Debate on Prime Minister’s Statement 
Debate on Prime Minister’s Statement 
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Debate on Prime Minister’s Statement 
Hon JOHN KEY (Prime Minister) 
: 
 I move  
That this House express its confidence in the National-led Government and commend its programme for 2010 as set out in the Prime Minister’s statement to Parliament 
. The Government starts the year with a very full programme in front of it. Our driving goal is to lead a step change in New Zealand’s economic performance so that we can deliver to New Zealanders the jobs— 
Mr SPEAKER 
: I apologise to the Prime Minister for intervening so early in his statement but I ask the House to recognise that this is a very important debate. I expect courtesies to be extended to the Leader of the Opposition when he speaks and I expect courtesies to be extended to the Prime Minister when he delivers his speech. I am not ruling out interjections but I think they should be reasonable. I ask all members to be reasonable so that the public can hear a speech that they want to hear. I thank members. 
Hon JOHN KEY 
: Our driving goal is to lead a step change in New Zealand’s economic performance so that we can deliver to New Zealanders the jobs increased incomes and better living standards that they deserve. In recent times New Zealand’s incomes have fallen further and further behind those of the countries we like to compare ourselves with including Australia. This year the Government will make a large number of economic reforms to turn this round. These will include changes to the tax system reforms in the public sector changes to our science and innovation systems unlocking access to our abundant natural resources and measures to improve firms’ access to capital. 
The Government’s other priority this year is to make significant changes in order to improve service delivery in social sectors like welfare education justice and health. We owe this not just to the people who rely on these important public services but to all taxpayers who fund them. What is more it is time that New Zealand came to grips with some of the big social problems that persist in our communities including welfare dependence crime and other social dysfunction. I have outlined the details of this programme of economic and social reform in a statement that has been published in this House. I urge members to read that statement in full. 
Let me take the opportunity today to address some parts of that statement starting with tax. This year the Government will make significant changes to the New Zealand tax system. We will announce the details of these measures as part of the Budget in May. We want to have a tax system that drives economic growth and the creation of jobs that creates incentives for people to work hard and to get ahead in New Zealand that boosts savings and increases the productivity of investment and that is regarded as fair and relatively simple to administer. We agree with the Tax Working Group that this is not currently the case. In particular we agree that New Zealand relies heavily on the taxes most harmful to growth particularly corporate and personal income taxes that there is a hole in the tax base around the taxation of property that the tax system lacks integrity and fairness because of differences in the treatment of entities and that there is significant risk to the sustainability of the tax revenue base. Tinkering over recent years has made the tax system more complicated. It has led to poor incentives and created a raft of different ways for people to minimise their tax payments. Given these facts is it any wonder that our economy has tilted towards consumption and property investment that we have a shortage of savings and that a high proportion of New Zealand graduates live overseas? 
We are looking at possible reductions across the whole personal tax structure not just to the taxpayers on the top rate as has been suggested by some people. However some of the reforms discussed by the Tax Working Group are not favoured by the Government and are therefore off the table. In particular we will not be developing any proposals for a land tax a comprehensive capital gains tax or a risk-free rate of return method for taxing residential investment properties. However the Government does believe there is a gap in the current tax system around property investments where income is being derived but in aggregate no tax is being paid. In fact the Government is actually losing revenue in this sector. We will therefore be making changes to the way that property is taxed that will result in increased revenue and more fairness for taxpayers. 
The Government is also carefully considering a modest increase in the rate of GST to no more than 15 percent. We are acutely aware of the effect that a rise in GST could have on lower-income families if it is not balanced out by compensatory changes elsewhere. Therefore if an increase were to occur it would have to be accompanied by across-the-board reductions in personal taxes as well as upfront increases in benefits New Zealand superannuation and Working for Families payments. 
These changes will allow New Zealanders to take home more of their own income. Do they not deserve to do that? They could use that income to save or to pay off their mortgages without being taxed on it. Saving and investment rather than consumption would be encouraged. GST is also a very difficult tax to avoid paying no matter how people structure their financial affairs. As David Lange once observed even drug dealers pay GST. No final decisions have been made about raising the rate of GST and the Government has asked for more work to be done on that. But suffice it to say that the Government would not embark on a policy of increasing the GST rate unless it would benefit the New Zealand economy in the long term and unless it would see the vast bulk of New Zealanders become better off. 
The Government is not considering a major change to the Working for Families scheme. But we are concerned that some people are using income structuring techniques in order to gain eligibility to a scheme that was never intended for them. This runs contrary to the policy intent and the Government is therefore looking at how to make the Working for Families scheme fairer in that regard. 
Science and innovation are also key elements of the Government’s economic agenda. From Weta Digital and Icebreaker through to Zespri and Fonterra New Zealand’s leading exporters have harnessed science and innovation to develop new products and improve the way they do business. The challenge for New Zealand is to get more out of our firms using science research and technology to deliver more valuable products and services and to create new and better-paid jobs for New Zealanders. We are not satisfied that the current policies are doing enough to encourage this. Therefore in 2010 we will make changes to our public science system to increase its contribution to economic growth and to encourage firms to increase their take-up and application of research. This will include changes to the way that we invest in the Crown research institutes. 
As I have previously outlined the Government will be keeping a tight lid on new spending over the foreseeable future which will help to keep public debt under control and keep pressure off interest rates. Even so we have been convinced that in order to be effective in the long run our reforms in the science and innovation area must be matched with a step up in public investment. Accordingly we have made science and innovation a priority for new spending in this year’s Budget and we are focused on boosting business research and science capability. 
The Government also wants to unleash the untapped economic potential of New Zealand’s incredible natural resources. Although Australia is sometimes described as digging its way to prosperity New Zealanders often forget that we too have access to highly valued resources. Fertile land petroleum minerals and water are in particular abundance. Our challenge is to make more use of that economic potential. In general the Government is in favour of unlocking resources for economic benefit where this is consistent with environmental conservation and other objectives. This year we will improve or remove regulations that prevent natural resources from being used more productively or from being used at all. In particular the Government will progress an action plan to ensure that more use is made of New Zealand’s petroleum resources. This is because although oil is already New Zealand’s third-largest export earner the estimates are that with improved Government policies the petroleum sector could generate up to $30 billion in export revenue by 2025. 
We will also take steps to maximise the economic potential of the minerals that are currently locked up in Government-owned land. Mining in New Zealand uses just 40 square kilometres of land which is around 1/100th of 1 percent of our total land area. The export value of that land however is $175000 per hectare which makes mining an extremely valuable use of land. The Government will shortly release a discussion document recommending that some areas of Crown land be removed from schedule 4 of the Crown Minerals Act. We will be calling for submissions on this document. But the Government is eager to unleash the increased economic growth and new jobs that could be produced from our mineral estate so we expect to make some changes to schedule 4 thereby opening up more Government-owned land to mining. I can assure New Zealanders that any new mines will have to meet strict environmental tests. Moreover the Government is proposing to establish a new conservation fund potentially drawn from royalty revenue from mining operations on Crown land. 
Finally the Government will this year take steps to ensure that New Zealand can make more of our abundant supplies of water. We will ensure that water storage and irrigation projects that meet environmental standards and are good economic propositions can happen in a decent time frame. This will include a particular focus on removing regulatory roadblocks to water storage and irrigation can begin in Canterbury. 
The Government will this year undertake substantive reforms to improve the access that New Zealand businesses have to capital investment. Our businesses simply cannot expand or take on new workers unless they can access the funding they need in order to grow. The challenge of accessing capital has increased since the global economic and financial crisis. Investor uncertainty has been high and a number of people lost money on investments that they were poorly advised on or knew little about. We want New Zealanders from all walks of life to be able to invest their savings in productive businesses either directly or through funds with more confidence in the regulation of those capital markets and with the knowledge they need in order to make informed choices. To this end the Government has been considering the report of the Capital Market Development Taskforce. We will respond to its recommendations shortly. Our response will outline significant policy changes across the Government sector including changes to the Securities Act. We are intrigued by the opportunity for New Zealand to become a hub for financial services in the Asia-Pacific region specialising in providing high-value middle and back-office functions for the funds management industry. If new industries could be developed here we have asked officials to determine what steps we should take to make this initiative a reality. 
The reforms I have just outlined demonstrate how ambitious this Government is for growth to occur in the New Zealand economy and how bold we will be in the pursuit of that ambition. However these are just some of the highlights of our economic plan for 2010. This will also be the year in which the Auckland super-city becomes a reality and in which four free-trade agreements are signed. It will also be the year in which we start to lay out the first of our ultra-fast broadband initiatives build new highways to relieve chronic bottlenecks and encourage our tourism industry to thrive. 
For now though let me turn to the Government’s other key priority for the year which is to make significant social sector reforms starting with our education system. Central to this reform effort will be the implementation of our national standards policy in years 1 to 8 in schools—backed I might say by 73 percent of New Zealand parents and rightfully so. This will be backed up with changes to ensure taxpayers’ funds are being used effectively for the schools for children that need extra support. They will include policies to improve the take-up of preschool education by children in our poor communities and in the Maori and Pacific populations. It will include moves to improve the training of our teachers to make more of the funding that is intended for struggling students and provide for more aggressive intervention in schools that are consistently failing their students. We will also step up our push to ensure secondary school - age pupils have greater opportunities to learn trades and practical skills in our schools and tertiary education institutions. This will include furthering our Youth Guarantee policy and supporting it with reforms to modernise the funding and legislative arrangements that govern our secondary schools. 
This year the Government will introduce legislation to reform the benefit system a move that is consistent with our election policies. In 2010 New Zealand taxpayers will fund an estimated $7.6 billion of benefits and income support not including superannuation. This amounts to more than $20 million every day or just under $1 million every hour. I need to be able to look New Zealand taxpayers in the eye and assure them that their hard-earned wages are not being used to support those who lack the will or the desire to work as hard for their living as their fellow New Zealanders do. Our benefit reform package will therefore be squarely focused on encouraging people to get back to work as soon as possible. It will include adjustments to the criteria used in testing eligibility for sickness benefits and strict application rules to prevent people from languishing on the unemployment benefit and it will increase work and training expectations for those who are currently receiving the domestic purposes benefit when their youngest child turns 6. These changes will be supported by adjustments to the benefit abatement regime. 
The welfare reforms will have a very positive impact and effect not just for the beneficiaries themselves but also—and this is more important—for the sustainability of the welfare system. For example if just 100 domestic purposes benefit recipients were to move off their benefits and into work the welfare system would save close to $10 million over their lifetimes. If we were to assist into work 5 percent of sole parents whose youngest child is aged over 6 years we would save almost $200 million over the next 10 years. 
This year will also be a year in which we tackle issues of law and order. We will have a comprehensive programme that follows on from the enormous work effort in 2009: stronger punishment for the worst offenders; reform of the legal aid system; reform of the liquor licensing rules; new youth justice programmes; extension of and progress on our P action plan; intensification of proactive policing policies; and improvement of our prisons. In the health sector highlights for 2010 will be new legislation to stop the duplication of waste make progress on elective surgery and make a new push for better-performing primary health care. 
In concluding this statement to the House I acknowledge the ongoing collaboration and support of our confidence and supply partners: ACT the Maori Party and United Future. We look forward to another year in which we work constructively with them to provide stable and inclusive Government. 
Let me wrap up this speech by saying that 2009 was not an easy year for many people. Some people lost their jobs some lost their savings and others lost their confidence. Yet things are undoubtedly looking up. The economy is picking up and new jobs will appear as businesses gain their confidence. The policies we intend to introduce this year will be a big part of this country’s improvement. The Government’s overriding concern is to improve opportunities fairness and security for all New Zealanders. As this statement has shown we have an active and comprehensive programme ahead of us in 2010 in almost every economic and social area and as a result of that New Zealand will be a better place to live in. Today I presented to Parliament a statement of 9500 words that has a work programme for this country to make a step change. A few weeks ago Phil Goff’s idea was to cap the wages of 16 bureaucrats in New Zealand. No wonder Labour is in Opposition! 
Hon PHIL GOFF (Leader of the Opposition) 
: 
 The Labour Opposition will oppose the motion. David Farrar who is the National Party’s pollster on his blog this afternoon gave the speech that John Key just read out a B grade and he was being generous. We heard a lot of rhetoric; we heard very little substance. I would say that Alan Bollard who rained on the Prime Minister’s parade on Sunday would classify that speech as Alan Bollard 1 John Key 0. That speech proved Alan Bollard right: there is no plan. There is the talk of a step change but there is no plan at all that any Government member could look at and say will close the gap with Australia. That speech was not a step change it was a step back. There was no bold plan—no plan at all. The Prime Minister’s spin doctors hyped that speech to be the most important speech that he would read out this year. It was “Big Tuesday” they said. It was more like “Tip-toe Tuesday”. 
Let us look at the one thing where there was a sense of where the Government wants to go: GST. Let me read out what the Prime Minister said. He signals a rise in GST and I oppose GST because there is no way that the Government will implement it to be fair to all New Zealanders. There is no way that it will make it fair to all New Zealanders. Forget about the rhetoric of fairness; this is about mates’ rates. This tax change— 
Mr SPEAKER 
: I apologise to the honourable Leader of the Opposition. Some interjection is reasonable when a point is raised that is perhaps controversial but to go on and on is unacceptable. I said that the Leader of the Opposition would be heard and that courtesy would be extended to him. I apologise for interrupting him. 
Hon PHIL GOFF 
: I oppose the increase in GST because there is no way that this Government will ensure that the tax changes that it is bringing in will be fair to all New Zealanders. 
When the Prime Minister talks about GST he does it with a trembling voice. Let us listen to what he said in that speech. The Government is only “considering” it—only “considering” it. “No decisions have yet been made and the Government has asked for more work to be done on this.” Government members know that New Zealanders do not believe that a National Government will produce a tax package that is fair across the board to all New Zealanders. Forget the rhetoric; look at the record. Look at the record of the Prime Minister’s last tax changes in December 2008. Thirty percent of the tax benefits went to the top 3 percent of New Zealand income earners. 
Hon Dr Nick Smith 
: They pay 75 percent of the tax. 
Hon PHIL GOFF 
: Nick Smith says that is OK—30 percent to the top 3 percent. I wonder whether he says it was OK that no New Zealand family with dependent children that earned less than $40000 got any tax cut at all. No New Zealand family with dependent children that earned less than $40000 got any tax cut at all but it was OK to give 30 percent of the benefits to 3 percent of the top income earners. Shame—absolutely shame! 
What was interesting in the Prime Minister’s comments was what he did not say. He did not say what he was going to do with the top tax rates. Well he did not say that in this package but we know because he has been promising those mates who funded the National Party at the last election that it will happen. Let us have a look at what will happen when the top tax rates are cut. The Prime Minister will do pretty well out of it. On his prime ministerial salary it will be worth $509 a week to him. Take Paul Reynolds who heads up Telecom—and I will not include his bonuses which run into millions; I will look just at his base salary. On his base salary he would get $2600 a week—$2600 a week. What about the person on the minimum wage? The person on the minimum wage of course got 25c an hour from the Prime Minister—very generous I tell the Prime Minister. You know over a week that 25c an hour almost enables that low-income but hard-working family to buy one packet of Weetbix. But out of the tax cuts at the top people on the minimum wage will get nothing—nothing. Well they probably did not expect anything out of a National Government. But take the people on the average wage of $48600; what will they get from a tax cut that will take the maximum tax rate from 38c in the dollar down to 30c in the dollar? They will get 35c—not 35c an hour but 35c a week I tell the Prime Minister. Is that what he is going to do? His silence in this speech indicates that that is in National’s plans. The person on $70000—you know a middle-income earner doing reasonably well but still finding things a bit tough—would get $12.69. Compare that with the Prime Minister’s $509! 
No member of the National Government therefore should come into this House saying that it is planning a fair tax package. Those members have floated the idea that they will put GST up. We know why GST is regressive. It is because the people who earn the lowest amount—the people who earn the lowest amount—have to spend all of their income and disproportionately end up paying more tax. I ask the Prime Minister which New Zealanders he has met out in the street have told him that they want the price of their bread to go up or the price of their milk their power their kids’ shoes and their back-to-school needs. Who has asked for an increase in GST? The truth is that no one has except for those people on the top incomes in New Zealand who expect an increase in GST to pay for cuts in the very high incomes they are earning. Labour members have no confidence that this Government will look after the needs of the people who will be affected by that. If anything there will be a token measure to partially compensate them for the increase in GST. I ask who the winners out of the National Government’s tax package will be. That is a fair question: who are the winners and who are the losers? The winners will be the Prime Minister’s best mates on their high incomes and the losers will be average New Zealanders. Mark my words that is what the figures show. 
But his speech was not just about taxation; it was about how we are going to move New Zealand forward. We needed a speech and we needed a plan that would show that the Government had some idea of how to move New Zealand forward but the speech lacked substance it lacked conviction and it lacked anything new. It was a little bit like watching those late-night TV programmes where we see the repeats; everything that has already been said was repeated in that speech. Take the Kopu Bridge. Do members remember the Kopu Bridge? It has been announced for the 11th time that the Kopu Bridge will be built. But I ask the House when the funding for the Kopu Bridge came into the Budget and who initiated it. It was under Labour. This policy announced 11 times by National brings the programme forward by 6 months—6 months only. 
Then I heard the Prime Minister talk about research and development. You know the Government has just discovered that science and research and development are important things. It is a pity that the Prime Minister did not discover that fact when he and his Government cut $2 billion out of the Fast Forward fund—$2 billion. Then he cut research and development tax credits. That was to deliver in about 5 years’ time I think about $300 million a year to innovative companies that could take New Zealand forward. He cut those tax credits and now he has the temerity to come into this House and say he wants to do something about science and research and development. I tell the Prime Minister that while he was cutting hundreds of millions out of research and development when he came into Government in this country a smart Government across the Tasman was increasing its expenditure on research and development by 25 percent. The Prime Minister says he wants to close the gap between New Zealand and Australia. I tell the Prime Minister that the gap has become wider not narrower. It is wider on research and development because of the steps that the Government in power has taken. It is wider on employment. 
The Prime Minister wants to close the gap but what has happened in employment since the election? Our unemployment rates have risen 30 percent higher than those of Australia. Australia is getting its unemployment down because it has a Government that believes in bringing unemployment down a Government that is active a Government that does not simply sit on the sidelines and do nothing. We have a Government that does nothing. No that is not right; it held a Job Summit last year. Does the Prime Minister remember? He told us that the Job Summit would not be a talkfest but that is all we got of it. We got just a handful of jobs and today 168000 New Zealanders have no livelihood. The Prime Minister told us in December last year that he was pretty happy about the rate of unemployment and that it was peaking at 7 percent. As he was telling us that unemployment in New Zealand rose by 18000—18000. Of those people who are now unemployed more than a quarter have been out of work for 6 months or longer. These are people who are losing hope who have lost their livelihood and for whom this Government is doing nothing. 
Then I heard in the Prime Minister’s speech about the job guarantee. Do members remember the job guarantee which was to give young New Zealanders a guarantee that they would be in work in training or in education? I tell the Prime Minister that the highest level of unemployment in this country is amongst our young people. One in five of our young people is not in work not in training and not in education. And I say shame on the Maori Party because more than one in four of young Maori is out of work. I also say to the Maori Party that raising a flag over the Auckland Harbour Bridge will not deal with the fundamentals of people who want jobs and want decent incomes. This Government has failed on unemployment and nothing in the Prime Minister’s statement gives us any hope that there is a plan. In fact the Prime Minister has told the country that his Government is doing everything possible for those who are out of work. That is simply not true. It is not true. This Government has sat on the sidelines; the Government across the Tasman has got on to the field has been active has brought in skills and training has brought in research and development and has a properly targeted stimulus package. Its unemployment is going down; ours is going up. 
What in the Prime Minister’s statement gives any hope to hard-working New Zealand families who are trying to get ahead? You know if the Government would listen it might learn something. It is a real problem that this Government is not listening. John Key was not listening to the Governor of the Reserve Bank. He is not listening to John Hattie. John Hattie is the man on whom National’s programme of educational standards was supposedly based. Everybody respects John Hattie. He is a renowned expert in standards. What is John Hattie telling the country? He has said the Government’s programme is fundamentally flawed—fundamentally flawed—and will achieve the opposite of what the Government is claiming. I tell the Prime Minister it is time to listen to John Hattie. It is also time to listen to Pita Sharples who told the Prime Minister that he had not been consulted and that he did not agree with the programme. What did he get? He got told off he got told to shut up and then he got bought off because national standards will apply in the general schools but they will not now apply in the kura kaupapa schools. That is double standards. If it is good for our mainstream schools why is it not good for our Maori schools? The Prime Minister never answered that. 
Families are struggling to make ends meet; not just those at the bottom of the heap although they are finding it harder but people right up to the middle-income level. The labour cost index that was released a week ago stated that 56 percent of New Zealanders got no wage or salary increase last year—56 percent of New Zealanders. Yet they have faced rising costs and now the Prime Minister is promising them with the lifting of GST that he will push those costs still higher. But where is there anything in the Prime Minister’s statement that says that those families will get a lift? 
I finish on the question of the vulnerable. The Prime Minister has told us time and again that he is going to look after the disadvantaged. You know he came into my electorate to a street called McGehan Close and insulted the people by saying it was a dead-end street. He said that the rungs of opportunity had been stripped out from under them and that he would make things better. He talked persuasively to a lady called Joan Nathan and he took her young daughter Aroha and led her hand-in-hand across the bridge at Waitangi. What did Joan Nathan say about John Key today? She said that she has been let down by the Prime Minister and that her daughter who was used as a photo opportunity exploited as a photo opportunity wants nothing to do with the Prime Minister. She said she was employed by Jackie Blue. Before the election things looked really good; the day after the election she was sacked. Jackie Blue said that was because she was merging her office with Sam Lotu-Iiga’s. Well I happen to know that Jackie Blue’s office is in Dominion Road and that Sam Lotu-Iiga’s office is in Onehunga Mall so that cannot possibly be true. It cannot possibly be true. Joan Nathan said—and I want the National members to listen for a moment to what this woman lauded by the Prime Minister said—that she had been impressed by John Key but “He’s just made everything worse for us”—he has just made everything worse for us—“and made it easier for ones that are higher up. I’m struggling every week.” That is what Joan Nathan said. She not only was sacked by the National Party when she was no longer politically useful to it; she had a training allowance she says to do a course but it has been stripped away from her. It has been stripped away from her. I wonder what the Prime Minister really meant when he said he was there to make sure the rungs of opportunity were available for those people. 
That is double standards. Nothing that we have heard from the Government today gives us any indication of how it intends to take this country forward let alone catch up with Australia as was promised with all the political hyperbole that the Prime Minister could manage at the time of the election campaign. There is nothing in this package that indicates that the benefits of economic recovery happening internationally—4 percent growth internationally this year—will be shared amongst all New Zealanders. There is nothing in this package that says that the Government has any idea at all about how it can promote growth how it can support innovation or how it will go about helping build skills. 
We had a New Zealand Skills Strategy. It was endorsed on a tripartite basis by the then Labour Government the trade union movement and by the employers. I listened to Phil O’Reilly this week. He normally is a strong supporter of the Government. Maybe the Prime Minister should listen to Phil O’Reilly on this because he said that one thing he was really disappointed about was that there was no skills strategy for New Zealanders. There are 72000 young New Zealanders out of work without hope and without the chance to make the most of their lives. The Prime Minister and the National Party can talk till the cows come home about guaranteed jobs skill guarantees or youth guarantees; the truth is they talk about it but that is all they do. They do not do anything to help people on the ground who genuinely want to help themselves who want to get ahead and who want to make their families get ahead. This Government has nothing to help them. This statement by the Prime Minister fails on every count. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 Tena koutou to the people of Aotearoa New Zealand. Tena koutou to all New Zealanders who love our country and our people and who want to protect this place and look after each other. The Green Party shares that love and we are in this place to serve those people. 
Today the Prime Minister has foreshadowed the “black hole Budget”. It is a black hole dug into the heart of our most precious land and a black hole opening up in our most vulnerable communities. John Key told Kiwis that they will have to work harder and longer with fewer holidays and that they will pay more for everything. In exchange for this effort we will have to give up the integrity of our most beautiful precious and beloved conservation estate. There is no vision for a smart economy that looks after the prosperity of people and the natural environment. There is only a statement of corporate intent. 
On the bright side this year there will be new heroes in Aotearoa. Kiwis will work together once again to protect our most vulnerable citizens. There will be new champions of the environment working together alongside the Green Party to stop the bulldozers from digging up our land. 
Mr SPEAKER 
: I apologise to Dr Russel Norman. I ask members please to show a little courtesy to Dr Norman. There are so many loud discussions going on in the House that I am struggling to hear him. It is unfair. I ask the House to show a little more respect. If members want to hold loud discussions I ask them to please move into the lobbies not hold them on the benches. 
Dr RUSSEL NORMAN 
: John Key’s proposed reforms for our tax system may encourage GDP to grow but they will do little to promote prosperity. Although the Greens welcome the Government’s commitment to do something about speculation on housing the fairest way to achieve this is through a capital gains tax excluding the family home—just like nearly every other OECD country. The Government’s failure to commit to this is gutless. It will entrench inequality between those who work for wages and those who live off capital gains. A capital gains tax is broad and it is a highly progressive tax. It would help to reduce inequality. It would also raise an additional $4.5 billion thereby giving the Government considerable scope to pay off debt and invest in good things like health and education. 
On the other hand raising the rate of GST as the Government proposes entrenches inequality and does not broaden the tax system. Those who are poorest will be hit hardest. That is using increased taxes on the poor for tax cuts for the rich. Large-scale tax avoidance is one of the reasons John Key is talking about tax reform this afternoon yet he makes no mention—no mention—of the most obvious response: strengthening tax enforcement. Tax is the price we pay for living in a civilised society but it seems that a lot of extremely wealthy individuals and companies do not want to pay their way. They want to bludge off everyone else. The overseas-owned banks were caught stealing billions from New Zealand taxpayers yet not one of their executives or advisers is behind bars. So if a taxpayer steals $1000 from a bank he or she is put in jail. But if a bank steals a billion dollars from taxpayers then the bank just pays it back if it gets caught and nobody goes to jail. 
The Tax Working Group has reported that only one-half of a sample of 100 of the highest-wealth families in the country is paying the top tax rate. That is wrong. National’s response to tax avoidance by the very wealthy is not to say that its donors should pay their share like everyone else. No it is to say that we must be charging them too much tax. That is why they are avoiding it. Therefore we should charge them less and cut the top tax rate. It is a new kind of “three strikes” policy. If one gets caught avoiding tax three times then we will cut the tax rate. 
What we need is tax reform that moves our economy in a green direction. We need ecological tax reform like a resource rental on the use of fresh water by irrigators so that we encourage the efficient use of water. We need tax reform that encourages genuine prosperity and equality rather than rewarding tax avoidance and prosperity is what we seek. 
Last week I paddled the Taumarere and Kawakawa rivers as part of my Dirty Rivers Rafting Tour. As I made my way across those rivers which are still degraded in spite of the efforts of hapu and others to clean them up I had pause to think: “Is this prosperity?”. Is it prosperity when we have a river that is so full of silt and excrement that even mullet barely survive? Is it prosperity when the seagrass beds are smothered to extinction by silt—seagrass beds that are nurseries of the snapper? Sure intensive dairying increases GDP and it has been growing at 4 percent a year for a decade. But what about those who can no longer catch a feed off the rocks because the snapper fishery is depleted by the killing of the seagrass? Their loss is not counted in those GDP numbers showing great growth. If anything the fact that people now have to go to the supermarket to buy a snapper adds to GDP by adding to economic turnover. In fact the absurd truth is that people who are catching fish for free are contributing nothing to GDP. They are a kind of economic trader by refusing to participate in the mantra of GDP growth by refusing to purchase their kai moana. 
Polluted rivers increase GDP but do they make us more prosperous? No they do not. Let us hang on to the things that make us prosperous rather than destroy them to increase GDP and make a few people rich. On Saturday up at Waitangi the kids spent the day jumping off the bridge leading to the Treaty grounds and into the water. They were having a wild time. They were enjoying a real and tangible form of prosperity and freedom and contributing absolutely nothing to GDP. Kids used to swim in our rivers and streams all over Aotearoa New Zealand and in some places they still do. In lots of places the rivers have been sucked dry for irrigation and filled with human and animal excrement. Those kids go to the local swimming pool instead of to the local swimming hole. Swimming pools cost money to build and maintain and they definitely contribute to GDP. The kids who live in areas that have polluted rivers and creeks the kids without the freedom to swim in the rivers who are forced to go to the swimming pool are definitely making a contribution to Labour and National’s dream of GDP growth. Those traitorous kids swimming off the beach at Waitangi were contributing absolutely nothing to GDP. They were simply enjoying the genuine prosperity given freely by nature. Let us hang on to the things that give us prosperity rather than sacrifice them to the great god of GDP growth where many lose a taonga and a few get very rich. 
Today John Key has confirmed the worst fears of thousands of New Zealanders—that his Government is gearing up to dig up our national parks. His speech was about trying to increase GDP growth not prosperity. The only way he can pay for it is by digging up our conservation estate. He is going to dig New Zealand into a hole that we cannot get out of—a hole of inequality and environmental destruction from which there will be no escape. Our conservation lands contain some of New Zealand’s most treasured places. We treasure them because of their water forest plants birds and animals not because of what is under the ground. John Key’s Government has consistently cut conservation funding and made it harder to protect those places. Now he has the gall to tell us that putting some mining money into a conservation fund a fund just like the one that the Green Party already established and that he cancelled means “If there is an increase in mining activity New Zealand’s natural environment will be improved.” That is a line that only George Orwell could have written. It is not true that in order to save the environment we have to destroy it. New Zealanders will see through it. 
Another growth industry in New Zealand is motorway building. Labour embarked on what Michael Cullen called “New Zealand’s biggest road-building project” and the new National - ACT - Maori Party Government is intent on building even more. Over $10 billion will be spent on new State highways in the next decade. As we grow the motorways we are also growing the kilometres travelled by cars and trucks in New Zealand and hence New Zealand’s greenhouse emissions and use of imported fossil fuels. Not only will our children inherit the bill for this motorway obsession but they will also inherit high greenhouse emissions and a very high dependence on fossil fuels just when we need to be cutting greenhouse emissions and fossil fuel prices will increase. 
Another leading growth industry in Aotearoa New Zealand is imprisoning people and building prisons. On a per capita basis we lock up more people than pretty much anyone except the United States. But does building more prisons and locking up more people make us safer and more secure? No it does not. Societies with higher rates of imprisonment do not have higher levels of security and a feeling of safety. The United States is a daily example of this basic truth. There is one thing that we know works to make our societies safer and more secure and that is reducing inequality. Longer sentences do not make societies safer even though they may feel good to people of shallow minds. If we took security and safety seriously we would invest in reducing inequality. How many people would be alive today if we had not made our country so radically unequal in the 1980s and 1990s and generated so much crime and violence? 
True prosperity is not having to do the overtime in order to pay for a home security system. New Zealanders already work longer hours with fewer days off than just about anyone else in the OECD and that is hardly my idea of prosperity. Surely in a prosperous society we would have more time off not less. How many lotto ads say that people can take on a second job if they win Big Wednesday? There are none. Every year we are told that growing productivity and GDP will mean more time for ourselves yet every year the hours of work increase and more mums have little option but to rush back to work after childbirth because they need the money to pay the mortgage. 
Making it difficult for mums or dads to spend time with babies after their birth also helps GDP growth. When they have the option to take a few years off after childbirth to do their own childcare it contributes absolutely nothing to GDP. Free childcare provided by a new mother or father at home has zero value to the great worshippers of GDP growth. But in a society like ours where wages are so low compared with the cost of housing many mothers go back to work as soon as possible which has a double benefit for GDP. Mums in the workforce contribute to GDP and they have to pay someone to look after their newborn child further increasing GDP; it is a double bonus for the GDP obsessives! Although taking away the option of allowing a new parent to look after a newborn baby might increase GDP does it increase prosperity? Are we a more prosperous society? Surely in a prosperous society new parents would have the option of choosing to stay at home or go back to work but that is an option we have taken away from so many people. 
John Key says he is worried about an underclass emerging in New Zealand but I ask how we can believe this when everything he is doing promotes inequality. His plan to cut support for sick and out-of-work Kiwis and parents will drive the growth of an underclass and mean more of our children go to bed hungry. His plan for hard-working New Zealanders is to take away their holidays and their employment rights. His plan for better public service is to cut it. His plan for accident victims is to cut the support they receive. He believes in tax cuts for the rich by reducing the top rate while poor New Zealanders are being forced on to the streets—and where is the big increase in State housing that we really need? This is not a plan for a better and fairer society; this is a scam that will benefit only the very wealthy while leaving everyday New Zealanders worse off. 
The Green Party believes in a fair go for all New Zealanders; sadly it seems that this Government does not. Even if it succeeds in creating GDP growth we will not see growth in prosperity and we will not have a fair society. This society will not magically appear somewhere down the line by forcing vulnerable people to suffer now. John Key’s Government is creating the very underclass that it says it is concerned about. 
The Prime Minister talks about his commitment to Maori but everything he has done is creating poverty and inequality and we know that Maori suffer even more. Maori deserve more than high words new flags and arbitrary settlement deadlines. They deserve change and a fair society that respects their rights. We call on the Government to respect Maori rights in respect of the foreshore and seabed and not repeat the mistakes of the previous Government. The te reo version of Te Tiriti o Waitangi did not cede sovereignty to the Crown. Why would people give away their land and sovereignty to the newcomers? Actual sovereignty was achieved by the colonial Government through the New Zealand Wars from 1843 to 1872 and after. Until we recognise the truth that the sovereignty of this Parliament was won through force of arms then we will continue to feel the pain of the Land Wars. We need constitutional evolution we need to look forward but we cannot do that without acknowledging the truth of the past and the suffering and pain and anger of that truth. 
A prosperity of the heart cannot grow on the suffering of others and the denial of that suffering. New Zealand in 2010 is facing a great opportunity and a challenge and that is to embrace the green economic revolution. In a world where carbon is constrained where fossil fuels are increasing in price where water is globally polluted and exhausted and where clean and green is increasingly valued by customers and consumers New Zealand has a real opportunity to embrace the green technology revolution. The sooner New Zealand moves towards a low-carbon economy the sooner we will start producing the innovative products and services that the low-carbon world will be calling out for and the sooner we will cut the cost of higher carbon prices to the New Zealand economy. The sooner we implement a serious domestic price on carbon the sooner we will begin the transition. 
We should never forget that the US car makers that ignored the warnings about climate change and oil prices had to be bailed out by the US taxpayer because nobody would buy their gas guzzlers. The modelling on carbon pricing is clear: the sooner a price is introduced the more jobs are created. Those Governments like the current one that put their head in the sand and delay putting a price on carbon will cost thousands of New Zealanders their jobs in the long term. The sooner we embrace the green technology revolution the more prosperous our future will be. It is prosperity we need and it is the smart economy we need not simply dumb growth and economic activity for the sake of it. 
The Green Party of Aotearoa New Zealand commits itself in 2010 to work for a prosperous country and a smart economy: a prosperous Aotearoa New Zealand where people have work that is productive and decently paid; a prosperous Aotearoa New Zealand where people have time to spend relaxing enjoying life being with their friends and family and time to get to the beach before the summer is over; and a prosperous Aotearoa New Zealand where we share our beautiful country with the other species of this place where we act as guardians of the mountains the plains the sea the rivers the wetlands and all the plants and animals that live there and we stop destroying ecosystems and start repairing them. 
The Green Party recommits itself in 2010 to working for a prosperous Aotearoa New Zealand where the gap between rich and poor actually narrows instead of widens as it has done for decades; a prosperous Aotearoa New Zealand that honours Te Tiriti o Waitangi; and a prosperous Aotearoa New Zealand that contributes to peace and helps out its neighbours in need. This is our vision of prosperity and a smart economy and that is the vision that the Green Party will work for in 2010. Tena koutou tena koutou tena koutou katoa. 
Hon RODNEY HIDE (Leader—ACT) 
: 
 New Zealand is now enjoying stable centre-right Government which is something we have not had since the start of MMP and we can put it down to the success of the National Party and the success of the ACT Party. ACT has delivered on its promise; ACT has kept its word. New Zealand has centre-right Government because of ACT. For that I would like to thank all ACT members ACT supporters and ACT voters. They made centre-right Government possible in New Zealand. 
I would like to thank the Prime Minister John Key the Minister of Finance Bill English and National Ministers for their leadership in Government through challenging times. We have worked closely together and we have built up a deep and mutual respect and trust. I would also like to thank the Maori Party. We have developed a deep respect for the Maori Party over many years. We have our differences of course but we talk about our differences openly and with respect for one another. 
ACT promised stable centre-right Government and ACT has delivered that but we made solemn policy promises too. Promises made were promises kept and they are proof positive that ACT is making a difference. No doubt the highlight of the past year was the “three strikes” policy. ACT campaigned hard at the last election for tougher sentencing with our “three strikes” policy a policy that is now to be passed into law. 
The Sentencing and Parole Reform Bill sends the loud and clear message that New Zealanders will no longer tolerate repeat violent offending. What do the critics say? What does the left say? What does the Labour Party say? They say it is too harsh—but what about the victims? One strike and they are dead. Their families are sentenced to a life of pain fear anguish and grief. Here is the message for violent offenders: it is easy to avoid “three strikes”; it is simple—just stop killing and maiming innocent New Zealanders. That is the message the Government has sent—“three strikes” and an offender is in. That is a promise made and a promise kept. 
However I have to say that is it not all love and roses. We have had our differences with National and we have a sharp difference over the emissions trading scheme. ACT has always maintained that it made no sense to stay committed to Helen Clark’s “all gases all sectors” trading regime. The failure at Copenhagen makes the commitment all the more silly. 
“Climate-gate” is now the greatest scandal in the history of science. It turns out that the prestigious agencies involved in leading climate-change science were breaking official information laws arbitrarily adjusting raw data hiding the reasons for those adjustments then somehow contriving to lose the original unadjusted data so that it could not be independently checked thereby making claims that were not remotely justified by the state of the science and in some cases were simply made up. 
The so-called scientific agencies responsible for climate science have ruthlessly suppressed competing theories and contrary data by controlling and manipulating the peer-review process. Government-sponsored climate science has proved to have more in common with the Spanish Inquisition than with Popperian science. “Climate-gate” “glacier-gate” and “Africa-gate” have left the once vaunted Intergovernmental Panel on Climate Change now totally discredited and in ruins. 
I have always been a sceptic. When I started studying environmental science in 1975 many of the same so-called scientists were trying to scare the pants off us all with the coming of a new ice age. That is because the world had been cooling for 30 years. Apparently it then warmed for 23 years so the same scientists turned global cooling into global warming. When the warming stopped in 1998 and the Earth started to cool the scare switched to climate change. That way the alarmists could never be wrong. They were right whatever the temperature. 
Sadly our own National Institute of Water and Atmospheric Research is caught up in the scandal and its scientific credibility is shredded. Its raw data for its official temperature graph shows no warming—the raw data shows no warming. But the institute shifted the bulk of the temperature record pre-1950 downwards and the bulk of the data post-1950 upwards to produce a sharply rising trend. That warming trend is not a consequence of measurement but of manufactured adjustment. 
There may well be a good reason for the adjustment so before Christmas with others I asked the National Institute of Water and Atmospheric Research to disclose the adjustments and its reasons. The institute said it would do that but it has just told the New Zealand Climate Science Coalition after having abused it up hill and down dale that it does not have the records of the adjustments. 
The National Institute of Water and Atmospheric Research’s entire argument for warming was a result of adjustments to data that now cannot be justified independently checked or verified. The entire thing is shonky but on the basis of shonky science our Government is whacking Fonterra with a bill of $100 million a year taxing the average dairy farm $10000 a year extra and hiking fuel and power costs to every business and household in the country. 
Even if the science was perfect we would not have an emissions trading scheme but now the science is not only not settled but has descended into a farce. The total cost to New Zealand is over a billion dollars a year. That is a billion dollars we do not have and we cannot afford and it is for nothing. It is madness. 
Prime Minister John Key is on record endorsing New Zealand being a “fast follower” on climate change not a leader. Let us put the emissions trading scheme on hold until the rest of the world catches up. I do not think any other country will be burdened like New Zealand. So there is bad news on the emissions trading scheme. 
But I go back to the good news. Education is central to ACT and that is why we support national standards. They will help identify those falling through the many gaping cracks in our education system. Because education is so important we have reached an agreement with National to introduce Aspire Scholarships. Now 600 students will have radically improved educational opportunities and life chances. That is just a start and I am looking forward to the inter-party working group’s report. 
ACT has put respect for property rights market competition individual freedom and personal responsibility into the heart of Government with Cabinet agreeing to the Government’s statement on regulation—another promise kept. This year a select committee will work on ACT’s taxpayer rights bill which is designed to cap Government spending and put it under tax bar control. It will rein in Government spending which is another kept promise. We have our Regulatory Responsibility Bill which we want to see passed into law to set fire to the red tape that is clogging our great country. 
The no-nonsense report of the 2025 taskforce outlined a path to boost New Zealand’s economic performance and lift the opportunities of New Zealanders. For 9 years we have been told that we should just accept the crumbs off the Aussies’ table. Well we want better than that. New Zealand is a nation of winners not losers. We are not going into the Rugby World Cup looking at coming second; we are going in to come first and so too should we for this country. 
This year is an exciting year for ACT. We plan to see our Regulatory Responsibility Bill passed into law the Productivity Commission up and running Government spending capped through ACT’s taxpayer rights bill and the Byzantine politics in Auckland changed so that we have for once unified decision-making and leadership in Auckland. Thank you. 
Hon TARIANA TURIA (Co-Leader—Maori Party) 
: 
 Tena koe. Tena tatou katoa. Our nation is marked by moments that define a generation. There is the generation who paid the ultimate price of citizenship in serving in C Company of the 28th Maori Battalion during World War II. The battalion was formed along whakapapa lines drawing on the enduring connections from common lines of descent. A generation later during the 1960s many of our w’anau took up the opportunity of a drive to encourage young Maori into skilled trades building on the strengths of the collective spirit as their foundation for success. Now a decade into the new century our w’anau are hungry to embrace a new vision. The vision which will be the defining moment for our generation and for their generation is Whanau Ora. 
The Maori Party has welcomed the statement of support from the Prime Minister for a new approach to the way that the Government works with many communities and in particular with Maori families. This new approach will require Government agencies to be innovative and to apply greater flexibility in the way that they deliver services. It will require the State to change the way that it does business in the provision of services to w’anau. Whanau Ora is a vision which was born from the history of tangata w’enua as entrepreneurs and as people willing to embrace new challenges. Across the globe tangata w’enua have a reputation for being innovative and for taking on new technologies. That spirit of enterprise has now taken on a new edge in the call for Whanau Ora. Just as the Maori Battalion and the trade training schemes drew their strength from the connections made through common genealogy so too is Whanau Ora about the commitment between and across generations based on the shared hopes of w’anau. 
In this House we often bear witness to the pathology of Maori as members of this House talk about the “unders and overs” clubs. The underachievers in education the overrepresented in justice the underreported in health and the overrepresented in areas of high deprivation and low income are described as an underclass which successive administrations have overlooked. The drive for Whanau Ora responds to the poor outcomes experienced in health education the economy justice and many other layers of our current social infrastructure. But the key determinant of success in this approach is the realisation that in this moment of greatest challenge there exists an even greater opportunity: an opportunity to rebuild the integrity of w’anau by empowering them to determine and take greater control of their lives and well-being. It is an opportunity to move forward and to restore to w’anau their capacity to be self-determining. 
It is for all of these reasons that in the relationship and confidence and supply agreement we signed up to with National there is a fundamental statement which I think it is timely to remind the House about. It is that the Maori Party seeks significant outcomes in Whanau Ora through eliminating poverty advocating for social justice and advancing Maori cultural economic and community development in the best interests of this nation. That statement was signed in November 2008 and is just as vital in 2010. The intentions of the Prime Minister which were laid out in his speech today state a commitment to lift our economic performance while also delivering increased incomes and better living standards. For the Maori Party those better living standards are firmly about Whanau Ora. 
Essential to this focus must be the importance of eliminating poverty. In this light we have begun the process of working through some of the impacts of the tax system upon our people and in particular the difference that will be made to low-income families. We are adamant that we will leave no stone unturned to ensure that these families are at the very least no worse off and hopefully are in a position to enjoy an improved quality of life. We believe that Whanau Ora is an essential approach towards advancing opportunities and outcomes for families. Ultimately Whanau Ora is in the hands of our families. It is their resilience determination and courage that will unleash the greatest potential for our nation. 
I will shortly be receiving a report from the task force that I established to provide the Government with advice. From the feedback that I have received to date there is enormous excitement right throughout the country about our people’s aspirations for themselves and the generations to follow. I have heard about the enthusiasm of w’anau to be self-managing and to participate fully in society while also being confident in their contributions to Te Ao Maori. There has been a keen hunger for living in ways that are consistent with nga kaupapa tuku iho the values beliefs obligations and responsibilities passed down through the centuries. This to me is one of the most profound aspects of transformation. It is in a sense a renewing of the promise that our ancestors signed up to in Te Tiriti o Waitangi. It is the promise that our traditions our heritage and our cultural assets would retain their integrity while enabling us to benefit from the full opportunities of citizenship. 
In this light I want to emphasise that Whanau Ora will benefit all people who call New Zealand their home. It is not for Maori to tell other cultures and other peoples how to achieve outcomes that will measure their success. We know that there is a keen interest from many other communities particularly our Pasifika families in applying Whanau Ora to their own situations and we welcome that. 
Although the vigour for transformation within our w’anau is evident we must not abdicate responsibility within the State apparatus to respond to the high level of optimism that things can be improved. We all know that the social framework that successive Governments have put in place has been unworldly and fragmented creating barriers to efficiencies. In some of our smaller centres we see 35 providers established all vying for the same target population. The overlapping contracts and the duplication of efforts have helped to shape the call for simplified funding and reporting structures. The appetite for a new approach is motivated by the call for integrated and comprehensive services that focus on measurable outcomes that will contribute to w’anau empowerment. The transformation being pioneered by w’anau must be met with a transformative process for Government agencies and providers alike. 
We are hearing about the desire for a fundamental shift in approach to support w’anau to become self-determining. It will be demonstrated in a united focus on achieving w’anau outcomes that make specific measurable differences in the lives of individuals and more important we should note also the tangible difference made in the lives of collectives. It will not happen tomorrow but with optimism and with faith we can all be part of an approach that is honest about the challenges that we face and be prepared to stand up and be counted. This is an opportunity to make the change that will bring benefits not only to Maori families but greatly to the nation and to future generations. Whanau Ora is quite simply an idea whose time has come. Kia ora. 
Hon JIM ANDERTON (Leader—Progressive) 
: 
 On Monday 20 October 2008 National leader John Key told a press conference that morning that if National was elected and did a “half-decent job” at growing the economy then increasing GST would not be necessary. Well presumably it has done not even a half-decent job. National has done no job at all. This is the man who used to taunt the previous Labour Government that it had to do what it said and so on. John Key who had been overseas all those years working and shuffling money around speculating against the New Zealand dollar and all the rest of it told us we had to keep our word. Where is this word? He said that if National did a half-decent job it would not have to increase GST. So presumably it has done a lousy job; why does it not resign now and go back and have another press conference? 
John Key said to the  
Wall Street Journal 
: 
“we can use this time to transform the economy to make us stronger so that when the world starts growing again we can be running faster than other countries we compete with.” Running faster? We are actually crawling backwards. That is what has happened. Mr Key in Opposition used to taunt the previous Labour Government about Australia. We were stagnant in terms of our research and development last year. Worse still the $2000 million Fast Forward fund was cancelled. The Government said that it would make a leap forward a step change. We found out about the step change at the select committee when I asked how much money had been invested in research science and technology in the most important agricultural and horticultural sectors of the New Zealand economy. The answer from the chief executive officer of the Ministry of Agriculture and Forestry was zero—nothing. That would be bad if it was a mistake but when in the House I asked the Hon David Carter the Minister of Agriculture why the Government had made zero investment in agriculture and horticulture where we earn 65 percent of our overseas exchange he said that it was part of his plan. So it was not just a mistake it was not something he forgot; he meant not to spend any money. 
When we look at the Budget this year $40 million is to be spent—that is over 2 years so that is $20 million—compared with the $700 million we put into the Ministry of Agriculture and Forestry which would have built itself up with private sector and interest to $2000 million. That is called “running” when coming out of a recession? Oh really! How does putting up GST make us run faster than the other countries we compete with? 
I was one who opposed GST. That is a matter of record so no one can taunt me on that. One of the reasons I did so was that it is the most regressive form of tax known to mankind. Does Mr Key know that the introduction of GST and the halving of the top rate of tax that New Zealand introduced—dare I say that a Labour Government introduced—in the 1980s led to the greatest increase in the wealth gap between rich and poor in New Zealand’s history? It was the greatest increase. I would have thought that people might learn a bit from that. The top tax rate was 66c in the dollar. It was halved to 33c so the people on the top rate got and still get a huge windfall in comparison with what they used to pay. They got 33c on every dollar over the threshold and that was a lot of dollars whereas the poorest people in New Zealand were paying 20c in the dollar and they went down to 15c. So they got 5c the richest got 33c and then they all paid 10 percent GST. That is fair is it not? The richest people have discretionary income and they do not have to spend it all whereas the poorest people have to spend all of their money on goods and services. 
Mr Key is either disingenuous or he thinks we are all thick because he said that it is just a small increase in GST. A small increase—2.5 percent! If we look at the records we see that GST income revenue for the Government is about $12 billion. A 2.5 percent increase on $10 billion is nearly another $2 billion. That is $2000 million. That is just a small increase to Mr Key—he is a slow learner—but that means that every single New Zealander will face an increase on all the goods and services he or she pays for. That is particularly so for people on low incomes and medium incomes—which represents 75 percent of the country I might tell members. Seventy-five percent of the country is on around or below the average wage. Those people will face a $2000 million increase on all the goods and services they pay for. 
How does that work? And if we are to compensate those people with the $2000 million that we are forcing them to pay then what is the point? There is a point only if they are not going to be compensated because otherwise we do not have any money. If we do not have the money then we cannot spend it. I used to be told that and it was on one of those TV programmes. But no Mr Key thinks that we can take $2000 million out of the pockets of most New Zealanders many of whom are below the average wage and we will compensate them with the same amount of money that we charge them for GST and that somehow it will all work out on the night. If one believes that then one believes in voodoo economics. 
The Labour-Progressive Government had a research and development tax credit that would have amounted to about $380 million for science and technology and we had to fight very hard to get that. I thought that that would be one of the policies that National would be sure to steal. Why would it not? No it cancelled it. The agricultural and horticultural sector had $2000 million for research and development. National cancelled it. In the speech we heard today there was talk about improving productivity and all the rest of it in the agricultural and horticultural sector. Actually while we were in Government the agricultural and horticultural sector had the highest productivity of any sector of the economy as a matter of fact but it will not have it for much longer because all of that research and development investment has gone. 
Here is what John Key said again in January 2008. It was a prolific year for John that year! He stated: “Do you really believe this is as good as it gets for New Zealand?”. I read that and I thought after I heard that speech: “Is that it? Is that as good as it gets for New Zealand?”. He went on to ask: “Or are you prepared to back yourselves and this country to be greater still?”. Greater still by increasing GST canning investment in research and technology for the future and not providing a skill base for tens of thousands of young Kiwis who will make a contribution to Australia I presume because that is where they will end up! We used to get hammered for that but just watch this space as we go through this lot. 
John Key’s statement lacks ideas. If one reads the 23 pages of it—I went through it and it is a big ask I can tell members—one sees that there is not an original idea in it. In terms of a strategic plan for New Zealand to do the sort of stuff he talks about such as catching up with Australia he mentions among other things rebuilding the Kopu Bridge. I know that Queenslanders will be terrified at the thought that we will say that they may well have signed a contract for $100 billion of coal exports to China but we are building the Kopu Bridge so they should watch out! I mean is he serious? 
While we are going through all this Australia is up and running which is the very thing we should have been planning for. We should have had a strategic plan. I know that late in 2008 if we had won the last election there would have been meetings of Cabinet over Christmas after that election. I think that the previous Prime Minister would have had meetings at her place over a roast chicken and would have used Christmas Day for an emergency Budget and we would have had plans to get New Zealand through this and out of it with everything running. 
What did we get from the new Government? Those members all went on holiday and they stayed there. We were almost wondering whether we would ever meet again and whether there would be a Parliament. One would have thought that everything in the world was hunky-dory yet the rest of the world was melting down. This is the result: a “no think” strategy. When I was in the Labour Government of the day I used to say that there was one thing worse than a Think Big strategy and that was a “no think” strategy. We had that then and this is it now. The thing is that this is like  
A 
Nightmare on Elm Street 3 
. One would think that someone would have learnt something from what did not work. This did not work. If it had worked then we would not be in the problem we are in now. If all this had worked well then why are we in the hole we are in? 
We did not go through all that meltdown in the financial sector that people in America went through so we had a great chance here. We had good public finances low public debt a strong financial balance sheet and all the rest of it. That is what got us through. That lot have no plan to deal with the crisis we face with our own people. This is the thought that I think I should leave National members with: 150 relatively unskilled jobs available in a supermarket in South Auckland and 2500 people queuing up for them. If that does not register if those members do not know what that means then they know nothing about New Zealand. 
Hon PETER DUNNE (Leader—United Future) 
: 
 I want to concentrate my remarks this afternoon on the Tax Working Group—on some of the changes it has recommended and on some of the changes that will flow from those changes. I will begin by saying that if one looks at that report very closely and addresses the distortions that it outlines in our tax system currently one is drawn to the inevitable conclusion that one of the most distortionary acts in New Zealand tax policy over the last decade was the move to increase the top tax rate in 1999. That of itself has given rise to a number of problems that we are now having to confront. What the report shows very clearly is that there has been a huge increase in the number and level of trusts formed since 1999 with significant spikes around the points where the marginal tax rates come in. People have been forming trusts not for asset protection purposes but for tax avoidance purposes as a consequence of the increase in the top tax rate. 
In 1999 when the top tax rate was increased the promise was made that it would affect only 5 percent of taxpayers. Notwithstanding the fact that over the last decade there has been a significant slowing in the reported increase of higher incomes in a time of high economic growth the 5 percent figure has risen to 9 percent. In reality because of the avoidance practice of which I have just spoken that figure is probably a lot higher in truth. We are starting to see the evidence reported—the report of around 10000 families is one example—of higher-income earners deliberately manipulating their taxable income to boost their eligibility for Working for Families tax credit. We also have the now well-rehearsed figure of a $200 billion investment in rental properties declaring $500 million in losses for tax purposes. 
We cannot ignore those issues and any reform of the New Zealand tax system has to start to address those distortions. That is why tax rate alignment has always been a priority for United Future and we welcome the fact that it is a medium-term commitment of this Government. I see the alignment of the top personal rate and the trust rate as an important start that we need to be focusing on to address the sorts of issues I spoke about a moment or two ago. We cannot have a system that is credible and fair if it gives rise to those distortions on an ongoing basis because people simply will not believe it. 
I want to welcome the Prime Minister’s announcement today that capital gains tax land tax and a risk-free rate of return method for investment properties are all off the agenda. I have long opposed capital gains taxes as inefficient cumbersome hard to put in place and based far more on envy considerations than on sound tax policy. I think it is now time to bury once and for all the capital gains issue as an option for New Zealand tax policy. But that is not to say that there are not big issues with regard to the taxation of investment property in particular that need to be addressed particularly in the light of the $500 million tax loss that I referred to a moment ago and the fact that we now have around 10000 families claiming Working for Families tax credit as a consequence of deducting their rental losses against other taxable income. We do need to be looking at the best way of plugging those holes. 
I have seen this referred to in some media as a concerted attack on landlords and property investors. It is not. It is simply about ensuring fairness and balance in the tax system and getting back to the important first principle that investment decisions are driven by the quality of the particular investment not the tax advantages to be derived from it. In that regard effective enforcement of the law as it stands is particularly important. I acknowledge the fact that in Budget 2007 Dr Cullen and I secured additional funding for the Inland Revenue Department to prosecute in a non-legal sense outstanding cases regarding properties. To date the return on that measure has been about 10 times the level of funding advanced. There is much more we can do in that area and I certainly think that will be a priority for action over the next little while. 
The recommendations regarding an increase in the rate of GST are problematic. We all know the efficiency of a consumption tax. In fact New Zealand’s is the best in the world and one thing we have to guard against is any argument that we start to exempt particular items from the GST net. We have a comprehensive GST in place now but any move to increase that rate of GST can proceed only if a couple of essential preconditions are in place. There has to be an adequate compensation package for low and middle income households in particular. It will not work if because of its regressivity in fact those families and households end up worse off as a result of any change. Any package that is introduced—this is the second precondition—has to be of a sufficiently coherent and administratively simple manner to ensure that we are not building a comprehensive cumbersome mountain of compensation to take the place of the GST increase. The challenge that the Government has over the next few weeks is working its way through that conundrum then seeing where the balance lies. 
I want to put on record my appreciation of the work of the Tax Working Group. When it was established I wondered whether it would be possible to have a clear and coherent debate on tax issues because of their sensitive nature. New Zealanders and the working group have responded in a remarkably sensible and mature way to that opportunity. I think that as the scale and structure of international tax systems become more dynamic and our international tax competitiveness becomes more of an issue the lesson of that working group is that we will need to be undertaking these types of reform processes on a far more regular basis than we do at present. If one thinks about it one sees that the changes that we are now contemplating whatever their eventual outcome will be in their scope the biggest single package of tax changes in this country probably in two decades. We did make some major changes to company tax a couple of years ago. We have made various changes along the way to personal taxes but the lesson is simply that we cannot afford to leave the gap between periods of considering major change as long as it has been because the world gets away on us for one and second the range of issues becomes too difficult to deal with. We do need to have more regular reviews and I will certainly be looking at ways that we can develop an ongoing tax working group - type process to achieve that. 
Finally let me say that it is all very well to talk about tax policy—how it might be implemented and who might benefit and who might not—but for it to be effective a good tax policy has to be supported by a good tax administration. A complementary part of this change will be ensuring that the Inland Revenue Department’s ability to deliver the systems the tax policy that we have in place now and the changes that will be made is up to that standard so that we have good policy supported by good administration. That will lead us to this point: a tax system that is credible and respected that is fair and equitable and that delivers the benefits it is expected to deliver to the vast majority of New Zealanders. That will be a considerable achievement. 
Hon CHRISTOPHER FINLAYSON (Attorney-General) 
: 
 It is great to be back in the House and I hope that everyone had a good summer whether it was on the golf course by the beach or even Mr Assistant Speaker Barker hooning around the North Island on a motorcycle. I hope everyone is looking forward to a lot of hard work because as the Prime Minister’s statement and the Order Paper show this will be a very busy 2010. 
I hate to say it but I am very disappointed in the performance of the Labour Opposition this afternoon. From the moment the Prime Minister stood in this House to make his statement most Labour members were yelling and screaming. One expects that kind of shameful behaviour from Mr Mallard because he knows no better but I have to say it was very disappointing. In my first 3 years in this House I was always told by the whips that when the then Prime Minister made a statement of the kind that Mr Key made this afternoon we were to sit in silence. So I had to sit there and listen while Helen Clark announced her programme to suppress freedom of expression to regulate the free exchange of ideas at election time to remove the right of people to go to court and so on. 
Of course the National Party believes in freedom of expression and the rule of law which is why the Prime Minister’s statement refers to the excellent work that my friend and colleague the Minister of Justice is doing to reform the electoral finance law. Unlike the previous Labour Government which introduced the Stalinist Electoral Finance Bill the responsibility of Annette King Mr Power has been undertaking extensive consultation with all Opposition parties as well as with our own support parties. 
Hon Annette King 
: That’s right. Say something nasty. 
Hon CHRISTOPHER FINLAYSON 
: Well she might yell and scream because the member for Rongotai will forever be known as the mother of the Electoral Finance Act. That is the difference between Labour and National. Labour is disrespectful of convention is disrespectful of human rights and has no class. 
One can understand why Jeannette Fitzsimons is so keen to clear out. As my ministerial duties will prevent me from being in the House tomorrow to listen to her valedictory speech I say in advance how much I admire her as a principled and gentle member of Parliament. She proves the point of what John Kennedy once said: that civility is not a sign of weakness. I wish her all the best for the future and I hope our paths will cross again. 
What a privilege it has been to be here in the House this afternoon and listen to a statement by New Zealand’s first great Prime Minister of the 21st century. We have heard about an active and forward-looking programme of work that will grow our economy make New Zealand safer and more prosperous and improve the prospects of all New Zealanders. This Government is not afraid to make tough decisions. It is not afraid to set ambitious goals. As outlined in the statement that the Prime Minister tabled in the House this afternoon one of the Government’s top priorities is progressing and resolving historic Treaty of Waitangi settlements in line with our goal of concluding those settlements by 2014 and our progress has been very good. I have to say our record could be classed as being somewhat better than the previous administration’s record. Even with Dr Cullen’s herculean efforts over 14 months Labour only managed to achieve the less than stellar result of 1.6 settlements per year. Well 1.6 settlements per year is not good enough for the National Government. Since coming to office this Government has recognised eight deeds of mandate and signed seven terms of negotiation 12 agreements in principle and four final deeds of settlement. 
I have had a very busy summer. Since the House rose agreements in principle have been signed with Ngati Whatua o Kaipara Ngati Manuhiri and the five iwi of Te Hiku Forum. I had a great day in Ahipara for the Te Hiku Forum signings together with Hone Harawira and Kelvin Davis. I did not see Shane Jones there which I was disappointed about I have to say because even if Phil Goff does not enjoy his company I do. The Muriwhenua claim I say for the benefit of Ms King was commenced by the late Mat Rata in 1986. The Waitangi Tribunal reported on it 1997 and the Labour Government throughout its 9 long years did nothing. I particularly place on record my thanks to Pat Snedden my negotiator and to the iwi negotiators who worked very hard to achieve that excellent result. Moreover since we began this year three Crown offers have been made in Tamaki-makau-rau including to the Tamaki collective for shared redress over the volcanic cones and to Ngati Whatua o Orakei and to Kawerau o Maki Trust for comprehensive Treaty settlements. The Crown has recognised the mandate of Mana Ahuriri Incorporated and also signed terms of negotiation with Ngati Pukenga. 
I was very interested to hear Maryan Street say on the radio the other day that her concern about the Treaty portfolio was that care needed to be taken that all iwi are included and that people do not feel sidelined left out or run over. That was a bit rich coming from a representative of the previous Government which did what it did in Tamaki-makau-rau in 2006. 
Nowhere is the difference in the approach of the two Governments more evident than in that particular settlement. The Waitangi Tribunal in 2007 slammed the previous Government for its handling of the Tamaki-makau-rau negotiations. Among its findings were that the Crown’s conduct was inconsistent with the principles of the Treaty and that the Crown failed to fulfil its duty to act reasonably honourably and in good faith. It added that if the Crown were to continue down the path prefigured in the agreement in principle the settlement would certainly create new grievances for the other tangata whenua groups. Is that not impressive? In the Auckland area which accounts for 20 percent of outstanding claims Ms Street’s Government achieved nothing but stagnation. Why? Because that Government thought it would be easier to negotiate with only one iwi out of 22—the others could be sidelined. They were left out and they were run over by the previous Labour Government in which Ms Street was a Minister. One of my first acts on becoming the Minister for Treaty of Waitangi Negotiations was to appoint Sir Douglas Graham as Crown facilitator in the region to develop a negotiations framework that would bring a fresh approach and get the ball rolling in Auckland. It is crucial that we make good progress in Auckland; those people have been waiting for too long. 
Ms Street also said she is concerned that new grievances will be created because of the speed that is being applied to the Treaty settlement process. That comes from the member whose party brought us the Foreshore and Seabed Act an Act opposed by 94 percent of New Zealanders so that is indeed a bit rich. National knows the importance of durability. This Government’s goal of settling all historical Treaty claims by 2014 is not just for the Crown; it is especially for iwi. Iwi are telling me constantly how anxious they are to make progress quickly. This Government realises that to delay settlements any longer than necessary creates new grievances. 
Today’s speech by the Leader of the Opposition showed that Labour has learnt nothing from its errors. Phil Goff’s speech sounded like the same vein-popping empty angry rant that we heard last year. It was the same speech—poor old formulaic Phil Goff. We begin 2010 with Labour led by two relics of the 1980s. Phil Goff was elected in 1981 and in 2011 he will have been here for 30 years apart from his 3 years’ enforced sabbatical when he lost Mt Roskill to Gilbert Myles. What an embarrassment it was to lose to Gilbert Myles—though I know the feeling because I lost to Annette King! Phil Goff is the same person who voted for the introduction of GST in 1986 and for the increase in GST to 12.5 percent. Phil Goff has held more portfolios than anyone other than Jack Marshall but he has achieved nothing. He has been in office but he has not been in power. 
Let me end as I began. This is not a time for boorishness from Trevor Mallard nor is it a time for negativism. The holiday is over; it is back to work. I wish all members well as we embark on this Government’s busy legislative programme. I look forward to working with everyone in my customary bipartisan manner. 
Hon ANNETTE KING (Deputy Leader—Labour) 
: 
 Members will know that 2009 was the Year of the Ox. I think it aptly named National in Government because an ox is a castrated bull and John Key and his Cabinet spent 2009 acting like castrated bulls. They had the semblance of the equipment they needed to make an impact but they lacked the necessaries to drive home their agenda. So instead of seeing some bold ideas for action we spent the entire 2009 year witnessing lots of grinning and lots of spinning lots of flipping and lots of flopping over 40 reviews and inquiries thousands of photo opportunities and lots of bluster and blatherskite. 
But wait—it is now the Year of the Tiger. The tiger is a very dynamic beast indeed—a very forceful beast ready to spring into action. So with a drum roll and with breathless anticipation today we waited for the tiger to pounce. We waited to get the motorway to the future. We were waiting for “Big Tuesday” to be a winner for all New Zealanders. We were waiting for “Ambiguous for New Zealand” to become “Ambitious for New Zealand” as we were promised. We waited for John Key to reach his own national standard. 
What did we get from the Prime Minister today for his much-hyped programme of action? Well I think Bernard Hickey got it right. Members should go and look at what some of the commentators are saying. Bernard Hickey said that it is a clear message to leave New Zealand now. 
I have to say that looking at the Prime Minister’s statement has been described particularly by my colleague Grant Robertson as looking at a late-night television guide. It is full of repeats—repeat after repeat after repeat. John Key announced today over 50 repeat policies—over 50 repeat policies. He announced 50 old policies—some of them were ours I have to say—and that is supposed to represent a step change to the future. There were 50 policies that had already been announced. The old Kopu Bridge was rolled out yet again. In fact the entire transport portfolio which Labour had already announced when we were in Government and had started was rolled out again as new policy today. 
You see 2009 was the year of reviews and inquiries and this year those inquiries and reviews will be replaced. I went through the speech and I saw that they will be replaced with such actions as looking at issues putting out discussion documents and developing some action plans. The Government will consider reports do a little bit of reviewing and develop a few policies. It will be setting up a working group and—wait—establishing an advisory group. 
Is that a step change to the future? What are the commentators saying? Well within minutes of that speech that so-called world-shattering speech the greatest speech John Key would ever make as Prime Minister what were the commentators saying? Bernard Hickey said: “Today he did nothing. He did worse than nothing. He shut down the debate.” Bernard Hickey went on to say: “He has finally shown his colours. He is a mediocre leader without the vision or the ability to change New Zealand. He is a seat-warmer who is too scared to scare the masses.” That was said by Bernard Hickey who is one of theirs—one of National’s. He also said: “He is saying he wants to get re-elected. How uninspiring. How pedestrian. He is saying he is not a real leader.” 
What does Brian Fallow say? Brian Fallow is a well-respected business commentator. He has said that “Business is unlikely to be blown away by the boldness of the vision outlined in today’s agenda-setting speech. Indeed the average thistledown would not be blown away.” Then we have John Armstrong. He is probably one of the foremost political commentators in New Zealand. What did John Armstrong say within minutes of hearing the speech? He said: “Key’s quick march … little more than a crawl”. But the doozy of them all is a comment by David Farrar the great blogger who runs the National Party’s lines. I have a great lot of respect for David Farrar actually believe it or not—in fact I do today because he said that John Key’s speech was a B-grade effort. It really was like a repeat movie from the past. It was a B-grade effort. 
New Zealanders should not be surprised that today was about hype and not action. The signs were all there before John Key became the Prime Minister of this country. We knew that John Key’s Government would be all mouth and no trousers. It was obvious before the election. Can members remember when he went to McGehan Close? It was the street that he called dead-end as Phil Goff has already said today—the place where the rungs of the ladder of opportunity had broken. It was the place where he pulled up in his limo his VIP limo and took an innocent 12-year-old girl to Waitangi to parade her in front of the media not for her benefit but for his photo-opportunity. Can members remember the job he arranged for the mother—for Joan Nathan? Do they remember the job he arranged before the election with great fanfare? She was given a job— 
Hon Steve Chadwick 
: An aspirational future. 
Hon ANNETTE KING 
: —and an aspirational future as my colleague has said. Well what happened? It was all aimed at showing New Zealanders that he the former State house boy could relate to Struggle Street and that he could fix the problems its people had. 
It has all turned out to be a big fat lie. There has been no road paved with gold for Struggle Street. In fact there has been no street at all for them. Mrs Nathan said on Sunday that she is worse off under Mr Key. She even lost the job he got for her soon after he got elected. She represents thousands of Kiwis who have suffered over the last year and today they were looking to see what was in this forward-looking visionary package from the Prime Minister. But like Mrs Nathan they will be used they will be abused and they will be dumped. 
Where in Mr Key’s speech was the fairness for hard-working Kiwis to get ahead? Where was the plan for the 3500 Kiwis who queued for 150 supermarket jobs? Where was the plan for the 200 people who applied for a single job in a pet shop in Wanganui? John Key said that the unemployment rate had levelled out at 7 percent but I say to Mr Key that it is still going up. 
Last week the Australian Government released a major report called the 2010 Intergenerational Report which looks at that country from 2010 to 2050. Brian Gaynor a respected business journalist said it showed that the Australian Government was “far more forward looking” than the one we have in New Zealand. He pointed out that if we “do not create more high paying jobs for our 15 to 24 age group the flow of people crossing the Tasman will increase.” Is there anything in the statement from Mr Key that will turn round those shameful unemployment statistics? Is there anything that will close the gap with Australia? No there is absolutely nothing. 
What about National’s pre-election promise of the fresh start for young New Zealanders? John Key claimed before the election that there were 25000 young New Zealanders who did not have any qualifications when they left school. They had no education and no training. So what happened to the promise that there would be universal access for all those young people under 18 years of age? There are now 43000 of them—not 25000 but 43000—and do members know what the promise has been to them until the election in 2011? There has been a promise of 4000 positions. For 43000 young people the vision and the promise is 4000 guaranteed positions for jobs training or education. That is what they have got out of this speech today. 
Hon PANSY WONG (Minister for Ethnic Affairs) 
: 
 I say “Happy New Year” to all New Zealanders. It will be a great Year of the Tiger. What a fantastic background for the incoming Year of the Tiger to have our Prime Minister deliver a statement about step change to growth. Not only did the Hon Annette King make a hash of the Electoral Finance Act; she made a hash of the Year of the Ox and the Year of the Tiger. The Year of the Ox as everybody knows meant that hard-working New Zealanders working together last year staved off the worst of the recession. Not only did the Hon Annette King make a hash of the Electoral Finance Act and the Chinese New Year symbols; she cannot even come up with any original Opposition speech as she was quoting all the time from newspapers and bloggers. That is typical of Labour; its members never have an original idea. We put up with 9 long years of political correctness and mouthing of other people’s policies. There were 9 long years of wasted opportunity. But at long last we have a Government elected by New Zealanders to govern for all New Zealanders—that is European Maori Pacific and ethnic men and women old and young. That is unlike Labour which was divisive with its “tax and spend”. 
I want to reflect on how the “three strikes” policy would have applied to the Hon Phil Goff. The first strike was when he agreed with the Governor of the Reserve Bank Dr Alan Bollard who apparently does not believe that New Zealanders can close the gap with Australia. He has no confidence that New Zealand can close the gap with Australia but that is why neither Dr Alan Bollard nor Phil Goff is the Prime Minister of New Zealand. I am very glad we have an aspirational Prime Minister who believes in New Zealanders and that the sky is the limit. The Prime Minister’s statement was ambitious and aspirational. 
The second strike for the Hon Phil Goff is that he said he would campaign against GST; he would remove GST. We did not realise he opposed GST. He is now in agreement with the Hon Jim Anderton on that issue. 
On the third strike he should be out. I tell Shane Jones to warm up his barbecue because I think the timing is right for him. The third strike for the Hon Phil Goff was when he said to the nation that the only way for New Zealand to get huge economic growth was to cap the salary of 16 chief executives. But those chief executives’ salary increases happened under a Labour Government which had a 5-year programme to increase their salaries. I say the “three strikes and you’re out” Labour Opposition will sit on the other side of the Chamber for a very long time. 
In contrast whenever Melissa Lee Kanwaljit Singh Bakshi and I go to functions with ethnic communities they ask us to thank our Prime Minister for delivering on his promises making New Zealand a safer community because we have provided 600 more police and a tougher law and order policy. Ethnic New Zealanders like all parents have aspirations for their children. They want their children to achieve in education. They say: “Good on you for bringing in national standards.” They want to know how their kids are doing. They want them to have a fantastic future. National is delivering on educational achievement. 
I turn now to economic growth. Ethnic business people and ethnic workers want a tax system that rewards hard work not one that punishes them for hard work. They want to work and to start up businesses. They say that a change in the tax system that is fair and rewards hard work should be brought in. This year the Office of Ethnic Affairs will organise a series of business forums because ethnic New Zealanders have much international linkage and a lot of business contacts with their home country. Established ethnic New Zealanders have fantastic international networks. This year they will help us to foster a lot more opportunity with China and they will welcome in the Prime Minister’s statement that there will be more marketing with China. They are so excited. Indian New Zealanders told me they are so excited about the negotiations for a free-trade agreement with India. They will be part of that growing linkage for the benefit of New Zealand. 
This Government will promote and utilise the expertise and international network of our ethnic New Zealanders. This year in respect of the Auckland super-city the Government recognised the importance of ethnic New Zealanders and in the legislation it passed it provided for the establishment of ethnic advisory panels. That is fantastic. Of course the Auckland super-city might have set up those panels but this Government believed in sending a strong signal to the ethnic communities that their voices are important their opinions are important and they will be heard through a legally instituted panel in the Auckland super-city. They are so excited about that. 
It is a privilege for me to be Minister for Ethnic Affairs and Minister of Women’s Affairs. Wherever I go nowadays women approach me and say: “Wow! This is fantastic. We want to join the board.” They say that the Government is promoting a message they have wanted to hear for a long time. The message is that women have expertise and they make a major contribution in the boardroom. 
Hon Annette King 
: They’ve been doing that for a long time. 
Hon PANSY WONG 
: A Labour member says they have been doing that for a long time but I remind Labour that the former National Government of 1972 brought in the Equal Pay Act and the pay gap between men and women has since then decreased. But what has happened since 2001 under the previous Labour Government? Since 2001 the gap was stuck at 12 percent. That Government did nothing about that but this National Government has provided more funding for the Ministry of Women’s Affairs. There will be four work streams to look at flexible work and women in trade. We want to champion our women’s aspiration. Women will benefit in the growing economy. 
In New Zealand we are so excited that at long last there is a Government in place that actually believes that a brighter future is for all New Zealanders. It believes that ethnic communities women European Maori and Pasifika will all benefit. The Prime Minister’s statement has all of them involved. It is not a divisive policy. The whole raft of policies will make sure that all New Zealanders can aspire. This Government was elected by New Zealanders to govern for all New Zealanders unlike the previous Labour Government which wasted 9 long years of good economic growth with New Zealanders falling behind. This will be a fantastic year to welcome in the Year of the Tiger because this is the year that New Zealanders will be strong will be aspirational and will be looking forward to a brighter future. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Firstly I wish a happy New Year to the member who has resumed her seat. The last time I saw her was on Indian Republic Day where at the Aotea Centre she and the regional apparatchiks of the National Party were on stage in front of a scant crowd of around 200 people drawn together by a front organisation—the so-called “United Indians”—which has since been disowned by the reputable bodies of the Indian community. I think that National was embarrassed about the manipulation of community organisations when 3000 Indians turned up at the function put on by the Bhartiya Samaj Charitable Trust in South Auckland and there were more National Party flunkies at the Aotea Centre than there were genuine representatives of the ethnic community. 
But coming back to the issue of the day New Zealanders are asking themselves the question about “Big Tuesday”. Is that it? Is that really the best that National can do after a decade to think about it and 15 months in office? It proves Alan Bollard right that there is no plan to catch up with Australia. If raising GST on thousands of ordinary New Zealanders is the answer Kiwis are asking what on earth was the question. What was the question if that was the answer? Surely it cannot be to make the tax system fairer because as Labour said from the outset dropping the top tax rate and paying for it by raising GST is the precise opposite of “fair” to ordinary New Zealanders. 
Surely it cannot be to make New Zealand more productive to benefit the real economy because National has ruled out all of the options put up by the Tax Working Group that would thoroughly address the property bubble leaving only the removal of depreciation rates. By virtually ruling out all those steps it has left itself with no fiscal wiggle room unless of course there is the old arsenic or castor oil trick. Instead of the arsenic of GST on Budget day we get the castor oil of a limited capital gains tax. Perhaps that is the real plan; we shall have to wait and see. 
In my remarks today I will provide a quick summary of our rebuttal of the National plan concentrating on the proposed tax changes and I will set out Labour’s three-way test for progressive sustainable tax reform. Today was supposed to be “Big Tuesday”. This day John Armstrong said would be the day that big John Key broke a few eggs to put New Zealand on course with the policies the country needed. Well today the same commentator has given National 4 out of 10 for boldness. Brian Fallow a respected economic journalist said it was a pity that rather than grasping that lever he barely crooked his “ … little finger around it.” Bernard Hickey rightly called John Key “mediocre” “not a real leader” “a seat-warmer”. He told him to move on and let someone else do the job. The team that is ready to do that is sitting here on this side of the House ready to grasp the real issues. It seems the little emperor has no clothes after all. The smiling assassin was all smiles and no assassination of the underlying problems in the tax system. He has no vision and no strategy to get us to a resilient a productive and a truly brighter future. 
No amount of flag waving can hide the hole in National’s strategic doughnut. There is no “there” there there is no centrepiece. Today has proved that. After the piece of fiscal genius that was the heart of that speech we are called to look at the re-release of other policies like the famous Kopu Bridge. As my colleague has mentioned John Key must really love holidays in Pauanui. That is unless he does not like the fact that Gerry Brownlee is going to turn it into a slagheap by mining all over public land. Of course John Key also did the perfunctory squeezing of the Public Service the traditional National recipe to shrink the State so that ordinary New Zealanders who rely on the services the State can provide will get less tomorrow as well as today. 
The three-way test of whether the tax plan will succeed comes down to this: is it fair to all New Zealanders; does it pass the equity test? Does it solve the underlying problems; does it pass the productivity test? Will it last; does it pass the sustainability test? National’s plan fails all three. Let us see why. The equity failure could not be more stark or obvious to all. Cutting the top tax rate to say 30 percent costs about $1.6 billion; leapfrogging to 25c—getting ahead of Australia if you like—costs $2.3 billion. In a deficit environment quite rightly the Minister of Finance says it must be fiscally neutral so how are they going to pay for it? Well raising GST to 15 percent raises around $2 billion but compensating ordinary New Zealanders for the regressive nature of that tax costs virtually all of it around $1.9 billion leaving only $100 million to $200 million over to fund the top tax cuts. Obviously it does not work. 
Ordinary New Zealanders are therefore quite right to be sceptical that they would be fully compensated. Mums who are trying to feed their three or five kids on a medium or a low income are frightened about the cost of bread and milk let alone power and rent. They are right to be concerned at the fairness of it because someone on the average wage as our leader has said will get 35 measly cents a week in tax relief. But someone on John Key’s wage will get $509 in tax relief. The chief executive officer of Telecom will get $2600 in tax relief. The equity test is absolutely beyond question. This policy fails. So why do it? Why raise GST? New Zealand is already—wait for it—the sixth highest in the OECD for indirect tax take as a share of total tax. It is sixth from the top. It is not light on indirect taxes. 
From National’s point of view raising GST can make sense only if it does not fully compensate other New Zealanders otherwise there will be nothing to contribute to the reduction of the top tax rate. National’s plan fails the productivity test. It does not sufficiently address the structural problems and here is why. Firstly—surprise surprise—there was no mention in Mr Key’s speech at all of closing down the rorts or plugging the tax avoidance and tax planning loopholes around loss attributing qualifying companies trusts and portfolio investment entities. They did not get a mention. Not once did they get a mention but the Tax Working Group highlighted it as a fundamental problem. 
Secondly as I have said he ruled out nearly all of the measures that would address the property bubble. Everybody accepts that it is wrong that there is a tax incentive to invest in real estate speculation rather than in things we can actually export and sell. That is making New Zealand poorer. He has ruled out nearly all the tools in the tool box. The only one left is depreciation on buildings and at $1.3 billion it does not raise enough tax to solve the problem. Hence perhaps the deep dark Budget secret of 2010 is actually a partial capital gains tax instead of GST. We shall have to wait and see. 
To quote Bernard Hickey: John Key “ … is saying tough. My backers own property. We won. You lost. Eat that.” He is saying: “I don’t like it but I’m not brave enough to challenge it.” “He has finally shown his true colours.” says Bernard Hickey “He is a mediocre leader without the vision or the ability to change New Zealand. He is a seat-warmer …”. Last time I checked Bernard Hickey was not a member of the Labour Party. 
This fails the final test too: the sustainability test. Labour offered National a gold-plated “get out of jail free” card. Labour members said right from the start that if National wants to make New Zealand better they would honour that with a bipartisan discussion and they would work constructively and in good faith to do that job with it provided it was a two-way street and provided it did not just jack up GST to fund the cut to the top rate. But what did National do? It ignored the offer of a sustainable plan and it did exactly what we said it should not do: raise GST in order to fund the mates rates at the top. It is a two-fingered salute to bipartisanship. New Zealand will be the poorer because when Labour members are inevitably occupying the Treasury benches we will have to change that back. We will do it for the good of all New Zealanders. We will make a policy that is equitable that does support the real economy and that is sustainable for the future of New Zealand. Today was “Big Tuesday”—no it was not. It was “Barely Timid Tuesday” “Tiny Tuesday” as one of my colleagues has said. 
Hon PHIL HEATLEY (Minister of Fisheries) 
: 
 At the heart of the Government’s economic plan lie six main policy drivers. At the heart of the Labour Party’s plan lie two drivers. I will go through the six drivers of the National-led Government. First of all National members have said clearly that a world-class tax system is what we want. That is what the Prime Minister announced today—a tax system that incentivises work and investment and disincentivises consumption; a system that incentivises saving and disincentivises unnecessary spending in order to help our economy. 
Secondly we are prioritising a better Public Service. That is a main policy driver. Unlike the Labour Party we do not believe that employing more and more staff in Government departments is a way to grow the economy. We believe that Government departments which are there to serve the people should work as efficiently as they possibly can. 
The third main policy driver is education and skills and that is why Anne Tolley the Minister of Education has been successful in convincing parents that it is important that schools show exactly how well their children are doing and that parents can work with teachers in order to address small problems before they become big problems. 
Fourthly investment in infrastructure is very very important to the National Government. We do not talk about building roads or investing in broadband as the Labour Government did for 9 long years. We are building roads and we are investing in broadband and that is what the public want to see. And I apologise to the general public who were held up over Christmas and even today by the amount of roadworks across the country. We cannot help it; we are investing in roads. That is what we are doing. An interim hold-up of traffic because of roadworks is the price we pay to have a world-class transport system. 
Regulatory reform is important to the National Government. Our fifth main policy driver is to cut red tape and make it easier to do business and make it easier just to live in New Zealand. Gone are the days of the nanny State telling us what to do. We are opening up new days where we trust New Zealanders and businesses to make decisions for themselves. 
Lastly the sixth main policy driver is innovation. We will reward those who think hard and outside the square those who work hard and those who invest with blood sweat tears and their own money. This is unlike the previous Government which punished people for doing well. If people did well in the education system they were punished. If people did well in business they were punished. If people worked longer hours they were punished. Under this Government people will be rewarded. 
The Labour Party has two main policy questions. Quite simply does it get Shane Jones to be its leader or does it get David Cunliffe to be its leader? I understand that Labour is to consult its membership and the general population who unfortunately are not engaged at the moment and ask whether Labour should have Shane Jones or David Cunliffe as leader. I think that once Labour makes that decision the country will breathe a sigh of relief and we might be able to get some policies out of the Labour Party instead of seeing Phil Goff week after week on television bagging everything that is suggested. Phil Goff is saying: “If the National Government and John Key suggest it I’m Phil Goff and I’m against it. It means I don’t have to think I don’t have to do any research I don’t have to get up early and I don’t have to travel around the country. If the National Government suggests it I’m agin it.” 
So those are National’s six main policy drivers: a world-class tax system better public services education and skills investment in infrastructure regulatory reform and innovation. Last year was National’s first term in Government and we succeeded in implementing a whole bunch of policy that was welcomed by New Zealanders. That policy ranged from the stimulus package—$125 million—into roads into building schools and into infrastructure right through to funding Herceptin. It is not as costly but we funded Herceptin for women with first-stage breast cancer. 
The Labour Government including the women in the Labour Government opposed that for 9 years. The women in the Labour Government never saw Herceptin funded. What a disgrace! Every New Zealander is thinking: “Hey we care about women. We think breast cancer is a real problem. Here is Herceptin which could fix it. Why wouldn’t you fund it?”. John Key said: “Yeah why wouldn’t you?”. So National funded it. [ 
Interruption 
] Look at the Labour Party women. I have touched a little nerve have I not? The Labour Party women are getting a little wound up are they not? Labour never funded Herceptin. Listen to those members. They are angry. Labour never funded Herceptin. 
The sensible practical honest humane thing to do was to fund Herceptin for women with first-stage breast cancer. [ 
Interruption 
] The Labour Government women never did it and they are upset. Why did they not think of it? Why is John Key more in touch with women’s issues than the feminists of the Labour Party? That is an excellent question. 
National has also focused on crime. We have passed new laws to toughen sentences restrict bail for violent offenders improve police powers crack down on gangs and support the victims of crime. We have provided funding for an additional 600 police. [ 
Interruption 
] This Herceptin issue has really wound up the Labour women has it not? They wish they had thought of it. They are thinking: “Why didn’t we think of that?”. National has also provided 720 Tasers and the power to DNA test offenders who are arrested for imprisonable offences. We have passed legislation to deal with boy racers and we have launched a crackdown on the drug P which is already resulting in increased seizures lab busts and prosecutions. 
It was a big year last year and it will be an even bigger year this year. Right at the top of course are our changes to the tax structure. I do not know why David Cunliffe felt that we were not addressing the issue of property investment. The statement from John Key is clear. He said: “However the Government does believe there is a gap in the current tax system around property investments where income is being derived but in aggregate no tax is being paid—in fact the Government is actually losing revenue in this sector. We will therefore be making changes to the way property is taxed which will result in increased Government revenue and more fairness for taxpayers. These changes will be announced in the Budget.” This is a comprehensive tax policy. 
I look forward this year to delivering more in the area of housing on top of the $20 million extra for in the Housing Innovation Fund stimulus package giving State house tenants the opportunity to own their own homes and allowing Maori to build houses on their ancestral land. I look forward to that. 
I would like to finish my speech by saying that last year I was errant. I called Maryan Street dishonest in this House and that was wrong of me because she is not dishonest. I disagree with some of the policy settings of the previous Labour Government. There were policy issues and philosophical issues that I disagreed with when Maryan Street was the Minister of Housing but she is not a dishonest person and I would like to take this opportunity to apologise to her for that. 
I look forward to this year as housing Minister and to working with John Key because we have a progressive package that we will put forward and it spreads into housing. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 This is a serious day in the parliamentary calendar. It is a day when the Prime Minister of the land sets out his vision for the country. I think Speaker Lockwood Smith made a good point when he said at the beginning of Mr Key’s speech that many New Zealanders were waiting to hear the speech. I would go further. I say that at least 168000 New Zealanders may well as we speak today be hanging on every word of Mr Key’s speech. They of course are the 168000 New Zealanders who do not have a job. They may well at 2 o’clock have tuned into this Parliament hoping to hear a vision hoping to hear a plan hoping to hear some idea or some solution that would alleviate the personal and family turmoil that those 168000 New Zealanders go through every day because they do not have the dignity of work. I suspect that both the Speaker and others are right. There are 168000 people out there without a job today who hoped—and their hopes have been sadly dashed—that this Prime Minister would provide a vision and a plan. 
What we had from the speech of course—other colleagues have touched on it so I will not—was a whole host of re-announcements. There were re-announcements about the infamous Kopu Bridge—the 11th time it has been announced—and re-announcements about the Youth Guarantee. Kate Wilkinson as the Minister of Labour sat with me on a Canterbury Television programme not 1 week ago. When she was asked when we would have the Youth Guarantee she effectively said she could not guarantee the Youth Guarantee that she had guaranteed before the election. There was a re-announcement of that. 
You see National members talk about economic growth and they are right to do so; every MP in this Parliament wants greater economic growth. But economic growth in itself is a means to an end. Everybody wants economic growth because it is a means to an end. But the key point is what the end is and what the vision is. What did this Prime Minister articulate that he wanted New Zealand and New Zealanders to look like if we achieve what we all want—which Dr Bollard made some comments about—which is economic growth to the levels where we can help those 168000 New Zealanders? The end is about a vision. The end is about saying what sort of country we want. 
The only thing we heard from the Prime Minister was a rehash of the pre-election slogan: “I’m ambitious for New Zealand.” I am sure he is; I suspect we all are in our own ways with our own definitions of what that means. But I would have liked as would the 168000 unemployed New Zealanders the Prime Minister to get up and articulate what being ambitious for New Zealand means. Does it mean that he has a plan to train people? In that speech all we heard about was Job Ops and Community Max which take 5000 of the 43000-plus unemployed 16 to 24-year-olds and give them the minimum wage for 6 months. They are doing something but they are not actually gaining skills or proper skill training like apprenticeships; when Labour left office there were 14000 people in trade training. The Government gives them 6 months’ work takes them off the books and tries to hoodwink people by saying they are not unemployed and that it is doing something with them. That is the means. What is the end? The end is that at the end of the 6 months there is no job and the employer might employ them. But do those people have a skill? Are they closer to an apprenticeship? Are they closer to a piece of paper or a qualification that will lift them out of the situation they are in? Are they incentivised to go to any training? No they are not; it is a fiction. 
Phil O’Reilly whom my leader quoted spoke about the Job Ops scheme on Kathryn Ryan’s show last week. She made reference to the scheme that subsidises employers $5000 on the wages paid for 6 months. She asked whether it had been successful and whether it was logical. Mr O’Reilly who is the head of Business New Zealand said this: “The problem with these kinds of programmes is often if you make them too big they turn into a bit of make-work really. That’s the problem. So you get into you know literally digging holes and filling them in again effectively.” Mr O’Reilly pointed out a very interesting thing: he disagrees with the Government’s slapping the cap on the polytechs and the universities at a time when young people especially are trying to get into those institutions for training. He made the point that we should be opening up our polytechs especially and pumping in those 43000 young people who are on the scrap heap so that they do not go to work for 8 hours a day just to do something anything. We should be bringing them closer to a viable qualification so that when they finish their course and the economy ramps up we will not get into the situation we were in before the last Labour Government took office when there was a massive skill gap. There were no people who were trained skilled and work-ready. We do not want people who can just get up in the morning breathe walk and go through the door but who actually have the skills to contribute— 
Hon Annette King 
: Plumbers electricians. 
Hon CLAYTON COSGROVE 
: —plumbers electricians my deputy leader says; carpenters—all the people that we trained when we said that young people would be in training or in school; 14000 people were engaged in trade training. That is a means to an end. That is a means of creating economic growth providing businesses with viable and highly skilled New Zealanders giving people the dignity of work and reducing the number of unemployed from 168000. That is ambitious for New Zealand. I argue that that is really ambitious for New Zealand. Was there any mention in that speech of a vision about training and what we are going to do with those 168000 Kiwis who are going through a living turmoil? 
Twelve or 15 months ago of course unemployment was down and training was up. People were in training. Under the previous Government Maori unemployment was I think the lowest in our history. People had options to train to go to polytech or to go to university. It is a fact that the odd student might drink too many beers over those 3 years and waste time—we all know one we all went to university or polytech with one and there is always one around in society—but to use that fact as an excuse to start carving up and restricting tertiary education when other countries in the world are seeing that as the key to unlock the handcuffs of economic degradation is I think short-sighted. 
The Prime Minister’s speech will go down in history as the first step to economic archaeology. There was nothing about skills training in there. There were fluffy words about research and development and innovation. If the Government was serious about research and development and innovation it would not have canned what the Canterbury Manufacturers Association wanted. Amy Adams knows that because she took a barrel from that association before the election about Mr Key’s back-down on what the manufacturing science and other sectors wanted which was money for innovation and training. 
Hon Annette King 
: They cut it. 
Hon CLAYTON COSGROVE 
: They cut it; they got rid of it. They made that choice. I do not see that as being ambitious for New Zealand. I do not see a plan. I do not see a vision. 
Hon Dr Jonathan Coleman 
: It’s a joke. 
Hon CLAYTON COSGROVE 
: That member says it is a joke. I invite Mr Coleman to go to 168000 Kiwis and tell them that their situation is a joke. I know of parents in my electorate who have gone to mechanics and carpenters—businesses like that—and told them that they have taken out a second mortgage and will pay them to train their son or daughter. They say to them: “For God’s sake get them out of the hole train them and we will pay you.” They offer them the cheque up front. There is no training happening now because of course the Government has pulled the pin. 
I ask National members to define what “ambitious for New Zealand” means. I ask them to define it for us once we wander down this great economic path that seems to be encumbered by a cycleway. That seems to be the plan—a cycleway a job summit a talkfest and giving 5000 young people a job doing something for 6 months. As Mr O’Reilly says they are filling in holes. I ask National members to define what they want out of economic growth and what New Zealand should look like. I ask them to define what they mean by being ambitious for New Zealand because today Mr Key over-egged the pudding. He overhyped it and New Zealanders know it. This was going to be the big bang to use the scientific term. 
Hon Annette King 
: Big Tuesday. 
Hon CLAYTON COSGROVE 
: Big Tuesday. We were hanging on every word. It has not been the big bang. The shameful thing I say as that member giggles over there is that after the speech we have to ask what has changed for 168000 unemployed Kiwis and what will change in the future as they lament their circumstances. They are not bludgers; they are not lazy people. Many are middle class and have never been unemployed in their life and they find this situation anathema to them. They are in a hole they want to get out it and they look to this Government to provide the means yet this speech provided them with nothing. It was hollow; it was shallow; it was nothing. 
Hon Dr JONATHAN COLEMAN (Minister of Immigration) 
: 
 I must say it is good to be back in the House and I trust everyone had an excellent break. Certainly there is some serious work for the Government to get down to this year as outlined quite clearly in the Prime Minister’s excellent statement tabled this afternoon. Clayton Cosgrove the member who has just spoken wants to know what the economic vision is. I think the Prime Minister has spelt it out very clearly on multiple occasions. We want to see the gap close between New Zealand and Australia. We want to see incomes in this country rise. We want to see GDP rise. It has been spelt out absolutely clearly and that member knows it very very well. 
Hon Clayton Cosgrove 
: We want to see it. What are you doing about it? 
Hon Dr JONATHAN COLEMAN 
: If that member reads the Prime Minister’s 9500-word statement which was tabled this afternoon he will see there is a very clear programme of work there to get the economy going. The Prime Minister said quite clearly that the economy is the No. 1 priority for this Government this year. Those on the Labour side of the House may have been expecting a detailed Budget statement but I think there was plenty in that statement that clearly indicated the direction the John Key Government is going in this year. There was a lot there about tax reform and a lot of new stuff. He has ruled out some options and he has said other stuff will happen. 
Those members over there say they do not like the idea of an increase in GST. Well it very much depends on how that question is put. If we go to someone and say “Do you want GST to go up?” there will not be too many New Zealanders who will agree with that. But if we say to someone “Would you rather have more money in your hands each week to spend and you control how it is spent would you be prepared to have an increase in GST?” quite frankly the overwhelmingly majority of New Zealanders would say “Yes.” Those members can try to twist it around how they like but the idea of the tax changes that the Prime Minister has foreshadowed today will incentivise work get people back into the workforce and give people the incentive to get off benefits and grow the economy. For 9 years Labour was in charge of a system where the incentives were totally wrong and where it made more sense for people to stay on benefits rather than get out and do that little bit of extra part-time work to earn that extra money for their families. 
I can tell members that Labour members complain about the Prime Minister’s statement today but one had only to listen to Phil Goff’s speech to hear a speech that had absolutely no substance in it. There is only one member here today who would have thought that that speech was good and that is Shane Jones. Quite frankly I think that speech has brought the leadership challenge forward by about 6 months if not a year. That was a dire speech from Mr Goff today. There was not a single idea and there is no response from the Labour benches because those members know it is absolutely true. The two big ideas Phil Goff has come out with this year are to cap chief executive officers’ salaries and something to do with Jackie Blue’s electorate office—some incoherent ramble he spent several minutes of his speech talking about today. 
Those members are all criticism but they have no ideas. The reason for that is that Labour had 9 years to grow the economy. It wasted the best years of our economy by shrinking it. Under that party when it was in power the tradable sector of the economy where we earn all our income shrank by 10 percent. There was economic growth but that was just on the basis of debt and consumption. We had this situation where New Zealanders had access to easy credit they borrowed more and more and the economy grew but in the end it turned out to be a house of cards. The only way this economy will grow is if we encourage exports get the tradable sector growing again and get tourism going—another major part of our economic growth. 
Hon Steve Chadwick 
: How? 
Hon Dr JONATHAN COLEMAN 
: Well it is pretty obvious. I ask members whether they know what has been happening in terms of the signing of free-trade agreements. The Government has gone out aggressively in the last year opening up new markets for New Zealand goods. The Prime Minister took the tourism portfolio. He recognised that that was a crucial area in which we could grow the economy. We will see revenue from that increase at quite a rate over the next couple of years because that is where the emphasis is going. 
The problem for Phil Goff is that he has no credibility. He got up in the House today and said “I do not believe in GST.” He has been around the circle twice in Government. He voted for GST in 1986. Actually he was a big fan of Roger Douglas’ flat tax. Phil Goff’s problem essentially is that he does not know whether he is left or right. He is caught in between. He has been around way too long and basically his parliamentary record has completely caught up with him. The idea he had last week about capping chief executive officers’ salaries is all very well but when we look at the historical record we see that Phil Goff was right behind the State Sector Act. He was part of a Government that spent a long time trying to raise the pay for public servants. He wanted the salaries of chief executive officers to go up and up so when he finally gets an opportunity at the start of the political year a crucial year for Phil Goff all he can come out with is one idea which is absolutely contradicted by his political record. 
Meanwhile National reckons we were elected on the basis of three things. One was to get the economy right. John Key was the man whom the public trusted to conduct effective stewardship of the New Zealand economy and the public have faith in the plan that he is putting forward. The second thing they elected the Government on was to sort out law and order. Frankly under that lot over there it is a fact that people did not feel safe in their houses. The third crucial issue that we have been elected on is to get education right. Back in 1998 before Helen Clark became the Prime Minister she said it was totally unacceptable that one in five New Zealand kids leave school not able to read or write properly. They could not read the editorial of the  
Dominion 
 each day or the front-page headlines. Ten years later when she left office the statistic was the same. Basically under Labour the education system failed New Zealand students. John Key has said that we will not stand for it and that education will be a key plank to getting the country going in the long term. We will make sure that New Zealand children come out of school being able to read and write. National standards will be a key part of that. We campaigned on that election plank. 
People knew what they were getting and Kelvin Davis agrees with it. He cannot say it now that he is a Labour MP but he knows what happened when he was principal at his school. When he took it over he knew the standards for reading and writing. That member made a great difference at his school but it was through testing children showing parents how their children stood at a national standard and how they should improve. I think of it like this: there will be many people out there watching and listening who have kids. When they go along to the Plunket nurse they know exactly how their child is doing on that growth chart. They want to know whether their little son or daughter is below the norm or above the norm and whether he or she is doing OK on height and weight. National standards are just like that. A parent at a school wants to know whether their child is below average or doing OK or whether he or she is a gifted child. Why should people in the poorest parts of New Zealand those whom Labour claims to represent be putting up with their children failing—why should they? It is not good enough. 
John Key has said he will get the economy right. There is a clear plan there but those members have not even bothered to read the statement. There is a clear vision for where we want to go in terms of catching up with the Australians. There is a clear plan in the education system. We will make sure that children can read and write and the first step in that is knowing how they are doing. There is a clear plan on law and order. We have brought in penalties and sentences that make it way way tougher for criminals out there to go about their dastardly deeds. 
I can tell members that Labour is in league with the teachers unions. Those Labour members over there are basically the provisional wing of the teachers unions. They know that 30 percent of teachers in New Zealand are not up to standard; 70 percent are excellent. I can tell members that an excellent teacher leading a successful school would want to be measured. The reality is that if teachers have nothing to worry about they are doing a good job. Those doing good jobs will not worry about the parents and their school being able to see exactly how the children are doing. 
I can tell members that the thing about the Prime Minister is that he has brought a focus to the job that time-expired Labour politicians like Phil Goff once had but do not have any more. John Key lays things out clearly in terms of the economy education and law and order and most important it is a programme that New Zealanders believe in. It is a great programme. I encourage members opposite to read it. It will be good for the future of New Zealand. 
Hon SHANE JONES (Labour) 
: 
 A kia ora ano tatou. E te Kaihautu o te Whare tena koe i tenei tau hou me o tatou hoa e noho mai ra tae atu ki a tatou nga mema katoa o te Whare. 
[ 
Greetings once again to us all. Greetings of this new year to you Mr Speaker of the House and to our colleagues sitting over there and to all of us members of the House 
.] 
We have an innovation in the House in that members—in particular some members from Hawke’s Bay—will have the benefit of understanding what their Maori colleagues are saying as we leap from one language to the other. But unfortunately never mind what language we use it will not change the hurt and sorrow within New Zealand families as a consequence of what the Prime Minister has delivered aided by Mr Rodney Hide and aided by the Maori Party. You see underlying the Prime Minister’s delivery is a narrative and the people who are largely applauding his statement are applauding the fact that taxes will be decreased. But in decreasing taxes to support John Key’s constituency he has no other option but to raise GST. There will be elegant arguments that we have to put GST up because it catches all of us as citizens who are in the business of buying things etc. But the reality is that if we introduce a system of changes where revenue goes down then as night follows day we are forced substantially to reduce expenditure. This Government underlying the coded message in its speech is really about shrinking the size of government—in particular those key areas of social services and dealing with those needs of vulnerable New Zealanders. 
But perversely enough National also talks about having research and development and putting some more money into capital inadequacy issues in the economy. But it will not admit to reducing revenue and introducing it through tax cuts so we are shrinking the amount of funding that the State has at its disposal to run the current services that we take for granted. 
So there is a transformational agenda to what the Prime Minister has outlined but it is bad for working people. It is extremely bad for those who have children or use most of their income to buy bread milk rugby boots netball shoes and the things that Kiwis take for granted they will be able to afford. That is the first point. 
The other point is that this Prime Minister has in a sense conned the country. He has come forward promising transformational change without pain. He has come forward smiling virtually walking on water. He has been aided and abetted by a besotted media. But this shows that his statement has no content to deal with the daily drudgery and the very dangerous problems facing families with children and families on low income. It might be said that they are not the people who voted him in. They are not the people he is answerable to. He is answerable to those who lie at the heart of his constituency. They do not include poor people or people largely on fixed incomes. So he has to use this statement to reward those who have propelled him into power. But he is dicing with fire. New Zealanders who are worried about whether their kids will get jobs and will be adequately trained cannot take much more of this pressure. They will not all go out of New Zealand to Australia. They will look for us to provide alternative ideas. 
Let us look at some of those ideas and ask where the jobs are. There are multiple opportunities up and down the country to work with firms to work with communities and to create jobs. It is jobs that integrate people back into the economy when they leave school and assume the positions that their parents have had. I mistakenly thought that with all the experts that this man has had at his disposal he would have more ideas. He has had the Capital Market Development Task force. He has had Don Brash and his heretics. He has had my friend Rob McLeod and he has had people such as John Shewan and others working on tax. He had them all at his disposal. He left the New Zealand public last year with the impression that he had all those experts around him so the public should just taihoa. He would glean the best of what they had to say and then he would cobble it together and make a compelling story that would affect a step change in the economy. 
There is no step change—none whatsoever. There are small nuggets and code language for what the Government proposes to do. It will take an axe without a doubt to what we regard as the entitlements of New Zealand citizenry in relation to welfare. Unless it makes cuts in that particular area it will not be able to afford the State with a vastly reduced level of income. It is afraid of saying that but rest assured that that is the deeper agenda. 
Secondly it will have to go ahead with privatisation. At least we have seen the truth. There are two examples. The first is where it will run prisons privately and then schools will soon find themselves in that position—certainly those schools that are manipulated used and abused as a consequence of this ideological drive called standards. It is inversely related to any established educational research. It is pinned purely now on the Prime Minister. He had a chance to moderate it but he is insistent that this will be his signature piece and its agenda is to harass and hound schoolteachers and close down schools. 
I shall turn for a portion of my speech to a saying that I recall—[ 
Interruption 
]. I am not sure whether that was Amy Adams calling out the person who is secretly plotting scheming and having all sorts of meetings with the Mackenzie investors whilst her senior colleague is trying to tell us that there will be no huge pollution in the Mackenzie Basin while she is quietly meeting with them and encouraging them. Do not to worry—we know all about that and the emails are being delivered to us. We have a situation where whilst National is endeavouring to provide a façade of being green and friendly key members from that part of the country have been meeting and encouraging those very investors for a long long time. National thought it would get that one past us. 
Anyhow let me move on to more serious matters rather than the short and uneventful career of that member from the Mackenzie Basin. There is a famous saying which I think it might have been Hone Harawira’s mother whom I heard use. It is that when poverty comes in the front door love goes out of the back door. Those Maori Party members are now the agents of assistance and facilitation to bringing greater poverty to the families they purport to represent. Herein lies the monstrous conundrum the riddle: they spent 3 years attacking us—that is fair enough; we are politicians; we need to be attacked—but they seem to think that by consistently talking about trinkets and trophies we are not going to put the acid on the Maori Party during the course of this year to account for their conduct in the area of jobs schooling and key other features that give people the confidence that they can go through a week of life without having to wonder from whereabouts the next dollar will come from and how to get the next item that their family needs. 
I have come in for a very unfair level of criticism from those members because apparently we are not meant to criticise the Maori Party. Apparently we might need it in the future. Well firstly that statement and that attitude of conceit makes me feel that the sooner it does go the better. Democracy and politics in this place are a contest of ideas. If I have said it once I have said a thousand times that the ideas the Maori Party represents will be put under scrutiny—they will be challenged. We do not wish it any particular injury of a personal nature but it is promoting a falsehood. Whanau Ora will be just a big money grab which was initially for Maori alone but is now a guise for bringing in ideological fascinations such as privatisation of welfare. It reminds me of that lost nun who came here in Jenny Shipley’s time from Wisconsin. It is providing cover for an ideological experiment that will have a dangerous impact on the people whom it represents or purports to represent. So the Maori Party is fair and open game. 
Hon Clayton Cosgrove 
: Where are they? 
Hon SHANE JONES 
: Well we know where they are. Hone Harawira is checking that it was not a conflict of interest but an investment interest he might have had over the flag. Pita Sharples is checking what the meaning of “Whoops” is. Tariana Turia is checking how she is going to explain there is no Whanau Ora and Te Ururoa Flavell is explaining why they will get a Clayton’s title rather than a seabed title. Kia ora tatou. 
KATRINA SHANKS (National) 
: 
 It is my pleasure to take a call in the debate on the Prime Minister’s statement this afternoon. I stand here in the capacity of a National list member of Parliament for the electorate of Ohariu—great electorate that it is. I stand here in the capacity of a wife a mother a sister and a daughter. In fact Labour would most probably call me an ordinary New Zealander. But I do not want to be an ordinary New Zealander; I want to be an exceptional New Zealander doing exceptional things. I think that we should all be aspirational and exceptional. I do not think we need to be ordinary. 
The Prime Minister’s statement highlighted a full programme of reform for the 2010 year. It is the programme that the National Party was elected on and that a million people in New Zealand supported on election day. It is a programme of lifting the country’s economic performance and achieving a brighter future. 
We hear endlessly that our country is rich with natural resources and that we are one of the best food producers in the world. We hear that our country is clean and green and we hear that New Zealanders are working hard and smart. Now is the time to start capitalising on the amazing assets New Zealand has. 
There is no silver bullet to ensure that New Zealand has globally competitive salaries or that every child who leaves school is able to read and write. There is no silver bullet to ensure that businesses want to stay in New Zealand because it is economically viable for them or that we are able to turn round a child or even a family who has gone off the rails. There is no silver bullet; there is no one answer. What New Zealand needs is a comprehensive programme of step changes and that is what the Prime Minister John Key delivered for all New Zealanders in his speech this afternoon. 
The economy is an important driver to New Zealand’s becoming a prosperous safe country with well-paying jobs and a high standard of living. The Prime Minister today outlined six key drivers which obviously the Labour Party slept through because those members have not been able to tell us what was delivered in that speech today. They cannot tell us what the drivers were what the platform is or what the change will be—and there was much in the Prime Minister’s speech that highlighted that today. 
A growth-enhancing tax system is a good beginning. Currently we have a tax system that taxes labour and investment income at a relatively high rate and taxes consumption at a relatively low rate. If we are serious about turning New Zealanders from spenders into savers then the tax system is a powerful lever in making that change. New Zealanders will see tax reform from a National Government that creates incentives for people to work hard improve their skills and be rewarded for achieving. The changes in the tax system will see much more fairness in the way that taxes are paid instead of seeing those who know how to best structure their legal entities gain the best advantage. 
National is considering changes in a range of tax areas—personal tax GST property—but at the end of the day we need a tax system that will have integrity moving forward over a period of time. Making small changes here and there actually makes it more complex harder to manage and much more unfair and when we do that we create loopholes which is what we see currently with property. That will change. 
Currently there are over 9000 families who use legal entities own investment properties and are able to access Working for Families which is aimed at low-income families. That was not what Working for Families was set up for. It was not set up for those people who can afford to get ahead themselves. It was set up for families who were genuinely in need so that they could live day to day and raise their standard of living so that they could live well and so that their children could have a certain standard of living. The tax system should be about fairness and the current system does not deliver that for New Zealanders. 
The Government wants better public services. The people of New Zealand work hard to earn a living and when they are taxed they expect the money to be spent wisely. In our own homes we work out what our budget will be. We have to consider the needs and priorities in our households and we spend money accordingly. The Government expects no less from its ministries and departments. It is not much to ask for. The Government is committed to ensuring that its departments will spend wisely the money that people have earned and will not waste it. 
Labour signed off on a formal policy in 2005 to increase the salaries of chief executive officers by 5 percent a year for 5 years. National cancelled this policy in 2009. By 2007 there had been a 375 percent increase in the number of public servants earning $100000 or more since Labour first came into power in 1999. A report in 2008 stated that in just 2 years there had been a 43 percent increase in the number of Public Service staff earning six-figure incomes not including the chief executives. 
Between 2000 and 2008 we gained 28 percent more front-line doctors and nurses but 51 percent more people were working in the Ministry of Health. Over the same period the number of front-line public servants in the Ministry of Social Development increased by 23 percent but the number of policy analysts research units and corporate units has ballooned by 109 percent. Is that where we want to spend our taxpayers’ hard-earned money—in the back office? We need the back office but it needs to be controlled. We need front-line services and that is where our funding should be going. 
Let us imagine a Government that has a vision for high-performing science systems supports economic growth and a wider innovation system and encourages firms to increase investment in securing their future development. Well that is what the National Government will do. We will make an investment in the Primary Growth Partnership of $40 million increasing to $70 million this year and we will make an investment in our agricultural greenhouse gas emissions to ensure that our agricultural sector can have access to the very best research in this area globally. This is just the beginning of the list. 
This National Government is committed to science innovation and trade because that will be the future for our country if we are to grow our cake. It is about growing the cake; it is not about how many ways we can slice the cake. We can keep on re-slicing the cake but if New Zealand really wants to get ahead we have to grow that cake and that is what this Government is focused on. 
Ten separate streams of work covering economic growth are under way. They are areas like infrastructure urban design and critical work improving New Zealand’s freshwater management. The Government will be releasing a raft of discussion documents for public consultation on the many potential changes we are looking at but one of them will be a change to the Crown Minerals Act. The mining of minerals is an untapped resource in New Zealand and it is one that New Zealand can benefit from economically. This has to be done in a considered manner to ensure that the environment is not harmed but we should be looking at it as a viable option for New Zealand because it can make us a much wealthier country. 
One thing I would like to touch on is our education in schools. I am the mother of three children aged 8 10 and 12 who are all at primary school. I can tell members now that as a mother what I want to see from my children’s reports is an understanding of how they are going where they are going and how they will get there. 
Hon Steve Chadwick 
: That’s what my children got. 
KATRINA SHANKS 
: That may be what the member’s children got but right here right now that is not what all the schools are delivering. 
Hon Lianne Dalziel 
: Do you get that for your children? 
KATRINA SHANKS 
: No I do not actually. I can tell members what I do get for my children. 
Kelvin Davis 
: Go and talk to the school. 
KATRINA SHANKS 
: I have talked to my school. I have been to see the principal and I asked her to work through the report because what I got this year for one of my children was a report that stated which level he was on and what he did. It was pasted out of the curriculum. As a parent I had to ask what that level meant to me. I had nothing to compare it with. It was just a level. Is my child above the level below the level or on the level and has he progressed at all? I just did not know. I could not tell. 
Is it too much to ask a school to report to the parents on exactly where a child is at and whether a child has improved from one year to the next or even from one 6-month period to the next? That is all we want. Many schools do that very very well but there are many schools that do not deliver that. As a parent of three primary school children I tell members that all I am looking for is a bit of transparency and some honest reporting. The school should tell me how I can help my children and whether they are progressing. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I was first elected to represent the electorate I now represent in 1999 the year that Labour became the Government. In the 9 years we were in Government I saw a change of almost unimaginable proportions in a part of my electorate that had suffered most through two decades of economic restructuring and one decade of ripping apart the social fabric that held communities together. When the renewal of Aranui began I hoped for good results but I did not for one minute really expect quite the extent of the gains that were made over that period in time. 
When the Government changed in 2008 I hoped that Aranui would be resilient enough to withstand the changes the new Government would bring and strong enough to maintain the momentum that had been built up over those years. I am pleased to say that despite the odds the people of Aranui are succeeding. But this Government is not making it easier for them. In fact it is making it much much harder for them despite the fact that the Aranui Community Trust has proven that it knows how to work in partnership with central government local government non-governmental organisations and all of the service providers that have an engagement with that community. The trust has a long-term strategic plan which it revises every 5 years and it has an annual business planning process. It has a very strict process in place. Both of those plans—the business plan annually and the strategic plan every 5 years—are based on a needs analysis that has been professionally prepared and updated in consultation with the community and all its stakeholders. 
What a great model they have there in Aranui! This is an amazing community which has given me real hope about what the future holds for an area that has been written off in the past by successive Governments and also I think by the wider Christchurch community. Even the response of the community to the tragedy of the murder of Tisha Lowry and Rebecca Somerville a candlelight vigil to remember the victims of violence and to commit to a community free of violence—that is the sort of thing that makes me really proud to represent them and my wider Christchurch East electorate here in Parliament. 
Why am I focusing on Aranui when we are addressing the Prime Minister’s statement to the House at the beginning of this calendar year? It is really because as Phil Goff says the Government must ensure that it considers the needs of the many and not just the privileged few. That is really why I want to speak in this way. I notice that the previous speaker talked about the need to grow the cake and we all agree that we should grow the cake. I think what we are concerned about on this side of the House is that we cannot for one minute allow struggling communities to be left with nothing but the crumbs. That is always the risk when someone is going to slice and dice the cake in the way that the Government has announced today. 
This Government has been chipping away at the very underpinnings of the transformation of Aranui. We did not hear that in John Key’s speech today did we? He did not draw attention to the things that his Ministers have been doing that are quietly chipping away at the foundations of a community like this. Let me run through a few of them. First the adult and community education funding cuts: in my electorate Aranui High School has completely lost all of its funding for adult and community education. That has destroyed adult and community education in Aranui and it has really set back Aranui in terms of its ambition—because I tell you what that high school is ambitious for its kids and its community. 
The cuts have set the school back about 3 years—provided we get back into Government in 2011 which I am certainly very ambitious to achieve—and its ambition to become a community college. That is what it wants to be. It does not want to be a high school. It wants to be a community college that meets the needs of its whole community and it is very well placed to do that given that it is in the middle of a rebuilding programme at the moment. I am going to the opening of the new technology block tomorrow and it will be fantastic. 
Aaron Gilmore 
: Tomorrow. It’s going to be good. It’s going to be great. 
Hon LIANNE DALZIEL 
: I am pleased to hear the National list MP Aaron Gilmore. I do not know whether he will be there but I hope he will be there backing this school which is the only secondary school in Christchurch East. What the Government has really missed in terms of that whole idea about community education is the whole question of infrastructure. It was supported by a mixture of volunteer and professional staff in terms of creating a cross-fertilisation of talent I guess I would call it between schools and communities. Aranui was no exception. I am surprised that Aaron Gilmore is chipping away on this because he was one of those who mocked the names of the courses that were being run at Aranui High School that were designed to attract people to learning opportunities that might otherwise have been considered daunting or unappealing. This school had done a fantastic job of reaching out into a community and getting people who had fallen out of the education system back engaged with the education system and I would have thought that the member would think that was a good thing but obviously he does not. 
The Government just does not get it about adult and community education. When this was pointed out to the Prime Minister I thought he was a little bit like Skipper the Penguin. I do not know whether members in this House have seen a movie called  
Madagascar 
 but someone pointed it out to me and in that movie whenever anything goes wrong Skipper says “Just smile and wave boys. Just smile and wave.” That really is the attitude that we have from the Prime Minister. 
As for the community nurse who was employed by the Aranui Community Trust and who was out in the community making sure that children and their parents were fully engaged with the health care they need her funding has been cut. There is no funding for a bottom-up initiative that works. We were told that only the bureaucracy would be cut in health. We were told that it was “out of the back office and on to the front line.” Well what about the closure of one of the union and community health centres in Christchurch which has had to close because the funding has been pulled so it could go to other services? 
How about the 1 hour a week of home help that has been ripped out of the homes of so many elderly people in my electorate which is absolutely outrageous? An 85-year-old receives a phone call from a person the 85-year-old has never met. This person is ringing from the district health board just checking up. The person knows the 85-year-old had an operation a couple of years ago. The person knows all of this personal information about the 85-year-old and asks to be updated on the situation. At the end of the conversation the person says the 85-year-old does not need 2 hours a week help with cleaning the house; just 1 hour will do. They are doing that over and over again. What would the Prime Minister say about that? “Just smile and wave Tony. Smile and wave.” 
What about the training incentive allowance which enabled so many of my constituents to get a tertiary education and become a nurse teacher or social worker or to get a degree in social policy because they could not quite hack the social work course when they were responsible for a child as the Minister for Social Development and Employment would understand. The Prime Minister’s statement said 100 domestic purposes benefit recipients coming off the benefit and into work would save the welfare system over their lifetimes $10 million. Why did the Government rip that money out of the training incentive allowance which got people into a job? I bet Paula Bennett took the advice she got from the Prime Minister on that one which was just “Smile and wave boys. Smile and wave.” 
Do not get me started on accident compensation. I have had case after case in my office as the Accident Compensation Corporation has clearly been advised to knock people out of the system without any due process. 
In the area of jobs Aranui has been affected like so many other areas in my electorate but for the first time I am meeting people who have never been in a Work and Income office in their lives. This is a true story: someone was told by a Work and Income official to just “dumb down” their CV. How about that for a pearl of wisdom? My constituent asked me how they should dumb down “chief financial officer”. Maybe it would have been better if the officer had just said “Smile and wave. Just smile and wave.” 
I felt that the Prime Minister’s statement was very disappointing. It was all words and no action and not ambitious for New Zealand at all. He continues to say that he wants New Zealand to match Australia and ignores the fact that everything National did during the 1990s was what separated Australia and New Zealand from the Employment Contracts Act on. The previous Labour Government managed to get real incomes starting to track towards each other again. I think this has been a very disappointing day devoid of a plan. It is another lost opportunity from a Government that has no plan no vision and no ideas for our future. 
CRAIG FOSS (National—Tukituki) 
: 
 It is a pleasure to welcome colleagues. I hope everyone has had a good summer break. I thought most people were working very hard over the break on some matters and I was wondering what lines of attack the Opposition would bring into this new year in Parliament. I am relieved to see that there are actually no new lines of attack whatsoever. 
I note that Mr Goff has obviously been very busy working on his grand economic plan over the summer break. He took a month and a half or so to come up with a grand plan that would cap the salaries of 16 public servants. It is very interesting—when the Government has a budget of about $60 billion and people with families are unemployed as other speakers have noted—that the Leader of the Opposition can come up only with a plan for 16 public servants. In 2005 that same member signed off on a policy that would have increased year on year salaries of chief executive officers by 5 percent per year for 5 years. That is 25 percent—5 times 5—before compounding. He then has the audacity to come out with that unusual policy headline-grab or whatever it was. 
I unfortunately have to note my disappointment in the Hon Shane Jones and his earlier speech. I have good money on Mr Jones occupying one of the front benches in the foreseeable future but after that speech which would probably fail Economics 101 I might have to cut back on some of my investments. 
I congratulate our Prime Minister on today’s statement. It is a pleasure to speak to this full programme of reform—not only economic reform but also social reform—which is badly needed after 9 years of deterioration of the New Zealand social and economic scene. This is a template for a step-up for New Zealand society. That is why most of us are in this Parliament: to make fundamental material change and improvement not only for the current generations but for many generations to come and to put in place a step change. 
I quote from the conclusion of our Prime Minister’s statement—they are very very good words—“The policies we intend to introduce this year will be a big part of the country’s improvement this year next year and into the future. The Government’s overriding concern is to improve opportunity fairness and security for all New Zealanders. As this statement has shown we have an active and comprehensive programme ahead of us in 2010 in almost every economic and social area. As a result New Zealand will be a better place to live work invest grow up and retire. There can be no greater result than that.” They are very very good words. I proudly stand by those words and will work this year with the policy programme to put them all in place. The programme puts in place the beginnings of a very ambitious plan for New Zealand to start to get us back into the global economic game in which New Zealand’s position has been deteriorating for the last 9 years. It lays out what changes we must make to unleash the awesome potential of our awesome country. That is exactly what New Zealand voted for on 8 November 2008. We would have liked to put these policies in place last year but unfortunately we inherited a recession and an absolutely appalling state of Crown accounts. Labour put New Zealand into that recession in January 2008—1 year before the rest of the globe. The tradable sector in New Zealand had been in recession since 2005. 
There has been a lot of discussion about tax. Many facets and policies were announced in the Prime Minister’s statement but I will concentrate on some of those related to tax. I congratulate the Hon Peter Dunne on his earlier speech about tax and things that impact tax. I congratulate him again. The big wheel is moving into some alignment to bringing fairness back into our New Zealand tax system. I also reiterate our leader’s thanks and support for our support parties in Government: ACT the Maori Party and United Future. I thank those members and say that we are all on the same waka looking towards and working for a much better and brighter future. 
I congratulate the Tax Working Group for the way it laid out its options and alternatives; those things have provoked great discussion. I note and reiterate what is off the table. A capital gains tax is off the table. A land tax is off the table. A risk-free rate of return method is off the table. What is on the table? Lower income tax rates are on the table for discussion. Lower company tax rates are possibly on the table for discussion. Obviously alignment of trust rates is on the table for discussion. Changes to the tax treatment of some residential investment properties are on the table. Changes to GST are being considered—that is right. But any changes we make in any part will be fiscally neutral. The vast majority of New Zealanders will be better off and have a brighter future. It is about bringing back fairness and equity after 9 long years of unfairness jealousy and green-eyed tax policy from the previous administration whose first job when it became Government in 1999 was to hike rates to 39c—the highest marginal tax rate—as other members have spoken about which caused so many problems. 
Where does Labour stand from what we have heard today? I mention just a couple of things. Mr Cunliffe spoke earlier. Where does Mr Goff stand? What does Labour want? Another speaker seemed to talk about a larger State and a larger Crown account. That translates to a larger deficit and larger borrowings. I am glad that at least Mr Cunliffe has confirmed and I think Mr Jones confirmed that Labour wants to tax our homes. It wants to have a capital gains tax and tax our residential homes. On Labour’s blog Mr Mallard—a previous Associate Minister of Finance and I think Associate Minister of Commerce; Mr Mallard will excuse me if that is not correct—says Labour wants to hike rates to 36 percent. Labour wants to hike rates. Old habits die hard. Its mouthpiece its blog said it wanted tax rates to go to 36 percent. It wants company tax to go from 30 to 36 percent individual tax to go to 36 percent and trust tax to go from 33 to 36 percent. That is what the Labour front-bench member said and it has pretty much been confirmed today by Labour’s spokesman on finance Mr Cunliffe. He talked about the highest rate and nothing else. It is balanced; it is a balanced approach. 
I will talk about GST. Phil Goff says he is against it. In 1986 he voted—he had to; I think he was a Minister—to take it from 0 to 10 percent. When he was in power his Government introduced it. In 1989 when he had even more power his Government took GST from 10 to 12.5 percent. He said he was not for that increase way back then. What did he do when he was an Associate Minister of Finance for the last 9 years from 1999 to 2008? What did he do? Did he lower GST when the surpluses were in place? If we take his arguments against any increase in GST and turn them round we must ask whether when New Zealand had a surplus the previous Labour Government lowered personal tax rates. No—it hiked them. Did it lower GST to offset the pain those members have been talking about? No it did not. Where is Labour? It is all over the show. 
The Tax Working Group says the tax system is broken. We know that it is broken. It has been broken for quite some time. It started when Labour put its envy tax on in 1999 and drove Kiwis across the Ditch. Actually it hurt middle and lower-income earners in New Zealand more than any other group. I very much look forward to the next election when Labour campaigns on what its members have said today: an increase in income tax rates and company tax rates. Mr Mallard and the rest of the front bench have all argued against what we are proposing today in the Prime Minister’s statement. Therefore the only way they can go is to increase New Zealand’s taxes and quite probably put a capital gains tax on our homes. Well that is off the table as far as this National Government is concerned. Thank you. 
STUART NASH (Labour) 
: 
 I can confirm for the people of New Zealand that Craig Foss does not speak on behalf of the Labour Party in terms of tax policy at all so everything they have just heard they can completely discount. Mind you that seems to be the theme on the National benches today. I must admit it was amusing when all the troops on the other side of the House all stood to attention for the Prime Minister after he finished his speech. As Lianne Dalziel has just mentioned the members on that side are all like the penguins on the movie  
Madagascar 
. They watch Key and they do not understand what he says because he actually does not say anything but it does not matter as long as they just stand up and “Smile and wave boys. Smile and wave.” 
The Prime Minister’s speech is a statement that bodes well for the future. It bodes well for the future of Labour and Phil Goff that is because it really contained nothing of substance nothing that one could really get one’s teeth into chew and digest. In fact what little substance there was completely bypassed the digestive tract and immediately came out the other end and was recognised for what it is and boy does it smell like right-wing offal! 
Sitting suspended from 6 p.m. to 7.30 p.m. 
STUART NASH 
: I was in the process of saying that the Prime Minister’s statement to Parliament was a little bit like a wine tasting when expectation is built up and the bottle promises much— 
Hon Dr Jonathan Coleman 
: Oh that’s not very Labour language mate. 
STUART NASH 
: —only for the taster to take a first taste and spit it out in disgust at the foul taste I tell Dr Coleman. It is the sort of taste that I can imagine many hard-working Kiwis will be experiencing when they do the sums on realising that the National Government is planning on increasing GST by 16 percent. That contradicts a statement made by John Key on 20 October 2008 when he said that if National did a half-decent job of growing the economy then increasing GST would not be necessary—enough said. 
Yes the Prime Minister was right when he said in his speech that the tax system changes people’s behaviour—voting behaviour I believe in this case especially when it comes to a tax like GST. Lange might have said that even drug pushers have to pay GST but so do the 78 percent of hard-working New Zealanders who earn less than the average wage who are not drug pushers but who are the backbone of this wonderful country. They are working like hell to get ahead and once again as with the tax cuts of last year when anyone earning under $40000 did not get even a bone National has pulled the rug out from underneath their feet. What about them I ask Mr Key? 
The main reason I find increasing GST so difficult to stomach is that it is regressive. It means that the less one earns the greater the percentage of one’s wages or salary that must be paid in GST. The Government’s Tax Working Group says that it is not regressive because “people tend to base their current spending decisions on not simply their current income but also their expected life-time income.” Well maybe they do that when they are purchasing a house but there is no GST on houses and I suspect that the 78 percent of hard-working Kiwis who earn under the average wage tend to base their current spending decisions on what they can afford at the supermarket to feed their family how much the school donation will be how much it will cost to feed their children how the hell they can afford to pay the power bill this month when the city council’s rates are due and how they will find the dollars to fill the car to get to work to earn the money so they can pay the increased GST in order for the top few to have a tax cut. Even Bill English has admitted that a rise in GST is unfair on families already struggling with the effects of a recession. 
I would like to relate something of interest published in the Tax Working Group’s report. It is a graph that shows the effects on growth of tax in public spending. The No. 1 form of public spending identified by Treasury officials to promote economic growth and included in the Tax Working Group’s report is infrastructure. For example in Hawke’s Bay the local residents paid a 6c per litre tax that was levied only in the Bay on petrol sold in the Bay. The $81 million collected from that levy was to be spent on Hawke’s Bay roads in order to drive Hawke’s Bay infrastructure and economic growth. But this Government stole—yes it stole—that money from Hawke’s Bay and put it into the consolidated roading fund. So who knows where it has been spent? 
Hon Pete Hodgson 
: It’s outrageous. 
STUART NASH 
: I agree: it is outrageous. I tell the people of Napier and Hastings that it is not being spent on roads considered vital to Hawke’s Bay’s economic growth and that is disgraceful. 
The second major item of public expenditure to increase economic growth according to Treasury and the Tax Working Group is education. But in Hawke’s Bay as around the country there are no more night classes because this National Government has cut adult and community education spending. So in the Bay the 6000 people who were taking adult and community education courses and the 350 people who were employed as tutors are now no longer pumping an estimated $10 million into the Hawke’s Bay economy. The Bay is going backwards under National and it is not what its people voted for. 
I am assuming that Mr Key has signalled a tax cut to the top marginal tax rates because he was informed by the Tax Working Group that “In 1989 New Zealand’s tax system was regarded as one of the least distortionary in the OECD. Its tax rates were comparatively low: the corporate and top personal tax rates were 33%”. But the report does not go on to say that in the 1990s New Zealand had 26 percent unemployment amongst its Pasifika population and 21 percent unemployment amongst the Maori population. But oh we had one of the least distortionary tax systems in the OECD. 
I tell the Tax Working Group and Mr Key that sometimes it is not just about the money. Sometimes we have to ask what the human cost of having one of the least distortionary tax systems in the OECD is. The cost last time was horrendous I tell Sir Roger Douglas. I would support 100 percent the findings of the Tax Working Group around tax alignment to the company trust and top marginal rates if with one of the least distortionary tax systems in the OECD companies and jobs came flooding into this country resulting in massive employment opportunities for those who were struggling. But this was not the case. Our deregulated economy with one of the least regulated tax systems nearly destroyed the fabric of our community. 
At the Tax Working Group conference there was a lone voice amongst the wilderness. Many were there talking about radical changes that would improve the viability of our broken system—flat taxes capital taxes land taxes increases in GST the dreadful effect of Working for Families and the heavy burden borne by those in the top 10 percent of taxpayers etc. But then a woman stood up a very well-qualified and incredibly able woman and she spoke for those who were not represented at the conference. Dr Susan St John asked the question: what will these proposed changes mean for the disadvantaged in our society? In fact 350000 hard-working Kiwi families receive the Working for Families hand-up. The percentage of children in poverty has dropped from 26 percent in 2004 to 19 percent in 2008. That is still far too many but we are making progress. Why were so many children in poverty? It was because of the economic changes of the 1980s and 1990s. 
Those wealthy well-educated and extremely articulate tax practitioners were talking about Working for Families as if it were just a series of numbers on a spreadsheet to be tossed around and manipulated. Well I say to Mr Key with the greatest of respect that I can assure him that for many of those 350000 families the hand-up provided by Working for Families is the difference between survival and something more insidious. By all means the Government should close down the loophole that about 2000 people are taking advantage of but it should not dare tinker with the livelihoods of 350000 hard-working Kiwi families. 
Susan St John’s presentation for me was the most uplifting because she was the only one who spoke up about the social implications of changes to the tax system. She spoke for the many not for the few as Phil Goff did today for the 78 percent of Kiwis who earn below the average wage. People listened to her rather uncomfortably because what she said they did not want to hear. She asked: “Is the focus on the company tax rate actually the right focus?”. Susan St John finished and the next chap gave a talk on the benefits of increasing GST: how much money could be raised if the Government raised GST to 15 percent 17.5 percent or 20 percent. It was as if Dr St John had not even spoken and the very strong impression I got from listening to Mr Key’s speech today is that she has not been heard. This is a great shame because she makes a lot of sense. 
I suppose we dared to believe that the speech today would be radical. At least Mr Key could have had the courage of his convictions but he really is the new “hollow man” of New Zealand politics. As for his team I say to them: “Just smile and wave; boys. Just smile and wave.” Thank you. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 I am very grateful for the opportunity to speak in this very important debate following the Prime Minister’s statement. The Prime Minister’s speech was not only aspirational practical and wide-reaching but extremely forward-looking and positive for all New Zealand and he got the standing ovation that he deserved. But what a treat it was to see the smile on Shane Jones’ face by the time Phil Goff had finished his speech. Shane Jones knows there is an opportunity coming. Phil Goff and Labour lost all their credibility this afternoon. In fact Phil Goff claimed that he opposed the introduction of GST yet he was in the very Government that introduced GST. If there was any legacy of that 1984 to 1990 Government that commentators around the world have applauded it was GST and the fair way in which it was introduced. Yet today we heard Phil Goff perhaps in true Judas-like fashion deny that he had voted GST in. 
This afternoon Phil Goff went on to say the Governor of the Reserve Bank was right. In my view Governor Alan Bollard’s remarks about the possibility of New Zealand catching up with Australia were pessimistic and dour. They were a bit like those of the last speaker. This is in sharp contrast with one of the great qualities of our Prime Minister John Key. He is optimistic and quick. He is determined through practical common-sense planning to bring about a brighter future for all New Zealanders. Phil Goff literally lost his mojo this afternoon. Any sense of credibility went out of the window when he claimed that the Government had no plan. How many times do we have to spell it out to Phil Goff that at the heart of the Government’s economic plan lie six main policy drivers let alone spell out the clear accomplishments and plans that have occurred in law and order in health and in education? They have been spelt out to Phil Goff time and time again. 
The first of the economic plans is to develop a world-class tax system. For 9 years all that the previous Labour Government did was to complicate New Zealand’s tax system and erode the ethic of “reward for hard work”. At the same time we watched New Zealand haemorrhage: 30000 New Zealanders crossed the Ditch to Australia every year. Under Labour 10 times as many New Zealand graduates left New Zealand permanently as Australian graduates left Australia. That was the legacy of the Labour Government. This National Government after a widely publicised and discussed tax task force will bring in a fair system that is simple and incentivises New Zealanders by rewarding them for hard work. 
The second area is the plan to deliver better public services. Under the previous Labour Government we saw massive growth in bureaucracy in the order of 30000 extra public servants. I repeat what Craig Foss mentioned earlier: that it was Labour that brought in a policy of increasing chief executives’ salaries by 5 percent a year for 5 years. We immediately stopped that. But Phil Goff is campaigning on lowering chief executives’ salaries! There is only one word for that and I am not allowed to say it in this House. 
One of the worst areas where problems occurred under Labour was the health sector and there was a failure despite putting in $6 billion more to increase elective surgery in any way. In one year under this National Government and its clearly signalled plans to focus on front-line health services National has delivered an additional 11805 elective operations. That is a record annual increase. I will say that again. In 1 year this National Government has delivered an additional 11805 elective operations which is a record annual increase. There is a pathway of sensible practical plans after the ministerial review to clear up the mess that the Labour Government left in the area of health. 
The next area is support for science innovation and trade. When Phil Goff says there is no plan he forgets that under National this year the Primary Growth Partnership will be fully up and running with the Government investing up to $40 million alongside industry. That figure will increase to $70 million in the future. Phil Goff forgets that his previous Government had a plan to bring in an undirected tax credit which would inevitably have been rorted as similar schemes have been around the world. He forgets that Labour’s so-called Fast Forward Fund although sounding large in number was not an economically sensible way to fund anything at all. Phil Goff also forgets that one of the most positive initiatives if not the most positive initiative that came out of the Copenhagen conference last year was New Zealand’s initiative for a global research alliance to drive much-needed research on agricultural greenhouse gas emissions. This is good for science it is good for New Zealand and it is good for the world. I am extremely excited by the facts that the National Government has appointed a science adviser of the calibre of Sir Peter Gluckman and that John Key has said science and innovation will be at the centre of the National Government. To put it in John Key’s words we have made this area a priority for new spending in this year’s Budget with a focus on boosting business research and science capability. I say to Phil Goff he should just try to concentrate. This is all part of a well-thought-out integrated plan. 
The first of the other three areas is investment in infrastructure where we will invest $7.5 billion extra in the next few years. The second is regulatory reform where the first tranche of reform has already been done and the second tranche of reform of the Resource Management Act is about to begin. The third area is education and skills. How can Phil Goff say there are no plans when under his previous Labour Government over 20 percent of our children left school without the appropriate skills to get a job in the new world? National has a very clear plan which is to introduce national standards to years 1 to 8. The vast majority of parents want this to happen for our children. 
Finally I mention that over the last 2 weeks I have had the privilege to attend both the Ratana and Waitangi celebrations. There is a great new mood; it is one of collaboration and aspiration. Under the coalition Government of the National Party Maori Party ACT Party and United Future there is a bright future for all New Zealanders. Phil Goff is wrong: National has a very clear plan. His problem is that he is not included in it and the smile on Shane Jones’ face is getting wider and wider. 
Dr KENNEDY GRAHAM (Green) 
: 
 The Prime Minister has delivered his opening statement to the House today—what he believes is the nearest thing to a statement of vision his Government can offer this country. I take the opportunity to contrast his National vision with the Green vision of New Zealand in 2010. 
This 2010 statement of the Prime Minister is the first substantive elaboration of his original vision in the Speech from the Throne in December just over a year ago. The 2009 Budget was an exercise in retrenchment during the recession so this 2010 statement is what the Government clearly wishes to be judged by. Let me offer a judgment. It is a judgment that reflects a different world view a different perception of the world out there and the place of New Zealand within it. Right from the Speech from the Throne the Prime Minister stated that the overarching objective of his Government was to drive the economy. This objective has come through loud and clear in today’s statement. The Prime Minister stated: “Our eyes will be firmly on the economy this year … The coming year will continue the Government’s focus on the economy and on jobs.” To achieve this the Government has six main drivers: enhanced taxation better public services support for science better regulation infrastructural investment and educational improvements. These National Party drivers are for the goal of lifting our economic performance. 
Some of these drivers are intrinsic goods provided they are within the right context. But let me offer six alternative drivers for a prosperous and a sustainable economy not one that is maniacally addicted to dirty growth. The Green Party’s drivers are as follows: one an alternative macroeconomic framework of sustainability; two fiscal reform for sustainability; three new macroeconomic accounts that employ sustainability indicators as well as traditional indicators and replace GDP with the genuine progress indicator; four sharing the available work and improving work-life balance; five tackling systemic inequality; and six reversing the culture of consumerism. These drivers would replace the Government’s six drivers to better effect for a green economy for New Zealand. 
The main flaw in the National Party’s economic vision is the false premise on which it rests. National believes that the way to lift the country’s economic performance is through continuous economic growth. The Greens do not. National regards the contemporary age as constituting an evolutionary linear direction. It is business as usual for economic growth both global and national. The global economy must recover from the recession and must recover its growth pattern; anything less than 2 percent growth is regarded as recessive. In advancing its world view of unlimited economic growth National does not focus on the global context. In contrast the Greens contend that in today’s world prosperity is possible without the mindless focus on “come what may” dirty economic growth that inspires the Government’s benches. 
As it happens we agree with the Government that there is need for greater innovation in the New Zealand economy. As Dr Russel Norman said earlier today the sooner we embrace the green technology revolution the more prosperous our national future will be. It is the smart green economy that will deliver for our children. That does not include coal mining raping our conservation estate feverishly surveying for oil within our territory or polluting our waterways in the name of supplying a particular white liquid to Asia as a new kind of 21st century colonial farm. 
The transition to a sustainable economy can be made in time to avert dangerous climate change but it will not be made with the economic orthodoxy of the kind we were treated to this afternoon. As Tim Jackson points out: “Every society clings to a myth by which it lives.” Our generation’s myth is mindless economic growth. For the past five decades the pursuit of that growth has been the single overarching policy objective around the world. The global economy is almost five times the size it was half a century ago. If it continues to grow at this rate in the 21st century—and it is Government’s policy that it does—the global economy will be 80 times larger by 2100. Just in the last quarter century the global economy has more than doubled but 60 percent of the world’s ecosystem has become degraded or overexploited. So the myth has failed us—or at least our 2 billion fellow humans who live on $2 a day. 
This afternoon we lamented the plight of the Haitian people. But this response was because of a natural disaster. They have lived on the edge of existence for years yet we have largely ignored their plight. The global economic crisis presents us with a unique opportunity to invest in truly far-reaching change to adopt a philosophy of global sustainability and a series of national policies designed to reflect that and to achieve a lasting prosperity for our children. “Prosperity” as Jackson says “consists in our ability to flourish as human beings—within the ecological limits of a … planet.” The challenge to our society is to create the conditions under which this is possible. That is a challenge that this Prime Minister shies away from. Steeped in orthodox economic and financial theory—and indeed supremely successful from such orthodoxy—he would rather regurgitate more of the same even as he sees the train wreck approaching. He would rather not confront the obvious. 
Where in the Prime Minister’s statement was the recognition that Earth is finite that New Zealand is finite in both size and capacity and that one cannot continue to grow the global economy or our national economy at a continuous rate for ever? Where is the recognition that both the global and national economy must be maintained at a sustainable rate that remains in harmony with the natural resources around us and that we cannot pass on to the next generation a country that has a net depletion in resources? We cannot that is if we wish to avoid having our names cursed and among all our Prime Ministers this one wishes above all others to be liked presumably in posterity as well as today. Where is the lament over the degradation and death of the coral reefs the acidification of the oceans the continuing deforestation of the lungs of the planet the steady erosion of the soil the diminution in the supply of fresh water and the melting of the planet’s ice? Does the Prime Minister really believe that New Zealand is immune from such global trends or that if we are not immune we are at least sufficiently well off relative to others? Does he believe that we can leave it to them to clear up while stealing a competitive march on trading rivals to enable our Kiwi battlers to get ahead? Where is the acknowledgment that the global oil industry has reached or is about to reach peak production and that the coal industry around the world is so polluting to the atmosphere that we cannot avail ourselves of the source any further? Where in today’s oration was the concern above all else—the Prime Minister’s abiding concern—over the prospect of climate change? 
At Copenhagen—a conference he studiously sought to avoid and was persuaded to attend only to avoid censure from those he wishes to please—it was clearly established among the international community that a threshold of 2 degrees Celsius was essential to avoid dangerous anthropogenic interference with the climate. The Copenhagen Accord that passed for agreement at the conference proved to be a vapid document—a damp squib—yet our Prime Minister declared it was a document he could live with. Well of course it was; he will not live to see the consequences. But his children will. The New Zealand youth delegation at Copenhagen wrote to him while he was there requesting a meeting. He ignored them. He did not reply; he simply left for home. The youth of his country went to the most important global conference of all time. He is representing all New Zealanders and that includes them. They wish to meet him; he heads off for home. Is that the way to provide leadership? Is that how he values the next generation of the country he leads? Rather than disarmingly producing orthodoxy the Prime Minister should listen to the voice of youth. They have some things to say. 
Hon HEATHER ROY (Deputy Leader—ACT) 
: 
 I rise to speak on behalf of the ACT Party in response to the Prime Minister’s statement. The previous speaker Kennedy Graham lamented the vision that the Prime Minister outlined and the plans he has put in place for moving New Zealand forward with an emphasis on the economy. The ACT Party is very supportive of course as one would expect of that approach. I comment that at least the Government has a vision for this country unlike the speech delivered today by the Leader of the Opposition who would have been much better advised to read out Sir Roger Douglas’ speech that he provided for him yesterday. 
That aside I was delighted as an Associate Minister of Education to see the statements that the Prime Minister made today regarding education. He said: “Reform is needed to better equip New Zealanders particularly young New Zealanders to face the significant economic challenges they will face in an increasingly competitive world. In this regard there is no more important area for reform than education.” He is absolutely correct. Education is the key to improving people’s opportunities and chances of leading a productive life and contributing well to society. He went on to say: “This Government views our education system as one of the fundamental tools for creating an egalitarian society where all New Zealanders have an opportunity to succeed.” Reaching their full potential is what we should be aiming at for each and every one of our young people attending schools. 
The National-ACT confidence and supply agreement was discussed by the ACT Leader Rodney Hide in his speech in response to the Prime Minister’s speech. He outlined the successes that we have had in the past year and where we would like to put our emphasis in the coming year. One of the areas in our confidence and supply agreement that I will talk about this evening is education. We put together our inter-party working group to consider and report on policy options relating to the funding and regulation of schools that will increase parental choice and school autonomy. The important thing of course is to enhance school choice. 
The National Party stated before the last election that it would work over time to increase the educational choices available to parents and pupils so that families will have more freedom to select the schooling options that best meet the individual needs of their children. ACT of course has always campaigned hard on school choice. We want to see greater choice and competition in education. That is very important because New Zealand needs to lift the level of education across the board. 
The inter-party working group worked steadfastly through last year and we are looking forward to soon releasing our report. The group which I chaired was made up of National MPs Hekia Parata Chester Borrows and Jonathan Young; Maori Party MP Te Ururoa Flavell; and I was joined by Sir Roger Douglas from the ACT Party. We visited a number of schools that excel in each of their areas. They varied widely from kura kaupapa schools to small area schools through to some of the larger urban schools. Each of them had one common theme. They explored the greatest potential of their students and focused heavily on outcomes which of course is what we want to see from all schools. 
Why is choice important? Why does ACT promote and campaign on school choice at every election? The answer is a simple one. Education is not one size fits all. Those people who have two children will know that no two are exactly alike and that their educational opportunities and their abilities vary widely. One cannot assume that just because the school around the corner might be the closest to where a family lives it is the one that best suits the children’s needs or that it will produce the outcomes that we want every child to have the opportunity to reach. 
To create and maintain an economically productive and competitive country we must provide every New Zealand child with a quality education that enables that child to participate in modern society. Every child should be able to read a bus timetable to read and write and to have numeracy skills that allow him or her to get through everyday life. Although some of our students are obtaining very high levels of achievement our current education system still fails one in five students. If this statistic is not of concern to each and every MP in the House it should be. The students who are not reaching the required standard and fail are not equipped with the skills necessary to make a meaningful contribution to New Zealand society. 
ACT proposes and has always proposed an education system that promotes accountability and innovation and creates real incentives for schools to raise standards and address student failure. That is not “mission impossible”. Many schools already achieve that standard but sadly too many do not. It is possible by extending school choice to parents and providing every family with the right to select the education that is best suited to their child and this is an important part of any democratic society. Such a system would entail encouraging a range of providers to enter the market. It allows schools autonomy and provides families with funding that follows their child to any school they select. Importantly this system would be supported by the provision to parents of good information on schools and a competent workforce of teachers. 
The national standards have been in the news for the last couple of weeks. It is actually pretty difficult to understand the vocal opposition that the opponents of national standards are in the midst of at the moment in a frenzy to slow down the progress and in some cases to stop it. 
The national standards are a particularly valuable contribution to our current education system. They will provide clear benchmarks against which expected levels of student achievement can be measured and they will provide parents with the information that they want—in fact demand—and have requested on their child’s educational progress. If student failure is to be attacked and it should be it has to be identified and addressed. National standards are crucial to this happening in a meaningful way. If parents are to be active participants in their children’s education they need to have a clear idea of how they are progressing how they are doing what they can and cannot do and the quality of education that their school is providing. 
A well-educated society ensures that every member has the capability to make a significant contribution. This is the making of a productive and prosperous country that is capable of overcoming challenges and participating in an increasingly globalised and sophisticated society. 
Why are national standards important? I have touched on some of the reasons. The Government has responded to a request from parents asking for access to clear and plain language reporting on their child’s progress. Any parent will be able to tell of reports they have read where they do not understand the language that is being used they do not understand what the teacher is trying to tell them and certainly in many respects they are not a reflection of the child they know. Parents access information in any way they can—formally when this is available and sadly this is too often not the case and informally through networks. Many people choose a school—mothers in particular will choose a school for their child when they have a choice—as a result of what others around them are telling them; that is information they are getting in a very informal sense. This is not the best way to make decisions but they are getting information of one sort. 
Parents have a right to the same information that is available to schools. As I said previously if parents are to be active participants in their children’s education they need a clear idea of how their child is progressing and the quality of the education their school is providing. Parents do want information on their child’s progress and the national standards provide the infrastructure to ensure that this is available. The policy has drawn criticism and generated much controversy but why should we be content in the knowledge that one in five of our schoolchildren is failing? The fact that we are content as a nation to sit by and allow the status quo to continue is a terrible injustice and it needs to be addressed. 
That is why school choice is important why the ACT Party will continue to promote it and why I am looking forward to being able to release the report that the inter-party working group has worked long and hard to produce. It will inform the country on ways that school choice can be put into place so that all children can benefit. The level of education across the board not just in the good schools will be enhanced significantly. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 A statement made by the Prime Minister in his speech this afternoon was one that I am sure will be endorsed by every single member of the Maori Party. I am talking about the 23000 members of the party not just the five in this House. It was the recognition that he was “impressed and heartened by the resilience and optimism of New Zealanders and by their desire to do better for themselves their families and their communities.” 
As I travel across Te Tai Tonga I am frequently in contact with people who are struggling to survive. The median family income for my constituents is $54500—some $5000 less than the median family income for New Zealand as a whole. That $5000 makes a difference at the petrol pump at the supermarket checkout at the pharmacy and at the bank. Today we are asking those same people to agree to a rise in GST to 15 percent. 
GST of course is an issue dear to my heart. Tomorrow I will once again submit to the ballot my members’ bill the Goods and Services Tax (Extension of Healthy Food) Amendment Bill. This bill has directly responded to the situation for the people of Te Tai Tonga and for the people of the Maori electorates—everyday New Zealanders who are powerfully motivated by the desire to do better for themselves their families and their communities. These everyday New Zealanders have suffered from the impact of food prices that have risen by more than 20 percent in the last 3 years while real incomes have risen only very slightly. Within that we know that increases for the staples of a nutritious diet such as fruit vegetables and milk have been particularly high. In response to the long-term impacts this could have on public health organisations such as the Public Health Association of New Zealand and the National Heart Foundation have called for GST to be removed from foods that constitute a healthy diet in order to make them more affordable. I repeat their call is for GST to be removed not to be rocketed up to 15 percent. 
I want to make it absolutely clear that the challenge faced by many of our families is of the harshest kind. It is our families who suffer from the reality that New Zealand’s after-tax distribution is one of the most unequal in the OECD. It is our families disproportionately who are suffering from the unacceptable level of child poverty with rates so dire that the 2008 survey of living standards reported that 19 percent of children were experiencing serious hardship and unacceptably severe restrictions on their living standards. These are the faces of the families that I bring with me into this debate. 
We are pleased that our consistent call to remember these families has been reflected in the announcements made earlier today by the Prime Minister. We have welcomed the decision of the Government that any decrease in personal tax will be made across the board. If there are across-the-board personal tax cuts then we will certainly be doing everything we can to ensure that our people will see some sort of benefit. 
We have certainly noted the statement of the Prime Minister that fairness is a very important consideration for this Government so we will be talking closely to the Government about finding a common context for what we mean by fair. Is it fair that 51 percent of beneficiary families with children are ranked as experiencing serious hardship? Is it fair that 28 percent of families with children had serious health problems for at least one child in the past year? Is it fair that for 22 percent of families keeping the house warm is described as a major problem with another 17 percent saying that dampness and mould were major problems? 
The challenge we face as a Parliament is to ensure that the current levels of inequality and poverty are not intensified by the tax package highlighted today. It would appear that we are shifting the burden of taxation from the people who can pay it to those who cannot. For those at the top income level there are ways and means of claiming back GST: they can set up trusts they can increase rents they can make the end-user pay. But for those at the bottom level there is no other place from where they can claim the money back. So we will be greatly interested in the discussions around fairness and equitable outcomes particularly as they relate to low incomes. The key thing for us is that there is an opportunity for dialogue and within that we hope to put forward some of the key ideas that we have promoted from the Maori Party. So I go back to that collective desire that I hope we share across this House—to respond to the aspirations of people to do better for themselves their families and their communities. 
As a first start we must do something about the unacceptable levels of serious hardship that compromise living standards. We must increase the minimum wage and by more than 25c. We want to see a minimum wage of at least $15 an hour. We are greatly pleased that benefits superannuation and Working for Families support will be increased to assist people on low incomes but if we were really to show a level of responsibility for those more vulnerable we would put in place measures to ensure that the first $25000 of income is tax-free. We need leaders who see that small is the new big. We need visionaries who can create opportunities for a new economy and who are not mired in old thinking or tainted by the existing economy. We need more Grameen Banks; we need community banks. Vision is what we need not more of the same. As a coalition partner with the Government we expect to be involved in discussions concerning the nature of the income support provided to New Zealanders. We support the goals of reducing dependency on benefits but it is absolutely critical that at the same time we maintain an appropriate safety net for those in genuine need. 
We are really concerned about the vulnerability of sole parents to fluctuating income. Sudden change can often have a detrimental effect on the whole whanau. We know that far too easily families go further into debt just to meet the basic costs of food rent and power. For too many of these families the opportunity to take up full-time work is simply not available. Although we are supportive of the efforts to gain better entry for Maori into the workforce we will not accept any proposals that threaten the capacity of whanau to be able to maintain a reasonable standard of living. We do not want to see our whanau in a worse-off position through any of the ideas being floated. In this regard I am honour-bound to remind the House that in the design of the Working for Families scheme its policy architects effectively cut out the poorest 200000 children who have been left floundering in increasing poverty. 
Finally I bring us back to a concept that resonates with tangata whenua: he aha te mea nui o te ao? What is the most important thing in the world? He tangata he tangata he tangata. It is people it is people it is people. Thank you. 
Hon SIMON POWER (Minister of Justice) 
: 
 Today we heard the Prime Minister set the agenda for 2010 and into the next general election. The debate of ideas has begun today in the tax area the conservation area the public services area and the science and innovation area and from today what will be just as interesting will be to see how the Labour Opposition positions itself in respect of many of these issues. 
Today we heard the Prime Minister talk about capital investment as one of the key pieces of work that the Government has been undertaking. The Capital Market Development Taskforce which was started by the Hon Lianne Dalziel and continued by me in my commerce role reported just before Christmas and we are expecting the Government to respond in some detail to that report in the very near future. Measures to promote investment in capital markets will be critical to that—the large piece of work around the Securities Act review; legislation that has not been reviewed in 35 years but will be critical for getting a savings and investment culture into our capital markets. The single economic market concept with Australia something that I am lucky enough to have been charged with is likely to move into a new phase of vigour in 2010. I can see my colleague Darren Hughes over there chuckling to himself at the prospect of my having to spend a bit of time out of this Chamber while we work on that agenda over the course of the next short while. This is a critical component of showing our international competitiveness and of aligning those regulatory regimes in the securities insolvency and court proceedings areas with our Australian counterparts to ensure the free flow of capital and business transactions across the Tasman. 
In the justice area 2010 brings a huge amount of work to this Parliament. Work around the simplification project for the criminal justice processes will overhaul the way the criminal justice system works probably in the most significant fashion in a number of decades. An overhaul of legal aid and the way that that operates within the justice system will also be a critical component of ensuring that efficiency is what drives the court system and that rather than using a debate about the court system and having that debate from the perspective of lawyers judges and lawmakers we have that debate through the eyes of those people who find themselves in the criminal justice system through no fault of their own. The delays they have to experience and unusual practices that might be slightly arcane and archaic in nature need to be looked at. The legal system belongs to the people of New Zealand and it must continue to develop and continue to evolve. Our legislative processes have to reflect that ongoing evolution in the way that we practise law and the way our justice system operates. 
A big discussion is looming in the area of alcohol in 2010. The Law Commission is due to report to me at the end of March or the beginning of April with a piece of work that has taken many many months to conduct. Of course against all of that background there are two significant pieces of work around our electoral system: legislation around the electoral finance changes that have not just been worked through by the Government but had ample opportunity for the public to have a say on how those processes should fall out and legislation dealing with a referendum on MMP is also shortly to make its way here following some consultation and further discussion across Parliament. 
A lot of work is coming out of those areas in 2010 but I cannot leave this opportunity without making the odd comment about what we witnessed in this Chamber today from Mr Goff. For me Mr Goff started strongly enough when he stood up but he started to speak and one of the first sentences out of his mouth was “I do not support GST.” That tells us there is no denying the baggage of a political career that stretches over nearly 30 years. This is the man who sat in Cabinet when GST was introduced and who sat in a Cabinet that increased GST. The problem with having nearly 30 years of political history and baggage on one’s back is that one can only recreate oneself so many times. The problem with an institution like Parliament is that we have very very long memories and everybody in this Chamber whether a participant at the time or a student of political history realises and remembers Mr Goff’s critical role in those decision-making processes. 
I will tell members what I noticed most about Phil Goff’s speech today. It was not Phil Goff; it was Shane Jones. I found it just fascinating and so it begins. The odd hint is dropped around the place about Mr Jones’ leadership aspirations. There is a quiet nod from the contender on TV in the weekend that he is interested in the job. There is a  
North and South 
 article out just today by Guyon Espiner promoting Mr Jones as the next Labour leader. I have to say having sat through 9 years in Opposition that I know the signs all the little bits that are working together and all the groundwork that is being laid; I have seen it all before. I have to say that the giveaway for me was that when the Labour supporters of Mr Goff were up and clapping famously for his speech I had a casual glance over to Shane Jones in this Chamber and he literally licked his lips. He knew it was all over and he was standing there thinking to himself that opportunity was coming his way. Everybody on this side of the House noticed it. 
Another thing I noticed about Mr Goff’s speech today was not about Mr Goff; it was about having a bit of surveillance over his colleagues what they were looking like and whether they were interested. Darren Hughes did his usual interested peer-over-the-leader’s-shoulder act and he is to be commended for this ongoing dramatic performance that he indulges in at every set piece that Parliament has. Jacinda Ardern also looked relatively interested from the back. She nodded occasionally at the odd salient point and at the odd point that was not so salient. 
I was interested in some others in the blocks opposite. Clayton Cosgrove was totally disengaged from the process. He had no interest in what was going on at all. Down in that corner Chris Carter was an interesting case. He is a man desperate to be seen as useful. Phil Goff is working through his mind the components of whether to do a reshuffle and whether he should have the older more experienced grumpy MPs on the backbenches or whether he should promote some younger more thrusting characters on the other side who are keen to be involved—those members who are quietly making their cases like Charles Chauvel and battling away in complicated areas like the emissions trading scheme and accident compensation. This is a man who thinks he is on his way up but Phil Goff cannot quite make up his mind whether he is prepared to take that risk. Poor old Chris Carter is desperate to be useful and is chipping in at every other opportunity. 
My old colleague Trevor Mallard is now clearly more interested in blogs than he is in politics. That man was sitting there reading blog entries on his computer while his leader was on his feet responding to the Prime Minister’s statement. Again he was totally disengaged. But it was the action on the cross benches during Phil Goff’s speech that drew the Government’s eyes and it is clear to us that Mr Jones has his path well and truly laid out. 
CHARLES CHAUVEL (Labour) 
: 
 Unlike the previous speaker Simon Power I want to address the Prime Minister’s speech and say a few words about it. 
Hon Simon Power 
: You missed the first half! 
CHARLES CHAUVEL 
: I am fortunate if I missed the first half because if the second half was anything to go by the rest of it would not have been a ripper. I want to point to three areas in the Prime Minister’s address where this Government is getting it wrong and where as a result New Zealand is being held back. Those areas are research and development climate change and energy and resources. 
I want to start with research and development because Mr Key said in his speech that science and innovation are key elements of the Government’s economic agenda both this year and into the future. I ask members how this Government has demonstrated its commitment to research development and innovation. The facts are that it began by dumping $700 million worth of existing investment in innovation in the primary sector. It then cut $300 million from research and tax credits for those very purposes. As Phil Goff reminded the House earlier today National did that while Australia was increasing its research and development expenditure by 25 percent. 
Hon Tau Henare 
: In Australia! 
CHARLES CHAUVEL 
: I tell Mr Henare that the truth hurts but Australia was increasing its expenditure by 25 percent. 
Hon Tau Henare 
: Why don’t you move to Australia? 
CHARLES CHAUVEL 
: The reason I do not move to Australia unlike a whole lot of Mr Henare’s rich Tory mates is because I am proud of this country and I want to see it do well. Unlike members opposite I do not believe in the Crosby/Textor strap-line that we need to catch up with Australia because that it all it is and members opposite know it. If members opposite need more evidence that this is just a Crosby/Textor strap-line here it is: under Labor Governments in Australia Australia is investing in those key areas while National just pays lip service to them. I was at the United Nations Climate Change Conference in Copenhagen in December and I saw more evidence of this lip service being paid to goals. When it became apparent at that conference that progress was not as good as it should be guess what happened? Tim Groser called a press conference to announce what he called a global agriculture fund. He said it was a cooperative mechanism between countries to look for solutions to greenhouse gas emissions from agriculture. I would like the House to take a moment to compare the global agriculture fund or “gaffe” for short with Labour’s initiative in this area the Fast Forward Fund. That fund was announced in March 2009 and the New Zealand Government committed $700 million to it. One of its purposes was to create new technologies to reduce agricultural emissions. 
Hon David Carter 
: It was $2 billion when Mr Goff spoke this afternoon. 
CHARLES CHAUVEL 
: I tell Mr Carter to just wait because I will get to that. After including earnings from interest the $700 million contribution from the Government would likely have reached $1 billion over the planned term of the fund. Matched with the funding from our pastoral and food sector industries that public-private partnership would have amounted to $2 billion of investment in primary production - based intellectual property. 
Hon David Carter 
: Ha ha! 
CHARLES CHAUVEL 
: That Minister thinks it is funny but that intellectual property would have been owned by Kiwis onshore to make a difference to our national interests here. In all likelihood that intellectual property would have seen us reach some solutions about emissions reduction technology. It would have been to the benefit of our own emissions profile and it would have enhanced our international reputation. 
Hon David Carter 
: No one even applied to it. 
CHARLES CHAUVEL 
: That Minister does not care about our international reputation but members on this side of the House are absolutely passionate about it. It would also have allowed us to exploit the technology developed commercially on the basis of that fund at potentially significant profit. If we decided not to sell it offshore at profit to our national economy we could have given away some of it in aid to developing food-producing countries. What a great solution and what a win-win—$2 billion worth of investment owned onshore and able to be directed by Kiwis for Kiwi benefit. What could be better than that? One would wonder. 
Hon David Carter 
: Why was it such a flop? 
CHARLES CHAUVEL 
: It was a flop because National scrapped it shortly after coming into office along with the tax credits for research and development. After confirming the funding for the global agriculture fund following Tim Groser’s announcement which we find is around $200 million it just pales in comparison to the $2 billion that would have been available under the Fast Forward Fund and worse the multinational nature of the global agriculture fund will inevitably mean that New Zealand will not own the results of any of the research it pays for. So as well as there being substantially less money for investment in the reduction of agriculture emissions New Zealand will be poorer because it will lose the opportunity to sell or share emissions reduction technology in our own singular area of expertise on our own terms. This is National’s commitment to research and development in a key area for New Zealand which is reducing our agricultural emissions so we can do our bit on climate change: divide the assistance that would have been made available by a factor of 10 and then make sure that New Zealand cannot control the outcomes of the research. That is National’s answer on research and development and it makes a mockery of what we heard from the Prime Minister earlier. 
Let us consider what John Key said about unlocking New Zealand’s resources. The Prime Minister confirmed that areas will be removed from schedule 4 of the Crown Minerals Act to allow for mining. Today he made it clear that whenever we hear the expression “unlocking New Zealand’s resources” he means mining our national parks. What did he really do? He confirmed that National has no forward-looking plan for New Zealand’s future. Was there any mention of our renewables advantage? Where was John Key who happens to be the Minister of Tourism celebrating the “100% Pure New Zealand” brand? Why was there a complete absence of any discussion of the possibilities of clean technology investment and all the jobs that that could create? Where is the vision beyond Gerry Brownlee’s desire to dig things up and send them offshore to be burnt? Phillip Mills Lloyd Morrison George Fistonich Geoff Ross Stephen Tindall Rob Fenwick Rob Fyfe and Jeremy Moon wrote to MPs last week about these possibilities. They included this book I am holding  
The Clean Industrial Revolution 
 
with their letter. I place my thanks on record for their correspondence. 
These people are some of our country’s leading businessmen. They remind us that New Zealand’s future should be focused on sustainable growth. They remind us that sustainable growth is not achieved by focusing on economic goals over environmental and social outcomes. Sustainable growth requires an integrated policy that merges economic environmental and social outcomes—the famous triple bottom line—to ensure that the needs of the present are met without compromising the prosperity and quality of life of future generations. Mining national parks and other high-value conservation land completely ignores environmental and conservation concerns and the benefits that New Zealanders derive from activities in our national parks and on the conservation estate. Areas included within schedule 4 have been identified as having high conservation value. That is why schedule 4 protects this land by preventing access for mining. Going down the path that John Key mapped for us today undermines the New Zealand brand as clean and green. 
Sandra Goudie 
: Thank goodness! 
CHARLES CHAUVEL 
: Well Ms Goudie was out with her chainsaw in the mangrove swamps in the Coromandel—we all know that. She is proud of it; look at her holding her arms up there with glee. That is what New Zealanders need to look at if they want to see the future of the environment under a John Key - led National Government. I am afraid it is not pretty. 
This Government is endangering New Zealand’s tourism industry and undermining our future. What a total tragedy that after only 1 year in office Paula Bennett and her ministerial colleagues have got so arrogant that they are not interested in listening to New Zealand’s leading business people—whose names I mentioned earlier—who are trying to show a way forward where we can have it all for the future. The National Party just does not want to know. My commitment as a Labour spokesperson in these areas is that the next Labour-led Government will not be deaf to the job-rich vision that these people have articulated for us. They know that it is the way to a clean and prosperous future. Labour will embrace that future. 
SANDRA GOUDIE (National—Coromandel) 
: 
 As I have often said the Opposition could not manage a piggy bank let alone anything else. I think the New Zealand public have said loud and clear that they could not have wished for anyone better than John Key and Bill English to dig them out of the hole that this country was rapidly falling into because of the Labour Government’s totally ineffectual leadership and management and its complete overspend of every single hard-earned taxpayer dollar. 
John Key has heralded a sea change. It is a new era that is positive pragmatic financially astute and dedicated to getting New Zealand back on its feet. National members care far too much to have allowed the suffering at the hands of members opposite to continue. We are determined to lift New Zealand’s productivity and economic growth as we continue to fulfil all the pledges we have made to New Zealanders. Our economic policies are aimed at shifting the economy towards exports and productive investment and away from consumption and borrowing. More exports and productive investment and less consumption and borrowing will make the difference and will also provide the jobs that keep our people employed. 
I will go over a few of the things that we have achieved in the short time that we have been in office. They far outstrip anything that Labour did during the whole of its 9 years—its very unfortunate 9 years—with its profligate waste. So what have we achieved? We have clamped down on gangs and P. We have taken action on violent crime including introducing tougher sentences for crimes against children giving the police the power to DNA test offenders arrested for imprisonable offences and putting in place stronger bail laws. We have boosted police funding and powers including providing $200 million for 600 extra police. We have passed anti-boy-racing laws which include the ability to crush the cars of repeat street-racing offenders. 
We have approved the roll-out of 720 Tasers to front-line police which will get under way this year. That is long overdue. Members will recall that the previous Government passed the buck about making a decision on Tasers. It could not make simple decisions that would have made a big difference in saving the lives of and giving some protection to our front-line police. It just could not do it. The National Government has no problem with making good solid decisions protecting and supporting our front-line police and getting the job done. And the police know that. They know that we have got their backs. 
We have passed laws that put victims first with on-the-spot protection orders and a victims’ levy and the Fresh Start programme for young offenders with its initiatives and programmes to steer young people away from a life of crime. Paula Bennett an excellent Minister is dedicated to that programme. It includes $72.4 million over 4 years for new youth justice initiatives. 
Our focus this year in terms of justice and youth crime is to reform the criminal justice system by improving legal aid court processes and victim treatment and to pass the Sentencing and Parole Reform Bill with its “three strikes” policy for the worst violent criminals. It will be interesting to see whether Labour once again passes the buck on that one. That bill is designed to provide appropriate consequences for offenders and ultimately to help New Zealanders to feel safer in their homes their streets and their neighbourhoods. We will reform the liquor licensing laws—something that was left to languish by the previous Government—with the purpose of reducing the crime and harm caused by binge drinking by reducing the number of liquor outlets in our communities. We will also pass the Fresh Start legislation with its new Youth Court orders and youth programmes to ensure that fewer young people embark on a life of crime. This initiative will be supported by a range of programmes and interventions. We will continue to support the police to develop new proactive crime prevention strategies expanding and intensifying the results demonstrated by new approaches in Counties-Manukau. 
We will roll out a new public-private partnership model for our prisons to bring innovation and fresh ideas to our prison system. But of course the Opposition does not support that idea. Those members do not have any fresh ideas so I ask how they could support the fresh ideas of anybody else. They do not have any innovation so they do not support innovation put forward by anybody else. We will boost prison capacity with container cells and double-bunking and I think that is another great initiative. So much was not done by the previous Government. In fact it made things worse. We all know that because of what it did to the bail laws. Those changes got people out of prisons early which meant that other members of the community were put in harm’s way. 
One thing that is very dear to my heart is tourism. I am delighted that tourism is one of the focuses of the current Government. It is one of New Zealand’s key export industries. What is more a strong tourism brand enhances New Zealand’s profile and benefits other exporters not just the tourism industry. Last year the Government boosted by $20 million the funding available to market New Zealand as a tourism destination and a number of new campaigns are being rolled out this year in key markets such as Australia the United States and China. We had up to a million Australian visitors during the previous year as Australians looked to travelling closer to home and that was absolutely fantastic. 
We also have the wonderfully successful 2011 Rugby World Cup tournament coming up. It is a priority for this Government. Ministers have ambitious programmes not only to ensure that the tournament is a success but also to maximise the wider benefits to New Zealand in terms of jobs and growth. That is why the Rugby World Cup website is such a great initiative; people can go on to that website and log their services accommodation or whatever else they might want to offer to overseas visitors. It is really important that people take up that opportunity. 
I digress for a moment to mention another tourism initiative. It is one of many that are happening around this country where communities get together and through a lot of hard work and voluntary effort create events. The Whangamata Beach Hop involves over 2000 pre-1970s vehicles. Up to 30000 people go to Whangamata for 4 or 5 days to look at all the magnificent cars. I defy anyone not to be impressed by that incredible event. In April there is the Festival of Speed in Whitianga. A boat races against a car and a helicopter. What could be better fun than that? It is fantastic. And there is drag racing with a difference: they do not use cars. Communities make a huge effort to get those sorts of festivals rolling in order to entice visitors and give them an experience they will never forget and will come back for. Those sorts of initiatives support our tourism industry support Tourism New Zealand and bring people to our communities. They bring visitors to New Zealand. That is how we will get back some of our productivity—through our tourism industry. 
I am delighted at the vision and the focus of this current Government. That is what will take New Zealand forward. It certainly will not happen through anything the Opposition has to offer. 
DARIEN FENTON (Labour) 
: 
 Mr Deputy Speaker— 
Paul Quinn 
: Oh a heavy hitter! 
DARIEN FENTON 
: Not so much of the “heavy” thank you. 
I wanted to say what a shame about John Key’s speech but now I also have to include the speech from Sandra Goudie the previous speaker because her speech was a real shame. It was really shameful actually. 
John Key and the National Government have talked up the Prime Minister’s speech and my goodness has it ever been put down. The commentators have dissed it and so will New Zealand. John Key has failed his “Big Tuesday” test. We in Labour are not surprised at that. You see it is one thing to come up with rhetoric and slogans during an election campaign and to parade up and down the country with a nice smile on one’s face but it is quite another thing to find real answers. It takes real talent and intelligence to come up with a step change as John Key likes to call it. But John Key has just proved to the country that he has not got it. Today we heard a mediocre speech from a mediocre Prime Minister and a mediocre Government. It was worse than average; it was a fail for National—a fail under the national standards that those members are pushing through. It was actually a D minus. 
I go back to saying that it is a shame about that speech. It is a real shame for the people who believed that the National Government would stop their kids from going off to Australia. What did we read in the paper yesterday? There is a skills shortage in Australia where the unemployment rate is 5.5 percent—30 percent lower than New Zealand’s unemployment rate—and it is looking for skilled workers. It is a shame about the people who believed that the National Government would be able to do something about catching up with Australia’s pay rates. Well we all know that that is rubbish. It is a shame about the half a million dollars that we wasted on the Don Brash manifesto which was in the rubbish bin almost before it was published. 
But then it is a shame about those workers who have lost their jobs in the last year. I feel that it is really shameful that workers’ hours have been cut and that they have been fighting pay freezes and there is more to come. It is a particular shame that workers on the minimum wage will receive a paltry—a miserly—25c an hour increase on 1 April. Those workers include the cleaners who work in Parliament. From 1 April they will be paid $12.75 an hour. It is a shame about all those people who have been laid off through no fault of their own with no redundancy pay and no compensation and there are no answers to that. I feel that it is particularly shameful that 2500 workers lined up for just 150 minimum wage jobs in South Auckland a couple of weeks ago. 
What is also a real shame is the underclass that John Key made much of in his speech a couple of years ago before he became the Prime Minister. It was 17 pages—17 pages—into his statement before he mentioned the underclass at all. Well I guess that is better than nothing because as far as I can see I do not think he has mentioned the so-called underclass since his speech in 2007 or at least not since he paraded young Aroha at Waitangi and we have all seen in the last week what she and her mother think about the way that they have been used. 
I cannot find one word in John Key’s statement today that describes a single idea about how to go about making change real change change for the better and change for the many not the few. Instead we have seen a statement that promises more review groups task forces advisory groups discussion documents action plans and even a working group of experts. What is that? That is a new one is it not? I have not heard that one before—a working group of experts. 
Hon Darren Hughes 
: More bureaucrats. 
DARIEN FENTON 
: More people like Don Brash being paid half a million dollars to come up with something that will go in the rubbish bin. 
The other shame is that John Key seems to be pretending that the steep rise in unemployment that was revealed last week does not exist. He must be pretending because otherwise surely today’s statement would have come up with a plan to do something about the nation’s unemployed to help those who are out of work or whose jobs are at risk. And those jobs are still at risk. There are jobs on the line as we speak today. 
A real Prime Minister who cared about these things would have talked about how we will address the skills and the jobs that we need for the future and how we will help current and future workers achieve the skills to get them into work. He would have talked about things like the Adult and Community Education funding cuts that are going on right now as we speak. Workers who are unemployed are unable to access any help with literacy and numeracy but is that not supposed to be the big push of this Government? He would have had a plan to give hope to those who are struggling both those in work and those who are looking for work. 
My attention inevitably turned to one particularly mean little phrase in his statement on page 10 that “the Government will continue to look at whether labour laws are imposing excessive costs on the country and holding back opportunities to create jobs.” That sounds like Don Brash. You know Don Brash managed to sneak one little sentence into this speech. I ask what the point of hitting workers is. Is it a crumb to please the right-wing supporters of the Prime Minister and the Government at the expense of those without economic or bargaining power? We should not fool ourselves that we will get closer to Australia by attacking workers’ pay and conditions. Labour laws did not cause a recession and they will not hold back any recovery but there it is in the statement: nasty little mean stuff about getting into holiday pay cutting back staff and getting into personal grievance provisions. Here we have today laid bare National’s brighter future. Unfortunately it is an empty vessel. 
I want to make it clear that Labour does not will not and cannot support an increase in GST. Labour does not will not and cannot support it because this Government believes that in order to give our richest— 
John Hayes 
: You introduced it! 
Paul Quinn 
: You’ve already done that once. 
DARIEN FENTON 
: That got them going. They do not like that do they! We do not believe that in order to give our richest earners a tax cut the rest of New Zealand should pay for it. Let us talk about who “the rest of New Zealand” is. The rest of New Zealand includes a single parent on $45000 a year who works in the Public Service. We know that the National Government hates the Public Service. The previous speaker talked about the police and so on. Where were members opposite when Department of Corrections staff were out the front protesting about this Government’s plans to privatise their jobs? Where were they? They were not to be seen. All of the people in the Public Service will not be getting a pay increase this year. They did not get one last year not even one to match inflation and they face increases in the cost of living and increases in the cost of accident compensation. That is a 3 percent pay cut. 
The rest of New Zealand includes workers whose families are living off the minimum wage—soon to be $12.75 an hour—and support through Working for Families. Under this Government they are facing increased pressure even to survive. I did not hear anything in the speech today about a plan for them. New Zealand has a wage problem not a tax problem. I remember that when I came into Parliament in 2005 we were delighted that members of the Opposition were saying we needed to catch up with Australia and to increase wages. Labour agrees with that but we need economic activity that creates jobs and a lot more than the pathetic Job Summit that we have seen. 
So many things could have been said in the statement but were not. Where are the job-rich programmes? Where is the green jobs development? Where are the programmes for skills development and apprenticeships? Where is the support to upskill for those who have lost their jobs? Where is the support for research and development? Where is the support to really take our country forward? Instead what we got from our Prime Minister today was 15 percent GST for all low-paid workers and low-income people. No there was not a $15 per hour minimum wage which there should have been but a paltry increase of 25c an hour. 
H V Ross Robertson 
: How much? 
DARIEN FENTON 
: Fifteen percent GST and a 25c an hour increase in the minimum wage. I have a feeling that the people of New Zealand will have a lot to say about this matter. I know that people in Auckland will have an awful lot to say about the local government reform. Shame about this speech—shame! 
JONATHAN YOUNG (National—New Plymouth) 
: 
 We live in a globally connected and fast-changing world that comes with its risks and opportunities both of them great challenges. If we can keep in step or better still move a step ahead the opportunities for this country are enormous. If we fall behind as we have over the last decade the risks are enormous. 
As the Prime Minister said today in his statement to Parliament: “We have a lot of things going for us as a country. We are rich in natural resources we are one of the best food producers in the world we have a beautiful landscape and we are home to some of the smartest and hardest-working people in the world. However we have not been making the most of our strengths” because “In recent times New Zealand incomes have fallen further and further behind the countries we like to compare ourselves with including Australia.” The statement went on to say: “The Government is committed to turning things around and in particular to closing the gap with Australia.” 
We are not achieving our best potential. There is a gap between New Zealand and Australia that needs to be closed. In fact the New Zealand Educational Institute acknowledges that the gap between those who succeed and those who are failing in our education system is wide compared with most other high-performing countries. We are not ahead and we are not abreast. We have fallen behind in significant sectors of our society. We have a culture of underachieving in New Zealand which this Government wants to turn around. As a Government we will bring reforms through in 2010 that will unlock greater opportunities for us as a country as families and as individuals. Change is usually uncomfortable but is often necessary. I remember that one agent of social change said that to change the future we have to disturb the present. We must bring change in what we do and how we do things. 
We inherited an economy that had gone into recession in early 2008. Government spending had increased by 50 percent in the previous 5 years. Spending had increased at double the rate of economic growth and Government revenue. This was short-term happiness like a drug. The tradable sector—that is exporters or industries competing with imports—has been in recession for 5 years contracting by about 10 percent over that time. There have been almost no net jobs created in the tradable side of the economy for the past 10 years. By contrast the non-tradable sector—that is domestic industries not competing with exports including the Government—has grown by 15 percent in the past 5 years. The part of the economy that provides national income has declined while the part that requires that income has grown. It is simple mathematics. It sounds to me that some rot has set in there. It sounds as if fiscal decay has been eating into the health of our economy. 
It is one of the reasons why we now face cash deficits of between $10 billion and $12 billion for each of the next number of 4 years meaning that we need to borrow approximately $240 million a week. This year the Government will get this economy healthy and strong again. We will do this through a number of strategies highlighted by the Prime Minister today. They will be detailed in due course especially around the time of the Budget on 20 May this year. This year the Government will continue to open up New Zealand exporters’ access to world markets. The Government will put considerable energy to attaining those trade agreements because New Zealand’s future economic prosperity depends on them. New Zealand exports already support a significant proportion of jobs here in our country. By increasing our access to world markets we have the potential to create more of the high-quality and well-paid jobs that New Zealanders seek. 
We live in a dynamic world of constant change and in constant competition. We must adapt or we will die. I remember famous US author Isaac Asimov and members will recall this quote who said: “The only constant is change continuing change inevitable change that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is but the world as it will be.” While Mr Goff bleated on—well he is a wealthy farmer—about the average New Zealander the Prime Minister talked about making that New Zealander above average. I know what side of the House I want to stand on. Today the Prime Minister has presented to us a work plan for 2010. It is tangible practical and plausible because it takes into account the state of the nation as it is. It identifies the areas that are holding us back. But his plan is also aspirational because it sets a high goal. It is inspirational because it takes into account the world as it will be and our nation as it ought to be. 
Like the Prime Minister I never want to eat the crumbs off Australia’s plate. I have too many Aussie mates over there who would just love us Kiwis to be satisfied with that. Goodness me with that sort of attitude pretty soon we would be happy with them beating us at the Rugby World Cup. No we are at least equal to them. We do not want the crumbs; we will have the Moreton Bay bugs off their barbies and take back our pavlova as well and then we will beat them at the Rugby World Cup to boot. We have to start thinking that New Zealand is the lucky country—and we have water. The world is changing and this country needs to make a step change to keep up. 
Because of the speed of change that happens in our world our children are now being educated to live and work in a world that does not yet exist. All parents know their kids are brighter than them or so my son tells me. Our kids every single one of them need to be prepared for the future that is incessantly approaching them from over the horizon. This year we will make legislative and funding changes to modernise our secondary schools. Because we live in a globally connected and competitive world we need to ensure that no one slips between the cracks in our education system. That is why national standards are critical to the unlocking of opportunity and success for our young people. 
Literacy and numeracy are the foundation disciplines and skills that lead us into every other discipline of learning. We cannot study medicine engineering horticulture finance or law without strong literacy and numeracy skills. We cannot train to be builders plumbers electricians or civil engineers without strong literacy and numeracy skills. Without those skills we can have only low-paid employment. The fact is that one in five of our students are failing. If we look at Maori and Pasifika students we see that the figure is even more frightening. It is of great concern to us. In 2007 nearly one in five school leavers left without National Certificate of Educational Achievement (NCEA) level 1. More than one-third—34 percent—of school leavers left without NCEA level 2. According to the Ministry of Education educational and job prospects would be limited for those who leave school without NCEA level 2. 
We will focus on increasing the number of children in our poor communities and in our Pasifika and Maori populations who attend early childhood education. We will improve the training of our teachers both in our training institutions and in professional development programmes. We will refocus the tens of millions of dollars currently aimed at struggling students. We will support national standards with further reforms to ensure that children who need extra support get it. 
Labour ought to support our changes. Labour members said in 1999 that every child in New Zealand should have access to schooling that enables them to reach their full potential in life but that is not what we have now. Even the New Zealand Educational Institute acknowledges that the gap between those who succeed and those who fail in our education system is wider that it ought to be in comparison with those nations we compare ourselves to. In terms of fulfilling the promises that we gave the people of New Zealand 2009 was a remarkable year of progress for the Government. The one promise we are focusing on in 2010 through a myriad of paths and strategies is simply this: to give New Zealanders a brighter future. Thank you. 
RAYMOND HUO (Labour) 
: 
 This afternoon almost immediately after the Prime Minister delivered his speech to Parliament the  
New Zealand Herald 
 website published three opinion articles by three influential commentators. Mr John Armstrong started by stating: “John Key’s promised quick march towards economic nirvana still looks like progressing at little more than a crawl.” Note the word “still”. Brian Fallow went a little further: “Tax the prime minister proclaims is a powerful lever for the Government to boost the economy’s performance. It’s a pity then that instead of grasping that lever he is proposing to just crook his little finger around it. He endorses the tax working group’s analysis of the problems: … But he then goes on to rule out most of the options the working group put up for addressing these shortcomings…”. Bernard Hickey’s comment said it all: “John Key has just sent Generations X and Y a clear message: Leave the country now.” 
Paul Quinn 
: What do you think? 
RAYMOND HUO 
: That member is louder than the Prime Minister. Like the Leader of the Opposition the Hon Phil Goff said this afternoon in his reply to the Prime Minister’s statement once again we have heard the rhetoric but there is no substance. The statement has proved Dr Alan Bollard right: John Key’s promise to catch up with Australia is a hollow one. There is nothing in his statement that represents a step change. But the problem is—and let me quote Bernard Hickey again—the Prime Minister “did worse than nothing. He shut down the debate.” 
When his Government needed to do something he picked up an option that would hit the most vulnerable the hardest. Why do I say that? Because raising GST for instance would hurt most those who have to spend all their income to make ends meet particularly those with children or elderly people to look after. Culturally speaking Asians take responsibility for looking after their parents when they become less independent. It is very kind for the Prime Minister to say that he is acutely aware of the effect that raising GST could have on lower-income families. Therefore he said should an increase occur it would have to be accompanied by across-the-board reductions in personal taxes as well as upfront increases in benefits New Zealand superannuation and Working for Families payments. 
Let us do some simple maths. According to Treasury of the $2.15 billion tax take generated from raising GST only $200 million more in revenue would be left after people were compensated for the rise in GST. That is $200 million out of $2.15 billion. What is the point? Mr John Key while Leader of the Opposition was quoted in the  
New Zealand Herald 
 in October 2008 as saying that if National was elected and it did a half-decent job of growing the economy then increasing GST and the top tax rate would not be necessary. That sounds like an admission that National has failed on the economy. Even the Tax Working Group acknowledged that in terms of current income a higher GST tends to be slightly regressive. It added that there were mixed views within the group as to whether the efficiency benefits from increasing GST would be sufficient to outweigh possible equity effects. 
As we discussed on the Labour MPs’ blog Red Alert this afternoon focusing on the bottom 50 percent of taxpayers not the top 5 percent seems to be more sensible. I borrowed the idea from my friend Keith Ng whose research shows that New Zealand’s tax system is less progressive than Australia’s. Higher-income earners in Australia pay more tax both proportionally and in absolute terms. In New Zealand the total income earned by the bottom 50 percent of taxpayers is about 17 percent proportionally and the total tax they pay is 12 percent while in Australia the bottom 50 percent of taxpayers pay the same proportion of tax of 12 percent but the total income earned is 25 percent. That is to say Australia’s bottom 50 percent of taxpayers have a bigger share of the total income which means that income is more equitably distributed in Australia before tax is taken into account. If the National Government is serious about catching up with Australia focusing on the bottom 50 percent not only the top 5 seems to be the starting point. It also helps to understand why New Zealand incomes have fallen behind those of other countries we like to compare ourselves with including Australia. Between 1990 and 1999 the gap between wages in Australia and wages in New Zealand increased from 18.9 percent to 28.4 percent. 
David Shearer 
: How much? 
RAYMOND HUO 
: It was 28.4 percent. Since 1999 it has barely moved. Under the last National Government over its long 9 years average weekly earnings increased by only $1.31. In sharp contrast under 8 years of the Labour-led Government the rate of increase was 30 times that level. However over the past year under National we have fallen further behind Australia. 
Paul Quinn 
: Is this in the Public Service? 
RAYMOND HUO 
: While that member is talking we have fallen further behind Australia. New Zealand has gone backwards not forwards. The National-led Government has widened the gap not narrowed it. 
The only thing that has increased steadily however is the unemployment rate. New Zealand’s unemployment rate always lower than Australia’s is now 30 percent higher than it was at the start of 2008. Where is the plan today to get 168000 unemployed Kiwis back to work? 
Earlier this afternoon we had the pleasure to hear the speech made by the Minister for Ethnic Affairs the Hon Pansy Wong. We are pleased to learn that the Minister is going to do something about unemployment in terms of her portfolio and that she is organising an ethnic forum. I sincerely hope that the proposed forum will not be just another example of hot air or a diminished version of the talkfest of the Job Summit last year. The Asian unemployment rate hit 9.2 percent last week. My colleague Dr Rajen Prasad and I urged the Minister to take immediate action to advocate within Government to help jobless Asian people. The number of Asian unemployed in New Zealand is now higher than the national average. We need a real plan not empty rhetoric. 
Finally I totally agree with the Prime Minister’s statement that New Zealand’s future economic performance depends to a large extent on generating and using new ideas. Weta Digital Icebreaker Zespri and Fonterra which he cited are all good examples. Research and innovation are important. The research and development tax credits the Fast Forward scheme and tertiary scholarships in various forms are good policies and good investment. The New Zealand Manufacturers and Exporters Association Chief Executive John Walley said this afternoon: “jobs follow investment as night follows day”. Sadly for New Zealanders tomorrow is just another day. The Prime Minister’s statement to Parliament this afternoon offered no bold plan or any plan at all. Thank you. 
MICHAEL WOODHOUSE (National) 
: 
 I will begin by wishing you Mr Deputy Speaker and members a very happy New Year. I trust we have all enjoyed a relaxing break and are now fired up and ready to go for what is going to be a pretty busy and aspirational year if anything that the Prime Minister has laid out is to go by. 
But let me talk about tax. Tax is a subject that is pretty close to my heart as I am one of the few chartered accountants in the House albeit I have not been practising for quite some time. It is a bit like riding a bike I suppose: we get a bit wobbly when we get back into it but our basic skill never really goes away. Certainly neither has my desire to make sure that New Zealand has a fair and equitable tax system that is simple to administer and that does not result in the sort of arbitrage that is possible. Sadly I think we have moved away from that goal and that is not just my view or the view of the Government. It is the view of the Institute of Chartered Accountants Business New Zealand and more recently the Tax Working Group which was pretty critical of the status quo. 
Labour’s revenue spokesperson Stuart Nash who is probably the best Tory in the Labour Party quoted from the report but I think it is worth repeating it. [ 
Interruption 
] Oh it is a contest with Mr Jones is it? We will see who wins there. Stuart Nash said that according to the Tax Working Group report New Zealand’s tax system was regarded in 1989 as one of the least distortionary in the OECD. But then the report goes on to say the Tax Working Group believes that in order “for New Zealand to have a world-class tax system and to ensure that the system is sustainable in the medium-term significant changes are required to the current tax mix and base. Small changes at the margin are unlikely to achieve this.” 
The Opposition may scoff at the Tax Working Group and that would be consistent with its “we know best” approach to fiscal policy but that group included some of the finest minds in finance and accounting. I think it is very pleasing that the Government is prepared to listen and to take that report seriously. Where the Labour Party is on that report goodness only knows. According to Mr Nash its members seem to support a broad-based tax as long as the status quo does not change—support change only do not change anything. They are very clear about their opposition to changes in the tax framework that would be inequitable and penalise low-income workers. That is OK; I accept that. The Government is committing itself to make changes that are fiscally neutral but that do not result in fluctuations in take-home income. But I want to know what is equitable about the fact that 10 percent of New Zealanders pay over 75 percent of the income tax in this country as the Tax Working Group reported. I think there is an elephant in the fiscal policy room. It has been there for some time and it is the impact on aspiration for middle-income earners of the marginal tax rates. 
In 2008 following the last Cullen Budget a PricewaterhouseCoopers accountant put the following scenario to readers of a tax newsletter. It went something like this: we understand the concept of a progressive tax system and the fairness that those in a higher-income tax bracket should pay a proportionately greater level of income tax. But how much more is fair? We can take a family in 2008 on the average wage of $47000 and with two children under 13 years. We can take another family with the same circumstances but who earn $75000 a year—that is 1.8 times more in income. A progressive tax system would say that that family should pay more than 1.8 times in tax. That is only fair. But how much more is fair? Should it be 3 times as much? Should it be 5 times as much? Should it be 7 times more in income tax? Well after the 2008 Budget of those two families the higher-income earning family was paying 14 times more in income tax and their marginal tax rate was about 58c in the dollar. 
I would like to be able to make the same calculation for the period after 1 October 2008 but it is simply not possible to do so. Why? Because the family on $47000 a year is not paying any effective income tax—none whatsoever. It pays no income tax. In fact for some families their net income would be greater than their gross income were it not for the rules that prevent that from occurring. So I refute the nonsense claims that any changes to income tax are tax cuts for the rich because it is simply not possible to give any more tax back to many low and middle-income earners in this country who do not pay it in the first place. 
What are the practical implications of that on a day-to-day basis? Well if one wants to get ahead and increase one’s income the increasing burden of the marginal tax rates acts as a handbrake on that aspiration and too many of our junior doctors our nurses and our other health professionals respond by jumping the Ditch for higher salaries and lower marginal tax rates—rates that stay lower than New Zealand’s until one earns several hundred thousand dollars a year in Australia. It is real it is happening and our country is really good at it. We have talked a lot about how our performance has slipped relative to that of other OECD countries on a variety of measures. Here is where we have not slipped; we are No. 1 in the export of our best and brightest. Fifteen percent of our tertiary-skilled New Zealanders live overseas. That is nearly one in six of our best and brightest gone and the tax system as it is is a material contributor to that. 
I want to talk about the possibility of an increase in the rate of GST. It is important to note that even those who pay little or no income tax do contribute to our tax system by way of GST. The Government has reassured the public—not that we would get any sense of this from the Opposition’s scaremongering—that those who are on benefits or low incomes would have a consequent adjustment to their earnings or tax liability in order to compensate for any increase in the GST rate that is decided on so that their take-home pay would not be any different from what it is currently. The most ironic statement we have heard today was Mr Goff in his leader’s reply suggesting now that Labour does not support a goods and services tax. Well that is a bit rich given that he was in Cabinet and part of the decision to first bring in GST and then increase it. It was good enough then but is not good enough now. 
I refer to another speech that Mr Goff made recently. I think it was entitled “The Many. Not the Few.” He said too many people on good incomes were avoiding paying taxes and evading taxes. He said it was not right that some high earners pay a lower percentage of their income tax than those on the average wage. I agree with Mr Goff’s comments but I find them incredibly rich coming from the leader of the party that created the climate for that to occur in the first place. When Labour took office in 1999 there was a pretty close correlation between the top personal company and trust tax rates. The first thing Labour did was to slap a 6c in the dollar increase on the top personal tax rate. Eventually it dropped the company tax rate. That was necessary I think to maintain competition with Australia but it created a form of arbitrage that enabled people to legally and legitimately undergo tax planning means to reduce their taxable income. Then it had a secondary impact—that is in child support payments in Working for Families and in student allowances. I challenge the Labour Party to say why on earth Labour put those structures in place if that is not fair and if it believes that those people albeit legitimately are not paying their tax burden. 
The 2009 Budget records that the Government maintains in the mid to long term that we are committed to aligning the tax rates for individuals for companies and for trusts at 30 percent and to returning to a broad-based tax strategy. I am confident that when the tax package is announced in Budget 2010 we will see moves in that direction albeit there are some constraints on our ability to do those things in these straitened times. 
I will quickly touch on the spending side and I applaud the Government’s expectations of continuing public sector constraint. The public sector grew by 49 percent under the previous Labour Government whereas GDP growth was only about 24 percent in the same period. But what was more concerning was that at the same time the tradable sector the sector that pays the taxes and fuels public sector services was stagnant. In fact in real terms it went backwards. I think the Public Service has got the message that constraint is necessary. I reinforce the fact that constraint does not necessarily mean cuts in services and it does not necessarily mean low wages. What we are looking for is productivity improvements and I know from my experience in the health sector that they are very very possible. They are possible by innovating and by introducing new technologies. We will hear of course that this will result in reductions in bed days or something. Ms Dyson will stand up and roar about cuts in services but the fact is that the productivity dividend is there. If the Opposition does not understand that fact and does not engage in a real discussion about the improvements in public policy that are possible it will be in Opposition for a very very long time. 
DAVID SHEARER (Labour—Mt Albert) 
: 
 It is very good to be able to take a call on this debate today. I came to Wellington this morning with a degree of expectation that this was going to be the day when we heard about where the Government was really heading. We were going to hear about its plan the cornerstone document the template the vision the strategy. The Prime Minister’s statement was going to be where the Government laid out its future. I got the Prime Minister’s statement at approximately 9.30 this morning. I spent a number of minutes reading through it and at the end of it I sat back and thought: “Is that it? Is that really what New Zealand wanted to hear? Is that the best this Government can do for New Zealand?”. 
Last year this Government was a new Government and in a way it was given the benefit of the doubt. Certainly media and other commentators gave it the benefit of the doubt. They let the Government get away with not announcing a proper plan although towards the end of last year a number of commentators were asking where it was. But there was a recession and that was the cover for much of the non-planning the lack of a strategic view. Those excuses now are gone. The Government is no longer new. The Government is no longer hitting a recession. We are now in positive growth and are trying to look at where we go from here on. Where then are the ideas? Where is the plan? Where is the sense that we know where this Government is going? 
There was a lot of speculation about the Prime Minister’s statement and 23 pages later there is still a lot of speculation. Colin Espiner wrote today that the speculation is out there but we really do not yet know any of the detail. Mr Brian Fallow writing in the  
New Zealand Herald 
 stated: “Business is unlikely to be blown away by the boldness of the vision outlined in today’s agenda-setting speech. Indeed the average thistledown would not be blown away.” It is a lightweight speech. There is nothing exceptional no big thinking and as my colleague said no step change. We are looking at more of the same that we saw last year. The goal is to try to make it through to the next election get re-elected and stay in power. That is the total sum of this Government’s aspirations. Indeed that is what Bernard Hickey said today in the  
New Zealand Herald 
. He said of Mr Key: “He is saying he wants to get re-elected. How uninspiring. How pedestrian. He is saying he is not a real leader. He is saying he will follow his followers.” That is what the Government is trying to do. 
The other big goal of course is to catch up to Australia. But we know that on  
Q+A 
 on Sunday Alan Bollard spiked that goal. He said it is not possible. He was courageously and—characteristically—unbureaucratically prodding the Government to make a difference and step up to the plate. He said this course of action will not be able to deliver the goods. The Minister of Finance Mr English already believes that. He says that currently that goal is aspirational not real. We have heard a lot about aspirations today but not too much in the way of how we will achieve those aspirations. I think the goal of catching up to Australia is frankly cringeworthy. Friends of mine in Australia said: “Do you mean your goal is simply to catch up to us? Is that all it’s about?”. We try to beat Australia on the rugby or cricket field but when it comes to economic growth we like to come close to tie with it. So when the Australian cricket team comes over here in the next few weeks we will hope to tie with them not necessarily beat them! 
Australia by the way is not looking behind. It is not waiting for us to catch up. Mr Bollard spoke of Australia being “blessed by God sprinkling minerals across the top of the surface”. Here is the big news: Australia is not just sitting there collecting royalties and expecting to collect royalties from its minerals; it is moving its economy into overdrive. To do that it lifted its research and development spending by 25 percent. Also it is looking at tax credits and tax rebates for its major companies that invest in research and development. Does that sound familiar? That sort of thing was abolished by this Government as soon as it got into power. Australia realises that to make its labour force more productive it needs to upskill its population invest in innovation and invest in science engineering and business. Its aspiration unlike ours is to be in the top five countries of the OECD. That is real aspiration unlike the aspiration that this Government is talking about. So why are we not following a similar path? This Government does not have the aspiration that is needed. We need our own vision not one of just catching up to Australia. 
I want members to look at the examples of Denmark and Sweden or more important to look at Finland which is a country of 5.2 million people. Its population is not dissimilar to ours and Finland is not blessed with endless natural resources. At the end of the Cold War it suddenly realised that trade with its biggest trading partner the USSR had dried up. Finland needed to make a step change and it did that. It is currently putting more than 3 percent of its GDP into research and development and science. Nokia is now a household name; when Finland began that step change it was not. That is a real step change. It came from understanding that science and innovation were the way forward. Finland is now one of the most successful European economies. We need that same boldness but it did not happen today with the Prime Minister’s speech. We will not succeed by simply changing the tax structure. That is not the silver bullet. Finland’s tax structure along with that of a lot of Scandinavian countries actually has much higher taxes than New Zealand’s but it is performing better than we are. 
We also need available capital to get in behind those ideas. Ninety percent of those ideas might fail but the 10 percent that will succeed will succeed overwhelmingly. We have a great education system and inspirational scientists but public sector levels of investment in science and technology are at 75 percent of the OECD average and business sector levels are at 33 percent of the OECD average. We heard a lot about science and innovation approaches in the Prime Minister’s statement but not much in the way of action. Mr Key announced in his statement that he was going to make changes to the Crown research institutes saying that they are “powerful engines for growth”. I agree with him. But then comes the crunch a couple of paragraphs down: “As I indicated earlier the fiscal situation means that future new spending allowances can only be very modest and most agencies will miss out on funding increases altogether.” What fantastic inspiration! We know what will work; we just will not give people the money to do it. What is the point of even putting that in a statement? So much for the step change! What did this Government do when it came into power? It abolished Fast Forward. The sum of $700 million was going to be put up to be balanced alongside the contribution of the business sector. Australia is now bringing in tax rebates. What did we do? We boldly went out and cut them! We saved ourselves $300 million. But that meant businesses are not able to make the investment that they need to do. 
My disappointment with today’s speech was matched only by my disappointment with the speech of National’s coalition partner Mr Rodney Hide. He spent most of his address today talking about the global conspiracy. 
AMY ADAMS (National—Selwyn) 
: 
 The first day of the parliamentary year when the Prime Minister makes his statement to Parliament—effectively a state of the nation speech—is one of the key set pieces in the parliamentary year. It is a day that those of us with a political interest certainly look forward to because it sets a tone for where we have been and where we are going. As I sat here today listening to our Prime Minister John Key deliver his speech to Parliament and reading through the 23 pages of economic plans and indications of where we are going I was extremely proud to be a member of this Government and to be a member of John Key’s team. 
This Government was elected to Parliament on a platform of being ambitious for New Zealand. Today’s statement shows anyone who is still in any doubt that we are ambitious. We are ambitious for New Zealand. Those are not simply campaign slogans. This is what we have come here to do. This is why I myself and so many of my colleagues have walked away from our own private lives our own successful careers. This is the sort of change that we want to bring to New Zealand change that will lift life for many many New Zealanders in this fine country. On this side of the House and I think probably for most people in this House we want to see jobs for every New Zealander we want to see higher incomes and we want to see a better standard of living. I do not think anyone in this House would stand up and disagree with any of that. We want New Zealanders to have jobs— 
Hon Damien O’Connor 
: Well try a little harder. 
AMY ADAMS 
: Does Mr O’Connor disagree? Well on this side of the House we want New Zealanders to have jobs we want them to be well-paid jobs and we want New Zealanders to have a good standard of living. If we have those things our young people will live here in New Zealand with their families. They will not feel the need to live overseas. I will not hear the sad stories I hear so often in my electorate from people who tell me that all their children live overseas and they never see their grandkids because the only way their children could get ahead was to go away. That is sad. That is what we want to change. 
The difference between the National Government and the members on that side of the House is that we do not just talk about those things; we understand that the way to get them is to lift economic performance—lift economic performance. The difference is the other parties that talk about lifting the standard of living throw up their hands in disgust and recoil at any suggestion that will actually lift economic performance. Only this party and the other members on the Government side of the House have the courage to make the changes that will see economic performance lift. That is the thing that will do that. That is how we will get jobs. 
Carol Beaumont 
: Like the complete absence of investment in skills. 
AMY ADAMS 
: We do not get jobs from the magic job fairy in the sky I say to Ms Beaumont. We get them from businesses business people making investments risking their own capital and working hard. We cannot all be relying on the State to provide our living. We know that that is what has to happen and that is why this Government and this statement are about getting business done. 
I say that for me and for this Government “business” is not a dirty word. We are not embarrassed by people who say they make a profit. We do not think that is a bad thing. Since when did it become somehow shameful to want to go out and make a profit? Why do we have to discourage those people and somehow shame them pull them down in the tall-poppy style? That is what we have had for 9 years. From 1999 to 2008 we had a Government that took offence at anyone who tried to make a profit who dared to stand up to be successful and to be entrepreneurial. It wanted to do everything it could to pull the rug out from under those people and somehow to insinuate that they were bad for this country. Well they are not. Doing business in this country is what will make the difference. That is what National members are here to support. 
The plan we are debating the plan we have before us from our Prime Minister is a detailed plan to help New Zealand lift its economic game. We can do so much better in this field. If this country were a business any bright chief executive officer would come along sit down look at it and say: “We could do so much more.” That is what is true of this country. It is a fabulous country with so many assets skilled people and resources at its disposal but we do not do enough with them. We sit here and watch our economy our standard of living and our incomes fall further and further behind and we have not done anything. We have not done enough. That is why this Government came in with a plan to make a difference. 
In this statement we see a number of things that are geared towards making that happen. They are the same six points that we have been talking about for some time now. It is about having a world-class tax system one that incentivises people to get ahead to work hard to grow their businesses and to create jobs and wealth. It is about using science and innovation well to develop that and to encourage it. It is about opening up our export markets because we are an exporting country. We will do well when our export sector does well. The work that Minister Groser and others in this Government have done to open up trade and export markets has been remarkable. The signs of that continuing this year and beyond are very very encouraging. It is about increasing our workforce and our workforce skills through better educational standards and better workforce training and encouraging those who are in the benefit system to get back into jobs where they can be productive. And it is about reducing red tape. If there is one thing that any business will say it is that red tape is the death of so many businesses. It is the one thing that they find so demoralising and so discouraging. Here we have a Government that will look at those roadblocks and get them out of the way. 
We will not address New Zealand’s problems by simply spending more and more and ignoring the realities. We cannot fix the problems by continuing to write cheques in the hope that people will go away and stop bothering us. That is what Labour tried for 9 years. That is what Labour members on that side of the House tell us day in and day out. They say we should just keep spending money. Never mind the debt. Never mind that the country’s economy is getting poorer. Just keep spending. Well we are not prepared to do that. We know that as a country we have been spending far more than we earn for such a long time and that has to stop. Tell me of any household in this country or any business in this country that can survive when it keeps spending and spending even though its revenue is down. Every mother or father in this country who runs a household knows that the first rule is to spend less than one earns. Do not spend what one does not have. That is what this country failed to do under the Labour Government and that is what we have to get on top of. 
New Zealanders should not fear change. The Labour Party clearly does but New Zealanders do not need to fear change. In fact we should embrace it. It is often said that the definition of delusion is doing the same old thing and expecting different results. That is a big part of what the Prime Minister’s speech today was about. We want different results we want better outcomes and we have to do things differently if we want to get different results. If we continue with the educational system we have we will continue to see 20 percent of our children come out of school not able to read or write to an appropriate level and that is simply not good enough. 
The tax changes that the Prime Minister outlined today are about doing exactly that. They are about incentivising work incentivising endeavour and not incentivising consumption. Reducing personal taxes and business taxes sends a message to all New Zealanders—and tax is one of the strongest levers we have to affect the economy—that this Government encourages enterprise and encourages and rewards hard work. It will give New Zealanders a choice. With the extra income that they will take home in their pay packet every week they will have the choice to put it into their savings reduce their debt and therefore pay no tax on that money and if they want to go out and consume the GST is there for that. So the tax changes do de-incentivise consumption and incentivise savings and investments. 
The last point I want to touch on in this contribution is about my own local economy in the electorate of Selwyn and the impact that some of the changes in the statement will have. In my electorate of Selwyn we have two big industries: agriculture and tourism. Both those sectors have a lot to be thankful for. One of the things I want to touch on specifically—and I have not heard it mentioned so far in today’s debate—is the Prime Minister’s very strong message of support for better use of our water resources in Canterbury for water storage and for irrigation. That alone is the single biggest thing that can be done in my region to increase economic activity. We know that through better use of our water through encouraging our farmers to increase their production we can lift the economic activity in our patch so significantly that it will have the single biggest impact on our local economy. That is exactly the sort of change we are talking about. That is how we will make the step change. That is how we will lift the standard of living for all New Zealanders. Thank you. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I rise to support the speech made by our Prime Minister this afternoon. It was a fitting speech from the popular and respected man who leads this country the Hon John Key. As we all know the Prime Minister is aspirational and he is ambitious. His 23-page statement outlining his vision for this country during this year is one that must be admired and it echoed across this country as a vision that will lead us into this new decade. The Prime Minister outlined six areas that this Government will focus on in the coming year. But before I talk to two or three of those areas I want to review what we have done in the last 15 months of this administration. 
We have navigated New Zealand through the worst global and economic conditions in this generation. We have enhanced New Zealanders’ trust in our Government by fulfilling many of the promises and many of the undertakings that we campaigned on in 2008. This trust is reflected in the latest polls which show on average 20 percent poll leads between this Government and the Opposition and show even far greater differential between our Prime Minister and the Leader of the Opposition Phil Goff. 
What have we done? We have reformed the Resource Management Act to reduce red tape and bureaucracy. In health we have capped wasteful bureaucracy and delivered more resources to front-line services. You see in 9 years the previous Labour Government doubled the health spending but outputs and deliverables did not change at all; in fact some of them went backwards. What have we done? We have added over 11800 elective surgeries improving the quality of life for those particular New Zealanders and their families. What has this Government done? It has signalled a whopping $7.5 billion in long-overdue infrastructure spending in the areas of roading public transport and broadband. We have also provided a fiscal stimulus and tax cuts for hard-working New Zealanders which saw the economy finally grow again. 
That is what this Government has done but it is not resting on its laurels—no. This Government in terms of going forward has set out six main goals. These are tax reform; more effective public services; support for science innovation and trade; better regulation; further investment in infrastructure; and improved education. These goals are consistent with making New Zealand a more prosperous country and one that can take its place among developed countries providing job opportunities for all New Zealanders and security for their families. 
Let us take a moment to just ponder the tax system. The tax system is of course about creating the right incentives for people to work and contribute to society. Savings are critical so the most important part of the system really should encourage savings and boost the productivity of investments. A lot of the discussion this afternoon has been about the gap between New Zealand and Australia and other developed countries. We all know that in order to bridge that gap productivity and gains in productivity are critical to the future of this country. We also look to our tax system to promote fairness. That is why this Government is looking at how taxation will affect people across the board. If there are to be increases in GST then of course these will be accompanied by compensation for lower-income earners and those on fixed incomes. 
When I go out to visit the businesses in my patch of Maungakiekie and I talk to the business owners and to the employees they say they are looking for some relief in the areas of taxation. The business owners want to pay lower taxes so they can carry on investing in their productive resources. The workers—what do they want? They want to have more money in their back pockets so that they can spend it on their families and on themselves. These businesses also give me feedback about a number of the programmes that this Government has implemented in the last 15 months. 
H V Ross Robertson 
: Tell me. I can’t wait! 
PESETA SAM LOTU-IIGA 
: One such programme I say to Mr Robertson is the legislation on the 90-day probationary employment period that we passed last year. Do members recall the scandalous way that the Opposition jumped up and down about this legislation and the fearmongering that went on? And have they heard a whimper since? 
Chris Tremain 
: The world was going to fall over. 
PESETA SAM LOTU-IIGA 
: The world was going to fall over as Mr Tremain has said. And did the world fall over? It did not. That shows that the sort of scaremongering that has gone on today is a continuation of the Opposition’s obvious whining and moaning about the sorts of Government policies that are working out in our communities. 
In terms of education this year sees the implementation of our national standards. National standards are about helping the children of this country—not the unions but the children of this country—to get extra support when they need it. It is about informing parents about how their children are faring in the areas of literacy and numeracy. It is also about informing their teachers as to how they can go about improving the learning levels of those students who are in need. When I speak to the principals and teachers in my electorate of Maungakiekie where the schools are primarily decile 1 to 4 I do not meet one teacher who is against having standards in education. I do not know one teacher who is against better informing parents about their children’s progress in school. I do not know one teacher who does not want the best for students. Although people may disagree about the implementation of this programme in terms of trialling and monitoring everyone whom I speak to wants to see a better education provided for the children. [ 
Interruption 
] 
If that does not stir Ms Turei I tell her to consider this: there is a teacher called Brian Langdon who runs the reading enrichment programme at One Tree Hill College. The programme predominantly assists Maori and Pasifika students to develop their reading. There are kids there who have the reading age of a 10-year-old but who are actually 15 years of age. If there is any reason to identify literacy issues earlier than at college then it is these kids. They give me ample reason to support this policy. If that member does not accept that she should come to One Tree Hill College and see the plight of these kids. 
Finally I just want to touch on the Leader of the Opposition who was screaming and ranting from the benches opposite. I have to say I like Mr Goff. He was once my member of Parliament. He represented me and he is a good electorate MP. But Mr Goff is not a Prime Minister in waiting. He is not a leader who has a vision. He is clearly in above his head when it comes to having a vision for this country. I wind this speech up by saying the Prime Minister has laid out our vision. I support that vision and I support his quest to improve the lives of New Zealanders. Thank you very much. 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
: 
 This evening listening to the debates in the House and reflecting back on the firm and confident presentation given by the Prime Minister on this the first parliamentary sitting day of the year I feel proud to be part of the National-led Government. I am proud to be part of a Government that wants the best for New Zealanders. I am proud to be part of a Government that bases progress on good business practice on earning more money and on letting people keep it in their pockets. It has been a very tough year for some. 
I have the privilege of representing the electorate of West Coast - Tasman as its MP. 
Hon Christopher Finlayson 
: And you will for many years. 
CHRIS AUCHINVOLE 
: I thank Mr Finlayson. Both the West Coast and Tasman are showing themselves to be resilient during the recession. The people of the West Coast and Tasman are enterprising resourceful and successful. National encourages enterprise rewards resourcefulness and salutes success and that is what the economic address will deliver. 
 I join with my colleagues though in expressing disappointment in the response from the Labour Party. I share the point of view of my colleague Sam if I may call him Sam that Mr Goff is a nice person. Indeed he actually signed me up as a justice of the peace following the recommendation of the electorate MP of the time Mr Damien O’Connor. I am most grateful to them for that. 
John Hayes 
: Bad judgment! 
CHRIS AUCHINVOLE 
: It was excellent judgment. I was sorry to hear Mr Goff giving a speech that rapidly fell away from economics and moved into personal attack. I was saddened by the way he chose to personalise his attack trying to discredit the Prime Minister as a person rather than achieve much in a well-structured argument. I had hoped for better but there we are. 
Reflecting on the speeches thus far given from this side of the House I must say that the one given by one of our senior MPs the Hon Simon Power had some excellent points towards the end. It was given in an amusing manner but was none the less smack on the button in relation to his perceptions of the leadership aspirations of other members of the Labour Party. I thought his phrase about seeing Shane Jones actually licking his lips at the end of Mr Goff’s speech was telling. I suggest in all seriousness having watched the body language that Mr Goff’s performance will leave him vulnerable in his position at the moment. 
But now I will talk on the economy. I speak in support of that particular part of the Prime Minister’s presentation where he talked about national resource development. I guess we are really talking about minerals. That is the most important point. Well all of the speech was important but that was one of the most attractive parts for me. I have seen the benefits that can accrue from modern mining—from mineral extraction. A railway passes my house and it carries $630 million worth of high-grade coking coal to the port of Lyttelton every year. We have a system called Glass Earth technology. By using all sorts of clever technical electromagnetic responses one can fly over an area with an aeroplane and detect the mineral levels. A survey showed there was $39 billion worth in Northland. Modern mining does not represent rip tear and bust. It is too expensive for that and it has to be done with care with precision and with profit in mind. 
Modern mining involves geology and engineering and it is very much part of our culture particularly on the West Coast. There is nothing better than spending an evening with a group of gold miners in the Ross pub. I remember an altercation broke out and I heard one say to the other: “Pick a window—you’re leaving.” I like that good fundamental straightforward speaking. We have the records of Mr Explorer Douglas who should be proclaimed with far greater voice than he is because he did so much surveying throughout South Westland. We have the records of Captain Moonlite who could sense where gold was with unerring accuracy. We had the miners’ seats; let us not forget them. They started at the same time as the Maori seats. They were to represent miners who did not own the land they were working on but who largely were the economy of the time. The miners’ seats lasted only 5 years. The Maori seats have lasted a little longer. It has been suggested that perhaps we should bring miners’ seats back. 
Debate interrupted.