Supplementary Estimates — Imprest Supply Debate 
Supplementary Estimates — Imprest Supply Debate 
[Volume:632;Page:3690] 
Supplementary Estimates 
Imprest Supply Debate 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I move  
That the Appropriation (2005/06 Supplementary Estimates) Bill and the Imprest Supply (First for 2006/07) Bill be now read a second time 
. These two bills give us a chance to dwell yet again upon the achievements of this Government and the obvious failings of the Opposition. Under this Government we have seen the most sustained period of economic growth for the last 30 years— 
Hon Member 
: You inherited that. 
Hon Dr MICHAEL CULLEN 
: No for the benefit of whichever Young Turk in the back bench opposite raised that one I can tell him that we inherited an economy that had obviously gone backwards in 1998-99—it was negative 1 percent in 1998-99. Under this Government we have seen one of the lowest unemployment rates in the Western World with 313000 more jobs and an unemployment benefit rate—the numbers on unemployment benefit—that is now the lowest for 20 years despite the fact that the workforce is much bigger than it was some 20 years ago. We have seen households with increased wealth averaging $125000 over the last 3 years. Our fiscal position is the envy of the world. We are in a net positive financial asset position for the first time in our history. Only seven countries in the world are in a net positive financial asset position. 
We are seeing some slow-down in that economy as a result of tightening monetary policy and slowing migration. But we still have a net inwards migration of 10000 people a year. We have a net inward migration of skills. We acquire more skills than we lose through outward migration and we still have positive growth—and that is recognised overseas. Standard and Poor’s in its commentary on the Budget says we had the right mix of budgetary principles. New Zealand is one of the best-placed nations in the world to deal with the rising costs of an ageing population. National wants to destroy that because it does not care about providing properly for the cost of an ageing population. The World Bank report of the ease of doing business states we are No. 1 in the world and we are above the OECD average on every sub-group within that World Bank report. We are No. 1 in the world in that respect. 
In this Budget we saw increased expenditure on economic transformation through for example interest-free student loans. It is not $1 billion a year as Opposition stooges try to claim; it is more like $250 million a year. There is a massive increase in land transport spending—most of which is to restore the roading programme some to build additional new roads and some to ensure we keep the public transport programme under way—which has seen a fivefold increase under this Government in spending on public transport and that will go up significantly in the next 2 or 3 years as we do the major work on upgrading the Auckland railway system. 
In terms of families we have seen the Working for Families package being extended out to $1.6 billion of targeted tax relief for New Zealand low to middle income families. We have seen extra money going into health and today the Minister of Health ensured that from 1 July the reduced costs of primary health care will roll out to the 45 to 64-year-old age group—which happens to cover most members of this House of course. We are seeing a new programme rolling out for improving the oral health of under-18-year-olds which is an area of significant difficulty within New Zealand and the rolling out of a new hearing screening programme which will cut off a problem that causes people many social problems in later life. 
Additional money—$128 million—is going to early childhood education. We will see the roll-out of 20 hours of free early childhood education during this term of Parliament and an additional 455 teachers over and above roll growth. Also we will see the beginning of the roll-out of 1000 additional front-line police and the necessary support staff and other equipment requirements. 
What have Opposition members got to say about all this? Don Brash of course predicted very confidently late last year that we would now be in a recession. Where has that recession gone? Where have the great economic expert’s predictions disappeared to? Nobody now believes that the quarterly figure due out on Friday will show negative growth unless of course there is a large upward revision to the last quarter of last year—and if that is true there cannot be a technical recession. Terms of trade are improving and exports are beginning to pick up even though we expect a very poor current account out-turn for the last year. If there is a poor current account out-turn if there are inflationary pressures and a tight labour market how can anyone possibly argue for massive loosening of fiscal policy? 
Chris Tremain 
: What level of growth do we need to get to the top half of the OECD? That’s what is important. 
Hon Dr MICHAEL CULLEN 
: The member for Napier should keep quiet because he got very rich under a Labour Government in the last 6 years riding the housing boom Labour created. He is a classic case of a person biting the hand that has fed him so well over the last few years. 
Why should we have any confidence in Dr Brash’s predictions? Only a couple of months ago Dr Brash found his way to the middle of the South Island to a place called Lake Tekapo—he was surprised to find it was there—and he stood there and said that we must have an urgent crash programme of energy savings or the power system would not last through the winter period. [ 
Interruption 
] That was a D-clamp coming undone there which is not the same thing as running out of energy. Members should know by now where their D-clamps go I would have thought by looking at them. But if Dr Brash were still standing where he stood a couple of months ago he would long since have been drowned. He would have become the first dry in the world to disappear in a welter of water and moisture. 
So National’s programme remains. It will try to bribe its way back into power paid for by the Exclusive Brethren—millions of dollars. As it comes out the amount of money that that group poured into the National Party keeps rising with every report we see. Don Brash—the former arch-dry the previous Governor of the Reserve Bank and the man who said not just that we cannot have our cake and eat it too but that we will be damn lucky to get even a crumb at any point in our life—says we can now do everything. 
We need just look at what National members have done over the last few weeks. On 19 June Tony Ryall said we should spend more money to train doctors. On 13 June Jacqui Dean was reported in the  
Southland Times 
 as saying that we just have to give the health boards more money so they can pay the doctors more. She said that if we gave them more money there would no need for any kind of strike. Of course Jacqui Dean is the economic wizard of the Opposition who famously during the election campaign said: “We won’t be borrowing because we’ll be getting the money from overseas.” That was her answer for fiscal policy. 
And so it goes on. Even Mr Key and Dr Brash are now arguing that they can fund tax cuts by borrowing from Belgian dentists and Japanese housewives. In an interview only a few days ago Mr Key said he would want debt to be $8 billion higher than under the Labour Government. That is not surprising because if one borrows and borrows and feeds that back into demand then interest rates will go up. Why should Mr Key worry about interest rates going up? It is because he has a mortgage only in order to qualify for a parliamentary accommodation allowance. Other people in the community have mortgages to buy a house. Mr Key has rearranged his $50 million to make sure he qualifies for a parliamentary accommodation allowance in the same way as he has rearranged his Sydney house so it does not show up on his parliamentary declaration in terms of his assets. 
John Key 
: I don’t own a house in Sydney. 
Hon Dr MICHAEL CULLEN 
: No he does not any longer. This is the man— 
John Key 
: I raise a point of order Madam Speaker. The Minister of Finance in his outlandish claims said that I own a house in Sydney. I do not and I never have. I ask him to withdraw and apologise. 
Hon Dr MICHAEL CULLEN 
: I withdraw and apologise. He certainly rearranged his $50 million to qualify for a Wellington accommodation allowance which is not even pocket money for that particular man. He was asked at a recent dinner what his first thought was in the morning. What do members think he said? Do members think he said it was New Zealand? Do members think he said it was the poor? Do members think he said it was teachers? No he said that his first thought in the morning was about what happened to his Merrill Lynch shares overnight. That was his answer at a dinner party to the question of what he thinks of first in the morning. The member is nodding; he accepts that. The first thought in the morning of a man who wants to be Minister of Finance of this country is about his own wealth. It is no wonder he opposes changes to the offshore investment regime. He would probably be one of the single biggest losers in the country. 
JOHN KEY (National—Helensville) 
: 
 That was the current Minister of Finance. In the National Party we are never quite sure who the current Minister of Finance will be because frankly those members are all lining up on television and claiming their credentials. A few weeks ago Phil Goff in his caravan did so and Trevor Mallard told us in the weekend that he should be the Minister of Finance but he does not know the difference between an asset and a liability. What a remarkable interview there was with Trevor Mallard on Saturday. When he was asked a question by Lisa Owen he said that it was OK if bonds owned by Meridian Energy went down because the Government still owned the assets. I hate to tell Trevor the bad news but the Government actually owns the liabilities and they are the ones that will have to be repaid with that kind of thinking. 
I am glad Michael Cullen raised in his speech the little issue about bribes. Let us go to the major bribe that this Labour Government had in its campaign: the student loan policy. It was a very interesting policy and it was the first thing in the Budget that Michael Cullen got a clap for and that took 14 minutes—it was about 12 pages into the Budget. Why did he get a clap? Because the blowout in cost was going to be slightly less than he originally thought. That came from a man who when I asked him before Parliament adjourned at the end of the last session what the impact was on the New Zealand balance sheet and what it cost the taxpayer of New Zealand looked at me and said: “I don’t know. I’ll have to go and ask somebody.” When he came back with the answer the figure was $1.5 billion. That has been the write-off to the New Zealand balance sheet. That is what mum and dad have had to pay for and 40c of every new dollar of every loan that goes forward. 
That answer came from the man who claims he is an economic genius. It is no wonder that he is about to retire. Actually the interesting question is whether he will retire. We have it on pretty good authority on this side of the House that the only person who supports Michael Cullen is his wife because Helen Clark certainly does not. She does not talk about Budget 2006. Members opposite refer to it as “Michael’s Budget” because nobody wants to be associated with it. It was a shocker and the message that she was sending— 
Hon Clayton Cosgrove 
: I raise a point of order Madam Speaker. There is a longstanding convention in Parliament—the member may not be aware of it but I know senior members who will adhere to it—that members should not bring family members or spouses into debate. That protocol is generally adhered to by both sides and I would ask you to line the member up on that point. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I just say to the member that it is a convention that family members are not brought into debate. 
JOHN KEY 
: Then the Budget is supported only by Molly the dog. She is the only one that would be prepared to stand next to Michael Cullen and that Budget. 
What do we know about that Budget? Interestingly the first thing we know is that when members look at land transport—the only thing theoretically that came out of the Budget—they will see that of the $1.2 billion $800 million alone went to fix up the hole that was there previously for inflation. There was nothing new about roads and nothing that will fix Auckland’s motorway network in a hurry. That was the centrepiece of this Budget and there was nothing there. 
Something else was very interesting about the Budget. We went into the process telling the Government that it was wasting a lot of money. We did not ask the Government to believe our point of view; we asked it to look at the briefing to the incoming Minister which stated the following about the rationale of spending in New Zealand: “There is little information to indicate that New Zealanders are getting more services and better results from the public sector for the large increase in resources provided. What little information exists is not encouraging.” Why did Treasury write that? Because it had taken a look at the annual bill for the State sector—the core State sector. It found that there had been a 27 percent increase in the State sector and that the wages bill in the last 5 years has doubled—it has gone from $2 billion to $4 billion. Last week Michael Cullen had the audacity to tell working New Zealanders not to ask for a pay rise because he had put so much pressure on the system with his own spending and hiring that they could not have a pay rise. The message to the workers of New Zealand is that the Government does not care about them any more; it just cares about bloating the bureaucracy hiring more people and having them there. 
Chris Tremain 
: And rents in Wellington. 
JOHN KEY 
: Let us have a look at that. This is a Government that now has itself in the position where over 50 percent of all commercial real estate in Wellington is leased by the Crown—one in two buildings in Wellington. I see that Jill Pettis is nodding. Is that meant to be a good thing? 
What was very interesting about the election campaign was the myths that came from the Labour Government. One of the things that came out concerned its borrowing programme. Michael Cullen went on about some nonsense about $8 billion. We have done some calculations about the borrowing programme. This Labour Government as a result of its student loan policy as a result of its Working for Families package and as a result of the things it has done is now in the position where it is borrowing more money than National would have borrowed had it come into office. That is the situation. [ 
Interruption 
] That is absolutely right; it is borrowing $8.7 billion. Parekura does not believe that but he should believe that he has been done over. I will tell him why. The Minister of Finance sat with me on TV during the election campaign and when we talked about saving money in the State sector he said: “Cuts cuts cuts—there’ll be no room.” I say to Parekura that interestingly enough when I picked up the Budget last time what did I find were the two areas that had had money hammered out of them—completely cut—with no explanation or rationale? There was $25 million cut from Te Puni Kokiri and $65 million cut from the Ministry of Economic Development with not one moment of explanation. Those were the cuts that came out. What is not in this supplementary estimates debate is the simple question around tax cuts. Where were the tax cuts? That was the question that was asked and that was the reason why this Budget sank faster than the  
Titanic 
. 
 What is very interesting is the most recent report from Macquarie Economics which came out just a couple of days ago. It shows that of all the OECD countries the only country now running a larger surplus than New Zealand is Norway. There is a reason for that. Norway has a hell of a lot of oil and it is running a surplus of 18 percent of GDP. We are the country with the next largest surplus according to the OECD. [ 
Interruption 
] That is right I say to Jill Pettis. So when Michael Cullen is next asked by Guyon Espiner on Television One about this issue and he says: “Oh $8.5 billion tax cuts—so?” I will tell him that the “so?” question arises because he is running a larger surplus than any OECD country other than Norway and by the way he has been taxing people so much over the last 10 years that they have not had a tax cut for 10 years. 
There is also another interesting little graph produced in this document. This Labour Government goes on and on about how much it has done but quite interestingly this graph shows—and members opposite might be interested to look at this—that during National’s period in Government from 1995 to 1999 revenues did not increase at all. That is right; that was the situation. Taxes did not go up at all because the National Government was cutting taxes. But in the last 5 years there has been a 45 percent increase in revenue. In Australia the number of people on the top personal tax rate has gone from 30 percent to 2 percent. 
Does anyone have any idea of what has happened in New Zealand in that time? Oh that is right the Government said that the top rate would affect only the elite rich those earning $60000 who used to make up 5 percent of taxpayers. That figure has now gone to 11 percent. That is the answer—11 percent of people in New Zealand now pay the top personal tax rate. So that is an interesting question. 
I say to Dr Cullen that the “so?” question arises because New Zealanders are working hard and they deserve to keep what they earn. We have a Government that is overtaxing people and according to the briefing made to the incoming Minister it is wasting every dollar of it. It is no wonder that members opposite do not want to be anywhere near that Budget. It is no wonder that Trevor Mallard is putting up his hand. It is no wonder that David Cunliffe wants to be the Minister of Finance and no wonder that Phil Goff does—and actually Clayton Cosgrove has a sort of sly little smile on his face. They are all eyeing up the chance to become Minister of Finance. They know that when Helen Clark tells a member of the press gallery who works for the  
Listener 
 that although Michael Cullen has been Minister of Finance for years she does not know whether he will read the next Budget those members know it is code for: “Michael you have read two. The last two have been shockers. We are behind National in the polls. We will not take another Budget without a tax cut.” It is no wonder that Michael Cullen is the only one who backs that Budget; I would not go within a hundred feet of it. 
Hon CLAYTON COSGROVE (Associate Minister of Finance) 
: 
 For the uninitiated out in the real world that was John Key who currently sits beside Bill English. As we know they are both auditioning. That was audition No. 1 for the leader’s job and I bet we also have a speech from Bill English which will be audition No. 2. I am told that the only reason Don Brash is still sitting in the leader’s seat and Gerry Brownlee is sitting in the deputy’s seat today—or maybe Mr Brownlee is sitting in both seats; I do not know—is that no one in the caucus neither John Key nor Bill English can get a majority. Neither of them can get there and the caucus cannot make up its mind. 
After listening to that speech I have to say that the “$50 million man” who talks about what the message for workers is is no further ahead. Dr Cullen said something very profound in that speech and John Key agreed with him. The first thing the pretender to the throne of the National Party leadership and the man who would one day be Minister of Finance thinks about is not the people of New Zealand or the message to the workers whom he talked about in that speech—oh no! It is numero uno. It is he who is No. 1. It is him and his personal wealth. 
What he did in that speech was try to ridicule a number of people who if Dr Cullen were to be hit by a bus—which ain’t going to happen—could take his place stand in for him and do a very credible job. I have two messages for Mr Key. The first message is that Dr Cullen is not going anywhere. The second message I have is could he stand up and say whether if National were ever returned to Government—heaven forbid—he could name two people on his side of the Chamber who could replace members on that front bench if they were to be hit by the proverbial bus. The answer is no because those members are hollowed out they are bereft of talent and also because people like Dr Lockwood Smith who is yesterday’s man did his time in Cabinet and still has not got over being bumped back to the second row. 
I say that the message to the workers of New Zealand today is that this Government is delivering and members opposite cannot get over it. This Government is delivering to 350000 working families today. That is three out of every four families in this nation. They are not the greedies whom John Key represents but 350000 families—three out of every four families—who are receiving on average $88 a week of their money back. The difference is quite clear. Three out of four families—hold this thought—are receiving $88 on average a week. Then we have the Opposition’s prescription for growing the economy. It is simply this: John Key adds to the $50 million he already has by $91 a week. That is called a Brash tax cut. Under National most other Kiwis including those 350000 working families would receive on average about $10 a week. So that is the stark contrast. There are 350000 families out there who can add up who are smart and who understand economics because they go to the grocer’s shop every week and balance their money and who are receiving on average $88 a week. 
But of course I am sure John Key could spend his extra $91 if Don got into power. He is good at spending; I am sure he could spend it. I am sure he could add to the $50 million he already has. He would wake up even happier in the morning knowing as he thought about his personal wealth that Don had given him in an across-the-board tax cut another $91 to go out and buy a few more bottles of pinot gris. That is the difference between the parties that is what an election was fought on and that is what New Zealanders know. 
I say we should look at Labour’s achievements. Dr Cullen outlined them. It is a fact that 313000 new jobs have been created. Apprentices have been brought back—and I know that every time I say that Dr Lockwood Smith grins. He is the man who destroyed apprenticeships and who pulled the rug out from under every young person in New Zealand when he got rid of the Apprenticeship Act. He always says that yes he did it. He is always proud of having done that. Well I am proud of the fact that we have backed young people and we are bringing up the number of apprenticeships—from 9000 on the go now to 14000 by 2008. We campaigned on that at every election. We campaigned on that issue in 1999. It was one of the most popular policies—and Dr Smith’s only legacy was to not train a young person or not provide any assistance to a young person. That is why we still have a training gap today. We have some of the lowest unemployment in the Western World. 
Dr the Hon Lockwood Smith 
: He’s telling lies. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member knows that that is not a parliamentary term. He will withdraw and apologise. 
Dr the Hon Lockwood Smith 
: I withdraw and apologise. I raise a point of order Madam Speaker. I know that this place is pretty lax about what people can say in it but blatant untruths are actually outside the Standing Orders and history will show— 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member has been here long enough to know that that is a point for debate. 
Dr the Hon Lockwood Smith 
: But Madam Assistant Speaker— 
The ASSISTANT SPEAKER (Ann Hartley) 
: No I have ruled on the issue. 
Hon CLAYTON COSGROVE 
: The truth is he cannot hack it. The truth is he cannot handle history. History will judge him. It is a fact that National abolished the Apprenticeship Act. That member cannot handle the history. That may be his legacy. That may be what he tells his grand-kids—that his greatest accomplishment in this Parliament was to do away with and destroy apprenticeships. Well he did it and that is a fact. 
John Key had the audacity to stand up and talk about borrowing. Well let us look at the National Party prescription for growth which is that we borrow excessively. In fact John Key who talked about our programme stated on 16 June in a  
Scoop 
 transcript with regard to borrowing: “We did some calculations prior to the election. You may remember we originally had said we thought over the first term or over the period of the first term of the National Government”—and this bit is a cracker—“we were likely to borrow $3 billion more than the current projections had been for a Labour Government.” 
 So he was going to use the old “think big” mentality and give a big tax cut of $9 billion or $10 billion—the rich would get more; the poor would get sold out. And how would that have been funded? It would have been funded in three ways: borrow and hope; slash social spending and anything else he could have got his hands on—because of course it would not affect Mr Key; and then sell assets. He was going to borrow $3 billion and even today some of his colleagues are still going around the country trying to deny that. 
I have to say that the election was good. Do members know why? It reinforced my view that Kiwis are smart and fair-minded. They saw through that mentality. They know that if money is given away and revenue goes down then spending has to be contracted and cut. That is how a household works. Kiwis know that if spending is put on the American Express card as Mr Key wanted to—to the tune of $3 billion—the economy will be crippled. I ask whether National could have delivered to 350000 families after it had cleaned out the cupboard of money. No it could not have; that is a fact. Mr Key will never be able to resile from the fact that he wanted to engage in what bluntly was good old-fashioned Muldoonism—borrow and hope. That is what he said he would do. Then he tried to dress it up by saying National would borrow for infrastructure after it had given a tax cut. 
Well the sad thing for Mr Key is that that simply does not add up. Those people in the National Party have no credibility. The last time they were in Government—and we ought to remember it—they were the ones who produced the “mother of all Budgets” and old “Colgate-man” Dr the Hon Lockwood Smith is grinning away. He was one of the ones who produced that Budget. He and his Government cut the pension three times and since then we have had an election campaign where Dr Brash mused about whether he would lift the age of eligibility for the pension to 70. He mused about the fact that if a person were 50 today that person would not get a pension under him. I believed him. I believe him to this day that that is the hidden agenda. How do I judge that? I base my judgment on the history of those people in National cutting the pension three times—again pulling out the rug from another sector in our community. 
That party broke all its promises and made massive welfare cuts in the 1990s. What happened to the economy? It imploded. What did National do in terms of infrastructure? If we look at roading—and National has not denied this—we see that Maurice Williamson went into an election saying basically that National wanted to sell roads. Why would National want to do that? Well any responsibility for infrastructural development that that Government would have as the Crown would therefore be abrogated and those members would be able to raise up their hands and say: “Not our fault if the roads aren’t getting fixed. We sold them; we got rid of them.” That is how they would fund their tax cuts and their social programme. 
I say to National that as Bill English and John Key go down to the wire like a couple of—I was going to say thoroughbreds—donkeys ready to audition for the jobs of Don Brash and Gerry Brownlee we are prepared and we are ready to go. We will remind people not only of the legacy of Bill English in Government but of the legacy of John Key in Opposition—the promises made the broken promises and the bizarre things that were said. We will also remind people that he was going to be a younger version of Rob Muldoon and borrow and hope. 
R DOUG WOOLERTON (NZ First) 
: 
 I just want to correct my colleague Clayton Cosgrove. It is true that in the dark of the National Party there is a contest for a leader. Having been there myself many years ago I understand about these things. The point the member is not correct on is that National members are unsure of their numbers for that challenge. They do know. Each one of them actually has the numbers. The thing is that they do not trust their colleagues because in the very recent past each and every one of them has been done over by his or her colleagues. So each of them is doing the numbers but each of them is so unsure the numbers are correct that no one wants to move. Be that as it may— 
Hon David Carter 
: Who is this guy? 
R DOUG WOOLERTON 
: And the person who is interjecting the guy from down south somewhere had in his day aspirations of being the leader too. 
Hon Clayton Cosgrove 
: Yes he did. 
R DOUG WOOLERTON 
: He did. I know that it is hard to believe but people close to the man—I cannot say who—told me that. However he no longer harbours such dreams. He is having to face reality and the fact that other people are superseding him in the hierarchy of the National Party. So if Don Brash goes that member is in trouble. 
Hon Clayton Cosgrove 
: Do you reckon he’s history? 
R DOUG WOOLERTON 
: Oh I am sure of it but the member can check it out for himself. The real concerns New Zealand First has about the economy were put out there by us during the election campaign. But because the fight was between those who wanted to deliver services in the case of Labour versus those who wanted to make tax cuts in the case of National that took precedence and New Zealand First had trouble getting its message through. 
As people have heard here this afternoon both parties are throwing accusations at the other. The problem is that nobody is actually looking at the real concerns relating to the New Zealand economy. They include excessive consumption excessive importing and a lack of exporting. I myself believe that that has been recognised by putting Jim Anderton in charge of agriculture forestry and fishing. He has said right upfront that although he knows very little about any of those areas he does know about motivation and his job will be to ask the productive sectors of the economy for one more turn at the pump. I know that my friends in Federated Farmers also believe that Jim Anderton was put there to say: “Look ladies and gentlemen can you please give us more exports?” 
New Zealand First believes that is the right way to go. We have had deep concerns about the amount of consumption that has been going on in the last few years but that having happened we believe it is essential that we now get back and support our exporters—to the degree that New Zealand First has insisted that 2007 be an export year and that the Government put emphasis on making exporters important again. 
Although that toing and froing is going on between the two major parties over what is happening and what has been promised New Zealand First has to come down on the side of Dr Cullen in carefully harbouring an $8 billion or so surplus. We know that if the economy heads south—if it weakens—that surplus will disappear in a heartbeat. We applaud him for hanging on to that surplus in the face of National’s calls to give it away in tax cuts. It is all very well to say—and we have all heard the line—that it is the people’s money and that we should not be taking it off them. Mr Key was going on about that; it was the main point of his address in this debate. But unfortunately history tells us that both in this country and—dare I say it—in America when tax cuts are given across the board they do not go to productive enterprise. That is the history. It is not me saying it and it is not New Zealand First saying it; it is what has happened traditionally in this country and it is what is happening in the United States of America at this point in time. If tax cuts are given across the board people will go out and spend more. I will not go into the detail of that but it is certainly what has happened. 
So in the situation we face now where we are having to do something about a $14 billion export deficit we will have to encourage exporters while being careful about what we import. That situation is certainly not going to be helped by one of the two major parties promising tax cuts across the board. I just hope that that party will not put so much pressure on the Government that Dr Cullen will be forced into a position of having to promise those things as we approach the next election. 
 We believe that the economy is not as robust as we are being told it is—we certainly agree with National on that front. We believe there is a downturn coming. We believe there is a sense of unreasoned optimism shall we say. We believe that internationally sharemarkets are showing signs of nervousness. We believe that New Zealand in total should put aside its differences between the parties and we believe we should be very very careful about how we go in the next few years because we do not believe we are in a position to give away anything in the way of tax cuts or anything that encourages consumption in order to get votes at the next election. 
We are scared that if those things were to happen we could get a 1987 situation. I am a positive person; I am not one to run around the country preaching doom and gloom and I am not suggesting that that will happen. But if we look at the fact that a couple of financial lending institutions have collapsed just recently—and I know the reasons for that—and if we look at what is happening in the financial markets then we would have to say it is a time for caution. It is not time for the gung-ho type of behaviour we are seeing from the National Party and with due respect from the Labour Party. It is time for this country to hunker down recognise that we have a debt recognise that the debt has to be paid and do something about it. New Zealand First for its part is saying that encouraging the Government to make 2007 an export year and to put our resources into that is the way to go. 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 It is becoming just a little bit clearer every day that along with waste instability is becoming part of the way this Government does business. We have only to see the charade that has been played out in the last few weeks by Trevor Mallard over his aspirations to the role of Minister of Finance to understand what is happening in the Labour Government. Helen Clark has now essentially left Wellington and she sees herself as campaigning full time for a fourth term. We know that her mind is on the big picture when her office instructs organisations that organise events to which she goes to make sure of two things: firstly that the National Party has no official role in the public function and secondly that the Labour candidate for that electorate must be on the platform. She did this in Lawrence in my electorate. I found out because the organisers rang me to find out who the failed Labour candidate was and none of us could remember. I do not yet know whether that person found his or her way to the platform. 
That is the petty level to which the Prime Minister of New Zealand is now descending. She is going around the country and handing out large cheques with $1 million written on them and is making sure that the local National MP who in most cases worked very hard for the project is not allowed on the platform and the failed Labour candidate is. Helen Clark does not want to be in Wellington because what is going on here is much more important to the country and it has now slipped out of her control—the battle for succession of the Minister of Finance’s job. Helen Clark has effectively given Phil Goff and Trevor Mallard permission to go into battle. She has done that by doing what she does with such masterly effect—nothing. When Dr Cullen’s Budget fell flat and the public decided that he was getting far too much of the surplus and they were not getting enough Helen Clark did not lift one finger to defend him. In fact if one was not a New Zealand voter one would not have known after the Budget that Helen Clark was the Prime Minister of New Zealand. One would have thought it was Michael Cullen. She had nothing to say. She has taken no position on whether there should have been tax cuts. She left Dr Cullen to it and that gave permission to Trevor Mallard and Phil Goff. Well what a battle that will be. Trevor Mallard will be much better at fighting his way to get the job than he ever will be at doing the job. Phil Goff as my colleague Tony Ryall has said is sitting in his caravan in Mount Roskill and waiting waiting waiting. 
When the members on the Government front bench are starting to talk openly about their ambitions and when the Prime Minister has lost control of those headstrong individuals we then know that the Government is headed for a period of trouble. In its third term that period will extend to the election it will lose. The signs are all there. It does not matter how much Dr Cullen protests about journalists or about his colleagues as I am sure he did when Trevor Mallard lost his grip on the difference between assets and liabilities. Trevor Mallard is the man who wants to be in charge of—what is the size of the New Zealand Government’s balance sheet? He does not know which side anything should be on. Actually that does not surprise me in Trevor Mallard’s case. I do not know why everyone else is surprised—we have always known that. 
The problem with Dr Cullen is that the public has stopped believing him. He has kept shifting the fiscal goalposts. He started out with the operating balance as his fiscal target and that got too big so he changed it to the operating balance excluding revaluations and accounting changes which is a variation of the operating balance and that got too big to justify not giving tax cuts. So he reverted to the 1950s and started talking about cash flow. Then that got too big to justify not giving tax cuts. Worst of all for him the public has simply stopped believing what he says. There is a wisdom in the crowd because they know that a cash flow measure is simply the wrong measure. It is not a measure of the financial state of the Government or its ability to give tax cuts; it is a measure of how much capital spending Dr Cullen has been able to finance out of current revenue—of how many houses he has been able to buy with his annual income. Actually because his annual income has been growing pretty fast he has been able to buy quite a few houses. So the public has just simply stopped believing him and that is a good thing. 
We have had 6 or 7 years when Dr Cullen has spent most of his effort trying to prove that he is more fiscally conservative than Arnold Nordmeyer and Walter Nash. That might be his little personal problem but this country does not have a problem with debt—it has a problem with growth. It is the prospect for getting our growth up that is the worry—and that he is doing nothing about—not the problem of getting our debt down which has been substantially dealt with. 
So Mr Goff and Mr Mallard are on the go and we have heard the code for it. Who heard Clayton Cosgrove talk about what would happen if Dr Cullen was hit by a bus? Any caucus knows that that is the tripwire. If someone was hit by a bus who would the caucus support? If someone was hit by a bus who would look better on TV? If someone was hit by a bus who would the public warm to? So the bus conversations have started. In Labour leadership conversations are barbeque conversations led by Phil Goff but this is a bus that Phil Goff thinks he is already on. 
Anne Tolley 
: He’s sitting in it. 
Hon BILL ENGLISH 
: He is sitting in the bus. If Michael Cullen is hit by Phil Goff’s bus I can tell members who will get the job and it will not be Mr Mallard—nor should it be because he simply lacks the credibility. 
Hon David Carter 
: He can’t read a balance sheet. 
Hon BILL ENGLISH 
: He cannot read a balance sheet but more seriously than that he just lacks the credibility. A person cannot go round in politics for a decade making the kinds of wild allegations that this man makes and making a fool of himself and his party and be regarded as a prospect for the Minister of Finance which is a job whereby credibility is everything. It is not just one of the important things—it is everything. So count Trevor Mallard out and Phil Goff in. Then there are the ones racing for the Associate Minister jobs—all the rising stars! Is that not a disease in the Labour Party. [ 
Interruption 
] Fortunately the member for Otaki almost lost his seat so he has lost his “rising star” tag. I say to him that that is a good thing because we forget that one rising star was David Benson-Pope. Look what happened to him. The next one was David Parker. Look what happened to him. 
Anne Tolley 
: Russell Fairbrother. 
Hon BILL ENGLISH 
: Look what happened to him. The next one was David Cunliffe who rings up companies—Crown Law actually—in the middle of question time to ask a company to do him a political favour when he is making a multimillion dollar decision about that company. 
Hon Trevor Mallard 
: That is absolutely not true and that member knows it. 
Hon BILL ENGLISH 
: It is true. It is in the answers to the parliamentary questions. 
Hon Trevor Mallard 
: He knows that’s absolutely untrue. 
Hon BILL ENGLISH 
: No no. It is in the answers to the parliamentary questions and that is why that man cannot be Minister of Finance. The answers to the parliamentary questions from David Cunliffe say that he rang Crown Law in the middle of question time to get the letter. 
Hon Trevor Mallard 
: No not that “he” did. 
Hon BILL ENGLISH 
: Well that is what it says. The problem now for Labour is that it increasingly has to live with the consequences of its own decisions. 
The doctors’ strike is the consequence of a period when Annette King gave everyone in health everything they wanted. Everyone in health knows that they made an agreement with the junior doctors last time that was ridiculous because the Minister said they should do it. Now someone has to unwind it. What is happening? Thousands of New Zealanders are being inconvenienced and there is no solution in sight. 
The same sort of thing is happening in education where the Government has spent and spent. As Mr Mallard has said himself spending on schools has gone up 50 percent since 1998 yet schools feel under more pressure than ever. Steve Maharey is giving them an operations grant review to try to string it out for a couple of years to try to make a promise before the election. The Government is now living with the consequences of its own mistakes not ours and will pay for it. 
Hon TREVOR MALLARD (Associate Minister of Finance) 
: 
 The time for that member’s speech has expired and whereas he was quite close to becoming National’s leader about 3 months ago as time goes on his leadership ambitions will slowly evaporate. That is true also for John Key. National has reached a gridlock. Bill English John Key Simon Power Gerry Brownlee and Don Brash are all holding 20 percent plus or minus a bit in terms of their support. National knows that Don Brash cannot do the job but that it cannot change its leader until it gets a majority for someone else. National cannot do that now so Bill English is propping up Don Brash John Key is now propping up Don Brash Simon Power is now propping up Don Brash and Gerry Brownlee is now propping up Don Brash. 
The problem with the arguments the previous speaker expounded is that he tried to play both sides of the street. When one is having an economic debate one just cannot do that. That is the member whose leader in a taxpayer-funded postcard—and I underline “taxpayer-funded” so that everyone knows the taxpayer paid for those postcards although about 3 or 4 weeks ago the National Party said it would never do anything like that—that we all got through the letterbox last week paid for by deliverers and paid for by the taxpayer committed the National Party to $2.2 billion a year worth of tax cuts. What did the previous speaker say today? He confirmed— 
Hon Bill English 
: Show us where it says $2.2 billion. 
Hon TREVOR MALLARD 
: $2.2 billion. I am not saying the member said it. I am saying that the person who represents him sent out a postcard that confirmed the National Party’s intention as at the last election to give out $2.2 billion worth of tax cuts. But what did that member do? Today he started to list out the further spending that he wants. Is he consistent? Is he responsible? Did he learn anything while he was understudying Bill Birch? No he learnt almost nothing. 
One thing Bill English did not learn was Bill Birch’s approach to State-owned enterprise board chairs which was that the first question he asked a board chair was how much that person had given to the party at the last election. What an outrageous approach that was! It is not the approach that this Government takes. We also do not take the approach— 
Hon Bill English 
: That is the Labour Party. Ha ha! 
Hon TREVOR MALLARD 
: I wonder whether Bill English has the spine to go outside the House and say that Jim Bolger donates money to the Labour Party that Paul East donates—well he might now; he has become more sensible. But would he say that Paul East a former Attorney-General donates money to the Labour Party? I would like him to run through the board chairs and other State-owned enterprise members and find people other than Mike Williams and possibly Stan Rodger who make donations to the Labour Party. I think he would have quite a lot of trouble in doing so. We believe in appointing competent people to boards just as we believe in appointing competent people in the House unlike the National Party which goes for the “Flash Harry’s” like John Key. National is now discovering it has a bit of a problem with him and I think the problem will become more obvious as time goes on. 
The National Party also goes for losers like Bill English. He lost worse than any National Party leader has ever lost before. But the trouble is that he is probably the best that National has. National has a terrible leadership dilemma. It has the old fellow who everyone knows cannot win and the person who thinks of himself as a Holyoake or a John Howard: someone who loses really really badly but then comes back and has quite a long reign— 
Darren Hughes 
: Like Dr Hewson. 
Hon TREVOR MALLARD 
: Bill English has certainly been flashing around the place the figures on Howard and Holyoake and the fact that he thinks it is time for history to repeat itself. 
Hon Bill English 
: I have not. 
Hon TREVOR MALLARD 
: He says he has not done that this week. Well I am sorry but it is early in the week; it is only Tuesday. I will give the member a chance to do it a bit more at some stage in the future. 
But I say to Bill English that when he is the leader he will have to get some control over the rest of his caucus. The National Party has someone called Borrows or “Burrow” as an MP apparently in Wanganui. He says there are not enough ambulances. 
Darren Hughes 
: Borrows. 
Hon TREVOR MALLARD 
: Mr Borrows from Wanganui a National Party member apparently says National wants to give more money to the ambulance services. Then there is someone called Jo “Godhew”—or is it Goodhew? Some of these people I have never heard of. 
Darren Hughes 
: Goodhew. 
Hon TREVOR MALLARD 
: There is one called Jo Goodhew who wants a massive increase in pay for home carers. I tell her that so do I but I think we have to get things in line as to their affordability. Just writing out cheques in the way she is proposing will not work. 
Here is one National member I have heard of: Gerry Brownlee and he wants more money for the Waitangi Tribunal and for Treaty settlements. He says it is not enough. I have also heard of this one: Maurice Williamson. He said today that the roading funding the extra $685 million announced as part of the Budget was not enough. There is another one: Jacqui Dean. Is she an MP? 
Darren Hughes 
: Yes she is an MP. 
Hon TREVOR MALLARD 
: Jacqui Dean is not from around here; I presume she is from out of town somewhere. She wants an enormous— 
Anne Tolley 
: She won her seat. 
Hon TREVOR MALLARD 
: She won her seat. That is something that is very special; it something that Don Brash has never done in his life regardless of all the attempts he has made. Anne Tolley was a member here once before and I think in the interim was appointed as a political crony to something or other. 
Anne Tolley 
: No I was not. 
Hon TREVOR MALLARD 
: I am sure she was—a political hack. In her case “hack” would be a good description. She was appointed to something I am sure. Then we have Tony Ryall—and I compliment him on his recent developments—who says that a whole pile more money is needed for health. Bill English says a whole pile more money is needed for education and I would love to do that. I have the somewhat sad job of doing work on expenditure control. I have to work with my colleagues who have lots of very very good ideas and I have to tell them I am sorry but we cannot afford them this year because we have Budget parameters and we are going to stick within them—and we do that. 
Darren Hughes 
: Year after year. 
Hon TREVOR MALLARD 
: Year after year for some particular projects—too often my own. Bill English wants to spend much more money on education. 
John Key is sort of like a day of the future past really. He was seen by many of us to have some real potential. He could have been a star then he opened himself up to the media and to the world. As a result of that people saw right through him. It is actually quite sad that someone who made so much money by playing the markets and pushing our dollar around and who is personally very very well off is as shallow as a bird bath. As soon as the light went on John Key as Lockwood Smith knows he was shown not to have the life experience or the political experience to do a job like that. So what is John Key doing? In order to try to boost his own numbers in caucus he is running around some of his old mates in the financial sector trying to get them to come into Parliament and be the bright young stars in order to give him the numbers. 
National is really a pretty sad party. It was once the grand old National Party. I know that it will have to do a bit of turnover especially off the current front bench but I hope it can recover. There are one or two bright ones further back. There is John Hayes from Wellington Central who appears to have some potential. I forget the name of the other one. I am certain that over a period of time the National members can renew themselves and do much better than they are doing. 
METIRIA TUREI (Green) 
: 
 I want to refer to the supplementary estimate on Vote Climate Change and Energy Efficiency. 
Dr the Hon Lockwood Smith 
: That will be a change. 
METIRIA TUREI 
: That is right it is so topical. I know that the House is fascinated by such issues because they are some of the most serious issues this country will face. It is very important that if we are going to future-proof our country and make sure we have a sustainable economy that will last many generations into the future we do take these issues seriously and develop policy to deal with them. So let us just have a little look at what is happening with Vote Climate Change and Energy Efficiency. 
There is an increase in Vote Climate Change and Energy Efficiency in the supplementary estimates of $112 million. Of that $111 million relates to other expenses to be incurred by the Crown Kyoto Protocol forecast liability. The forecast liability in June 2005 for the Kyoto Protocol was around $310 million. It has now increased to $627 million for two reasons. One is the reforecast of deforestation in this country which reduces the credits available to New Zealand from forest sinks because we keep on cutting down our forests; and secondly the decision not to proceed with the carbon charge which means that our projected greenhouse emissions are set to rise by 13 million tonnes a year. 
It is absolutely clear despite some naysayer scientists—and only a very few of them—that levels of carbon dioxide worldwide are increasing. The recent predictions are that levels of carbon dioxide in the atmosphere are now higher than they have been for 650000 years. That is a horrible and shocking figure for people to hear and people sometimes do not quite understand why that is so important and feel that perhaps it is excessive but it is not. It is scientifically recognised as being the current understanding of carbon dioxide levels and we must take it very seriously because we are seeing effects—unprecedented ice melt at the polar caps; the acidification of our oceans; the slowing down of the Gulf Stream which if it gets too bad could significantly decrease the temperature of northern Europe; the thawing of the tundra which is leading to the extinction of species; and freak storms droughts and floods. We need only to look at our own country at the moment; parts of our country are still without power because of such freak storms. That is actually happening to our own people in our own land right now. 
This Government has no new plans to address these issues since it abandoned the carbon charge. Recently at the climate change conference Simon Upton said that the carbon charge was the simplest most effective and fairest way of putting a price signal on carbon to encourage a change in behaviour. What is most surprising is that National members could oppose this mechanism. They are committed to market tools. They advocate for the management of scarce resources like water by the use of market tools yet when a market tool is used for carbon—one of the most serious issues facing this planet—they oppose the carbon charge. It is very unfortunate that National has such an inconsistent policy and principle approach. How can it possibly have a rational responsible environmental policy if it cannot even deal with these issues by using its own tools effectively? 
The carbon charge sets the price for carbon across the whole economy and it makes energy efficiency and renewable energy options much more effective. It would provide real incentives to reduce the burning of fossil fuels which would increase the sustainability of our natural resources on which our economy is highly dependent—fisheries forestry and farming are highly dependent on the natural resources of this country. A carbon charge would help to stimulate market responses to the demand for energy and fuel alternatives. This would shift our economy from a dead-end extractive one that goes nowhere to a sustainable economy future-proofed against environmental and international vagaries of all kinds. This could make us world leaders in innovative sustainable technology. 
But instead of opening the door to this potential for our country—this potential sustainable future for us all—National and Labour are both responsible for the complete policy vacuum that exists in New Zealand at the moment. So New Zealand is continuing to dig up fossil fuels out of pristine fragile New Zealand ecosystems—fossil fuels that will contribute millions and millions of tonnes to the carbon dioxide in our atmosphere. We continue to spend precious transport dollars which could be used to protect against rising fuel costs not on public transport—which people actually want they actually use and they say they need—but on building more roads on which only the rich will be able to drive. 
That is not a sustainable economy. There is no future-proofing plan or policy in place to deal with the rising costs of oil and the resultant massive increases in the current account deficit—something like 9.5 percent of our GDP—or with the rising mortgage interest rates that result from the price of oil going up overseas. The Vote Climate Change and Energy Efficiency supplementary estimate—the new money that is needed—is indicative of the complete lack of planning and care that this Government and National have in making sure we can have a sustainable economy in a sustainable country that our environment is able to provide for us long into the future for our children and grandchildren and which protects our economy and our development over time. 
The Greens have a proposal called  
Turn Down the Heat 
 which we released earlier this year. It contains a wide range of policy options that could be used to help address this policy vacuum. It has been very well received by people in the know—by specialists who understand these issues—and it has been relatively well received by the Government which is great. We look to all the parties in this House to take seriously the proposals in that plan because it is the only plan on the table. We are the ones who have seriously put time energy and effort into finding out what those options are for us if we do not have a carbon charge and if we do not deal with the Kyoto Protocol. We are urging parties across the House to really consider these proposals because we can future-proof our country if these proposals are taken seriously. These are the only options on the table and they must be considered by the Government and other parties as well. 
 This country has so much potential to do amazing things for itself and for the world. The world is crying out for innovative technology sustainable ideas and ways of protecting ourselves and the planet into the future. We need to make sure the way we live is socially just so that all people have what they need to live well and have healthy lives and environmentally sound so that our planet is protected resources are available for many generations of people to use and consume and systems are in place to manage waste so that we do not continue to poison our rivers lands and seas with the dregs of what we choose not to use—with what comes from our excessive consumption. 
These options and opportunities are truly available to us. We need only the political will and forethought to think not just about ourselves or the next election but about what our children and grandchildren will truly need in the future. We strongly urge this House and the parties and MPs in it to take a future-looking view to make sure that we have a future-proofed country and a sustainable economy. 
Hon ANNETTE KING (Minister of State Services) 
: 
 I rise to speak on the Appropriation (2005/06 Supplementary Estimates) Bill. At this time a Government can set out its agenda and look at how that relates to its main priorities. Before I do so I want to refute something Bill English said. He claimed that the Prime Minister controls certain events and who gets invited to them. I absolutely refute that. It is the sort of nasty little thing some people in Opposition will say. I am just sorry that Bill English wants to be one of those nasty people. I can tell this House that Bill English was invited to an event in Lawrence recently—not controlled—and his apology was read out. He had a much more important event to go to than the one in Lawrence. He was going to a National Party conference which obviously was far more important than the Lawrence event. However he would like to make out that in fact he was not invited. He was invited and I know of many occasions to which he was invited when I was Minister of Health and to which he may or may not have turned up. 
He might like to consider that people who invite him do not take kindly to being abused when he arrives. Recently he did exactly that. At the opening of the velodrome he abused the master of ceremonies because he claimed he was not recognised properly. So before Bill English slates the Prime Minister in this House and makes up stories he should consider his own actions and what he does in his own electorate. This is not the place to be a lion; the place to be a lion is his own electorate where he should turn up to events he is invited to and make them a priority. 
Today I want to talk about two of my four portfolios. I wish to talk about Vote Transport and Vote Police and how they relate to the Government’s three main themes: economic transformation families young and old and national identity. I would like to begin with transport. As the new Minister of Transport I was particularly lucky to receive a major boost for transport in the last Budget. In fact I was very lucky in police as well with a major boost in the police budget thanks to our work with New Zealand First and our arrangement with it. 
The Budget 2006 transport package really is an investment in the future. The Government is trying to deal with past neglect. It is true that infrastructure investment is sadly lacking in New Zealand. I think it is fair to say that it is sadly lacking in the Auckland area particularly. We have to acknowledge a lack of investment in Auckland. Auckland did not get its proper share of money and investment over a decade in the 1990s and we need to ensure that Auckland catches up. Auckland is a powerhouse of our economy and an important part of New Zealand. Over a third of the people of New Zealand live there. Although the rest of New Zealand is of course important one neglects Auckland at one’s peril. So part of what the Government is doing with the transport budget is to invest in the deficit gap in transport. 
The thing about infrastructure investment is that it must be ongoing; it cannot be stop-start. One cannot put a bit of money in then stop look around and wait to see what will happen. Unfortunately we saw a lot of stopping in the 1990s and not much starting—National stopped and we started. So we have investment going into transport infrastructure. I know that many members of this House welcome that because they know that it is so important not only for their regions but also particularly for the Auckland area. An extra $1.3 billion of investment is guaranteed to go into the State highway programme to be locked in for the next 5 years. That is a major change to what has been done in transport in the past. We have usually had a 1-year Budget cycle. It is very difficult to have ongoing infrastructural development planning and strategy when one does not know what the funding will be from one year to the next. 
As this House knows the outlook around funding has been uncertain because funding is related to money that comes in from excise duty from road-user charges and so on and that fluctuates. That made it very hard to plan what roads would be built and how they would be funded in the future. In this Budget we see for the first time the funding locked in over a 5-year period to bring forward projects that were on the 10-year plans of Transit and Land Transport New Zealand—to say that those projects will be done in that 5-year period and to put the funding behind it. 
A very important part of that is that we will spend all the money that comes in from road-user charges and excise duty. Not only will we spend it all but also over the next 5 years we will invest $300 million more than what comes in from those charges. That is important. The National Party says it was committed to doing that—it was committed to moving petrol tax to fund roads over a 6-year period. That was just petrol tax. We have done that now and over the next 5 years an extra $300 million will go into funding New Zealand’s transport infrastructure. That is a very large investment—in fact it is an unprecedented level of spending on land transport. It will increase by $13.4 billion over the next 5 years to guarantee and accelerate the country’s largest-ever road-building programme. 
I have been asked why we have not spent more on passenger transport and public transport. I have to say that the answer is yes we should spend more—and we are spending more—but I remind the House that public transport never had a high profile in the 1990s. I have looked back at investment in public transport. Maybe it did not seem so important then but throughout the 1990s funding for public transport was frozen at around $40 million a year. Members need to know that the annual spending on public transport has increased by over 700 percent since 1999 from $43 million to an estimated $360 million in 2006-07. Of course I think we can do even better in public transport. As we look at our needs over the years going forward passenger transport and public transport are very important indeed. But the truth is that alongside public transport we still need the roads for the buses to travel on and so on. 
In the few minutes I have left I want to speak about the New Zealand Police. As a country we can be very proud of the New Zealand Police. If we look around the world we will see that other police forces do not necessarily have the integrity of our police. They are not necessarily as well trained and well coached as our police. I believe that the investment the Government puts in over the next 4 years will be very important indeed as we train 1000 more sworn police and 250 more non-sworn police over that period of time. 
 As I said extra police funding came out of our confidence and supply agreement with New Zealand First. The total funding for this initiative in the Budget and through to 2008 is likely to reach around $500 million. That is a huge investment into New Zealand Police. What is important is not only having the additional human resource but also how we actually use those police in helping our communities. I believe that the important thing is the engagement the police have with communities the community safety initiatives they undertake and the prevention and early intervention of our police to try to prevent the sorts of crimes we see happening in our communities. The police have a big role to play in that. 
I have seen—in my short time as Minister—some very very good projects around New Zealand where police work closely with communities. I ask members to take the example of Neighbourhood Support or Community Patrols. I opened their conference just a week ago in Rotorua. We had 300 to 400 people involved in Community Patrol—the eyes and ears of the police—scattered all around New Zealand and working very hard on behalf of but with the police. I think that sort of approach is very important as we go into the future. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 The Hon Annette King has just provided a very interesting contrast to a previous speaker. She actually talked about the Labour Government’s programme as it looks ahead. I do not agree with everything she said but at least I have to give her some credit for talking about what her Government plans to do. In contrast there was the Hon Trevor Mallard the pretender to the role of Minister of Finance. I ask members to compare those two front-bench Ministers. Trevor Mallard just made up anything when he spoke to this House half an hour ago. I came into this Parliament in 1984 the same year as Trevor Mallard. He was just a bully-boy back then—a gutter fighter—and he has not improved. If he thinks he will take over the role of Minister of Finance for this Labour Government God help this Labour Government! 
Mind you I gather his competition is Phil Goff. I followed Phil Goff as Minister of Education in 1990. The very first appointment the Ministry of Education asked me to have as Minister was with John Gill the financial controller. He contacted my office and said to my senior private secretary that he had to see me urgently. He came into my office and said: “Minister there are some things you must know.” He laid out in front of me—as the new Minister—the illegal spending that had been ordered by Phil Goff the previous Minister of Education leading up to the 1990 election. Phil Goff had spent money not appropriated by Parliament to try to buy votes for Labour which knew that it was on the skids and on the way out. 
That is the integrity of Phil Goff when it comes to financial matters. Phil Goff was illegally spending taxpayers’ money—hundreds of millions—to try to buy votes for Labour on its way out. I have never forgotten that because—as the new Minister—I had to pass legislation through Parliament to make Phil Goff’s dishonest spending legal. And Phil Goff wants a claim to the role of Minister of Finance! Mind you the guy they seek to replace Michael Cullen was Associate Minister of Finance at the time and he brought into Parliament one of the most deceitful Budgets and one of the most dishonest Budgets seen here in the last 20 years. Michael Cullen as Associate Minister of Finance brought into Parliament the 1990 Budget. It claimed a $79 million surplus— 
Hon Pete Hodgson 
: That’s right! 
Dr the Hon LOCKWOOD SMITH 
: Pete Hodgson says that is right. It was—after the books were fiddled—because the revenue included the proceeds from the sale of forestry assets that should never have been included. That was blatantly dishonest. And what is more shortly after that when the books were opened after the election that $79 million surplus proved to be a multibillion-dollar deficit. Those members were all implicated. Trevor Mallard was here Michael Cullen was partly responsible for it and Phil Goff contributed to that huge deficit blowout because he spent hundreds of millions of dollars—that had never been authorised by Parliament—to buy votes. I will never forget that because I was the Minister who had to pass the legislation to make that dishonest spending legal. 
I will talk now about this latest Budget and the supplementary estimates we are meant to debate today. This Appropriation (2005/06 Supplementary Estimates) Bill provides an extra $14.697 million to Vote Revenue for departmental output expense “information services”. That extra $14.697 million is to enable this Government to promote its Working for Families and interest-free student loan policies. This is $15 million extra on top of the $116 million that the Inland Revenue Department already has for information services to put spin on its Working for Families package. 
I am not surprised the Government has to do this because this Labour Government—with Michael Cullen Phil Goff and Trevor Mallard—claims that someone on an income of $60000 should be on the top tax rate of 39c in the dollar. They consider that people with an income of $60000 are so wealthy they should pay the top tax rate. I am not surprised they have to spend $15 million on promoting Working for Families because under this scheme a person earning $60000 and on the top tax rate who has one dependent child gets a benefit. From 1 April next year a person who is earning enough to be on the top tax rate and has one dependent child can put out his or her hand out and get a benefit and become a beneficiary under this Labour Government. What an outrage and what a shocking policy this is that people are taxed at the top tax rate and then the Government has to spend another $15 million explaining to these people that they can also get welfare. 
Working for Families needs a lot of explaining. People earning $47000 with 3 dependent children will have $10500 PAYE deducted by their employers for the year. But under Working for Families people can go cap in hand to the Government to get welfare and get every single cent of it back. People on $47000—which is above the average full-time ordinary wage in this country—and with three dependent children pay $10500 in tax and get $10500 of welfare. That is a dumb absurd policy because it costs taxpayers more to channel the money through the bureaucracy to pay it all back. 
Would it not make a bit of sense to actually cut the tax that people are paying in the first place? Instead of taxing people $10500 and asking them to come cap in hand to get it all back—and on $47000 they get every single cent of it back—I would have thought it would be better policy to tax them a bit less. It is no wonder this Government has to spend $15 million to explain this package because how will it explain it to poorer families? 
There are families trying to get off the domestic purposes benefit or the unemployment benefit who have three children and are earning at the moment $10000 of extra income. If they earn an extra $15000 a year this will take them up to $25000 of extra earned income. For poorer people at $15 an hour that is an extra 20 hours work a week; at $12 an hour for some of our lower-paid people that is an extra 25 hours’ work a week; they earn $15000 extra income in the year. Do members know how much of that the Government takes off them? Under Working for Families this wonderful wonderful package that it is spending $15 million explaining the Government will take $13306 of that $15000 from that poor family. The Government will take 89 percent of every extra dollar earned by that poor family as it earns between $10000 and $25000 of extra income to try to get off the benefit. This Labour Government which says that it cares about poor families will take 89 percent off every one of those extra dollars earned and will leave with that family $1.30 per hour for that extra work. Minimum wages—where the hell is the minimum wage when the Government takes so much tax off that extra money earned that the family is left with $1.30 an hour for every one of those extra hours worked? That family works an extra 25 hours a week and it is left with $1.30 an hour. It is little wonder New Zealanders are sick of this Government and sick of its taxation policies. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
:  
Tena tatou te Whare. I understand that amongst other things the supplementary estimates list the changes in appropriation since the Budget and often I hear those changes mean funding cuts. That means of course that when the spotlight is on the Budget Treasury can promise the earth knowing that it can make the cuts later when nobody is watching—good politics probably but hardly good leadership. 
These estimates can take into account policy shifts and reality checks and they can even be used to respond to extraordinary actions of the moment such as the tragic and preventable deaths of the twins over the weekend. As usual talkback radio has been freely accusing all and sundry over the epidemic of child abuse and murder—who did it and who is responsible for stopping it. 
Knowing that I would be speaking to this bill today I decided to have a look at the supplementary estimates for Child Youth and Family Services. What did I find? Well it would seem that the State has been so successful in putting an end to child abuse and promoting the well-being of children young people and their families that the supplementary estimates show funding has actually been cut. For example funding was withdrawn from the “Prevention Services” output because of—members should get this—“Changes in Departmental structure in response to the first principles baseline review.” whatever that means. In another output ”Family Wellbeing Services” we see a further $1.5 million slash from services to improve the life outcomes for children young people and their families through programmes to prevent future harm and abuse. 
These cuts are being made while the statistics are telling us that in the 10 years from 1990 to 2000 86 children were killed—34 Pakeha 42 Maori 2 Indian 3 Asian 3 Pacific and 2 others. The nation is reeling from the double tragedy over the weekend and we are all struggling to find the answers. An unfortunate by-product of that debate of course is the rehashing of the names of other children whose deaths have also become burnt into our souls. 
It is also inevitable that the names of Maori children who have been senselessly and sometimes brutally killed rise quickly in the public memory. New Zealanders are quick to ask what Maori are doing to stop this trail of despicable murders while somehow not being able to remember even one of the names of the many non-Maori kids killed during the same time. But I do not dodge the question about Maori deaths because as a past chairman of a kohanga reo and current chairman of a kura kaupapa Maori it is a question that is very very close to my own heart. 
There is much that is being done and I am happy to acknowledge the work being done by iwi in my own home electorate as part of a joint project known as Amokura—involving the iwi authorities of Ngapuhi Aupouri Ngati Kahu Whaingaroa Te Rarawa and Ngati Wai. They made a strong statement to encourage and promote a culture of non-violence. They have not done it by just trying to lecture people either. Last year their contribution to the Amokura project Te Runanga Whaingaroa launched a waka tete to symbolise the value of women and to recognise in a special way mana wahine mana tane and mana tangata. Although the construction of the waka was overseen by internationally renowned carver and navigator Hekenukumai Busby women were also called in to help with the carving. The waka  
Uerangi 
 projects the sense of unity between men and women and the sanctity of the children born by us all. 
Another Amokura project was the launching of a series “Step Back” concerts to promote non-violence and the production of a series of radio stings such as “Raising a hand don’t make you a man” asking people to step back and think before their rage takes over. Initiatives such as these are not just happening up north. Next week Kahungunu launches its own violence–free strategy and action plan to help its iwi reject violence because it wants its actions to be based on meaningful and productive tikanga and kaupapa rather than simply adopt Government’s family violence prevention strategy which is not kaupapa based. 
We need more of these initiatives not less. We need all citizens of Aotearoa to step back and think and to make the changes necessary to stop us from lashing out. Last summer more than 6000 kids suffered from family violence and for those 6000 last summer will be a holiday they will never forget. We must stop the blame step back and think for a bit and then step forward together with answers and resources. Yes there is much that is being done but equally yes there is much more that can be done. We challenge this Government to invest in positive action and flourishing communities rather than take money away from those who desperately need it most. Kia ora tatou. 
GORDON COPELAND (United Future) 
: 
 I am going to use the majority of my time in this debate on the supplementary estimates for 2005-06 to talk about our forecast liability under the Kyoto Protocol. Our liability period begins in 2008 and goes through to 2012. It is interesting to note that on 30 June 2005 our liability under that protocol was estimated in the Crown accounts at $310 million. In these supplementary estimates it has gone up on a forecast as at 31 March 2006 to $627 million. That is an increase of some $317 million. The report we have received on this matter is that that is still only an estimate and it could go up further by the time the Crown accounts are finalised on 30 June 2006. So this is like an interim measure. 
I am very very concerned indeed because a large part of that increase in our Kyoto Protocol forecast liability results from the fact that there has been a faster rate of deforestation than the former Minister responsible for Climate Change Issues forecast. That of course boosts New Zealand’s Kyoto obligations because in cutting forests down we actually reduce the amount of carbon capture and the number of forest sinks in our country. The converse of that is also true of course that by planting more trees and encouraging harvesters to delay harvests we indeed increase carbon capture and with that reduce our liability to the rest of the Kyoto Protocol nations. 
This represents a serious breakdown of policy of the most serious kind. Time spent by the Government on its failed “burp and fart tax” and time spent on the flawed carbon tax could have been used to strongly incentivise the planting of new forests. That should have begun 6 years ago. One of the problems with this whole area is that time is against us. We cannot recapture the last 10 years; we cannot go back now and reinvent them. So there has been a real failure over the last 6 years. We have not incentivised the planting of new forests in this country. Instead of being $700 million in deficit at this point of time I think that if action had been taken earlier over that 6-year period we could have reduced that amount and reduced it very significantly. In fact I would venture to say that we could probably have come to a break-even situation. 
It is not really rocket science. The Government needs to stop dragging the chain on getting trees planted and move into getting strongly incentivised forestation campaigns under way. We have already lost 6 years. How much more time will be allowed to drift by? Every day is important and every hour is important. Surely it is better to spend a few hundred million dollars now on tree planting rather than pay out up to $700 million a year to some overseas jurisdiction under the Kyoto Protocol. But that is where we are heading. Continued delay is a disgrace. I ask the Government to please get on with doing something about planting more trees in this country.  
The other thing I want to mention to do with the Appropriation (2005/06 Supplementary Estimates) Bill concerns the New Zealand Railways Corporation. ONTRACK is its trading name but we have gone back to using the more old-fashioned name for it now the New Zealand Railways Corporation. Another $93 million has been put aside for railways. Of course the Crown again now owns the land around and under the tracks the stations etc. I suggest to the House that the Crown has an opportunity to look at building parking buildings around railway stations in the Auckland and Wellington suburban areas. Overseas they call it park-and-ride. People would like to catch the train because of the increased price of motor fuel but all the surveys show that they still have to use their car to get from their home to the station and when they get to the station there is nowhere to park it. So I suggest to the Government that it looks positively at that issue over the next few years to see whether we can indeed build parking buildings at railway stations. The private sector will put up the money. This would be an opportunity for what we call public-private partnerships. As I said the Crown owns the land and it could lease the land to a private sector company. If we built some car-parks then a lot more people would travel on our trains as a result. 
Hon STEVE MAHAREY (Minister of Education) 
: 
 It is a pleasure to take part in this debate on the Appropriation (2005/06 Supplementary Estimates) Bill and to look at the expenditure for the Government because of course this debate takes place within the context of the broader programme that the Government has embarked on—and in fact the country has embarked on. It is I think common knowledge now that the focus of the Government is on a programme of very serious change in New Zealand. In fact we have gone so far as to use the words “transformation of New Zealand” by which we mean that we want to go from the way we were to the way we are meant to be if we are to succeed in the 21st century. 
Stated quite simply what I mean by that is that if we look at what we were we can see that most of the people in this House—not some of the people here but the majority of them—who have grown up here during the past century have lived in a country that had low skills low wages and low productivity and that was highly successful in employment. It was a highly successful society but it was a society based largely on the production of things that we did not have to do much about. We took advantage of the fact that we lived in a country with good water good air good grass good growth and a good climate and we lived as people used to say in the old days off the sheep’s back. We know today that that simply will not get us through the 21st century. We know that we must go through a period of major change. We have been going through those changes but we are not there yet. We have not yet got over the hurdles that will take us to what we need to do in the 21st century. 
What we need to do today is to become what most people would refer to as a knowledge-based economy and society. In simple terms that means we have to produce more knowledge in New Zealand—we produce about 0.01 percent of the world’s knowledge in this country at the present time—and we need to apply more knowledge. We may be able to produce a little more but we can apply a lot more because we can take the whole stock of knowledge around the world that is relevant to us and make use of it right here in this country. That is the aim of this Government. We can call it a smart society or a smart economy—whatever we want to say—but we know we need to do that. We need to focus ruthlessly on the process of making ourselves a knowledge-based economy and society. If we are to do that then we have to invest. That is really what this debate is about. It is about how to invest the money we take off New Zealanders like ourselves like the families who are working hard to get by and like the businesses. We take money off them and we invest it. 
One of the arguments we have heard so far is that an investment would be to cut taxes—to give large personal tax cuts. What would happen if that was done? Would person X in Wanganui today say to Mr Ryall or anybody else on the National Party side: “Thank you. I’m an average income earner and I know you’ve just given $250 to people who are well off like Dr Brash but as an average earner I have $10. I am sitting at my kitchen table and I want New Zealand to be a knowledge-based society and economy because my kids need to have a real future. So I will take the $10 and invest a little bit in health to make Mr Hodgson happy that he can do things about trying to resolve the issue of all New Zealanders getting access to health care when they need it. Health care is always going to be rationed. It’s a tough job but he could always use some more money so I will give him some. I will give a bit to Mr Maharey because we want to have great schools and to employ more teachers. And I will give a little bit to Mrs King so we can have a few more roads.” And the old $10 is being split up in that example in a way that just will not happen in reality—it just will not happen. 
Does any member in the House—it is packed in here at the present time I tell those listeners to this debate who are at home—think New Zealanders in the average household who have their $10-a-week tax cut would sit there and divide it up in that way? No they would not. They would spend it across the shop counter and cause inflation in our already overheating economy. So that $10 would be worth nothing in minutes because people would have pumped it into the economy for consumption. That is what would happen and then those people would come back and ask where the investment was for health education roads housing driving our economy science and everything else we need to transform the country. It is a simple choice to make. How do we invest the taxes we take? Do we invest them through individual microchoices in households where people spend their 10 bucks or do we aggregate that money so we can attack the issues that are holding back the transformation of this country? 
It is interesting that in Australia people have had exactly that debate in the business communities there. Where is the investment in the things that will transform Australia? Where is the money that underpins the research and development Australia needs in order to get smarter businesses so they can sell elaborately transformed manufactured products and earn a better living long term for Australia? Eventually Australia will have to stop digging up coal and sending it to China. It will actually have to make a living off being smart. That is what Australia argued for and that is what New Zealand argues for and that is why in this Budget we see investment in the economy in society in groups like Maori in groups that are concerned about our biosecurity and environment in infrastructure like roading and in the creativity that will drive this country to do the kinds of thing I am talking about. 
As someone who is interested in social policy issues I am pleased to see that the Government will continue to invest in the social areas of this country because it is not as many people see it the case that when we invest in areas like health or education and so on it is like having a limitless blank cheque. Those investments are made into trying to keep New Zealanders healthy so they can contribute educated so they can contribute and well housed so they can contribute. In fact we now know that if we do not develop socially there is an eventual break in what we can do economically. If we do not invest in literacy and in the kids in South Auckland who are living in homes where they are not eating properly and who are going to school without having the aspiration to stay there after they are 16 and get a qualification then they are not going to be part of the transformation of New Zealand at all. So social investment is important. 
In this Budget we have seen some wonderful social investment in the areas I am closest to such as education. We know and have argued for a long time in this country that investment in early childhood education—in the kids with the smallest shoes as they used to be called—is the best expenditure we can make of any education dollar. If we can get those kids to become socially and educationally poised to go on to the compulsory school system and really start to take advantage of what they are doing we know they will accelerate right through the education system. So we have put money into free early childhood education and playcentres. We have adjusted the funding rates for early childhood education. We have invested in the primary school sector—in new teachers in school property and in the operations fund going up by $37 per child every year. We have invested in information and communications technology so we can make sure that people have a choice wherever they may be in terms of their education. 
We have invested in the other area that helps us with what we are doing in knowledge and that is research science and technology. We are boosting commercialisation. We are investing more in our Crown research institutes. We are investing in pastoral research energy biosecurity and biodiversity. We are investing in our partnerships with scientists all around the world. We are piloting new programmes to get young people in schools interested in science so they can go on and make a career that includes science in whatever they may do. 
Anne Tolley 
: They should do more research. 
Hon STEVE MAHAREY 
: Making those kinds of investments is what we are doing with taxpayer dollars. 
Mrs Tolley may want the people of Gisborne to sit around with their $10 clip it up and decide whether to put that money into roads education and so on but she knows in her heart of hearts that that would not happen. She knows in her heart of hearts that the only reason the region she comes from is growing is that 6 years ago a Government came into power led by Labour that said it would invest again in the regions and in the things that make regions grow and every single region is growing as a result of it. It is therefore extraordinary to see after 6 years of the Government making that investment that the National Party wants to cash up those advantages and bugger off and spend the money. That is basically what it wants to do whereas for members on the Government side of the House this Budget was another investment Budget that we believe strongly in. 
I close by thanking Michael Cullen for his stewardship over the last 6 years and for another fantastic Budget. 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 If Phil Goff is in his caravan this afternoon with the transistor turned on I think he will be sitting there—having heard from Minister Maharey one of the pretenders who offers no hope for the future of New Zealand—and thinking: “I haven’t got long to wait.” The House is sitting at a time of untold industrial strife within the public health service and at a time when fewer and fewer New Zealanders are getting the services they want. Listeners would have been angry at Mr Maharey’s comment that this Government was investing in social infrastructure in this Budget. Minister Maharey should tell that to the 8-year-old girl who cannot get plastic surgery for a smile. He should tell that to the women of New Zealand who cannot get breast reconstruction following their mastectomies. He should tell that to the New Zealand women who have been told they were culled off the radiotherapy waiting list during the radiotherapists’ strike. Those women have still not been given a date for their treatment and they have heard the Minister of Health in the House today say some patients may wait 2 months to get back on to the theatre list. How do those women feel given that they need to have their treatment now? What about their social structure? What about those women who are waiting? 
What will happen to the thousands of New Zealanders who have been dumped from hospital waiting lists in the last few months? What about the 20000 New Zealanders who will be dumped from hospital waiting lists in the next financial year because of the Minister’s edict? We know that that is what New Zealanders are facing. In the Health Committee that considered the issues of the estimates in Vote Health last Wednesday Ministry of Health officials said that it was their expectation that the district health boards would cull their waiting lists down to the targets set by the elective service indicators—that is a 6-month waiting list—and officials said that that added up to around 25000 New Zealanders— 
Anne Tolley 
: Off the list. 
Hon TONY RYALL 
: Twenty-five thousand more New Zealanders will be off the list. That should be set within the following context: the Minister has admitted in this House that fewer New Zealanders received elective surgery in the last financial year than received it 5 years earlier. That is what the Minister of Health had to admit. He can stand up in this House and talk about case-weighted this and all that but when it boils down to who got an operation he had to say that fewer New Zealanders were getting elective surgery in the last financial year than they did 5 years earlier. 
Anne Tolley 
: So what happened to the money? 
Hon TONY RYALL 
: That is the issue. Four billion dollars has been spent and fewer people are getting elective surgery. The Government says that is not a problem. If it is not a problem why did Michael Cullen point this out as a major problem in the health sector and why is a team of Treasury officials working on value for money in Vote Health if the Government does not believe that this is an issue? The Government does believe it is an issue. The first person to blow the whistle on the issue of productivity was in fact the outgoing Minister of Finance. He said it was an issue and we have been looking at those figures to see what services New Zealanders have got. Even the Minister of Health was forced to stand up in the House and say fewer people got elective surgery in the last financial year as compared with 5 years earlier. 
In this forthcoming Budget year what action will we see on the workforce issues in the health sector? What indications are there that the Government values general practice—general practitioners family doctors? Members should remember that the Government is putting an awful lot more pressure on the family doctor. What does the Government say about the 20000-odd people culled off the waiting list? It says: “Go back to your general practitioner.” What did the Government say to the 17000 people who could not see their specialist or have elective surgery because of the strike? It said: “Not a problem. Go back to your general practitioner.” What does the Government say to the general practitioner workforce in New Zealand? 
Anne Tolley 
: “Do what we say.” 
Hon TONY RYALL 
: It says: “Do what we tell you to do. Set the fees according to our requirement.” But the Government has backed down on that in the last day. Minister Hodgson can chuckle but we know that that is the case. 
In respect of the general practitioner workforce so many sensible things could be done to get more family doctors. This is the Labour Government that is apparently investing in social structure. Its members should tell that to the almost 800 people on the Kapiti coast who cannot get on a general practitioner’s books. They should tell the people of Timaru that they cannot see a general practitioner—and that is investing in the social structure—and they should tell that to the people of Gisborne who it has been reported cannot get on to a general practitioner’s books. 
One might ask what the problem is if someone cannot get on to a general practitioner’s books and that that person should go to accident and medical. The problem is that if one is not registered one will not get cheaper doctors’ visits—one pays the full price. So the almost 800 people on the Kapiti coast who cannot get registered—many of them are people of low income—are facing the barrier to access that the Government identifies with high general practitioner fees. 
There is another disconnect that nothing in this Budget will do anything about. The Government is telling New Zealanders that it wants them to see their general practitioner. So it is lowering the cost of going to the doctor for some of the wealthiest people in New Zealand and is telling people to see their general practitioner. But the disconnect is that if those people see their general practitioner there is no way they will get anywhere near the hospital if they are sick. If people are sick and need to see a specialist and have elective surgery those people will find that the Government is making it harder for them to get there. 
In fact the Government will make it a lot harder because I can tell the House that the consequence of the Government’s policy to cull hospital waiting lists is that the thresholds needed to get surgery in New Zealand are going up. District health board after district health board has come before the parliamentary select committee and said the patients they are treating have to be sicker to be seen in their hospital. The people that they are dealing with have to be sicker to be treated. In fact did not the cartoonist in the  
Press 
 sum it up best with the picture of Mr Hodgson sitting at his desk as Minister of Health saying that the trouble is now that patients have to be as sick as the health system to get any care? That is the situation we are in. 
This Budget offers no hope for the parlous state of the New Zealand health service mainly because it presents no vision or coherence as to how to deal with the very fundamental issues facing the system that need to be dealt with—that is we need more elective surgery and we need to deal with the waiting lists professionally. 
One of New Zealand’s leading breast cancer surgeons Belinda Scott says that the health service has fallen to Third World standards we have the head of the Royal Australasian College of Surgeons saying that the system is a disaster and the head of plastic surgeons in New Zealand is talking about the fact that New Zealanders are missing out on the sort of care that is the basis of any other system around the world—and that party opposite calls itself a Labour Government. The problem is that those members have become completely tied up in a system that is not working they have a huge focus on bureaucracy they think that a strategy a hui and a plan— 
Anne Tolley 
: A review. 
Hon TONY RYALL 
: —or a review—will fix everything rather than taking any action. The wages and salaries of bureaucrats and managers are now over $500 million for the first time. We know that for every 2.5 nurses the Government has employed an extra manager. That is ridiculous and that is why we have a Minister of Health who is being routinely mocked by the media by the surgeons and—more important—by patients around this country. After 6 years of Annette King keeping a lid on this issue Mr Hodgson is showing himself to be as incompetent with health as he was with New Zealand’s greenhouse gas policy when he promised that the Kyoto Protocol deal was worth a $500 million cheque—and it was worth a $500 million bill. 
HEATHER ROY (Deputy Leader—ACT) 
: 
 I rise to speak to the Appropriation (2005/06 Supplementary Estimates) Bill and I want to devote my short speech to the supplementary estimates for Vote Defence Force. No doubt the Government thought it was being very generous in allocating an extra $39 million to Vote Defence Force and I expect that New Zealanders are supposed to be eternally grateful for that move as are probably the Army Navy and Air Force. But when we look at the supplementary estimates we see that most of the extra allocation although perfectly reasonable is symptomatic of the chronic underfunding of our military defence forces at present. Most of the extra money goes to various line areas in the estimates and covers changes to the capital charge and depreciation so we will see very little extra as a result of that extra spending. 
In fact at Budget time the estimates themselves referred to a multi-year appropriation which means that funding will be spread over 3 years as opposed to being year by year. The concept is a sound one and it gives some security in planning. However there are fishhooks in there and I will highlight those today. On page 333 of the estimates under the heading “Operationally Deployed Forces” is a very interesting paragraph. It is almost at the very end of the estimates and I quote from it: “It is projected that the total three-year funding appropriated for this MYA”—multi-year appropriation—“will have been expended by the end of the second year”. What is the point in having a 3-year plan when the Government has sanctioned the spending of all the money by the end of the second year? Very little I would have thought. 
The same paragraph goes on to state $24.8 million is the expected actual expenditure “as at year end 2005/06 year and $40.575 [million] being budgeted for 2006/07. This projection is based on projected commitments to operational deployments in 2006/07.” the financial year we are about to move into. Heaven help us if anything else happens and we need peacekeeping troops or whatever in the 20007-08 year because there is no money for that. What would happen is the Defence Force would have to go cap in hand to the Government yet again for extra spending. That very point was highlighted earlier in the estimates document under the heading “Comparison of Departmental Output Expenses: 2005/06 and 2006/07” where the document states: “the NZDF may request an additional appropriation from Cabinet for the incremental costs” of any major operational deployment. But that hardly gives the Defence Force any surety or ability to plan for what may be proposed or for any engagements it may have to undertake. 
One thing that I think has not been highlighted at all in the estimates is the fact that our reserve forces are undervalued. Balanced capable forces have strong reserves and we do not need to look very far overseas to see that that is absolutely true. Why do we have reserves? They are a contingency plan and they provide extras in the times of need. In fact our regular forces do rely on our Territorial Force now. Very recently we have had extra troops go to Timor and to the Solomons. The troops were deployed very quickly because of escalating tensions and our Government felt that it was right and proper that we should contribute towards peacekeeping in both of those places. 
What we are seeing because of the lack of funding is a complacency. The attitude of the Government is one of complacency. The implication is that our Government can predict every eventuality and that of course is not the case. We need to see some sort of commitment to our reserves and Regular Force troops and an avoidance of Government complacency. They should not be buried in outputs in hefty tomes and documents such as the Budget ones but we need to ring-fence some specific funding. This Government despite the fact that it can justifiably say it has increased military spending needs to go a long way further than it has gone. Our forces operate on a shoestring and it is time they were looked at seriously so that we can fulfil our obligations to the rest of the world. 
KATHERINE RICH (National) 
: 
 In tonight’s debate I will turn my mind to some of the commercial announcements the Government has made. I would like to focus on some of the recent announcements made by the Minister for State Owned Enterprises and Minister for Economic Development Trevor Mallard. When we looked at some of the budgetary documents many of us had hoped to see some kind of indication of where the big changes would be to put in place this grand plan for economic transformation. It comes with great regret to evaluate some of those plans and to talk about some of the latest announcements—in particular the new plan for State-owned enterprises. 
I think that what the Government has attempted to do is to point to some activity in the area of State-owned enterprises so it can look as if it is doing something in the area of commercial development but of course the rhetoric does not necessarily match the activity. So some of the announcements made by Minister Mallard are cause for concern because it is very clear from comments that have been made after those announcements that policy has been made on the hoof. 
In fact the nature of the announcement in the Government’s grand plan seems to change almost on a daily basis with every interview that Mr Mallard makes. In the last interview he started discussing the issue of privatisation—not privatisation of State-owned enterprises one must understand but privatisation of subsidiaries of State-owned enterprises. So how he can start to discern a difference between not selling the silver as he would put it in one area and putting the silver in another drawer and selling that I do not know. 
But what is of concern is the total lack of analysis from those officials whom many of us put faith in. Many of us rely on their views and their knowledge in a lot of areas and the rather damning comments made by various officials—albeit in diplomatic language—about some of the changes that Minister Mallard was putting forward were of concern. The Ministry of Economic Development just as one example said that it was very concerned about governance and about the ability of State-owned enterprises to undertake some of those risky expansion plans as presented by the Minister. 
That is an interesting point which was overlooked by Cabinet I think in approving those plans and it is exactly the point we have heard discussed in the House today. As a result of research done by Victoria University we have seen today that concerns are held not just by the Opposition or the Ministry of Economic Development in relation to governance; they are held also by enterprise board directors themselves who have responded to an anonymous survey in which they have told the researcher how they felt about some of the capabilities around the board table. The results of that research today is rather telling. Board directors are saying they have real concerns about the types of skills they have around the tables of State-owned enterprises and they are concerned that some of the processes around the selection of board directors are more about political selection and the rewarding of people for party activity than about having the capabilities and skills to be able to do the job. 
Minister Mallard in the House today started talking about State-owned enterprises being training grounds for new directors. That in itself is cause for concern because if someone is going to go on to a State-owned enterprise board it should be as a result of the experience that person has had in the financial community and he or she should already have demonstrated the ability to make good commercial decisions before entering into businesses that are very complex and increasingly more risky as a result of the plans that have been announced. State-owned enterprises are not simple businesses. Over the years they have become very complex businesses and very large businesses. Frankly we do not need trainees; we need people who are at the top of their game who have the ability to make good commercial decisions and who understand the financial implications of various investments. 
It is not an area where one puts people just on the basis that they have had lots of life experience as Minister Mallard said he would like to do. Life experience is great and it counts for something but when we are talking about the governance of State-owned enterprises we need to appoint board members who are able to understand facts figures and business and who have worked at a very high level. It is not good enough suddenly to use those appointments as paybacks for those who are party-friendly. If Labour has done anything it has methodically placed on those boards people who are to the boards’ detriment as we have seen in the research released today. 
The Minister wants everybody to think he knows more than the officials who advised Cabinet in making this decision. The Ministry of Economic Development expressed huge concerns; Treasury said there were associated risks with that new plan and that those risks were significant; and the Crown Company Monitoring Advisory Unit said the same. So I think that it is the height of arrogance for the Minister to override their concerns and pretend he knows more than they do when it comes to expanding the role of State-owned enterprises. 
The Minister continued to use glowing examples of successes offshore but of course overlooked the fact that those projects had already been conducted and carried out prior to that new announcement. He pointed to Southern Hydro which was a success for Meridian Energy and which generated some $600 million but that will not be the case for many other risky projects that State-owned enterprises embark on. The Minister seems to think that if State-owned enterprise projects go belly up something quite different will happen to those enterprises that does not happen to other companies that face financially dire circumstances. He seems to think that a State-owned enterprise going belly up is OK because the Government still owns the assets—the dams the windmills etc. Well I have news for Mr Mallard: creditors do not care who owns a company; creditors just want their money back at the end and they will do anything they can to get it back. So I think it showed major commercial naivety on the part of the Minister even to make a statement of that kind. 
But as we have seen in just recent announcements that Minister thinks he is the pretender to Michael Cullen’s throne. Well I would like to think that anybody who inherits that title would at least know about risk and would at least know that assets come hand in hand with annoying things called liabilities and that the Minister who takes over would at least have a basic grasp of what is required on those boards as they look at new projects. I think the Minister will be upset to hear that the business community does not share the same faith he has in his ability to have the final sign-off on many commercial projects. 
One of the things I think we need to address is the whole governance issue and when Minister Mallard says he will deliberately continue to make placements of people on that board who do not have commercial skills that is something I think all of us should be concerned about. We need to hear more from the Minister about his reconciliation between his statements in the House last week—that he was more than happy with the skills around the board table—and today’s revelation that board members themselves are frustrated by the capabilities that as a combined board they have access to as well as the statements that have been made through that research which demonstrate that the reality is quite different for those who are actually trying to do the work. 
State-owned enterprises within their present framework have always had the flexibility to get into new projects. Some chief executives of State-owned enterprises are privately saying that very little will change—that this is more about spin than actual reality—but it concerns me that the Minister will want to come up with some pet projects he can point to and herald as being successes. That is not the way I think State-owned enterprises should conduct their business and the business community is not feeling at all confident that an ex-teacher and an ex-historian have the ability to sign off what could be complex projects put forward by those enterprises in an ever-complex business arena. 
It is not good enough for the Minister to say that he knows best when in fact all his officials have said that the contrary might be correct and that there are some real concerns. Economic transformation cannot be achieved if the Government continues to ignore the big issues like tax the Resource Management Act etc. so that is why this Budget has been a real disappointment to all of us. 
Hon PAUL SWAIN (Labour—Rimutaka) 
: 
 The great opportunity of this debate is for the public to have some view of comparison between and to weigh up what the Labour-led Government is doing and the proposals put forward by National. It was a bit rich for the previous member to talk about State-owned enterprises because that is clearly where one of the differences lies between the two parties. National would go back to flogging off those enterprises but the Labour-led Government has said that no it will retain them. 
When Dr Brash made the following comment in 2003 everyone thought that it sounded a bit refreshing. He said that he did not want National to show fear of the electorate by watering down its message. The big problem of course is that unless National waters down its message it is not electable. That is the huge dilemma National has and everyone recognises that. 
On the subject of State-owned enterprises for example it is interesting to hear what Dr Brash said a few years ago back in 2003. He said there were some things he would not sell like Transpower for example but he could not quite see the logic of the Government owning a business that was operating in a very competitive environment. Did we hear much about that during the election campaign? I do not think so. Did we hear Dr Brash go out and say that National would flog off State assets again? No he did not say that. He said first of all that National would get rid of Kiwibank. Then I seem to remember National members saying they would keep it. Then they talked about flogging off Landcorp but when the pressure went on they said that oh no they would sell only one or two farms. 
So the problem National has—and the public has—is that the public does not understand what National is on about. In my view that move is quite deliberate. National does that quite deliberately because if it told the public exactly what it wants to do in relation to flogging off State assets—and I will refer to that a bit later; it was completely avoided in the speech made by the previous speaker—then it would be unelectable. So it is a case of the old “tell the people something before the election and do something else after the election” trick. I tell members that the New Zealand public have had a gutsful of that. That is why they do not trust the National Party and that is why National will not be back in Government for a very very long time. 
Let us compare National’s approach with the incredibly productive and constructive approach this Labour-led Government is taking. We have the three main themes around economic transformation around families and around building national identity. The Budget itself and the estimates build on the things that have already been done. What are the key things this time? More funding is going into transport. After many long hours of arguing by very good and capable former Ministers of Transport who have been arguing for transport issues now for many years—one is sitting next to me and another one is close by—what do we hear from the National Party? It wants to cut taxes but at the same time it does not tell people that in doing that it will have to cut money from roading. 
It goes back to the old National Party economics. Something I have never understood about the National Party is that it believes that somehow we can cut taxes—cut revenue—and spend more. I have never quite understood that. It is something the National Party has tried to kid the rest of New Zealand about but of course the fact is that people do not believe it. That is why National Party members are sitting over there and we are sitting here. 
We are unbundling the local loop and there is a whole new phase around industry training picking up on the fact that in the 1990s it was completely demolished. Bill Birch brought the apprenticeship system to its knees and we have had to completely reconstruct that. We are also doing things around student support and research science and technology and we have a whole export-led innovation programme. 
So when people weigh up what this Labour-led Government is doing they can see quite clearly that this Government is trying to take New Zealand forward. The National Party wants to take us back to the 1990s where the National Party told the public one thing in 1990 and then did completely the opposite thing through the “mother of all Budgets” in 1991. Those are the things that the public of New Zealand remember. 
The reason why the National Party does not want to come clean to the public about what its message is and what it will do is that if it did it would not be electable. That is the difference. The Labour Party does what it says and the National Party confuses people by not doing what it says. It knows that if it does do what it says it will never be back on the Government benches again—and thank God for that. 
Hon DAVID CARTER (National) 
: 
 We know that a Government is in trouble when it brings a has-been like Paul Swain down to the Chamber to make a Budget speech. The supplementary estimates debate is one of the most important debates we have in the year and along came Paul Swain. He did not manage to struggle through a 10-minute speech; all the man could manage was a 5-minute contribution. We know that the Government is in trouble. 
However to be fair to Paul Swain it was my understanding that that speaking slot was meant to be taken by the Hon Jim Anderton. That was what was determined at the Business Committee. But Mr Anderton who is part of the Progressive party—in fact he is the only part of the Progressive party—was unable to come to the Chamber to make his contribution to the supplementary estimates debate because he knows there is nothing he can say his party achieved in that Budget. Mr Anderton is also a has-been the Progressive party is a has-been and nothing in the “Bondi Budget” of 2006 can be attributed to anything that Mr Anderton and his political party have been able to achieve. 
I am delighted to take part in this debate because it is a fascinating debate in which the Government has the opportunity to defend the “Bondi Budget”. For me what has really been interesting in this debate is the fact that none of the Labour Ministers who have come to make a contribution have actually spent any time at all talking about the good things in the “Bondi Budget”. 
We had a really interesting contribution from that up-and-coming star of the Labour Party the heir apparent Minister of Finance the Hon Trevor Mallard. One would have thought after his public statements of the last few days that if he does want to be the next Minister of Finance he would have taken the opportunity to come to the Chamber tonight to make a serious contribution in order to display to the listeners of New Zealand and to Parliament that he actually understands something about finance. But no he came to the Chamber and he managed to display his lack of knowledge of even who the 121 members of Parliament in this House are. I heard Mr Mallard say he did not know who Jo Goodhew was who Jacqui Dean was or who Chester Borrows was. 
Hon Pete Hodgson 
: Well give us a hand. 
Hon DAVID CARTER 
: The Minister of Health is interjecting as well now. Maybe he does not know so I will take this opportunity to tell him who those three members are. They are part of the up-and-coming National Party team that will be in Government after 2008. 
For the information of Mr Hodgson Chester Borrows is now the member of Parliament for Whanganui because he beat Jill Pettis. Jo Goodhew is the member of Parliament for Aoraki because she beat the previous safely ensconced Labour Minister Jim Sutton. Jacqui Dean of course is now the member of Parliament for Otago because she managed to take that seat from the Labour member David Parker. Eric Roy is in the House tonight. He managed to take yet another seat from the Labour Party—the seat of Invercargill. So those are just a few of the talented people in the National Party who are lining up to be part of the next National Government as soon as the stench of decay reaches the stage where the Labour Government is well and truly finished. 
In this debate on the supplementary estimates to Budget 2006 I heard the most incredible comment from the Minister of Finance himself. He came into the House this afternoon and displayed to anybody who was listening to his contribution that he is a man under extreme pressure. He is a man who now needs urgent treatment for his anger management. But to be fair to Michael Cullen he is under tremendous pressure because Helen Clark has put him on the Labour Party dog-tucker list as well. 
Michael Cullen has now consecutively presented two disastrous Budgets for the Labour Government. The first one was Budget 2005. 
Anne Tolley 
: Chewing gum. 
Hon DAVID CARTER 
: Anne Tolley is so right—it became known throughout New Zealand as the “chewing gum Budget”. Then Dr Cullen had the chance to do a little better this year. He was sitting on an $8 billion - plus surplus. He could have actually done something to make it a Budget to remember but instead it has been labelled the “Bondi Budget”. It followed a week after Peter Costello presented the Australian Budget which delivered to Australians $45 billion worth of tax cuts and made Australia a very attractive place for talented young New Zealanders to go and work. So Dr Cullen is under pressure. He has given two disastrous Budgets one after another. It is not surprising that he has joined the dog-tucker list that Helen Clark has to deal with over the next few months. 
Dr Cullen is in good company. He joins people like Jill Pettis who has been here for quite a number of years. She is not known by many New Zealanders because her list of achievements would not take long to complete. But Helen Clark knows her as someone who lost the good safe Labour seat of Whanganui—it had been held by the Labour Party for election after election. It is now held by my colleague Chester Borrows because Jill Pettis failed to perform. 
Next on that list are people like Dianne Yates. She is looking forward to her retirement—well whether or not she is looking forward to it Helen Clark will tell Dianne Yates very shortly that she is part of the renewal process because she lost her safe Labour seat in Hamilton. Then there is my old sparring partner Jim Sutton. He was the Minister of Agriculture in the last Government. He managed to make sure he turned off every farmer in New Zealand with his arrogance and disinterest in the issues that face New Zealand farmers. We know that he has been offered— 
Anne Tolley 
: He lost his seat. 
Hon DAVID CARTER 
: To find out when that seat was last held by the National Party we would have to go right back to a by-election held after the death of Sir Basil Arthur when Maurice McTigue held it. That would be the last time the National Party held effectively the seat of Timaru. That safe Labour seat was lost to Jo Goodhew and she is doing a tremendous job as its member. 
Those names are just part of Labour dog-tucker list which Helen Clark is working on. Then there is Russell Fairbrother or Fairweather— 
Anne Tolley 
: Fairfax? 
Hon DAVID CARTER 
: No not Fairfax but Fair-something. He is going too. Then there is Dover Samuels and of course there is the man who spoke first in this debate—Michael Cullen. He is on his way out. The Government faces some real issues over the next while because there is a real stench of decay amongst its members. If the Government lasts until 2008 I will be very very surprised. 
But whenever the thing finally falls to bits—and it might be when Winston Peters departs to replace Jonathan Hunt in London which I suspect will be any time soon— 
R Doug Woolerton 
: Ha ha! 
Hon DAVID CARTER 
: Doug Woolerton knows; he is a goner. Doug Woolerton is a goner. He is looking forward to picking up the pension very very shortly because New Zealand First— 
R Doug Woolerton 
: I’m a survivor mate. 
Hon DAVID CARTER 
: Well Winston Peters was a survivor. He said he would never pick up the baubles of power—until he was offered the ministerial car the ministerial salary and the house. That is what he took. 
I conclude by repeating the comments made by the Prime Minister when interviewed on  
Breakfast  
on TV. Paul Henry asked her about the big snow that hit the South Island the other day. She said: “There’s certainly a lot of snow.” and: “I’m very pleased to see the snow.” Paul Henry said incredulously: “What about the farmers? Aren’t you concerned?”. The Prime Minister responded: “Well I love skiing so it’s good to see they’re getting off to a great start with the ski season.” That shows the arrogance of the Prime Minister. While those people without electricity suffered day after day she was more interested in being able to do a bit of skiing in the House adjournment. 
Hon PETE HODGSON (Minister of Health) 
: 
 That speech is another example of why National is not about to reach the Government benches any time soon. That gentleman spent most of his discussion which was supposedly about the Budget on a sort of rollicking ad hominem attack on people who have been defeated by other people. I ask the member who did he defeat in the last election? Who did he take out in the last election? What electorate success does that member think that he can offer the House? That member ought to do something more with a debate like this than talk about who defeated whom. I congratulate those members of Parliament on the opposite benches who enjoyed electorate success in the recent polls. I congratulate them. I hope their stay here is good. I do not of course hope that it is long. 
In the election we have just mentioned we actually had a debate going on in our society about whether we would use the idea of investment as a way forward or whether we would disburse the largesse of the State into tax cuts we could not afford especially as the National Party made sure that it had targeted them towards the rich. The National Party put $11 billion on the table and asked: “Are you interested?” and of course New Zealanders around the country were and they sniffed pretty hard at it. They gave it a sniff test and they said: “This is not affordable. The damage to be done to roading investment health police education or whatever would be too high.” That is why this Government was returned. 
That happened despite the fact that National promised $11 billion of tax cuts and despite the fact that National rolled out the Exclusive Brethren a very strange group of white men who do not even vote who put a million dollars on the table to help the National Party get across the line and went very close to breaching electoral law in this country in doing so. That is a very strange group of people. They were the people that Don Brash “did not meet” until he met them “oh well perhaps once” then until he met them “oh well perhaps more than once” and then until it became clear in the course of the campaign that he had met with them several times. Then the scales dropped from the eyes of those New Zealanders who were taken in by the $11 billion worth of tax cuts and the Labour Government was returned to office. 
New Zealanders said no. Because they said no we have funding to make student loans interest-free. Because they said no we can build roads rail and public transport infrastructure throughout New Zealand. Because they said no we can invest further in research science and technology in both the public and private sectors; we can invest in economic development; we can develop exporters further; and we can invest in our tertiary education our early childhood education and for that matter in our primary and secondary education. We can invest in health because New Zealanders said no to the $11 billion tax bribe. They said no to $11 billion over 4 years and of that $11 billion precisely $3 billion is going into health over the next 4 years. 
We will put $3 billion extra into health. That is enabling us to build hospitals to continue the building programme that starts in Kaitaia and finishes in Invercargill. Not far from here an entire new hospital is being built in Wellington. The one most recently opened was in the Wairarapa just a few weeks ago with the Prime Minister. We are able to invest in new buildings but we are also able to invest in primary health care. We are able to say to New Zealanders that there can be lower fees when they go to the doctor. We can say to people working in our primary health care sector that we are pleased they are doing better than they were before that general practices around the country are somewhat more sustainable and that general practitioners are making more money and are worth more on the market. One would not know that if one heard the National Party talking. But that is the fact of the matter. 
While I am on that point I would like to congratulate all those people who were party to the negotiations that concluded at 9 o’clock this morning as we saw the roll-out of the next phase of the Primary Health Care Strategy so that 45 to 64-year-olds can have access to cheaper doctors’ fees from 1 July—just 10 days from now. I thank those people who took part in those negotiations. We have achieved a good deal. We have made sure we have transparency. We have made sure we have worked out what a consultation actually is. We have made sure that in the unlikely event that a recalcitrant doctor decides to put the money in his or her pocket we have a way of stopping that. All those things are important. That has been achieved and I congratulate those who were involved in the negotiations. 
We have made progress in this country. Because the people said no we were able to roll out further funding into mental health further funding into Maori health. One never hears the National Party talking about those areas of health. National does not care about them. We have made further investment into mental health further investment into Maori health and further investment into the health of older people. We have made a bigger investment this year than ever before when all the bits are added up. We have made a bigger investment than we have ever had before into the disability support directorate into those people who do not consider themselves part of the health system but who live with a disability of one form or another and who are supported to live a more ordinary life—one day one hopes an even ordinary life—because we are able to improve the support services for those people. 
What about children’s health? One does not hear the National Party talking about children’s health. It could not care less when it was announced today that there had been a 90 percent reduction in meningococcal disease amongst Maori children in Auckland. Members opposite could not care less that nine cases out of 10 now do not occur and that we have had a very successful roll-out of a vaccination for a very very serious disease. They seem to be uninterested that this country is about to move into the screening of newborns for hearing loss so that if children are discovered to have hearing loss it can be addressed very early in their life. 
National seems to be unconcerned that we have decided to pay attention to oral health for children. It is a fact that the improvement in oral health in New Zealand’s children has stopped. Our children’s teeth used to get better and better as each decade went by. Now it is not getting better any more; in some measurements it is actually getting worse. That situation cannot be allowed to continue. How did it happen? 
Hon David Carter 
: Blame the Government. 
Hon PETE HODGSON 
: Well we will blame the previous National Government because in the 1990s guess what happened? This country stopped training dental nurses. Unbelievably in the 1990s this country stopped training dental nurses—now called dental therapists. 
 So in the 7 long years of this Government we began first of all a course in dental therapy at the dental school at Otago University and secondly a second course in dental therapy at the Auckland University of Technology. Those courses have been developed people have entered the courses and they have completed the courses so that this February for the first time we had graduates from those courses going into the dental service. So in this Budget we decided we had better make sure we had decent clinics and decent pay for them. That is something we will never hear the National Party talk about. 
We will never hear National members talk about the Cancer Control Strategy. We will never hear them talk about diabetes or cardiovascular disease. All we will hear them talk about is electives. In this Budget we continued the roll-out of the orthopaedic initiative which doubles the number of major hip replacements performed in this country and we continued the roll-out of the initiative to increase cataract surgery by 50 percent on what it was earlier. These are the things that a Government can do when it decides to invest in our health. This is what we can do to enable 60-year-old people to live well through into their 70s and 80s because they have received a hip replacement or a cataract operation in a timely manner. That is what happens when we invest in people; when we invest in children; when we invest in a public health system. 
What we have heard from National members is them simply hollering up a storm and dialling up a crisis and their being professional grizzle-guts—even though they went to the polls 9 months ago and said: “We do not need to put any more money into health you can have it in tax cuts.” Now they say that somehow or another the expenditure is not enough even though it was increased by 8 percent in 1 year in the last Budget. They say that we spend it on bureaucrats even when they are confronted with proof that the ratio of bureaucrats in the New Zealand health system is dropping. 
CRAIG FOSS (National—Tukituki) 
: 
 I rise to speak to the Appropriation (2005/06 Supplementary Estimates) Bill which is related to the 2006 Budget. I was going to raise a point of order earlier—but I let it lie—because I think the bill may be misnamed. It should probably be the “Misappropriation of Taxation Bill” because about $60 billion of hard-earned New Zealand funds have been snaffled by Mr Cullen and his cohorts on the other side for the purposes they deem best for the country to build their socialist utopia. 
I thank the previous speaker for his congratulations on my winning the seat of Tukituki. I came into this House about 9 months ago having won the seat of Tukituki Hawke’s Bay. This is a House full of great history and I thought it should have a Government with integrity accountability transparency and most of all one that took responsibility. It should take responsibility not abdicate responsibility. It should admit when things go wrong. It should admit when it has mucked up. It should fess up and take responsibility. That is what gives integrity accountability and adds to the great history of this House. 
I understand that the scuttlebutt about the Prime Minister and Cabinet was that they were furious that they lost the two Hawke’s Bay seats Napier and Tukituki. They could not understand it. Labour lost those two seats and it could not understand how ungrateful the people of Hawke’s Bay were because it had pumped so much welfare into that area. So much welfare dependency was created in Hawke’s Bay that Labour could not understand why the good people of Hawke’s Bay kicked out two of its MPs one of whom was a Minister. That shows how out of touch Labour members are. That was the exact reason they got kicked out. The good people of Hawke’s Bay and the rest of New Zealand do not want to be dependent on some bureaucrats and the whims of a Cabinet that will do anything for the front page and whose members think of short-term gain for themselves as opposed to the medium - long-term future of New Zealand. 
It has been 7 long years and all that this Labour Government could deliver recently was the “Bondi Budget”. It is getting pretty tiresome. Every line from the previous speakers opposite every attack and every debating point is about the 1990s. Labour members should get over it and get up with the programme. Every time a point of order is raised by certain Government poodles it is prefaced with comments referring to 1996 1992 and so on. They should get over it and lurch into the next millennium. If you keep looking back as you are now New Zealand is in trouble. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! The member is bringing the Speaker into the debate. 
CRAIG FOSS 
: I apologise Mr Assistant Speaker. The chickens are coming home to roost. They are the chickens from 7 long wasteful unproductive unaccountable years. It has been an expansionary and inflationary “spend-athon” from a visionless Government. The suffocating impact of its snatching 45 percent more tax revenue in the year 2005-06 than was taken in 1999 is starting to come home. We have had the smashing of the 1999 election pledge when only 5 percent of taxpayers were supposed to be in top tax bracket. Now it is 11 percent. With the impact of the suffocating tax grab the breaking of tax thresholds and the abandonment of any indexation the chickens are coming home to roost. 
I am concerned. The current economic conditions in New Zealand are perilous and that is not good. The consumer price index has burst out of the top of the band and is nudging 4 percent. Consumer price index expectations for the next 18 months at least are also 4 percent. Members might recall that the target band is between 1 and 3 percent. Growth is forecast to be flat or virtually non-existent. 
Mr Cullen took great pleasure today in announcing that he thought the March quarter growth would be something like half a percent. He was ecstatic. That is pathetic. Annual growth of 1 to 2 percent is pathetic. Annual growth of 1 to 2 percent is forecast for New Zealand over the coming months. That is one-quarter of the growth in the countries we are now competing against in Asia. 
We are in a period of increasing inflation decreasing growth and declining asset prices. The Reserve Bank of New Zealand in its recent policy statement warned of this exact scenario. It is translated into stagflation which is perilous and incredibly dangerous for our economy. 
I am astounded that I have yet to hear the word “productivity” from any member opposite. Productivity has not even been mentioned. We have had a massive explosion in spending on health and on education with little or no result. It is not just I who is saying that. My learned colleagues are of course saying it but also Treasury the Inland Revenue Department and independent economists are saying it. Where will we get the productivity gains? Productivity gains are the only way out of the inflationary trap set by Mr Cullen and Labour’s “spend-athon”. They are out of control with their spending. The loose fiscal policy that they have forecast for the next year or so is exactly why inflation is north of the 3 percent band. It is exactly why interest rates are higher than they need to be. 
A few months ago we heard about the razor gang. Mr Trevor Mallard announced he was in charge of the razor gang. Has anyone heard anything since? Whenever the borax comes on the need to cut spending and to be more productive they disappear from the headlines. 
A previous speaker Mr John Key pointed out that one out of every two buildings in Wellington is now run by Government departments. Fifty percent of the office space in Wellington is for Governmental purposes. That is nuts. Where is the productivity gain there? A lot of people ask me how on earth Mr Cullen and Labour have blown 5 years of once-in-a-lifetime economic conditions. Those economic conditions have been set by higher commodity prices around the world which neither Mr Cullen nor the rest of the Labour Government has had anything whatsoever to do with. 
Many people ask me how they blew it. How did they waste so much? Why have they taken so much? How have they taken so much for so long to spend on so few—those squeaky wheels who speak the loudest who scream the loudest? 
I understand that Mr Cullen was devastated at the reaction to his earlier “chewing gum Budget” which offered a tax cut of 67c a week to hard-working New Zealanders. What a gross insult! 
Sitting suspended from 6 p.m. to 7.30 p.m. 
CRAIG FOSS 
: Prior to the dinner break I was talking about Mr Cullen’s 2005 Budget the “chewing gum Budget” which offered 67c in tax relief in 2 or 3 years’ time. In the recent Finance and Expenditure Committee discussions with Mr Cullen he said that wage claims over 4 percent were extravagant in the current environment and he would do his utmost to prevent them. By the way last year Mr Cullen received an 8.1 percent increase in his salary package. I also point out as we are talking about percentages that if New Zealanders really do want a decent increase they should note that Australian after-tax incomes are currently 33 percent ahead of New Zealanders’—and that is before the recent tax cut package announced by Mr Costello.  
Talking of tax cuts if National’s policy were implemented—if this were our Budget 2006—85 percent of New Zealanders would be on a 19 percent tax rate. That is not too bad. Also Ministers such as the Hon Judith Tizard who earn nearly $200000 would still pay north of $60000 in tax—those high-income earners would still pay $60000 in tax. 
One further point is that the Finance vote is about $55 million per annum and the advice and policy part of that vote is I think about $5.5 million. I suggest that if Mr Cullen is looking for savings given that he and Mr Mallard are ignoring the advice of Treasury the Reserve Bank of New Zealand the Inland Revenue Department and the Crown Company Monitoring Advisory Unit perhaps he should abolish the Treasury department. If Treasury’s advice is described as an “ideological burp” every few years when it advises Mr Mallard not to venture into the DFC New Zealand Ltd world of selling State assets or advises against getting political appointments made to the board and the advice is again ignored I suggest that some money could be saved there and taxpayers could get some value for money. 
SHANE JONES (Labour) 
: 
 I follow the mokopuna of Granny Smith from the Hawke’s Bay otherwise known on the Finance and Expenditure Committee as “the Fossum in the headlights”. 
I rise to support the programme that has been outlined. I along with everyone else have heard a great deal of drivel from our friends in the Opposition—but I shall say more about that shortly. Some underlying themes inform our thinking in relation to the programme that as a consequence of our capturing the attention and imagination of the voting public we on this side are presenting. One of the key notions is caring; another is being prepared to invest in equity. What does that actually mean? It means looking at a person’s life identifying those who are unable always to fend for themselves and ensuring that they can rely upon the compassion and appropriate interventions of the State from the time they are very young. 
That is why we are very proud to introduce and sustain policies that will improve the prospects of those children before they go to school and assist the parents of those children to enrol them and to promote their education. This would be impossible if we were proceeding on the ill-founded thinking of the Opposition with indiscriminate tax cuts and attendant service cuts. 
Moving on from that we have invested substantial amounts of money in the school sector because we want a school sector that—unlike the unfortunate experience we saw recently in Vanuatu—is available to all people at minimal cost irrespective of creed colour or background. The State has an ongoing role to play in that regard. 
As we have listened to the various speakers during this debate and earlier debates we have witnessed the fact that no credible Opposition exists only a group of personalities here who treat politics as a hobby not a vocation. When they do not get their own way they sink very quickly into personality sniping. Of course they come off second-best there because we on this side of the House have some of the most able parliamentary debaters. What the Opposition particularly did not do during the election campaign—and we did which is why we are rolling out this fantastic programme—is talk about anything but tax cuts. For example what about something as important as the future shape form and funding of welfare policy? 
What do we find when we go to the Opposition’s website to try to find out what it would do about welfare in the unlikely event that it ever occupies this side of the House? We find the message “This domain is parked”. Well we know that as a consequence of leadership squabbles the Opposition is parked. The current leader is just about to move out of “park” mode but he is in a horseless carriage. We know that Mr Key with his fantastic ambitions is running on high-octane fuel in a very flash vehicle. But will that go down well with the Kiwis? No. The Kiwis do not like a smart alec approach to politics and people who feel they constantly need to wear either their wealth or their earlier prowess—enjoyed and demonstrated in another life—in this House. The Kiwis like a political culture and political personalities that care for people and bring a sense of humility to this very important vocation. So we see that the domain is parked. 
Recently Mr Key leader-in-waiting—in the unlikely event that he comes to enjoy that status; I am sure Bill English will deny him that as time goes on—presented his Budget ideas. He basically said that we needed to firstly increase infrastructure spending; secondly invest more in schools; thirdly have a competitive tax system especially in corporate affairs; fourthly encourage more research and development spending; and fifthly increase savings. He is not only an aspirant to the leadership but also a plagiarist of exactly what this Budget does. Firstly this Budget increases expenditure on infrastructure to a level that has not been heard of or seen for many a generation. Secondly this Budget revitalises skill training. 
I have recently been through the Tairawhiti and up and down the East Coast. One of the common complaints in that area is shortage of skilled staff—shortage of qualified tradesmen and related personnel. I will tell the House why. The reason is that during the 1990s some brilliant schemes—not the least of which was the Maori apprenticeships scheme—were smashed and nothing was put in their place because of a silly naive belief that somehow the market would deliver a suitable level of skills. On occasions of course the market works. I have had the pleasure of seeing it work to our benefit. But on the question of human capital training and skills it did not work. It has left us with a deficit. It has left us with a situation we are now scrambling to remedy—and fortunately we are in power and we are able to do so. 
I lament the day apprenticeships and skill enhancement strategies were smashed in the 1990s. Had fate dealt us a sinister hand and put the members opposite on this side of the House we would now be seeing a similar destruction decrease and undermining of the entire human capital strategy—a reversion to the 1990s. 
 I will talk very briefly about the third point; why Mr Key has flattered the Government by plagiarising what exactly this Budget proposes to do. Not least he overlooked the fact that in the OECD the average worker in New Zealand enjoys the status of having the third-lowest tax burden. Why and how do we arrive at that calculation? Firstly it is lower than Australia’s rate. Secondly there is a very competitive corporate tax system that does not involve stamp duty payroll taxes land taxes and a myriad of other obscure taxes that conveniently do not find a place in either the rhetoric or the dodgy narrative put forward by Dr Brash. 
I am sure listeners up and down thehau e wha the four winds listening to this level of oratory will not fail to notice that we have a business tax review coming up soon that will substantially improve our competitiveness. With assistance from our friends in New Zealand First there will be a particular focus on not only export activities but on identifying how businesses will gain greater efficiency and greater competitiveness. 
On the question of research and development it is beyond cavil. The evidence is clearly outlined in the various pages comprising the Budget and the different policies that we are rolling out that research and development is not only identified as a key component but also has been substantially and handsomely invested in. That beats the rhetoric of envy and deep disappointment. Those are the sorts of policies the Opposition had the time to put before the country chose not to and sought to cakewalk from Opposition into Government on the basis of promises of tax cuts. I am sorry it did not work then and it will not work in the future. 
My final point is on savings. Recently we had the Singaporean Prime Minister here and we also know that Mr John Key and a host of others have been to Singapore recently to look at how its economic miracle has been constituted. He did not need to go to Singapore to learn about the importance of savings. We have a Government with the character and courage to introduce a savings scheme that will be very soon faithfully implemented called the KiwiSaver. To all Kiwis listening I say kia ora tatou katoa. 
A party vote was called for on the question  
That the Appropriation (2005/06 Supplementary Estimates) Bill and the Imprest Supply (First for 2006/07) Bill be now read a second time. 
Ayes 61 
New Zealand Labour 50; New Zealand First 7; United Future 3; Progressive 1. 
Noes 50 
New Zealand National 48; ACT New Zealand 2. 
Abstentions 10 
Green Party 6; Maori Party 4. 
Bills read a second time.