Appropriation (2010/11 Estimates) Bill — Third Reading Imprest Supply Debate 
Text is incorporated into the Bound Volume 
Appropriation (2010/11 Estimates) Bill — Third Reading Imprest Supply Debate 
[Sitting date: 03 August 2010. Volume:665;Page:12893. Text is incorporated into the Bound Volume.] 
Appropriation (2010/11 Estimates) Bill 
Third Reading 
Imprest Supply Debate 
Hon BILL ENGLISH (Minister of Finance) 
: 
 I move  
That the Appropriation (2010/11 Estimates) Bill be now read a third time and the Imprest Supply (Second for 2010/11) Bill be now read a second time 
. This is an opportunity for Parliament to debate the economy and I had been looking forward to it until I saw what a mess the Labour Party had made of its internal rifts splits and divisions. 
Hon Darren Hughes 
: Well that’s rich—their worst political leader in 100 years. 
Hon BILL ENGLISH 
: I knew that those members would say that and all I can say is that they are following the playbook almost to a T including having the leader make the mistake of saying that he would throw Chris Carter out of the Labour Party. One would think that those members would have learnt but they have not. Of course Chris Carter has played exactly the right card so that it is drawn out for several months while the leader’s position is progressively weakened by Chris Carter’s other accomplices within and outside the caucus. 
Of course there is one extra bit here. Usually in the playbook that we know about the president supports the leader; that is what usually happens. The president realises that he or she has to objectively oversee a process to deal with the member who has committed an offence. But not in the Labour Party; no not in the Labour Party. The president is out in the media looking so relaxed that one would think that he has just come back from a beach holiday and he probably has—a beach in New Plymouth. [ 
Interruption 
] No Andrew Little. He should be sounding a bit uptight in the media but no he is quite relaxed. Everything is playing out. At least John Key got into the caucus before he became the leader; at least John Key got into the caucus. Andrew Little does not have to because— 
Dr Russel Norman 
: I raise a point of order Mr Speaker. We are debating the appropriations legislation and I would like to hear what the Minister of Finance’s economic strategy is. He has no responsibility for the Labour Party and this matter has nothing to do with the appropriations. 
Hon Gerry Brownlee 
: Mr Assistant Speaker you will I am sure uphold the long-held tradition that this is a very very wide-ranging debate. I think that it is being conducted in an appropriate manner. The fact is that these matters are topical to say the very least and I think it is not unreasonable that the House might give them some attention. 
Hon Members 
: Where’s the plan? 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I am on my feet. I do not have to provide anybody with a plan. But I will say to Mr Gerry Brownlee that he is almost right with his interpretation. It is not a very very wide-ranging debate; it is a very wide-ranging debate. Members are free to range over those things. It is not the Speaker’s intention to censor what people say. The public and others will make judgments about the content and the veracity of speeches. All in all it is almost a general debate. 
Hon BILL ENGLISH 
: I agree with the comment that this matter is topical but fortunately—and I say this advisedly—it is irrelevant. It does not matter now which talking head of the left faction or the right faction it is or from outside or from wherever those members will do whatever they are doing. We are getting on with the economy. 
I will outline the main components of the Government’s economic programme. This Government is dealing with a very considerable challenge in respect of the economy. The economy went into recession in early 2008 because of the mismanagement of the previous Government and that was compounded by the global financial crisis. These are some of the measures we are taking. Today we announced the policy expenditure review which is part of our overall plan for better smarter public services. In the last couple of Budgets we have reallocated about $2 billion of spending over the next 4 years from low-cost and ineffective programmes and expenditure to higher-priority front-line services. That is a process that will continue. We have had to bring under control the runaway spending habits of a Public Service that was used to getting pretty much whatever it liked. We have also had to deal with the attitude issues and the culture in the Public Service—the combination of too much money and a lot of bullying. It created among civil servants a degree of passivity and lack of confidence in their own judgment. There has to be change if we are to meet the challenges of the next 4 or 5 years so a better smarter Public Service is one of our six drivers. 
Another driver is a growth-enhancing tax system. In Budget 2010 we delivered a fairly significant shift in New Zealand’s tax system and there is a pretty simple theory behind it: those things that have been harmful to the economy in excess such as borrowing for highly leveraged property and too much consumption now face higher effective tax rates. Those things that we believe will be better for the economy over the next 4 or 5 years such as investment exports and savings are now subject to a lower tax rate. That will all come into place on 1 October this year. 
I have to say that we are one of the few developed countries—if there are any others—reducing income tax rates and taxes on savings as the world emerges from one of the more significant recessions that it has had. We have cut the company tax rate to 28 percent which will now be lower than Australia’s and is likely to remain so. The average wage earner will be around $15 a week better off after GST and a family on the average household income will be $25 a week better off even after paying higher GST. Another pretty interesting statistic is that 73 percent of all New Zealand earners will face a top statutory tax rate of 17.5c in the dollar. That is because we believe that incentives matter right across the board. If people on the minimum wage want to do an extra hour of work we believe that it is important that they get to keep over 80c in the dollar for their extra effort. 
We are also focusing on lifting education and skills. There has been good robust public discussion about our national standards policy that we are putting into place. The Youth Guarantee is another innovative policy designed to make sure that young people do not lose contact completely with education and training in the workforce. And of course we are tidying up the tertiary education funding system to make sure that it is more focused on achievement than the previous system was. So those drivers are improving the tax system better smarter public services and lifting education and skills. 
No. 4 on that list is boosting infrastructure. I must say that the timing for this infrastructure boost has turned out to be highly appropriate. At a time when the domestic construction industry is really struggling it turns out that the Government’s large-scale investment is maintaining thousands of jobs as we spend billions of dollars on upgrading infrastructure that needs to be brought up to the levels required to handle a growing economy. I will go through those in detail. The State highway programme now amounts to $10.7 billion over 10 years; the national grid upgrade now amounts to $3.3 billion over 5 years; the broadband project amounts to $1.5 billion over 10 years; and investment in schools and other buildings the Government is investing in now amounts to $2.7 billion over 5 years. But it is not just about spending the money. What is even more important is upgrading the process by which those decisions are made because it has to be quality spending when we are borrowing that money. 
We have also embarked on an ambitious programme of cutting red tape and regulation. That picks up work that the previous Government had talked about and done a bit of. We are reviewing the Resource Management Act. A couple of other Acts we are currently reviewing are the Food Act which applies to every food outlet in New Zealand and the Building Act whereby we are moving along to the legislative stage with a sweeping reform to reduce costs and compliance in the building sector. Even with tough Budgets we have also invested quite heavily in better business innovation in an ambitious trade agenda to help particular sectors and to help to encourage research and development. 
Overall this is a very balanced but energetic programme designed to get this economy up and running after a decade of mismanagement when New Zealand squandered its opportunities wasted public money smothered the business environment and prevented New Zealand from taking the opportunity of what in retrospect looked like one of the more encouraging decades that the New Zealand Government could have had. In that respect I must say that Australia did do a better job over the last 10 years and that is why closing that gap will be such a big challenge. 
Hon PHIL GOFF (Leader of the Opposition) 
: 
 When Bill English got to his feet and began to decry the runaway spending habits and the bad culture of the Public Service I thought that at last we were hearing a mea culpa. He is paid the highest housing allowance of any beneficiary in the country; he is paid thousands of dollars to live in his own home. If it started off as a bitter speech we can understand why. He is the man who took National to 21 percent in the 2001 election—21 percent. Worst of all he was a leader doing his best who was stabbed in the back by his own current party leader who had promised to support him the night before the party ballot and instead gave his support to Don Brash. It is no wonder that Bill English is a bitter man in the House. 
But I do not want to waste time on Mr English; I want to talk about what National promised New Zealanders. John Key said that the fundamental purpose of his Government was to narrow the wage gap with Australia. On any measure the Key-led National Government has failed in that purpose. The media showed that the wage gap with Australia had increased by $40 a week since John Key was elected Prime Minister. John Key came into the House and said that was untrue and had not happened. He tabled a document of the best-massaged figures he could provide and it showed that the wage gap had grown by $23 a week. But then—and this is what I objected to most—from Mr Brownlee and Mr Key there was the dishonesty of trying to disguise figures that represented the reality that New Zealand workers are much worse off. 
Mr Key and Mr Brownlee proudly became the joint holders of the title of “Wallies of the week” in the  
Dominion Post 
 last Saturday. Let us hear what the  
Dominion Post 
 had to say: “[Gerry] Brownlee for so brazenly claiming that the wage gap with Australia has shrunk under National when by any measure it had grown”. But wait there is an even better award for John Key. He was joint “Wally of the week” “for thinking anyone would be fooled by his inept attempt to manipulate the statistics to support his Minister.” They are the “Wallies of the week”. 
Well New Zealanders are not so easily taken in. They know they are not better off they know wages are not increasing at the rate of prices and they know the wage gap with Australia is growing wider and accelerating by the day. We got that information from Statistics New Zealand which today stated that the wage increase in the last year was 1.6 percent. Well inflation went up by higher than that amount. Every New Zealander going through the supermarket checkout knows that when John Key tells them that they are better off it is not true. 
What else did we find? We found that the wage increases in New Zealand in the year ended June grew at half the rate of the wage increases in Australia—half the rate. Most of all we learnt that the wage increase under this National Government in the last year was as reported by Statistics New Zealand well under half of what Labour gave workers in its last year of office. That is where the truth lies. 
Mr English can talk as much as he likes about Labour’s legacy; Labour’s legacy was a country with one of the lowest rates of unemployment in the world where wage increases were consistently above price increases and where people were better off in their workplace in the social policies that were being pursued and in their living standards. Mr English made a half-hearted attempt to say what his plan was. Well I hold up the real plan taken off the National website today. It is the policy statement  
2010 Budget: Building The Recovery 
. What does the policy say? It is a blank piece of paper. Oh no it has a copyright on it. But this sheet of paper is as blank as the ideas and the plan that National has to address the problems of this country. There is no plan. 
Mining in a national park or a protected conservation area is not a plan. John Key Kate Wilkinson and Gerry Brownlee told the House at the start of this session that that was their big plan for step change. They were going to dig up our national parks. Ask anyone in New Zealand and they will tell members that it was a load of nonsense economically and a load of nonsense environmentally. Now those members have slunk away from that policy with their tails between their legs. John Key denies that he ever had anything to do with it. But the truth is that 6 months was wasted during which this Government should have had a plan to lift New Zealand wages and employment rates and close the wage gap. 
I asked the Prime Minister in the House today whether he had the courage of his convictions and would stand by the promise that he had made to set benchmarks for progress towards the objective of closing the wage gap with Australia by 2025. The answer was no. There was no courage of convictions. We know that the promise to close the wage gap with Australia was simply empty electoral rhetoric. There is no plan we are not catching up and it is getting worse. The wage gap is growing. For the first time in more than a decade we have a higher unemployment rate than in Australia. Under John Key’s watch we have a higher unemployment rate than in Australia. 
When challenged this afternoon in question time as to whether he would predict that the employment gap with Australia would narrow he declined to make the prediction. I will tell members why. The Ministry of Social Development statistics already show that our dole queues are growing bigger while the Australians are cutting down their unemployment rate. The projection this week is that will continue. 
We do not have to be rocket scientists to know what New Zealand needs. It is pretty clear how we can move forward and Labour has put this into its plan. Labour’s plan is about upskilling the workforce because we know we need more apprentices not fewer. We know there is a looming skills shortage but this Government is doing absolutely nothing about it. We know we need more people with tertiary education but the Government is locking out an unprecedented 5000 people. We know we need to achieve better in education. National standards do not achieve anything; they just measure achievement. What achieves better standards is better early childhood education but that is what the Government is cutting. 
We know we need more savings because if we save more we invest own and control our own country. Why then did National cut KiwiSaver when the Australians were expanding their scheme? Why did the National Government cut the money that was going into the Cullen fund so that baby boomers could contribute towards their own retirement? We have fewer savings because of what the Government is doing. Government members can whine all they like about being tenants in their own country but they are causing that situation because they do not have a plan for savings. 
We know we need to invest in a smart economy. We will not catch up with Australia by making workers worse off by cutting their entitlements and cutting their wages. We will catch up with Australia and do well through a smarter economy smart technology and a highly educated highly paid and highly skilled workforce. This Government is not going in the right direction; it is going in the wrong direction. 
Hon TONY RYALL (Minister of Health) 
: 
 When their colleagues were applauding what was going on with George Hawkins the young guy from Rimutaka Chris Hipkins and the chap from Palmerston North Iain Lees-Galloway? 
I must pick up from where the Minister of Finance finished because it really is going according to the playbook of what happens when the Leader of the Opposition is on the skids. In that situation the leader has a speech and a little note will go around in an email stating “The leader is about to speak; please all make your way down to the Chamber”—and they did. But I have to say after hearing that speech from Phil Goff that it can only be summed up with these words from Chris Carter: Mr Goff is a very nice man but he just cannot win. What is more Mr Carter went on to say that there are many members of the caucus who feel the same way. They are the ones who did not stand when we saw the ovation following Mr Goff’s speech today and a lot of the members who did stand are also included in that group. 
The statement that Mr Goff is a very nice man but just cannot win came from someone who was one of his front-benchers until a few weeks ago Mr Carter. It is a bit like what used to happen in the Soviet Union where if anyone disagreed with the leader that person would be sent to the asylum. That is what they are saying about Chris Carter. It is very very impolite and it is not a reflection of the situation that Mr Goff finds himself in. 
What was sad about Mr Goff’s speech was the fact that it is clear Labour does not get that its “more debt higher tax” policies will not work for New Zealand. There is no awareness from the party opposite that we are coming out of the worst recession since the 1930s. Mr Goff was in a party that during the best of times squandered the opportunities New Zealand had and he now represents a party that has no coherent vision for the future of this country. He is a very nice man but he just cannot win when he has no plan or policies for New Zealand other than to spend another $300 million which is what Ruth Dyson is going around the country and saying we should do. Apparently we will fix everything by spending another $300 million. What we know is that that is not the case. 
During its term the previous Labour Government spent recklessly interest rates were persistently high exporters were struggling and the tax system clearly was not working. Under this Government we have a six-pillar programme of economic recovery for New Zealand the first of which is growth-enhancing tax cuts which are putting large amounts of money in the pockets of ordinary New Zealanders. Many New Zealanders will remember that Phil Goff and Annette King voted to put $500 a week tax cuts into their pockets and the pockets of Cabinet Ministers when they were in Government between 1984 and 1990. That is what they voted for: $500 a week in the pockets of Cabinet Ministers. Annette King and Phil Goff stuck their hands up and said “Yes thank you we’ll have the $500 a week tax cut.” 
What this Government has done is to give average wage earners the significant benefits they deserve. A family on the average household income will be $25 a week better off and the vast majority of New Zealanders will face a tax rate of no more than 17.5c in the dollar. 
Sue Moroney 
: Not after their early childhood education fees have gone up. Tell us about what’s going on with young children Tony. 
Hon TONY RYALL 
: Oh and what is her name from the Waikato? 
Paul Quinn 
: Moroney? 
Hon TONY RYALL 
: Was Sue Moroney in favour of Phil Goff’s voting to put $500 in his own pocket? Oh she was in favour of that. 
We have lower personal tax rates a lower marginal tax rate for the vast majority of New Zealanders and lower tax rates that make us more competitive with Australia thereby giving the right incentives to business and individuals to get ahead. We are also focusing very strongly on better smarter public services for New Zealanders and on getting the Government debt and spending under control. We know that we inherited a forecast that was a nightmare for the New Zealand economy. What we had seen was the world economic crisis economies heading way down and the previous Government not doing enough to prepare New Zealand for that situation. 
We have capped the Public Service bureaucracy and moved resources to front-line services and New Zealanders can see those improvements every day. An extra 13000 people received elective surgery last year because of the National Government’s investment. People are getting faster cancer treatment than they did under the previous Government and today I can tell the House that the significant extra $60 million investment that we put into community medicines sees a quarter of a million New Zealanders getting medicine that they would not have been given 2 years ago without that significant investment. 
Minister Paula Bennett has been leading a real drive for welfare that focuses on work. Not only has this been coupled with lowering personal marginal tax rates but also she has put together a package that encourages people to get back to work and take responsibility for themselves. Job Ops and Community Max are really giving young people in my electorate and elsewhere around the country the opportunity to get workplace skills and experience. 
Thirdly and very importantly Minister Anne Tolley is leading a significant sea change in education with national standards— 
Hon David Cunliffe 
: That’s not what teachers say. 
Hon TONY RYALL 
: Actually most teachers are getting on with the business of implementing national standards because they do not like the fact that one in five kids can leave school not being able to read and write well enough to get a job. They do not like that so they are working very hard to implement national standards in literacy and numeracy. The reports that parents are getting are providing much better information than was provided previously. We know that in education there has been significant investment such as a 4 percent increase for schools in their operations grant funding $350 million for school property over the next few years and very exciting things happening with Youth Guarantee and trade training in schools. It is excellent that we are investing in these trade academies around the countryside and really making a significant change. These are the things in education that will really deliver the lift in skills and attainment that we as New Zealanders want. 
Very importantly as the Minister of Finance said not only are we putting more money in people’s pockets focusing on education and getting better quality public services but also we are investing in infrastructure—an area neglected by the previous Labour Government. As it was throwing the cash around it did not focus on the really important infrastructure investments that can help our country grow. We will invest almost $11 billion over the next 10 years in roads and roading infrastructure in New Zealand we will invest $1.5 billion over 10 years in the ultra-fast broadband network and we will upgrade the electricity transmission. 
What is more there is nothing more significant than the Government’s public health investment in the Warm Up New Zealand: Heat Smart programme. Under that programme 50000 homes have been insulated. This is a significant public health measure. As we travel around the country we are already picking up on stories of families that now have opportunity and success as a result of having warmer and drier homes and their kids are no longer having respiratory problems like asthma and other difficulties that one gets from living in damp homes. That is a significant investment and a major public health programme. The health service has made a contribution. The Labour Party called that a cut in the health budget because we gave money to the Healthy Homes programme but that is one of the best things we can do in health. 
We are also making a significant investment in business innovation and in our trade agenda but also very importantly we are making a real commitment to cut red tape and regulation. Minister Kate Wilkinson is leading a huge effort to streamline employment law in order to give businesses and employees the opportunity to expand employment opportunities. The 90-day trial period is being extended to all businesses. Nick Smith is doing a great job on the Resource Management Act. Everywhere I travel around New Zealand people are saying that we are doing significant things in resource management in order to make it easier for people to invest in their businesses and get ahead. 
This is a Government with a real agenda for the changes that we are driving through. The Labour Party has a real agenda for change—its leader is a very nice man but he is just not up to the job. 
Hon ANNETTE KING (Deputy Leader—Labour) 
: 
 We have just heard from Mr Ryall who is not a nice man. He is not winning for the sick and vulnerable people of New Zealand. When we go around this country we hear that they call him “Minister of Cuts”. People tell us daily of cuts that are occurring in health and most of it is by stealth. People wake up and find they have had their health service cut only after he has passed through and after it is too late to do anything about it. He had the cheek to mention the Healthy Homes project but he forgot to tell the House and listeners that the National Government cut that project by 60 percent in this year’s Budget. But of course he says it is not a cut; it is only a change. 
In 2008 we saw from National so many promises so many commitments many political bribes so much hype and more slogans than Goebbels could produce. We could call 2008 the “Year of the Great New Zealand Con” because 2008 was the year that John Key sucked in thousands of New Zealanders by his great propaganda machine. He talked about a “brighter future”; the “unrelenting focus on catching up with Australia” the “turbocharged economy”; the “fresh start for young New Zealanders” the “step change” in every policy one could see. Amongst all of that he promised to keep all Labour’s major policies. He said he would also keep those and that is why the media called him “Labour-lite”. 
Then we have to remember that the very policies that he said he would keep he voted against when he was in Opposition. He voted against Working for Families; he called it “communism by stealth”. But in the election campaign he promised that he would keep that “communism by stealth” programme. He does not now recognise that the programme lifted 130000 families out of poverty and last week in the House he had the cheek to say that the previous Government had done nothing about poverty. 
The Minister promised to keep interest-free student loans but in Opposition he said it was “irresponsible economic vandalism” and that National members would oppose it with every bone in their body. I say to them now: “Where is their spine?” because one part of their body has disappeared. National members were going to oppose it with every bone in their body but in the promise—the great New Zealand con—they promised they would keep interest-free student loans. National said it would keep the 20 free hours early childhood education policy but then it took out the word “free” and now we know what it means. It means “free with a fee”. 
National also opposed the seabed and foreshore legislation. How many members of this House have forgotten the “Iwi/Kiwi” billboards? National ran that campaign against Maori up and down New Zealand to divide this country and that has been forgotten by the National Government. It was all about optics when National was in Opposition. Now I believe that New Zealanders are starting to see through the great New Zealand con. They are saying they voted for a different Government. On a daily basis Opposition members—whether getting into a taxi meeting people on the street walking through the supermarket or collecting for charity somewhere—have people coming up to them and saying: “This is not the Government we thought we were getting. This Government is not giving us what we voted for.” I say that this Government cannot make decisions. It cannot make a decision and stick with it. It seems to us that the last person who spoke to John Key leads to the decision he makes that day. 
Today we have found out it is even worse than that; we now have “Government by Google”. Imagine that! We must be the first country in the world that has “Government by Google” as the chief Opposition whip has called it. When Government members want to find out what is happening they put a word into the Google machine a computer and out spits all the comments that they want. They do not do research they do not do any work they do not have a plan; they just have “Government by Google”. Government members do not have the internal fortitude to stick to their principles and policies. They do not stick to a plan. Why do they not stick to a plan? The answer is simple: they do not have a plan. It is so obvious now to all New Zealanders; there is no plan from the National Government in this country. It really is funny if it were not so sad. 
This is National’s plan: “Building the Recovery” policy statements. It is empty except it is copyright and also has an address on it for a Mr Oldershaw. Perhaps we should ring him and ask him what happened to the plan because the Prime Minister cannot tell us the Minister for Economic Development cannot tell us and the Minister of Finance cannot tell us. I ask whether there is anybody over there who can tell us what the economic plan is for this country. 
Hon Darren Hughes 
: The next speaker can. 
Hon ANNETTE KING 
: Nick Smith is the next speaker. If people can understand what he says they might hear a little bit of a plan. At least he has tried to have a bit of a plan even though everybody is laughing at it. 
There is no plan particularly around National’s biggest promise which is its biggest con of all. You see New Zealanders are proud people and we really like to compare ourselves with our closest neighbour. We like to think that we can beat the Australians at things like rugby on Saturday nights. The Prime Minister at that time the Leader of the Opposition said: “We will close the gap with Australia by 2025.” There were no ifs no buts or an aspirational “maybe” or “we will lead towards it”. When he said: “We will close the gap with Australia by 2025.” New Zealanders believed him. They believed that there would be a closing of the gap in wages in skills and in education. In anything we liked there would be a closing of the gap. 
This is the plan now. It is not written anywhere but behind the Government’s own closed doors and in smoke-filled rooms its members are saying: “We can’t do it. We can’t close the gap but we are going to fudge it. Let us now say it is aspirational.” The Government says that it is still committed to closing the gap even though it knows it can never make it. If we do not believe our goals and we do not have a plan we will never achieve anything. This Government is so good at telling us what the score will be but it never tells us how we will get to that score. It is a pretty crazy way of going about running a country. It is easy to tell people what one thinks the score would be; it is much harder to say what the game plan is to be able to reach that score. 
The Government does not have a plan. It has no commitment to this country. Fortunately New Zealanders have an alternative party that does have a plan. 
Hon Dr Nick Smith 
: Oh! 
Hon ANNETTE KING 
: I tell members opposite that our plan is not secret or covert. It is not one that even those members do not know; every New Zealander will know Labour’s economic plan. We had one in Government and it saw us have the lowest unemployment rate in the world. It saw us with net Government debt and as a country that was growing that had invested in our young people and in apprenticeships and that had invested in the future in terms of savings. Labour got New Zealanders saving and we got families working. We invested in social services. 
That was the legacy for National and every day its members stand in this House and try to pretend that the recession we have gone through was the worst since the 1930s. I can tell Nick Smith that there were more people unemployed in this country when National last went out of office than there were in this latest recession. The Government has done nothing to address the current unemployment rate; in fact the Budget is predicting that in 5 years’ time unemployment will still be above what it was in 1999. [ 
Interruption 
] I tell that member to read his own Budget documents. That is what we are getting from this National Government. There is no plan to reduce unemployment no plan for a skills strategy and no plan for growth in this country. Anything the Government is doing is based on reducing the rights and the incomes of working New Zealanders not based on any growth or strategy that it could put in place. 
Hon Dr NICK SMITH (Minister for the Environment) 
: 
 The elephant in the room that has been ignored by the deputy leader of the Labour Party is simply two words: Chris Carter. You see those members opposite want to sort of pretend that the dramatic political events that unfolded in this Parliament last Thursday simply did not happen. I challenge the next speaker for the Labour Party to front up— 
Hon David Cunliffe 
: How much stress leave? 
Hon Dr NICK SMITH 
: Oh it is Mr Cunliffe who will talk about the elephant in the room Chris Carter. 
This debate is about Budget 2010. It is the most visionary Budget that members of this House have seen in a decade. It is a Budget that addresses the challenges that are facing New Zealand in respect of our economy. In contrast we have the unfolding mess that is the Labour Opposition. Those members are so much more focused on the scraps amongst themselves than they are on the real issues that are facing New Zealanders. Is it at all unbelievable that we have a situation where mother Helen Clark and dad Michael Cullen have left the Labour house and the children are running riot? This is a leaderless Opposition and members on this side of the House simply point out the contrast. 
I raise a simple issue: can we believe Phil Goff’s policy pronouncements? He said on 20 July in respect of trading in the fourth week of annual leave: “I am quite relaxed about that as long as there are safeguards to ensure that the employer cannot abuse it.” Well the interesting thing is that 2 days later the president of the Labour Party a Mr Andrew Little who is not an elected member of this House said “No the policy is that there will be no tradability of the fourth week of annual leave under Labour Party policy.” I ask who is writing the Labour Party’s policy. Labour’s leadership has left this Parliament and it is now in the hands of a union leader. That exposes the depth of mess that there is within the Opposition. 
I remind members opposite of the legacy that Labour left New Zealand in terms of our economy. Over the 9 years that Labour was in Government the debt of this country grew from $90 billion to $180 billion. We have a situation— 
Hon David Cunliffe 
: Net debt was reduced to zero. 
Hon Dr NICK SMITH 
: Mr Cunliffe knows that consumption expenditure was out of control. Even more importantly I point out that over the period from 2002 not one new job was created in the productive export part of the economy. 
Hon David Cunliffe 
: That’s rubbish! 
Hon Dr NICK SMITH 
: Mr Cunliffe knows that that is true. If we take the period of the last 3 years of the previous Government we see that in each one of those years economic growth was less than 1 percent. I faced the very first Cabinet meeting of this new Government when Treasury advised us that Labour’s legacy was a decade of deficits. Every single projected year from 2008 to 2018 had this country churning up additional debt. 
We have had to confront those basic economic problems by putting forward a growth strategy. I will go through each of the six key elements of this Government’s plan to lift our country’s economic performance. The first of those contained in the appropriations that we are debating is in respect of tax reform. It is the most comprehensive tax reform that New Zealand has had for more than two decades. 
Hon David Cunliffe 
: Rubbish—wimped out! 
Hon Dr NICK SMITH 
: Well I have a challenge for Mr Cunliffe. I ask him what he would do. 
Hon David Cunliffe 
: Fix LAQCs. 
Hon Dr NICK SMITH 
: Ah we have some Labour policy. My question for Mr Cunliffe is whether Mr Little has signed off on that latest piece of policy we are hearing about from Mr Cunliffe. I suspect not but I suspect that Mr Cunliffe will be building a chummy relationship with Mr Little as the months of speculation over Labour’s leadership go on. What we see in this Budget package are tax changes that will help drive economic reform— 
Moana Mackey 
: The Minister has destroyed ACC. 
Hon Dr NICK SMITH 
: Now we have Moana Mackey chipping in about accident compensation. Let us look at Labour’s record on accident compensation. Within days of being appointed as Minister I say to Moana Mackey I was called into an urgent briefing because of the mess that members opposite left in the accident compensation scheme—a debt of $2.4 billion in the second to last year of the previous Labour Government and a $4.8 billion loss in just the accident compensation area in its last year in Government. That is absolutely financially reckless and it is one of the reasons that the people of New Zealand will not trust Labour with the Treasury benches. So tax reform is at the heart of the 2011 Budget. 
The second major element is regulatory reform. Regulatory reform in respect of the Resource Management Act has both a phase one and a phase two. 
Hon David Cunliffe 
: That’s not going to change the world. 
Hon Dr NICK SMITH 
: Well I put this to Mr Cunliffe: what did Labour do in its last year in Government when 27000 resource consents were not processed in the statutory time frame? What did it do? It did zip. In fact it got worse in every single year that Labour was in Government. What did its members do about the prolonged and protracted legal disputes over getting resource consents for new infrastructure? If members ever want to see a disaster in relation to Labour’s record they should look at the Wellington motorway and the decades that it took for its consent. 
A third key element of this Government’s programme is the $320 million commitment in this year’s Budget to research to development and to innovation. If we are to grow the economy and if we are to close the gap with Australia investing in our scientists and in innovation has to be a key part of the programme. Equally so this Government has been committed to constraining growth in the public sector. How many members opposite really in their heart of hearts believe that it is OK to have the public sector grow by 50 percent—huge growth in the public sector—at the same time as the economy grew by just 10 percent? That was absolutely unsustainable and that is why today the Government has announced a further important piece of work on ensuring value for money for the taxpayer in those key areas of public sector policy advice. 
Hon Members 
: Cuts. 
Hon Dr NICK SMITH 
: Members opposite shout “cuts”. Those members believe in a bloated expanded Public Service an unproductive Public Service and a Public Service that grows at a huge rate. The truth is that Labour members care more about navel-gazing in Wellington than they do about real services for New Zealanders. 
Then there is the huge programme of Anne Tolley and Steven Joyce: investing in skills development and in better standards in education. Of course there is the programme on infrastructure investment. I have a simple response to Annette King in terms of her challenge on closing the gap. When will the tax policy that this Government has introduced come into effect? It will come into effect on 1 October. When are the resource management changes that we passed last year coming into effect? Only yesterday. When will the infrastructure that we have invested in start to pay a dividend in terms of growth? The truth is these are long-term policies that will pay rich dividends for New Zealand. We are here for the long haul. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I stand to speak in the appropriations debate. I wish to particularly address the Government’s economic strategy. The Government speakers in between attacking the Labour Party have outlined an economic strategy with six different elements. I think it is important that we actually address the Government’s strategy. 
One of the key elements that the Government has addressed is the issue of changing the taxation system. There in particular Government members have talked about the changes they are making to the income tax rates. It is worth noting that the changes overall to the taxation system are fiscally negative—that is the Government will have to borrow around a billion dollars in order to pay for its tax changes. It seems to me that when the Government is already running a deficit borrowing in order to fund more tax cuts is fiscally irresponsible. I am genuinely surprised that the Minister of Finance who quite rightly makes quite a big deal of the fact that he tries to be fiscally responsible put forward a Budget this year that involved the borrowing of very large amounts of money in order to fund tax cuts. 
The second part of the tax cuts is that they tend to go towards the wealthy. New Zealand already has dramatic inequality. We are one of the most unequal countries within the OECD and that has enormous costs. The fact that we are so unequal is closely linked to the facts that we have one of the highest imprisonment rates that we have very high crime rates and that we have real problems with health and education. Those are linked to the fact that we have a highly unequal society. The changes that the Government is making in terms of the income tax rates and in terms of hiking the rate of GST will result in a more unequal New Zealand and that will have all of those downstream effects. 
It is also notable that the other change that the Government introduced was to lower the company tax rate. That was done on the basis of the mistaken belief that Australia would lower its company tax rate further and that New Zealand had to follow it. As it turned out Australia did not. But putting that to one side it is interesting to look at the Inland Revenue Department advice on lowering the company tax rate because the Inland Revenue Department said the major beneficiaries from the lower company tax rate will be foreign companies and that foreign companies operating in New Zealand have a much higher rate of return on equity than New Zealand companies. The reason that the Inland Revenue Department gave for the differential between the return on equity of New Zealand companies and of overseas companies is that overseas investors in New Zealand tend to target monopolies or oligopolies where they can maximise their profit rates. Those sectors of the economy where there is very little competition such as the banking sector where there is very little competition aside from Kiwibank are targeted by foreign investors in order to have higher rates of profit. 
So by cutting the company tax rate we are rewarding the foreign companies that are involved in the New Zealand economy not to export overseas. Most of the foreign companies involved in New Zealand are not export companies—that is what the Inland Revenue Department advice said. Those companies are in fact largely rentiers that simply receive an above-average rate of return. They are receiving an economic rent from their investment in New Zealand with very little benefit for New Zealand. The big investment in the telecommunications sector is another example of overseas investors seeking just an economic rent but producing very little for New Zealand. 
The changes that the Government is introducing to the taxation system will not only make New Zealand more unequal and will not only result in a higher debt for the New Zealand Government—around an extra billion dollars—but will also reward foreign companies against the best advice of the Inland Revenue Department. It is hard to see how the tax changes that the Government is making are part of any kind of coherent strategy. 
The second part of the Government’s strategy that I will talk about is infrastructure investment which Government members talked about. I think some parts of the Government’s infrastructure investment make sense. I think the grid upgrade makes a lot of sense. If we are to have a number of sources of renewable energy throughout the grid we need to have the grid in good shape. I also think that making sure that people have high-speed Internet access is very important particularly in a world where energy prices and particularly transport energy prices are very likely to be high. For people to be able to work from home by having high-speed Internet access is a good idea. I think we can question whether having wires rather than having other forms of delivering the Internet is the best way of doing it but none the less getting high-speed Internet access is a good idea. Likewise the buildings for schools is a good idea as is home insulation. Normally that would not be thought of as a piece of infrastructure but in a way it is infrastructure that is incredibly valuable to New Zealand in terms of reducing health costs making sure that kids go to school more often and making people warmer and drier. 
The part of the Government’s infrastructure programme that I think is particularly absurd—there is really no other way to think of it—is the motorway investments. Those are the same waste-of-money programmes that the previous Government followed through. Labour and National share a kind of obsession or fetish with building motorways. This is in a world where quite recently Lloyd’s of London produced a report that talked about rising oil prices and said Governments around the world needed to look at alternatives to relying on oil and becoming dependent on oil. We have now had more than a decade of Governments—and no doubt more are planned—that want to increase the New Zealand economy’s dependence on imported oil. This is in a world where we are somewhere near to the peak rate of oil production where the price of oil will become only more expensive with time and where we have to constrain our greenhouse emissions—or we certainly will have to constrain our greenhouse emissions. Yet we are building infrastructure that will result in an increased dependence on oil and we are building infrastructure that will result in more greenhouse emissions. Not only is that the case but we have to borrow money in order to do it and we are wasting vast amounts of our taxes on these white elephants. I think the Minister of Finance talked about the $10.7 billion over the next decade that he plans to waste on new motorway projects. 
The ridiculous thing about the Minister of Finance’s contribution on infrastructure was that he talked about how the Government wants to upgrade the decision-making process before it makes infrastructure investment decisions. We know from the papers that we forced out of the Government that the benefit-cost ratio on for example Steven Joyce’s “Holiday Highway” north of Auckland is actually less than 1—that is for every dollar that the Government spends on it it will get less than $1 in return using the most generous pro-roading assumptions to generate the benefit-cost ratio. So we know that the decision making around these major infrastructure projects is actually very very poor. The roads of national significance have been selected by a political decision-making process and now the Government wants to say it has upgraded the decision-making process for infrastructure investment. In fact its own studies show that the investments it is making in motorways are actually of very poor quality and are a waste of large amounts of money. Of course this issue is actually about Steven Joyce running in the Rodney electorate at the next election: getting Mr Lockwood Smith on to the National Party list so that Steven Joyce can win the Rodney seat by building the “Holiday Highway”. That is the actual decision-making process behind how we have ended up spending billions of dollars on the “Holiday Highway”. 
The third part of the Government’s programme is the so-called regulatory reform programme. I say to those who are unaware of this that the last time that National got its hands on regulatory reform it implemented the Building Act a laissez-faire regulatory reform that resulted in leaky houses. It will cost the New Zealand economy around $20 billion according to reasonably conservative estimates to fix the problems created by the Building Act of 1991 which was the last time that National interfered with the legislation. That Act was a laissez-faire piece of regulation that said the Government did not really care and people could put up whatever they liked to build. That has resulted in a massive cost. So although it is very attractive in the short term for the Government to say it is saving money the long-term costs are enormous. Likewise when the Government weakens the laws around irrigation and the protection of rivers for example that has a dramatic impact on our clean and green reputation further down the track. 
The other part of the programme that I will touch on is the Government’s approach to innovation. The Government strategy is what I would call an extractive strategy—it is very much focused on mining minerals oil and also water—and an innovative strategy really seems to be missing. We need to have a clean technology strategy for the New Zealand economy: a strategy that says we want to make the most of the international market for clean technologies which is only increasing over time. But the Government seems to pay no attention to the green economy and seems to have no understanding that the future opportunities around the globe for a country like New Zealand lie in the green economy—an economy where cleantech greentech high-tech products and services will be very much in demand. New Zealand would be in a position to supply those. 
So when we look at a number of the Government’s strategies we see that they do not seem to address some of the big issues that face us. How we move our economy towards a much more sustainable basis how we reduce our carbon emissions and how we reduce our dependence on oil are all serious issues that seem to be completely missing from the Government’s economic strategy. For that reason the Green Party does not support that economic strategy. 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 The Budget is now more than 2 months old and it is becoming more obvious why the Government did not tackle some of New Zealand’s main economic problems including a lack of economic growth in that Budget. It is clear that the Government goes about its decision-making process in much the same way as Labour did over its 9 years in Government. 
The big problem we have is that the Government always asks the wrong question. When faced with a major issue the Government asks what it can get away with; what it can sell to the public. When one asks that question one will always come up with the wrong answer. The real question that should be asked is what the Government should do in relation to the particular policy area in the interests of the country. Having decided what one should do in the interests of the country one then asks how one markets that decision to the public. 
Getting that round the wrong way has serious consequences and I want to talk today about one of the consequences of that approach—that is the consequence for the poor and disadvantaged. I believe it is extremely harmful. In fact what makes me more cross than anything else is the way that National Labour the Maori Party and the Green Party claim to want to help the poor and disadvantaged then implement or advocate policies that do absolutely the opposite. 
This afternoon I would like to discuss how we deal with the issue of disadvantage. I agree with the other parties when they say that the key issues faced by the country include unemployment race crime health education housing welfare and the economy. Where I disagree with the other parties is the way in which we solve these problems. The country simply cannot solve these issues by seeking short-term solutions over the next 3 months or 18 months. None of these issues can be resolved in my view to the satisfaction of the public unless they are placed in a medium-term context. 
Because these issues are linked fundamentally and voters know it they cannot be solved if we look at them in isolation as we have done over the last 15 years. Poor parenting lack of motivation inadequate skills alienation unemployment and delinquency all reinforce each other. Low incomes inadequate housing poor health lack of opportunity and lack of economic growth are all part of the same syndrome. In these circumstances delivering real gains to disadvantaged people is crucial because that automatically delivers something of value to everyone else. 
Although income is obviously important to disadvantaged people income in itself is not enough to remedy their situation. Their deeper need is for the incentive and the opportunity to contribute more to society through their own efforts. By helping them to achieve independence and contribute more to society we not only transform their future but improve everyone else’s. 
These gains have an important role to play in creating a dynamic growth economy higher incomes for everyone and a fairer society. The alternative is a society with a permanent underclass—alienated people with no stake prosperity or social harmony. That is one reason why the community as a whole is desperate to see a recovery of the growth and investment needed to develop our future potential. 
The social cost of very low growth over the last 15 years has damaged the security and well-being of people at every level of society. Those costs however hit the disadvantaged harder than anyone else but their reaction to disadvantage has an impact on everyone. Deep down the public knows that growth is the only way to get sustainable jobs and avoid an ongoing erosion of living standards and well-being. That necessarily involves a reduction in waste inefficiency and avoidable burdens on those who create and contribute to growth yet Labour National and other parties see any proposal to eliminate waste as a negative and as one to be avoided at all costs. In other words there will never be a solution to our problems while this mentality actually exists. 
If we truly want to help disadvantaged people we need to end the vicious cycle we have at the moment where the disadvantaged are often forced into education in which they learn nothing life on a benefit or unproductive jobs that simply perpetuate their problem. Until we recognise that scope for constructive personal choice is the basis for the dignity of human beings we will simply not move ahead. 
The central feature of disadvantage is in fact not a lack of money or housing and so on; it is a total lack of choice. The disadvantaged need the kind of help that puts people on their feet able to make a contribution and make gains for themselves in doing so. We ignore the policies that can do that at our peril. 
The Government has increasingly allowed over the last 18 months in my view Labour and others to portray even the smallest attempt to change as the seeking of heartless efficiency at the expense of equity. Let us be clear about this: without improvements in efficiency improved equity is in fact impossible to achieve and even existing levels of equity come under increasing threat. Until New Zealand realises this economic fact then New Zealand’s relative decline of the last 15 years will continue. 
The fact is that waste consumes resources that could otherwise have been available to improve equity levels throughout the community. Certainly everyone involved in wasting resources collects a rent dividend or pay packet but they do so at the expense of the whole community. We need to be very clear about this: the benefits of privilege are concentrated in the hands of well-organised groups. For example a lot of the help that this House and the country provide to Maori goes to a few and not to the many and that needs to change. 
The issue of helping Maori people is deeply interlocked with all the other issues of disadvantage at every level. Perceived equity in these circumstances is critical. The objective for Maori people must be to open up effective opportunities for them to share fully in the nation’s future. Moreover the need is to place them in a position to do so in a self-sustaining way based on their own skill and their own imitative. That is not simply or even fundamentally a question of righting past wrongs or of restoring lost lands and fisheries to them. 
Complete justice based on the past in my view is impossible and in attempting to restore it we must take care not to make bitterness a permanent feature of our race relations. Justice for Maori people has to be based on what will work best for them and the community for the rest of the century. Their central problem is a lack of knowledge and skill which are essential for self-esteem and success in the year 2010 and beyond. Unless that deficiency can be remedied the Maori people will remain as they are at the moment—at a permanent disadvantage. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 I apologise for interrupting Sir Roger Douglas; he was on a bit of a roll in laying down all the solutions for Maori people for the next hundred years. I thank Sir Roger very much. 
Exactly 150 years ago to this very day on 3 August 1860 on behalf of a gathering of chiefs at Kohimarama in Auckland Tamihana Te Rauparaha presented a petition to the Native Secretary asking that the Conference of Maori Chiefs of New Zealand be established and made permanent while at the other end of the country the warship  
Victoria 
 was coming into New Plymouth with the commander of the forces in Australia and his staff on board. So as we consider this appropriation legislation today which allocates extra funding over the next 3 years for Treaty settlements we are reminded to look to the lessons of our history to help set the guidelines for our future—our history in which 150 years ago today Maori were looking to step up to the challenge of nationhood while the Crown was girding for war in Taranaki. 
It is in line with the importance of settling those historical Treaty claims in order to help grow the Maori economy that the Maori Party supports the resourcing in this bill for extra staff to support Treaty negotiations and Treaty settlements which many iwi and Maori entities are now using to unlock the potential value of the Maori asset base through further research and development. 
But we note that this bill is not the only thing we want to see in the Government’s Budget planning; we also note that the Treaty has far greater value to our society than of just backstopping recent Treaty claims. In 1970 NgaTamatoa’s activism forced New Zealand to come to terms with Maori issues particularly those related to the Treaty of Waitangi and by 1974 Waitangi Day had become a national holiday. In 1975 Whina Cooper led the great Maori land march to Wellington—to protest the loss of millions of acres of Maori land in breach of Te Tiriti o Waitangi—which led directly to the establishment of the Waitangi Tribunal. It was NgaTamatoa that helped organise the petition to the Government that gave birth to the revitalisation of the Maori language—a taonga under Te Tiriti o Waitangi—and which led to the emergence of kohanga reo in the early 1980s. 
If we were to question the Minister of Maori Affairs he would tell us that although significant progress has been made in the area of language revival it is still not enough. Hence he announced last week a $250000 review of the Maori language sector to update the Maori Language Strategy and to ensure that Government expenditure on te reo was meeting Maori aspirations. Again that was a great move and one that we fully support. 
Of course it would be remiss of me to forget to mention the foreshore and seabed march of 2004 which challenged the Government’s intention to deny Maori rights to the foreshore and seabed enunciated under the Treaty of Waitangi and which gave rise to the Maori Party for which I speak today. 
On another level just yesterday the Waitangi Tribunal released the second instalment of its report into the history of the conflict in the Urewera in which the tribunal recommended the return of part of the national park to Tuhoe. I am reminded that only a fortnight ago the United Nations special rapporteur on the situation of human rights and fundamental freedoms of indigenous peoples Professor James Anaya respectfully urged the Government to reconsider its decision to refuse to return the Urewera National Park to Tuhoe. 
While I am talking about Tuhoe I see that the Commissioner of Police Howard Broad says that he would like to bring Tuhoe and the police together before he leaves his position next year although Tuhoe say that it is unlikely that the rift between the iwi and the police will be resolved any time soon. None of this is rocket science. As Tuhoe negotiator Tamati Kruger said the basis of good relations between Maori and the Crown is goodwill and sincerity the absence of which jeopardises the very basis of Te Tiriti o Waitangi. In fact that is also the very reason why I have drafted a bill to establish a parliamentary commissioner for the Treaty of Waitangi: to promote respect for the Treaty as the nation’s founding document and constitutional blueprint to review and investigate Treaty-related issues to provide information and analyses to the general public to promote respect for the Treaty and to provide advice to Parliament on Treaty issues. I just add again that it was also the advice of the United Nations special rapporteur that the principles of the Treaty provided a foundation for Maori self-determination as guaranteed under the United Nations Declaration on the Rights of Indigenous Peoples based on a real partnership between Maori and the Crown. 
Finally I wish to speak about the Government’s radical reshaping of our society to cope with the effects of a global recession and its failure to protect the most vulnerable in our society from its impact. A 2 percent lift in benefits will do nothing to help those already living on a knife-edge particularly during a period when GST has been increased prices are going up job losses have been huge and the economic recovery has been slow particularly for Maori. The Maori Party remains committed to ensuring Te Tiriti o Waitangi becomes a document that the whole country will one day see as the basis for good relationships between Maori and all others in Aotearoa the source of sound environmental policies and practices the footing for strong and positive growth in our economy the background to the nation’s commitment to eliminating poverty and addressing the injustices that limit the potential of a great sector of our society and the foundation for a legal framework that encompasses tikanga Maori and Pakeha legal principles for the benefit of all New Zealanders. Kia ora tatou. 
Hon JUDITH COLLINS (Minister of Police) 
: 
 It is with great pleasure that I rise to speak in this debate particularly in relation to the areas of corrections and police where we have had a standout year in terms of public confidence and the delivery of services. That is not to say that everything is always perfect and it certainly will not ever be perfect in portfolios that deal with the worst-behaved people in New Zealand—prisoners and criminals generally. But I can say that there has been a real turn-round. In corrections we have gone from a situation whereby the very best level that public confidence ever reached when Phil Goff was the Minister of Corrections was 40 percent. That is how many people had faith in corrections. That figure is now at an all-time high at 61 percent and that is a pretty fantastic result particularly for the hard-working staff at the Department of Corrections who have to put up with just about every form of abuse from members opposite as they possibly could. These staff have been able to stand up to that and they have delivered well beyond what I think even they believed they could deliver. 
Let us look at what they have delivered. At the moment about 8500 prisoners are in our cells which is up from 5000 prisoners in 1996. The last decade under Labour was characterised by massive increases in the prison population. Under Labour’s watch four new prisons were built and a fifth was started—the rebuild of Mount Eden Prison. Did Labour increase drug and alcohol treatment for prisoners? Well nobody noticed if it did but we are doubling it in the first 3 years of a John Key - led Government. As well as doubling the amount of drug and alcohol treatment for prisoners we are also increasing the availability of literacy and numeracy training. 
I was very interested to hear the speech before from the Hon Sir Roger Douglas when he spoke about education and the need for people to get education and about how it is our poorest people who miss out on so much. It is a sad but true fact that about 90 percent of our prisoners are basically illiterate and about 80 percent of them do not have basic numeracy skills. When we look at that very sad fact and at the fact that they have also undergone years of education we have to wonder what went wrong. Well I do have something to say to them and it is that there is hope we have national standards and I am very glad that Minister Tolley has the wherewithal to bring it about. Nothing we ever hear from Labour members in Opposition would ever give any encouragement in education. I am very pleased at the work Mrs Tolley is doing to try to make sure we do not have people ending up in prison. 
We have also seen a massive increase in the number of people whom we have to deal with in the Community Probation and Psychological Services. Under Phil Goff’s leadership there was one bad news story after another about that service. We now have a very well-trained group of people—our probation officers and psychologists—who work together with their managers to use their discretion training and intelligence to try to bring about change for the better in people’s lives. I have been thrilled with the quality and calibre of the people we have in corrections and I am very proud to be their Minister. 
The number of escapes has also come down. In 1999-2000 which was the first year in office of the last Labour Government there were 40 escapes from our prisons. Now with a greater number of people in prison in the last year the number was 12 most of whom were “walk-aways”—people in work parties who are low-security prisoners. We have seen the first of the public-private partnership work going on with corrections working on that with the Infrastructure Unit at Treasury. It is really good to see the department taking such a lead role in this. We are seeing the first contract management work going on and that is progressing well. We are seeing double-bunking increase. When Labour was in Government 21 percent of our cells were double-bunked. We never heard Labour members talk about that when we were in Opposition but the fact is that that is true. That amount of double-bunking has been increased because although Labour left us with four brand-new prisons it did not leave us nearly enough beds for the forecasts that it knew were coming down the pipeline at us. 
We have also brought in container cells and I am really pleased with those; they are outstanding. Container cells are cheap quick waterproof and extremely humane but they are spartan. Although I have been accused by the Opposition of pulling a stunt on this matter I have to say that they have been a standout success. I understand that prisoners are practically lining up to go into them because they are considered to be some of the best-quality accommodation we have in the prison estate. 
The department has really brought itself together and has looked at ways in which it can deal with the safety of staff and the safety of prisoners. The number of serious assaults on our staff went down to two in the last financial year down from 11 in the financial year before that. Part of that is as a result of the staff safety project and part of it is as a result of the razor blade project and change in policy which now means that people like George Baker are not allowed to retain and store razor blades in their cells so that they can then make them into weapons. That has been a standout success as there has been a 61.5 percent reduction in attacks using razor blades. Of course it is also a way of dealing with people who sometimes have suicidal tendencies to make sure that we try to keep them safe. 
Cellphone blocking which was started under the previous Government has been completed under this Government. The New Zealand Department of Corrections is the first such department in the world to have this in all of its prisons. That is a fantastic achievement. I also have to congratulate the technology sector on the way in which it has worked with corrections and continues to do so as technology consistently improves. I was in Australia recently for a meeting with other corrections Ministers and I was thrilled to see that a New Zealand Government - owned company Kordia has been asked to be the lead adviser for the Australian states on how they can bring in cellphone blocking. As a Kiwi Minister it was absolutely marvellous to be able to sit there and say “Isn’t it great.” I did not even once remind the Australians that it was a New Zealand company but everybody knew they just were not saying. 
In relation to my other major portfolio police it is also marvellous to be the Minister of the finest police in the world. [ 
Interruption 
] I know that Mr Cunliffe might think that that is going a bit too far but it is not. I ask him to name me one other police force in the world that New Zealanders would rather have. The fact is that there is no other. Our New Zealand police are renowned for their lack of corruption and the fact that they are respected by people from one end of the country to the other. I am sure many people would be very proud to be the Minister of Police. I consistently come across people who want to thank me for the work of the New Zealand Police. I do not want to take credit for it because it is not actually my work but I am pleased to be able to say that as a Government we have backed the police. When the police needed Tasers we got them Tasers. I have no idea why it took the Labour Party about 5 years of fluffing around and trying to work out whether the Greens would support it. Who cares whether the Greens support it; the people support it and that is what we should do. It is the right thing to do. It is good to have a Prime Minister who consistently backs the police and does not blame them when something goes wrong because some criminal has done a particular activity that has caused harm. It is great to have such a Prime Minister in the Rt Hon John Key who gets out there and backs the New Zealand Police and who backs me when I have to go out there occasionally and take the odd hit for the police. 
I think it is great to look at some of the innovations that the police are bringing in. Obviously this Government has supported them with a raft of legislation. Police safety orders are one of those measures. They have been in for only the last month or so. The New Zealand Police have taken to them like ducks to water. They have issued a couple of hundred of these orders and have been able to stop family violence before it has got to the stage where people’s lives are being put at risk or where people are being injured. These orders are already working well. The New Zealand Police have been very keen to take up any opportunity that they can in order to deal with the dreadful plague of family violence that we have in so many homes. 
The police have also taken up a whole lot of different work streams. Case management projects rostering to demand the national crime reporting line and community neighbourhood policing are all innovations that the police have been trialling around the country and most particularly in Counties-Manukau. The police have been working with other agencies to try to do better work for victims particularly the victims of child abuse. I know that that work is continuing. 
We are very lucky and very well served by the New Zealand Police. We always know that the 12000 sworn and unsworn police officers—our constabulary and our employee staff—joined the police force for the right reasons. I am very proud to be their Minister. I am very proud to represent them from time to time particularly around the Cabinet table. I know that they are the finest police force in the world. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 It is truly a privilege to follow Judith Collins the most humble and modest Minister of Police and Minister of Corrections in the entire Western World. We have of course the most uncorrupted police force in the whole world and that is all the Minister’s own work! I am gratified that the Minister has got Tasers for the police. Next she will want lasers then she will want bazookas and then she will want Sherman tanks for our bobbies on the beat. I am thrilled that the Minister has managed to lock up an extra 50000 prisoners. 
Soon she will be personally locking up the whole of Wellington—ka pai kia ora te Minita. It is almost as embarrassing as Nick Smith lecturing our departed former colleague about mental health issues. That would be funny if it were not so sad. He was the man who was the deputy leader of the National Party for about a day and then had to have 3 weeks’ stress leave. So let us not hear from members on that side of the House about stress in politics. 
We all know why Nick Smith was stressed do we not? It was because there was a little vote for the leadership and the majority of one changed at the last minute. Let us just recall who that one was. Who was to be Bill English’s right-hand man then mysteriously became Don Brash’s right-hand man? It was none other than the “Prince of Darkness” the Svengali of the National caucus: John Key. That is why “Honourable English” and “Right Honourable Key” do not take tea to this very day. It is why “Honourable English” says: “We will loosen foreign investment.” and “Right Honourable Key” says: “We will tighten foreign investment rules.” and it is why “Honourable Key” says: “It will be an aggressive recovery.” and “Honourable English” says: “It will be a bumpy ride.” They do not take tea. 
The lingering stresses of that time are with us still and that is one reason why this Government has no plan: its top two Ministers cannot agree on one. Therefore they lurch from polling and focus group to focus group and polling. I had to pinch myself in this debate because I thought I was in a parallel universe. I found myself agreeing with Sir Roger Douglas for about 4 minutes of his speech when he was talking about the importance of principle of getting one’s bearings of doing what one thinks is right and of making a difference for the sake of the country. I agree with him on all of that. I also agree with him that polling is helpful to teach one how to sell it and market it when one knows what to do. That is not what this Government is doing and he is absolutely right about that. 
What this country needs is a strategy. It needs an economic plan because every New Zealander knows that we are not making it. New Zealanders know that something is seriously wrong in the State of New Zealand to quote from  
Hamlet 
. They know when they are standing in the cold winds of winter outside boarded-up shops—and 30 percent of the premises in downtown Auckland are empty—that this is no kind of recovery. The families in Kelston and New Lynn in my electorate know when dad loses his job and they are living in a caravan that it is no kind of recovery. 
When this Government is talking about the brighter future and turbocharging the economy I say that it should tell that to the people who do not have their own home who do not have a roof over their heads and who cannot afford to pay for the groceries while this Government is borrowing to give a third of the tax cut money to the top 5 percent. A third will go to the top 5 percent and the Government is borrowing to do that—and it lectures us about economic strategy! 
The New Zealand people are sick of Government by focus group. They are sick of poll-driven stop-start flip-flops. They are sick of mining schedule 4 conservation land firing workers at will cycleways to nowhere that have created no jobs and a 2025 taskforce that did not see the light of day. We can always tell when a Government is on the back foot because to explain is to lose. Somebody should have told the National research unit when it was writing the key lines for this debate that to explain is to lose. 
That is why it is embarrassing for those members that Bill English in John Key’s absence had to reiterate what their so-called strategy was. We took notes because no New Zealander can work it out. Here is what those members said. They talked about tax reform infrastructure deregulation attacking workers’ rights and slashing public services. Let us go through them one by one starting with tax reform. Rebalancing failed. Property depreciation was underdone on private residences overdone on business assets and overdone on short-life depreciation. The Government missed $2 billion worth of avoidance rorts on loss attributing qualifying companies and it lectures us about tax reform! 
With regard to infrastructure it was the previous Labour Government that trebled the investment in infrastructure. It was multimodal for our roads our railways and our ports. It is this Government that has merely continued the level of spending but it has diverted it 12 times to the Kopu Bridge and now the election plan for the new member for Rodney Mr Joyce is based on the “holiday highway” to Wellsford. Fantastic! And those members lecture us about infrastructure! 
Mr Nick Smith talked about deregulation. Deregulation is like having a hedge and giving it a clip once a year. Of course we clip the hedge to keep it back and at bay because otherwise it tends to grow but clipping the hedge is not ploughing a field or landscaping one’s garden. It is just a hedge. Deregulation has its place. It is something that happens every year to keep the public sector in good order but it is not a growth strategy. Someone needs to tell the Government that deregulation is not a growth strategy. 
Then there is the issue of attacking workers’ rights. If the Government could not mine conservation land then it will mine the well-being of New Zealand workers by giving the right to any boss from the biggest Fletcher Challenge or Fonterra to the littlest corner dairy to sack their workers without notice without cause without the right to take a personal grievance and without explanation in the first 90 days of employment. 
I predict that there will be a lot of 89-day wonders in the workforce—a lot of 89-day wonders wondering why they got the boot. It is a plan to drive down wage rates. What is that strategy about? Will we get rich by trying to catch up with China on low wages—$1 a day or $1 a week? How low is low in the National Government’s limbo dance for worker degradation? That is not a strategy. I am looking at those members opposite with their heads hung down. Where is the—[ 
Interruption 
] Oh “The Maestro” is awake. “The Maestro” in the back row the brilliant architect of the Mt Albert campaign and the motorway to Mount Eden Prison is awake. Thank God somebody is. 
It behoves every responsible Opposition to say what it would do if it had the chance and the Labour Opposition is up for it. Labour has been working hard in the background. We have had policy working groups for Africa and this Government is in trouble because when our plan hits town the New Zealand people will see the difference between poll-driven panic and proper policy. 
Here is a foretaste in the economic area. No. 1 is a proper growth strategy and that includes investment in research and development not cutting research and development tax credits; fixing the innovation pipeline; and developing a productivity framework that covers capital skills and technology. Rolling out ultra-fast broadband would be a change. What an oxymoron! There is nothing ultra-fast about that roll-out; it has been 2 years and they have not put an inch in the ground. It is time for a reshuffle for Steven Joyce. 
Labour will invest in clean technology. We will leverage our clean green brand to create jobs build market opening and encourage exports with a proper economic development strategy which the Hon David Parker will lead. We will have a proper rebalancing of the economy. We will invest to close the savings gap build our domestic savings industry not cut KiwiSaver pre-fund New Zealand superannuation push harder on the tax system and stop the rorts. It is obvious—stop the rorts and remove distortions. 
We will walk the talk on fiscal responsibility including intergenerational equity. We will not put the cost of superannuation on our kids because we cannot tell the truth to their parents. We will close the external account gap which is partly exports partly savings and is a lot about owning our own future. Otherwise the one thing that John Key will get right—honourable—is that we will become tenants in our own country. We need Labour’s plan. 
Hon ANNE TOLLEY (Minister of Education) 
: 
 If that speech by David Cunliffe had been made at a job interview I would have said “No thanks.” [ 
Interruption 
] In fact he is; he is quite a nice guy I suppose. But I stand here as the Minister of Education in a Government that is serious about raising student achievement. We are serious about making sure that our children leave school with the skills that they need in this modern 21st century. 
I start today by taking us back in time: not too far back; just to the start of the previous Labour Government. Shortly before that time the then National Government had commissioned research from a team of researchers from the school of education at the University of Auckland. They looked at two communities in South Auckland Mangere and Otara and their research was called  
Strengthening Education in Mangere and Otara 
. They were looking to see how they could intervene: at the sorts of interventions that would be needed in schools in order to lift achievement by Maori and Pasifika children particularly but also by children who were living in a low socio-economic environment. I refer to the third report; there were three reports out of this research. The third and final report which was published in 2004—so in the time of the previous Labour Government—looked at three things: school governance reporting to parents and perceptions of Pasifika student achievement. I will pay particular attention to the conclusions that the researchers came to on reporting to parents. 
The researchers say in the executive summary: “The development of a partnership between schools and their communities formed a central tenet of the reforms of education administration”—that is Tomorrow’s Schools—“… This partnership was to be based on the free flow of information between schools and their communities.” The study examined described and explained the reporting practices of schools in Mangere and Otara. It “sought to answer the research questions ‘To what extent did the reporting practices involve parents/whanau as educational partners with the school?’ ”—does this not have a ring of familiarity to it—“and ‘What difficulties were experienced by school personnel and parents/whanau when changing their reporting practices in the directions required by the new regulations?’ ”. The first part of the study found that “student achievement was likely to be evaluated against implicit individual or class-based referenced standards. As a consequence parents of under-achieving children were frequently misled about their children’s achievement levels.” 
The study published a very famous story called “Lita’s Story” which was an amalgam of the stories that the researchers had heard in Mangere and Otara. It was basically about Lita who arrived at middle school 3 years behind her peers in her reading comprehension and about 1 year behind them in her reading accuracy. But neither Lita nor her parents or family knew about this. They did not know about it because first despite the fact that Lita loved her primary school—she felt safe and secure there she loved her teachers and her parents were supportive of the school and attended all the events—the teachers at her school had treated Lita as an individual starting with what she could do and carefully taking her on to the next level when they believed that she was ready. Apart from the reading assessment that the school did when Lita was 6 it really did not know how her achievement compared with national standards because it did not have the tools needed to make those comparisons and some teachers did not think that they were necessary anyway. Second the school had a policy of not saying anything that was negative in school reports. This meant that the teachers described only what Lita could do and do well. As a consequence of that neither Lita nor her parents had any idea of how she compared with other children throughout New Zealand of the same age. 
Why do I bring up that research? What happened to Lita in the story? She went on to high school and she failed. She left school without any qualification and this National-led Government has heard the same story over and over from parents. The previous Labour Government had that research. It knew that one in five children was failing in our education system that 150000 children were being failed by the education system and what did it do about that? That Government ignored the research. It had strategies and initiatives that piled up on teachers’ and principals’ desks but it did not address the key issues that the research had shown needed to be addressed for kids —not what teachers needed but what kids needed. What do kids need? They need honesty. They need their parents to know what they are doing well in what they are not doing well in and how their parents and their teachers will change the experience of those kids in the education system. That is what the research had shown that the kids needed. And did the previous Labour Government give that to them? No. For 9 years it sat on research like that and now the Labour members have the gall to stand up against us when this Government says we have talked about the tail of underachievement for too many years. 
Too many parents have told us that they wanted to know about how their children were doing and they have said that if they had known that their children were falling behind they would have taken some action and given them some help. Too many kids like Lita have left school without the qualifications that they need and they are now on the dole without any qualifications and without hope of employment. This Government said it would not stand for that any more. We said we would have national standards that are aligned to National Certificate of Educational Achievement (NCEA) level 2 and we would have that as a goal for every single child in New Zealand. 
Hon Steve Chadwick 
: You don’t trust teachers. 
Hon ANNE TOLLEY 
: You see the Labour members keep talking about the teachers. This issue is about the children. I ask those members to focus on the children. The education system is there for the children and 50 percent of Maori children leave New Zealand schools without NCEA level 2—50 percent; that is half of them—and that has happened under the previous Labour Government’s watch I say to the Labour members who are sitting over there and shaking their heads. It happened under their Government’s watch. 
This Government has said it will not have that. Children deserve more than that and students deserve better than that so this Government has implemented national standards that mean that children will learn to read write and do maths. And we have done more than that. We know that the teachers are the ones who need to deliver this education. So we are redesigning in the announcements that we made yesterday the support that will go into schools. We are redesigning the professional development that will go into schools so that it is targeted. There will also be new interventions. The sector has said that reading recovery works well for kids in years 1 and 2 but it has asked about what happens after that. There is no reading recovery for kids in year 3 so we need to give some help to those children as they go into years 3 and 4. We know that in maths there are five different points where children have to learn some basics or otherwise they cannot progress. We have said we should put some resources into that. 
We have heard all the excuses from the Labour members sitting opposite about why they did not do things like focusing on fundamental skills for children like Lita. Those skills are reading writing and doing maths. Children cannot do science if they cannot read. They cannot play sports if they cannot count. They cannot do any of those things out there in the wider world if they cannot achieve a basic level of literacy and numeracy. This Government is focused on that fundamental goal. Our responsibility as a Government is to make sure that every single child in this country receives an excellent education. 
Hon DAVID PARKER (Labour) 
: 
 The Minister of Education was quoted in the House today by Mr Mallard as having said that it is disgraceful that one-fifth of all students are in the bottom 20 percent of student performance. Unfortunately that grasp of statistical logic is matched in her Cabinet only by Mr Brownlee because in respect of students it will always be the case that one-fifth of students will be in the bottom 20 percent of performance. It can never be anything else. Sadly this lack of grasp of the fundamentals of portfolio extends beyond Mrs Tolley into the economic development portfolio which Mr Brownlee is responsible for. New Zealanders—not just politicians but also journalists and the wider public—are starting to pay attention to this issue because it has become increasingly obvious that the National Government does not have any plan to meet its promise of catching up with the fortunes of Australia and closing the wage gap with Australia by 2025. 
Why has that become obvious? Well of course the central plank of the Minister for Economic Development’s part of all that was the step change that he was going to bring about in the New Zealand economy by mining national parks. That was such a silly idea in the first place that it was eventually unpicked. After 40000 people marched down Queen Street in Auckland and after similarly large protests in other parts of the country from Invercargill to the north the National Government did what it always does and caved in to public pressure. That was the right decision on this occasion because it was always a nonsense to mine in national parks and other schedule 4 areas like the Coromandel but it laid bare the cupboard. The cupboard is bare when it comes to realistic ways in which the Government will bridge the income gap with Australia. 
The Minister for Economic Development came down to this House and tried to pretend that he was on top of his portfolio. He told the House that the wage gap was narrowing. The media were of course all over that immediately because it was obvious no matter what way we measure it that the gap has been growing and has not been narrowing. 
This is an important debate to have at this time because this debate is about the estimates. This is when Parliament votes taxes to be gathered and spent by the Government. Unless this Parliament has confidence in what the Government is doing to achieve its aims this motion that the House is voting upon should go down. This is the second Budget of three that will be delivered by Bill English and we have to ask whether the Government is measuring up. Of course Mr Brownlee has shown that the Government is not. He has shown that he has not even got a basic grasp on whether the gap is getting bigger or smaller. He said that the gap is getting smaller. 
What did the third-party commentators say about that? The  
Dominion Post 
 said: “Stats prove Brownlee wrong”. That was pretty clear and pretty definitive. On that same day John Key came down to the House after that headline had been in the paper trying to say that black was white—trying to say that the gap was narrowing. He came to this House and thought that we were all so dim that we would accept the statistics that he tried to palm off to the House. Then he was forced to table the document from which he was quoting. That document showed that even in the best massaged figures that the Government could produce the gap was getting bigger. That was the same day that the  
Sydney Morning Herald 
 had as one of its main headings: “NZ wage gap with Australia widens”. The article read: “Australian workers are being paid even more than their Kiwi cousins since National became the Government.” 
Another interesting paragraph further down noted that Australia’s top tax is higher than New Zealand’s and the reason that New Zealanders were going to live in Australia was wages not taxes. Mr English should take a lesson from that. Tax policy is not economic policy; it is but a subset of it. The Government does not have anything other than tax policy when it comes to economic policy—that plus a bit of reform of the Resource Management Act that the Government pretends will somehow cause the gap to narrow with Australia. What did the television stations say in respect of John Key after he came to the House and tried to blather his way through and deny the reality that the gap has been growing rather than shrinking? Under the headline: “Key too selective and slippery”. TV3’s Duncan Garner said: “John Key should stop the slippery act—immediately. … Yesterday’s performance in Parliament was too selective and too slippery for him to get away with.” So it is not just the Minister for Economic Development who has not been on top of things; the Prime Minister has not been either. 
What did the  
New Zealand Herald 
 say in the weekend? Its editorial on this issue stated: “Trudging along the same old road is not going to produce the desired outcome.” It noted that the stats showed that the gap has been growing with Australia rather than shrinking. Then it said that “This provided its own commentary on the Government’s attempt to close the gap which so far has encompassed little more than tinkering with the Resource Management Act and suchlike.” Again the editorial in New Zealand’s largest newspaper has said that really the Government is only tinkering. It has no significant plan to bridge the income gap with Australia. The editorial went on: “In reality the Government fears the political damage that would result from …” anything more significant. “This accent on short-term popularity has also engendered a cautious approach in other areas that might deliver long-term benefit including most recently the mining of conservation land.” The final sentence of the editorial really sums it up: “But when relatively little is done relatively little happens. Things can even go backwards.” That encapsulates the story of this Government. Relatively little is being done and relatively little is happening to bridge the income gap with Australia. As a consequence— 
Paul Quinn 
: I raise a point of order Mr Speaker. My understanding of the Standing Orders is that only the speaker at any point in time is allowed to use assistance—placards and such. In fact we had the whip flashing around paper. 
Mr DEPUTY SPEAKER 
: I did not see it. I hear what the member is saying. 
Hon DAVID PARKER 
: It is interesting that members opposite are breaking up my speech on this. The editorial in New Zealand’s largest newspaper the  
New Zealand Herald 
 concludes with this statement: “But when relatively little is done relatively little happens. Things can even go backwards.” That says it all about National’s economic policy. The cupboard is bare. The Deputy Prime Minister was caught on tape at the National Party conference a year or two ago saying of the present Prime Minister that he flits from cloud to cloud. We have seen one idea after another put up on a cloud. The first was a cycleway which was not a bad idea but it was never going to create many jobs. Then we had the Job Summit and nothing else of substance came from that and the 9-day fortnight which virtually no one took up. Then we had the idea that New Zealand would mine our national parks and that that would be the step change in the New Zealand economy. Those words about the step change in the New Zealand economy came from Mr Brownlee. In his Prime Minister’s statement at the start of this year Mr Key placed much credence upon that idea about the part that the increase in mining would have on New Zealand’s economic recovery. In his view that was a major part of how we would catch up with Australia. Of course the Government has abandoned that ambition. 
Since then the next idea floated on a cloud was the idea that we would be a financial services hub for the world. Well New Zealand which has such a poor savings record and thin capital markets just does not have a hope in hell of doing that compared with Australia. Just across the ditch Australia has better savings and deeper investment markets and it has some hope of being a financial services sector in a way that is not at all realistic for New Zealand. Instead the Government has gone backwards on savings. It continues to attack the wages and conditions of New Zealand workers by making terms and conditions worse in New Zealand than in Australia which again will be encouraging the flow of people to Australia rather than the other way around. 
When we look through the Estimates and see what the Ministry of Economic Development is doing that is new this year compared with last year one thing stands out for me: $1.6 million is being voted through the economic development portfolio for Rugby World Cup free-to-air broadcasting rights. How will that grow the New Zealand economy? That is shameful. We know that the extra $1.6 million extra that is being voted through the economic development portfolio has come about because there was a scrap between Te PuniKokiri and Television One about funding. 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 The speech made by the member who has just resumed his seat David Parker was a fine example of a speech from a party that lacks vision lacks direction lacks a leader and needs to step up and step forward for New Zealand. When it comes to Vote Employment there is a lot of talk at the moment about employment opportunities for young people for those who are struggling most and for those who are feeling the effects of the recession. 
We might think that the Opposition would be holding the Government to account and we just heard a fine speech on how it wishes to hold people to account and everything else. At the estimates debate this year at the Transport and Industrial Relations Committee the previous Minister for Social Development and Employment the Hon Annette King did not even ask for Vote Employment to be debated. Labour purports to be the party that speaks for workers and wants to step up on employment but it did not even ask the Minister to present on Vote Employment. I ask members to ask themselves how that is asking the questions and identifying problems. 
Last year the Opposition did ask for Vote Employment to be debated so I fronted up but in the more than half-hour that I was there not one question on employment or unemployment was asked. I suppose after that performance last year Labour members decided to simply wash their hands of it and to not even ask questions about Vote Employment and what it means for people who are trying to find jobs. 
In all fairness I have to say that Annette King is probably kind of busy at the moment. She is trying to rally a party that is falling to bits. She is trying to find some meaning. Her name is not being bandied around as leader though which would be pretty hard for her to take I am sure. Let me quote Annette King directly from last week when the Chris Carter saga was all unfolding. She said: “I don’t know but as you know I am a former minister of police and let’s say we are following some leads.” Was that the handwriting on the letter or the fact that Mr Carter was on camera? Annette King is a former dental nurse so was she checking dental records? Maybe she was out there seeing whether he had kissed the envelope and whether she could trace it back through some sort of saliva test. That is what Ms King was spending her time on last week. As I say she did say that as a former Minister of Police she was following some leads. 
Annette King is stepping up and holding me to such account that she has withdrawn from the Social Services Committee. Let me put that in perspective: the most senior Labour member on that committee now is Dr Rajen Prasad. 
Hon Member 
: Who? 
Hon PAULA BENNETT 
: Yes. Ms King has withdrawn from the select committee on which she is the Opposition spokesperson—the shadow Minister as such—and is no longer even on the select committee to be following it through. That is how much she is stepping up and seeing it as important. So there was no request to debate Vote Employment at the estimates debate at the select committee. There was no talk about what is happening on employment unemployment and what is going on there. But fortunately this Government is stepping up and doing something about it. 
So let us talk about what the Government is doing. We have invested an extra $302 million in response to the recession. That funding comes through in the ReStart package the Job Support Scheme summer student jobs the Community Response Fund and Youth Opportunities. Obviously Job Ops was such a success that the first 6000 opportunities were taken up very quickly so in the Budget we have just had we presented another $27.6 million in funding doubling the opportunities on Job Ops with an extra 6000 places. Since then we have announced another 1500 places on Community Max identifying the more urban areas that need those sorts of programmes. Job Ops works well in the towns and cities where we have a number of employers who can step up and take the young people on and quite frankly the results have been outstanding. Of those who have completed their Job Ops and done the 6 months’ work 92 percent to date have not gone back on benefits. 
Paul Quinn 
: Unbelievable. 
Hon PAULA BENNETT 
: That is kind of unbelievable. In terms of the young people who have gone through the Community Max programme more than 70 percent have avoided going back on to benefits. That is pretty outstanding. 
Earlier I was listening to the debate and I was hearing things about the comparison between New Zealand and Australia and where we are at with that. Let us take the percentage of the working-age population who are receiving an unemployment-related benefit. In New Zealand that percentage is 2.1 percent; in Australia the figure is 4.7 percent. That tells us that we are getting somewhere. It tells us that Job Ops is making a difference Community Max is making a difference and the economic stimulus we are seeing is making a difference but it is time to look at the balance and how and where we get it right. 
The summary of the Budget shows that we have introduced $88 million for Future Focus and some of the welfare changes. Members will see increases in abatement thresholds. That means that those who are on the domestic purposes benefit and those on the invalids benefit can earn $20 a week more before it affects their benefits. That will make quite a big difference. That level has not been raised for years and years and the increase means people on those benefits can step up. We have $53 million going towards that initiative increasing abatement thresholds for those who are affected. That goes into their pocket and I think that is a good thing. 
The Budget also introduced a new study loan for sole parents who are on the domestic purposes benefit with another $9 million in funding along with changes to out-of-school care and recreation which recognise that parents need help with after-school and before-school care. We are looking at how we can make that better organised get rid of red tape and make sure that those sorts of opportunities are there for those parents. 
Budget 2010 was the first time we saw $15 million go directly into initiatives for teen parents and that is something I am proud of. Not only are we supporting teen mums who we know struggle at times and can have a bit of a hard row to hoe—having a wee one to think of while they are still relatively young and trying to find their feet—but we are also providing parenting support for teen fathers. To me it feels sometimes that we do not acknowledge the role teen fathers can play and how they can do it. There are some good New Zealanders out there who want to back them and work alongside them. 
At the moment we are putting together a group to look at how we can work with those teen dads to help them. Supported houses for teen parents will make a difference—they absolutely will make a difference. We have $6.2 million going into that initiative and I hope I get to celebrate its successes so I can continue to prod my Cabinet so that we can get a bit more. These initiatives mean we are wrapping those services around those young people and their children over a period of time. It teaches them about what it means to budget live in a house buy food and cook it and raise a family at the same time. We all acknowledge that those things can be huge pressures on them and I am really proud of those initiatives. 
We have also developed the Community Response Model and we have seen $90.5 million go into it. That model means local places are more involved in decisions about social services making the services more regional and getting the funding at the grassroots. That is also making the current spend of $110 million through the family and community services group far more transparent with local people on those forums. Adding in another $90.5 million will make a direct difference to their priorities. It is about what happens for them locally what makes a difference and what we can actually do. 
We will be increasing GST and we will make sure that people are compensated for the increase. This will cost around $420 million and I am responsible for making sure that that is rolled out on 1 October. So I say to those superannuitants who are feeling the effects and are a little bit concerned that I give them my guarantee that they will see compensation come through for that change in GST. They will also see changes because of changes to the real wage and thus the percentage of that wage. 
So payments will increase by over 2 percent for those receiving superannuation the veterans allowance the unemployment benefit the sickness benefit the invalids benefit the domestic purposes benefit the disability allowance and the child disability allowance. We are making sure that some of those allowances are rounded and are equally recognised for the changes they need. 
This Budget is a great Budget that delivers to the people. It recognises the priorities of this country and where that money needs to be. I am very very proud to be standing up for those who need our help most. Thank you. 
Hon MARYAN STREET (Labour) 
: 
 I would find it easier to accept a lecture from the member who has just sat down Paula Bennett if I was persuaded that she cared about some of the people whose lives are quite literally in her hands. If she cared enough then perhaps she would not be taking a 6-week stint on full pay to go to America later in the year to attend something that may or may not enhance her ability to do her job. If she had any sense of urgency around people who live on benefits and who are unemployed then I might have some sympathy for her. I do not get any of that from anything that member says. 
A plan is a systematic timetable that gets people towards a goal and it is very clear that the Government does not have one. The Government simply has a vacuum where a plan should be. A plan requires some strategic overview that links and binds actions together in pursuit of a goal. That means having enough of a vision to join the dots to be able to see how one portfolio relates to another and how one decision impacts on another and to be able to guide those in concert to achieve the end goal. 
We do not have a plan from this Government. We do not have a plan in this Budget because the Government has no idea what its goal is except to get closer to Australia. The Prime Minister has backed away from that goal in recent days because it is clearly becoming less and less achievable under this Government. 
To have a plan to have some sense of strategic forward movement there needs to be enough vision to join the dots. I will give a couple of examples. This Government has had two ideas about how to improve economic performance. The first was mining the conservation estate—that is digging up our precious territory which is part of our tourist attraction—and the second was building a cycleway. It had two ideas: dig up the conservation estate and build a cycleway. Did anybody get the Prime Minister to talk to himself about the connection between his role as Prime Minister and his tourism portfolio or the connection between Bill English’s role as Minister of Finance and the Prime Minister’s own portfolio as Minister of Tourism? 
Here we have two ideas: first to mine the conservation estate especially those areas that are most precious and are under the greatest level of protection; and second to build a cycleway. I will give the House an example of how those dots are not joined; I will give a very very local example. I am talking about Dun Mountain in Nelson where the Government still insists it is going to continue with prospecting despite the back-down—the humiliating back-down—on the grand plan for improving economic performance. But the Government was also promoting and announcing a few months ago the cycleway around Dun Mountain. One can only assume that now there is going to be a cycleway to view some open-cast mining. Tourists will come to our cycleway and look at our mining. They can look at how we are digging the wealth out of this country from underneath its surface instead of cashing in on the tourism potential developing the cycleway so that it can earn tourism dollars. Tourism is one of our biggest earners—if not the biggest earner—of foreign exchange. This is a classic example of the dots not being joined. The Government will continue to prospect on Dun Mountain regardless of the humiliating back-down and continue to build a cycleway. This is a nonsense. 
I will give the House another example. We had cuts to early childhood education. We will dumb down early childhood education because the Government says that we do not need 100 percent of our early childhood educators to be fully trained and qualified. It says that we do not need our 3 and 4-year-olds to have the best start possible with the best-qualified early childhood teachers; we do not need that any more. I ask the Government to take a nanosecond to join the dots between early childhood education and rates of incarceration. I tell Mr Key to join those dots. Everybody else in the community can join those dots but the Government cannot. 
If we do not invest heavily in early childhood education as the previous Labour Government did we do not give children the best start possible. If we do not give children the best start possible they will not be able to maximise their education opportunities. If they cannot maximise their education opportunities they will not be eligible for employment. If they are not eligible for employment they will be unemployed. If they are unemployed they will get into trouble. If they are unemployed they will not be able to sustain themselves and their families and they will head down the inexorable path to incarceration. That is called joining the dots and the Government seems incapable of doing it. 
These estimates have the very real potential to cause in a very short time Vote Corrections to be the largest vote that this Government expends on from general taxation. That will be the legacy of this Government. Where Labour would put money and did put money into early childhood education—[ 
Interruption 
] I have not begun on tertiary education yet. Labour invested in early childhood education because of that long-term vision and the long-term flow through. This Government is chipping away at that investment and it is eroding it. It prefers to spend money on Judith Collins’ portfolio of corrections. That is the portfolio that should have the least money put in it. 
I will give one further example; it relates to my shadow portfolio of trade. Somehow Mr Key cannot join the dots between an attack on workers’ rights in New Zealand and putting the trans-Pacific partnership in jeopardy. I will try to join the dots for the Prime Minister. If he is going on the attack on union rights and on access to workplaces by unions and if he is going on the front foot in order to shore up his redneck contingent he needs to realise that the New Zealand Council of Trade Unions does not operate in a vacuum; it operates in an international movement. Richard Trumka who is from the American Federation of Labor and Congress of Industrial Organizations was going to visit here but he has pulled his visit— 
Hon Tau Henare 
: Who cares? 
Hon MARYAN STREET 
: I tell Mr Henare that the Prime Minister ought to care because it is about trans-Pacific partnership. That is exactly what Mr Trumka’s visit was about. 
Hon Tau Henare 
: Who cares whether a unionist comes to New Zealand? 
Hon MARYAN STREET 
: That member ought to speak to his more senior colleagues because I think they understand. The person who does not is the Prime Minister. He has no plan he cannot join the dots and there is no prospect for improvement under these estimates. 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 I rise to speak in this debate because I am very very excited about the initiatives this Government is taking to grow the New Zealand economy. Before I continue I must point out to the previous speaker Maryan Street a certain fact of life. If the Department of Corrections is growing to the extent that it is I ask her whether that is the fault of a Government that has been in office for 22 months or of the previous Government that had been in office for 108 months prior to that. It was that previous Government that left the legacy of the growing numbers for the department to deal with. In fact soon after I got the opportunity to sit around John Key’s Cabinet table we were shown a graph that showed the legacy of the spiralling numbers of prisoners left by the previous Government which we are now dealing with. We have already managed the numbers down and we are looking to manage them down further. But that legacy of the previous Government sits in front of this Government right now. 
Right across the public services that New Zealanders value the big issue is getting New Zealand to grow faster. Getting New Zealand to grow faster is how we will afford those services. The Government has a massive economic growth agenda that is unfolding as we speak— 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the honourable Minister but the discussion and yelling across the Chamber is not acceptable. Let us concentrate on the debate. If members want to interject on the member speaking then that is fine but this other dialogue is not called for. 
Hon STEVEN JOYCE 
: Thank you Mr Deputy Speaker. It is all right; I know the other side has been under a bit of pressure lately. 
The economic growth agenda is very very important not just to this Government but to the country. It is all about getting New Zealand to grow faster and this Government has an agenda that is unfolding day by day. Personal tax reform will take place on 1 October this year when most New Zealanders will be paying a top personal tax rate of 17.5c in the dollar. That is a magnificent achievement and it will encourage people to work hard get ahead and keep more of their own money. 
In the new highways area which is an area I happen to know a little about we have projects around the country that are growing quickly. The Kopu Bridge in the Coromandel has just marked 1 year’s progress and the Victoria Park tunnel which many Aucklanders drive past every day is growing rapidly. Shortly Nikki Kaye’s birdcage will be shifted from one side to the other to get the tunnel done. Last week I was able to announce the bringing forward of the Tauranga Eastern Link by about 7 years as a result of tolling—it has been brought forward by about 7 years. The link is a 23-kilometre four-lane highway and it was the subject of a press release this Government made on 29 July last week as we progressed our economic growth agenda. 
Today just to pick another random example the Minister of Finance and the Minister of State Services are out there saying that we are going to have a very close look at the policy expenditure of the Government which has ballooned out hugely over the last many years. In looking at Mr English and Mr Ryall I am confident that they will have a very close look at the policy purchasing process of Government because part of our economic growth agenda is keeping Government expenditure under control. It is only by keeping Government expenditure under control that we can keep the pressure off interest rates. Lower interest rates allow the economy to grow. 
There are a whole range of things. There is the science investment that we announced in the Budget. It is a very important investment and this Government is very serious about the country’s investment in science and innovation. 
The small matter of employment law reform is very important. It was announced by the Prime Minister just a couple of weeks ago at a conference in Auckland. It is a very important yet reasonable and moderate reform of employment law and it will achieve a huge amount in terms of giving employers the flexibility and if you like the confidence to employ new workers. That is already having an effect in the workforce. I suspect it will be quite helpful for the Labour Party when it comes to hiring a replacement in Te Atatu. I think the employment law reforms are big positive steps forward in our economic growth agenda. 
We are also putting more money into tourism—I say that in picking another random one from the list. More money for tourism was announced this year and that is very good for New Zealand’s very important tourism industry. We are also lowering company taxes to 28c in the dollar from the current 30c in the dollar. That is a good contribution to the economic growth agenda. 
We looked at some of the issues around productive land in the South Island and said that we had to do something about removing the logjams for irrigation in Canterbury. We had to make some calls there as we had some issues with the battle between regional councils—and frankly within regional councils—about coming up with a water policy for Canterbury. That is very important as it is a big productive part of the New Zealand economy so we have taken the steps that the other side acknowledged they should have taken. I think it was Trevor Mallard who came out after we had made the change and said that they had been going to do that. It took them only 9 years to think about it; it hadn’t happened. But that is a very important part of the economic growth agenda. 
Aquaculture is very important for the growth of the New Zealand economy. The reality is that under the previous Government we had a moratorium on aquaculture and as the Minister of Fisheries has pointed out Labour’s step forward from there was to extend the moratorium a bit longer. Those were the issues. There was a situation in aquaculture where the industry was frozen. We have unfrozen it and we are moving forward. 
Ultra-fast broadband is another issue. I was pleased to come down to the House and speak now because we have just made a press release today to say that the final refined proposals have been received by Crown Fibre Holdings in order to deliver ultra-fast broadband. The company has received proposals from a total of 15 parties. A number of the original respondents have formed new consortia or indicated a willingness to do so and the company is now in the process of crunching through those bids. The process is contestable which is very exciting because it will get the best price for the Government and the best price for taxpayers and it will give ultra-fast broadband right around the country to 75 percent of homes as soon as it possibly can. I think that that is very exciting because it will help growth. Once we have given that opportunity to people they can work from their own homes and increase the size of their businesses. Most important they can communicate with the wider world and that will allow them to achieve more. 
We can move on to things like trade negotiations. We have Tim Groser and Murray McCully out around the world for two reasons. The first is that it keeps them out of here; the second is that they are advancing our trade negotiations agenda. They are working very very hard at advancing that trade negotiations agenda because they know that New Zealand is a country of traders and that the only way we can get ahead in the world is to trade more. Interestingly the trade statistics on that are out and they say that we are trading more since the new Government came along. The statistics say that exports are increasing. Just the other day merchandised trade data for June showed a 6.8 percent increase in export values over the June quarter and we have a quarterly trade surplus of $389 million. That is the largest since September 2001 which was about when the previous Government lost interest in the tradable economy. We have been working to grow exports and trade negotiations are just one part of that. 
If I can I will also touch on export education because that is all part of the trade exercise. We have now had 2 years of year-on-year growth in international student numbers in this country so that is a 7 percent rise in the number of fee-paying international students for the first 4 months of this year compared with last year. I was able to announce that last week. That increase was on top of a 6 percent increase for the year before. So there we are—we are growing the international education sector. That does a number of things: firstly it brings income into the country which is very important. Again something that the previous crowd forgot about was that we actually have to earn our way in the world. The second thing it does is that it brings income into institutions which is also important. Of course lots of crocodile tears are being shed on that side of the House for institutions but those members do not work to help institutions increase their revenue streams. 
This is all good progress and it is part of the Government’s economic growth agenda that will see this economy turn round. I am excited to be a part of Budget 2010 because it will help us to close those gaps with Australia and with the wider world. That is what this Government is all about. 
Hon DAMIEN O’CONNOR (Labour) 
: 
 It is a pleasure to follow Mr Joyce who started his speech by saying that the agenda of the Government was unfolding day by day. I will tell members that the way I see it is that the Government wants to build more prisons. The Minister of Corrections said that here in the House. Those members think that that is success. Not only will they build more prisons but also they will have them in private ownership. That is what the Government’s agenda is. It has also indicated that it will privatise newly built schools. Mr Joyce said that he will build more roads. Well the only roads that he is building are the ones around the cities. The people in rural New Zealand who create the wealth know that their money is being taken to fund Mr Joyce’s city roads. The only agenda that is going on here is that National is putting more money towards its mates who funded its campaigns. That is the simple fact of the matter. National’s mates will build the prisons build the schools and build the roads. 
What those members want is higher unemployment and lower wages. I ask whether members know that that is the economic agenda that National is rolling out. We have seen higher levels of unemployment and declining wages. That is not good news for New Zealand. When will the National Government wake up to that reality? Mr Joyce had the stupidity to say literally 3 minutes ago that lower interest rates allow the economy to grow. I tell Mr Joyce to wake up. The official cash rate has just been put up and it is likely to go up further and further. The inflationary pressures that this Government has brought to the economy through the rise in GST and the emissions trading scheme is likely to drive up interest rates further. That means that the only thought that Mr Joyce brought to this House is that lower interest rates allow the economy to grow but he has it wrong. 
I must speak on behalf of the rural economy. I picked up a paper today and the heading was “Does the ‘farmer’s government’ give a damn?”. It could read: “Does the ‘farmer’s Government’ have a clue?” because it is the same thing. Rural folk up and down this country are asking what this Government is up to. They voted in National as it has been called the “farmers’ Government” for many many years. They voted National back in. They did that because they were promised that the emissions trading scheme would be scuttled—no emissions trading scheme. The farmers up and down this country thought that National would scupper the emissions trading scheme. Why? Because National campaigned against it. Because it ranted and raved against climate change and the emissions trading scheme the farmers understandably thought that National would scupper it. National also went up and down the country saying that it absolutely opposed any increase in taxes. Maybe that is true except that it has put up taxes as GST has gone up. It said that it would cut bureaucracy and cut costs but it has not. If the step change that it was advocating was a step down then National should have been upfront about it. For most workers in the country its economic agenda is a step down. 
At least with Labour under Helen Clark we had clear and consistent leadership. Do members know what farmers are saying up and down this country? Mr Guy knows this. They are saying that we have confused and contradictory leadership from National. They do not know whether their Government gives a damn. Those are the facts and all those members over there know that because they are getting that feedback. The reality—and we were able to expose it today—is if that is one’s plan for building the recovery and for an economic step change little wonder their leadership is confused and contradictory. That is the fact. People have seen U-turns on so many issues now that National cannot tell a U-turn from a circle. I am guessing that National will go round and round again and again. 
Let us go back to the emissions trading scheme. Contrary to what farmers and rural folk thought would happen National passed a dumbed-down emissions trading scheme. It is a Clayton’s emissions trading scheme that many of us think will be ineffective. It will not drive behaviour change but that is what we should be attempting to do. Across the globe the view is that we are emitting too much and we should reduce that. Does the emissions trading scheme passed by the National Government against the wishes and expectations of rural New Zealand do that? No it does not. The question is where to now. 
Amy Adams 
: What’s your position? 
Hon DAMIEN O’CONNOR 
: I ask Amy Adams what her farming constituents say to her. I am guessing that they are asking the same question: “What is our Government doing for us?”. They know that the National Government is confused and contradictory. I ask where to now. I ask what the plan is for a step change in economic recovery. There is no plan. The rural sector though that scuppering the emissions trading scheme would be a step up. Well it is not and they know it is a step down. It is a step down not just for rural folk but also for every taxpayer who will pay the cost and subsidise the ongoing behaviour of emissions across the industry including farming. 
National in Opposition campaigned that it would reduce costs and bureaucracy. The one thing that it has done that is out there for everyone to see is increase every single cost on the farming industries and the rural and primary sectors for everything other than the cost of finance because it put up GST. GST has gone up. Every single cost for any farmer or any primary producer will go up. That is aside from the increase in interest rates and the resultant high dollar that they will have to suffer. Many in the sheep and beef industry are suffering. They have their backs to the wall. Many in the pipfruit industry are suffering. Many wine growers in the wine industry have their backs to the wall. They had expectations that their National Government would deliver some assistance but it has not. It does not have a plan. It has a Minister of Agriculture who refuses to intervene. He will appoint taskforce after taskforce but get nowhere and do nothing. I understand that his mate Dr Murray Horn has just resigned from the Wool Industry Taskforce. He walked out. He got his big fat check and he has gone and done a runner. I ask what will happen with the wool industry if the Minister refuses to intervene and show some leadership. He does not because there is no leadership from John Key there is no leadership from his ministerial colleagues and there is no leadership from National because its members do not know where they are going. They have no plan. We have said that we need to look at the area of monetary policy again because it is failing the export sectors in this country. 
KPMG did an extensive report on primary industries. It said some glaringly obvious facts. Unless we spend more on research and development and unless we have higher skills in the primary sectors this economy is ruined because the primary sector still generates over 65 percent of our export earnings. If we do not get it right there there will be no money for anything else. The National Government might rely on public-private partnerships to build its prisons and schools but in the end it has to generate wealth and it has to do it through the rural sector. Mr Joyce was praising the broadband initiative. What a joke! The Labour Government committed $48 million to that initiative and the extra money is coming from a levy on everyone else using broadband in this country—another tax. It is another tax that he refuses to acknowledge. 
The National Government’s plan has simply been to increase GST increase costs and do nothing to show leadership direction or vision. It is a sad sad day. All it has done is cut polytechs cut adult and community education and cut the skill base from the rural sectors. It is restricting the opportunities to encourage people into the primary sectors and that means that down the track this country will suffer dearly. It took the $700 million that we had set aside for research and development and used it to pay for tax cuts. Instead of a research and development tax credit it reintroduced a system of grants that is a bureaucratic nightmare. 
CRAIG FOSS (National—Tukituki) 
: 
 Mr Goff is a nice man but he just cannot win at the next election—so said the Hon Chris Carter just last week and once or twice over the weekend. I think the Hon David Cunliffe thinks that Mr Goff is a nice man but he just cannot win at the next election. I tell members who missed it that Mr Cunliffe gave a speech on the letter “T” earlier on. He is the last person who should give a speech on the letter “T” and he is on very very slippery ground if he tries it. I will not go any further. 
Mr DEPUTY SPEAKER 
: Interjections are OK but I ask members to lower the tone. I am having difficulty hearing the member who is on his feet. 
CRAIG FOSS 
: I think Mr Parker thinks that Mr Goff is a very nice man but he just cannot win at the next election. It is very interesting to watch the arm wrestle between the Hon David Parker and Mr Cunliffe for the finance portfolio. Did members note that the finance question today was in the name of Mr Parker? Did members note that on  
Q+A 
 a while ago Mr Goff did not endorse Mr Cunliffe? He endorsed Mr Parker Mr Mallard and Maryan Street as finance people but he conveniently forgot Mr Cunliffe. 
The factions are obvious to us now. The Hon Bill English talked about it earlier. The copybook has been followed to the letter by members on the other side of the Chamber; we have been there and done that and they are starting to follow it through. But I wonder who the various factions are supporting. What about the feminist faction? I think that it thinks that Mr Goff is a nice man but he just cannot win at the next election. I reckon it will be backing Maryan Street. I do not know what member the rainbow faction is backing. Will it be backing its own member? I think the rainbow faction thinks that Mr Goff is a nice man but he will not win at the next election. It is pretty obvious that the lefty faction over there the union side thinks that Mr Little is the man. He is not even in caucus or Parliament yet. It is pretty obvious that he thinks that Mr Goff is a nice man but he cannot win at the next election. 
What about the righty faction? I think this is where Mr Goff’s support comes from although there are not too many sensible people over there. But truth be told I think that the righty faction—and even the Hon Phil Goff himself when looks in the mirror—thinks that he is a nice man but he probably cannot win at the next election. What about the Maori faction? I am sure that the Hon Parekura Horomia would back the Hon Shane Jones. That faction also thinks that Mr Goff is a nice man but he probably cannot win at the next election. I understand that Mr Jones has joined the blue team so he should be sitting over here anyway. 
Many Labour candidates out there have been selected and will work hard at the next election but I want to tell them something. In 2001 when I was selected National was polling at around 33 percent. Some issues spilled out into the public arena then it all broke loose. There was infighting there were speeches at conferences and there were leaks from caucus. It all turned to custard. As the record shows National did not perform very well at all at the election; we ended up with something like 22 percent on the party vote. The copybook is being followed to the letter by the other side so far. So far we are seeing it and I am interested to hear other speakers talk about the factions and whom they are supporting. As we all know—and it is repeated time and time again by the Hon Chris Carter—Mr Goff is a nice man but he cannot win at the next election. 
This is a celebration. The third reading of the Appropriation (2010/11 Estimates) Bill is an absolute celebration. This is the third reading of the Budget the estimates and the reports back. This is the most fundamental tax reform we have seen in 25 years. It took 25 years to get this kind of tax reform through this House and into this country. We have been waiting 25 years; the hardest were the last 9 years of the previous Government. We have made a $4 billion investment in New Zealand families. It is a $4 billion investment in freedom of choice about how families spend their own money whether they pay off their mortgage which does not attract GST save those funds at a 28c tax rate or choose to spend it. 
Hon Steve Chadwick 
: And GST wipes it out. 
CRAIG FOSS 
: That is part of the tax switch; the member opposite is quite right. Balance and fairness are back. By the way members on that side have forgotten to talk about the compensation part of GST. If we recall Labour increased GST from 10 percent to 12.5 percent without any compensation whatsoever and now it is crying poor. Well it is a funny old game. 
For 9 long years the tax take increased. Fiscal drag pumped up by profligate and relentless spending by the previous Government pulled 20 percent of the New Zealand population’s PAYE payers into the top marginal tax rate. Labour promised 5 percent in 1999; it got it to 20. Funnily enough Labour members are talking that 5 percent again. Members should keep an eye on them. We know from previous speeches that they want to bring in a capital gains tax and they want to do something about loss attributing qualifying companies but they did not do anything about them for 9 long years as the property boom absolutely took those things up. Members should watch them. 
They talk about plans. Let us talk about plans of the recent past. Let us talk about plans versus action. What happened to the knowledge wave? Do members remember the knowledge wave? We were to be in the top half of the OECD. What happened? We slipped down under the Labour Government. We slipped down under its so-called plan. Do members remember closing the gaps? There were more poor and more reports from the UN and now we are dealing with that legacy. Do members remember carbon neutral? There were 50000 hectares of deforestation as a result of that plan. What happened to economic transformation? We went from a robust economy to a total disaster. To be fair Labour transformed the economy—to a pile of custard. An example is the KiwiRail purchase which we had to take on and write off. There are plenty of examples. Do members remember the classic example of Sovereign Yachts? It was part of the Labour Government’s economic development. When speakers over there start going on about plans versus action I am more than happy to line up what we have achieved in 20 months from this particular Budget with what the crowd over there achieved in 9 years. 
They get up and talk about monetary policy solutions. The Hon Damien O’Connor is going where other economists fear to tread I believe. Many many experts have studied this issue and have not come up with anything different but Mr Cunliffe Mr Parker Ms Street and Mr O’Connor are apparently going to do something that central bankers around the world have failed to do even after years and years of examining and studying monetary policy. It will be interesting. I always note that Labour did in fact sign off and agree to no changes to monetary policy in the inquiry that Dr Cullen under its watch put in place at the Finance and Expenditure Committee in 2008. They all agreed. I cannot work it out. I am also surprised once again and saddened that the Labour Party if it was ever to reclaim the Treasury benches is going to rip up the cycleway. It is so disappointing. I challenge members to get up and say that they support the cycleway and that they will not rip it up. That is the rhetoric that is coming from the other side. 
The Government’s economic agenda is rolling out and it is rolling out fast. We have the most fundamental personal tax reform in 25 years. We have new highways such as the Hawke’s Bay Expressway southern extension. We have resource management reforms—supermarkets are getting approvals in 4 months; under the previous Government it took 12 years. In ultra-fast broadband we are investing $1.5 billion over 10 years. We have national standards in literacy and numeracy—to be fair to the Hon Chris Carter his printing was very legible so he probably did pretty well in those. National has been sorting out Canterbury irrigation whereas after 9 years Labour had no plans whatsoever. But we got in did the job and started the charge towards a more productive New Zealand. In trade negotiations Mr Groser is working very very hard around the world and so is Mr McCully. We have a welfare focus that works. 
On employment law reform we still do not know where the other side stands particularly on the issue of buying back the fourth week. Andrew Little who wants to be in Parliament is pulling all the strings. He has said that he does not want that; the Hon Phil Goff has said that he does want it. Please could we have some clarity from the other side? This legislation is a celebration. It is an absolute pleasure to be speaking to this legislation about a Budget and estimates that bring in some discipline some transparency and the most fundamental tax reform New Zealand has seen in over 25 years. 
AMY ADAMS (National—Selwyn) 
: 
 As the previous speaker Craig Foss just said it is a pleasure to take a call in this estimates and appropriations debate. It is a useful time actually to stop and look back at the 2008 election when this National-led Government under John Key came to power. When New Zealanders elected us as they did overwhelmingly in 2008 to lead this country through the recession they did it on a platform of aspiration and ambition. We did not get mired in the mud-slinging and negative campaigning from members on the other side of the House. We stood up—John Key stood up and our members stood up—and said we thought that New Zealand could do better than it had been doing. We had high hopes for New Zealand and we offered to New Zealanders a positive vision for a way forward and a package of economic growth that could lead them into the future. That package was the key to our plan because we knew that in order to be ambitious for New Zealand and to deliver more for New Zealanders we had to address the issue of economic growth. That was what had been holding this country back for so long. 
Let us take a moment to go over the issue of economic growth because from listening to some of this debate this afternoon it is very clear to me that members on the opposite side of the House neither know what it looks like and what it means nor have any clue whatsoever about how to deliver it. So let us have a look at it for a minute. Economic growth is important because it means creating jobs. That is what it means in a real sense. It means more Kiwis being in work. It means having higher incomes; it means lifting the incomes of New Zealand families. That means that they can get ahead under their own steam and are not reliant on handouts from the State so they are not caught up in the culture of entitlement and of asking what the Government is providing for them. No we say people should work hard get ahead and accept responsibility for their own destiny and we will back them. That is what economic growth means to us. 
Economic growth means getting this country back to having Government surpluses. Why is that important? When we get this economy back to showing Government surpluses it will mean that we have choices. We will have choices about how to deliver the sorts of public services that New Zealanders deserve. We will have choices about how to deliver the best in education the best in health— 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the member. I have mentioned before that barracking across the benches is unacceptable. Interjections are fine but they should be interjections about what the member is saying at the time. I ask members to please calm it down. 
AMY ADAMS 
: I was talking about the fact that when we get this economy back to showing surpluses we will have choices about what we can deliver. That means that we can deliver to the people of New Zealand the sorts of public services that they are entitled to expect—the sorts of education health law and order and other things that we want for all of our citizens. In order to do that we have to get the economy into surplus. 
Under the Budget that Bill English has delivered in 2010 we will now be returning to surpluses; they are predicted for 2016. That is 3 years ahead of the predictions that we had just last year and considerably better than the decade of deficits that the previous Labour Government left us as its legacy. This Government understands that we have to earn money before we spend it. It is a pretty simple lesson. Most Kiwi families get it and most businesses get it but Labour never understood that money has to be earned before it is spent. That Government just kept on spending it. As a country New Zealand had been living beyond its means for far far too long. We cannot continue to just assume that money will come from a magic ATM in the sky. 
We understand that Governments have no money. There is no such thing as Government money. The money that we spend is taxpayers’ money: the hard-earned money of New Zealanders who contribute to this country and its prosperity. We understand that if we do not back those people those workers and those businesses—every man woman and child who is working hard to get this country ahead—then we will never prosper as a country. That is a fundamental truth that Labour does not get. Spending was the only thing that the previous Labour Government was ever any good at. 
National has always been seen as the party that people turn to when they want to have sensible economic management and that is exactly what New Zealanders wanted in 2008. That was exactly what they were asking for and that is why they delivered to this John Key - led National Government the strong overwhelming mandate that they did. We understood that recovery and economic growth were going to come from addressing the imbalances that had been hamstringing our economy for so long—the imbalances that meant that under Labour’s watch no net new jobs had been created in agriculture or manufacturing since 2002. For the Labour members now to cry crocodile tears when they had presided over an economy where no net new jobs were created in agriculture and manufacturing—the backbone of our economy—for the last 6 years of their Government is an absolute tragedy. It is an absolute shame and a farce. 
We knew that in order to get growth we would have to rein in expenditure. A country cannot keep spending more than it earns; we had to get a handle on expenditure. We had to better manage our balance sheets which showed $217 billion of Government assets. If we do not manage our assets far more prudently this country will never recover. We had to ensure that there was better value for money. It is not good enough to simply throw money into a health system that saw expenditure double under Labour yet the amount of elective surgery per capita fell. That is what that previous Government did: it put twice the amount of money into the health system but outputs fell. Labour thought that if it just kept throwing money into the pit without any sort of value-for-money assessment then that had to be good. Well that might have been fine if we had had money to throw around but that Government was spending more than it had. That simply was not sustainable. If we are to get growth in this economy we have to encourage our export sector. We have to get behind our farmers we have to get behind our manufacturers and we have to get behind our innovative New Zealanders who are out there working hard. That is what this Government is focused on; that is what Budget 2010 is all about. 
We understand that growth is a partnership between the Government and the private sector because Governments do not create jobs actually. Governments do not create jobs; businesses create jobs. The Government does not pay taxes; New Zealanders pay taxes. Governments have to support businesses. We have to support Kiwis: we have to help them to invest and to grow and we have to not make their lives harder and harder. Faced with the situation that was in front of us we knew that no single solution would magic away our problems. But we know from the debate in this House that Labour has spent the last 20 months waiting for a bill to come on to the Order Paper entitled “The Solution to All Our Problems Bill” because that must have the answers. Those members have not seen it so they have figured it out that there is no plan. But do members know what that tells me? It tells me that they simply do not understand what economic growth is and what delivers that growth. They have no idea of how to roll out a strong economy for this country. Every time they say in this House that there is no plan all that tells me is that they do not get it. They do not have a clue; they would not recognise a growth agenda if it jumped up and bit them. That tells us that if they were in charge of this country right now we would be continuing the downward spiral that they put us on in their 9 years in office. 
There are many elements to our economic plan. In 20 months the sheer volume of what this Government has delivered in order to turn this economy round is staggering. If we just focus on the six main points we can see that we have the biggest tax reform in 25 years which is designed to encourage hard work discourage consumption and back New Zealanders who want to get ahead. We have one of the biggest infrastructure packages that New Zealand has seen and we have been starving for infrastructure growth in this country. Ten billion dollars will be spent on roads alone and $1.5 billion on broadband with another $300 million on rural broadband. We see better smarter public services being consistently rolled out by this Government and there is better value for money in our spending as well. We see a focus on lifting education standards. We actually say it is not good enough that 20 percent of our kids cannot read and write. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
A party vote was called for on the question  
That the Appropriation (2010/11 Estimates) Bill be now read a third time and the Imprest Supply (Second for 2010/11) Bill be now read a second time. 
Ayes 68 
New Zealand National 58; ACT New Zealand 4; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Appropriation (2010/11 Estimates) Bill read a third time.Imprest Supply (Second for 2010/11) Bill read a second time.