Estimates Debate — In CommitteeText is incorporated into the Bound VolumeEstimates Debate — In Committee[Sitting date: 04 August 2011. Volume:674;Page:20371. Text is incorporated into the Bound Volume.]Estimates DebateIn CommitteeDebate resumed from 2 August on the Appropriation (2011/12 Estimates) Bill.Vote Health (continued)Dr PAUL HUTCHISON (National—Hunua): I must say that it was a pleasure listening to the members of the Labour Opposition being so gracious about my colleague the Hon John Carter. It was great to hear the enthusiasm of the Hon Clayton Cosgrove when he heard that I was about to speak on the good news in terms of Vote Health because indeed it is very good news. This year $528 million has been made available; $1.5 billion has been made available since National came into power in 2008.But I want to talk about health promotion and disease prevention which is something that Labour goes on and on and on about. We have an absolutely incredible record. First of all I will mention immunisation. Back in 2007 in the order of 76 percent of 2-year-olds were covered. Now that figure has rocketed up to 90 percent. That is an absolutely excellent achievement in the last few years.Let us look at the second thing: home insulation. Under the Labour Government something like 2000 or 3000 homes were insulated. Under the National Government 100000 homes have been insulated which is another great public health achievement. There is no doubt that a whole spectrum of respiratory illnesses is being prevented by this initiative which has been executed so ably by the National Government.Let us go on to rheumatic fever. This Budget puts $12 million into clinics for children. I think the plan is that something like 22000 children will be covered in this particular initiative which was something that the Labour Government talked about as one of its many many priorities and strategies year after year. But what did National do? We put it into action.Then we go on to smoking. What happened under Labour? There was something like a 10 percent increase in excise tax in 9 years. National has executed a 30 percent increase in excise tax and we know that this is one of the most effective methods in reducing smoking and all the ill health that is associated with it.Let us look at the roll-out of before-school checks. There were something like 1000 or so under the Labour Government. All Labour could do was about 1000 checks. Under National 100000 children have had before-school checks and something in the order of 8500 children have gone on to have their eyesight corrected or have various other interventions that have helped their eyesight.There is also the area of maternity. I must say that if ever there was an area of health promotion and disease prevention it must be the area of maternity.CHRIS TREMAIN (National—Napier): It is great to be able to take a call in the estimates debate on Vote Health. I want to focus on some of the achievements the Minister of Health Tony Ryall and his team have made in this area. Health is one of the few Budget portfolio areas across all the portfolios where we have actually been able to increase funding. Constituents will be pleased to know that health alone has received $1.5 billion worth of additional funding over a 3-year period which is absolutely fantastic.The recessionary environment in which National became the Government was an extremely difficult environment to come into. Many people would have said that the Government needed to cut its cloth to fit the revenue that was coming in the door. Well we took a very practical approach to this and there were some key areas within the Government spend—health being one of those and education being another of those key areas—where we continue to spend at and beyond the level we were previously spending. We are investing in the health of our community and in our education. There is nothing surer. It has paid huge dividends particularly with the six key areas of focus that Tony Ryall has brought in with the new national standards in health. They are absolutely fantastic. In terms of cancer treatment the Minister has focused each of the district health boards on lifting the bar in terms of cancer treatment. Focusing on that has made a huge difference.Take immunisation. I know that in my own province of Hawke’s Bay the Hawke’s Bay District Health Board and its immunisation team have lifted the level of child immunisation to levels that we would not have anticipated 2 or 3 years ago. As a team through the district health nurses they have done a fantastic job. It is interesting that the Labour Opposition would take time to criticise district health nurses and the work that they do in our communities to immunise young babies and to improve the health and welfare of groups in poverty. I think that work is fantastic but Labour is concerned about it and that is a worry.There have been other standards we have focused on such as elective surgery. We have lifted the level of elective surgery despite the difficult times. That has been absolutely fantastic. We have seen accident and emergency waiting times improve throughout district health boards around the country. Cardiovascular services have also improved. A wonderful initiative from the Hawke’s Bay District Health Board has been a nurse-led initiative to allow prescribing of diabetes medicines which is a wonderful enabler that the Minister of Health Tony Ryall has implemented in this term of Government. It is absolutely fantastic. Smoking cessation is another focus we have in this Government which is absolutely marvellous.One of the things I want to focus on in the estimates debate is the more than $500 million being invested in hospital capital projects. I was particularly fortunate to be at the Napier Health Centre on Wellesley Road on Monday where as part of that $500million capital investment we were able to open a new digital X-ray facility. Absolutely sensational.Sue Moroney: It was Labour who put that money in.CHRIS TREMAIN: The project started just 3 months ago. I am not sure how that could have been started under the Labour Government if it was started 3 months ago and is being implemented now.Let us talk about the Napier Health Centre which was going to close under Labour. That is what was going to happen under Labour. It was getting to the end of its 10-year lease and the previous Government was going to close that centre.Sue Moroney: What rubbish!CHRIS TREMAIN: Well if that is rubbish then what was the protest that I was a part of in the last term of Government? It was to make sure that that facility stayed open for the citizens of Napier and it has. What is more important is that we have signed a 10-year lease now—in this term of Government; not under a Labour Government—that will ensure the longevity of that service for Napier residents. With this new digital radiology facility I acknowledge Wietske Cloo Andrew Lesperance and Warrick Frater who have brought about all these new services and Mandy Robinson who will head up the new digital service in Hawke’s Bay. This is fantastic.In particular I acknowledge the board of the district health board led by Kevin Atkinson. He has done an amazing job of ensuring that that district health board will be one of the more profitable ones going forward or that at least it will break even and reach profitability which will be the first time we have seen that in many many years. That is absolutely fantastic. Kevin has done an outstanding job.A party vote was called for on the questionThat Vote Health be agreed to.Ayes65New Zealand National 57; ACT New Zealand 4; Māori Party 3; United Future 1.Noes53New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C.Vote Health agreed to.Vote State Servicesagreed to.Vote ACCHon Dr NICK SMITH (Minister for ACC): It is a great pleasure to be standing before the Committee of the whole House for the estimates debate on Vote ACC in far stronger circumstances. In other years in which I have been before the Committee I have had to acknowledge huge multibillion-dollar losses. I have had to acknowledge that there has been—Hon Steve Chadwick: Created.Hon Dr NICK SMITH: The member interjects “Created.” Righty-o she needs to explain this point for me. ACC had a loss of $2.4 billion in 2007-08.Sue Moroney: Oh that’s rubbish.Hon Dr NICK SMITH: The member says it is rubbish. Whose signature is on the annual report showing a $2.4 billion loss? It is that of the Labour Minister of the time Maryan Street. So for Sue Moroney and Steve Chadwick to say that what I said is not true is to say that Maryan Street signed false accounts. That is what they are asserting and I think that is a very serious charge for which they should perhaps go to the Serious Fraud Office. To say that someone signed a set of accounts that was false is a very serious accusation which they are making against Maryan Street and I ask them to reflect on that.The fact is that ACC claims costs between 2005 and 2008 went up by 50 percent. Claims costs were up by 50 percent. It was out of control. It was financially reckless. The previous Government breached the Public Finance Act. It did not disclose the size of the problems in the pre-election update and this Government has had a hard job to sort out that mess.The great news for New Zealand households this year is that we are able to have substantive levy reductions for households and for businesses at a time when they are under real financial pressure. Let me tell members how much it means. It means that workers on the average wage next year will receive a 17 percent reduction in their earners levies which will put 10 bucks a week into the hands of the average Kiwi household. Ten bucks a week for the average Kiwi household—I think that is a great thing and I commend the work of the board and the staff of ACC.Even better we are able to reduce business costs. There is a 22 percent reduction in the levies for businesses. The people who have achieved that have to be encouraged and congratulated.Sue Moroney: I thought you said it was broke.Hon Dr NICK SMITH: Exactly; it was when we had reckless financial management. Let me tell members how bad it was. When Labour was in charge ACC lost $4.8 billion in just 1 year.Sue Moroney: An investment.Hon Dr NICK SMITH: The member interjects “investments”. I am happy to bet her the best bottle of Nelson wine that of that $4.8 billion loss—do members know how much was lost in investments?Dr Cam Calder: Zero?Hon Dr NICK SMITH: Zero. Not one penny. That is absolutely the truth and I challenge the member who is interjecting to show me in those financial accounts from when she was in the Government what part of that $4.8 billion loss was in investments because it was not a dollar. It was not a dollar. That is in the accounts audited by the Auditor-General.Hon Steve Chadwick: I raise a point of order Mr Chairperson. This is all very interesting from the Minister but I thought we were in the estimates debate which is about this year not the term of the previous Government.The CHAIRPERSON (Eric Roy): The member is correct but the Minister in the chair the Minister for ACC is responding to interjections. It is rather hard to curtail him when he has been somewhat induced to respond to a series of interjections. If members want him to stay on track I suggest they curtail the interjections somewhat.Hon Clayton Cosgrove: I raise a point of order Mr Chairperson. With respect I think if you review the tape you will find that before any interjections occurred the Minister opened his speech by recasting history rather than dealing with the estimates then interjections followed after that. The Minister broke the Standing Orders immediately he spoke and I ask you to bring him back to the estimates.The CHAIRPERSON (Eric Roy): I think that is also a fair comment so I would ask the Minister to address the estimates.Hon Dr NICK SMITH: These estimates provide for the ongoing huge improvements in rehabilitation within ACC. If we are to make progress the real key is to make sure that we get people back to work as quickly as possible. Stunning results are shown by programmes like Better at Work which are supported in these estimates. Although Labour feels far more comfortable with people sitting on welfare and people sitting on accident compensation we in the Government want to work on people being able to focus on what they can do. Programmes like Better at Work which aresupported in these estimates are the way in which we can rightly deliver accident compensation in New Zealand.There is a further very important change and it is welcomed. This year we are introducing experience rating and a no-claims bonus for small businesses. There are 290000 small businesses right now receiving no-claims bonuses for their improved workplace safety. I think it is a good thing to reward workplaces that have better safety practices and are able to avoid claims. The experience rating is an equally important reform.Vote agreed to.Vote Climate ChangeNICKY WAGNER (National): I am delighted to take this opportunity to speak in the estimates debate on Vote Climate Change. It is well understood that climate change is one of the most difficult issues for Governments today so it is to the enormous credit of the Minister for Climate Change Issues the Hon Dr Nick Smith that New Zealand’s modified emissions trading scheme has been introduced so smoothly and that in a relatively short time it has so effectively changed investment patterns in our economy. New Zealand introduced its emissions trading scheme because it is the lowest-cost way to reduce our emissions on greenhouse gases. As an environmentally aware country with a“clean green” brand we need to be serious about reducing greenhouse gas emissions. Putting a price on carbon is the most credible and least costly way to reduce emissions. That is because theemissions trading scheme passes on the costs of reducing emissions to emitters as they are best placed to find the most cost-effective way of doing this.How well has our emissions trading scheme done? Well forestry entered into the scheme in 2008 and since then there has been a sharp switch from deforestation to afforestation. Deforestation hit a record of 4000 hectares between 2005 and 2008 but since forestry entered the scheme new forest plantings have grown each year with 8000 hectares expected in 2011. This change reflects both the significant cost of permanently removing forests and the valuable income stream from new forests in the emissions trading scheme.The increase in afforestation has had a dramatic impact on New Zealand’s net emissions and it is essential to meeting our Kyoto obligations over the period 2008-12. On 1 July 2010 energy transport and industry entered the scheme. Emissions from electricity have grown 130 percent since 1990 which is the largest increase in any sector but the emissions trading scheme has changed that. In 2010 the industry achieved a 12-year high in renewable generation of 79 percent.Hon Steve Chadwick: I raise a point of order Mr Chairperson. I have been listening very carefully to the speech but I have not heard estimates mentioned yet. We have had a wonderful history about the emissions trading scheme which Labour introduced but we have not heard yet about estimates. This is a Budget debate on Vote Climate Change.The CHAIRPERSON (Eric Roy): I think the member has been talking about current things that are in the estimates. She should perhaps make the comparative illustration but she has not been too far from the mark. This is a caution to all members: this is the estimates debate.Hon Clayton Cosgrove: I raise a point of order Mr Chairperson. Again with respect as you would quite rightly concur the estimates are forward-looking documents as to how the Government proposes to spend public funds. Although I am sure the emissions trading scheme forms part of that the member has given us a history lesson in respect of the emissions trading scheme and talked about industry and how manyforests have been felled and what have you. The estimates are about how the Government proposes to spend money. The member has not been around long enough—New Zealand Bill of Rights Act aside—to work that through.The CHAIRPERSON (Eric Roy): I have cautioned the member. Current policy is relevant but the whole speech should not dwell on that. It is really the estimates that we are referring to.NICKY WAGNER: I think it is particularly relevant that the costs of afforestation will make sure we meet the Kyoto Protocol. If we do not meet that protocol it will be very expensive for our Government when we look at the 2008-12 period.I will focus on renewable generation. I think it is important that we understand that increased renewables will help us in the future in managing our carbon footprint. The growth of renewables has increased. I think we have already mentioned in the Chamber that 1340 megawatts of renewable generating capacity has been consented in the past year with no fossil fuel plants. That is a fivefold increase in renewables compared with the last decade and that will help us manage the cost of carbon.During the last 12 months the emissions trading scheme has performed well and we expect it to continue to do so. Actual emissions have proven to be significantly less than those estimated and it was expected that over the first reporting period the combined industrial electricity and transport sectors would have emitted approximately 18.8 million tonnes but emissions were only 16.3 million tonnes. That means that our liability is absolutely decreased.We can clearly see that a price on carbon has now been factored into New Zealand’s economy and that this price is helping us to achieve the Government’s goal of reducing emissions and managing the costs of New Zealand’s international climate change obligations.I would like to reflect on the fact that New Zealanders do enjoy our beautiful country they do appreciate its great outdoors and they are very keen to do their bit towards managing climate change even if it is costing them. I think the emissions trading scheme is helpful in this.Hon Dr NICK SMITH (Minister for Climate Change Issues): I am delighted to talk in this estimates debate on climate change. Does it not speak volumes about the level of confidence there is in the Government’s policy around climate change that neither the Green Party nor the Labour Party want to take a single call? I think that says the policy is actually in really robust shape that there is a high level of confidence about the Government’s policies and ultimately that they are working. Let me go through a number of ways in which they are working including in terms of how that will flow through to 2011.One of the key objectives for the Government is to reverse the awful deforestation that occurred during the term of the previous Government. In this year we are dealing with officials estimate there will be 5700 additional hectares of forest. Let us compare how that works. In the previous decade there was a huge increase in deforestation; the worst period of deforestation since records began in the 1930s was under the previous Government. So when we introduced our policies around climate change we wanted to reverse that and we have achieved just that with an increase in afforestation for every single year we have been the Government and that is continuing on into this year.A second key objective for the Government and our climate change policies is that we think we should be producing more of our energy from renewables. New Zealand is actually more privileged than most countries in that regard. What actually happened was that during the term of the previous Government we saw a constant decline in the proportion of electricity that was renewable. Most of the power stations that were builtunder Labour were thermal fossil-fuelled power stations. In the last year we have seen a huge improvement in that regard. It is as impressive as this: a fivefold increase—Hon Member: How many?Hon Dr NICK SMITH: —a fivefold increase—that is a 500 percent increase—in the amount of consenting for renewables.Brendon Burns: Isn’t that unbelievable?Hon Dr NICK SMITH: It is very unbelievable. Mr Burns says it is unbelievable. It is unbelievably good and that is what we get under a National Government. The interesting thing is this: in terms of this future year we are expecting to see and the Government is budgeting for an ongoing improvement in the proportion of renewables and that is to be celebrated.The third element is of course—and this is absolutely pivotal to estimates—what the cost to taxpayers will be of meeting our Kyoto obligations. Again let me show members how it works. Under the Labour Government emissions increased by 23 percent. This was the Government that campaigned on being carbon neutral that said when it came to Government it would reduce emissions by 20 percent—Hon Steve Chadwick: I raise a point of order Mr Chairperson. I again repeat that this debate is about the estimates in the Budget. I have not heard one word about Budget investments since this year of 2011.The CHAIRPERSON (Eric Roy): I will overrule that. I think the member is making comparisons and projecting—looking forward. I think he is in the zone.Hon Dr NICK SMITH: They are so sensitive because their record is just so ugly. Let me tell members the advice I received when I became Minister for the Environment. It was that if that emissions track continued the cost to the New Zealand taxpayer of meeting our Kyoto obligations—Hon Clayton Cosgrove: I raise a point of order Mr Chairperson. I simply ask for your clarification. In responding to my colleagues and giving your ruling to my colleague’s question about relevance to estimates you made a comment in respect of that that I assume means the Minister was adhering to the Standing Orders by talking about forward-looking estimates. But you used what we could probably call new parliamentary language and said he was “in the zone”. I just want you to interpret that—The CHAIRPERSON (Eric Roy): Please sit down. That is rather trivial. The member has surmised correctly.Hon Dr NICK SMITH: The key issue in the estimates is how much the New Zealand taxpayer will have to pay for New Zealand to meet its Kyoto obligations. And the answer is absolutely not a penny. Do members know why? Under the first 2 years of the emissions trading scheme our emissions have stopped going up; they have gone down. And they have gone down so well that New Zealand will comfortably meet its Kyoto targets and that is absolutely good news for the taxpayer. Rather than having to write out a cheque for $485 million to countries around the world—Dr Cam Calder: How much?Hon Dr NICK SMITH: The cost to New Zealand without the emissions trading scheme would have been $485 million. But as a consequence of having the scheme in place emissions are down we are meeting our targets and that is extra good news—extra good news! While the Māori Party is in the House I will acknowledge that the only way this Government has been able to get that scheme up and running get emissions down get the investment in forestry and get the investment in renewable energy is that the Māori Party had the wisdom to back a sensible pragmatic emissions trading scheme that is working for New Zealand that is working for Māori and that is ensuring we meet our environmental obligations. I simply say how proud this Government is of the sensible progress it has made and over the course of dealing withthe emissions trading scheme review and working forward our objective will be to maintain that balance of minimising costs and maximising progress on this important issue.Vote agreed to.Vote EnvironmentLOUISE UPSTON (National—Taupō): It is my privilege to stand and speak this afternoon on Vote Environment. I am proud to be one of John Key’s team and proud of the fact that he has navigated the balance so nicely around growing the economy and protecting the environment. I thought I would touch on three areas in particular and I want to give a very local example of how exactly that balance can be achieved.I will talk about the creation of the Environmental Protection Authority under the leadership of Minister Nick Smith; renewable energy which again has been touched on by the Minister under his climate change responsibilities; and also the environmental issue that affects the Taupō electorate more than anything and that of course is water quality and our Fresh Start for Fresh Water Clean-up Fund.Let me start with the Environmental Protection Authority because the establishment of that authority is yet another election promise delivered. It was something that was talked about in the blue-green vision document and it is great to see it being enforced from 1 July. Clearly in terms of the estimates funding has been put aside for this stand-alone authority that provides central direction at a national level and makes environmental protection so much easier. It brings together the range of regulatory functions but more important it provides the direction that has been so lacking under the previous Labour Government. Regional and district councils actually have some guidance now in terms of providing some direction.One of the other things that the Environmental Protection Authority has been able to do is the national consenting processes. This is particularly valuable with renewable energy projects of which there are quite a few in the Taupō electorate. One of the questions that came up today in the Chamber which Minister Smith was talking about was the stunning results that we are seeing in terms of renewable energy in this country. We are seriously on track to achieve our target of 90 percent renewable energy by 2025 and we have had consented in 2010 the highest level ever in terms of generation with renewable sources. [Interruption] Forty-two percent was geothermal. The Taupō electorate is the heart of geothermal energy.Progress reported.Report adopted.