown 
 which described the remarkable friendship between Witarina Harris and film historian Jonathan Dennis. In 2006 she still retains her chiefly role as the kaumatua for Archives New Zealand.  
However it has not all been neon lights and film-star glory; in  
The Silent Migration 
 in 2001 Witarina recalled her experience of moving to Wellington in 1929. She said: “Sometimes I’d leave work and go to the continuous pictures at the Roxy in Manners Street and I’d cry. I used to go in there and cry and cry you know? I was so lonely. And I’d think to myself ‘Please just to see a Maori face that’s all I want to see’ ”. These silent tears speak volumes of the key critical factor in maintaining the health and well-being of this 100-year-old wonder. A couple of days ago this kuia had a few words of wisdom to share with the nation which give a context to those tears: “Kia mau te aroha i a koutou.”—“I have survived to this age because I have always known the most important thing is love within your wider whanau.” 
The Maori Party will support the Social Security (Long-term Residential Care) Amendment Bill. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I stand on behalf of United Future to speak to the first reading of the Social Security (Long-term Residential Care) Amendment Bill. I begin by saying that we will support the bill going to select committee but like other members in this House we have one or two areas of concern. We will be very interested to hear what submitters say about those issues and the outcome of how the bill is progressed beyond that stage will be of interest to us and may even determine our ongoing support. 
I want to correct a couple of interesting things the National member Sandra Goudie mentioned in her speech. She created a bit of a misunderstanding—it sounded like there are hundreds of residential care facilities closing down all over New Zealand. I think there are a few people out there who think that is the truth. I looked at that issue a little while ago and found out that no a number of residential care facilities have been sold and have changed owners but most of them remain in operation. A few that were beyond maintenance or would have been too costly to bring up to spec have closed down—and that is probably a good thing. A number of providers—I spoke in particular to Presbyterian support services up north—explained that they had sold on some of their residential care facilities to providers so they could focus their attention on home-based care. Home-based care is becoming the cutting edge of age care in New Zealand and they wanted to be part of that. They therefore felt that there were a number of sensible and good providers that were able to take over the work they were doing so they sold their facilities in order to engage in home-based care. 
Part 1 of the current Act is to do with disability allowances and this particular amendment bill that we are talking about sets out to amend section 69C of the Act with provisions to preclude those who are already catered for in a residential care facility from receiving some disability allowances because the understanding is that they are now receiving it within the facility. The great thing I found when I read the fine detail of this is that if there is some care that their disability allowance covers when they are in community care that is not covered by the residential provider—it may be something like some physiotherapy that they are in need of to stay mobile that is not offered on site at their residential facility—they are still allowed to get that disability allowance to cover that lack of service where they are living. I think that is a really really good thing. 
The amendments proposed to Part 4 and schedule 27 of the Act are probably the areas that will be the most controversial. I expect that we will hear from people involved in aged care from Grey Power and from people who want to talk to this bill. It is an area that United Future has some questions over. 
Those who require long-term residential care indefinitely are those who are affected by this bill. Providers with contracts with district health boards will not be able to require a resident to pay any more. Let me say up front that I think it is important that people are not treated unfairly. I think the intention of this legislation is to make sure that there is no unfair treatment of people in residential care. However the concern we have is that on one hand we are encouraging New Zealanders to save towards their retirement and their needs in their senior years and on the other hand we are now saying that having gone to all the trouble of saving and providing for themselves they cannot use the money from their assets to provide a better standard of care for themselves. That is flawed. That is the kind of area that I would like to see properly discussed at the select committee so that we can have some flexible arrangements around that. 
Having said that I reiterate that our concern does not mean that we believe there should be two standards of care given to elderly residents in residential care. The standard of medical care needed by anybody in one of those situations should be consistent across the board. We need to make sure in talking about flexible arrangements that those flexibilities are not dependent on a person’s ability to pay. However it is possible that people who have gone to a lot of trouble to save towards their retirement and their needs may be able by adding some of their own money to the money offered to have a larger room to have their own TV or maybe to have a room with a view. There may be some additional comfort factors that they could choose to pay for and secure for themselves and I think that needs to be considered. If we ask people to save and make provision for those last years then we should not suddenly remove their ability to use those savings productively for what they want. We need to look at that and I will be really interested in it. However I say again that this must not be about the level of care that is given but about the comfort factors that people may want to afford. We really are keen to see that. 
United Future does support the clarification of assessment against income not assets and we support the intention to treat income assessment equitably regardless of whether it is secured in New Zealand or overseas. That is a great move. 
The explanatory note of this bill explains under the heading “Funder liability”: “If the cost of contracted care services provided to a resident assessed as requiring care exceeds the maximum contribution the funder is liable to pay the difference.” This raises some questions for me. Many of us have heard from providers that the assessor—the person who determines what level of care an elderly person will receive—is also the funder. A lot of providers say that they often receive somebody who has been assessed at one level of care and in reality find that the person needs a much more intensive level of care than he or she has been assessed at. Currently funders have to absorb that loss themselves. Does that mean then that despite what an assessor may decide a person’s level of care needs to be the provider can then invoice the district health board that funds that person for additional funding if the provider believes that the level of care required is more intense than has been designated to the person? If that is what it means then that is very interesting. Has anybody calculated what that could possibly cost us? I suspect that no one has. We need to be very clear about what that means. 
United Future totally supports the intention to correct any disadvantage that is currently experienced by couples in the matter of increasing the income from assets exemption when one partner is in care. That is a really good provision. 
I say in finishing that I have an interesting background to this issue. My paternal grandmother—and I was the only grandchild who ever enjoyed staying at her house having her conversation lollies that she kept in little jars and seeing her make dolls’ clothes for our toys because the other grandchildren were never old enough to be able to be left in her care—had a stroke that left her in residential care for the last 11 years of her life. She had serious mobility problems and a loss of speech. That meant that nearly every Sunday afternoon for 11 years of my life I went over the hill at the Raglan deviation—if anyone here travelled it in those days he or she will know that it was no small trip—and spent 3 hours with grandma. When someone has lost her power of speech and get confused by lots of people talking at her the way those 2 or 3 hours are managed is by taking turns. So I spent a large part of my childhood wandering around the hospital wing of a rather lovely residential care place and getting to know and befriending lots of people. I was really impressed with the level of care that was given. But I will say one thing here. My dad and his brother could never have afforded to pay the full cost of what that service provided over those 11 years. It would have taken my father out of the small farm that he owned and changed our life for good if we had had to pay the full amount. We have always been eternally grateful to Presbyterian Support Services which owned the home that my grandmother lived in for 11 years for the subsidies that allowed us to see her in very good quality care to visit her at will and also to befriend a lot of other people. 
We need to make sure that we remind ourselves that the measure of a nation surely is how we treat those who are most vulnerable in our society. This bill is all about that. United Future is happy to support its first reading. 
JO GOODHEW (National—Aoraki) 
: 
 I rise to speak in support of the Social Security (Long-term Residential Care) Amendment Bill. I heard a whisper in front of me just before that this is the “Look after ‘Bob the Builder’ Bill” but in fact it is not. Bob is way too young— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member must use the member’s full name. 
JO GOODHEW 
: The bill will be called the “Look after Bob ‘the Builder’ Clarkson Bill”. There is a bit of alliteration there. The Hon Tony Ryall has spelt the situation out this evening. We have some questions for the Minister the Hon Pete Hodgson and for Government members who should answer the questions if they can. Maybe they will not be able to dispel National’s disquiet and concern about this bill. I am speaking along with my colleagues in support of the bill but with severe qualifications to that support. 
What is the reason for this bill? The explanatory note states: “The amendments address anomalies in the Act so that the Government’s policy decisions in relation to long-term residential care for older people can be fully implemented.” What does that mean? I have a couple of suggestions—one of them my own and the other someone else’s—as to what it may mean. The first—my suggestion—is that the Government mucked the legislation up and now needs to fix it. It is time in fact to have a second try at getting it right. The second view is from some of the providers who say: “The bill Ruth passed last time was poorly drafted so we are going to spend good taxpayers’ money to do it again.” Those are not my words but they are nevertheless quite succinct. The last 6 years have been a litany of unintended consequences and the taxpayers are the poor sods who get to foot the bill again and again. We know what we are here to do. If we do it what will happen? 
Here I will digress. I will tell those present tonight and anyone who is listening to this debate how I spent part of last Friday night. The Strathallen Lifecare Village a rest home and hospital held a ball to celebrate 10 years of that institution. I was a special guest and I had several hats on. I spent the early part of the evening pinning corsages and buttonholes on the residents who were attending the ball. They arrived in wheelchairs or on walking frames some shuffling and others walking. Some were with their lifelong partners and some were on their own. They purposefully went towards the decorated hall attired in their glad rags. Some of them had their own glad rags which had been saved from times gone by when they had attended parties and balls. Others were attired in garments from the drama league—and the rest home provided a large selection of drama league garments for those people to wear. I can tell members that they all looked amazing and they obviously felt amazing. There was much pride as I pinned buttonholes or corsages on the ladies and gentlemen. 
Members may wonder what that has to do with the bill. As I waltzed with the beau of the ball maybe not as skilfully as Georgina Beyer or Rodney Hide could perhaps do—but one never knows; maybe I was as skilful— 
Steve Chadwick 
: You could be one day. 
JO GOODHEW 
: I might be one day indeed. Maybe one day we will try it out. I realised what a huge commitment it was for the rest home—that organisation—to put on the ball. By commitment I mean the commitment of all the staff. Every single one of them was present whether or not he or she was on duty. Those who were not on duty had returned from home in order to help the residents to get ready. They helped the women to put on their best lipsticks and get their hair looking great and they helped the men to look dapper—and they were dressed in their glad rags as well. About 130 residents were involved. 
What about the costs associated with putting on the event? There was a three-piece band there were drinks decorations and party food and the families were gathered there. Now I come to another one of my hats on this occasion: my grandmother was there as well—she is a resident of that rest home. She is 90 years old and celebrated her birthday just recently. She was dressed in a beautiful jade outfit; she looked fabulous. My parents were there with her and my uncle was there as well. That event came at quite a cost which was met by the organisation. Were the wages paid for the extra staff that came back? I am sure they were not. There is no fat in the system to pay the staff who came back for the ball. 
I spoke with the senior manager who was also the manager of a facility here in Wellington and of others elsewhere in New Zealand. We talked about the two risks that face that organisation—and one of those risks is attached to this bill. One of the risks that may result in the ball not continuing—it is the fourth such event over a 10-year period; it happens every 2 years—is the increasing acuity of the residents. What does acuity mean? It means that those residents are sicker. It means that the residents who enter the facility are becoming much sicker as the years go by. Yet the funding has not changed and the qualifications of the staff have not changed. More hospital and dementia care residents are coming in. Those residents will enjoy fewer of those events over the years. 
The other risk is this bill. Let us concentrate on the element of the bill that has been mentioned already which is that the Government wishes to cap one particular funding stream that is currently available to rest homes. It wants to restrict cap and interfere—members can call it what they like. Currently the funding for subsidised residents would not cover extras; it barely covers the staff now. The funding certainly does not meet the cost of wages that compare with those paid to district health board nurses. Events like the Strathallen Lifecare Village hospital and rest home ball may be a casualty. Where is the aged care sector now? In my electorate we have the highest over-65-year-old population of any district health board in the country—it is 17.2 percent. The caregivers worry about existing on the poor wages. The managers worry about replacing the staff; they find it very difficult to compete with the district health boards. 
So what do the representatives of the sector say about the bill? There is a consensus so that is healthy. They say there is some merit in improving the lacklustre original bill—again there is some consensus on that which is healthy. But we find that the agenda that worries them intensely is again that the method of funding will be capped—that they will find that people will not be able to negotiate the level of care that they can afford. I make reference to what Judy Turner has already said this evening. If people have saved hard for their retirement but they find they have been assessed as needing residential care why would they not want to use their savings for their own benefit? Some people would like to do so and they should be able to. Representatives of the industry fear this legislation and the ramifications it may cause. They are after all business people; they try to operate a business and this is a problem for their funding. They want to keep afloat. Forty providers have exited the industry which is not the small number that Judy Turner has suggested it is. Will this measure bring them back? No it will not. 
I will finish by speaking briefly on one topical issue at the moment. “I wore a pedometer and did more than 17000 steps on a single shift. Ten dollars fifty an hour is not enough—not with our baby.” Are comments like that any justification for the appalling photographs that have appeared in the  
Kaitiaki 
 magazine—a magazine I used to value as a New Zealand Nurses Organisation member? No they are not. That is yet another issue we will have to address if it is the sort of— 
Hon David Benson-Pope 
: You’re in the wrong party. 
JO GOODHEW 
: I am not in the wrong party. I say to the Minister that I know value when I see it. I tell members that issue was a dreadful indictment of that organisation and a case of appalling judgment. 
Having made those final comments I finish by saying that I support this bill but with severe reservations. 
Bill read a first time. 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 I move  
That the Social Security (Long-term Residential Care) Amendment Bill be referred to the Social Services Committee for consideration and that the committee finally report the bill back to the House on or before 30 September 2006. 
Motion agreed to. 
New Zealand Superannuation and Veterans’ Pensions (Entitlements of Spouses and Partners of People in  Long-term Residential Care and Remedial Matters) Bill 
In Committee 
Clause 3 Purpose 
Hon Dr NICK SMITH (National—Nelson) 
: 
 I bring the attention of the Committee to the genesis of this bill. I have a lovely constituent Mr Stan Page who is 91 years of age and lives in Hope in the Nelson region. Mr Page is a returned serviceman and he is proud to have been married to his lovely wife Nancy for 70 years. When his dear wife Nancy had to go into residential care at the Wakefield Village Rest Home he went to Work and Income and applied for a living alone payment. One would think that common sense would have applied because he was now living alone but what the people at Work and Income told him was gobsmacking. They told him that to get the living alone payment he would need to divorce his wife of 70 years. 
 That is disgraceful and it is insulting to a senior citizen of this country. I went digging and I found out that on 24 July 2004 this callous Government made a policy announcement stating that a person in the circumstance of Mr Stan Page could not get the living alone allowance unless his or her spouse suffered from dementia and could not recognise him or her. Well this was not the circumstance. Dear Nancy Page was physically incapacitated and required rest home care but she did recognise her husband. 
I asked myself what sort of a callous Government would have a policy that discriminated against one of our older respected citizens in that way. I wrote to the Minister and said that even a Labour Minister might see that the policy is unfair. I received a patronising response from the Minister that basically told me to get knotted. I thought that was unacceptable so I laid a complaint with the human rights commissioner who rightly determined that the policy was unlawful discrimination and needed to be fixed. I am pleased to say that at that point the Government succumbed. 
But I say to fellow members that since 2004 for 2 years—and this case was highlighted on the  
Holmes 
 programme—Labour members have sat on their butts and let this injustice go on and on. It is not just dear Mr and Mrs Page who are affected. I have stories from all over New Zealand. We have the case of Ralph and Josephine Simons here in Wellington. I could cite cases of people in Timaru 
Auckland Dunedin and Christchurch who are affected by these unfair provisions. It was only when the Government was on the ropes with the Human Rights Commission which said it was in breach and that it recognised the injustice and the wrong that had to be put right. 
That is why National members will support the clauses that put this injustice right. We say we should not discriminate against people because they are married and I hope the Minister in the chair the Hon David Benson-Pope has the courage to apologise to 91-year-old Mr Stan Page of Hope who has been married for 70 years and who was told he had to divorce his wife to get a living alone allowance. People were horrified when they heard this story on the  
Holmes 
 programme. A businessman from my electorate rang me to say he was so disgusted that he would pay Mr Page the living alone allowance for the years until this matter is sorted. Do members know what Mr Page said? He said that he did not want that sort of charity; he was a man who had stood tall with his wife for all those years. The Minister should apologise. This injustice is wrong and needs to be fixed. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 In speaking to Part 1 of this New Zealand Superannuation and Veterans’ Pensions (Entitlements of Spouses and Partners of People in Long-term Residential Care and Remedial Matters) Bill— 
The CHAIRPERSON (Hon Clem Simich) 
: We are on clause 3—on its own. 
Dr PAUL HUTCHISON 
: That is exactly what my colleague the Hon Dr Nick Smith was talking about. But I want to go back again to the genesis of the bill—to where the Labour Government has shown extraordinary tardiness in relation to the cares and concerns of older New Zealanders. From 2004 not only was Mr Page in great anguish over this situation but also many others in New Zealand were in the same position. It has taken 3½ long years for this callous Labour Government to move to do anything about it. Back in 2002 Barbara White and 1519 others brought a petition to Parliament calling for the moves that are finally taking place today with the support of the excellent National Party. It did indeed take 2½ to 3 years before this Labour Government did anything about this iniquitous situation and it was the Hon Dr Nick Smith who made all the difference in terms of bringing Mr Page’s case to the human rights commissioner. That hugely embarrassed the Government and it was not until the Labour Government’s embarrassment was acute that it finally decided to move. 
I reiterate and emphasise that it was not only Mr Page and many many others throughout New Zealand but also back in 2002 Barbara White and 1519 others who begged the Labour Government to do something about the situation. But no it was not prepared to do so. It was far too busy creating welfare dependency and other such situations with thousands of New Zealanders and it failed to admit this very unfortunate iniquity that affects so many older people. 
I must say that when we look at the figures we see that there are very serious connotations to the situation because the net after-tax married income is $203. Effectively this bill changes that to $263.90—a difference of $60. That is a huge amount of difference to an elderly person who is living alone and who has to contend with not only power and food bills but also doctors’ bills and all those other basic necessities of life that are so difficult for them to provide. Here we have a Labour Government that has known about this situation since 2002 and has chosen to do absolutely nothing about it. 
Bob Clarkson 
: It’s inhuman. 
Dr PAUL HUTCHISON 
: As Bob Clarkson says it is absolutely inhuman. It is really just a reflection of the Labour Government having a lacuna for some of the very important detail that affects people around New Zealand. I think Bob Clarkson was absolutely right when he said it was inhuman. Thank goodness the National Party was here to remind the Government that this iniquity existed and it is good today to be supporting a bill that will indeed put right this very very wrong situation. 
The other thing I wanted to say will have to wait for my next speech because it looks as though the time has come for me to finish. But I am very glad to support this clause. Thank goodness the Labour Government has finally moved. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 I rise in support of the amendment to the New Zealand Superannuation and Retirement Income Act—the New Zealand Superannuation and Veterans’ Pensions (Entitlements of Spouses and Partners of People in Long-term Residential Care and Remedial Matters) Bill. I congratulate my colleague Nick Smith and others who have brought this uncaring socialist Government to heel on this issue. I also talk about Stan Page from Hope in Nelson—that is Hope in Nelson not Hope in Arkansas which is President Bill Clinton’s home town. There is Hope in Nelson—unlike the Government of course as this Government has no hope of surviving beyond the next election. 
This bill is about Stan Page from Hope in Nelson. I congratulate my colleague Nick Smith on putting pressure on the Government over Mr Page’s situation. An amendment to an Act was passed under this socialist Government that brought about total inequity for about 2000 senior citizens to the tune of $60 per week as my colleague Paul Hutchison just mentioned. To people on a fixed income—whom members opposite claim to represent but have no understanding of—such as people in this circumstance $60 a week is a substantial amount of money. 
So what do we have? We have one of these people on a fixed income in this circumstance who has had to put a petition together supported by the National Party and bring it to this Parliament to politically embarrass this Government into doing what it campaigns on—that is to support the underdog. We have a classic example here of where that has been the case. It is a proud day for the National Party and Nick Smith to get this measure to the stage where we are debating it here tonight. I say to the Minister in the chair the Hon David Benson-Pope that he should go back through all of his social policy and see whether there are other areas where he has created the same kind of inequity as has obviously come about in that legislation. 
If people are wondering what the debate is about the living alone payment represents the difference between a single sharing rate and a higher single living alone rate. That amendment Act brought about a circumstance whereby people who were living alone because their partner had gone into residential care had to divorce their partner or spouse of many years in order to get the higher rate. How ridiculous is that? How could that have happened? Did that one slip past the officials or did the Minister just rush it through in the normal socialist way out there engineering for people’s good and it backfired in this case—or was it a considered proposal when the legislation that brought about that circumstance was introduced? Part 1— 
The CHAIRPERSON (Hon Clem Simich) 
: Clause 3. 
SHANE ARDERN 
: Clause 3— 
Dr Paul Hutchison 
: It’s a drafting mistake. 
SHANE ARDERN 
: It is a drafting mistake. We have both made the same mistake I suspect. I wish the Minister would take a call on clause 3 and explain to the Committee how that mistake took place or whether it really was a mistake. That question has not been answered tonight. Was there a deliberate intention to try to save a few pennies and put these people in a precarious circumstance where they were clearly disadvantaged by having their spouse or partner go into a retirement or rest home environment? I will guarantee that the Minister will not take a call and answer that. 
I also thank the other members who have supported this bill. Clearly there are 2000-odd people out there tonight who will for the first time in a number of years have the equity they should have had from the beginning. I ask the Minister to please take a call and explain to the Committee how we finished up in the situation where with all the power of the ministry—with all the horsepower he has at his disposal—he passed legislation that brought about this ridiculous circumstance and explain why it took the Government so long to respond to the situation once it was made aware of it. The Minister should apologise to those older people who found themselves in this circumstance. 
I thank Barbara White for her petition which brought the matter to the attention of the Government. The Government should do something about it as soon as possible. 
PAULA BENNETT (National) 
: 
 It seems that there are so many other things we could be doing with our time this evening because there are so many wrongs that need to be righted. But instead we need to fix yet another mistake that has been shoddily put through. Really this is about fairness. I am not saying that every penny does not count; every penny does count for these people. They are generally in a situation where they are living day to day and every penny means something to them. The fact is that they have to fight for a mere $20 extra a week which could be the difference of getting the paper each day for example. It is ridiculous that we have to come back and address something that should have been done a long time ago. I understand from my colleague the Hon Nick Smith that this matter was raised in 2004. It seems ludicrous that it has taken 2 years for something like this to come around and to be addressed. 
The measure is about those spouses or partners who are in long-term residential care in a hospital or rest home. Frankly the single rates are higher. It relates to a situation where they need to apply for an increase and it is a matter of whether their partner recognises them. If someone’s spouse or partner recognises that person it means that he or she is not eligible for the living alone allowance. We all know the costs of living alone at different times. To clarify things it is absolutely incredible that people would have to look at divorcing their spouse or partner whom they may have been married to for up to 70 years as in the case raised by Dr Smith. If a couple have been married for 70 years and they happen to recognise each other they can be faced with telling untruths. 
What really upset me when I was looking at this legislation was how much dignity people have lost so far. To date people have had the indignity of sitting before their spouse of many many years and having someone else determine whether they recognise each other. It is utterly an issue of fairness and what is unjust in our society that people needed to go through that sort of indignity. I quote from the Minister himself who said in the first reading that the current legislation requires officials to ask intrusive questions and make complex decisions regarding sensitive issues. 
Thank goodness we are standing in the Chamber tonight to try to right this wrong. How ridiculous that we need to do so but thank goodness the National Party raised this matter as the very important issue that it is. Thank goodness for someone taking on the good fight and battling his way through to see it standing before this Parliament tonight. I commend Nick Smith and I feel saddened for those elderly people who have had to endure the indignity of standing up and asking for a voice—a voice they were not getting from the current Government. It is ludicrous unfair and unjust and as such we proudly stand up and advocate for these people. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 This very significant bill is known as the New Zealand Superannuation and Veterans’ Pensions (Entitlements of Spouses and Partners of People in Long-term Residential Care and Remedial Matters) Bill. I draw to the attention of the Committee that we are speaking on clause 3 “Purpose”. I think it is worthwhile going over what the purpose is: “The purpose of this Act is to—(a) extend eligibility for the higher single rate of New Zealand superannuation living alone payments or veteran’s pension to superannuitants or persons entitled to the veteran’s pension whose spouse or partner is in long-term residential care in a hospital or rest home:”. 
The reason I think it is so important to point out that we are speaking to clause 3 is that the Labour Government has put a very unusual situation before Parliament because we have a purpose clause that is not included in a part. I understand that this is an example of the Labour Government once again making a mistake. We have the Minister—the Hon David Benson-Pope—sitting there in the chair. I hope he will have an explanation of why once again the Labour Government has made a mistake over this bill and the way it has been framed. 
After all it was brought to the attention of this House 4 long years ago in a petition by Barbara White in which she pointed out the gross inequity of a situation where someone is living in long-term residential care who is unwell or infirm and whose partner who is living at home is not eligible for the higher living alone single benefit which is worth about $60 a week. It is a great worry that the Labour Government is likely to vote against its own bill which just demonstrates the silliness of this Labour Government and the lack of preparation and thought it often has for detail. In this bill which is hugely important to older New Zealanders in a very difficult situation the Labour Government has not only delayed the payments for something like 4 years but also when it finally brings the bill to the House it mucks it up. It is just not acceptable. 
Hon Member 
: Take your pill. 
Dr PAUL HUTCHISON 
: Well we see that the Hon David Benson-Pope is not taking it seriously. I hope he will give us a serious explanation of why his Government intends to vote against the purpose of this bill which I understand it is going to do. I hope Government members will give us an explanation because after all as Nick Smith has pointed out it was Mr Page who was put in this very invidious position 4 years ago at the same time as Barbara White and the 1519 others who brought a petition to Parliament. They have had all these years to put it right and they have only just now finally—with the support of National—brought this bill to Parliament but they have managed to muck it up. 
Another point I want to make is that in one of the submissions to this bill Age Concern makes the point that while it certainly supports the proposed amendments through this bill it believes that it does not address the fundamental issue which is that many older people currently do not receive adequate financial assistance from the Government to ensure that poverty does not predetermine their health and well-being. This is a very important issue for many thousands of older New Zealanders under this Labour Government. The Government has basically prohibited older people from having the $60 or made it impossible. Finally they are bringing the payment in after 4 years. 
Hon CLAYTON COSGROVE (Associate Minister of Finance) 
: 
 I want to take a short call on this bill. 
Hon Member 
: Give us an explanation. 
Hon CLAYTON COSGROVE 
: Well the member asked for an explanation in respect of the vote against clause 3. If the member took a moment to look at parliamentary procedure he would note there are two Supplementary Order Papers one of which splits the bill. Because of that the clause becomes redundant. It is rather a technical phenomenon. I have tried to use small words and small concepts. I know “redundant” is a rather large term but that is why we voted against it; it is a technical move. 
I cannot resist focusing on the false bravado and immodest behaviour of Dr Smith and other speakers. They get up in this Chamber and have the audacity to talk about their deeply held beliefs and feelings for our good elderly folk how they have been so deprived under this Government and how all this is so awful. Mr Ardern—if he pulled his head in for a moment because I know he is quite an honest bloke; he is one of the better of them—knows deep down what this is all about. This is about a National Government who in 9 years first had asset testing and second cut the pension three times. 
Hon Dr Nick Smith 
: Not true. 
Hon CLAYTON COSGROVE 
: Yes that is true. That was Mrs Shipley’s legacy—as Nick Smith did the numbers to roll Bill English and I am now told he was not sure who he was doing the numbers for—the pension was cut three times and the rug was pulled from under every elderly New Zealander. I see the members of New Zealand First are nodding. They helped to rectify that problem and I acknowledge that. 
When we talk about clause 3 and the Opposition bleats about why Labour is opposing it it is simply because—as National does know—of the two Supplementary Order Papers. One splits the bill and therefore clause 3 becomes redundant. Nick Smith’s guile in getting up and bleating and trying to have any credibility with our elderly folk is amazing after National pulled the rug from under every elderly person for 9 years. National members cut the pension and did not inflation-proof it and they cut the link to the average wage. They did all those things then introduced asset testing—which we are removing through legislation we have passed. 
I ask members who has more credibility with the elderly folk in this country. We reversed all the cuts of the National Government. We did not actually promise to increase the pension but we increased it. We got rid of asset testing. We are the ones who are putting the rates rebate up so that elderly people can actually afford it—so who has the credibility? 
That silly member from Nelson stands up and thinks he can get away with hoodwinking and conning the elderly people in New Zealand. He thinks that just because people are old they are silly. He thinks every elderly person at home tonight will sit there awestruck by Dr Smith. He thinks they will not remember what National did over 9 years—how it forced elderly people to turn their heaters off at home because National cut their pensions and they could not afford to have them on. The National Government forced elderly people who maybe should have been in a rest home but could not get there because of asset testing and who did not want to give up the family home and the assets they had put aside for their grandkids because Dr Smith’s Government introduced it. Labour got rid of it. 
If Dr Smith thinks any elderly person tonight is sitting at home and giving him any credibility at all then he is condemned because he says that people who are old are silly and they are not. National members have quietened down now because somebody has got up and reminded them of their legacy and of their history. I invite one of them—even the elderly member over there who took a point of order—to try to get up and tell this Committee that first they did not introduce asset testing second they did not take off the inflation index to the pension and third they did not cut the pension three times. All of those things are true. 
When we dispose of the technical amendments in clause 3 we will deal with these issues. When it comes to standing beside our elderly folk and supporting them I look forward to the debate. If all National members can do is get up and bleat about clause 3—because Mr Ardern is too stupid to understand that a Supplementary Order Paper splits the bill and that is why is has become redundant—then they are bereft of any ideas at all. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I recognise that the Hon Clayton Cosgrove who has just resumed his seat has made a worthwhile contribution; he has outlined a number of facts. But I advise him to hang on to his halo for a little bit longer because I ask members who introduced the superannuation surcharge. It was of course the Labour Government. Members will recall that in 1990 the Rt Hon Jim Bolger the Prime Minister of the time said the Government was going to dispense with the surcharge—there were “no ifs no buts no maybes”. But what did the National Government do? It increased the surcharge. Then to pour salt on to the wounds it had the “mother of all Budgets” and reduced a lot of benefits for a lot of people in New Zealand. 
The removal of the superannuation surcharge came about as a direct result—absolutely 100 percent as a direct result—of New Zealand First. It would not have been removed but for the efforts of New Zealand First and in the main our leader the Rt Hon Winston Peters. That was a condition—and the Hon Nick Smith knows it—of the coalition Government in 1996. If he doubts my word I will bring the document and show it to him. 
Tonight in the Chamber there are all these compassionate National people—they have obviously been on a bus ride. Do members know where they have been? They have been on the road to Damascus; they have seen the light. They have suddenly recognised that elderly folk in this country count for something. They have suddenly recognised that fact and I have never seen so many people converted on the road to Damascus at any one time. I could not believe all the compassionate speeches I was hearing from National members in support of the elderly because in 1998 about 6 or 7 weeks after the National Party dispensed with New Zealand First in the coalition National made an attempt to scale down the pension the superannuation to being 60 percent of the average wage. 
Shane Ardern was there. He might have been the National MP who came and sat next to me—as one of them did; that is the absolute truth— 
Hon Clayton Cosgrove 
: Which one? 
PETER BROWN 
: I think it was Shane Ardern. He came and sat next to me in this House and he asked: “Why in the dickens are we doing this?” and I said: “If you find out let me know because there’s nobody else here who knows.” The National Party—and Clayton Cosgrove said this—has taken the elderly for a bunch of fools. There are 500000 of them out there and they are growing by the day. 
Hon Dr Nick Smith 
: Winston does that all by himself. 
PETER BROWN 
: There is one of them there—and they are growing by the day. I am pleased that National members have seen the light and now recognise that people of more mature years count for something in this country that they have to make a contribution and that they should be considered by parliamentary legislation. 
The purpose of this bill is very clear-cut. I accept that it will be divided into two and have some technical adjustments and that it appears apparently—on the surface at least—that Labour will vote against it but I assume that Labour will not vote to put it right out of court. 
New Zealand First supports this bill. We believe it would not have come into being without the efforts of New Zealand First under the leadership of the Rt Hon Winston Peters. We have said for many a year now that the more mature segments of our society should be looked after. Governments have been treating them over a number of years as people who do not count but National members now realise that the elderly do have political clout and that they do count. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 I move  
That the question be now put 
. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 We heard something of a pathetic speech from Clayton Cosgrove. He raved about all the great things Labour has done for elderly New Zealanders but he did not refer for one moment to this bill. I have a simple question for the previous Minister in the chair Mr Clayton Cosgrove. Why for 5 years have Government members knowingly allowed the injustice of elderly people being discriminated against in terms of the living alone payment because the married partner lived in care? Mr Cosgrove cannot answer that. Can the Minister in the chair David Benson-Pope answer it? No he cannot. For all their rhetoric about how much they care for the elderly they cannot answer when it comes to a practical issue like the case of 91-year-old Mr Stan Page getting a living alone payment because his dear wife has gone into a rest home. In that situation Labour said to Mr Page in respect of his wife of 70 years: “Divorce her!”. That shows the callousness of Clayton Cosgrove and his colleagues. 
Let us test a few of the assertions that have been made by Mr Cosgrove. He said that Labour has abolished the asset and income test. Well that is news! I have to tell members that this very week—Saturday at the Nelson market—a dear old lady whose name I will not mention because I do not have her consent told me how disappointed she was that Labour promised to get rid of the asset and income test and 6 years later it is still there and it is still being applied. I ask Mr Cosgrove this question: will he bet me the best bottle of Nelson wine that the asset and income test is gone? He is silent now. Five minutes ago he was making all sorts of assertions but he will not take me on for a bottle of wine because the asset and income test which Labour promised to abolish in 1999 is still being applied as we speak. 
Then he had the audacity to talk about some of the costs for older New Zealanders. Let us talk some facts I say to Mr Cosgrove. Does he know how much the price of power has gone up since his party has been the Government? It has gone up by 42 percent. That is an average of a 7 percent increase per year in the price of power. Let us have a look at National’s record. What was the average increase in the price of power between 1990 and 1999 when National was the Government? The answer is 2 percent. It was 2 percent per year in the 1990s and it is 6 percent per year I say to Mr Cosgrove when his party is in power. He should hide his head in shame. 
Let us have a look at another significant expense for our elderly—rates. Does Mr Cosgrove know how much rates have gone up because of the dopey legislation his Government has been passing through the House? Rates have gone up by 7 percent per year—so rates have gone up 44 percent for those elderly folk for whom this evening he was crying crocodile tears. Does he know what the average increase was when National was in office? It was less than half that. So I am happy to stand in this House and say that when it comes to the real issues of our elderly folk—their power bills their rates bills and their superannuation— 
Hon Clayton Cosgrove 
: You cut the superannuation. 
Hon Dr NICK SMITH 
: Well let us talk about superannuation. This bill is about the living alone payment. Does the member know who introduced the living alone payment? Does the member know who it was who recognised that people living alone actually have greater expenses and are deserving of a greater allowance from the State? It was Jenny Shipley one of the great Prime Ministers of this country. She was the person who introduced the living alone payment which recognised the costs of living alone to older New Zealanders. I am proud of the heritage that the National Party brings to the House and I proud today again that it is the National Party that is providing leadership on the issues of justice and dignity for our elderly people by making sure that they get that living alone payment even if their partner is in a rest home. It is right and it is just and the only thing I say to those Labour members is that they should hide their heads in shame because they have known about this for 4 years and have done nothing. That is why I hope they will be supporting my amendments—so that Stan Page and those like him might get this payment that they should have been getting 3 years ago and that they will get it for the period for which they were ineligible. That will be the test of Labour members’ mettle when it comes to the question of whether they are prepared to honour elderly New Zealanders. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 I move  
That the question be now put 
. 
Motion agreed to. 
A party vote was called for on the question  
That clause 3 be agreed to.  
Ayes 48 
New Zealand National 48. 
Noes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Clause 3 not agreed to. 
Part 1 Amendments to New Zealand Superannuation and Retirement Income Act 2001 
Hon Dr NICK SMITH (National—Nelson) 
: 
 For the benefit of the third parties in the Parliament I want to outline the amendment I have put forward because it is significant. On 24 July 2004 the Social Security Appeal Authority ruled that the way in which the Government was applying the provisions was unfair and unjust. I am proposing in my amendment that eligibility for the living alone payment—which I think this Parliament uniformly agrees is unfair and wrong—should apply from that date. What does this mean? Mr Stan Page the constituent on whose behalf I have advocated applied in 2004 for the living alone payment when his wife Nancy went into care. My amendment will say that he will be eligible for the payment from 24 July 2004 or if it was after that date from the date they first applied. 
I think the Parliament is in agreement that there was an injustice. But I think a real test for this Parliament is the question of whether we are prepared to put it right for the likes of Mr Page. When I met with him in 2004 I was doubtful that he at the age of 91 could wait many years to get justice on this issue. He promptly applied to the department for the living alone payment. I think it is right and proper that he be eligible from the date on which he applied particularly as at that date the Social Security Appeal Authority had given its ruling and the department had to revise it. So my appeal to the Committee is on a matter of justice. Mr Page applied and thousands of other New Zealanders applied so should they not receive the living alone payment from the date on which they lodged their applications? 
I say to New Zealand First members Green Party members and Maori Party members who are in the House today: “Will you today stand up for the likes of Mr Stan Page?” When Mr Stan Page’s case was highlighted nationally a business person came forward and said: “This is so appalling. This is not the way that we treat returned servicemen and this is not the way we treat senior citizens in this country. I’ll pay the living alone payment.” Mr Page being of that decent generation said he did not want to accept charity and that it was the Government that needed to put this right—and that is what my amendment will do. 
So I say to Labour members opposite who have just heard Clayton Cosgrove say that his party will stand beside elderly New Zealanders that this will test them. What good reasons can this Parliament give for Mr Stan Page not having the living alone payment backdated to the date on which he would have been eligible? Can any member—the Minister or anybody else—tell me why Mr Stan Page whose wife Nancy is in a rest home should not be eligible for that payment from 24 July 2004? 
What good reason has this Government had for taking 2 long years to get to this point when it knew about the situation for longer than that? [ 
Interruption 
] As my colleague Paul Hutchison points out the Barbara White petition was in 2002. I have been reasonably generous in saying that we will backdate it to 24 July 2004 the date of the Social Security Appeal Authority decision. I ask members of New Zealand First the Green Party and the Maori Party whether today is not the day to put this situation right. Is today not a day on which we can say to the Stan Pages of the world: “Parliament is going to put right this wrong. We will ensure that you’re eligible for the living alone payment from that date.”? It will be an interesting test for the Parliament. Are we truly committed to fixing this? Will Parliament be able to stand tall and correct this anomaly? It is a test for Mr Stan Page. 
I see that Mr Clayton Cosgrove is doing one of those cynical grins that Mike Moore used to do. He is the guy who said that it was not sincerity in Parliament that was important; it was the capacity to fake sincerity. Clayton Cosgrove represents all of that. Let us test Mr Cosgrove’s sincerity and see whether he will vote for an amendment that gives justice to Mr Page or whether he will get to his feet and explain why Mr Stan Page should not receive the living alone payment from the date when the Social Security Appeal Authority gave its ruling. That is the right and just answer and I say to this House that that is what we should do. 
I also want to comment briefly on the provision in respect of Volunteer Service Abroad. I too have had constituents draw attention to this problem. I have two elderly constituents who are working for Volunteer Service Abroad in Bougainville. They are beavering away there helping the community with its infrastructure and with its teaching facilities at a school in Bougainville that war-ravaged land. They are ineligible for superannuation because they have completed a 2-year contract with Volunteer Service Abroad. I commend to the Committee clause 8 which will correct that anomaly. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 Part 1 deals with amendments to the New Zealand Superannuation and Retirement Income Act 2001. Indeed I absolutely agree with my colleague the Hon Dr Nick Smith that this part will test the sincerity of Labour members of the Government. It will test the sincerity of Clayton Cosgrove who waxed so lyrical about what he says is his party’s attitude towards the elderly. There is no doubt that in this bill before us there has been nothing shown but negligence by the Labour Government towards the elderly. 
I certainly want to commend to the Committee the very appropriate amendment of my colleague Dr Nick Smith which will address the anomaly that has been perpetrated on Mr Page from Hope Nelson. It is very unfair that Mr Page aged 91 who applied for the single living alone allowance in 2004 was totally ignored by the Labour Government. He was totally ignored by the Labour Government not just once but I understand two or three times to the extent that it required Dr Smith to take Mr Page’s case to the human rights commissioner. The commissioner said: “No this is an anomaly that the Labour Government has perpetrated.” and the Government was finally shocked out of its lethargy. So the amendment we have before us is very right and proper in that it would backdate the living alone payment to Mr Page and to others like him who applied prior to 24 July 2004. 
 I too want to make the comment that this part deals with those aged 65 and over who are doing Volunteer Service Abroad around the world. Many many New Zealanders who do that fantastic work right around the world often in very dangerous situations have been penalised by that situation. I think we heard about Mrs Myrtle Whitehead who had done some terrific work in Asia but who had to keep on coming back to New Zealand in order to get her rightful entitlement. So indeed it is quite appropriate that this bill extends the period from 52 weeks to 156 weeks. That means that the over-65 category of superannuitants who are working for Volunteer Service Abroad—and I understand that something like 11 percent of Volunteer Service Abroad workers are in that category—will be affected by that provision so it is appropriate. 
The other point I want to make is that in the Age Concern New Zealand submission on the bill the one major problem its people had was that the bill did not address the fundamental issue—which is that many older people currently do not receive adequate financial assistance from this Labour Government. I think that that is the nub of the issue because as we all know superannuation is indexed to the average weekly wage and we have a Labour Government that came into power in 1999 when the economic growth rate was 4.9 percent—[ 
Interruption 
] 
Hon Dr Nick Smith 
: I raise a point of order Mr Chairperson. I know that Mr Benson-Pope who is a relatively new Minister is in the chair but there is a longstanding rule from Speakers that the Minister who has preferential access to the microphone should not be able to interject in the way he was doing. I suggest that you bring the Minister to order. 
Mr DEPUTY SPEAKER 
: I thank the member for raising that. Dr Smith is absolutely right and I dealt with that matter just before the member raised it. 
Dr PAUL HUTCHISON 
: I am very glad to hear that because I was making the point that this Labour Government came into power in 1999 when the growth rate was 4.9 percent. But what is the growth rate now? It is 0 percent. If we did not have the situation where over 600 New Zealanders are departing these shores every week for Australia perhaps things might be different. But we have a legacy from this Labour Government that the growth rate in New Zealand has not been sufficient to make sure that the elderly of our nation have sufficient financial assistance to ensure in the words of Age Concern that poverty does not predetermine their health and well-being. What an indictment against this Labour Government! If we look into the future for the next few years we can see that the economic growth rate under Labour will fall—it is estimated that it will be between 0 and 1 percent—and that is very serious for the elderly people of this country. 
CHESTER BORROWS (National—Whanganui) 
: 
 I rise to speak in favour of this bill. It is interesting to note that we always seem to make assumptions about the way people live their lives. We have made a lot of assumptions about elderly people who are living together are sharing a home and have been married for many many years. I think back to my grandparents who were married for 71 years and I am sure that from time to time my wife thinks: “Hell I can’t take another 45 years of this!”. 
Fortunately we as a family did not have to go through the situation of that couple being separated. But through my work as a funeral celebrant I have come across this situation on many many occasions. A couple may have been married for 60 years. The wife is in the home looking after dad. Dad is starting to lose his way a little bit and she through loyalty and commitment does all she can for him—covers the tracks makes little excuses and changes the sheets or whatever when there have been problems. I can think of one particular lady who I buried about a year ago in exactly that situation. For years and years she looked after her husband; she did not want him to go into a home. Eventually it had to happen and by the time he got to that home she was absolutely wrung out. She was a spent force. She passed away not very long after he went to the home and he has survived her. 
There have been inequities around that situation for many many years and they extend right back to a time that we are not really allowed to talk about. It is quite interesting but as soon as National members start speaking about this sort of situation people from the other side yell out: “What about the 1990s?” 
Peter Brown 
: Yeah what about them? 
CHESTER BORROWS 
: That is a valid point—what about the 1990s? But if we go back a little bit and start talking about the 1980s then we are told that that is ancient history and that no one wants to know anything about that. After all the Prime Minister apologised to Labour people for the way the Labour Government dealt with them during the 1980s. But a lot of those people knew and Mr Brown would know—because he had less grey hair in those days; he could concentrate on what was happening on the wireless a little more easily I suppose—the situation we found ourselves in in the 1990s. It led to some of the decisions that have been thrown back at us across the Chamber tonight but those decisions were actually being cooked up through the 1980s. I do not know where members on the other side were during the 1980s; maybe some of them were asleep or in some sort of self-induced coma. But some of them had very high positions in the Labour Government and they were part of that situation. When National went into the 1990 campaign the Minister of Finance was saying that there was a $2 billion surplus then we won the election and found that in actual fact there was an $8 billion deficit so I ask members what the hell we were supposed to do. People did it hard; we know that people did it hard. But there is no point in trying to pretend that the situation extends back to only 1990. This Labour Government forgets that Labour has been in Government for 12 of the last 22 years and it is time it started carrying the can for that. But all its members do is swim like a crayfish whenever that issue is raised—“Oh no Chester! That is ancient history.” 
The fact is that Labour has people who have been living with inequity for a long time and it would have been good to have dealt with that through the 1990s. It would have been good to have dealt with that in the last week of 1999 or it could have been dealt with in maybe 2000 2001 2002 2003 2004 2005 or—here we are—2006. Labour cracks on that its members are so articulate that they know what is going on and that they have a finger on every button but it was not until the matter was raised by our colleague Nick Smith that they had any intuition it was going on. 
I look forward very much to the day when Labour members start casting their eyes around the other inequities that exist within our welfare system and start to deal to some of those too. And yes I would like to think that they had been dealt with within the term of the National Government but it did not happen. Well now is Labour’s chance—its chance to accentuate just how on top of it Labour is. Let us see Labour deal to all those inequities—just let us see it. I will look forward to seeing that happen. 
The other provision I am pleased to support is the ability for people to spend 3 years overseas working with Volunteer Service Abroad or other aid organisations. That reinforces our role as global citizens and it enhances the cultural values of New Zealanders who have been working overseas for many years. I was speaking to a constituent only yesterday who on a regular basis travels up into Cambodia to train people in optometry. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 It is with pleasure that I rise to support Part 1. I say to my colleague over there Clayton Cosgrove who was kind enough to mention me on more than one occasion in his last speech that he should think about two things when he comes to this Chamber. The first is his predecessor in Waimakariri Mike Moore who I believe represented the true values of the Labour Party and cared for poor old people like those we are speaking of in this legislation. The second point that that member should remember and take on board is that it is no good standing up in this Chamber and running the 1999 campaign now. It is gone. Labour won in 1999 and it has had 6 years to fix up some of these problems. 
Tonight we are debating an issue that has been around since 2001 in fact. The original New Zealand Superannuation and Retirement Income Act was passed in 2001 and that is when this Government made a mistake. The question I put to Labour members and to the Minister in the chair David Benson-Pope is how that mistake happened. How did this inequity come about and why once the issue was raised did this Government take a minimum of 4 years—maybe longer—from the first time it was notified of this inequity to do something about it? Why has it taken the Government so long to come around to the conclusion that this needed to be fixed up? 
I will look at Part 1 because I know that the Chairperson is anxious that somebody does so at some stage during this debate and at the amendment put forward by my good colleague Nick Smith which was a result of the case of Stan Page in Hope Nelson—not Hope Arkansas which is where President Bill Clinton is from. I know that Labour members have a fixation on anything that comes out of the United States at the moment but I am talking about Hope Nelson. That is for their information just in case they get confused about that. Looking at that particular case and at others like it I understand that 2000 people are potentially affected to the tune of $60 per week by what has been an inequity over all this time. That inequity is from a Labour Government that campaigns every time on social policy. 
I was pleased to hear the comments of my colleague Chester Borrows from Wanganui when he said that not all of the problems within this country were caused by the last National Government. In fact going back to the genesis of some of this inequity it most certainly started in the 1980s under the Labour Government of the time—Helen Clark was a senior Cabinet Minister in that Government and so too was Michael Cullen and a number of other members of the current Government. We should not forget that. In fact there may be one or two members sitting over there who had a fairly senior role in the party during that time as well. So it is a very good point to raise at this stage in the debate. 
Not all of the problems that we face today came about in the 1990s. This Government has had 6 long years since the 1999 campaign when it campaigned against that stuff. Further it has had the best economic circumstances in a generation in which to fix up some of these social inequities. Tonight we heard from the member Clayton Cosgrove about what a dreadful bunch of uncaring people the former National Government members were. Well that member should take a close look at his own track record and that of his party. 
I also say that it is a great thing that tonight with this amendment we are finally recognising those people who are willing to do voluntary service abroad. The fact is that we have a huge number of people with a huge amount of institutional knowledge in a whole range of areas that is useful to New Zealand not only from a public relations point of view but also from an economic market access point of view and a humanitarian point of view—from the point of view of any kind of good work one can think of. They are willing to give up their time go off to countries that one could describe as being not as pleasant to live in during one’s twilight years as New Zealand is and give their services and expertise that has been built up over many many years of experience in their field. 
I also say to the Government members that it is an absolute indictment on them that it took a group of elderly people led by Barbara White to bring a petition to this Parliament to finally get them to do something. I am pleased that the Minister David Benson-Pope is finally standing to take a call. 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 I am hoping a lot of older New Zealanders sitting out there wherever they are are listening to this debate tonight because like me they will be absolutely gobsmacked by the sanctimonious self-serving nonsense they have heard from the benches of the Opposition. Just to remind the members of the Opposition of matters that they have not covered I will talk about Labour’s record of achievement for senior citizens. It was this Government that reversed National’s cuts to superannuation and restored the pension to not less than— 
Hon Dr Nick Smith 
: I raise a point of order Mr Chairperson. We are in the Committee stage of Part 1 of the New Zealand Superannuation and Veterans’ Pensions (Entitlements of Spouses and Partners of People in Long-term Residential Care and Remedial Matters) Bill. I am looking at the details and we have made many speeches and have wanted some answers from the Minister in the chair David Benson-Pope. There are issues of living alone payments for people in residential care and also of people on Volunteer Service Abroad. I think it would be helpful for the Minister actually to address those issues rather than give us a lecture in ancient history. 
The CHAIRPERSON (Hon Clem Simich) 
: That is not a point of order. I am sure that the Minister was coming to that. He was fully entitled to range over a few issues because he and the Government had been under attack for some time. 
Progress reported. 
Report adopted. 
The House adjourned at 9.56 p.m.