Estimates Debate —  
Estimates Debate —  
[Volume:610;Page:7149] 
Estimates Debate 
In Committee 
The CHAIRPERSON (H V Ross Robertson) 
: I take the opportunity to remind members that the debate on the Appropriation (2003/04) Estimates Bill should be confined to the current spending plans as contained in the Estimates of Appropriations. The debate must relate to a matter for which an appropriation is included in the estimates. The estimates debate is not a vehicle to scrutinise and debate past performance—that is the function of the financial review debate. In general the purpose of the estimates debate is not to permit a discussion of general policy but to focus attention on the need to grant alter or refuse to grant particular appropriations. The chairperson of the select committee that reported on each vote may speak first. The first two speakers have 10 minutes each and subsequent speakers have 5 minutes each. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I raise a point of order Mr Chairperson. This is intended to be helpful. Since we have introduced the new Standing Orders in this area there is a slight problem about the way in which the Committee proceeds. I think it is still appropriate that the longer tradition is followed—that is by and large Government members do not speak on a particular vote unless members of the Opposition parties choose to speak so there is actually an engagement— 
Hon Richard Prebble 
: I cannot hear the member. 
Hon Dr MICHAEL CULLEN 
: The new Standing Orders which came in some time ago present a sequential problem in this debate in that the chairperson of a select committee that reported on a vote—normally a Government member—has the right to take the first call. However if the Opposition parties do not want to debate that particular vote it is rather pointless for a Government member to take a call. As a matter of procedure Mr Chairman it might be advisable that when you put a vote you ask whether any non-Government party wishes to seek a call. If it does the chair of the select committee could seek the call at that point. I think that would make things easier in terms of the process we follow. 
The CHAIRPERSON (H V Ross Robertson) 
: Is there any objection to that course of action being followed? 
Hon Richard Prebble 
: It seems eminently sensible. 
The CHAIRPERSON (H V Ross Robertson) 
: I thank the member. There appears to be no objection. 
Vote Audit agreed to.  
Vote Office of the Clerk agreed to.  
Vote Ombudsmen agreed to.  
Vote Parliamentary Commissioner for the Environment agreed to.  
Vote Parliamentary Service agreed to.  
Vote Arts Culture and Heritage agreed to.  
Hon RICHARD PREBBLE (Leader—ACT NZ) 
: 
 I raise a point of order Mr Speaker. Thinking about how exciting this is for listeners I suggest that it might be an idea for you with the leave of the Committee to start reading out all the votes under each Minister’s portfolios until someone seeks a call. For example you could start putting the next set of votes—Communications Security and Intelligence Ministerial Services and so on—and keep going until someone seeks the call. Let us do the votes together to speed things up. The debate is a time-limited one and we do not want to spend our whole time reading out all the portfolios. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 It might be an idea to slightly modify that Mr Chairman. You could just run down the list calling the votes until you get to one that somebody wants to take a call on. The question could then be put on the votes on which no call is received. We will then know which select committee chairperson is involved. 
The CHAIRPERSON (H V Ross Robertson) 
: All through at once? OK we will have a go at that. 
Vote Communications Security and Intelligence agreed to.  
Vote Security Intelligence agreed to.  
Vote Ministerial Services agreed to.  
Vote Prime Minister and Cabinet 
Hon BILL ENGLISH (Leader of the Opposition) 
: 
 I rise to address page 1040 of the Estimates volume II—vote Prime Minister and Cabinet. I wonder what value we are getting for the $7.104 million for the purchase of “free and frank advice”. After all this is the money that pays for the idiots who make up the excuses the Prime Minister always makes when she gets into trouble. This $7 million is being spent on the people who “weren’t conscious” to quote their Prime Minister—the people she blamed for the debacle over ancestral landscapes appearing in the resource management legislation. 
These are the officials who were blamed for the Government’s reversal of its economic goal of achieving a place in the top half of the OECD by 2011. We spent $7 million on people who believed the Prime Minister when she said that that was what she wanted to achieve. We spent $7 million on people who wrote a foreword including that goal which the Prime Minister signed but did not read. So why do we waste $7 million on people who sit around listening to what the Prime Minister says when by now they should have learnt two things: first she never really means it and secondly if she is caught out they get it in the neck? 
Simon Power 
: It’s someone else’s fault. 
Hon BILL ENGLISH 
: It is someone else’s fault. I ask the Prime Minister this question. Are these the people who advised her to tell the New Zealand public that her Government would confirm that title to the seabed and foreshore belonged with the Government? And are they the people who gave her advice today to sidestep exactly the same question? I think they probably are and I think the blame will now be worn by them. People who work for hours and hours every day providing high-quality “free and frank advice” will now get it in the neck because the Prime Minister has backtracked on the most important commitment she has given to the New Zealand public in this term of Government and probably in the last term as well. 
What advice has the Prime Minister had from these “free and frank” advisers that has made her change her mind about the seabed and the foreshore? Will we now hear from her that she never really said it in the first place? With the economic goal she ended up saying: “Other people said it. We just adopted it.” Well I am willing to take the credit; I think all the Opposition parties are willing to take the credit for saying that first which the Prime Minister then picked up. Are we going to hear that she never really said it? Or will she say that officials lied to her that they gave her only some of the papers not all of the papers and that that is why she made an undertaking to the public which she has now backed down on and will not keep? Is that what she is going to say? Or is she going to say that no one was really “conscious” of the implications when that was agreed to and she made that remark to the public? It was all very careful. Are these the people who give the advice about the “Helenisms”—one-third truth two-thirds spin? Actually the Prime Minister of New Zealand has said only about two things on the seabed and the foreshore. She has been trying to be very careful. It is that vacuum of leadership that has made this issue so divisive. 
Are these the people who advised her not to say anything about Maori issues or the treaty? Why are we paying $7 million for “free and frank advice” on the treaty when the Prime Minister never says anything on it? She is the first Prime Minister in living memory to refuse to take up the challenge of speaking to New Zealand about treaty and Maori issues. Well I think the $7 million for advice on the treaty consists of officials saying to the Prime Minister: “Don’t say anything because it’s politically risky for you.” Every other Prime Minister in New Zealand has had that advice but every other one has taken his or her own counsel that this matter matters so much to New Zealand that its leader must speak on behalf of the unity of the nation. But this Prime Minister does not. She has taken the advice that the best thing to do is to go around the country providing $90-a-plate dinners for as many people as can be invited for free and then be offended when Maori expectations are raised. Did she get advice from officials that the Government’s habit of feeding Maori expectations on every matter in the civil service would mean that Maori did not expect anything from this Government over the foreshore claim? Of course she did not. She should have got that advice from experienced civil servants who know their way around these issues because they have served successive Governments with “free and frank advice”. 
I am asking the Prime Minister what advice on the treaty we are paying for. Just what advice on the seabed and the foreshore are we paying for if the Prime Minister has so little to say about them? Or is it the case that officials know that they should serve up only what will be palatable? Is that the case? Is it actually “free and frank advice”? If that were the case it would be quite exceptional in the civil service or in the wider community. Many people feel they cannot give this Government or this Prime Minister “free and frank advice” because they are likely to get it in the neck if the advice is something that this Government or this Prime Minister does not like—and a trail of wrecked careers stands as proof of that. 
I am asking the Prime Minister to tell us what advice she has got on those issues and how she has acted on them. I am asking her to tell us whether the Department of the Prime Minister and Cabinet has advised her not to legislate to secure the Crown’s title to the seabed and the beaches. That is what she said she would do—unambiguously. That is unusual. Usually these things are done very ambiguously with a sort of slightly slippery statement in a press release then a background briefing about what it means so that the Prime Minister does not have to take full responsibility for everything that is said or so that the Minister of Finance the Deputy Prime Minister can get up here and say the press always gets it wrong. Every time we ask a question here that is what he says; we cannot rely on the reported comments of the Government on anything because the journalists are always wrong. 
Are these the same people who advise the Prime Minister not to answer parliamentary questions? Someone is giving her that advice; if not she must have thought of it herself. New Zealand has never had a Prime Minister less accountable to this Parliament. We saw that practice again today. Occasionally I am sure Prime Ministers have transferred questions they did not want to answer but they knew that if they kept doing that it would come to be seen as a sign of weakness. Because they could not keep doing it they faced the music. This Prime Minister has made a habit and an art form of not answering questions in Parliament—firstly by not accepting them but instead ducking for cover and allocating them to other Ministers so that they have to answer them; and secondly by the rigmarole we always have to go through such as happened today. I asked the Prime Minister a direct question about whether she will legislate to secure Crown title to the beaches and the seabed. We got no answer. Apparently it was good enough a month ago to tell a  
New Zealand Herald 
 reporter that the Government would do that but now that matter has to be kept secret from Parliament. 
Did the Department of the Prime Minister and Cabinet give her that advice? Did it say to her: “Actually you can’t meet that commitment. When you go to Parliament don’t answer the question.”? I do not think it did. I think the Prime Minister Helen Clark has adopted that strategy all on her own. That strategy will fail her. 
DIANNE YATES (Chairperson of the Government Administration Committee) 
: 
 What a ridiculous speech and what a lot of puff and whistle about nothing! I am the chair of the Government Administration Committee and I would like to read out the report back to the House: “The committee has considered the appropriations within its area of responsibility. It has no matters to raise in regard to … Prime Minister and Cabinet”. I say to Mr English and to the members of his team who are on that select committee that we reported back that we had no matters to raise. Mr English who purports to be a member of a political party has not even bothered to read the committee’s report which says there were no matters to raise. Nor did his members on the committee at that stage raise any matters when we reviewed this department and reported back that there were no matters to raise with the House. 
So the speech made by Mr English which went on for 10 minutes was made up of just his imagination. That is what his political party is—a matter of imagination. The only member of that party who faces reality is Mr Maurice Williamson who actually does look at some of the realities. But I am absolutely surprised that Bill English given that he is supposed to be a mature politician— 
Darren Hughes 
: “Supposed” to be. 
DIANNE YATES 
: —I said “supposed to be”—and given that he has been a member of this House for a considerable time can speak such puffery for 10 minutes about a report that stated there were no matters to raise. 
Darren Hughes 
: What about the National members on that committee? 
DIANNE YATES 
: Well we had Pansy Wong on the committee and then the membership seemed to move about because various people replaced other people at that time. 
Darren Hughes 
: What did they say? 
The CHAIRPERSON (H V Ross Robertson) 
: Come back to the subject. 
DIANNE YATES 
: I am talking about the report and the process of the select committee that produced this report and that stated there were no matters to raise. It is very hard to talk about a report that states there were no matters to raise—unless as Mr English did one creates a whole lot of things out of one’s own imagination. 
I can say however and I have looked at the Audit report how very frugal the Prime Minister and Cabinet are. It has been reported by Audit that it is a very frugal very canny and very careful Prime Minister who runs the Department of the Prime Minister and Cabinet. If anything the department can be said to be a bit mean—the Prime Minister is so frugal in expenditure. We have noticed over a period of time that that expenditure and the appropriations have gone down that the Prime Minister runs a very very tight ship and that she is very very careful with the money for this department. I think Mr English has got the wrong department or is reading the wrong report or is making something up. 
This is not the first time that the Government Administration Committee has looked at the Department of the Prime Minister and Cabinet looked at the frugality of the Prime Minister and seen that she has been very very careful about what is spent by this department. I would like to congratulate the Prime Minister on running a very tight ship and to congratulate the department on being very careful. As I have said and Pansy Wong will verify this because Pansy Wong is an accountant and I believe a very careful person with money the Opposition members on that committee had no matters to raise. So I congratulate the Prime Minister on the estimates and on continuing in her usual fashion to run the country in the same way that she runs the Department of the Prime Minister and Cabinet—that is in a very frugal and careful way. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 Speaking to page 1040 of volume II of the Estimates for 2003 I want to tell the last speaker that we in New Zealand First were not on the Government Administration Committee but if we were we would have had a lot of issues to raise—particularly about a department that is engaged in spin and duplicity. I want to know who those people are who occupy so much of the Prime Minister’s time and the taxpayers’ expenditure compared with for example truly frugal administrations run by people like Kirk and Muldoon. For every person they had she has about 10. 
But most important the difference is those gentlemen and Prime Ministers when they were required to came down to the House and spoke for their administrations whereas we have a Prime Minister who is all spin all image but cannot front in this House—like no other Prime Minister I have ever seen. When have we seen a Prime Minister too scared to turn up and face the music? She ducks out and gets junior Ministers to speak about the portfolio that she is in charge of. 
She was asked these questions which are very simple questions. What does “leeway” mean? She cannot tell us. On the question of collective Cabinet responsibility she cannot even tell us fundamentally what that means. Who in her department advised her how to answer that question? These are people who advise her at a cost of $7.104 million and that is just the known cost; the rest of course is hidden somewhere else. There is a whole raft of people like the “Burns unit”. What do they do? Well they are meant to speak to provincial New Zealand. What does that unit cost? The Government has all these people it is hiding. The Prime Minister was asked a simple question and I want to know who advised her not to answer it. She was asked: “Does the Prime Minister believe in same-sex marriage?”. That is a pretty simple question. What would her department do on that question? Would it need to have a whole review? Would it need to spend weeks and weeks studying the policy in order to tell the Prime Minister to answer as follows: “I don’t understand the question.”? 
It is no use the Prime Minister muttering to the man in the Chair because frankly we are going to have it out in the open. Say it louder! If the Prime Minister cannot hack the job that she is required to portray herself every day as being equipped for by coming down here and answering questions she should just say so. She should let us all know because then we will vote for a significant reduction in her vote of $7.1 million because clearly it is a waste of money. If she cannot hack fronting the public stage in this Parliament and ensuring that New Zealand has an accountable democracy she should just say so. Then we will carve back the vote commensurate with the lack of sound advice that she is getting. If she cannot for example tell us how Tariana Turia can make a statement on the issue of the Supreme Court and the Privy Council that is totally contradictory to the statements of everybody else in Cabinet then perhaps we could constrain her vote back to being what it should be for an absentee Prime Minister. 
Talk about frugality—does she love travel! She cannot wait to go to places like— 
Simon Power 
: The Air Force had to buy two new aircraft for her. 
Rt Hon WINSTON PETERS 
: That is right. It did. 
Jill Pettis 
: You’re just jealous because you’ve got no friends. 
Rt Hon WINSTON PETERS 
: Well if she is offering friendship—no thanks! I know that misery loves company but I cannot help the member. 
I ask the Prime Minister this question: why will she not answer parliamentary questions? Why is she always—[ 
Interruption 
] No no there are people up there who when they get a question from the rest of Parliament’s parties are meant to spend the next 4 hours providing the Prime Minister with an answer. Do members know what answer they provide her with? It is: “Duck it Prime Minister. Give it to some junior.” So why on earth are we spending all this money on these people who do not even know for example how to answer fundamental questions? Why can she not tell us for example who these people are who are being paid so much money every day to ensure that she does not front up and does not do her job? Where in the Western World does one see a Prime Minister like this one? 
Darren Hughes 
: As good as this. 
Rt Hon WINSTON PETERS 
: Oh yes I know she has very malleable media. Where in the Western World would one see a Prime Minister—Canada the UK Australia or anywhere else that is a democracy—who is not prepared to front up? I have seen Blair for example go down to the English Parliament and on questions without notice he answers the whole lot. Of course that is the man whom she attacked before and during the Iraq war. 
Dail Jones 
: What did she do last week? 
Rt Hon WINSTON PETERS 
: Last week she went across there— 
Simon Power 
: Another kiss. 
Rt Hon WINSTON PETERS 
: The second kiss—yes. 
Dail Jones 
: Face to face. 
Rt Hon WINSTON PETERS 
: Face to face she said—what was it? She said she trusts his sincerity. One day he cannot be trusted but off she goes of course wasting the public’s money as the Prime Minister supported by prime ministerial staff to a democratic union sort of conference that is based on ideology. How parochial is that? Imagine if I said that I wanted to go to a conference comprised of sane rational sound practical parties and that I wanted the taxpayers’ money! She just abuses the taxpayers’ money. She goes to see her leftist and middle-ish friends and somehow that is OK. No other Prime Minister has done that ever but for Helen Clark it is OK. 
But my point is simply this: when it comes to it she cannot hack the job in its most principal important form. 
Darren Hughes 
: This is the man who went to Australia for the Bledisloe Cup. 
Rt Hon WINSTON PETERS 
: How could I have gone to Australia for the Bledisloe Cup when it has not been held yet? [ 
Interruption 
] How can I go to the Bledisloe Cup when the game has not been held? Not only do those members deal in duplicity and spin but they plain do not tell the truth. The game is next week so how could I have gone? 
Darren Hughes 
: Last year. 
Rt Hon WINSTON PETERS 
: There is the young fellow—what is his name? Damien Hughes? 
Peter Brown 
: Darren Hughes. 
Rt Hon WINSTON PETERS 
: Oh—Darren Hughes. He had a predecessor Judy Keall and he is going to spend a long time trying to match her ability. He is going to spend a long time here trying to demonstrate that he is up to the job. I want to tell Darren Hughes this: shouting in the House showing one’s ignorance is not a way to progress up the political ladder— 
Darren Hughes 
: It worked for you. 
Rt Hon WINSTON PETERS 
: —and take it from somebody who knows! I want to ask the Prime Minister this: why did she say for example—and who told her to say it—that if the Democrat candidate at the last presidential election Al Gore had succeeded there would not have been a war? Why did she say that? Do we have to put up with a prime ministerial department led by a Prime Minister whose understanding of history is so cursory as to be a waste of time? Worst of all is the saying of it—it is not so bad that she thinks it; it is the saying of it. 
In the next breath she says: “We’re going to piggyback Australia in a free-trade agreement.” I say: “Don’t make me laugh! Don’t make the poor New Zealand exporter cry with such naive and stupid statements!”. Which person in her department told her to say that? What does the Prime Minister’s department say about for example the dollar rising by over 30 percent in 1 year flat—by this chart? What does her department say about that? Exports are down; they have been damaged severely by a Prime Minister who is too scared to show some leadership and some direction. This is terrible. The dollar has risen by over 30 percent from September until now and she and her Minister of Finance fail to take action. 
But they say according to the Labour Party back bench that she is a good Prime Minister! Oh no she is not. I will make this bet with those guys right now. At the next election this Labour Government is going to be out on its ear. The economy is changing as we speak. The American economy is in a situation of deflation and it is very severe. But more important on the fiddling socially odd strange and dare I say queer issues those members are going to go down—big time. They may not like it but frankly we on this side have had a gutsful of that Government over there foisting its weird silly gender-bending ways on the New Zealand people. I want to know how many gender benders there are in the Cabinet structure. How many gender benders are there in the Cabinet structure who let people like Chris Carter and the other guy from Christchurch let loose with some of the most evil vile legislation this country has ever seen? 
A party vote was called for on the question  
That Vote Prime Minister and Cabinet be agreed to. 
Ayes 60 
Labour 52; United Future 8. 
Noes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Abstentions 9 
Green Party 9. 
Vote agreed to. 
Vote Finance  
Vote Revenue 
CLAYTON COSGROVE (Chairperson of the Finance and Expenditure Committee) 
: 
 I rise to speak in support of these estimates. I think that what these estimates prove is that this economy is in very good heart despite the international conditions. If we look at the statistics in respect of the economy we see as Minister Maharey outlined that we have the lowest unemployment since 1988 at about 5 percent. We have a $4.4 billion surplus as was outlined in the Budget and we have a Minister of Finance who is as many Opposition members have accused him of being tight on the fiscal purse. Given the international situation I think that is a good thing. 
I repeat what I said in my Budget speech and that is I could not quite believe the response of the National Party to these estimates. On the one hand the finance spokesperson Dr Brash said that Dr Cullen’s spending promises and fiscal constraint were about on target and on the other hand Mr English a Tory leader accused a Labour Government probably for the first time in history of being too tight on the purse strings. I see Mr Peters grinning and nodding; I know he has a sense of history as other members do. As I said in my Budget speech normally Labour Governments get accused of blowing the Budget and spending. For the first time we have a Tory leader who says that our Minister of Finance is too tight on the purse strings which I think should be noted down in history. 
It should also be noted that we have net Government debt below 15 percent of gross domestic product. 
Darren Hughes 
: What? 
CLAYTON COSGROVE 
: It is below 15 percent of gross domestic product. We have total Government debt below 30 percent which I believe is one of the commitments we made. If we go back to unemployment and compare our unemployment rate—5 percent—with the average unemployment rate under a National Government we see that it was for 9 years in the order of 8.2 percent. In examining these estimates we note that this economy is in good heart. This Government is a tight fiscal manager that believes in providing a stable platform for businesses and for our commodity sectors to advance and grow. 
But I want to refer briefly to page 7 of the Finance and Expenditure Committee’s report on the estimates—the minority report of the National Party and the ACT party. I note: “The National and ACT members are concerned at the increasing involvement of Government in business both through grants and taking ownership interests.” I think to translate the double Dutch that means they are concerned that we are not going to sell assets. I know that Dr Smith Mr Hide and others on the committee have expressed concern that we are not going to sell assets—and Dr Brash; I should give him credit for stating his view. On the other hand National members have firmly put their position especially in respect of the Tranz Rail purchase—if and when that occurs—that they would sell those assets. I think it was Mr Sowry who said that the New Zealand public would have to wait and see whether the National Party in Government if it ever got across the line would sell that particular asset and others. With regard to Air New Zealand the National Party has stated its position as has ACT—that it would go back on the chopping-block. I think that is something that should be highlighted and noted. I think the National Party and ACT wanted to bury it in the last two lines of the select committee report but we owe it to the New Zealand people to make that position very clear. 
Again there is a stark difference between the parties. The Labour Government is committed to asset management to getting growth and revenue out of those assets—Landcorp for instance has record growth—so that we can then redeploy that revenue for the good use of our people and our taxpayers. Contrast that with a National Government which would go back to the tired policies for which it was rejected in two elections—that is the sale of strategic Government assets. For what purpose we are yet to find out but I am sure Dr Brash will take up the cudgels and the challenge and outline it to us. I am sure the people of New Zealand as Dr Brash will also know are vehemently opposed to asset sales and that is outlined in Labour’s poll rating of 51 percent and a poll rating for Dr Brash’s party in the order of 20 percent. 
I think it is also worth highlighting that these estimates build on a stable platform of—[ 
Interruption 
] Listen to them. They babble like a bunch of headless chooks. There is one less head today I am told with Maurice Williamson gone. But instead of babbling interjecting and bubbling away over there like a lot of ninnies it would be nice if they made a positive contribution and told us what they would do in respect of their estimates if they had any and in respect of their alternative budget if they had one. As I said in my Budget speech we could then have a proper debate. The problem is that when we are debating Vote Finance when we debate these estimates it would be nice it would be productive and it would be helpful to the listeners and the people of New Zealand if some Opposition members stood and proposed some alternatives. If they say we are wrong if they believe that we are wrong they are entitled to that view. But in order to frame that view surely they have to have a solution or an alternative. 
Darren Hughes 
: What would they do with the cash? 
CLAYTON COSGROVE 
: That is very interesting. 
Mark Peck 
: Give it back to the rich. 
CLAYTON COSGROVE 
: That is probably true given that that is their track record. What they say is they will have tax cuts which the people rejected. What they say is they will have asset sales which the people rejected. But they do not tell us how they will spend the cash. I wait with bated breath for Dr Brash and Dr Smith to tell us about that. 
We are building on a strong platform in respect of these estimates. These estimates continue our commitment to the people to provide an environment where they can grow their businesses and where we can look after our people in respect of health and education—but we will not go into those areas of course. They build on a platform of 4 percent growth. What these estimates show is we do have a Minister of Finance and a Government that are prepared to tighten the fiscal purse strings in anticipation of a rocky road internationally. I would have thought and given the poll rating I think the people of New Zealand share my view that that was the prudent thing to do in respect of our economy and that that was the prudent management structure we should adopt when we do not really know what is going to happen internationally. I would have thought that a Tory party would agree with that. But of course we saw in Budget speeches and in other places that it does not. On the one hand National has a leader who says we should spend more. On the other hand its official spokesperson on finance Dr Brash says we are on the right track and we should spend less. 
I conclude by endorsing these estimates. I think they are sound. I think they answer the critics across the board and they provide a platform whereby people in this country can prosper and whereby we can be socially responsible and look after some folk at the same time as we build a foundation where businesses can grow. 
I finish with a small piece of advice for Opposition members. I am sure they could win some brownie points from the members of the public who are listening to this if they got up as their next speaker will—I am sure it will be their finance spokesperson Dr Brash—and told us in this Chamber and the people of New Zealand exactly what they would do. I respect their right to be critical of us. That is the role of an Opposition—weak as dishwater as it is. But part of the role of an Opposition I would have thought—not having been part of one—is to propose. 
Rt Hon Winston Peters 
: Won’t be long now. 
CLAYTON COSGROVE 
: Some genius over there said we will be the Opposition. I say to that genius whoever it was not to be so arrogant and to listen to the people and look at the polls. I wait with bated breath on the wings of angels to hear Dr Brash and his alternatives for this country as he tries to demolish a substantial fine and solid set of finance estimates. 
Dr DON BRASH (NZ National) 
: 
 Mr Cosgrove made reference to the fact that the economy has been buoyant in recent times and indeed that is absolutely true. But as I have pointed out a number of times in this Chamber the reasons for that good growth have nothing at all to do with the present Government’s policies. The latest strong growth last year was due to the fact that in 1999 2000 and 2001 the exchange rate was at an all-time record low. It started falling in 1997 when Mr Peters was Treasurer and it declined right through 1997 1998 1999 and into 2000. That was the first reason we had strong growth. Secondly we had strong immigration caused by the very uncertain world economic environment—September 11 and similar factors. That had nothing at all to do with the present Government. Then we had good growing weather and even Dr Cullen would not claim credit for that. 
I will claim credit for the fact—often ignored in this Chamber—that through 2000 and 2001 we had damn good monetary policy that kept the economy moving at a brisk pace. None of those things have anything to do with the present Government’s policies. 
We are debating an appropriation of roughly $57 million for funding the Minister’s Treasury advisers. My worry is that the Government appears absolutely hell-bent on ignoring Treasury’s advice. In 2001 a Treasury economist estimated that if this country were to overtake the top half of the OECD within a decade it would require per capita growth in income levels of between 4.5 and 7 percent per annum. What did we get? We have a Government that appears to have abandoned any attempt to reach the top half of the OECD. In fact it has explicitly denied ever aiming at that objective. The Government did aim at that objective but it has now had to acknowledge that there is not a dog’s chance of meeting it. Far from trying to meet that objective almost every single policy the Government put in place is designed to slow down the economy. 
 For example Mr Cosgrove referred to the fact that this Government is committed to holding on to all State-owned enterprises. Yet we have Treasury advising the Government that the case for doing that is relatively weak—reported as recently as in last Sunday’s  
Sunday Star-Times 
. This Government puts its finger in the air and says what does the public—the lowest common denominator—want? There is no attempt to explain to the public why it makes sense to sell most State-owned enterprises. 
Mr Cosgrove referred to the fact that Government debt was down because the Fiscal Responsibility Act had mandated strong surpluses which he says this Government has continued. But most of the public sector debt reduction occurred during the term of the last Government—a result of large fiscal surpluses and the sale of certain State-owned assets. Instead of explaining to the public why that made good sense the Government simply says: “Whoops the public have not understood this issue. They do not understand why Treasury is telling us to continue this policy. We will simply stop the policy because that is what the public wants.” There is no attempt to explain to the public that unless the growth rate of the country is picked up this society will not survive. 
What do we have? Over the last 10 years we have had per capita growth in incomes of 2.5 percent. As Treasury pointed out that is not as good as we need but it is nevertheless better than it has been in the past. Looking forward what do we see? We see an economy that the Minister’s own Budget documents suggest will gradually slow down. It is based on an assumption that productivity per person will continue growing at about 1.5 percent per annum. That is about enough to get 1.5 percent per annum growth in per capita incomes—about one-third of that estimated to be required by Treasury in 2001. 
What on earth is the point of spending $57 million on Treasury advice when the Government simply ignores that advice? It listens to what the public is saying in their partial ignorance and says that whatever the public wants we will do—even if that is suicidal for the long-term future of this society. That is an abrogation of responsibility. It is focus-group politics—do whatever the lowest common denominator of the public wants; do not try to explain to them why different policies would make sense. As recently as last Sunday the Treasury reported in the media a relatively weak case for holding on to most State-owned enterprises. The Minister simply says that we said we would not sell them therefore we cannot. What on earth is the point of paying for good Treasury advice when the Minister routinely ignores it? 
In some cases the Government does not even seek Treasury input. The other day my colleague Bill English made the point that when Mr Mallard announced $34 million for the America’s Cup he did so with no evidence at all that Treasury had been consulted. Cabinet papers apparently make no reference to any check with Treasury in respect of that $34 million. Why? I suspect it is because the Government knew perfectly well that Treasury would suggest that it was an ill-advised use of taxpayers’ money. 
This Government talks about the need for economic growth. It has had it very easy for the last couple of years for reasons beyond anything it could control. It is forecasting a slowdown in growth and it is doing nothing discernible to increase that growth rate. That seems to me a serious indictment on what the Government is doing. 
Let me talk briefly about tax. The Government said in 1999 that it would increase the income tax rate from 33 percent to 39 percent but that would affect only 5 percent of taxpayers. We now know that that increase in the tax rate affects 10 percent of all taxpayers and the almost 20 percent of full-time earners who are now in the 39 percent tax bracket. We know that many New Zealanders paying less than that are hardworking diligent workers but we also know that the people in that 39 percent tax bracket are by and large those with the most skill the most incentive to innovate and invest—and those are the ones who have the most option to leave. If we are serious about economic growth we cannot afford a situation where roughly 20 percent of full-time taxpayers are into the 39 percent income tax bracket—which means that almost half the income earned above $60000 goes in a combination of income tax and other taxes. This is a Government that talks about a need for growth but at every step makes it less likely. 
Quite apart from that increase in tax—which was at least acknowledged by the Government before it was elected in 1999—there has been a whole plethora of other tax increases that it did not talk about at all before the election. We have seen the tax on income from trusts going to minors increased from 19.5 percent to 33 percent and there was no advice of that before the election. We saw the tobacco excise tax increased in 2001 by 23 percent. We saw an increase in the excise tax applying to petrol last year. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The Government is very happy to debate the advice it receives from Treasury. As Minister of Finance I get hundreds of recommendations each week from Treasury. It is not like being Governor of the Reserve Bank where every 6 weeks he or she gets to make one decision—I get to make hundreds of decisions every week and in the vast majority of cases I agree with Treasury. But the member is quite correct every now and then I disagree with Treasury. 
Let us sum up Dr Brash’s prescription for growth and let us measure it against the past and what has happened and whether it will work and why I do not get the advice he seems to think I get all the time. His first prescription is to flog off the State-owned enterprises. That has been a great success for Tranz Rail has it not? That piece of movement has really been dynamite in terms of generating growth! [ 
Interruption 
] It must be coming up to lunchtime the member opposite has woken up. Second he would flog off New Zealand Post. How would that drive stronger growth when New Zealand Post is doing very well already? Of course we saw it work with Air New Zealand as well did we not? We saw our national airline going down the tubes following privatisation. 
Rt Hon Winston Peters 
: Who did that? 
Hon Dr MICHAEL CULLEN 
: The fourth Labour Government did that. Mr Prebble did that. It was a stupid mistake to do it. 
We pass on to the second prescription for growth: do everything Treasury tells us. The Minister should just become an overpaid rubber stamp paid about $180000 a year to plonk “ Yes” on the page. Why not just buy somebody out of Work and Income New Zealand to do that particular job and save $150 to $160 a week? That person could be on a work scheme and all he or she would have to do would be to sign off every Treasury recommendation while being called the Minister of Finance. 
Sometimes Treasury makes recommendations that I do not agree with. Sometimes Treasury makes recommendations contrary to Government policy. Lo and behold we do not always agree with them. But in the vast majority of cases we do because Treasury officials offer good solid independent advice. But they would not claim to be absolutely always right in every instance. 
Rt Hon Winston Peters 
: They must have changed! 
Hon Dr MICHAEL CULLEN 
: They have changed since that member was the Treasurer. Treasury does not now believe that it holds all the knowledge in the universe. The people who thought that have long since departed this life. 
 The third prescription for growth is not to listen to the public. The public do not know what is going on especially those people paid under $60000 per year. Their opinions do not count for anything in the world in which Dr Brash lives. The fact that they happen to be 90 percent of taxpayers is neither here nor there; they are just the public and the public are mean and self-grasping. As far as Dr Brash is concerned they put their interests first—unlike the situation in the pure market economy which is supposed to work because people put their interests first. But never mind we are not worrying about the logic as we work through all of this. Public choice theory states that the public have a right to be wrong and politicians might occasionally listen to them if they want to. If the member wants to run on a platform of flogging off the State-owned enterprises doing everything Treasury tells him and not listening to the public 21 percent will seem a very very high target for the National Party at the next election. The 5 to 6 percent that ACT gets is about what that policy rates in terms of public support. 
Then there is the bit Dr Brash did not mention which is to slash public spending. This Government holds to a policy of Government spending growing at about the same rate as nominal gross domestic product (GDP) over the medium term. The figures show that Government spending has remained constant as a proportion of GDP and is projected to continue to do so declining slightly as time goes on. Dr Brash says that we should increase it by the rate of inflation only which is 2 percent on average versus 5 percent. It does not sound much but it is $1.25 billion cumulative on top each year. By the end of 3 years we are looking at $3.75 billion per year in spending cuts. 
As Dr Brash said to the National Party conference one cannot do that by fiddling around the edges especially when his colleague Mr Ardern called for big increases to Department of Conservation spending today. Dr Lynda Scott is always calling for increases to health spending the law and order spokesperson is always calling for more spending on courts prisons and police. I have yet to find anybody in the National Party who calls for a reduction in spending in his or her area; it is always in somebody else’s area. Even Georgina te Heuheu does not call for a cut in Maori spending. A sum of $3.75 billion has to be carved out and that has to come out of the big votes which are health and education. 
Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: 
 I pick up where my honourable colleague Don Brash left off. When we look at the tax revenue figures in this year’s estimates and compare them with what this Government inherited it is interesting to see that when this Government took over it took $32 billion in round figures in tax. This Budget over the next 12 months plans to take $40.5 billion in round figures. That is a huge increase in tax. I want to have a brief look at that. 
We all know that the Government has put up the tax on people earning over $60000. The Government stated that it would be 5 percent of taxpayers only but of course as we now know it is 10 percent of all taxpayers and 20 percent of those are full-time earners. The Government said that it would do that but what about the fringe benefit tax going up? What about the income tax on trusts going up? What about resident withholding tax on interest and dividends? All that is going up. The Government did not talk about that prior to being elected this term. 
We know about the tobacco tax going up we know about the petrol tax and road user charges going up we know about the accident compensation levies going up. On my business alone since this Government renationalised the Accident Compensation Corporation my accident compensation payments have trebled. Dr Cullen frowns. He does not run a business so he would not know. That is all revenue. Even the cost of getting married has gone up. Marriage licences and drivers’ licences have gone up almost 50 percent. Government taxation and revenue is going up and up. 
One lot has come down and that is the tax on Maori businesses; the tax on Maori businesses has come down to 19.5 percent. But the doozy of them all was the sherry tax. Jim Anderton came to this House and said that the Government aimed to put up the tax on the drinks that young people drink—the alcopops. What happened? The alcopops got off scot-free and the Government taxed the old folks’ sherry. One could say that that is a joke but it is actually serious for the reason that clearly the Government did not do its homework. It was a knee-jerk reaction. The Government was concerned about public reaction to young people’s drinking—which is a serious issue there is no doubt about that—and thought that it could do something about the problem by a tax on young people’s drinks. 
I can see some members opposite who know that that is what was supposed to happen. But what happened? Jim Anderton came to the House with a bill that did not do what the Government thought it would do. It did not tax the alcopops. It taxed the old folks’ sherry. 
I want to focus on the latest move by this Government which is the flatulence tax. The Minister in the chair Michael Cullen may claim that it is not a tax but a levy but when it looks sounds moves and smells like a tax and everyone thinks it is a tax it is a tax. 
I want the Minister in the chair to tell the Committee what research he or his advisers have done on this tax. Is it like the alcopops tax? Is it a politically correct move with no basis to it at all? I want the Minister to tell us what study research and advice the Government has had on the half-life of methane in the atmosphere how long methane stays around the stability of the background levels of methane in the atmosphere what causes most methane to be in the atmosphere—which is certainly not ruminant animals—and what advice the Minister has received on the chances on altering through that tax on ruminants in New Zealand the level of methane in the atmosphere by any measurable amount at all. 
I challenge the Minister to tell us what advice he has had on the ability of this tax to alter the level of methane in the atmosphere in a measurable way at all. I suspect that if he talks to some scientists who know something about the chemistry of methane he will find out that first it does not last long in the atmosphere. Methane is very unstable and degrades very quickly to carbon dioxide. It does not produce any more carbon dioxide than the methane that we already have. Secondly there is a background level in the atmosphere that probably is largely the result of forests rotting. It is certainly not the result of eructation from ruminants. I want to know whether it is just another cock-up like the sherry tax. 
GORDON COPELAND (United Future) 
: 
 The balance sheet of the nation is in great shape. Gross and net debit debt levels are better than target and the international rating agencies have continued to award the New Zealand Crown a triple A rating equivalent to that of the USA Japan and Germany. However the same cannot be said of the nation’s balance sheet. New Zealand is already the most indebted country in the OECD and the Budget projections forecast a deteriorating current account deficit over the next 4 years totalling a whopping $26 billion. Media commentators and others have asked me whether we should be concerned about those trends. I believe we should. 
It is as simple as asking oneself whether one is better off with or without a large mortgage on one’s house. We all know that freehold property is a desirable objective because we are then freed from the ongoing cost of servicing the interest and principal repayments on the mortgage. The same is true for New Zealand as a nation. According to the OECD report of 2001 servicing charges paid to overseas investors in New Zealand during that year totalled around $9 billion. That absorbed some 21 percent of our export income. As our debt level rises that percentage will also rise so that more and more of the funds that we earn by exporting will go into debt servicing. 
Further increasing debt means that New Zealand will face higher interest rates than other OECD countries in the future. We already have the highest rates now and that trend is likely to continue. In the short term that will appreciate our foreign exchange rate but in the longer term it is bound to depreciate it. Simply stated debt is not the route to wealth or sustained economic growth unless it is wisely invested to achieve a rate of return to our economy over and above the cost of the funds borrowed. 
If we are to turn that situation around and move on to a path of sustained economic growth for the New Zealand economy I believe we need to address a number of issues. Firstly greater encouragement needs to be given to private savings. The New Zealand Superannuation Fund supported by United Future makes a contribution to national savings but I believe that in addition greater encouragement needs to be given to private savings. Secondly I believe that personal income tax brackets need to be adjusted at the very least to reflect inflation. That would move the present bands from $9500 $38000 and $60000 to about $10500 $42000 and $65000. I believe that the Government has erred in not making those adjustments which would have meant tax reductions for all taxpayers. As a result New Zealanders are now over-taxed. 
For a similar reason we should immediately reduce the company tax rate to 30c. Since interest rates are higher in New Zealand than in Australia we cannot in my view afford to continue to run a higher tax rate. Companies are the engine of the New Zealand economy so we need to depress the accelerator a little and speed that engine up. 
I strongly believe that New Zealand’s economic interests would have been better served by the Government had it chosen to adopt United Future’s policy of indexing the tax brackets and cutting the company tax rate to 30c in the new Budget year. [ 
Interruption 
] I note that the ACT party apparently is in opposition to those two commonsense measures and I will remind them of that at the next election. 
This would have provided fiscal stimulus to the New Zealand economy at the very point at which it was most needed. Budget projections clearly indicate that we are looking at a halving of the growth rate—from 4.4 percent in 2002-03 to 2.2 percent in 2003-04. Surely in those circumstances and given the size of the surplus—which incidentally continues to run ahead of forecasts—we have a perfect opportunity to use fiscal policy to cushion the downturn minimise its duration and establish a pathway back to strong growth later this year. In the absence of fiscal stimulus we are now entirely reliant on monetary policy—a much more indirect route.  
I note that in interpreting these economic trends a number of economic commentators have suggested that the Minister of Finance act sooner rather than later to stimulate the economy through tax cuts or equivalent—perhaps as part of a Christmas package. Should he choose to do that he would certainly have United Future’s support. I am also deeply concerned that New Zealand has saddled itself with an unbalanced process in relation to the conservation estate. 
JOHN KEY (NZ National—Helensville) 
: 
 What is in a comma? There is not a lot in a comma. One can miss it out easily enough; there is not a whole lot. But in this Minister’s vote there is a comma that moves an amount that in my opinion should be $4 million to $4 billion. That is right—$4 billion! And where is it going? It is going to the New Zealand Superannuation Fund otherwise known as the “Cullen fund”. How much of the $4.018 billion will be staying in New Zealand? Absolutely zippo is my suggestion—absolutely zero. Why? Because the New Zealand Superannuation Fund has a target of 9.4 percent as a rate of return—9.4 percent on $4 billion. There is more chance that we will see Elvis in the debating chamber tonight than that the Government will achieve 9.4 percent. That is a blended average of 11 percent on equity and 6 percent on bonds. I do not think so. Last time I looked New Zealand Government stock had a big handle of 4 percent on it and it is going down. The Government will not be earning 6 percent there. It will not be earning 11 percent on equities and it will not be earning 9.4 percent as a blended average. 
This has all the hallmarks of the Government Superannuation Fund about it and we know what happened when the Government got that money. It sent it off shore and lost $353 million before one could say: “Elvis Presley”. That is how quickly it lost $353 million. This is a disaster. Why has the money not gone to Auckland’s roads? I will tell members why. They are not a priority for this Government. Before Transit was nobbled on its 10-year plan Auckland had 11 of its top 20 projects. Now it has three. The only reason it has three is that the projects have already started and it is too late to stop. 
So which projects have gone up the list? Let me have a look. The Rimutaka corner-easing project has flashed up from No. 92 to No. 14. Whose electorate is that project in? That is right—the Hon Paul Swain’s electorate. Let us move up a bit to Waikato. That project has gone from No. 82 to No. 60. What electorate is that project in? That is right—the Hon Mark Burton’s electorate. Let us move up a little bit more to project No. 25 which has gone to No. 9. Whose electorate is that in? Jim Sutton’s! I am watching a trend here. Then what did I find when I had a look the other day at Transit’s board? Here is a rhetorical question. Who is on the board of Transit? 
Rodney Hide 
: Who is it? 
JOHN KEY 
: Mike Williams—Labour Party president! Well do not tell me it is a coincidence that Jim Sutton’s pet project has all of a sudden gone from No. 25 to No. 9. Do not tell me that it is a coincidence that the Hon Paul Swain’s project has gone from No. 92 to No. 16. So that is what is happening to the New Zealand Superannuation Fund. It is not going on Auckland’s roads because Auckland is not a priority. That is why projects are not taking place. 
I want to speak for just a moment on the advice that Treasury gave the Minister of Finance regarding Track Co. We had the Minister in front of the Finance and Expenditure Committee and we asked him the hard question: will $100 million be enough? We asked him whether Treasury was giving him any advice that might indicate that $100 million to repair the rail-track network when he took it over from Track Co. would be enough. “Hmm” said the Minister. No he was not sure whether that would be enough. “It sounds a bit light.” he said as he wiped the sweat from his brow knowing that we the aggressive Opposition parties were on to it. “Ah yes. I have had some advice” he said “from Treasury. That’s why I pay them—” 
Darren Hughes 
: This is a fairy tale. 
JOHN KEY 
: No it is not a fairy tale “Dazza”. “That’s why I pay them $57.061 million. I pay Treasury for some very sound advice.” What Treasury told him—but he would not tell us because he pays the bill we know—was that $100 million would not fix up the bridges on the West Coast. The sum needed is not $100 million. It is not $200 million $300 million or $400 million. It is hundreds of millions of dollars. So where will that come from? I know. It is a good idea to raise the top personal tax rate—again! 
DAVID PARKER (NZ Labour—Otago) 
: 
 Well after that rather light-hearted contribution from Mr Key I would like to reflect on Vote Finance which is under the capable responsibility of Dr Cullen the Minister of Finance and Deputy Prime Minister. The adequacy of the management of his responsibilities can be gauged from the $4 million Budget surplus before capital obligations that is estimated to be the outcome of this Budget. That surplus is before capital obligations which include $1.8 billion going into the New Zealand Superannuation Fund in order to fund superannuation more sustainably well into the future. That leaves a $1.4 billion surplus after those capital adjustments and that is after substantial additional votes going to the areas where taxpayers want to see that money focused. 
Health is getting an increase of $737 million which is a 9 percent increase in funding—well ahead of inflationary increases. Education is getting $481 million which is a 6 percent increase—again well ahead of inflation. This is being done in an environment in New Zealand in which growth is about 4 percent which is one of the highest rates in the OECD and unemployment is at a very low 5 percent—one of the lowest rates in the OECD. Crown debt levels are at their lowest since Treasury began collecting data in 1971. Gross debt was at 36.8 percent of the gross domestic product (GDP) when the Labour-led Government took over from National and over the next year or two that goes down to 23 percent of GDP which is a very substantial decrease. Net debt drops even further to 14 percent of GDP. 
Now against that background I wondered what Dr Brash was going to come and say to us today as we debate Vote Finance. He gave us again his edited view of the growth prospects of New Zealand and when I hear that I like to reflect on what he said at the time of the Budget. On 15 May 2003 Dr Brash stated in the  
Dominion Post  
that the rate of projected growth is too slow to narrow the large gap between us and Australia. He said that the rate of projected growth “is too slow a rate to narrow the large gap in living standards between New Zealand and Australia that emerged during the 1970s and 80s.” I read that and I thought it seemed very strange that the 1990s were not mentioned in that quote so I went and had a look at the statistics which make for interesting reading. Comparing New Zealand with Australia I find that Australia was No. 10 in the GDP rankings within the OECD in the 1980s and New Zealand was 18th. 
The 1980s were by and large the decade of Labour Government. During that decade New Zealand went back by one place as against the Australians who went back by six places from 10 to 16. Clearly the New Zealand performance was better during that decade of Labour Government stewardship. 
I look at the next decade of the 1990s which seems to have escaped Dr Brash. It was the decade of National and the decade when Dr Brash was in charge of monetary policy strangling the productive parts of our economy. During that decade New Zealand started at position 19 and went back a position to position 20. During that same decade Australia—to which Dr Brash now doffs his cap—charged forward from position 16 up to position 12. During the period under the National Government Australia went forward and New Zealand went back. 
What is Dr Brash’s prescription for an alternative? His alternative to the very wise Budget under the direction of the Deputy Prime Minister and Minister of Finance Dr Cullen is to go back to those failed National policies which would see New Zealand charge backwards in comparison with Australia. This Government will not allow that to happen. These appropriations are most appropriate and I recommend them. 
ROD DONALD (Co-Leader—Green) 
: 
 It is time for Labour to listen and it should start by listening— 
Rodney Hide 
: To the Greens? 
ROD DONALD 
: —to the Greens too; I thank Mr Hide for that. However let us start with the advice of the Government-dominated Finance and Expenditure Committee of which Mr Hide is a member. And I am actually talking about last year’s advice because it is always important to look at what we were proposing in the previous year to see how well the Government has done in terms of what it is predicting for the coming year. 
Last year the Finance and Expenditure Committee said: “We would expect the Government Superannuation Fund Authority to reconsider its investment strategy in the light of its recent losses to determine whether its level of investment in overseas equities is appropriate and whether to amend its strategy to reduce its exposure to less reliable investments.” Has it done that? I would say no because the Minister of Finance stuck his neck out 2 years ago and said that investing on the overseas sharemarket would make more money than keeping the Government Superannuation Fund in Government Bonds. 
The Government Superannuation Fund Authority is still planning to invest 42.5 percent of its fund on the overseas sharemarket despite suffering substantial losses since embracing this strategy. Yes we are grateful that it has reduced its target from 52.5 percent to 42.5 percent but that is cold comfort to the country the members of the fund and all the rest of the taxpayers who have to make up the difference. The consequence of ignoring the Finance and Expenditure Committee’s advice last year is that the unfunded liability of the Government Superannuation Fund has gone up by $2.4 billion in 1 year. I know that Dr Cullen will say that that is mainly due to the discount rate and that is true. But the fact is that the fund itself was estimated to be worth $2.99 billion at the end of June this year—that is what the statement of corporate intent says. That is $590 million less than when Dr Cullen set up the authority. 
Dr Cullen said the Government Superannuation Fund would earn 2.9 percent more than Government Bonds—that was his whole rationale for doing this. What did Government Bonds earn over the previous 5 years? They earned 8.96 percent. What is the Government Superannuation Fund Authority’s new investment target for 2003-04? It is a 9 percent return on its overseas investments. 
Can even that target be believed? Last year the target was 9.6 percent on the overseas investments. Overall for all investments the forecast net return from investment activities was $272 million. What is the authority’s new investment estimate? It is a $6 million return on investment activities—that is the total overall estimate for the year ended June 2003 compared with the projection of $272 million. That is an absolutely appalling result which exposes the disaster of this Government’s policy of taking the Government Superannuation Fund and putting it on the overseas sharemarket. 
Last year the authority predicted a net increase in net assets of $83 million; its new estimate is a decrease of $193 million in net assets. I am sorry to say it but “We told you so.” We are telling the Government that the same thing is about to happen to the New Zealand Superannuation Fund which is commonly known as the “Cullen fund”. 
The Government is planning to hand over $3.8 billion in this financial year to the so-called Guardians of New Zealand Superannuation—to do what with it? To invest it on the overseas sharemarket. Given that the Government Superannuation Fund has failed to meet its own performance targets why follow the same investment strategy for the New Zealand Superannuation Fund? We urge the Government to think again and to listen to its own advice and I am referring in particular to the recently released social report. 
As one of the two examples of significant cross-sectoral issues that are highlighted in the report’s conclusion stated: “It is common knowledge that the New Zealand population is ageing.” It goes on to state: “What the social report makes clear is that outcomes for those currently young who will be the workforce when the baby-boomers retire are not good. Youth suicide youth unemployment and children living in families with low incomes do not bode well for the skills and resilience of New Zealand’s future workforce.” Here is the key point: “Counter-intuitively one of the best ways to prepare for an ageing population may be to invest in the young.” That is exactly what we want this Government to do. 
MARK PECK (NZ Labour—Invercargill) 
: 
 I say to the member who preceded me and also to the National Party members opposite who have been chortling throughout the previous contribution that I am surprised at their lack of confidence in capital markets. I would have thought that John Key in particular would understand that it is important for this Parliament to send very strong signals about the importance of capital markets in our economy. Indeed I say to the member who preceded me that I am looking forward to the time when he retires and is sitting in a rest home when he will say to Dr Cullen: “Thank you very much for actually thinking about my future.” The Superannuation Fund is there to ensure that we can meet our obligations about decency which we have determined as a nation. 
When we say that at age 65 we get 65 percent it has to be paid for. We know that the demographic change in this country has set in in such a way that unless we pre-fund that even in the partial way that this fund does we will be in trouble in the future in terms of meeting our obligations for superannuation for our population. 
I also say to the member who preceded me that he should read today’s  
Dominion Post 
 and look at the comments about the need for people to save which will be made at a superannuation conference that I believe will be held on Wednesday this week—Dr Cullen may well know more about that—by someone who worked in Dr Cullen’s office. 
What I find fascinating in this debate is the lack of confidence in capital markets. Capital markets have no memory at all. What John Key and others are talking about is putting money into housing and getting it out of capital markets. Well Don Brash who led off for the Opposition in this debate made some considerable comments in his time as Governor of the Reserve Bank about people putting money into productive enterprise. That is what he wanted to see. Indeed in response to a question from Dr Cullen at one Finance and Expenditure Committee meeting he really held out the hope that one day we would have a capital gains tax. He thought that that was a great idea. I notice that he has not espoused that today. 
When we look at the report of the Finance and Expenditure Committee on the finance estimates the Fiscal Strategy Report and so on we note in the headlines that a number of the issues that that committee has to grapple with are directly the result of the poor planning of previous Governments. I look through here and see the accountability processes for Air New Zealand. As Dr Cullen said what a great success the privatisation of Air New Zealand was—to such an extent that we nearly did not have a national carrier! It is good to see that the select committee is now seized of the need to look at some accountability measures. That is progress. At least the select committee has some interest. 
We then look at Tranz Rail—what another absolute cracker for privatisation! Anybody with half a brain looking at a country the size of New Zealand with a long skinny corridor would realise that a company such as Tranz Rail is probably a very good national monopoly but it has been flogged off. We are now in the position as a Government where we have to do some things to make sure that at least we have a track for trains to run on into the future. It is good to see that the select committee has been seized of that. 
We then look at Auckland’s infrastructure. I come from Invercargill and ever since Zinzan Brooke scored a try against Southland that was not a try and admitted at the after-match function that he never got the ball down we in Southland have not had a great love of Auckland. However when we see that the regional council in Auckland has to put rates up by 600 percent it tells us that there is a problem. People in Southland understand that if the gridlock in Auckland is costing the nation $1 billion then something needs to be done about it. The fact that this Government has taken on board the need to do something about infrastructure in Auckland is a good thing. 
John Key 
: Why didn’t the Government spend anything in the Budget on it? 
MARK PECK 
: The numbers in the Budget are very good indeed. They have shown a Government that is committed to keeping the country growing in a sustainable way and to using the money that it collects in a wise and prudent manner as it provides the services that the public believe to be necessary. We have done enormously good things in health in education and in the social services. I know that with Dr Cullen at the helm into the future this will be a very good Government for the people of this country. 
Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: 
 Now that the Minister the Hon Dr Michael Cullen is back in the chair I would like to question him about the quality of the advice he has received from Treasury in respect of certain revenue policy matters. It is common knowledge in this Committee that when the Government introduced its increased tax on alcohol which took the tax from $21 to $38 per litre on beverages with an alcohol content of between 14 and 23 percent it was aiming at the alcopop market. 
Hon Dr Michael Cullen 
: No. 
Dr the Hon LOCKWOOD SMITH 
: If members check  
Hansard 
 they will see that Jim Anderton said when he introduced the legislation that it was aimed at combating youth drinking. Quite clearly the policy has failed totally because it did not hit the drinks that young people drink—unless Dr Cullen thinks that young people drink sherry. That tax increase hit sherry drinkers instead of young people. 
When I was formerly the deputy Minister of Finance the Treasury advised on increased taxes. I want to know from the Minister in the chair whether Treasury advised the Government on that increased tax and on its effectiveness in dealing with youth drinking issues. If Treasury advised the Government on that did its advice point out that the tax the Government proposed to bring in would not even hit the drinks that young people drink? If Treasury did not point that out what is the Minister’s assessment of the quality of its advice—or was it the case that Treasury did point that out and the Minister took no notice? 
We are debating important issues this afternoon—the $50 million - odd that this Parliament appropriates for Treasury to advise the Government. That tax was clearly a cock-up. Whichever way we look at it no one on the Government side of the Chamber can claim that the Government planned to hit the old folks with a sherry tax. That was clearly a stuff-up. As we appropriate $56 million to the Treasury we as a Parliament have a right to know what the advice of Treasury was on that matter. 
My second issue in respect of Treasury advice is that I want to know what Treasury has advised with regard to the “flatulence tax”. I want to know whether Treasury has advised the Government on the time that methane exists in the atmosphere. I want to know whether Treasury has looked at what the Government has proposed to impose on our primary agriculture industry in terms of revenue gathering and whether it has advised the Government that it has the remotest opportunity at all to change the level of methane in the atmosphere through playing around with ruminants’ eructation levels. If the Government is to go ahead with that tax without Treasury advice it is worth us knowing that because we will then know we are spending this money on Treasury for no purpose. If Treasury has advised the Government on that tax then I want to know the quality of its advice. 
Has Treasury looked at the level of methane in the atmosphere? I know that it used to do that kind of work. It would advise the Government on all those sorts of things and would not just rely on other departments. Has Treasury looked at the length of time that methane lasts in the atmosphere? Is it a few hours in daylight hours? If a ruminant animal belches out some methane this afternoon will it still exist in the atmosphere tomorrow morning? The answer is that probably no it will not. Yet millions of dollars will be taken from farmers in this country putting them at a competitive disadvantage when the methane that they are supposed to damage our environment with does not hang around. 
What is more has Treasury advised the Government on the background level of methane in the atmosphere? Has Treasury advised the Government on our ability to change that level one iota? By that I mean change it perceptibly at all—not just change it by 1 2 or 3 percent. If the Government is to go ahead and tax New Zealand’s farmers millions of dollars that Australian or American farmers do not have to pay this Labour Government is just imposing more anti-competitive policy on New Zealand. What is the quality of the advice that the Government is receiving? Is it that the Government has gone headlong into the Kyoto Protocol and is now so caught up in it that it does not know what it is doing and what damage it is doing to this economy? Is it just that the Government has to be seen to be doing something because it is determined to implement the Kyoto Protocol come hell or high water? 
Someone has told the Government that ruminants eructate methane into the atmosphere and that methane is a terrible greenhouse gas. The fact that it does not stay in the atmosphere for very long has not occurred to the Government. I want to know what advice the Government has received on methane emissions and what the quality of that advice was. 
GORDON COPELAND (United Future) 
: 
 I want to take up where I left off by saying I am deeply concerned that New Zealand has saddled itself with an unbalanced process in relation to the conservation estate. Since the enactment of the Conservation Act it comes as a surprise to most New Zealanders to find that effectively no new hydro schemes or tourist facilities have been built on conservation land even in circumstances where the proponents of such desirable activities which would boost our economy could readily have agreed to conditions that would have led to a net gain in conservation values. That makes no sense. We are shooting our own economy in the foot and closing off win-win situations sight unseen in many instances. For that reason United Future has formally asked the Government to undertake a review of the Conservation Act in the interests of balance and common sense. 
I also want to refer to the decongestion of land transport in Auckland. United Future believes that the nation must assign urgency to the resolution of Auckland’s congestion. The prize will be a gain estimated to be in the region of between $1 billion and $1.5 billion each year. On current projections completion of the decongestion network could extend beyond 10 years. In view of the high stakes involved that is unacceptable. For that reason United Future favours a speedy commitment by the Government to the funding of Auckland’s land transport needs through borrowings. That could take the form of private-public partnerships or—this may indeed be a cheaper route—borrowings by the Crown itself. 
 The opportunity to borrow is presented to us because of the strength of the Crown’s balance sheet and its triple A credit rating. Both bridging and say 30-year-long borrowing mechanisms should be explored and employed. Let us remember that we will save between $1 billion and $1.5 billion in each year that we are able to accelerate the completion of the network and see transport in Auckland once again moving freely. There is a great deal of debate in this Chamber about our inability to fast track a free-trade agreement with the United States and estimates were that that would yield a billion dollars a year to our economy. Here we are looking at saving a billion dollars by decongesting Auckland. 
I appreciate that funding the repayment of the loans would need to be thought through carefully. Where funds are borrowed and can be repaid at the other end of the bridging period then the only cash-flow requirement will be for the interest payments. Where longer-term loans are involved then a source of both interest and principal repayments will need to be found. That could take the form of tolls an increase in petrol excise duty congestion charges or something similar. We must for the sake of our economy be creative get on with the job and realise the economic benefits as soon as is practically possible. 
Another point I want to mention once again is that United Future believes that our economic growth can be both sped up and smoothed by endeavouring to grow New Zealand’s annual population in a way that will add at least 0.5 percent per annum to gross domestic product (GDP). That area has been woefully researched to date. We have failed to establish the linkages between economic growth and population growth or to adopt a highly flexible immigration policy based on the resultant net population increase goal. For too long we have followed a boom-and-bust policy which in recent memory has actually seen negative net migration in some years when the number of departing Kiwis has comfortably exceeded the number of new immigrants. By contrast in 2002 we saw a huge boost to our population and to our GDP growth rate as returning New Zealanders boosted near-record numbers of new immigrants. 
There is a truism about setting goals. If one has no goals one will by definition never know whether one has achieved them. United Future believes therefore that we are better to set a population-growth goal including immigration on the basis of robust research so that we can plan our future on a systematic basis. 
I want also to mention the important role that increasing research and development expenditure can make to our economy. United Future will support the efforts of the Government to incentivise research and development by private industry in New Zealand and we would even look at changes in the tax system if that is the way to do it. There is another aspect too that would be in our policy mix and that we need to see greater effort given to. This time it is really a matter for the Minister for Economic Development and his Associate Minister—that is to foster sector cooperation so that the necessary critical mass is created for joint marketing and pricing initiatives by New Zealand in order to penetrate markets and maintain our exports of value-added products. 
A party vote was called for on the question 
 That Vote Finance be agreed to. 
Ayes 60 
Labour 52; United Future 8. 
Noes 56 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8; Green Party 9. 
Vote agreed to. 
The CHAIRPERSON (Hon Clem Simich) 
: The question now is that Vote Revenue stand part. Those who are of that opinion should please say “Aye”— 
Rodney Hide 
: I raise a point of order Mr Chairperson. I think you were going to ask whether the chairperson of the Finance and Expenditure Committee wanted to speak first. 
The CHAIRPERSON (Hon Clem Simich) 
: Vote Finance and Vote Revenue were debated together but I am putting the votes separately. This is not a new vote. The debate on Vote Revenue was held in conjunction with Vote Finance as the member would have picked up from most debaters— 
Rodney Hide 
: No it wasn’t. 
The CHAIRPERSON (Hon Clem Simich) 
: Yes it was. 
Hon Dr Michael Cullen 
: I raise a point of order Mr Chairperson. Perhaps I should advise that Mr Hide had indicated he would take a call on this vote. I therefore seek leave for him to be able to take a call. 
The CHAIRPERSON (Hon Clem Simich) 
: Leave has been sought. Is there any objection? There appears to be none. 
RODNEY HIDE (ACT NZ) 
: 
 I thank the Minister of Revenue who is the Minister in the chair for giving me a chance to whack him for 5 minutes. 
Darren Hughes 
: Someone’s got to help the ACT party. 
RODNEY HIDE 
: Well someone has to point out for the benefit of Darren Hughes what is happening in this country. For the Minister’s information I am looking at page 1117 of the Estimates of Appropriations which provides $113 million for audit functions. 
We have a Government that wants our country to become richer yet its very policy is to punish the rich. Members should ask themselves how that works. We have heard today from the Government that it does not want to give taxation cuts to the rich. Indeed what it did was to put up taxes for the rich. What was the Government’s definition of “rich”? It was that anyone who earns over $60000 is rich and should be punished with a tax rate of 39c in the dollar. We on the Opposition side of the Chamber oppose that. We say that the way to run a proper tax policy is to have simple rules that are enforced and those simple rules are to have a low flat tax. 
I want to point out something quite serious that is going on and I am pleased to see the Commissioner of Inland Revenue here. However I want to speak directly to the Minister of Revenue because I believe that this country is in danger of shooting itself hard in the foot. The Inland Revenue Department is targeting taxpayers simply because they are rich. It goes through the rich list finds out who is rich and then hassles those people in terms of the audit function. 
We on the Opposition side of the Chamber say that people should pay their taxes but we ask why people should be hassled simply because they are successful. Why should the demands be harder on those people than on anyone else? They are the people who create the wealth in New Zealand who provide the goods and services that we enjoy and who provide the jobs that we all aspire to. It is bad enough that we are taxing them at the rate of 39c in the dollar but how bad is it if the Inland Revenue Department comes along and asks them to justify their very existence simply because in the capitalist economy that we have they have achieved some success? 
I remind the Minister of Finance that he spent something like a million dollars on the McLeod tax review in 2001. The report on the review contained a very good proposal which was that the maximum level of tax imposed on a single individual in any one year should be capped at $1 million. The ACT party says that that is a good idea. One should ask oneself whether anyone in New Zealand actually receives $1 million worth of services from this Government. Never! I ask the Minister why we do we not do as the McLeod report recommended. We should say that any fair sir or fair lady who generates sufficient income in a year to be paying more than $1 million of tax has done well and that his or her reward is to have his or her tax capped at $1 million. That is more probably than most of us will pay in a lifetime and that should be it for any person. 
Instead what happens in New Zealand is that if people are in the fortunate position of being successful not only will they pay tax at the rate of 39c in the dollar but they will be harassed and hassled by a deliberate policy of targeting people—not because they are tax dodgers and not because they have broken the rules and done something that is wrong but simply by virtue of the fact that they are successful. If we do that we will drive the bright successful people to sunnier places where their enterprise money skill and aptitude will be welcomed by the Government there. They will go somewhere where they will not be penalised with high taxes and certainly will not be hassled and harassed by a Government department. 
It is hard enough to do business in New Zealand now with the Resource Management Act the Health and Safety in Employment Act and accident compensation without the Inland Revenue Department coming down on people simply because they are successful. 
Hon Dr MICHAEL CULLEN (Minister of Revenue) 
: 
 Very briefly I would like to respond to one thing the member said. There is a yawning gap between the ACT party and the Labour Party. I do not accept the notion that the only people who contribute to generating wealth in this society are those in the top 10 percent of income earners or the top 1 percent. What the member said was that those on the top tax rate create most of the wealth in this country. That is despicable rubbish compared with the way that most people spend their lives working hard year after year with no hope of ever earning $60000 in a year. 
A party vote was called for on the question  
That Vote Revenue be agreed to. 
Ayes 60 
Labour 52; United Future 8. 
Noes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Abstentions 9 
Green Party 9. 
Vote agreed to. 
Vote Economic Industry and Regional Development agreed to . 
Vote Employment agreed to . 
Vote Housing 
Vote Social Development 
GEORGINA BEYER (Chairperson of the Social Services Committee) 
: 
 It is a pleasure to take part in this debate on the 2003-04 estimates and in particular on housing. Nearly $260 million in extra funding for housing for low-income people and those at risk is contained in the Budget for 2003. The funding which is over 4 years consists of nearly $100 million to be spent on providing another 318 State homes as well as extending 80 houses to better suit larger families. That is on top of the nearly 3000 more State houses that were already planned. 
About $60 million is to accelerate the modernisation programme of State houses and that is on top of $30.5 million already planned over the next 3 years. That modernisation programme is important for many other reasons and I highlight the fact that health reasons would be most helpful in the wider scheme of things. This Government is committed to providing quality housing for low-income people in New Zealand and will work to alleviate some of the conditions that people have found themselves living in as a result of a depleted and rundown State house system particularly during the 1990s. 
We must remember that somewhere in the region of 11500 State houses as I recall were sold off by a previous Government during the 1990s. That caused a great deal of stress in communities such as mine in Wairarapa where most if not all of our State houses no longer exist. However when this Government came into office in 1999 it made a commitment to return to income-related rents. That has contributed greatly to at least 53000 low-income New Zealanders in Housing New Zealand houses having the better quality of life that this Government is committed to. 
I chair the Social Services Committee that has some responsibility in this area under the aegis of Vote Housing and the committee was pleased to greet the Minister and other officials who came to speak before it. I also commend the committee for its work on this particular vote. 
Given the ability to range on to other subject areas such as social development which is also under the aegis of the Social Services Committee I would like to make a few other key points in my contribution to the 2003-04 estimates debate. Unemployment is at its lowest level in 15 years. More people are working now than at any other time in our history. Treasury estimates that declining overall benefit numbers have saved the taxpayer $937 million in projected spending on benefits. That is a considerable amount of money in anyone’s language. Unemployment benefit numbers have dropped by 30 percent since 1999. That is a remarkable figure and it has been achieved under a Labour-led Government. 
Unlike National and ACT Labour is committed to assisting job seekers into meaningful employment. For example the 2003-04 Budget increased subsidised childcare and out-of-school care and recreation (OSCAR) assistance from 37 to 50 hours per week to improve support for low-income parents moving into work. That is a very proactive commitment to low-income people who are most desirous—and most people I know are in that situation—of moving into work but there are certain barriers that get in the way. This particular initiative is gratefully accepted on behalf of those people who will benefit most from it. 
A concern was raised during the committee report regarding the rise in sickness and invalids benefits that many OECD countries are experiencing. The primary drivers of that rise in New Zealand are an ageing population the increase in the superannuation entitlement from 60 to 65 and policy changes resulting in people moving off accident compensation and on to the sickness benefit. Budget 2003-04 provides $400000 over 2 years. We need to have a better understanding of the reasons behind the growth—the ballooning out for want of a better term—of sickness and invalids benefits and this kind of initiative will give us the opportunity to do that. 
I now move on to employment and I have already mentioned some of the good points there. However the unemployment level is the lowest in 15 years. New Zealand’s unemployment rate of 5 percent is lower than our major trading partners and above the OECD average. That is something this country can be proud of. Indeed 130000 jobs have been created since Labour came to office in 1999. There are now more people in work than at any other time in New Zealand’s history. It is encouraging that there is potential out there for employment figures to improve beyond that. The country needs to be prepared—and this Government certainly is—to embrace whatever opportunities there are to get people into employment. 
The CHAIRPERSON (Hon Clem Simich) 
: We have dealt with Vote Employment. 
GEORGINA BEYER 
: Thank you for reminding me Mr Chairperson but it never hurts to reiterate the good news—something we never hear enough of in this Chamber. 
I return to some of the interesting points that the select committee reported on regarding social development and point out that invalid benefit numbers have grown from 32000 in 1992 to 65000 in 2002. That is quite a remarkable increase. If current trends continue that number is set to increase to nearly 80000 in the next 3 years which is sobering. I see that a member from New Zealand First Mr Dail Jones is also astounded by that possibility so we expect support in our initiatives to try to tackle the problem. On current trends sickness benefit numbers are also forecast to grow—to 39000 by 2006. 
Gaining a greater understanding of the drivers of that growth will place the Ministry of Social Development in a better position to manage it which is a sensible and responsible thing to do. The research will assist the ministry to investigate ways to keep people connected to employment opportunities when they have an illness or a disability and to the communities they live in. The ministry’s research on sickness and invalids benefits is currently being scoped and while the time frame is not yet finished it is proposed that the study will have a number of components with different completion dates over the 2003-05 period. Interim results will be released as different components of the study are completed. 
As I conclude my comments on housing and social development—and I reiterated employment just to get it on the record—I point out that the Minister in charge of this area the Hon Steve Maharey and the Budget delivered by the Hon Dr Michael Cullen are proof positive that this country and this Labour-led Government are committed to tackling the tough and very vexed issues of social development—housing and employment—and getting to the core of them. This Government is working positively to find long-term solutions—not the short-term slogan-grabbing work-for-the-dole kinds of initiatives that have been proposed by the Opposition. Its policies exist only in its memory of the last 10 years. Nothing particularly new is coming out of the National Party; it has given us a rehash of the old. Hopefully as that party sorts itself out it might begin to see that while it dithers over its policy development in this area we are actually implementing positivity for low-income people in this country. 
The CHAIRPERSON (Hon Clem Simich) 
: Before I call the next speaker the chairperson of the Social Services Committee dealt with both Vote Housing and Vote Social Development. Is it the wish of the Committee that we combine debate on those two votes? Is there any objection? There appears to be none. We are now discussing both housing and social development. 
PITA PARAONE (NZ First) 
: 
 Tena koe Mr Chairman. I will confine my remarks to housing because that was my original understanding of the rules for this debate. I do welcome this opportunity to speak. 
On listening to the previous speaker who wanted us to believe that all is well in God’s own country I thought I must have been looking at a television channel from a different country last week when I saw a family in need of housing and also saw the Minister of Housing. On  
One News 
 and  
Holmes 
 we saw a young lady with three children who was living in a garage with a concrete floor no cooking facilities and no running water. If I am to believe the previous speaker all is well in God’s own country. I think not. Although the Government might be well intentioned I contend that we are not doing enough. The case we saw on  
One News 
 is just a small example of the true reality of what is happening in New Zealand. 
That family was based in Auckland but the housing problems of our country are not confined just to the urban areas. I make reference to the fact that in the estimates there is reference to the Special Housing Action Zones programme. Although that programme was established some 3 years ago there has not been very much progress in that area and I wonder why that is. That programme is designed to assist those families who can afford mortgages and are prepared to assist in the building of their homes within a community environment. Yet in the rural situation that sort of assistance is not being made available to the families who are in need of it. 
The Social Services Committee did indicate that the implementation of the Special Housing Action Zones programme has been slow and as a consequence the Housing New Zealand Corporation has moved from it to another programme that is commonly known as the “NECBOP” programme which means “Northland and East Coast / Eastern Bay of Plenty” and which identifies those three areas as the most-affected rural areas in New Zealand. I note that in the 2001-02 financial review the select committee endorsed the collaborative efforts of many agencies to eliminate sub-standard housing in those areas. But it also noted that although the programme provided suspensory loans for 207 urgent and essential repairs the planned target for 2003-04 was to increase that to 266 houses. 
The select committee notes that it now appears that the Northland and East Coast / Eastern Bay of Plenty programme is taking longer than was originally foreseen to implement so capital and associated operating funds have been subsequently transferred from the 2002-03 year to the forthcoming 2003-04 year. The select committee indicated it was concerned about the delay in implementation of the programme as we believe it is a valuable programme. We need to ask ourselves why it is that when we are talking about approving an increased amount in the Budget for that programme we are still not able to meet the demands of our rural people. 
I need to ask that question because a particular group is most affected by all of that: Maori. Although the family we saw on  
One News 
 last week was of Maori or Pacific Island extraction a lot of people from those communities who have decided they will return home to their rural areas their turangawaewae are not able to move into affordable and liveable housing conditions. That is of great concern to me because we are talking about increasing the appropriation for this programme but it is not meeting the needs of those people. I would like the Minister to take a call on that matter because although his ministry has produced a number of reports such as  
New Perspectives on Maori Housing Solutions 
 it has still not dealt with the problem that a number of our families are facing today. 
 Although I said I would confine my comments to housing I realise that we must look at housing in relation to employment and health. Earlier today we heard the Minister respond to a question about whether he had received any reports commenting on social development in this country. He made reference in his response to the fact that New Zealanders are now living longer and becoming healthier. Although that might be true the same report that indicated that—which was put out by Otago University—also indicated the disparities between Pakeha and Maori. I suggest that the figures in relation to Maori are related to their poor housing conditions. It is important that we get our housing programme right because everything else will then fall into place. It is no use for us—or particularly for the Government—to expound the virtues of reduced unemployment when in fact our people still have poor health and are still not being housed in proper and affordable housing. 
Earlier in another debate I made reference to the fact that in order to increase our housing supply serious consideration should be given to on-selling those State houses that families have occupied for more than 20 years. Those houses should be sold to those particular families and in turn the money from those sales could be put towards building more homes. The response from Government members was negative then and I suspect it will be the same now. I ask the Minister to seriously consider that proposal in relation to the appropriation for the 2003-04 year. 
KATHERINE RICH (NZ National) 
: 
 I rise to speak in this debate about Vote Social Development and I refer specifically to pages 1153 to 1198 of the Estimates of Appropriations. But first I would like to pick up on a few comments that were made by Georgina Beyer. She made some pretty positive comments about this Government implementing some of its ideas. Well if we had not seen some ideas after 4 years the Government would have been pretty desperate. If we look at some of the comments that members on the Opposition side of the Chamber have made we can see that one of the major issues of concern has been about the pace of implementation of change. One of those areas of concern for example relates to the simplification of the entire benefit system—something that Labour campaigned on in 1999 but that as we understand from comments made at the Social Services Committee it has only just recently begun to work on. 
When I read this part of the Budget I had some expectations that there would be some new ideas and new strategies to try to reduce the number of people on welfare and in particular to reduce welfare dependency. I was very disappointed. Nothing that is presented in this Budget will make a skerrick of difference for many New Zealanders who do need additional assistance to make the transition from welfare back into work. The Minister often discusses the fact that we have low unemployment but that is not unexpected when the fact is that we have had nearly 4 years of the best economic conditions that we are ever likely to have—certainly the best economic conditions in my generation. 
Yet the gains that we should have seen in the welfare area have been minimised and there are a number of reasons for that. A number of the changes that have been made while Labour has been in Government have served to make the welfare system easier to remain in and harder to get out of. Certainly a lot less assistance is provided to help people to make that transition. 
One of the examples that I think it is worthwhile to look at is the abolition of work testing for some benefits and the abolition of community work schemes for some people. For a lot of communities and for a lot of people that I have spoken to those programmes did provide a lifeline. They provided people with an opportunity to get back into a routine and on to the first rung of the ladder towards getting back into work. I dispute the idea that such schemes do not work. There is plenty of evidence in this country and certainly in Australia that shows that such schemes do work and that there are no substitutes for work itself when it comes to getting people back into work. 
This is the fourth year that the Minister has been in charge of this portfolio and there has been little progress. Yes unemployment is down but welfare dependency is higher than it has been before. If we look at the number of people who are supported by the State we can see that we now have more people supported by the State than we have ever had in this country’s history. Yes we have more people in work but let us remember that the household labour force survey defines someone as being in work if he or she is in work for 1 hour a week. If a person happens to be in work for 1 hour a week but has been on the unemployment benefit or another benefit for more than 10 years that to me does not count as being in employment. So we need to remember that and to use that knowledge to temper some of the celebratory comments that come from the Government. 
One of the questions that simply has not been answered here is why after such buoyant economic times we have not seen dramatic drops in welfare numbers. I have outlined a number of reasons for that such as the removal of some of the work-test provisions. The Minister would have us believe that work testing was an onerous Outward Bound - type process but basically it involved asking someone whether he or she was capable of work and working with the person to overcome the particular barriers that the person might have had. It is of great concern that work seems to be very much an optional part of a job seeker agreement. I was gobsmacked when we sat and looked at the new legislation. We asked officials what happens if one is negotiating a job seeker agreement and one does not want to work but wants to nominate a wide range of other things like training to go into that agreement. We were told that is totally possible and that is of real concern. 
It is also of note that despite New Zealand having had good economic times Treasury projects that the numbers of people on the four main benefits will go up. If I look at the part of the Budget where some of those projections are discussed I can see that the Government has glossed over the fact that the cost of the domestic purposes benefit for example will increase considerably as will the cost of the invalids benefit. 
It is of interest to look at the numbers—the change in invalids benefit numbers from 1998-99 to the present budgeted figures. There were 50000 people drawing that benefit in 1998-99 and in 2003-04 the projection is that the number will increase to 71000. It is the same situation with the sickness benefit. In 1998-99 there were 34000 on that benefit and that figure is estimated to increase to 40500. There has been a massive blowout in the numbers on the special benefit. In 1998-99 $43 million was put aside for the special benefit. That figure is estimated to increase to $130 million in this budgeted year. That is a skyrocketing amount of money and I think the Minister has not really explained why that has occurred. 
I go back to the domestic purposes benefit as it is important to add a bit of history to this debate. When that benefit was brought in it was imagined that no more than 20000 New Zealanders would use that benefit including widows. If we look at the figures now we see that there are 110000 parents trying to support their children on the domestic purposes benefit. Most of us in this Chamber know that it is pretty tough being a parent full stop but it is certainly a lot tougher trying to do so on a limited budget supported by welfare. I think it is important that we start to discuss things like assisting those parents who are supported by the benefit back into work. We are one of the few Western countries that do not ask parents to consider part-time work when their youngest child reaches school age. I think it was a huge backward step for New Zealanders when that requirement was removed. That is why we will see a projected increase in the numbers of parents mainly women who are drawing that benefit. 
I think we have a lot to learn from other countries. When I released my welfare paper which looked at a wide range of ideas it did not matter whether the people who read it were from the left or the right of politics. People agreed on one thing and that was that the welfare system as presently practised in this country is not working. Members will remember that John Tamihere made a similar comment along those lines. That is why we need to consider some new ways of delivering welfare in this country. It is also why we need to consider community work schemes. A recent Colmar Brunton poll found that 91 percent of people agreed that people on an unemployment benefit should be available to do community work. Seventy-five percent of those who were part of that survey said that unemployment benefits should only be available for a set period of time until an unemployed person finds a job. 
We need to start talking about certain benefits being temporary and not being considered as an option to support people for long periods of time. We know the outcome of remaining on the unemployment benefit for long periods of time; that outcome is poverty. The ministry debates whether welfare and poverty are linked. I say to it that they are one and the same. Certainly the outcome is the same. So we can be cute with regard to some of our academic discussions about welfare and welfare dependency but I think a person who is living that life probably does not see very much difference in terms of the outcome for his or her life. 
The aim is to get more people back into work. National is a party that strongly supports the welfare safety net and always has done so. But at the moment some of the changes that are included in this Budget are not a step forward. That is why we have not been able to capitalise on what should have been good economic times by bringing down the welfare numbers and making the welfare decreases sustainable. It is a travesty that Treasury now predicts that the number of people on all four major benefits will go up again. The Minister has not explained why invalids and sickness benefit numbers are going up. His answer was to commission some research at the cost of $400000. I was shocked to learn that that research will not be reported on until 2005. 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 I rise to speak now because I think one of the most interesting things in the social development debate which is what I will focus this 5-minute speech on and I will come back to housing in a later contribution is that we have a good comparison now between the main Opposition party—at least in size—and the Government at this time. 
We came into Government 4 years ago on the back of a debate about welfare which had been fundamentally about blaming and punishing beneficiaries. There had been an unbroken 10-year period of saying that if a person was on welfare it was very likely to be his or her own fault and of saying it was very likely to be the case that if pressure was placed upon a person individually to acknowledge it was his or her fault that person might come off the benefit. That policy for example drove unemployment up to 11.9 percent. There were 170000 people on the register in 1992. That policy gave us work for the dole the campaign on television about how we were supposed to dob in our neighbour if he or she was a beneficiary and a culture where beneficiaries felt that they were fundamentally under attack under siege by the Government. Every single year the beneficiary numbers went up. 
Words fail me to be truthful. I am speaking in this debate after the National Party spokesperson on social development who says she wants to see fresh ideas in the Budget and that she wants to offer fresh ideas yet what we heard was that the same analysis that National adhered to previously underlies Ms Rich’s analysis. It is all about the individual being wrong and about blame and the punishment because we know that that is the case. Ms Rich said that her alternative Budget effectively would have been based upon her welfare document. What did that state? 
When Opposition members were asked the reason for the kind of attack on beneficiaries that the welfare policies of the National Party signified we heard from Bill English and Katherine Rich that Jules Mikus; a convicted rapist and murderer is the motivating force for the National Party’s welfare policy. I know that that is an exaggeration but I did not say that—they did. Bill English and Katherine Rich had the cheek to go on the radio and say it is a cheap shot to say that Jules Mikus is the face of their policy. But we did not say that. We would not have dreamt of saying that somebody who was a convicted rapist and murderer was the motivation for introducing time-limited benefits but they said that. Bill English and Katherine Rich said we had to get people moving off the benefits because Jules Mikus was on them for all that time so that is why they want to have time-limited benefits. 
That was said despite the fact that the only country that does run time-limited benefits does not actually apply them because they do not work. Only 8000 people in the entire United States have been moved off a time-limited benefit because either the federal budget just carries on paying for people or they move on to a state benefit. They do not move off the benefit because the results of moving people off the benefit just mean poverty. Even the US under the kind of regime that is there now—which is clearly one the National Party likes in terms of its policy towards beneficiaries—does not limit the time spent on benefits. 
What we have from the National Party is a policy of compulsory immunisation of beneficiaries’ children and Mr English told us of removing $40 to $60 a week from the household if parents do not have their kids attend school—if they are truants—time-limited benefits and that wonderful old chestnut work for the dole. 
Work for the dole in this country was proven to be worse than doing nothing for someone in terms of getting that person into a job. Why is that? It is because as soon as we put people out in the community working for the dole the community becomes dependent on that cheap labour like my local schools did I am afraid. Up to 16 people who were working in a primary school worked for the dole and the school fought tooth and nail to hang on to that cheap labour. Work for the dole creates that kind of society. It does not get a person a real job a real wage a real career and a real future like the one that everybody here expects. It gets them locked into the dole. I will not have a Government that I am part of lock people into the dole. I want people to be in a real job with a real wage and a real future because that is what every single person should have an opportunity to have in this country. 
I know I have to finish my 5-minute contribution but I say the contrast between Labour and National is absolutely clear after listening to Ms Katherine Rich who unenthusiastically went through the National Party’s policies. They are policies that have been proven to be wrong. We should provide people with a positive opportunity and this Budget does so. 
SUE BRADFORD (Green) 
: 
 A number of interesting issues were raised during the Social Services Committee’s examination of the estimates for the Ministry of Social Development this year particularly in relation to the Work and Income side of its operations. First of all there is the ongoing question of why so many more people are to be found proportionately on the invalids and sickness benefits than in years gone by. For example the number of people on the invalids benefit has doubled in the last 10 years and the number on the sickness benefit has increased by over 50 percent. As a result of rising concern about why that is happening—and it is not new news—the Government has responded by investing $400000 in research into it this year. 
While the Green Party commends the Government for its willingness to confront and analyse the problem I suggest that with some 350 or so policy analysts at its beck and call within the Ministry of Social Development itself that particular ministry should already have the capacity to find out the answers. I also suggest that those answers are actually self-evident both to the Minister and to the ministry—and in fact pretty much to anyone else who has been following socio-economic and health trends in our society over the last decade. 
The Government acknowledges as Steve Maharey himself did in the Chamber earlier this afternoon that a lot of the reasons for the increase in numbers on the sickness and invalids benefits are well known. They include the fact that we have an aging population like many other countries that the retirement age has been lifted to 65 that people are being pushed forcibly off the accident compensation tail and into the benefit system—that is if they are lucky—that hospital waiting lists are growing and that the number of people with a serious mental illness is rising. 
 When people are older and disproportionately sicker whether physically or mentally in part because of failures in other parts of the Government like the health system it is no wonder that the number of people on those benefits goes up. Personally I think it would have been a lot more useful to spend the extra $400000 on finding and actioning solutions across and between various parts of Government like Work and Income the Accident Compensation Corporation and the mental health physical health and disability sectors rather than on more analysis that I believe will simply tell us what we know already. 
The second area I would like to touch on today is that of special benefits. The cost of the special benefit is forecast to increase from nearly $83 million in 2002-03 to over $130 million in 2003-04. The Green Party welcomes this Government’s avowed commitment to do more to make sure that people receive their proper entitlements but at the same time we are concerned at the ever-increasing reliance on third-tier income support like special benefits and special-needs grants to make up what families need to live on when what really needs to happen is a wholesale reform of the benefit system so that the core benefit for all beneficiaries is enough to live on in the first place. 
As the Ministry of Social Development itself pointed out last year in its report to the incoming Government a huge amount of Work and Income staff time is wasted on administering the massive complexities of the around 35 different benefits allowances and supplements that are potentially available to people. I am sure it would be much more economical for this or any Government to throw the 1964 Social Security Act out of the window along with all its amendments and to immediately rewrite all relevant law and regulation in the form of a slimmed-down sensible system governed by the principles of simplicity sufficiency and universality. 
The Minister himself continues to promise that under Labour that will happen one day and that a lot of work on it has already been done—and I say good on Labour. However that day is an awfully long time in coming and it is galling for people who are barely surviving on benefits right now to see $4 billion or more in Budget surpluses and billions more in the “Cullen superfund” while benefits stay at levels where they cannot be lived on and Work and Income itself depends on food banks to feed many of its so-called clients. 
 Finally and again in relation to the special benefit the Green Party would like to highlight the ongoing disparity in how that and other third-tier benefits are administered around the country. The Ministry of Social Development rejects the findings of the  
Widening the Gaps 
 report put out last year which showed that Pakeha were more likely to obtain a special benefit than Maori and Pacific Island people and that there were huge geographical variations in how special benefits were administered. However even in the department’s own statistics for February of this year variations continue. For example at one extreme 59.1 percent of the potentially eligible people receive the special benefit at the Kapiti office while at the other extreme 2.7 percent of those at Gisborne and 2.5 percent of those at Ruatoria luck out. If that does not show regional and ethnic variation I do not know what does. 
MARC ALEXANDER (United Future) 
: 
 I would like to address the issue of housing. I notice that the Residential Tenancies Amendment Bill is Government order of the day No. 11 at the moment and it looks like it is speeding up the Order Paper which is a good thing because it is timely. For too long landlords have been disadvantaged in terms of the law and their ability to recoup the costs of their investments because of very lax tenancy laws and the inability of the tribunal to action some of the judgments made by it. 
There are 315000 rental housing units in New Zealand of which 230000 are privately owned. That means that a rather large and substantial proportion of the New Zealand public have skimped and saved their money throughout their lives to buy an investment property to let. They are being responsible and for many of them that property is their retirement fund. The inability of the law to protect the integrity of that investment is something that needs to be looked at. I look forward to working with the Minister to try to push through a few amendments to try to balance what has so far been an imbalance. 
I look now at some particular issues. The 4-week bond should I think be completely between the landlord and the tenant to decide depending on the kind of tenant. This is part and parcel of accepting a certain risk with a certain type of tenant. There may well be situations where a tenant with a good track record could prove financial hardship so that the landlord might forgo the need for a bond. In another case a tenant with not such a good history might be asked for a slightly larger bond in order to satisfy the landlord that there is some protection on the property. 
Another issue is the landlord’s right to enter an abandoned property and relet it without a tribunal order. It is a frustrating expensive and protracted bureaucratic procedure for the innocent landlord to enter an abandoned property and relet it without going through the tribunal. It makes no sense. I turn now to the matter of fines for such things as wilful desertion breaking lease breaking the agreement or failing to attend the tribunal or mediation. Right now people can walk away from mediation and they accrue no fine—no penalty at all. In fact the penalty actually accrues on the landlord. That is wrong. That issue has to be addressed. 
In terms of going after tenants who wilfully damage property or do not pay the rent Work and Income the courts and the Inland Revenue Department must be made to hand over details of where those people are. Why is it that rent arrears will not be paid for by Work and Income but emergency accommodation will be paid for by Work and Income? That makes absolutely little sense when we are talking about tenants who abrogate their rights to a property run off and leave behind a whole stack of debts yet can front up happy as Larry collect another amount of taxpayer-funded money and move into another home while having no sense of accountability for the home they have just moved out of. That makes absolutely no sense either. There are no teeth in the legislation. 
If we have a look at the obligations that are set out for landlords and tenants we quickly find that there are 12 obligations on landlords—one is an obligation on both landlord and tenants which is that there will be no changing of locks and that makes sense—and only one obligation on tenants which is not to refuse entry to the landlord. That makes no sense whatsoever. In some circumstances for example a landlord who wants to use force to enter his or her premises—sometimes because it is abandoned—is liable according to section 48 to a fine of up to $500 or 3 months in jail. That is plainly ridiculous. Entry without a tribunal order can also attract a penalty of up to $1000 or 3 months in jail. That is clearly crazy and all out of proportion with the obligations of both tenants and landlords. 
Stephen Franks 
: And you support those people. 
MARC ALEXANDER 
: No I do not support this bill at all. I do not support it unless we can make some decent changes. We will try as much as we can. 
Stephen Franks 
: As much as you can but you will vote for it. 
MARC ALEXANDER 
: Not necessarily. Why is it not possible for there to be direct deductions of rental payments by Work and Income directly to landlords? That would take away the opportunity for some tenants to abuse the money they have been given through the taxpayer in order to find accommodation. That makes absolutely clear sense but it has not been done at all. I refer to the 90-day termination notice which is found in section 51 of the Residential Tenancies Act. Troublesome tenants who are noisy or irritating to other tenants in a close-by block can be very difficult to remove. Good tenants have been known to leave premises because of bad tenants who play music at loud decibels all through the night destroy the property and so on. The law is causing landlords potential losses of rent. If the Government argues that rental property is a business then the law should not intentionally hinder or delay due process of recovery or countenance losses sometimes of considerable amounts. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
MARC ALEXANDER 
: I want to talk about two things one of which is compensation. Currently there is no compensation for a landlord for rental arrears or for damaged or stolen goods—and nearly all the offences are directed at the landlord—no fair and reasonable compensation for abandonment wilful damage arrears leaving premises without notice etc. At present a lease to stay for a certain duration is worthless. Tenants can and have walked out of a lease with no redress for the landlord—all other courts allow this but not the Residential Tenancies Act. Once the application has been made for arrears etc. and a further amount for compensation and interest on the outstanding rent has been made—after all that—a tenant can bring exemplary charges against the landlord but it is very limited with a landlord on a tenant. This is permitted in commercial leases in the District Court under section 20 of the Disputes Tribunals Act. All other avenues of redress permit this apart from the Residential Tenancies Act. That needs to be addressed. 
The Residential Tenancies Act is in dire need of review to protect landlords from being victimised by a small minority of irresponsible and unscrupulous tenants. Why are there 12 obligations on the landlord with fines of up to $3000 and 3 months in jail? One obligation applies to both landlords and tenants yet only one applies solely to tenants. It is ridiculous to inflict so many provisions on landlords who have for the most part scrimped and saved to have such an investment in the first place and not impose an equivalent number of provisions—provisions in order to safeguard the investment—on the tenant. How can it be right that a tenant’s failure to pay rent does not negate the tenancy agreement? There are no fines for tenants if they desert or abandon a property or fail to attend a tribunal hearing. How therefore can redress be sought? Why is the landlord liable for property in an abandoned premises whereas there is no obligation on the tenant to be liable for damage to the landlord’s property? 
How come Work and Income does not address the rent arrears of tenants who abscond yet will pay an emergency accommodation grant so that those scoundrels can get their foot in the door to prey on yet another unsuspecting landlord? Most important why is it that the Inland Revenue Department the courts and Work and Income will all share information on a tax matter but will not do so when money is owed to individuals such as landlords? Is there a double standard there? I suggest that there is. The bottom line is that we need a register to vet tenants. We need a register that gives accurate and up-to-date information to prospective landlords and is backed up by legislation with teeth. The opportunity is coming up. Let us seize the moment and do something to redress the imbalance and look after the landlords for once and for all. 
JUDY TURNER (United Future) 
: 
 I want to spend a little bit of time speaking about the benefit system and about some of our observations to date. Last year United Future supported the passing of the Social Security (Personal Development and Employment) Amendment Bill and received much criticism from the Opposition for doing so. I have taken an interest in the implementation of that legislation at a community level and recently I visited some of the groups—non-governmental organisations that provide a range of services for beneficiary families with single parents and dependent children—that work with single parents. Those who are involved at the coalface with single-parent families have reported that they are not particularly happy with the implementation of this legislation. When I questioned them closely I was interested to note that they were very happy with the new abatement procedures and the ability to earn more money without losing money from their benefit—they all agreed that that was helpful—but what concerned them was that they are now being held far more accountable on a yearly basis which is the very reason that United Future supported the legislation. 
Under the old legislation work test or no work test there were only two definable moments when a person on the domestic purposes benefit was asked to consider his or her working future. Under the new legislation—and this is what has been causing some grief—there is now yearly accountability and questions being asked of recipients of the benefit as to what the future holds for them what plans they are making and what steps they are taking towards eventual sustainable employment. It is an extremely exciting development even if there is some resistance out there towards it. United Future is pleased to see that that is happening. It may mean that the $14 million from memory that was budgeted to train case managers needs to be increased I say to the Minister so that some additional training can be done. I have had concerns that case managers have had their roles severely redefined and some additional training to make sure that they are doing well by their clients may be essential. 
We have mentioned before some concerns we have about the increasing numbers of people who are going on to the sickness benefit. This is not because I want to bash sickness beneficiaries. In fact over the years I have worked in a voluntary capacity with a number of people on benefits and have always found them to be people who genuinely needed some sort of State assistance. Our concern is whether the form of the assistance is appropriate to the existing needs. My concern is illustrated by some of the current problems that we are having with the sickness benefit. 
The Government is in a very fortunate position of holding office at a time when unemployment is at a record low but it is also apparent that the numbers of those on the sickness benefit and other benefits are increasing at the same time. Yesterday’s  
Dominion Post 
 reported that unemployment is down in the Wellington region but at the same time the number of sickness beneficiaries is steadily increasing. Occurring as it does in one of New Zealand’s most employable regions I have discovered that I am not the only person concerned with that. During question time today I mentioned the Downtown Community Ministry director Kevin Hackwell who has mentioned his concern at the growing number of people claiming the sickness benefit. 
We understand that the Minister points to the aging population as the reason for that increase but we need to look a little more closely at the figures. On a national basis there has been a 17.3 percent increase in the number of sickness beneficiaries since the end of 1999 and a 7.4 percent increase in the past year alone. The ministry’s statement of intent acknowledges that the numbers of people on that benefit will continue to increase and we repeat that we understand that changing demographics as a result of an aging population will over time contribute to benefit trends. But the fear is that the relationship between the increase in sickness beneficiaries and the reduction in the number of registered job seekers is not a healthy one. We see an obvious bubble in the graph when we look at the breakdown of why people need to be on the sickness benefit. That huge bubble is called “stress”. 
PANSY WONG (NZ National) 
: 
 It is refreshing to hear that even United Future members are talking about the problem of the rise in invalids beneficiaries and sickness beneficiaries. The test that remains is what they are going to do about it. United Future continues to support the Labour Government which does not seem to be able to keep its social welfare portfolio under control. 
When I read through the select committee’s report I immediately got the message that there is bad news for the Minister for Social Development and Employment Steve Maharey because even his own caucus members are no longer convinced by his spin that the social welfare portfolio is under control. Even the Labour members on that select committee are frustrated because they state in this public document that the number of people on the invalids benefit has been increasing for some years and they urge the ministry to proceed with its pilot study to find the causes of the rise. Just to get a feel for why they are worrying in late 1999 when National was in Government there were 52700 invalids benefit beneficiaries. By this year there were 68800 and the numbers are forecast to increase to 71000 people. 
 The number of people on the sickness benefit has increased from 32000 to 39000 and the warning that an urgent study needed to be done into that area was already recorded in the select committee’s report last year. But what has the ministry done or shall we ask: how did the Minister respond to that urgency? We learn that the ministry is now conducting four pilot demonstration projects but apparently all those results will not be due until August 2004. I think that the public should get as worried as the select committee and myself that it took about 3 years just to learn the result of a study on that urgent issue and some members on that select committee believe that the research findings will not be made available until 2005. I think that the Minister should take a call and say whether that is how he responds to an urgent problem at hand. 
Talking about benefits the other issue that I learn from the select committee’s report is that the expenditure on special benefits is forecast to increase from $82.9 million in 2002-03 to $130 million in the coming financial year—a whopping 57 percent increase. I notice that the only other items that have increased at the same speed are the number of increases in taxes imposed by the Labour Government. There are 17 tax increases. I think that is about the only area that has kept up with the increases in these special benefits. Apparently we have some explanation. According to the select committee’s report it is partly to do with some people who might have been entitled to special benefits but who were not aware of that and the ministry’s task is to increase their awareness of those benefits. But the other explanation in the select committee’s report which I find really fascinating is that it reckons one of Wellington’s social welfare agencies claimed that the Ministry of Social Welfare’s staff might have some bias against bringing the availability of those special benefits to the attention of the Maori and Pacific Island communities. When I read that in the report I begin to get quite worried because the ministry says it has implemented a policy to ensure that staff members are not—even subconsciously—operating a bias in order to fix the problem. 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 I took a short call earlier on in the debate and I thought that given that the debate is drawing to an end I would take a short call again. It is interesting to follow on from another National member. The earlier speech by Katherine Rich outlined the blame-and-punishment policies that the National Party wants to follow and Pansy Wong has just introduced a series of criticisms of the Government that are once again gobsmacking in their misguided nature. 
For example we were invited by that speaker to say what we will do about the sickness benefit. We have spelt out that just like all OECD countries we believe we face a real issue because of problems like the aging nature of the population which means more people are eligible for benefits. We have said that we should get it into proportion. There are 13000 people going on to the special benefit from other benefits and 8500 coming off. Let us not get into a situation in which we start to make people who are on a sickness benefit somehow feel—as the National Party always does—that they will be hunted down individually for daring to be on a sickness benefit. One of the main ways people get off a sickness benefit can I stress is that they die. That might be worth remembering by the National Party—that that is why people get on to sickness benefits after they go through all the processes of getting on to them. 
But what was the National Party’s answer? Its answer was the capacity test in the 1990s which even its members did not agree with in the end because no one could make the thing work. In the end the entire mental health community turned on the Government prior to the last election to say that it was unworkable and put people in situations that were simply condemning them to even worse situations. Even the National Party said: “Look we can’t do this.” Since then I have not heard a single answer from National Party members about the sickness benefit. All it does is whine about other people doing something about it. We will. We understand the issues and we want to individualise and tailor the assistance to people on sickness benefits so that we can ensure that what assistance they get is tailored to their needs. 
The member asked what we were doing about the special benefit. The reason we have the special benefit going up is that one of the things this Government has done is paid people their full entitlement. That is unlike the National Party which did not pay people their full entitlement such that it created the food-bank industry at the beginning of the 1990s—because it cut benefits by up to 30 percent. Out of that came the food-bank industry and out of that came the tiers in the system of social welfare benefits that we have to operate. That is why we pay people on the third tier of the benefit system because if we did not pay them that kind of money they would not be able to live. I guess we are hearing from National Party members tonight that because they blame and punish people if they happen to be unlucky enough to be on a benefit they do not want to pay them a special benefit. That means $40 or so coming out of 32000 households in this country because that is what we do—unlike the National Party which when it left power was paying about 7000 people the special benefit. 
So I think the debate which is supposed to be a forward-looking one tonight would benefit from the National Party stopping rehearsing its failed ideas like work for the dole as Ms Katherine Rich did. The National Party would benefit from not having members getting up in the House and crying crocodile tears over issues that they have no answers to but simply saying that the Government is dealing with these very very difficult issues extremely well. There has been a 33 percent drop in the unemployment rate since we came into power. I know that members say: “Oh gosh only 33 percent.” But we have to compare that with an 11.9 percent unemployment rate under the National Party. There were 170000 people on the register under the National Party. Until that party breaks from the 1990s and starts telling us how it intends to provide solutions in this debate no one will listen to it. 
PANSY WONG (NZ National) 
: 
 What a wasted few minutes! So this Labour Minister will take credit for the decrease in the unemployment rate—which is because of good weather and a low exchange rate—but as soon as it comes to the increase in the number of beneficiaries then somehow that is out of the Government’s hands. I would like to remind this Minister that the questions I raised just now were listed in the select committee’s report and the Labour members were part of that committee. It was the Labour members who got so frustrated—which I can understand—by the Minister doing nothing. That is what they put down in the report—for the issue of the increase in the invalids and sickness benefits to be addressed with urgency. All they can get from that Minister is that he really has no solution so he blames the National Party. 
I am very proud of my colleague Katherine Rich who came up with a well-researched logical good piece of documentation concerning the social welfare issue of getting rid of the dependency attitude in the second generation. The honourable Minister should look to that document for solutions and stop blaming the National Party which would be very happy to fix the problem. 
But before the interruption of the Minister’s speech I was commenting on the scary thought that the Minister—I presume—influences the ministry which then says that it wants to implement policy to ensure that the Ministry of Social Welfare’s staff members would not even subconsciously operate on a biased base. That is the type of action we came to associate with autocratic regimes overseas in which people were told they were not even allowed subconsciously to operate with certain attitudes. But I can assure the public that denial and trying to control the mindset of staff members will not solve the issue of the increase in beneficiaries. 
 The other issue in the select committee report that I want to raise is the issue relating to caseload management. Apparently the reduction of caseload management is an important priority for the Department of Child Youth and Family Services. It currently works on the basis of one staff member to 160 clients and the aim is to reduce the ratio to one staff member to 120 clients. If the Minister is so keen to take a call I would like him to take a call to explain why at the same time that there is a target of reducing the staff-to-client ratio this department can spare Shannon Pakura the chief social worker to operate out of the Associate Minister of Maori Affairs’ office. She is in a $100000-a-year job and can apparently spare a day to work in the office of the Associate Minister of Maori Affairs. 
I think the Minister should take a call and explain that to the public. What sort of message is that sending to the staff at the Department of Child Youth and Family Services who on the one hand were told to reduce the staff-to-clientele ratio and to reduce the caseload backlog and who on the other hand learn that a senior manager who is on $100000 a year can spare a day for a secondary job in the office of the Associate Minister of Maori Affairs? How can the Minister expect his departmental staff to get the message that they have to work harder? I think that is not sending the right message. 
A party vote was called for on the question  
That Vote Housing be agreed to. 
Ayes 69 
Labour 52; Green Party 9; United Future 8. 
Noes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Vote agreed to. 
A party vote was called for on the question  
That Vote Social Development be agreed to. 
Ayes 60 
Labour 52; United Future 8. 
Noes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Abstentions 9 
Green Party 9. 
Vote agreed to. 
Vote Foreign Affairs and Trade 
Vote Justice 
Vote Pacific Island Affairs 
The CHAIRPERSON (H V Ross Robertson) 
: The next set of votes is in the name of the Hon Phil Goff. They are the Foreign Affairs and Trade Justice and Pacific Island Affairs votes. I intend to take those as one debate as has been the practice throughout this debate. However there will be three separate votes at the end unless there is any objection to that course of action being taken. 
DARREN HUGHES (NZ Labour—Otaki) 
: 
 I rise in support of the votes before the Committee particularly Vote Justice as a member of the Justice and Electoral Committee that considered that vote. The committee reported back to the House in favour of the estimates that were presented as part of the Budget. The vote contains spending to the tune of $171.43 million. Before going on to talk about some details of the vote and how it will be appropriated this coming financial year I want to record on behalf of Labour members of the Justice and Electoral Committee our gratitude and appreciation for the justice portfolio leadership team of Phil Goff the Hon Lianne Dalziel Taito Phillip Field Rick Barker and Margaret Wilson. Those Ministers work across quite a diverse range of interests in pursuing Government policy and I believe they are making very good progress on these goals. 
Stephen Franks 
: Is the member blushing? It’s only in question time that he has to do that. 
DARREN HUGHES 
: Mr Franks has never been part of any Budget process where ideas are turned into policies that are implemented across the country; if he had been he would know the great feeling of joy and pride that members of Parliament can have in seeing things actually happen rather than just carping on the cross-benches in perpetual irrelevancy. I express my sympathy for him at the same time that I congratulate New Zealanders who are making a difference. 
The select committee has a number of pieces of work in front of it at the moment that refer to Vote Justice and I want to talk on particular areas where that vote is impacting on young New Zealanders. I will start by talking about Project Early which is a project that was piloted in the city of Christchurch over a period of time which has now been funded through this vote into the city of Auckland. I believe that it is a very good example of using the justice portfolio as a lead agency in coordinating with other Government agencies to work with young people and to ensure that we try to turn round any signs of criminal offending. Project Early does help young children targeting children between the ages of 4 and 8. We know that it is possible to identify people who may go on to offend through some of their behaviours at an early age and if we can intervene early spending money and putting support in place for them early we have a chance of changing their lives and making a real difference rather than ignoring that and then spending the money after they have committed criminal activity. 
That is something that Parliament and Government agencies have been very good at doing. We have been very good at paying for things at the wrong end when it is expensive and when we can look tough about it but what we are doing here is spending a smaller amount of money early. We do not know whether those 4 to 8-year-olds will go on to a life of criminal offending but we do know that if we do not try to help them we will not be able to make a difference for them. 
We also know that the formal evaluation of this project—and I will be interested to hear whether Opposition members support Project Early—has found that it has been very very successful in dealing with behavioural problems through intervening and being able to resolve some of the issues that those young children face. Eighty percent of the interventions that Project Early has made have been successful. I am sure we are going to hear from the ACT party and from other Opposition parties that this is a waste of time and another example of big Government spending on programmes that do not actually make a difference. Of course that flies in the face of the evaluation that has been done and it flies in the face of the young children whom we are helping through programmes like Project Early but I am sure that will not stop Opposition members from being negative about the kinds of things we are trying to do in the area of early intervention. The project will be going into Auckland and it will continue to have funding in Christchurch through this estimate. The committee very strongly supports that approach. 
Money from this Budget’s Vote Justice is also going to fund the victims’ rights legislation. I acknowledge the United Future party which made the Victims’ Rights Act a part of the confidence and supply agreement with the Government and has put a big emphasis on making sure that victims’ rights legislation was passed before Christmas last year. In this set of estimates the money goes in to make sure that we can make a difference in victims’ rights. For example in the 14 areas that Victim Support deals with through the country there will be $2 million to hire district managers who will be able to support the work of Victim Support. What is the work of Victim Support? Over 100000 crimes have had intervention by Victim Support and that has led to support for 135000 victims across communities in New Zealand. So not only do we have legislation where Parliament says that victims’ rights are important but through Vote Justice we have a recognition in a financial sense by the Crown that these things need to be funded and properly appropriated for. 
In my own area in both Horowhenua and Kapiti we have two very strong Victim Support organisations run by volunteers. Volunteers have always run them. In the 1980s it was set up under the previous Labour Government. Our Labour-Progressive Government with the support of United Future has been able to make sure that we then make sure that the Government is a partner with Victim Support in terms of making money available. 
I come to the family group conference part of Vote Justice where there is some money available. We see that the Government is making a very strong commitment to ensure that family group conferences are well resourced. The group conferences were an innovative part of the 1989 legislation but there has been a need to make sure that it is a vehicle that is actually useful. There are two ways of doing that. One of course is in follow-up once the family the police and the victims have come together for a conference making sure the decisions of those conferences are followed through. It is very important in terms of the legitimacy of the family group conference process but also being able to identify some of the wider issues that affect the people coming before the group conference is important. That is why in Vote Justice funding is available to have a regionally based professional management structure but more than that also to be able to work with young people to do health and education assessments for the high-risk young people who are offending. 
This reinforces the theme I spoke of earlier which was early intervention with young people and making sure that these needs are taken care of when people appear at family group conferences. If we intervene early in that way we can put in place support networks to ensure that the offending does not go on. Being proactive when we deal with criminal offending is very important. It is so easy in this House—and I have heard it so often in the one year that I have been a member here—to be very reactive in the criminal justice debate. Members of Parliament try to be the toughest and angriest about crime and very little goes into dealing with how we can prevent crime in the first place. There are some tangible examples in Vote Justice in that regard. 
Some of the other structural things that are happening will be the money and the vote for the merger of the Ministry of Justice and the Department for Courts on 1 October. That is part of the Review of the Centre that the Minister of State Services has been leading but the funding is in there to bring those two departments back together again. I am very pleased that restorative justice is continuing to be taken seriously within Vote Justice. There will be 16 programmes funded within the coming financial year. This is a very effective way of dealing with crime where we can try to change criminal offending. In my area in Levin and Foxton there are two very successful restorative justice programmes that have an extremely low level of reoffending. That is because families friends and victims are involved and because key agencies are involved. They are all focused on stopping reoffending rather than simply meting out punishment to look tough. 
The fact that there is low reoffending is reinforced by the fact that the restorative justice programmes are running effectively. It is very easy in political debate to make them look like soft options but when one talks to people who have been through a restorative justice programme and talks to some of the judges involved they often say that the punishment— 
Stephen Franks 
: Try the victims! 
DARREN HUGHES 
: The victims are involved in the process and have to agree for restorative justice to be an option. The ACT party spokesperson on justice does not even know what the trigger is for restorative justice. We spend time in this House talking about how we try to raise the level of debate about criminal offending and we have a member of Parliament in his second term who is meant to be responsible for this portfolio area who tries to say that he does not know what the trigger is for restorative justice. How on earth are we to try to raise the tone in this Parliament to make sure there are fewer victims when there are contributions like that by way of interjection? It is an absolute disgrace that the member would do that. 
The other area that is in the vote refers to the clean slate legislation currently before the Justice and Electoral Committee. If that is passed by this Parliament there will be funding within the vote to ensure that can happen. That will be a good move as well. In respect of burglary the ongoing commitment of this Government is to make sure that we target crime early because burglary is a stepping stone to further crime. We have seen those rates come right down through the intervention of the Government and through funding that at the front end. 
With regard to the youth offending teams that are running around the country there is no actual new funding but existing funding from within the vote is used to support them bringing together four agencies—health education the Children Young Persons and Their Families Service and the police. They are working very successfully in the community. Labour members visited the Nelson youth offending team. It is a very good vote. I support it. 
STEPHEN FRANKS (ACT NZ) 
: 
 That was an interesting contribution from a member on the Government side particularly given that he was on the Justice and Electoral Committee that went through Vote Justice and presumably knew that the committee had a number of reasons for saying that it could not tell just what was happening in this vote—what the intended effect was what some of the targets were and what outcomes were planned—because the reporting was so poor. 
Let me run very quickly through the select committee report. I remind the member that we said for a start that the merger of the Ministry of Justice with the Department for Courts made it hard indeed to understand the estimates in this area. We had the evidence that Treasury believed that the proposed merger would be more likely to worsen performance given that there would be a loss of focus on matters of strategic importance in both public law and the criminal justice system and in the rather oblique language and jargon we get from bureaucracies that are anxious not to offend their political masters “the proposal may constrain the ability of an incoming chief executive to address capability and cultural issues that seem to be affecting performance in both organisations”. One really does wonder what is meant by “capability and cultural issues”. The New Zealanders who pay the many many millions of dollars that go into this department would probably ask in respect of a department of State whether capability and cultural issues might be more simply expressed as “work ethic” or is it trying to say that they are lazy stupid poorly qualified or have loopy theories that cannot be knocked out of them? Just exactly what was it that Treasury was trying to say? We can only glean what is meant from what the Minister has done and approved. 
The Secretary for Justice told us that the main cultural difference between the two organisations is that the ministry is more policy focused and that “the biggest driver behind the merger was to bring the courts closer to policy development as the division of the old department has reduced the connection between policy and operations”. I really would appreciate the Minister setting aside the time this evening to reassure us that this is not a set of code words for subordinating the courts to the executive. 
I see that one of the stated objectives of the merger is to “enable better coordination of the relationship between the Executive and Judiciary in respect of both policy and administration”. Just what exactly is it that the judiciary is to have its arm stuck up behind its back to do? Why would a merger of departments with supposedly independent politically neutral judges give us “better coordination of the relationship between the Executive and the judiciary in respect of policy and administration”? Is this a signal that we are quite right to expect Margaret Wilson’s new Court of Appeal to have a preset agenda? Is this telling us that by sticking the judges under the Ministry of Justice they will have to do what they are told? Or is this something just as sinister but more simple like bringing an indigenous law into the heart of our legal system? This may be just that the Minister expects that he will be able to get the judges to read what is in his mind when they look at something like section 86 of the Sentencing Act. That provision was stuck in at the last minute to reverse the Minister’s previous decision that there would not be a power for judges to set non-parole periods. 
 Section 86 has been repeatedly criticised by the judges. They have to find that a crime is extraordinary before they can set any sort of non-parole period. Perhaps what the Minister means here and what the select committee could not get to the bottom of is that there is an intention to put the judges more under the thumb of the politician and the executive. Certainly nothing of what we have seen in performance in the justice portfolio reassures us that that is not the intention. We have a Minister who was determined to get rid of suspended sentences despite the expressed opposition of both the judiciary and the profession and who turns to berating the judges when they implement his own law in the way that the Opposition in this Parliament told him it would be implemented. And what do we get? We seem to get a response that says: “Bring the Department for Courts under the thumb of the Secretary for Justice and the Ministry of Justice and we will get better coordination of the relationship.” whatever that may mean. 
We see in this vote that there is $1.25 million more in funding for policy advice. The policy advice might be needed to work out exactly what the Ministry of Justice is trying to do. We could not understand the statement of intent. We strongly urged—as Mr Darren Hughes ought to have known—the previous recommendations of the select committee to include quantifiable data on family group conferences that would allow national comparisons to be made. That was the recommendation not just of the Opposition but of the entire select committee. We unanimously recommended that we get something that would tell us whether family group conferences were working. Yet Mr Darren Hughes was able to stand here in this Chamber as a young Labour member get 10 minutes of the Committee’s time and tell me as an Opposition member that expressing a little bit of justified cynicism about family group conferencing was in some way a reprehensible use of the debate in this Chamber. 
Let me draw to Mr Hughes’ attention what the victims think of family group conferencing and some of the justice processes that the ministry has implemented and is supposed to supervise. What the victims think about family group conferencing was very clear in the message given by the Sensible Sentencing Trust to Parliament today. It reads: “The existing law means young offenders are not being held accountable. The politically correct family group conference is totally ineffective as a deterrent. This is confirmed by our youth reoffending rates. Youth offenders should be processed through the normal court system but with the judges having the power to hold parents and guardians jointly accountable. The courts must be able to order parents and guardians to undertake parenting courses and continued offending could see parents and guardians prosecuted.” It goes on to say that parents would need restored power to control or discipline those for whom they are responsible and that there is a need to end the living-alone benefit which allows kids to give the fingers to their parents. 
Representatives of the Sensible Sentencing Trust gave us three examples of the junior crime waves that have so upset the judges. The page they gave us at 2 o’clock today reads: “Youth laughs at frustrated judge.”; “Boy 14 charged with rape.”; “O’Brien to appeal”; “Fifteen-year-old schoolgirl found guilty of murdering Waitara truck driver Kenneth Pigott will appeal both her conviction and mandatory life sentence next Monday”. That is what the victims think of the vaunted family group conference system that the Labour member Darren Hughes took such pains to praise just now. The select committee could not form a view because it found that not enough quantifiable data was available to know whether the thing works and the system has been in effect since 1991. 
We also looked at possible future developments. National ACT and United Future—and I will be interested to see whether United Future can find it in itself to vote against this appropriation given the clear agreement it had with the Opposition—listed the matters that need addressing in relation to the Sentencing Act. Can the Minister assure us that some of that extra $1.25 million he is giving to the policy section of his ministry will go into addressing the perception that people can pay reparation to significantly reduce their sentence? That is a polite way of saying that the reparation and amends provisions have become a means for buying justice. Another matter that needs addressing is the loophole for serial non-fine payers that sees the court powerless to impose further punishment once an offender has completed a maximum of 400 hours of community work. 
I ask Mr Goff whether he has looked at the headline in today’s  
Dominion Post 
 which states:“Get out of bed and pay fines says father.” The article goes on: “An Upper Hutt man who owes $91000 in fines could have full-time work to pay back the money if he got out of bed his father says.” He owes $91000 in fines and what did he get for that? He got 400 hours community work and an order to pay back $30 a week. 
Vote Foreign Affairs and Trade agreed to. 
A party vote was called for on the question  
That Vote Justice be agreed to. 
Ayes 60 
Labour 52; United Future 8. 
Noes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Abstentions 9 
Green Party 9. 
Vote agreed to. 
The CHAIRPERSON (H V Ross Robertson) 
: I just remind members that under Speaker’s ruling 56/4 and Speaker’s ruling 8/2 (Supplement) it is highly disorderly to interject when votes are being cast. In fact it can be seen as intimidation and could lead ultimately to a breach of privilege. I just caution members about that. 
Vote Pacific Island Affairs agreed to. 
Vote Food Safety  
Vote Health 
STEVE CHADWICK (Chairperson of the Health Committee) 
: 
 I am very proud to be speaking tonight on Vote Health especially with our Minister of Health sitting in the chair. This is the first time in New Zealand for many years that we have had a Minister leading Vote Health into a second term of Government. She is showing the sector and the communities of New Zealand that she is a Minister who is prepared to ride the hard knocks in health—and hard knocks are certainly what they are. The challenging health sector needed leadership in the second term of this long-term Government to show that we have stability and are prepared to continue to work through the challenges. Health is not just about money alone. 
I want to point out some of the very positive aspects of that vote in this estimates debate. With funding of $9.6 billion the health sector goes into a very well-financed period in this financial year. That funding is up virtually $1 billion since the previous year and is an 11 percent increase over that year. That is not well understood around the country but it is a very substantial chunk of all new spending in the overall Budget this year. In fact we have 31 percent of it with $443 million in new spending. One of the complex issues of this vote is that this is a 3-year funding package and we are in the second year of that package. That is what has given the health sector such certainty—it knows where it is going. It has a longer-term strategic view than it has ever had before in order to start planning and this is a forward-thinking debate. 
One of the things I want to talk about is the rhetoric we keep seeing in publications like  
GP New Zealand 
 that bureaucracy is killing the health system. That is rubbish. When Labour took over health the Ministry of Health had been run down while privatisation was occurring. We are now building up a vibrant public sector and we are also supporting the Minister in her role. 
We also hear about district health board deficits and I want to talk about that. Newspaper articles all around the country from Dr Scott and others in Opposition claim that they handed over a health sector in the black. I remind that member that in 1998 the Minister of Health did a deficit switch. The Crown health enterprise sector had a burgeoning deficit and was driven to brutal bottom-line management. National did a very natty little deficit switch that gave us all a clean slate which was a very artful thing to do. We inherited a run-down sector with hardly any capital spending going on at all. This year alone we have put $656 million into capital spending. That is hardly one of the things we want to trumpet because most of our emphasis in health in this term is moving that emphasis into the primary health sector. 
I personally know that the Minister opened the Nelson-Marlborough Hospital—$4.7 million worth—on Saturday. I know from many people who work in that hospital how thrilled they were that clinicians were involved in the planning of that hospital. The clinical director who planned the hospital happened to be my brother-in-law and those people are delighted with the end result. In fact it is one of the better hospitals. Things are much better planned when clinicians are involved. Another thing we heard in the estimates of capital spending is that the Auckland Hospital building programme is on time and to budget. To be able to deliver that is a massive undertaking and an absolute tribute to that hospital. 
We are moving the emphasis of our funding much more into the primary sector which is something that the Opposition cannot bear. I seem to be dancing along behind every general practitioner meeting in the country at which Dr Scott is saying that bureaucracy is killing the health system and primary health organisations are not targeting those in need. I go out there and get a totally different story. In fact the back of this magazine states: “Rotorua smells sweet.” Now here is a primary health organisation covering our entire community doing exceptionally well and actually realising that it is not an independent practice association in drag. It is a primary health organisation that is getting practice nurses physiotherapists child health workers community and women’s health workers all addressing the health needs of their community. It is a model primary health organisation and around the country 46 others are covering 1.7 million New Zealanders with primary health access. 
Extra funding is going in that area. It has jumped up from $115 million to $165 million and that is an incredibly exciting move. It is going into keeping people well and that is the secret whereas the Opposition still carps on about waiting lists which are the only things it likes to measure. Even though it claims that bureaucracy has run amok it likes information on waiting lists and hands out some very interesting facts about them. It tells us that we have culled 25000 people from waiting lists. I remind the Opposition that before we got into Government the Health Funding Authority culled 28000 people from waiting lists. Mrs Shipley did that but the Opposition has forgotten about it. 
The Opposition also talks about that magical 35-point threshold for cardiac surgery. No one ever achieved 35 points. General practitioners I used to visit had manuals about how to use the booking system and they had not even taken them out of the plastic. They did not even know how to use them. We now have people in liaison roles helping general practitioners to use the booking system manuals helping them integrate with hospital outpatient clinics and helping them with specialist assessments. Yes we have waiting lists and we will always have waiting lists. It is never going to be easy to get rid of them but we are much more concerned about waiting times in surgery. For the first time we have people who know that they will get their surgery within 6 months. 
I want to quote what Judith Collins from the Opposition who has just walked in said to physiotherapy students. It was a very good speech. She said: “No matter which political parties are the Government there will never be sufficient money to meet all people’s health needs. The best that any Government can do is create and foster a vibrant growing economy creating an environment where primary health care is everyone’s personal and family responsibility and that of the community; creating a health system where wastage is not accepted where the best use is made of taxpayers’ funds and where those in need get the help they need as quickly as possible.” That was a fantastic speech and she is absolutely right. That is what this Government is all about. We are focusing on primary health-care. We are giving certainty about waiting times for surgery. We are managing surgery honestly and openly with the community and taking the hard knocks. 
But there are also some very exciting things going on. Our community and every community in New Zealand that I go around understands that it is getting cheaper access to primary health-care so that people can see their general practitioner or practice nurse. They might not need to see their general practitioner and they are starting to cotton on to that too. Funding this year is going into decreasing general practitioner charges for 6 to 17-year-olds and that is vital. We had it for the under-sixes and now we are making it easier for 6 to 17-year-olds to have lower general practitioner charges. That will cost this Government $8.6 million but we do not mind that because we think it is money well spent. We are also lowering prescription charges for children and that is very valuable for those who are enrolled in primary health organisations. 
Another very interesting initiative is being developed called care-plus which focuses on “disease state” management. That will cost us $11.2 million and it will make a difference. 
Dr LYNDA SCOTT (NZ National—Kaikoura) 
: 
 The Government spends 6.25 percent of gross domestic product (GDP) on Vote Health and total health expenditure is 8 percent of GDP when one takes into account public private and accident compensation spending. 
We heard from Steve Chadwick about the superb job she thinks Labour is doing in health. I do not think that many people around the country would agree with her. If she asked the general public they would say that there are serious problems in New Zealand’s health system. With the 21 district health boards the Government seems to be pouring money down a black hole. We heard in the Budget speech that Michael Cullen wanted a deficit of $80 million for the 2002-03 year. I shall talk about hospital deficits because they do matter. The deficit was about $237 million last year and this year will it be $80 million? No it will be nowhere near what Michael Cullen wanted. The deficit will be $180-$200 million. Once again district health boards have failed to perform in this regard. We have 21 district health boards—in a country with a population the size of Melbourne. Why do we talk about hospitals deficits knowing that most people switch off when we start talking about them? Because it matters and it matters because of what happens to an area when a hospital is in deficit. 
We saw Graeme Edmond resign as chief executive officer of the Auckland District Health Board. He was an exceptionally good chief executive officer. I remember talking with Graeme when he got Auckland Hospital and Health Services out of the red and into the black. He was really ecstatic about that. The whole dynamic of a hospital system changes when one is looking forward to what can be done that is positive instead of looking at the cuts that have to be continually made. But instead of looking at the progress made under the Health Funding Authority with its four regional offices this Government continued to look back at 1993. Because of the Government’s ideology it could not see what was in front of its nose—that the Health Funding Authority was doing an exceptionally good job. The funder/provider split did not just happen in New Zealand; it was implemented in many parts of the world and there were good economic reasons for that. In 1998-99 going into 2000 the Health Funding Authority was doing an exceptionally good job and it is such a shame that this Government could not see that. 
Graeme Edmond resigned because he had had enough of this Government. He had had enough of seeing the Auckland District Health Board continually having to deal with a massive deficit and having to look continually at making cuts to surgery and cuts to what it could deliver. The Government has done that by putting up the points one needs to get surgery. That has happened all around the country so people have to be sicker or more disabled to get service. It has also been done in different clinical areas—in orthopaedics in gynaecology in ophthalmology. Cataracts hip and knee replacements have been affected and hernia operations have been crossed off the list altogether. That is why those deficits matter. 
Also the boards cannot afford new equipment. Do members remember the linear accelerator that women with breast cancer need so urgently that we heard this Government rave on so much about and how it was going to fix the problem? It has not done that at all—we still have a lot of old equipment. The district health boards cannot afford to invest in it so women go to Australia for Australian private care and to get their radiology because we cannot deliver. Because the studies have shown it women in New Zealand know that if they wait more than 8 weeks for radiotherapy—post-lumpectomy or post-mastectomy—there is a marked increase in local recurrence. One would think that the Ministry of Health would know that and would be pushing very hard to get the equipment needed. 
Judith Collins 
: It is paid enough. 
Dr LYNDA SCOTT 
: It is paid enough but the ministry said that waiting 12 weeks was fine. The studies have shown that it is not and the Government should be doing everything it can to deliver timely treatment for women with breast cancer. Sending people to Australia was a short-term solution that has now dragged on for 3 more years. 
I know that up in Auckland John Childs would have liked to see a public-private partnership on the North Shore that would be able to deliver better services—where people could work in both systems earn more money stay within the sector and within New Zealand. We would actually retain our staff not lose them. But no this Government’s ideology is against that. Although the Minister says that public-private partnerships are all right she then appoints board chairs who are philosophically opposed to them. 
Hon Annette King 
: Name one. 
Dr LYNDA SCOTT 
: Waitemata District Health Board for a start. Waitemata cancelled the birth-care contract said it had the capacity and is now saying that it will have to build another 10 beds because it cancelled that contract. That is a good example of how one builds the public sector and forgets about what one can use in the private sector. We do not have the equipment. Hospital deficits mean that one cannot invest in new procedures—like drug-alluting stents for cardiac patients whose coronary arteries are beginning to occlude. I will tell members what these drug-alluting stents are about because they are more expensive but more effective. They are little things that are put in to open up the arteries so they do not clog up. They save people from having heart attacks or needing coronary artery bypass grafting. But this country cannot afford that. 
Then there are the drugs. We cannot afford things like Gabapentin. People blame Pharmac but Pharmac’s budget went down from $520 million in 2001 to $516 million last year. No wonder people in this country cannot get access to new medicines! No wonder they cannot get access to the medicines they need to keep them well! Gabapentin is a medicine used to treat pain. I have used it myself for people with amputations. One tries everything else first but it gives very good pain relief and people cannot get it. The Otago District Health Board is about to cancel all people on Gabapentin. That is absolutely cruel but this Government has not increased the amount of money that Pharmac gets to fund new drugs so one cannot blame Pharmac. The Government has not even approved the budget for this year. Those are the problems with hospital deficits. 
The Government says it is going to put all the money into primary health organisations. Once again it is being driven by ideology only. Instead of building on independent practitioner associations which most doctors in this country thought were doing a very good job we get primary health organisations. Instead of funding on patient need and ability to pay—no matter where one lives in New Zealand or what one’s race is—the Government decided it had to have politically correct primary health organisations which are funded on location. It was going to force doctors into them because if doctors did not join they would get no access to new money. Does the public know about that? It knows nothing about enrolment. When one asks what the 10 big problems facing primary health organisations are enrolment process is No. 2 because the public does not understand what is going on. New Zealanders shop around for their doctors. They might live in one area but work in another. If they get sick they go to the local accident and medical clinic. What happens is that all the money that was supposed to go to their primary location goes somewhere else. 
Doctors are having a nightmare with primary health organisations. The system was never trialled. It is based on location which has to be 50 percent Maori/Pacific Island or highly deprived. What about the other 50 percent? Why give them cheaper visits when only two primary health organisations have been set up in the South Island and poor people and people with high health needs in the South Island are not getting anything? That is just unacceptable. 
HEATHER ROY (ACT NZ) 
: 
 We have heard that Vote Health this year 2003-04 is going to receive $9.61 billion—an increase. If one listens to the Government one hears that this health system is working wonderfully well. Well I agree with Dr Scott: when we go out and talk to people that is not what we hear. More and more money of course is being thrown at the system. That is what the Government measures its success by; it is not worried about how the money is spent or where it goes. 
I want to talk in my brief time about accountability. I have just recently asked the Minister of Health some questions. I asked her where the money is going. I asked her to tell me where the money given to Maori health providers and non-Maori health providers is going. Do members know what the Minister’s answer was? It was: “I can’t tell you. You need to ask the DHBs.” This Minister does not know what is happening in the health system. Her ministry does not know because it has devolved everything to the district health boards. 
A while back we were able to get some information about two Maori health providers. One of them had spent $3.1 million in the previous year and the Ngati Whatua o Orakei health clinic has received $5.7 million since Labour came to power. We asked where this money had gone—we had a very short list with a few itemised bits and pieces—and then we asked what the health outcomes were. The Minister’s answer was this: “Health outcomes general health outcomes are difficult to assess.” That is code of course for “I don’t know.” The Minister does not know where this money is going. These Maori health providers may well be providing a wonderful service. In fact as I go around the country and visit some of them I see that some are providing a very good service to their communities. But there are also some that are not providing a good service. The question is how do we know which ones are providing a good service and which ones are not? They all say they have forms to fill in and send back to the Ministry of Health; the problem is nobody bothers reading them. The providers are expected to fill them in but nobody looks at them. We have no idea what the money for health is being spent on. 
It is interesting to move on to the primary health organisations and see where the money for them is going. Last year $50 million was earmarked for the primary health-care strategy implementation. This year it has been increased to $165 million. Taxpayer cash is being poured into the primary health organisations at the expense of the secondary sector. The hospitals are missing out and having to cut back their services. The Minister says that is not happening either—because nothing happens without her knowledge—but as we have just heard the accountability is non-existent. 
If we look at the funding formulas for the primary health organisations what we see is that we have race-based funding in this country. If a person is Maori or Pacific Island that person gets more funding than one does if one is European. If a person lives in a poorer area he or she gets more funding no matter what his or her health status. ACT says—and we agree with the National Party—that we need to have a health system that is funded based on need not on race or where a person lives. Under the new funding formula the interim—[ 
Interruption 
] Why does Mrs Pettis not stand and take a call seeing that she is such an authority on health? Under the new funding formula the interim formula the great majority of male Pakeha superannuitants who do not have a community services card are funded at $17 a year. The amount that a Maori or Pacific Island superannuitant is funded is over three times higher—$53 a year—no matter what his or her health status or need. Why is it fair that a young fit Maori like Christian Cullen for example should be funded at a higher rate than his Pakeha counterpart who is not well? What is fair about that? He has the wrong skin colour or he does not live in the right location so he misses out. Health funding must be based on need not on race or where people live. It must be determined on one’s need. 
I move on to deficits. The National Party speaker Dr Scott was correct in saying that deficits are important. She outlined a very good case as to why that is. The deficits of course have been speculated about for a long time. We hear a lot about the $400 million—the magic cure for the health system. 
SUE KEDGLEY (Green) 
: 
 I would like to address the estimates which of course are what the debate today is about and in particular a couple of issues in the health estimates. 
The first one is an interesting little sentence in the Health Committee’s report on the estimates under the heading “Trans-Tasman therapeutic products”. The committee notes that the legislative programme for this year includes legislation regarding therapeutic products. Then there is this extraordinary statement: “The ministry was not able to tell us whether drafting of this legislation would wait until our inquiry is concluded.” What does this mean? We have a major Health Committee inquiry going on into how best we should regulate dietary supplements in New Zealand. The overwhelming majority of submitters have suggested that the trans-Tasman model is expensive restrictive and so forth so it is quite likely that we as a select committee will not recommend that model. But a sentence in the committee’s report on the estimates tells us that the Ministry of Health cannot tell us whether it would go ahead with the legislation even if our inquiry should recommend against what the legislation is proposing. What does this mean? Are we completely wasting our time? Why are we having this select committee inquiry if in fact the ministry and the Minister have completely made up their minds and are going to ignore all our recommendations? It would be interesting if the Minister would clarify that unusual sentence. 
Interestingly I received a letter just 2 days ago from Australia from someone who had been talking with the Therapeutic Goods Administration in Australia. On being asked whether the trans-Tasman harmonisation would be going ahead the administration’s answer was that yes it would be going ahead regardless and lots of examples were given as to what would happen to therapeutic goods in New Zealand. The person who wrote to me said: “The way I see it you’re going to lose all products that don’t comply with the TGA. Dare I say it New Zealand will effectively become another state of Australia under the trans-Tasman scheme.” In other words in Australia the Therapeutic Goods Administration is busily telling people the harmonisation will go ahead regardless of the result of our select committee inquiry. Why on earth are we having it? It is completely scandalous that the Government is going to press ahead and presumably ignore all the recommendations of our lengthy and expensive inquiry into this matter. 
The other issue is an odd sentence that points out that the Ministry of Health has still not undertaken any consultation on the National Health Index. Every year for the last 4 years the select committee has made the point that there has not been any consultation on the National Health Index. The ministry has promised it will undertake consultations and every year it has come back and said that it still has not done anything about consulting on this issue. The interesting thing is that the Health Information Management and Technology Plan report  
Working to Add Value Through E-information  
pointed out that it is quite extraordinary that most people are completely unaware that under the National Health Index they have a unique identifier. The report said it is time to get that out of the closet. It is a unique identifier. Most people do not know about it. Consumers must be informed about it and its purpose. There are privacy concerns. The Privacy Commissioner has expressed concerns about it. 
JUDITH COLLINS (NZ National—Clevedon) 
: 
 I rise to speak in relation to the health estimates. First I would like to thank one of the previous speakers Steve Chadwick for the very nice comments she made about a previous speech I had given in relation to the health system. I would also like to follow on from the comments of my colleague Dr Lynda Scott and to thank her for the great contribution she has made yet again tonight. 
The Counties Manukau District Health Board covers an area that is of particular interest to me because my electorate of Clevedon is in fact within the board’s area. It has been a real concern when I have been working in the electorate to see how badly off the Counties Manukau District Health Board is compared with any other district health board or area. The last time I checked the district health board had still not signed off its plan for the financial year that has just finished. One wonders what is going to happen with the next one—it is as bad as that. The board is severely underfunded and continues to be so despite the fact that there is an increase in the health spend. That is because so much money is going on things that it should not be going on. 
I will have a look at some of the actual statistics for the Counties Manukau District Health Board area and compare them with those of other areas. I have been to visit the neonatal unit at Middlemore Hospital which services the board’s area. Middlemore Hospital has the third-highest number of births in Australasia for its catchment area. In 2000 there were 6250 births in the area but there were only 20 neonatal beds. Compare that to Dunedin with 1751 births and 16 neonatal beds. That is an indication of the shortfall in the Counties-Manukau area. What is happening is that these very sick little babies and their parents mostly the mothers are being flown all over the country in order to have any sort of care. This is totally unacceptable. I was heartened to hear that under the plans of the Counties Manukau District Health Board a new neonatal ward is being built that will be bigger. However it will not have the 40 beds that are needed; it will have only 29 beds. That number of beds will be insufficient. It is absolutely ridiculous to build a new health unit that we know already will not be big enough. 
One of my sisters worked in the neonatal ward at Waikato Hospital for close on 25 years so I have some knowledge of this area having visited there many times and seen the work and the dedication of the staff and the doctors in these units. They are dealing with people at the most stressful time of their lives—when they have very very sick babies. The last thing the staff need to be doing is trying to find a room somewhere to put an incubator or sending people off in helicopters all over the country away from their families and support. In many cases the mother cannot even feed or express milk for her baby because she has to be in another part of the country from her baby. It is a dreadful situation. It is Third World. I heard the speaker from the Greens talk about our becoming effectively a subsidiary of Australia. Well I am sure that Australia does not treat its women and its babies like this. When National is back in power in 2005 we will certainly stop that. We have a commitment to provide superior health-care rather than provide politically correct funding based on race rather than need. 
That brings me again to the Counties Manukau District Health Board. Two weeks ago I received some flowers from a grateful constituent who wanted to thank me because he said I had got him knee surgery. This man had been referred at the end of 1999 for a knee operation. He was clearly in need of it. He had it done only this year and only after I had spent months and months nagging the Minister and nagging the Counties Manukau District Health Board to for goodness’ sake let this man be able to walk again. He has paid his taxes all his life he has been a good contributor to society yet he received nothing until his MP got on to this issue for him. Frankly for an elderly person who is not getting any younger to spend 4 years waiting in pain is simply not good enough. 
The Minister knows that I am not someone who makes silly comments—nor do other National Party members—that we should pour more and more funding into the health service. We all know that it can become a huge black hole in terms of the Budget and that no matter what we can never ever achieve everybody’s wants and needs. But the fact is we must do far better in the use we make of our health money. 
We certainly cannot afford to have policies like the ones affecting the people of Drury in my colleague Dr Paul Hutchison’s electorate of Port Waikato. Drury is all of a kilometre away from my own electorate. The doctors in Drury are looking at closing. They are very badly off because of the race-based funding policy. No doubt the Minister did not intend that result but my having said that she has not done anything about it. She has not done anything to help those doctors 40 percent of whose patients come from Papakura in my electorate and have been travelling the 1 kilometre down the road to Drury to go to the doctor of their choice. Now they are being told that if they go to a doctor in Papakura where it has been decided special funding will apply they will pay only $8 a visit. If they go down the road to their own doctor in Drury whom they have been going to often for 15 years they will pay the full rate of $48 a visit. 
These people often like many others do not have money to throw around. They are having to leave their doctor of choice to leave the continuity of care that they have enjoyed to leave the comfort of knowing their doctor very well of being able to tell him or her their problems and of being able to discuss their family’s health with him or her. They now have to go to a different general practitioner at a different health centre which will not necessarily be able to cope and will not necessarily suit their needs. This is all because of preferential funding based on the position of the surgery not on where the patient lives and because of the race-based funding that now occurs. It does nothing for the people of Drury or for the 40 percent of those doctors’ patients who happen to live in Papakura. 
It also does nothing for the people at the other end of my electorate in Howick who find that they are not a favoured group of people. The majority of them happen to be elderly and to be Pakeha New Zealanders. They feel that they are now left out of the funding because they are not Pacific Islanders or Maori. They are people who have paid their taxes and been good New Zealand citizens and they deserve to be treated as well as anyone else. I look at this from the position of being a mother of a child who has Pacific Island heritage and a wife of a Samoan. It shocks me that our country is being divided on the basis of race. People are being asked and told—in fact it is demanded of them—that they choose what race they are when they are often of many different races because that is the nature of New Zealand today. We are a people of many races and ethnic backgrounds. It is appalling to see health funding dollars being wasted on race-based policies that have nothing to do with need that presume that someone of a certain race therefore has a health need or that presume that people of a certain race therefore do not have a health need. That is wrong. What about the people who happen to be Chinese English or whatever and who happen to have a need? They are being left out of this equation. 
What does this policy say to the people who need health care who happen to be Maori or happen to be of Pacific Island heritage? It says to them that they are needy because of their race and that is wrong. It is insulting to people. It is absolutely wrong that people are not being credited with being able to make their own choices. If this policy continues we will end up with a divided system and a divided country. Everything that I see happening in this area is going to contribute to that. I am sure that the Minister does not really wish to have all these ramifications but the fact is that is what is happening. 
Dr PAUL HUTCHISON (NZ National—Port Waikato) 
: 
 Page 678 of the Estimates reveals that for 2003-04 $9609.746 million will be spent on the health system in New Zealand. That is almost $10 billion—much more than the dairy exports. The question to ask the Minister of Health in relation to these estimates is whether that $10 billion is being spent well by this Labour Government. The answer is emphatically no. In almost every facet of the health system under Labour there is failure. Much of that failure has been brought about by Labour’s totally unnecessary bureaucratic and ideologically driven structural reforms. That failure extends from the Ministry of Health itself to the 21 indebted district health boards to Labour’s utterly inequitable primary health restructuring and to the fact that Plunket told us at its annual conference that under Labour it is resourced for only half the post-natal visits that mothers and babies received in the 1970s—and that is a shame. 
 Let us look for a moment at Dr Euphemia McGoogan’s report on the National Cervical-screening Programme of June 2003. That report gets to the centre of the failure of the Ministry of Health 4 years after this Government said that it would improve the situation. Dr McGoogan said: “I do not believe there is as yet a good understanding of the principles of public health screening programmes generally within the Ministry of Health among health professionals or by the public in New Zealand.” That is an indictment on the Minister and on the Government. 
Dr McGoogan goes on to say: “I remain unconvinced that the culture that had been developing in the Health Funding Authority regarding the management of the National Cervical-screening Programme under the influence of Dr Julia Peters has been maintained.” There has been clear deterioration under this Labour Government. Furthermore the doctor says: “I have serious concerns that there are inadequate appropriate training and development courses in New Zealand for all groups of health professionals involved in cervical screening.” 
Something like 14 years after the Cartwright report and some 6 years after the tragedy at Gisborne under Dr Bottrill once again—despite all the promises of the Labour Government and a budget of almost $9.5 billion—the very core of this Government’s organisation the Ministry of Health is dysfunctional and sadly that is absolutely epitomised by Dr Euphemia McGoogan’s report. 
Despite the $9.5 billion of spending almost every one of the 21 district health boards remains indebted and there have been successive resignations of chief executive officers. They are resignations in despair at Labour’s bureaucratic muddled and wasteful restructuring. I would like the Minister Mrs King to tell Parliament exactly why Mr Graeme Edmond chief executive officer of the biggest district health board of all has just mysteriously resigned. I ask the Minister to take a call and explain why. She will not because she knows the truth—that the Auckland District Health Board is dysfunctional. We hear this from every level. We hear from the highly committed professional nurses and doctors working there that under the new structure this Government has put in place there is endemic dysfunction. It is more than ironical that 14 years ago in 1989 the then Minister of Health—one Helen Clark—actually happened to call for the resignation of the board due to its dysfunction. 
Hon ANNETTE KING (Minister of Health) 
: 
 I am pleased to rise to speak to the estimates and to thank the chair and members of the Health Committee for the report they have given to Parliament. A number of issues have been raised this evening. I deal first of all with what I think is a very important issue which was raised in the estimates discussion by Michael Cullen when he said he had looked very closely at the programme that Don Brash talked about at the National Party conference last weekend when he called for $3.75 billion to be carved out of spending. One would have to ask where one would find that sort of money. I say to New Zealanders that the only place the National Party would find that sort of saving is out of education health and social spending. New Zealanders want to listen very carefully to the weasel words they hear particularly from the National Party when it comes to health expenditure. 
The member for Kaikoura lamented the fact that there were so many district health boards. Gosh I cannot imagine why National members have such short memories! There were 23 Crown health enterprises that became 23 hospital and health services and that was never thought to be too much bureaucracy. However when this Government turned them into 21 district health boards suddenly a decrease from 23 to 21 became an increase! The logic of that defies my understanding. 
The member went on to talk about cancer services and made an impassioned plea for the women of New Zealand. I do not believe a word of it because the action could have been taken in the 9 years that National was in Government. Today I had a question from the member asking what reports I had received on cancer needs in New Zealand. I said that I had received in 2001 a report that was dated April 1999 to one Wyatt Creech telling the Government of the day that it had a huge problem with cancer that 50 percent of the linear accelerators’ lives had expired that not enough radiation therapists were being trained and that the growth in cancer at 5 percent a year meant we would face a crisis in 2000-01. 
What happened to that report? It was buried. It was never released. I received it in January 2001. That is a scandal. It was a cover-up by the National Government and from that time on this Government has been dealing with the problem. Under the National Government 16 radiation therapists were trained a year. The Labour Government increased that to 38 radiation therapists a year with the first graduate at the end of this year. It takes 3 years to train them. We have been in this job for 3½ years and we have more than doubled the number of radiation therapists. We have bought four linear accelerators and there will be more in the next 3 years at $4 million each. We have increased the number of therapists in training we have increased the amount of money in relation to cancer and we have increased the amount of money for cancer drugs. National members have the cheek to come in here and try to tell the people of New Zealand that the problems we face in cancer have happened in the last 3½ years. It was a cover-up and the people of New Zealand need to know it. 
The next issue came from ACT and National members who constantly tell New Zealanders that we have a race-based policy. 
 I ask the ACT party members and in particular Judith Collins whether they were shocked when they read the recent report on the health status of New Zealanders. Was Judith Collins shocked? Was she insulted when she read that report to find that Maori in New Zealand die 10 years younger than other New Zealanders and that we have not been addressing the health issues of Maori as a population? This Government has said that we have to address the health status of Maori and Pacific people and raise their health status. No New Zealander wants to see Maori and Pacific people die earlier than other New Zealanders. 
When we put in place policies to help raise that health status members opposite say it is race-based. I say that they do not know what they are talking about. This country wants to improve the health of the population of New Zealand and in particular the health of Maori people. It is an absolute disgrace that every effort this Government has made to improve the health of Maori and Pacific people is played as a race card by the Opposition parties ACT and National. It is disgraceful. I can only imagine that Mr Worth and “Mr what’s-his-name” from Nelson want Maori people to die earlier. I can only assume that because they have done nothing to help promote the health status of New Zealand. 
Hon Dr Nick Smith 
: Check your record in Government you stupid cow. 
Hon ANNETTE KING 
: I raise a point of order Madam Chairperson. He will stand and apologise for that. 
The CHAIRPERSON (Ann Hartley) 
: I ask the honourable member to stand withdraw and apologise. 
Hon Dr Nick Smith 
: I withdraw and apologise. I raise a point of order Madam Chairperson. The Minister has been stating that members on this side of the House want Maori to die young. That is grossly offensive. The record of National in setting up a whole number of Pacific Island and Maori health programmes shows that it is grossly untrue. I ask you to bring the Minister to order and for her to withdraw and apologise for that serious slur on all Opposition members. 
The CHAIRPERSON (Ann Hartley) 
: No that was a point of debate. There has been a robust debate on this. 
Hon Dr Nick Smith 
: I raise a point of order Madam Speaker. Is it OK for me to say for instance that Labour members want Asians to die or something of that sort— because I think that is grossly offensive? What drew my comment was that sort of reference by the Minister which brings this House into disrepute. 
Hon ANNETTE KING 
: If the member took offence at what I said I withdraw and apologise. Can I continue with— 
Hon Brian Donnelly 
: I raise a point of order Madam Speaker. Prior to that exchange the comment was also made by I think the Labour whip that New Zealand First wanted Asians to die young. I take deep offence at that and I ask that that member withdraw and apologise. 
The CHAIRPERSON (Ann Hartley) 
: I did not hear the comment. I ask the member if he said that to withdraw and apologise. 
David Benson-Pope 
: I did not make any comment. 
Dail Jones 
: I raise a point of order Madam Speaker. I probably had a slightly better view of it. I believe that it was the honourable Minister Chris Carter who made the comment and I ask you to ask him to withdraw and apologise because I find it grossly offensive. 
The CHAIRPERSON (Ann Hartley) 
: I ask the member whether he made that comment. 
Hon Chris Carter 
: I did and I apologise to New Zealand First members. I meant Mr Peters only not the rest of his party. 
The CHAIRPERSON (Ann Hartley) 
: I ask the member to withdraw and apologise unreservedly. 
Hon Chris Carter 
: I withdraw and apologise. 
Hon ANNETTE KING 
: One of the points made by Lynda Scott in her contribution was that primary health organisations had not been trialled in New Zealand and that somehow this was a terrible thing. I wonder whether members would like to tell us whether we trialled independent practice associations when they were set up in the 1990s. Of course the answer is that they were never trialled. They were a formation of organisations by doctors and other health professionals in the 1990s. The fact is that primary health organisations have built on independent practice associations on Maori development organisations and on union and community health services. They have taken vehicles that were there and have built on those to provide primary health care in a different way in New Zealand. We now have 1.7 million New Zealanders enrolled in primary health organisations and it will be only a matter of time before most New Zealanders will be enrolled in primary health organisations. 
By October this year regardless of how a primary health organisation is funded all under-18-year-olds will receive affordable primary health care. I know that New Zealand First will be very pleased with that announcement. It tried to achieve that when it was in coalition with National and managed to achieve affordable primary health care for under-6s but could not push the National Party any further. I am pleased that we have been able to get agreement to fund affordable health care in primary health organisations for all children under 18 from 1 October. From 1 January all people who are chronically unwell or on active review will receive affordable primary health care regardless of where they are in New Zealand and regardless of how their primary health organisations are funded. 
I see that Mr Worth is taking a bit of notice. Perhaps he did not know that that was to happen. [ 
Interruption 
] No he certainly did not know. I can see that. We are now working to bring forward affordable primary health care for all New Zealanders who are over the age of 65. By the time we get to 2005 most New Zealanders will once again have affordable primary health care. Subsidised primary health care was taken away from them in the “mother of all Budgets” in 1991 when the community services card was brought in and the remaining New Zealanders were chopped out of affordable primary health care. 
The cost of it is very high. At this stage the cost is around $400 million and to fully implement it the cost is closer to $800 million. That is the cost of bringing back something that was taken away by a Government that thought that the market would provide it but it never did. 
The member for Waikato mentioned the National Cervical-screening Programme. In the time that I have been Minister I have never played politics with that issue. Let us remember that the review of the National Cervical-screening Programme and the Gisborne inquiry was called by Wyatt Creech because the problems arose in the mid-1990s under the National Government. I received the report 2 years ago and a lot of progress has been made. There is more progress to make. The report came out 2 years ago. It had to be done to show the mistakes made in the 1990s. We need to do more. A lot has been done. This Government has taken responsibility for the errors of the past and we have set about improving the situation. A lot of progress has been made in health and it makes me sick to hear people like Nick Smith rattle on over there about health when he has done little to improve the health of New Zealanders but plenty to improve his own publicity and status if he thinks there is a vote in it. 
Vote Food Safety agreed to. 
A party vote was called for on the question  
That Vote Health be agreed to. 
Ayes 60 
Labour 52; United Future 8. 
Noes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Abstentions 9 
Green Party 9. 
Vote agreed to. 
Vote Agriculture and Forestry 
Votes Biosecurity 
R DOUG WOOLERTON (NZ First) 
: 
 I wish to speak about Vote Agriculture and Forestry and the agriculture portfolio in general. I say that while many millions of dollars are appropriated for policy advice administrative and legislative provisions management of the forestry assets the Sustainable Farming Fund and many other issues by far the most major issue is not written into the appropriations. 
The biggest issue for agriculture as all the people involved in it know—and I know that the Minister knows this—is the exchange value of the New Zealand dollar compared with the currency of the countries that we trade with. We have seen a rising New Zealand dollar and a consequent fall in our farmers’ incomes but we have not seen any action—or even concern dare I say it—from the Government. We know that we have a floating dollar and we do not intervene in those things but it is outrageous that something else is being imposed upon the sector of the community that provides the major income for the people of New Zealand and therefore sets the living standards of New Zealanders that is not being imposed upon our competitors in Australia in America or in many other parts of the world. That is the cost of signing the Kyoto Protocol. 
 We know because we listen intently to the Minister’s speeches that the Government says we will ultimately be the net beneficiary of a carbon-tax regime. But to be a net beneficiary in the future is no use to our farmers who are struggling with a high exchange rate for the dollar and a falling income today. So the heat that has been generated by protest—and there is more protest to come as I understand it—from farmers in this country something that has been unseen for many years is not just about the $8.4 million they are being asked to contribute to research on methane emissions but is indicative of wider concerns in the farming and productive community. 
Those concerns are about where this Government is taking us. Is this Government concerned about primary production? Is it interested in encouraging exports from this country or will we face what we have been facing over the last year or two: a completely false consumer-led prop-up of the economy by means of immigration? New Zealand First for one says that that is not what built this country. Immigration is not what built this country and it will not take this country forward. This country will go forward only on the basis of the products of our labours of our wonderful climate of the ingenuity of our farmers and of the hard work of farmers and their families. That is what will take New Zealand forward. Any cost imposed on our farmers that is not imposed on their competitors in other countries obviously makes them less competitive and that is exactly what is happening in this country today. 
I want to place on record the concern of New Zealand First and I believe the concern of many of my colleagues on the Primary Production Committee at that. We know and we should be able to expect that any Government—be it a Labour-led Government a National Government a New Zealand First Government or whatever else—should recognise the dominance of agriculture in this country and the need to have a very very healthy export sector for the benefit of us all. 
Hon Dr NICK SMITH (NZ National—Nelson) 
: 
 I want to challenge the Minister in the chair the Hon Jim Sutton on a series of porkies that have been given by the Government in respect of the issue of climate change. We have seen— 
The CHAIRPERSON (Ann Hartley) 
: No I am sorry but that term has been ruled out. Would the member please stand withdraw and apologise. 
Hon Dr NICK SMITH 
: I withdraw and apologise. It is unusual to rule that out when we are dealing with agriculture—and pork. But I want to put some serious questions to the Minister of Agriculture. 
Firstly I want to ask how the Minister can stand up in the Chamber today and tell the very competent Hon David Carter that the Government has never proposed the “fart tax.” Well I say to Mr Sutton that he would be the only person in New Zealand who believes that he has not done just that. So I ask him to explain that when we have all the talk about it. Whether members want to call that tax by the flash name of an “animal emissions levy” or the like for New Zealanders it is a “fart tax” and it is a stupid tax. 
The second thing I want to challenge Mr Sutton on is that he told Parliament today that there is a global crisis over climate change. I have been to four of the conventions and discussions on climate change going all the way back to 1992 and the Earth Summit in Rio de Janeiro and I say the Minister is the only person who is saying there is a crisis. Climate change is a very slow long-term issue. There are significant uncertainties over the science and I tell the Minister that he is just talking rubbish when he says that there is a global crisis. 
Then Mr Sutton told Parliament today that he is not nationalising the forestry credits. Well that is not what his officials are saying. I went to the consultative meeting in Christchurch which was about exactly what the Minister is doing and I ask what the Minister is doing if he is not nationalising the forestry credits and taking the credits for the Government against the commitments given by previous Ministers notably Simon Upton in terms of the Kyoto agreement. So I ask the Minister how he can honestly say to this Parliament that he is not nationalising the credits from forestry when everybody knows that he is. 
Then we have what I thought was one of the great daddies of them all. That was the Minister saying that the Government had a duty to provide a stable climate. That is a rather grand statement. I have looked at the issue of climate change in the world over the last 2000 years and have seen there have been periods in the last mini - ice age when temperatures were 2 or 3 degrees lower than they are at present. We know there were times in the 1200s when we had a warm period and temperatures were 2 or 3 degrees higher than at present. What does the Minister believe about this Government that means he can suddenly change the climate trends of hundreds of years and can be like the king who stopped the tide—that Jim Sutton can stop the climate-change trend and guarantee farmers a stable climate? I say that he is kidding himself. 
I now want to challenge the Minister on another point and this was one of the most appalling cons that I have seen. When we went to the farmers’ consultation meetings on the “fart tax” the officials had the gall to say to farmers that they were not there to consult them about whether the farmers had to pay the tax; the officials said they were only there to consult farmers about how to collect it. What sort of a farce is that in terms of a consultation process? I want to know from the Minister whether that was what he told his officials to consult farmers on. Did this Minister tell farmers they were to get the “fart tax” like it or not and the only thing the Government wanted to talk about was how to collect it? What sort of a fiasco is that sort of consultation process? 
Let me make it plain to this Committee that David Carter and Bill English have made an unequivocal commitment that the “fart tax” under National will go. I want the Minister— 
Hon Trevor Mallard 
: What a 3-year-old! 
Hon Dr NICK SMITH 
: Does Trevor Mallard support the “fart tax”? He is pretty much into hot air so I suspect that he does. 
Hon Trevor Mallard 
: See you in court. 
Hon Dr NICK SMITH 
: Oh we see. He does not want to talk about it does he? He does not want to stand up for free speech; he does not want to talk about the “fart tax” because it is an embarrassment to the Government. I ask Mr Mallard whether the Government will back down on the “fart tax.” I ask Mr Sutton whether he will back down on it because it is a silly tax. It makes New Zealand a laughing stock. I say to Government members that they should listen to the farming sector to David Carter and to our farming leaders. They should stop calling those people whingers because they are right when they say that tax is silly. 
IAN EWEN-STREET (Green) 
: 
 I raise a point of order Madam Chairperson. I am sitting here patiently waiting for the debate on Votes Biosecurity but I have not heard you call that yet. 
The CHAIRPERSON (Ann Hartley) 
: Votes Biosecurity have been called. They are in this debate. 
IAN EWEN-STREET 
: I am dismayed that there has not been a substantial increase in the spending on biosecurity in this Budget. We as a country simply cannot afford not to spend substantially more money on biosecurity. Alien species pose a huge threat to the economy of New Zealand. As I have asked the House before how long would it take for the economy of New Zealand to go into free fall if we had foot-and-mouth come into this country? Would it be a week? It would probably be a day. 
R Doug Woolerton 
: Two days. 
IAN EWEN-STREET 
: Two days. That is not very long at all. Spending on biosecurity is not a cost to this country; it is an investment. How much would we have saved if we had not had the painted apple moth infestation in Auckland? On the surface we would have saved $90 million but that excludes the externalities of all the costs that individuals have picked up in looking after their own personal health. 
 When we consider that thousands of people in west Auckland were blanket-sprayed with poison in relation to the painted apple moth incursion we must ask how much we would have saved had there been no infestation of New Zealand by the varroa bee mite the southern saltmarsh mosquito the guava moth the gum leaf skeletoniser moth the tropical grass web worm or by many many other species. I will not even mention the glassy-winged sharpshooter. What would happen if we went back further in history and looked at some of the firmly established biosecurity infestations that we have like rabbits gorse broom possums deer and stoats? How much have they cost us? 
We need to spend more on biosecurity and we need to spend it very wisely. I am pleased to note that our border control inspections for aircraft arrivals and international mail arrivals are now very good—and I say well done to the Government for that. The risks associated with tourists coming into this country are worth taking. There is a balance between the risk that we take and the benefit that the country derives. I do not mind taking necessary risk but I do object to taking risks that unnecessarily put our economy at risk. Those risks are stupid because we can avoid them. 
As I have said in this House before the main problem I have with our biosecurity inspections at the moment concerns the inspection of sea containers. That is the most glaring pathway for allowing alien species into our environment. It almost beggars belief that we presently inspect only 24 percent of the 400000 containers that come into this country every year. I know that our biosecurity people in the front corner of the Chamber will be saying they target those containers and I think the officials do a good job given the money they have to spend. But what we really need is to have a 100-percent inspection rate. I know we cannot get 100 percent inspection on the wharves and there is a reasonable argument against that because there is insufficient physical space on the wharves for that. 
But what is to stop us from taking the containers off the ships giving them a six-sided external decontamination putting a seal on their doors and sending them off to the warehouses—the devanning sites? When they are there the seal should be broken only by somebody who is an expert in biosecurity. That is where I come to grief with what the Government is planning. It wants the owners of the warehouses to do the biosecurity inspection of containers. That creates another unnecessary risk because for all their goodwill those people have a perverse motivation. 
Hon JIM SUTTON (Minister of Agriculture) 
: 
 It is deeply disappointing to me that the chair of the Primary Production Committee has not deigned to make a contribution to this debate. He did turn up but his whip sent him away again and I suppose that was prudent. 
Hon Dr Nick Smith 
: I raise a point of order Madam Chairperson. 
The CHAIRPERSON (Ann Hartley) 
: The member cannot refer to a member’s absence. 
Hon JIM SUTTON 
: I will just think of him as being present. The member Doug Woolerton said that the biggest issue facing agriculture forestry and biosecurity is the value of the dollar. There is no doubt that changes in the value of the dollar do make a big difference to an exporting sector like agriculture or forestry and the fact that our dollar has now reverted to the level that was the norm for many years until about 1998 or 1999 is extremely uncomfortable. I can assure the member that if I knew of a way to bring the dollar down and to keep it at an exporter-friendly level I would certainly do that for him. 
Hon Dr Nick Smith 
: That’s not what you said in Opposition. 
Hon JIM SUTTON 
: Indeed that is the sort of thing I have consistently said when the dollar has been too high. We are fortunate that we had a few years where the dollar was down at a very exporter-friendly level—although not really a consumer-friendly level. 
The member Nick Smith’s speech was memorable for the fact that he found a way in which he could use the word “fart” in Parliament and he used it about 25 times. It really showed what sort of member he is. He is stuck in the fourth form and cannot get promoted out of it. I predict that that is the way he will continue to be. He forgets that it was a National Party Minister in a National Government who signed the Kyoto Protocol for New Zealand. He sang a different song then. This member wants to run with the hares and hunt with the hounds. Of course when he is addressing “greenies” he is all for the Kyoto Protocol but when he is addressing farmers who might have to pay a few dollars a week to help mitigate their greenhouse gas emissions he sings a different song. He is the man of the short memory. 
I have some respect for Ian Ewen-Street—I could not recognise him for a while but I finally worked it out. He expressed his dismay that there has been no increase in biosecurity. I suggest to the member that he should go back and look at the Budget tables for the last few years because during the term of this Government—being the last 3 years and a bit—baseline biosecurity expenditure has gone up by $50 million a year. That money is being well spent. 
He went on to come out with the classic Opposition stunt: he found out what the Government is doing and demanded that it be done. Well good for him; at least he could not get anything wrong except the timing. He called for some action on the biosecurity of sea freight containers. He would well know that a new import health standard for sea freight containers is out for consultation. That has been completed and the analysis of that input—which followed a million-dollar research programme conducted over a couple of years under this Government—is pretty close to being at the point where the Government can sign it off. Provided that my colleagues support the necessary funding New Zealand will then be the world leader in the biosecurity of sea freight containers. 
We are already the world leader in biosecurity in respect of the handling of incoming passengers and aircrew and I am proud to say that. However I have been far from satisfied with the sea freight container situation. I am now satisfied that we are heading in the right direction. We will have every sea freight container unpacked under the supervision of a trained Ministry of Agriculture and Forestry person who knows what to do if a cloud of insects appears or if a snake starts to slither out or if something of that nature should occur. The thing will be done methodically. An elaborate paper or electronic trail will follow every container coming into the country. We will be able to gauge the degree of caution that needs to be exercised when each container is opened. Where it is opened and under whose supervision will depend upon the history of not only the container and the manifest of its cargo but also the performance of all the people who have been involved in importing exporting and packing the container in filling out the forms and so on. 
We will have the most biosecure border in the world as far as sea freight containers are concerned as we do at present as far as travellers are concerned. But that does not mean that we will not occasionally get incursions of pests and diseases. We will need to keep a very high standard of preparedness for dealing with such incursions recognising them as quickly as possible and eradicating them if possible as well. 
I thank members who have been very supportive of biosecurity matters over the past year and I urge members on all sides of the House to continue to support the splendid work being done by the MAF Quarantine Service and other parts of the Government in ensuring that we preserve a high level of biosecurity in New Zealand. 
A party vote was called for on the question  
That Vote Agriculture and Forestry be agreed to. 
Ayes 60 
Labour 52; United Future 8. 
Noes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Abstentions 9 
Green Party 9. 
Vote agreed to. 
Votes Biosecurity agreed to.   
Vote Education 
Hon BRIAN DONNELLY (Chairperson of the Education and Science Committee) 
: 
 As the chair of the Education and Science Committee which reviewed this vote I have to say we were somewhat diverted by a bit of a sideshow during the review. There was an unseemly spat between the National spokesperson for education and the Minister of Education. I have concluded that these two gentlemen—if we can call them gentlemen—do not get on very well at all. There is not a great deal of mutual respect. In fact if they were paddling together in Lake Rotoiti they would spend more time trying to tip each other out of the boat and into the water than getting on with the paddling. 
The issue that the Hon Dr Nick Smith raised was whether the real funding the operational funding for schools has increased or decreased since the time that Labour took office in 1999. It is a difficult one to answer because we well know that in the first Budget of 2000 all the additional funding from the bulk funding of teacher salaries was distributed through the operational grants. A large amount of it was distributed through the Targeted Funding for Educational Achievement scheme. 
Hon Trevor Mallard 
: Half of it! 
Hon BRIAN DONNELLY 
: Yes half of it. The question that really needs to be asked—and I think that who has the biggest type of question is a silly line to pursue—is whether all schools are being funded at an adequate level to achieve the fundamental expectations that are laid upon them. Any locally raised funds should not be included in that particular formula. The basic formula should provide adequate funding. That is a question that the Government has to answer. There are some questions about the higher-decile schools at this particular time. 
I am taking only a 5-minute call and want to make one other observation. Obviously we had the Associate Minister of Education (Tertiary Education) at the committee; tertiary education was also being reviewed. We all remember that back in 1999 and prior to that there were all those terrible statements about the burden of student debt and how it was suffocating young people. Labour said that when the Labour Government came in it would slash the burden of student debt. I refer to one of the statements in the report: “The Minister told us that the level of student debt in New Zealand will continue to grow”. How is that for slashing student debt? In fact since this Government took office it has increased at a faster rate than previously. 
But that is not the area I really want to talk about. In the little time I have left I want to talk about the issue of truancy which we spoke to the Minister of Education about. New Zealand has a very good education system. It had a good education system prior to this Government coming to office and it still has a good education system. But the challenge—and it is a challenge for whatever administration is in office—is the tail. The tail is the challenge we have to overcome if we are to have an outstanding education system. One of the things that came through in the reading review was that a large proportion of the tail could be attributed purely and simply to non-attendance at school—through truancy irregular attendance condoned absences or transience. That was put very very strongly in one of the submissions the select committee received. 
It appears to us that for quite some years now we have been asking questions about what the Government will do about truancy. The Minister has quite rightly answered that he has put all his eggs in the truancy database. In this particular review however he has told us—and I quote—“there is no pilot project for a national student database yet as the concept has proved to be more complicated and expensive than was initially thought.” I believe that the Minister’s officials are not taking this issue seriously enough. I also believe that the Government is not taking this issue seriously enough. It still has 1990s thinking. Back then the ministry was a hands-off policy maker and the schools themselves through the boards of trustees were to do things to prevent truancy. The incentives were all wrong. We got it all wrong during the 1990s. 
Since that time some moves have been made to put some systems in place but I say to the Minister that I went out as an honorary truancy officer for 1 day last year to see how things were operating and I saw that although we do have some sort of system in place now it is funded for only 40 weeks of the year so how will we get good-quality permanent staff performing this particular role? We still have really large problems with transience with children moving between schools and not being picked up. They fall between the cracks when they move from one particular area to another. The biggest problem is not bunking. Bunking is when a person just does not go to school; it is condoned absences. 
Hon Dr NICK SMITH (NZ National—Nelson) 
: 
 In the Budget and this appropriation we see a Government programme that does nothing to address the fundamental issue of standards in education. I want to point to three particular issues that the Government and the Minister are ignoring. In April we saw the release of the Progress in International Reading Literacy Study on literacy standards around the world. That study showed that New Zealand had the second-bottom ranking of any English-speaking country whereas in 1972 New Zealand was the very best in the world. We heard the disgraceful comment made by the Minister that being 13th second bottom was a “very pleasing result”. I say to the Minister “Shame.” What sort of dumbing-down standards is he setting for New Zealand that we are second-bottom in the world? I guess as Minister for Sport and Recreation he will say when we come second-bottom in the rugby world cup that the result is “very pleasing”. Well National says it is not good enough. We should be aiming to be the very best in terms of those literacy standards. 
The second issue I want to raise in terms of standards is the disgrace of students being able to receive National Certificate of Educational Achievement credits for picking up litter. The New Zealand Qualifications Authority the agency that is meant to set the benchmark for standards in education is saying that it is going to provide credits for picking up rubbish. 
Hon Trevor Mallard 
: No it didn’t. 
Hon Dr NICK SMITH 
: I have the quote. The New Zealand Qualifications Authority has backed up Cambridge College in allocating credits for picking up litter. I want the Minister to explain how that in any way provides this country with a robust qualifications system because it does not. 
The third issue I wish to raise which was also raised by the Minister in the chair Trevor Mallard is truancy. Why has the Minister in the chair not made any provision at all for increased funding for truancy services even just to keep up with the 10 percent inflation since he has been the Minister? That money has been frozen and it means that it is going backwards in real terms. New Zealand has a truancy crisis yet we have a Minister and a ministry doing absolutely zip. Do members know how many prosecutions there were last year of parents failing to get their children to school? Absolutely zero. A raid in Auckland identified 900 truants but there has been no response and the report from the select committee shows serious concern about that issue. 
With those serious education issues what do we see in the Government’s estimates for new education expenditure? A package for treaty education. That is what the Minister in the chair has put up as the great way in which standards will be raised. What sort of sickly political correctness is that? 
Hon Trevor Mallard 
: I raise a point of order Madam Chair. I think the member is aware and you are aware that the treaty information campaign is part of Vote State Services not this vote. 
The CHAIRPERSON (Ann Hartley) 
: That is correct. 
Hon Dr NICK SMITH 
: It is in his name. He is the Minister of State Services and the Minister of Education and I want to know— 
The CHAIRPERSON (Ann Hartley) 
: Would the member please be seated. The point of order was correct. We are not debating State services in this vote. 
Hon Dr NICK SMITH 
: I find it extraordinary that this Government has all the serious education issues of literacy standards in secondary schools and truancy and the Minister’s big promotion this year is $6.5 million for treaty education. I just say— 
Hon Trevor Mallard 
: I raise a point of order Madam Chair. 
Hon Dr NICK SMITH 
: He is embarrassed. 
The CHAIRPERSON (Ann Hartley) 
: Please be seated. The member knows that he is not to speak during points of order. 
Hon Dr NICK SMITH 
: I wish you would apply that to the other side. 
The CHAIRPERSON (Ann Hartley) 
: The member will withdraw and apologise. 
Hon Dr NICK SMITH 
: For? 
The CHAIRPERSON (Ann Hartley) 
: A ruling was given on a point of order. I am asking the member— 
Hon Dr NICK SMITH 
: I withdraw and apologise. How many times are you going to interrupt my speech? 
The CHAIRPERSON (Ann Hartley) 
: The member will withdraw and apologise correctly. 
Hon Dr NICK SMITH 
: I withdraw and apologise. 
Hon Trevor Mallard 
: My point of order is relatively simple. You ruled about 30 seconds ago on the question of whether we are debating Vote State Services or Vote Education. The member deliberately defied your ruling and continued to debate a vote that is not before the Committee. I am quite happy to get to that vote soon but my gut feeling is that that lot would not even have the spine to debate it. 
Hon Dr NICK SMITH 
: Are you going to allow that? 
Hon Ken Shirley 
: I raise a point of order Madam Chair. I have to say that I am somewhat surprised you did not reprimand the Minister in the chair and call on him to withdraw and apologise. To accuse another member or group of members in this House of being spineless or lacking courage in any way is a definite breach of the Standing Orders. I would ask that you call upon the Minister in the chair to withdraw and apologise. 
The CHAIRPERSON (Ann Hartley) 
: I ask the Minister to refrain from— 
Hon Dr NICK SMITH 
: What? You asked me to withdraw and apologise for a simple innocuous interjection saying that something is different and now you are going to allow the Minister in the chair to— 
The CHAIRPERSON (Ann Hartley) 
: Please be seated. 
Hon Dr NICK SMITH 
: Madam Chair I am saying that you are being deliberately— 
Hon Chris Carter 
: What’s your point? 
Hon Dr NICK SMITH 
: My point is that the Chairperson is setting different rules for different sides of the House. I have been required to withdraw and apologise for making extremely innocuous statements but the Minister is allowed to make statements like “spineless” and the Chairperson does not make him withdraw and apologise. That is inconsistent. 
The CHAIRPERSON (Ann Hartley) 
: As I said I counselled all members on moderation. The time has come for me to report progress. 
Progress reported.