Volume 606 Week 17 - Wednesday 5 March 2003 
Volume 606 Week 17 - Wednesday 5 March 2003 
[Volume:606;Page:3975] 
Wednesday 5 March 2003 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Visitors 
Professor Dr Herta Daubler-Gmelin 
Mr SPEAKER 
: I have much pleasure in informing members that Professor Dr Herta Daubler-Gmelin Chair of the Committee for Consumer Protection Food and Agriculture from the Federal Republic of Germany is present in the gallery. I am sure she should be welcomed. 
Business of Select Committees 
Membership 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I seek leave for Sue Kedgley to be a member of the Commerce Committee for the purpose of its consideration of any broadcasting legislation but without the right to vote on any question before the committee. 
Mr SPEAKER 
: Is there any objection to that course being followed? There appears to be none. 
Speaker’s Rulings 
Questions for Oral Answer 
Mr SPEAKER 
: On Wednesday 26 February 2003 the Hon Murray McCully raised a point of order concerning the processes for the acceptance of an oral question and the determination of ministerial responsibility. 
Standing Order 367 requires notices of oral questions to be delivered to the Clerk each sitting day and for 12 questions to be accepted. This process of acceptance may involve considerable negotiation and may involve Ministers indicating whether or not matters come within their areas of ministerial responsibility if there is question about this. 
A Minister’s word about his or her own portfolio responsibility area must be accepted. Where a Minister indicates a question is outside his or her area of portfolio responsibility or challenges its validity acceptance of the question must be reconsidered. If ministerial answerability cannot be adequately established the question cannot be accepted and would ultimately be disallowed by the Speaker if it were inadvertently accepted. 
In order to avoid this happening and to save the question for the member the Clerk’s Office goes to considerable length to negotiate rewording of questions. Like any process of negotiation this will of necessity involve some give and take. The Clerk’s Office will accept a question when it considers that it is in order. But ultimately it is the Speaker who must rule upon whether a question is in order. 
All issues relating to the acceptance of a question should be raised with the Clerk’s Office up until the commencement of question time in the House. Only during questions for oral answer in the House will I consider points raised about whether or not a question is in order and rule accordingly. If members or Ministers have any doubts about a question I expect them to be raised with the Clerk’s Office and resolved as far as possible through a process of negotiation prior to 11.30 am when the oral questions accepted for that day are published to the Parliament web site. 
In this regard I draw members’ attention to Speaker’s ruling 123/6. It is the oral questions printed and circulated with the Order Paper in the Chamber that are the questions for that day. Publication on the web site is a courtesy and does not give an oral question any particular status. 
JOHN CARTER (Senior Whip—NZ National) 
: 
I raise a point of order Mr Speaker. Thank you for that ruling. It has helped to clarify a number of issues. It does raise one point which maybe at some stage you will make a comment on. If a member as Mr McCully did puts down a question with the Clerk and a Minister has an issue about that question and asks for some alteration or change to the question then there should be an opportunity for the member to be notified and to have opportunity to comment. In your ruling I did not hear you provide for that opportunity. 
Mr SPEAKER 
: I am sorry; that was assumed. 
JOHN CARTER 
: I think it would be important that there be an interchange if there is something not right with the question—that the member be given that opportunity. 
Mr SPEAKER 
: Absolutely and I thank the member for raising that point. 
Points of Order 
Iraq—Debate 
Hon PETER DUNNE (Leader—United Future) 
: 
I raise a point of order Mr Speaker. I seek leave for the House at the conclusion of the debate on the Budget Policy Statement to set aside its normal business and hold a 2-hour debate on the situation in Iraq. 
Mr SPEAKER 
: Leave is sought for that. Is there any objection? There is. 
GERRY BROWNLEE (NZ National—Ilam) 
: 
I raise a point of order Mr Speaker. This matter has been discussed by way of leave in the House on several occasions and I point out that the request has been defeated twice by the Government previously. Albeit that Mr Dunne may say he is not part of the Government it is not surprising that the seeking of leave has been defeated today. However as there seems to be a willingness from the Government to have a debate on Iraq I would move that we have a debate— 
Mr SPEAKER 
: Seek leave. 
GERRY BROWNLEE 
: I seek leave that we have a debate on Iraq and that the House sets aside time immediately after question time tomorrow—Government time as it is a Government issue; the only people who can make a decision about New Zealand’s participation in or contribution to any conflict in Iraq are those in Government. 
Mr SPEAKER 
: Leave is sought for that course to be followed. Is there any objection? There is. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 I raise a point of order Mr Speaker. It is very hard to believe that this issue is being treated in such a frivolous fashion. The National Party having failed in its seeking of leave I seek leave that the original leave sought by Mr Dunne now be put again to the House and we will take the House’s direction on it. 
Mr SPEAKER 
: Leave is sought and I understand that what Mr Dunne said was that after the Budget Policy Statement there be—[ 
Interruption 
] Leave was sought to put Mr Dunne’s question again. Perhaps Mr Dunne can state it because he alone knows exactly what it is. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. Can I assist the House by saying that we are reluctant to support our having this debate in members’ time. I want to make that very very clear. It is unacceptable that the Government wishes to move that a debate on something that it must make a decision on be held in members’ time. 
Mr SPEAKER 
: This is not a debatable issue. I am putting leave. 
Hon Ken Shirley 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: We are in the middle of a point of order— 
Rt Hon Winston Peters 
: I have sought leave. 
Mr SPEAKER 
: Leave has been sought and we have to go from there. Please be seated. 
Hon Ken Shirley 
: I am speaking to the point of order— 
Mr SPEAKER 
: No; leave has been sought and leave must be put when it is sought. Would Mr Dunne please state his request for leave. 
Hon PETER DUNNE (Leader—United Future) 
: 
 I sought leave for the House to set aside its normal business at the conclusion of the Budget Policy Statement and hold a 2-hour debate on the question of Iraq. 
Mr SPEAKER 
: Leave is sought for that purpose. Is there any objection? There is. 
Questions to Ministers 
Economy—OECD Rating 
Hon BILL ENGLISH (Leader of the Opposition) 
 to the  
Prime Minister 
: What specific directions if any has she given to Ministers regarding the Government’s vision of being “in the top half of the OECD” in 10 years as set out in the Prime Minister’s statement to Parliament in February 2001; and when were these directions given? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 As that was not a time frame adopted in the growth and innovation framework no such direction was required. 
Hon Bill English 
: Why did the then Deputy Prime Minister and Minister for Economic Development the Hon Jim Anderton give a speech as recently as June 2002 in which he said: “This Government has set itself an ambitious target. It wants to see New Zealand once more in the top half of the OECD league table by 2011.”? 
Rt Hon HELEN CLARK 
: The member can put that question directly to the Minister for Economic Development if that is what he wants to find out. 
Rodney Hide 
: What made the Prime Minister first think that getting into the top half of the OECD economic table was possible and then what made her change her mind? 
Rt Hon HELEN CLARK 
: It was an ambitious idea that was debated around. I decided it was unrealistic just as the National Party decided it was unrealistic to go for the Maori vote within a century. 
Hon Bill English 
: What directions will the Prime Minister give to Industry New Zealand which in its November 2002  
Venture 
 magazine referred again to the Government’s goal of moving NZ back into the top half of the OECD by 2011 and does she intend to pursue the same step as she did with the closing the gaps policy—that is instruct civil servants to airbrush all references to the unwanted goal out of any public documents? 
Rt Hon HELEN CLARK 
: My direction will be to read the framework which has been out for a year. 
Rt Hon Winston Peters 
: Is it not a fact that in the space of less than a week the Prime Minister has gone from denying she ever said it to now admitting that she did say it but that she was wrong and what does that make her? 
Rt Hon HELEN CLARK 
: No there is no fact in that. I said I had no recollection of one of a thousand—forehordes—that I write every year. 
Child Pornography—Penalties 
2.  
RUSSELL FAIRBROTHER (NZ Labour—Napier) 
 to the  
Minister of Justice 
: Does he intend to increase penalties for the possession and supply of child pornography? 
Hon PHIL GOFF (Minister of Justice) 
: 
 Yes. Recent convictions of individuals trading in child pornography have resulted in sentences only of community service which I believe are inadequate for people distributing material that shows children as young as 4 years old being sexually abused by adults. Penalties for both possession and distribution of such material should reflect the fact that to create each image a child is sexually abused. Collecting the images creates the market and encourages the crime. 
Russell Fairbrother 
: Is the problem of child pornography getting worse; if so why? 
Hon PHIL GOFF 
: I believe that the problem of trading in child pornography is getting much worse. The key factor in that is the use of computers and the Internet. To give the House an international example in Greater Manchester in 1995 there were 12 seizures of child pornography—photos and videos. Four years later there were 41000 seizures and all but three of those were from the Internet and from computers. 
Richard Worth 
: Why has the Government not moved to punish those who engage in so-called “child grooming” for sexual abuse where paedophiles go online in Internet chat rooms to “groom” or build up a relationship with children with a view to meeting them in person? 
Hon PHIL GOFF 
: Of course the Government has moved in that area. The member may not have seen the publication put out by the Government in association with ECPAT which is the organisation that is designed to prevent that sort of thing. No it is not simply a question of a law change. It is illegal to do that but what is necessary is that we also create the means by which families and children can protect themselves against the activity that the member is talking about. 
Dail Jones 
: Why has the Minister taken so long to act in this area bearing in mind the comment of Auckland barrister Denise Ritchie the chair of ECPAT which is a group fighting pornography that: “New Zealand has been lagging behind the rest of the world when it comes to these penalties.”; and will he be amending both the Crimes Act and the Films Videos and Publications Classification Act when he considers new legislation? 
Hon PHIL GOFF 
: There are several questions there. Firstly the Films Videos and Publications Classification Act was only 7 years old at the time that I became Minister. It is not usual to amend legislation after such a short period of time. However I have looked at it closely and believe that because of the changes I referred to in my answer to Mr Fairbrother those changes are now needed. In relation to ECPAT the member will be pleased to know that the organisation has put out a statement praising the Government for its actions in this regard. We will be amending the Crimes Act because I am proposing increasing the penalty for possession from a $2000 fine to up to 2 years’ imprisonment and a tenfold increase in the penalty for the offence of distributing and supply from 1 year’s imprisonment to 10 years’ imprisonment. It is more appropriate that such penalties appear in the Crimes Act than in the Films Videos and Publications Classification Act. 
Stephen Franks 
: If the Minister is a genuine convert to the idea that tougher punishment for pornographers works why not extend that to all criminals instead of dribbling out announcements on high-profile crime; why not end parole force criminals to pay the fines they have been given and make sure that a sentence of up to 2 years is not automatically cut in half which allows the pornographer to be on home detention 4 months before that and back at his computer? 
Hon PHIL GOFF 
: There is no one in this country who is not aware of the fact that penalties for serious crimes have been dramatically increased and that is shown by the recent non-parole period of 33 years given for a serious murder and the fact that this proposed legislation will increase tenfold the penalties for distributing and trading child pornography. 
Marc Alexander 
: Why does the Minister think the penalty increases will lead to increased apprehension of child pornography traders and what effect will that have on the overall child pornography industry in New Zealand? 
Hon PHIL GOFF 
: The change in penalties is important for its own sake both to show abhorrence and to send a clear message to those indulging in such behaviour. But it will also have an effect on apprehension. At the moment it is not possible on reasonable grounds for suspicion that a person possesses child pornography for the police to get a search warrant. That is because the penalty is not a penalty of imprisonment. Under the new penalty of imprisonment the police will now have that power. That should lead to a clear increase in apprehension of people possessing such material. 
Russell Fairbrother 
: Does introducing the penalties the Minister mentioned bring our penalties into line with those of comparable jurisdictions in the Western World? 
Hon PHIL GOFF 
: Yes. I looked at jurisdictions that New Zealand would normally compare itself with—in particular the United Kingdom and Canada. In both those cases there is a maximum penalty of 10 years for the supply production and distribution of child pornography. I have aligned New Zealand penalties with those of those jurisdictions both because they are comparable and because that penalty is the maximum penalty that they apply. 
Marc Alexander 
: What factors did the Minister take into account when deciding to increase penalties and what weight did he give to them? 
Hon PHIL GOFF 
: There are a number of things. First I was personally concerned about the low level of penalty for what I regarded as participation in a horrific crime. Secondly I have talked to groups around the country including ECPAT. I have talked to the member himself who I know is very keen that penalties in this area should be brought into line. The other factor is the factor I mentioned earlier: Internet trading means that a crime that was quite hard for people to participate in a decade ago is now relatively easy to participate in and we need to respond to that situation. 
Economy—Reforms of the 1990s 
3.  
Dr DON BRASH (NZ National) 
 to the  
Minister of Finance 
: Does he accept that Statistics New Zealand data shows the real disposable incomes of the poorest 20 percent of New Zealand households increased over the 1990s despite the cuts to welfare benefits in 1991; if so does he agree that the Statistics New Zealand data contradicts comments made by the Prime Minister that the reforms of the 1990s left “the poorest New Zealanders an estimated twenty to twenty five per cent worse off”? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 No and no. 
Dr Don Brash 
: I am stunned I must confess. Further to the Minister’s comments yesterday that welfare cuts in 1991 left the poorest New Zealanders 20 to 25 percent worse off should we conclude that the Government believes that increasing the benefit payroll by nearly 10 percent over the next 4 years as predicted by Treasury in December is the ultimate way of improving the lot of the poorest New Zealanders? 
Hon Dr MICHAEL CULLEN 
: No. In fact what the data shows clearly is that the most important factor is the number of people in employment and how that affects household income. But could I point out to the member that firstly the Statistics New Zealand data shows very clearly that the bottom 20 percent were worse off in 1998 than they were in 1990; secondly the bottom 10 percent were worse off in 1998 than in 1991; and if we take the full gamut of the entire reform period between 1982 and 1998 we find that the bottom 10 percent fell 5 percent and the top 10 percent increased their real incomes by 43 percent. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I am very close to the member but I could not hear that final figure. Could you ask him to repeat it please? 
Mr SPEAKER 
: No. I could hear it. 
David Cunliffe 
: What other aspects of change in the 1990s did the Prime Minister mention in her speech? 
Hon Dr MICHAEL CULLEN 
: She reminded us that after those cuts the unemployment rate rose to double figures the public health system was rearranged on a commercial model and the cost of gaining tertiary education access rose very steeply indeed. These seem to be the reforms of the 1990s that Dr Brash continues to praise. 
Sue Bradford 
: Does the Minister have any estimate of how much of the social wage was lost in the 9 years of National rule from December 1990—that is the loss of a wide range of things that were formerly provided by the State—and does he agree that income alone is only a part of what keeps people in poverty? 
Hon Dr MICHAEL CULLEN 
: That is a very perceptive question. I do not have the exact figures in front of me but clearly there are other factors that come into play—for example the abandonment of income-related rents is very important in terms of the impact upon low-income households; the increased cost of health care; and the increased cost of education. People may have slightly more money in some cases but that money has to stretch further than it did in 1990. 
Rt Hon Winston Peters 
: Why is the Minister seeking to lay the blame wholly at the door of National when he knows full well that he Helen Clark and a number of his front-bench colleagues today happily went along with the Rogernomics revolution which did so much damage to New Zealand between 1984 and 1990? 
Hon Dr MICHAEL CULLEN 
: The Prime Minister and I both disagree with the word “happily” in that question. 
Dr Muriel Newman 
: Could the Minister tell the House exactly what were the facts or reports on which the Prime Minister based her statement that the reforms of the 1990s left “the poorest New Zealanders an estimated 20 to 25 percent worse off”? 
Hon Dr MICHAEL CULLEN 
: The Prime Minister did not actually say that. I suggest people read what she said. She said: “It was part of a radical right menu of change which also slashed welfare spending and public housing subsidies leaving the poorest New Zealanders an estimated 20 to 25 percent worse off.” That is undeniably correct when one looks at the benefit cuts of 1991. The poorest were worse off by up to 25 percent. 
Hon Maurice Williamson 
: I raise a point of order Mr Speaker. I find that this House gets itself into a terribly unacceptable position. The Minister just answered saying to this House that the Prime Minister did not say that. He then went on to quote the Prime Minister’s words and the words included those words: “leaving the poorest New Zealanders an estimated 20 to 25 percent worse off.” Both cannot be true. He cannot say the Prime Minister did not say it then read a quote from her that included those words. 
Mr SPEAKER 
: Unfortunately that is debatable material not a point of order. [ 
Interruption 
] Of course it is Parliament and the member will behave himself. I made a ruling. I said that the comment that had been made by Mr Williamson could well be in his own view correct and he is entitled to say it but that is not necessarily in any way related to the question and answer period. 
Dr Don Brash 
: Is it not true that even on the basis of the Minister’s own figures which are certainly different from the ones I have the assertion made by the Prime Minister that the living standards of the poorest people in New Zealand dropped by 20 to 25 percent simply is not true? 
Hon Dr MICHAEL CULLEN 
: No that is not correct. Some poor people had their benefits cut by up to 25 percent in 1991. Their incomes— 
Hon Bill English 
: That’s not what she said. 
Hon Dr MICHAEL CULLEN 
: Oh yes that is what she said. It is also clearly true that during the 1990s the bottom 20 percent got worse off. There is the graph; read it. Down is down; up is up. See that—1990-98. It is not like looking at interest rates on a Reserve Bank table. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. I wonder whether the Deputy Prime Minister would be good enough to assure the House that the Prime Minister approved that graph. 
Mr SPEAKER 
: No that is not a point of order. 
Literacy—Standards 
4.  
JILL PETTIS (NZ Labour—Whanganui) 
 to the  
Minister of Education 
: What recent reports has he received on New Zealand’s performance on international literacy standards? 
Hon TREVOR MALLARD (Minister of Education) 
: 
 I received a report last year on the Programme for International Student Assessment “PISA” which shows that New Zealand’s 15-year-olds are on average among the top OECD achievers in literacy. However while New Zealand is third in the world in literacy we do have unacceptable disparities. I have also received a suggestion that the careful coherent policy approach that has been put in place—and is making in-roads into disparities—should be replaced by bulk funding and “cherry picking”—the failed policies of the 1990s. That came from the “new fresh” approach of Don Brash in his recent leadership bid. 
Jill Pettis 
: What initiatives have been put in place to raise literacy levels for all students? 
Hon TREVOR MALLARD 
: We do have a comprehensive strategy in place for all students and I want to thank Wyatt Creech for getting some of the policy work done. It includes the Early Childhood Primary Link Via Literacy Project a Labour one; the Pasifika English language literacy initiatives; and new and expanded literacy assessment tools. The answer lies in this coherent approach not in the Roger Kerr circa 1993 approach to bulk funding apparently plagiarised by Don Brash. That policy failed. 
Phil Heatley 
: Is the Minister at all concerned that in the international adult literacy survey—the only substantial international survey done to date on adult literacy—over 40 percent of New Zealanders were below the minimum level required for individuals to meet the complex demands of everyday life and work in the emerging knowledge society; if so why is he just receiving all these reports and doing nothing about it? 
Hon TREVOR MALLARD 
: Yes I am very concerned. That is why the Government has taken the following measures: first literacy leadership for principals so that schools can get proper programmes throughout the schools; whole school or syndicate professional development; assessment tools for teachers to use; an enormous amount of materials to support teaching practice; a lot of materials for learners; materials for home-school partnerships; and even adult education courses which I can recommend to some members. 
Hon Brian Donnelly 
: Given the Government’s agreement in its response to the Education and Science Committee’s report on the teaching of reading that policy work on the specific problem of transience which is associated with that tale would be put into the 2002 policy programme what progress has been made on that policy work? 
Hon TREVOR MALLARD 
: In some areas some progress has been made but not enough yet. 
Maori Sportscasting International—Te MangaiPaho 
5.  
RODNEY HIDE (ACT NZ) 
 to the  
Minister of Maori Affairs 
: When he told the House yesterday that he was generally satisfied with Te Mangai Paho’s distribution and administration of funds did this include the $534964 in payments over three years to Maori Sportscasting International that saw approximately $7000 in travel meal and accommodation expenses returned to the Te Mangai Paho employee responsible for their radio and music portfolio for his co-commentary of games such as the Wallabies versus All Blacks in Sydney on 1 September 2001; if not what has he done about it? 
Hon PAREKURA HOROMIA (Minister of Maori Affairs) 
: 
 On 20 February 2003 I met the chairman of the board and the chief executive of Te MangaiPaho and raised this matter with them. I was assured by Te Mangai Paho that this matter has been managed appropriately including that the employee concerned no longer participates as a guest commentator with Maori Sportscasting International Ltd. 
Rodney Hide 
: How come Te Mangai Paho is still employing Tame Te Rangi or are the kickbacks he arranged for himself through the contracts he was managing acceptable to this Government and to this Minister of Maori Affairs? 
Hon PAREKURA HOROMIA 
: I assure that member that this Government takes a dim view of the misuse of any operational funds that are given to any organisation. This is an operations matter that is the responsibility of Te Mangai Paho. It is not for the Minister of Maori Affairs to be carrying out employment-related discussions with staff. That is the job of Te Mangai Paho. 
Mahara Okeroa 
: Is the Minister satisfied with the action Te Mangai Paho has taken to ensure that the employee concerned no longer participates as a general commentator? 
Hon PAREKURA HOROMIA 
: I am more than happy with Te Mangai Paho’s handling of this situation and that the staff member is under strict guidance. 
Hon Murray McCully 
: Given the Minister’s admission that Te Mangai Paho approved funding of $3964 for Maori Sportscasting International for the purpose of broadcasting in te reo the New Zealand Maori versus Australia rugby game at Stadium Australia on 9 June 2001 and that Maori Sportscasting International then paid for Te Mangai Paho executive Mr Tame Te Rangi to travel to Sydney and for his meals and accommodation has the Minister sought any advice from the Auditor-General or any similar authority as to the appropriateness of those arrangements; if not why not? 
Hon PAREKURA HOROMIA 
: I have not but can I remind that member that Te Mangai Paho had a very high-rated audit summary done by New Zealand Audit. 
Rt Hon Winston Peters 
: Why does he and his Prime Minister now take a totally different view to the level and requirements of accountability as they relate for example to Tuku Morgan who only spent $89 of his own money on a pair of underpants—and we call that hypocrisy actually—and why has he adopted a different standard; or is it the fact that he has received reports that Te MangaiPaho’s distribution and administration of funds policy relates to the advice it got from the ACT party as to how one breaks the rules when it comes to public funding? 
Mr SPEAKER 
: The last part of that question is not to be commented on but the rest can be. 
Hon PAREKURA HOROMIA 
: I was not around at the time of the underpants incident but I repeat that this Government takes a dim view of any misuse of taxpayer funding in an operational sense. 
Rodney Hide 
: Why does Te Mangai Paho pay Maori Sportscasting International over $1000 to broadcast a game when Maori Sportscasting International pays its Maori commentators as little as $50 or $100 per game to their TAB account or is that a feather-bedding routine and the reason that Te Mangai Paho is always crying poor? 
Hon PAREKURA HOROMIA 
: That is an operational matter. I remind the member that I have sent him piles of detailed responses to those sorts of questions from him and I have the pile here to give him again if he has not read them. 
Manufacturing—Exchange Rate 
6.  
GORDON COPELAND (United Future) 
 to the  
Minister of Finance 
: Following the release of the latest ANZ-Business NZ Performance of Manufacturing Index that shows expansion of manufacturing has slowed for two consecutive months does he agree the rapidly appreciating New Zealand dollar is having a serious adverse effect on the manufacturing sector; if not why not? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The index referred to does show that manufacturing continues to expand but at a more moderate rate. So at this stage I think it is still too early to say the exchange rate is having a serious adverse effect on manufacturing. The effects on agriculture seem to be more pronounced at this point. 
Gordon Copeland 
: Can he assure the House that the effect of the exchange rate on New Zealand manufacturing and I guess also on farmers is taken into account when establishing monetary policy settings and if manufacturing and farming effects are not taken into account why not; and if they are is he satisfied that the current policy settings are effective in this respect? 
Hon Dr MICHAEL CULLEN 
: The general economic factors are taken into account in setting the monetary policy targets agreement. Within that agreement the actual settings in terms of interest rates are of course a matter for the Governor of the Reserve Bank. 
Luamanuvao Winnie Laban 
: Has the Minister received any assessments of the overall effects that an appreciating currency might have on the economy? 
Hon Dr MICHAEL CULLEN 
: The latest assessment from Treasury is that a lot will depend on the extent and duration of the period that the exchange rate stays at or above its current level. But overall the effect is expected to be mildly negative for real gross domestic product growth over 2003-04. Because the economy is carrying more momentum going into 2003 than previously forecast any moderation in growth is from a higher starting point. 
Dr Don Brash 
: Does the Minister recall explaining to the public that one of the key goals of the 1999 changes to the policy targets agreement was to reduce exchange-rate volatility and does he now believe that these changes were successful when the appreciation of the New Zealand dollar over the last year has been the sharpest since the New Zealand dollar was floated almost exactly 18 years ago? 
Hon Dr MICHAEL CULLEN 
: It is certainly true that the dollar fell to a very low level in early 2000 I think down to roughly US38c at one point so appreciating on that base looks like a large appreciation. I note that already the cross-rate against Australia which is the most important rate for manufacturing exporters is starting to come back as the Australian dollar recovers from the effects of droughts and fire. 
Rod Donald 
: Has the Minister sought or received any advice on the need for the Government to have a more active exchange rate policy given the negative impact the high dollar has had on manufacturers exporters and on the trade deficit and especially in the light of comments made by former World Bank economist and Nobel Prize winner Joseph Stiglitz that short-term capital flows and exchange rate policy are crucial to the success of small open economies? 
Hon Dr MICHAEL CULLEN 
: Exchange rate policy is always a matter for open public debate. The alternative of freely floating currency as New Zealand has is a fixed currency or some form of crawling peg. The experience is that sooner or later a fixed currency or crawling peg arrangement leads to very large losses by the State as speculators pick off that currency. 
Australia—Social Security Agreement 
7.  
Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Minister of Immigration 
: What is the number of non-New Zealand born permanent residents or citizens who left New Zealand to live permanently in Australia in the 12 months since the Social Security Agreement with Australia in February 2001 and how does this number compare with the number of non-New Zealand born permanent residents or citizens who left New Zealand to live permanently in Australia 12 months prior to the Social Security Agreement? 
Hon LIANNE DALZIEL (Minister of Immigration) 
: 
 The departure cards which are the source of permanent and long-term departure statistics did not begin recording country of birth until September 2000 therefore comparative data relating to non New Zealand-born permanent and long-term departures cannot be provided for the year ended January 2001. The total figures for the 2 years rounded to the nearest 100 are 39400 and 33200. The year that I can give non New Zealand-resident departure statistics for or non New Zealand-born figures is the year ended January 2002. That figure was 10400 but I should note that there were 1000 people who did not identify country of birth on their departure card. 
Rt Hon Winston Peters 
: Why is it yet again that the Minister has no idea of what is going on in respect of immigration to or emigration from this country has not done the research does not have the detail and the figures she does give are wrong as provided this day from—[ 
Interruption 
] 
Mr SPEAKER 
: There is a lot of comment and I would like the member to get to the question. 
Rt Hon Winston Peters 
: Why is it that this day Statistics New Zealand has provided information that states that the figures are 42196 for February 2001 and 29729 for February 2002—a 29 percent decrease—and is it not a fact that this country was used as a bolt hole by immigrants who came to this country with no long-term commitment and shot through to Australia hence the signing of the agreement and the loss of a 100-year relationship that we once had with Australia? 
Hon LIANNE DALZIEL 
: Given that the member is referring to statistics that relate to the year 2000 and that a migrant to this country— 
Rt Hon Winston Peters 
: No. 
Hon LIANNE DALZIEL 
: —or 2001 it does not matter which one—and because a person of residence has to have residence for 3 years before he or she is eligible for citizenship and a New Zealand passport that member should be asking himself that question. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. It is not acceptable for that Minister to claim that the person asking the question should be answering it particularly when she has been provided the information by her department under the Official Information Act and under Statistics New Zealand disclosures. It is simply unsatisfactory. We are paying her to have an LTD and a ministerial home. She should be fired because she is incompetent. 
Mr SPEAKER 
: The member has gone on too far again. The last clause of the Minister’s answer was not in order the rest of it was. 
Georgina Beyer 
: Has the Minister received any advice on why fewer New Zealand citizens and residents are leaving for Australia on a permanent or long-term basis? 
Hon LIANNE DALZIEL 
: Yes the most recent advice which I received last week from the Labour Market Policy Group comments on the tighter eligibility criteria for New Zealanders receiving social welfare in Australia coupled with favourable economic and labour market conditions in New Zealand. Members will be pleased to know that that advice will be released on the Department of Labour website tomorrow. 
Katherine Rich 
: Is the Minister at all concerned that New Zealand’s lower standards of entry have created a situation where we are being used as a back door to Australia for migrants who cannot meet Australia’s far more stringent tests and that as a result genuine New Zealand citizens and permanent residents have lost their social services privileges in Australia; if not why not? 
Hon LIANNE DALZIEL 
: I take it from the question that the member supports New Zealanders being on the dole in Australia. I do not. 
Rt Hon Winston Peters 
: Given the Minister’s answers in the House again today I ask her why she would make that statement when on 7 March 2001 she said: “Uncertainty created by negotiations finalised last month was responsible for a sizeable increase in the number of skilled Kiwis leaving the country last year.” Why is she disowning her own words that she said back then? 
Hon LIANNE DALZIEL 
: I am not disowning my words from then at all. In fact if we look at the report that came out from Statistics New Zealand on Monday 3 March we see that there has been a significant drop in departures to Australia. If we look at the 3 years in total— 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. The Minister again has had 4 hours’ notice. The dates I am referring to are the 12 months before and the 12 months after the agreement was signed. She is now seeking to go way away from all the questions that have been asked on the issue which concerns whether there was a flood of people who went before the agreement was signed and whether the flood stopped afterwards. 
Mr SPEAKER 
: The Minister is addressing the question. She may continue. 
Hon LIANNE DALZIEL 
: That is precisely the point that I am making. At the end of January 2001 39400 people left for Australia. In the following year there were 33200 and last year I am pleased to report it was down to about 24000. 
Meat Hygiene—Meeting 
8.  
STEVE CHADWICK (NZ Labour—Rotorua) 
 to the  
Minister for Food Safety 
: Why did New Zealand fund an international meeting on meat hygiene in Wellington from 17 to 21 February 2003? 
Hon ANNETTE KING (Minister for Food Safety) 
: 
 New Zealand’s leadership of the Codex Committee on Meat and Poultry Hygiene gives us an opportunity to influence the international standards that apply to trade in meat. That committee has made amazing progress in reducing the current five codes on meat standards to one and work should be completed after one more meeting only. That is not unknown; some committees in fact work on a single code for over 10 years. Some excellent work has been done under New Zealand’s leadership and it is very much appreciated. 
Steve Chadwick 
: What benefit does such a meeting have for New Zealand? 
Hon ANNETTE KING 
: New Zealand’s purpose in the Codex committee is to ensure that all Codex activities add value to protecting and promoting the health of New Zealand consumers and to fair practices in food trade. The export of meat and meat products plays a significant part in New Zealand’s economy and contributes to around 20 percent of export receipts per annum. While the value of those exports has grown over recent years New Zealand exporters face a raft of requirements. Therefore we need to ensure that we are participating in making those rules and having our voice heard. 
Dr Lynda Scott 
: Why have New Zealanders’ campylobacter rates increased so significantly—40 percent in Auckland and 53 percent in Wellington last year—costing an estimated $40 million per year and what is being done to stop so many New Zealanders from getting food poisoning? 
Hon ANNETTE KING 
: First of all that issue does not relate to the work of the Codex committee which is to do with international food standards. Campylobacter is to do with domestic food safety. It is mainly related to the handling of food particularly in food outlets in New Zealand. This Government set up the Food Safety Authority to bring together domestic food issues along with those international issues. The Food Safety Authority has made domestic food safety a priority—something that should have been done many years ago. 
R Doug Woolerton 
: What was the cost of the international meeting that was held in New Zealand? 
Hon ANNETTE KING 
: I am sorry but I am unable to provide the cost. However I can tell the member that it has been very beneficial for the industry. In fact the industry believes that it is absolutely crucial to it. The result will be a reduction in compliance costs to the industry itself. I am happy to provide the member with the cost of hosting the meeting as soon as possible. 
Sue Kedgley 
: If the Government is so concerned about meeting international standards in meat and poultry and protecting the health of New Zealand consumers why does it continue to allow cancer-causing drugs such as furazolidone to be fed to New Zealand pigs and poultry when most countries ban their use in food-producing animals because there is no safe level for their residues? 
Hon ANNETTE KING 
: A considerable amount of work is carried out by authorities in New Zealand to ensure that our food is produced safely. I have no doubt that the food that New Zealanders eat and export is safe to eat. 
Oyster Farming—Waikare Inlet 
9.  
PHIL HEATLEY (NZ National—Whangarei) 
 to the  
Minister of Fisheries 
: Is it fair for his Ministry to threaten Waikare Inlet oyster farmers with lease forfeiture saying “if they are serious about farming … they need to fix things up and get on with it” when the possible pollution sources in the Inlet still exist and are outside the farmers’ control? 
Hon PETE HODGSON (Minister of Fisheries) 
: 
 Yes it is both fair and appropriate for the ministry to require Waikare Inlet oyster farmers to meet the terms and conditions of their leases over public space. As the member knows the official whose words he quotes also said that the farmers’ breaches of their lease conditions were “relatively straightforward”. If those farmers rejoined the sanitation programme and paid some rather modest bills they could do what eight other oyster farmers in the Waikare Inlet are already doing and go back into production. 
Phil Heatley 
: Going by the Minister’s default notice is he still intent on adding insult to injury by first taking away the livelihood of the oyster farmers through forfeiture then on top of that making them pay $2.5 million to clean up the Waikare Inlet—a mess originally caused by someone else’s pollution? 
Hon PETE HODGSON 
: It is a shame that the member has not chosen to work with other parties in this dispute—as has for example the member for Northland or the member for Te Tai Tokerau—and has instead decided to join a rather illogical grandstand. Here are the facts: the outstanding debts to the health authorities across all 17 farms are $7000—not $7000 each; $7000 in total. In addition if a further $6500 or $7000 were paid those farmers could rejoin the sanitation programme until the end of the year. Instead of doing that and going back into production—either directly or by relaying—they have chosen to go to court. The answer to the question is that the farmers ought to consider afresh rejoining a solution instead of perpetuating a problem. 
Dr Ashraf Choudhary 
: What progress has been made in addressing the water quality issues in the Waikare Inlet? 
Hon PETE HODGSON 
: I am advised that the Far North District Council and the Northland Regional Council have made valuable progress in addressing the potential pollution sources that were identified last year. That includes the installation of filters on septic tanks in the area the commissioning of an upgrade to the Kawakawa sewage treatment plant and steps to improve the control and monitoring of sewage discharges from boats. That is why some of the farmers in the Waikare Inlet are back in production now. 
Jim Peters 
: Could the Minister please clarify for us how many oyster farmers were notified that their leases were not meeting the conditions of their lease and how many others in the Waikare Inlet are farming and trading in oysters now? 
Hon PETE HODGSON 
: From memory the answer to the member’s first question is 17 and the answer to his second question is eight. 
Jeanette Fitzsimons 
: Has the Minister talked with his colleague the Minister of Local Government and of Conservation about why regional coastal plans have for a long time not succeeded in protecting water quality adequately; and when the oceans strategy is developed does he intend that it will deal better with the land-water interface? 
Hon PETE HODGSON 
: No and the reason is that the law itself seems not to be at issue. What seems to be at issue is its implementation from case to case. I do not want to point too many fingers here but I would say that the Waikare Inlet oyster event has brought home to a number of local authorities some home truths that they had not earlier considered. 
Phil Heatley 
: Will that Minister force the 20 farmers to sacrifice their family homes to meet his lease obligations; if so will he do anything to help them besides taking away their livelihoods threatening forfeiture and making them pay $2.5 million to clean out someone else’s mess or is the Minister completely heartless? 
Mr SPEAKER 
: No. The Minister can answer the first two questions. 
Hon PETE HODGSON 
: My officials held off for months and months trying to negotiate a solution. Some weeks ago they gave notice of their intention to require forfeiture. In order to stop that notice from reaching its logical conclusion the 17 farmers need to rejoin a sanitation programme and some of them— 
Rt Hon Winston Peters 
: That is blackmail. 
Hon PETE HODGSON 
: Well they cannot sell their oysters unless the oysters are known to be healthy. That is why it is not blackmail. That is why there must be a sanitation programme—and while we are at it some of them have to put their signs back up. The question is whether anything will happen now that the sword of Damocles is hanging over that industry. 
Phil Heatley 
: I seek leave to table some documents: written question 13362 from the Minister— 
Mr SPEAKER 
: Leave is sought to table written question— 
Phil Heatley 
: I have not said what it is about. 
Mr SPEAKER 
: Well leave is sought to table a written question. Is there any objection? 
Phil Heatley 
: I raise a point of order— 
Mr SPEAKER 
: It is official identification of a written question. Leave is sought to table a written question. That is quite satisfactory. 
Phil Heatley 
: I raise a point of order Mr Speaker. In the “long years” that I have been in this House I have noticed that when members seek to table documents of habit they give the date the name of the document—in fact they are required to do it—and a rough general outline of the contents of the document. I never got any of that out and I am most disturbed. I would like to resubmit it. 
Mr SPEAKER 
: On this particular occasion—[ 
Interruption 
]—I do not want my good humour altered at this moment—I will let the member say just a little bit more but he must be brief. 
Phil Heatley 
: I will be brief. I seek leave to table a written question from the Minister conceding that the source of the pollution could be from anyone but the oyster farmers— 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. The member should read it out accurately. It cannot be a written question from the Minister; I assume it is to the Minister as it is the answer that the member is trying to table. 
Mr SPEAKER 
: I presume it is the answer that the member is trying to table. 
Phil Heatley 
: If it will satisfy the smart alec that is fine. 
Mr SPEAKER 
: No. 
Phil Heatley 
: I withdraw and apologise. 
Mr SPEAKER 
: Good idea. Thank you. Leave is sought to table that answer. Is there any objection? There is objection. Carry on. 
Phil Heatley 
: I seek leave to table a second document of 13 January—a default notice from the ministry served on 20 oyster farmers saying: “Shape up ship out and pay $2.5 million.” 
Mr SPEAKER 
: Leave is sought to table that document. Is there any— 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. There is a most important question involved here—that is when one seeks leave to table something the description has to be accurate. I suggest that the member is putting himself in some peril if that document does not say: “Shape up ship out and pay $2.5 million.” 
Mr SPEAKER 
: No. I think it would be much safer for the member to seek to table the default summons and leave it at that particular point. 
Document by leave laid on the Table of the House. 
Phil Heatley 
: I seek leave to table a document of 12 February a report in the  
Independent 
 which accurately says: “Get serious about farming … fix these things up and get on with it.” 
Mr SPEAKER 
: Leave is sought to table that article. Is there any objection? There is objection. 
District Health Boards—Community Health Needs 
10.  
PITA PARAONE (NZ First) 
 to the  
Minister of Health 
: Is she satisfied that district health boards are using their funding to meet the maximum benefits of community health needs? 
Hon ANNETTE KING (Minister of Health) 
: 
 No there is still some way to go. Until the establishment of district health boards the old hospital and health services were predominately responsible for hospital services. The change to district health boards requires them to take a broader responsibility for health needs. Over time I would expect a better alignment of district health board funding to meet local community needs based on the health needs analysis they are now required to undertake. 
Pita Paraone 
: Does her dissatisfaction include the Taranaki District Health Board paying twice for chief executive officer services at a total cost of over $500000; and for how long is she prepared to allow taxpayer funding to be wasted particularly when the board is turning away patients in need of surgery in order to make its elective surgery waiting lists appear shorter? 
Hon ANNETTE KING 
: While I have no responsibility for employment matters I have been advised by the board that a serious complaint was laid against the chief executive officer. The board decided to investigate but the chief executive officer went on sick leave and that has been slowing down the resolution process. A temporary chief executive officer has been employed because the position could not be filled internally. She accepted the position at short notice and at a lower rate than the State Services Commission recommends. The board is very keen to resolve the complaint but has been frustrated and hamstrung by the fact that the chief executive officer is entitled to unlimited sick leave as part of the employment contract that he signed and has been in place for quite some time. 
Nanaia Mahuta 
: When was the requirement instigated for district health boards to undertake a comprehensive assessment of community health needs and why? 
Hon ANNETTE KING 
: This Government made it a requirement of district health boards through the New Zealand Public Health and Disability Act. While boards must implement the New Zealand health strategy and other agreed national strategies they need to take account of particular local health needs. Those needs change over time and boards require regular reviews. 
Dr Lynda Scott 
: Have any district health board public hospitals decided to ration surgery plus deny patients access to first-specialist assessment as a way of coping with their financial deficits and what does she believe will be the outcome of those rationing decisions for patients? 
Hon ANNETTE KING 
: All boards are required to live within a budget. I am pleased to tell this House that in the 2003-04 financial year at least 15 of those boards will be out of deficit. They are working hard to ensure that they provide the range of services they need to provide and I think they are doing that in an extremely good way. 
Heather Roy 
: What responsibility does she accept for the double-up in chief executive officer services at the Taranaki District Health Board and if none who really is in charge? 
Hon ANNETTE KING 
: I do not accept responsibility for employment matters. The board is taking every step it should take in an employment matter including natural justice for the chief executive officer. I believe the board is handling the matter correctly. Under the New Zealand Public Health and Disability Act I am not able to be part of the employment contracts of chief executive officers. That has been the case for at least 20 years. I would be interested to know whether ACT intends to change that should it ever become the Government. 
Sue Kedgley 
: To ensure that district health boards are able to be fully responsible to local community health needs will she ensure that all democratically elected district health board members are able to speak freely to their communities and to the local media about local health needs and are not muzzled or gagged; if not why not? 
Hon ANNETTE KING 
: Practically every district health board meeting in New Zealand is now open to the public and the media. The member should compare that with the board meetings of the old hospital and health services and Crown health enterprises which were closed. The media and the public were locked out for 10 years. Board members are entitled to speak on what they want and I am pleased to say that they are. 
Judy Turner 
: Can the Minister confirm that the new chief executive of the Taranaki District Health Board was also the recipient of a $25000 pay rise when making the transition from chief executive officer of Southern Health to the head of the Southland District Health Board when the health sector was restructured? 
Hon ANNETTE KING 
: No I cannot. What I can confirm is that the acting chief executive officer Mary Bonner is receiving less than she is entitled to under the State Services Commission guidelines. 
Judy Turner 
: Is she satisfied that funding from district health boards is being optimally utilised when combined deficits of $272 million mean that money that should be used to save people’s lives is instead devoted to debt servicing? 
Hon ANNETTE KING 
: The deficit for the 2001-02 financial year was $217 million. It was paid off by deficit support in the financial year in which it was incurred. The predicted deficit for this financial year is $188 million. According to the latest statistics they are right on track and funding is provided to pay for that deficit throughout the year. 
Rodney Hide 
: I raise a point of order Mr Speaker. I waited until the end of the question so as not to interrupt anyone. The Minister is required under the Standing Orders to address the question. The Speaker is not responsible of course for the answer but a Minister must address the question. MPs are allowed to ask two parts to a question and my colleague Heather Roy asked the Minister whether she accepted any responsibility and if none who was in charge. There were two questions. The Minister gave a great long answer. She said that she accepted no responsibility but she never once addressed the question of who was in charge. 
Hon Dr Michael Cullen 
: I want again to raise this issue which is very important. It is all right to apologise or state that one is not going to interrupt the member but this is classically a case of a point of order that must be raised at the time the issue occurs. It should have been raised when the answer was given not somewhat later on. There is a good reason for that part of which is to ensure that people’s memories are absolutely fresh about what was said at the time so as not to encourage them to come back and raise new points of order about matters that have already happened. Secondly Mr Speaker it is not for you to judge the nature of the answer. We are getting on to a slippery slope if we continue to question the nature of an answer given because it then becomes a contest as to who is deciding what the answer was and whether the answer was accurate. Thirdly if the member had actually listened to the answer he would know that the Minister made it clear that it was the board that was responsible. 
Hon Ken Shirley 
: I would like to address the first point raised by Dr Cullen. My colleague Rodney Hide raised the matter while we were still on this question. That is his point; he did not interrupt the supplementary questions but raised the matter when the House was still considering that substantive question on the Order Paper. So I put it to you that it is not an unreasonable delay to raise it in that manner. 
Mr SPEAKER 
: All I want to say is that it is best to raise the issue when it occurs when we can easily recall the details. But if members ask more than one question it is still over to the Minister to decide how to answer. The answer must address the question and it did. 
Forest Stewardship Council—Plantation Forests 
11.  
IAN EWEN-STREET (Green) 
 to the  
Minister of Forestry 
: Does he support efforts within New Zealand to develop a Forest Stewardship Council-based national standard for the certification of plantation forests? 
Hon PAREKURA HOROMIA (Associate Minister of Forestry) 
 on behalf of the  
Minister of Forestry 
: The Government supports efforts within New Zealand to develop a New Zealand-specific International Forest Stewardship Council-based standard for the certification of production forests in New Zealand. The Government considers that this work will improve our market access and the environmental performance of our forest sectors. 
Ian Ewen-Street 
: Why then has the Minister allowed a Sustainable Farming Fund grant of $92139 to the Indigenous Forest Certification Steering Group to be used in part to fund opposition to the development of the New Zealand standard for plantation forests especially as the Ministry of Agriculture and Forestry expressly told the steering group that no funding was to be used to influence the process? 
Hon PAREKURA HOROMIA 
: The top end of that question is correct but I remind the member that the Ministry of Agriculture and Forestry has suspended further funding of the project until it has satisfied itself that no ministry funding is being used in relation to the process complaint that was made by two of the members within the indigenous forest group. 
Mita Ririnui 
: What specific role is the Government playing in the development of the Forest Stewardship Council-based standards for the certification of all forests in New Zealand? 
Hon PAREKURA HOROMIA 
: The initiative is a non-Government process. In mid-2001 a hui a get-together was called in Rotorua where a construct of four chambers was developed—social economic environmental and Maori—and out of that there was a standards-setting exercise that was relevant to New Zealand which will be sent back to the international standards-setting board. It is important to say that this initiative is a non-Government process but this Government is supportive of developing it. 
Brian Connell 
: Given that there is conflicting evidence as to whether certification does in fact protect the world’s most vulnerable forests and given that there are 3500 small foresters in New Zealand many of whom say they cannot afford to lock up 8 percent of their plantings as a reserve or to pay up to $3000 for certification—which many feel is just another form of compliance—what course of action does he recommend to those small foresters? 
Hon PAREKURA HOROMIA 
: One of the generic issues around standards-setting in relation to forestry production is that the bottom-end principle is to ensure that our markets overseas are relevant and that we can keep up the supply of timber. It is important that these two groups are put together. That the complaints have come out of one side or the other side is another issue. 
Mr SPEAKER 
: Before I call the Rt Hon Winston Peters I want to indicate that he is entitled to have his 11th supplementary question today but that means 10 tomorrow. 
Rt Hon Winston Peters 
: I might not be here tomorrow. 
Mr SPEAKER 
: The member can certainly have his 11th one today but that means 10 tomorrow. 
Rt Hon Winston Peters 
: Thank you very much. 
Brian Connell 
: I raise a point of order Mr Speaker. I asked the Minister a specific question. I asked what course of action he recommends to these small foresters. 
Mr SPEAKER 
: I am not getting into that now. The Minister addressed the question that was asked. 
Rt Hon Winston Peters 
: In an endeavour to dissect some sense from what the Minister said I ask him to please tell us what a construct is. 
Hon PAREKURA HOROMIA 
: A construct most certainly is a framework of groups that get together to make decisions that hopefully are correct. [ 
Interruption 
] 
Mr SPEAKER 
: I advise members that the  
Oxford Dictionary 
 has about 12 volumes. 
Hon Ken Shirley 
: Is the Minister aware that the International Forest Stewardship Council praised the operations of Timberlands West Coast and regards it as one of the best examples in the world of sustainable forestry management and therefore why on earth did he and his Government together with the Greens campaign against and close down the operation of Timberlands West Coast? 
Hon PAREKURA HOROMIA 
: That question is a summary of “destruct” from the sound of it. There are certainly issues around the West Coast forestry industry and they have been well dealt with and tested in this country over a period of time. 
Gordon Copeland 
: In terms of the intended certification of plantation forests would a private indigenous forest managed on a sustainable-yield basis come within the definition of a plantation? 
Hon PAREKURA HOROMIA 
: In terms of where the two different organisations are at the moment or the two different sets of construct the indigenous forestry development group which has those partners in it and the plantation forestry group are working in different streams but they are trying to get to the same end point. 
Rt Hon Winston Peters 
: I seek leave for the Minister to answer that question again. I know we are only simple country boys over here but none of us can understand what he is saying. 
Mr SPEAKER 
: Leave is sought for that purpose. Is leave granted? It is not. 
Rodney Hide 
: I raise a point of order Mr Speaker. My question is this— 
Mr SPEAKER 
: This had better be a genuine point of order and not related to my ruling. 
Rodney Hide 
: You didn’t rule. 
Mr SPEAKER 
: Leave was sought and denied. That is the end of the matter. 
Rodney Hide 
: But how can one seek leave for someone else to do something when you have always ruled that members cannot do that? 
Mr SPEAKER 
: That is why leave was denied. I would have denied it also. 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. Is that an example of two constructs working together? 
Mr SPEAKER 
: I am tempted to think about the plural of that word. 
Ian Ewen-Street 
: Did the Minister approve of the manager of the Ministry of Agriculture and Forestry’s indigenous forestry unit adding his name to a letter of complaint to the International Forest Stewardship Council board the purpose of which appears to be to undermine the process of establishing a national standard for plantation forests; if not what will he do about it? 
Hon PAREKURA HOROMIA 
: “Construct” can be singular or plural. The Ministry of Agriculture and Forestry member on the board— 
Mr SPEAKER 
: I could not hear the first part of the Minister’s reply. I want to hear it. 
Hon PAREKURA HOROMIA 
: I do not think I will carry on with the first comment; I will just get to the member’s question if that is OK. 
Mr SPEAKER 
: Carry on with the answer. 
Hon PAREKURA HOROMIA 
: As the member will recall from earlier discussion the Ministry of Agriculture and Forestry member was put on to the board by the Government as a technical adviser to help the process in the sense of developing the standards. That member’s name was placed on the list of complainants without his having any knowledge of that and without any approach being made to him. That is the report back that we got through the Government agency. 
Hon Ken Shirley 
: Is the Minister aware that when the International Forest Stewardship Council—based in Oaxaca Mexico—first brought out its principles for sustainable forestry management it proposed that plantation and exotic species would not qualify for certification; that being the case is the Minister still convinced that it is an appropriate body to be in charge of certification of New Zealand’s commercial forestry? 
Hon PAREKURA HOROMIA 
: I am not aware of Oaxaca in Mexico; I am aware of Mohaka up the line here where there is forestry. I assure the member that any collective effort to set standards that create better quality for an important export of this country and that consolidate our markets overseas must be good news and must be a good effort. 
Ian Ewen-Street 
: I seek the leave of the House to table a document. It is a letter to the International Forest Stewardship Council seeking to undermine the national certification process. 
Document by leave laid on the Table of the House. 
Gas—Efficiency 
12.  
GERRY BROWNLEE (NZ National—Ilam) 
 to the  
Minister of Energy 
: Does he agree with Heather Staley Chief Executive Officer of the Energy Efficiency and Conservation Authority that direct use of gas reticulated to households is “three times more efficient than burning it to produce electricity”; if so why? 
Hon PETE HODGSON (Minister of Energy) 
: 
 Yes. The direct use of gas can be close to 100 percent efficient while gas-fired electricity generation is more like 35 or 40 percent efficient. The net effect is that the direct use of gas for residential water heating for example is about 2.5 or 3 times more energy efficient than using electricity from gas-fired power stations to power a standard domestic hot-water cylinder. 
Gerry Brownlee 
: Given that gas burned in households is more efficient than gas used to produce electricity does the Minister approve of the move by the State-owned enterprise Genesis Energy to institute a fixed charge on gas use which will mean for some household customers increases of up to 60 percent in their gas bills and does he believe that encourages efficient use of energy? 
Hon PETE HODGSON 
: In order to deal with that and many other aspects of an emerging competitive gas market some months ago—I am sorry that I cannot remember the exact date—I set up a process involving a Government policy statement and an industry grouping in order to address various issues that might arise in order that we might see a competitive gas market arise of the kind that we have seen arise in the electricity sector. I am meeting the gas industry tomorrow to get an idea of forthcoming progress. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. We have been over and over all day the issue of Ministers not answering questions. You are telling us as you should that they should address questions. The Minister made no attempt to answer the question. 
Mr SPEAKER 
: Please be seated. I listened to the Minister’s answer very carefully. I thought that he most certainly did address the question on this particular occasion. The member had better not question my ruling on this occasion or he will be leaving. 
Gerry Brownlee 
: Have you ruled? 
Mr SPEAKER 
: Yes I have. 
Gerry Brownlee 
: You ruled that he answered the question? 
Mr SPEAKER 
: No I did not. I ruled that he addressed the question and that is what I am required to do. 
Gerry Brownlee 
: I have another question for you. I turn to the Standing Orders and see that there is a requirement on Ministers to address the question. Four criteria are laid down in the Standing Orders by which Ministers should answer. I asked him whether a 60 percent increase in the cost of gas for householders encouraged energy efficiency and he told the House that he was talking to gas people about a competitive market. That is not addressing the question at all. 
Mr SPEAKER 
: No I thought the Minister said that he had asked for a report which was coming out either next week or something like that on this particular issue. That addresses the question. 
David Parker 
: Should domestic gas consumers be concerned about the rundown of the Maui gasfield? 
Hon PETE HODGSON 
: No they most certainly should not. Domestic consumption of gas is such a small proportion of total gas use—under 5 percent—that there is no threat to domestic supply. It is the most valuable use of the gas. Any increase in the wholesale price of gas arising from the decline of Maui is likely to have only a modest effect on domestic prices as most of the domestic gas bill comprises transmission and distribution costs rather than fuel costs. 
Jeanette Fitzsimons 
: Will the Minister commit to taking some action to limit the size of fixed charges for gas connections which are the single biggest disincentive to households using gas just as he took some action over fixed electricity charges? 
Hon PETE HODGSON 
: As I said in answer to a supplementary question from the member who asked the primary question that and many other issues have been whacked into a Government policy statement and a gas market formation process which we have just kicked off. My first progress meeting on it is tomorrow. But if the member would care to consult my history on those matters she would find we are pretty keen to make sure fixed charges of any sort do not get out of hand. 
Gordon Copeland 
: Should New Zealand be fortunate enough to discover another large Maui-sized gasfield would Government policy be to develop it based on gas conversion into say compressed natural gas or methanol in preference to using it to generate electricity? 
Hon PETE HODGSON 
: Whilst it is unlikely that another Maui-sized gasfield will be found—big gasfields are quite hard to miss—it is possible. If we were ever in that position we would need to be very careful indeed that the extraordinary errors of “think big” were not repeated. 
Gerry Brownlee 
: Why would a household facing a 60 percent increase in its gas bill continue to be connected to gas when it would be cheaper for it to go to electricity even though it is more expensive to produce that electricity? Why do we have the Energy Efficiency and Conservation Authority which is funded by the Government to encourage efficient energy use when we have a State-owned enterprise that comes up with a pricing structure that basically says to users that they should use as much gas as they like as their costs will go down accordingly and was he consulted about that? 
Mr SPEAKER 
: That is two questions so far. 
Hon PETE HODGSON 
: Of course I am not consulted by State-owned enterprises before they put up prices. It is a market. However what the member may like to reflect on is whether Genesis Energy gas prices in this that or the other area compare well or badly with the prices of other suppliers of gas. If he would like to make a careful study of his shadow portfolio he would find that although Genesis Energy has put up its gas price it is still competitive. If it were not people would disconnect. 
Gerry Brownlee 
: I seek leave to table a Genesis Energy gas bill showing a 60 percent increase in the cost of household gas which will lead to the disconnection that the Minister worries about. 
Document by leave laid on the Table of the House. 
Debate on Budget Policy Statement 
CLAYTON COSGROVE (Chairperson of the Finance and Expenditure Committee): 
 I move  
That the House take note of the Budget Policy Statement 2003 and the report on it of the Finance and Expenditure Committee 
. 
This is the first Budget Policy Statement of the new parliamentary term and it is the first I have engaged in as chairman of the committee. I start by thanking the committee for its work which was in large part constructive. I also thank Mr Gordon Copeland my able deputy chairman. 
The Budget Policy Statement confirms the Government’s careful and prudential fiscal management. The Budget Policy Statement again continues what this Government did in its last term—to lay the building blocks for strong and sustainable economic growth and for a cohesive society. This is part of the Government’s focus which centres on higher rates of sustainable economic growth. How will that be achieved? It will be achieved by doing something that the last National Government did not do. We will put money into and build a strong infrastructure. We will build and strengthen social capital. We will leverage off the talents of our population the skills of our talented people in this country and we will maintain and enhance the health welfare and well-being of our people through strong social services better education and stronger and better health-care. 
I have to say that the work has already begun. Indeed if members look at the Budget Policy Statement and the good news that is around none of them can deny that this Budget Policy Statement is anything but positive. We have 120000 new jobs in this economy the lowest unemployment for 20 years at 4.9 percent and economic growth of 3.9 percent. Those are some of the best growth figures in the OECD despite the international turmoil the international instability and the risks that we face. Economic growth is brought about by putting more people in jobs and by growing businesses and that is what this Government is about. 
That leads us to the positive Budget Policy Statement forecasts. I point members to this: the Budget Policy Statement forecasts higher than expected tax revenues leading to an increase in the operating balance excluding revaluations and accounting charges of on average $1 billion per year rising to 4 percent of gross domestic product (GDP) by 2006-07. We will use that tax revenue. We will redeploy that tax revenue in priority for the betterment of our people in this country—building infrastructure building better transport systems building better education and health services. We ought not to forget that for 9 years our infrastructure our social services our education health and welfare systems were eroded and underfunded and our people were degraded by the National Government when it was in office. 
If we look at other forecasts we see that gross sovereign-issued debt is forecast to fall below 25 percent of GDP by 2006 and net debt including the assets of the New Zealand Superannuation Fund is forecast to be 2.9 percent of GDP by 2007. Then we come to the forecast of a Budget surplus of $2.5 billion for the current year climbing to $3.8 billion by 2003-04. That is more good news—more jobs more growth better value for people a better economy a better society and a better environment. 
However there is pressure that comes with good news. Many commentators have identified that there is expenditure pressure. I am pleased to see and I know that many New Zealand people and commentators are pleased to see that the Minister of Finance has signalled that he does not want vast lurches in expenditure because we have international risks. We have risks that could slow down our tax take and we have risks that impact on economic growth. We will manage this economy in a prudential and sound way. We are tight fiscal managers. That is acknowledged by those polls that put us at near 50 percent and that lot over there nearly down the drain. 
I want to focus on the Budget Policy Statement and its priorities—a higher standard of living for our people through growth and innovation. We have put forward our growth and innovation framework in contrast to that party which put out a sort of election pamphlet that had no new vision that had nothing in it except the tired old policies for which it was rejected in two elections and for which it will be rejected again. 
What is our innovation framework? What are the key areas that we identified? It is the building block for economic growth. We want to continue to build an open and competitive microeconomic environment coupled with stability in terms of the macroeconomic environment. We want to improve skill levels. We want to enhance our innovation and our global connectivity. There are Budget priorities that are signalled in this Budget Policy Statement. We will improve New Zealand’s capacity to develop and retain skilled and talented New Zealanders and encourage those with entrepreneurship to come to this country. 
We are increasing investment in infrastructure. Take roading which is very interesting: the policy of the previous Government National—I am pleased to see that its policy has not changed—was designed to run down roading to the point where it could sell it. That is what National’s stated policy is. We have faced 9 years a decade of roading underfunding which people in my constituency in Waimakariri pay for. We pay $1 billion a year almost around this country in road congestion charges but that Government did nothing about it in 9 years. 
Ron Mark 
: It has been deferred for 2 years. 
CLAYTON COSGROVE 
: The “Little General”—I think he was called—from New Zealand First bleats; he was part of a Government that contributed to the lack of funding and to no rebuilding of infrastructure in terms of roading. It took me 3 years to get the roads in Belfast in order. That member when he was propping up a National Government did nothing about it. 
I want for a moment to compare our record with that of the previous Government. We proposed policy work in the health sector. Primary health-care policy is up moving being implemented. Why? Because it makes sense to keep people out of hospital. They do not need to go to hospital because they can get to their primary health provider and get fixed up and stitched up so they do not put pressure on the hospital. In education early childhood has been signalled as a priority and that is continued in this Budget Policy Statement as is strengthening the capacity of our teachers and our tertiary sector. [ 
Interruption 
] Well there is “Spongy”; all I will say to that member over there is that at least members in this House other than him are toilet trained. He ought to breathe for a minute and consider— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member will desist from using—[ 
Interruption 
] The member will withdraw. 
CLAYTON COSGROVE 
: I withdraw Mr Assistant Speaker. I want to compare our record of stable prudent fiscal management with the record of that group over there. Dr Brash put out the financial blueprint of the National Party. On the one hand Dr Brash said that he wanted smaller Government smaller spending. On the same day we had Katherine Rich coming out and saying that we were not putting enough money at $10 million into the TVNZ charter. On the same day National called for spending in a whole series of areas. The fact is the only policies that the National Party hangs its hat on are the tired old ones for which it got rejected in the last election. National members want tax cuts. Who for? The rich. They want to abolish zoning. Did they not get rejected for that in the last election? Yes they did. [ 
Interruption 
] They do not like it when we rub salt into the wounds. They want to bring back bulk funding Did they not get rejected for that in the last election and the election before that? All they have done all they have learnt in the last 3½ years is to roll out tired rejected policies which are the reason that people put them on that side of the House. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Running commentaries are out of order—Speaker’s ruling 51/5. 
CLAYTON COSGROVE 
: I just want to turn for a minute to National’s semi - Opposition coalition partner the ACT party; Mr Hide likes it when I have a bit of a dig. I tell Mr Hide to clean up his own act in his own house. He and Donna Awatere Huata have become the Bonnie and Clyde of the New Zealand Parliament. That member has exhibited ill discipline throughout his parliamentary career and the recent example in the  
New Zealand 
Herald 
—we will not go into that though—is just another example of his form that the people will judge him on. Whether it is his visit to Fiji and his lack of will actually to stick up for and protect New Zealanders who were ripped off or whether it is his own physical indiscipline in places like Waiheke Island that member has form. The latest fiasco is on the front page of the  
Dominion Post 
 today. That party has form and that is being opened up. That is a good thing because the people of New Zealand can judge it. 
This is a sound document. I commend it to the House. 
Hon BILL ENGLISH (Leader of the Opposition) 
: 
 In the last 10 days we have seen the Labour Government abandon the economic goal that it set as its top priority the heart of its strategy back in 2001. Just as important we have seen it abandoned in a way that reveals the true nature of the Prime Minister and the Government which in the polite language of Parliament can only be characterised as “economy with the truth”. We have seen another block in a pattern of deception that goes back to the closing the gaps policy. That was once a flagship policy but the Prime Minister suddenly decided that it would disappear—while the committee the money and the programme still existed. Just recently we saw the revelation that at the same time that the Prime Minister was criticising statements I made about the SAS she had decided months in advance to bring them back by the end of last year. 
The tawdry display of semantic gymnastics that we have seen over the last week is a further example of this pattern of deception. Let us sort out some simple facts. Helen Clark set an economic goal which was to lift New Zealand into the top half of the OECD on per capita income by 2011 and the only person who says that never happened is her. But we have a welter a stack of public documents that include that goal. 
Hon Member 
: And a graph. 
Hon BILL ENGLISH 
: And a graph—a famous graph. I will come back to that. So that is one fact; a goal was set. Then it turns out that the Prime Minister got some embarrassing advice after the goal was set. The embarrassing advice was from Treasury which basically concluded that it could not be done—that it would need to be a very long-term goal. In fact Treasury on the basis of the policy concluded this: “It appears more likely that New Zealand’s ranking among OECD countries will continue to fall.” No wonder she was worried about it. She had not taken advice and Treasury said that it could not be done. The next really puzzling decision of this Prime Minister who expects everyone to believe what she says was that she never told anyone. She never told anyone that she had been advised that the goal could never be achieved. She never told her Ministers. She never told the Deputy Prime Minister—because he kept repeating it as did his officials. She never told Dr Cullen. Why should we believe that? Something is wrong. If the Prime Minister discovers that a fundamental plank of a fundamental policy is totally unrealistic— 
David Benson-Pope 
: That member’s lost his marbles. 
Hon BILL ENGLISH 
: Does the member not believe her either? No he does not. She discovered that and she did not tell her Minister of Finance and her Deputy Prime Minister—or she did but they thought they would just keep on saying it anyway just like she said she would keep on saying it. So having abandoned the goal she did not tell anyone. We found out about this only because of a chance remark she made in reaction to some criticism from the knowledge wave conference. So the Government has abandoned its economic goal and it has no replacement. I would like to hear from the Minister of Finance today as to what his goal is because Treasury members will remember has said that New Zealand is likely to drop down the rankings. So even the goal of getting into the top half of the OECD at any time is regarded by the Government’s primary economic advisers as one it simply cannot achieve. So why does it not give that one away as well? What did we see instead of Helen Clark owning up and fronting up? We saw all this nonsense. 
Jill Pettis 
: You’re just shaking dead rats. 
Hon BILL ENGLISH 
: The member is right: it is a dead rat. It is a dead rat that Labour members have to swallow particularly the Minister of Finance who has been left marooned by his own Prime Minister. He was left yesterday to paddle his canoe out of it by himself when it was all her fault. So now we have found out that this is the kind of semantic ballet we get. We found out that Helen Clark said—I think it was Michael Cullen who said it—that she did not set the goal; it was talked about by other people and she repeated it. That is one of the things we found out: she did not set the goal; it was talked about by other people and she just picked it up. I believe that that tells us something. It tells us that they were never really sincere about it. Helen Clark never meant it. She wandered into a brand new country that she has never been to—a country called “economic policy”—and picked up the nearest little glossy bauble. Then she thought: “Right I’m meant to be a centrist Government. I’d better talk about economic growth. What are they saying? Here it is. Heather put it in all the booklets and the publications.” But of course she never really meant it. Then we were given the excuse that it was actually the officials who set the goal by mistakenly repeating it in documents that the Prime Minister signed—documents that contained her little photo airbrushed a foreword graphs and her signature. So it is all the fault of the officials. 
Just 3 months ago Industry New Zealand which is at the heart of the economic strategy was still repeating the goal because it had never been told. Then we were told this and it is really good: “It wasn’t a formal goal.” The Prime Minister stood up in this Parliament and stated the goal in her speech—but that was not formal. What kind of nonsense do we have to put up with from a woman who cannot tell the truth? Of course it was formal. It was in the Prime Minister’s statement presented to the House of Representatives of New Zealand in a speech required by the Standing Orders. And it was not formal! What does that tell us? That it was informal! So the goal was informal everyone else talked about it and it was only in the graphs it was not in the text—it was informal. The formal goal was apparently in the document called  
Growing an Innovative New Zealand 
—the one of course that does include the graph which tells us that the Prime Minister— 
Katherine Rich 
: They’re getting upset. 
Hon BILL ENGLISH 
: OK so the Minister of Finance is going to get up and explain how all this fits together so neatly— 
Hon Tony Ryall 
: To three of his members. 
Hon BILL ENGLISH 
: —to three of his members because the rest of them are so embarrassed about what they have seen happen over 10 days in this House. The Prime Minister and Dr Cullen have had to crawl out of the undergrowth and own up to the dirty little secret: they never meant it; when they found out it could not be done they never told anyone; and their chief economic adviser has put up only one plausible scenario—that it can be achieved by 2049. That is in advice to the Government called “Climbing the OECD ladder: What does New Zealand have to do?” 
John Carter 
: Is that official? 
Hon BILL ENGLISH 
: It is informal advice not formal. That is what we want to hear about in this debate. We want to hear what Dr Cullen’s economic goal now is. Otherwise we can only conclude that the Government is busy but it does not know why. I think that that is now the case. The Government is busy but it does not know why. It has abandoned its goal. We have found out that at the heart of this Government is a moral rottenness about the truth and I am so pleased that the public are now starting to see it. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 There is a wonderful Kiwi phrase: “Get a life!” and that is all I can say to that member. We are discussing a $40 billion-a-year Budget the forecast for the next 3 years is $120 billion - odd and all he can do is fail to acknowledge a very simple fact that I told him yesterday—that is on 27 February 2002 in answer to an oral question from one of his own members—I think it might have been him—I pointed out that there was no goal in terms of a specific date because of the advice we had had from Treasury. So let us now pass on to some more important matters in life because that was the speech of a dying man—a man who has to take his shirt off in a crowd to get noticed. 
This year’s Budget will be presented on—[ 
Interruption 
] I say to Dr Lockwood Smith: “Please don’t take your shirt off in front of me again. I still remember it from the mid-1980s!” This year’s Budget will be presented on 15 May. It will be the fourth Budget that I have presented as Minister of Finance. The Budget will be presented within the framework of higher living standards for all—which is what this debate is actually about I say to Dr Lockwood Smith—through growth and innovation. It is about supporting a productive and cohesive society. It is about reducing crime and the impacts of crime. It is about investing for the future and building infrastructure for New Zealand. I congratulate the Finance and Expenditure Committee on the lucid nature of the report it presented on the Budget Policy Statement. It incorporated a wide variety of views and if one cared to read it I think one would see that it was laid out in a way that led to some interesting thoughts about where New Zealand is going. 
The forecast within the Budget Policy Statement shows a surplus for this year of some $2.5 billion—though it seems now likely that that will be exceeded by the end of the year—and $3.8 billion for 2003-04. Those are very substantial surpluses even allowing for the transfers that have to be made into the New Zealand Superannuation Fund over the coming 2 years. The Government is continuing to take a very cautious approach about large ongoing expenditure or revenue reduction programmes that would affect that operating surplus. The reasons for that should be clear to many. Firstly and obviously some economic slow-down in the rate of growth is anticipated this year as a result of international circumstances the increase in the dollar the drought we have had on much of the East Coast and a number of other factors. What is not clear is how much those surpluses may reduce under those situations. Clearly the Budget Policy Statement incorporates within its forecast the assumption of a decline in the rate of growth over the coming year but one of the things I have said to this House on many occasions is that revenue continues to run well ahead of forecast and that leads to some concern and therefore some caution that as economic growth slows the slow-down in revenue could be higher than is anticipated. 
It is not desirable to spend surpluses before we are sure that they are structural and not simply cyclical. Both the United States and the United Kingdom have made that fundamental mistake. Both countries are now reverting to forecasts of long-term operating deficits—a situation that this country has taken many many years to get out of and one that we must not get back into because it is so hard to get out of. Plenty of people want to spend that money in advance not least most of the members of the National Party who call for increased spending in every area but for a reduction in the total. In the National Party of course the total is less than the sum of its parts when it comes to fiscal provision. 
The Government has a clear programme about how to expand economic growth and how to transform this economy over time. It will take a long time to catch up to the top half of the OECD on economic measures though on many social measures we are already securely within the top half of the OECD. It is on the issues of per capita gross domestic product (GDP) that we have fallen behind most obviously. The Government is addressing issues of innovation investment in research and development the commercialisation of that research and development and the provision of venture capital funding. I expect to be making more announcements over the coming year in terms of the tax issues surrounding some of those matters relating to commercialisation of research and development. 
We have a major reform programme in the area of tertiary education—the most significant reforms in tertiary education for many many decades. The fact that many people do not understand those changes well does not detract from the fact that they are enormously significant changes that are designed to shift the entire direction of the tertiary education system over time. We are putting more resources into early childhood education which is crucial for addressing our real problem in education in New Zealand in terms of standards which is our long tail. We perform well in the middle and we perform well at the top—we are in the top three or four of the OECD in our achievements at those levels—but in the bottom areas we are worse than the bottom levels of many other countries. That is not good enough particularly because that tail tends to have brown faces rather than white. So it is a social issue as much as an economic issue within New Zealand. We are addressing issues of attracting investment by reforming the Government’s own agencies in that respect and in the Budget I will begin making announcements about how we are going to change the environment for savings. There is already before the House legislation to assist infrastructure development in terms of roading. 
The public has a right to ask what the alternative is. The alternative is not in fact New Zealand First. No—as I said three digits will become two by the time of the next election. The alternative is the blueprint—or the blue as we prefer to call it—put out by the National Party. It is a document with not a single target not a single date and not a single detail about policy. It has nothing at all except one clear statement: National is not going to lower the company tax rate—which has been the central National Party policy for all the last 3½ years. Suddenly it was denied. Unfortunately National brought in a new person to go on the road to Damascus and he decided to have a revelation on the way in that respect. What National has of course is a policy of reducing the size of the Government because we all know that countries with smaller Governments grow faster than countries with bigger Governments. Does Dr Lockwood Smith not agree? He cannot answer that question but it was a pretty easy one—it was the first item of policy. If we look at the countries higher than us on the OECD almost every one except about two the United States and Australia have bigger Governments as a percentage of GDP than New Zealand does. They spend more on health more on education and far more on social welfare than New Zealand does and that is true of all the European countries that are above us on the OECD tables. The evidence simply is not there. 
National’s second policy is of course to reduce the burden of tax. But again the fact is that our tax burden is below the average of the OECD and particularly below that of nearly all the countries above us in the OECD. The countries that we have higher tax levels than by and large are the countries below us on the OECD tables—such as Turkey and Mexico. The National Party’s models are Turkey and Mexico and looking at them I can see why. It is always “tomorrow” and it is always an early Christmas as far as National is concerned. As Ralph Waters an Australian businessman has pointed out in Australia there are worse depreciation provisions there is a payroll tax people have to pay for Medicare there is a super tax stamp duty a capital gains tax and a land tax none of which exists in the New Zealand tax system for companies. Then that National Party document in the most extraordinary statement I have seen for many years states that National’s priority is to lower the tax at the top end of the income system. It seems clear that if National could afford to do only one thing in tax it would lower the tax at the top end of the tax system and do nothing for those at the bottom. 
If we look at the reform programme of the last 20 years what stands out? What stands out is the fact that this country has seen the highest growth in inequality of any developed country. The bottom deciles all lost real income between 1982 and 1998. The top decile gained 43 percent. If inequality is the engine of growth we should have been moving like an express train by the end of the 1990s. We were not. It is simply an excuse for greed on the part of the National Party and its base support group. It has nothing to do with economic growth. It is all about how they reward themselves and their mates. It is not about how to make an economy grow faster how to create a cohesive society or how to create social capital as Jim Bolger was once trying to create within this country. Then to improve the education system National is going to abolish zoning. I have just said that our biggest problem is at the bottom end of the system—and very few primary schools have zoning. We have a fully competitive system in the primary sector where kids can move from school to school and do move from school to school. Has that solved the problems of underachievement? No it has not. Indeed moving from school to school too much is one of the causes of underachievement amongst New Zealanders particularly low-income New Zealanders and it will continue. The National Party has no answers no timetable no solutions and no hope. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 There is some truth in what the Minister of Finance has said. However this is a Government leading a country with no economic plan in real First-World terms at all. If I were to ask any businessman or business woman in the main street of any city or town in this country: “What is this country’s export plan?” they would not be able to give me an answer because the Prime Minister and the Minister of Finance cannot. As a consequence all the evidence surrounding this year’s Budget Policy Statement irrefutably points to a country in economic decline and down the ranks of the OECD countries. It is irrefutable; it is all there. 
In the last week the Prime Minister has admitted that she herself never really had a plan and that she has no idea where this country will be 10 years from now; and that is dramatically serious for this country. We saw a party come to power in 1984 and it is in power again now and although Dr Cullen talks some sense he refuses to acknowledge that every other First-World country has plans and policies and programmes to help its business people and in particular its exporters and we here in New Zealand have none. We can have all the knowledge wave conferences and talkfests and all the flim-flam and ballyhoo we like but this country is on a slide and this Government has no plan to arrest it because it is trapped by its own past. It does not for example like Australia have 75 different policies and mechanisms to help its exporters. What do we have here? We have the export credit guarantee scheme. How many applicants have been successful? None. 
We wonder why people rise in this House every day to argue about education and health and social welfare delivery when we know full well that we do not have the economy to sustain the arguments being mounted every day on this issue. It is of paramount importance that the people out there who claim to be commentators for goodness’ sake understand that if we want to compare economies we have to compare New Zealand’s economy with like-sized economies elsewhere. How do we compare with Scandinavia? Well we do not. How do we compare with Ireland? We do not. How do we compare with Singapore and Taiwan? We simply do not compare and that is because we have had successive Governments—apart from a brief 2-year period—that are believers in the hands-off laissez-faire approach with a bit of social tinkering around the edges. As a consequence the number of beneficiaries since 1984—and I notice Dr Cullen did not use 1984; he used 1982— 
David Cunliffe 
: This member was a National patsy finance Minister. 
Rt Hon WINSTON PETERS 
: Oh I see. That is not what he said back then but then again Mr Cunliffe suffers from a malaise called “recognition hunger”. Do members notice how he loves to be seen around and near newspaper people and near the photographers? He suffers from something called “recognition hunger”. I do not always agree with Richard Prebble but the day we first saw him Richard Prebble said: “This member will become the most hated member in Parliament and particularly on his side.” Know what? He is—and all in the space of a very brief career. 
But I come back to my point. All the evidence suggests that the economy is in permanent decline. Our dollar is rising disastrously. Our dollar in an export-dependent economy is rising disastrously. What does the Government do? It does nothing at all. I heard Don Brash say today that the dollar has risen more rapidly in the last 9 months than ever since it was floated in March 1985 where it started at US44c and ended at US72c. Our exporters went from a feast to a massive famine and we are experiencing it all over again as happened under National in the years 1994 1995 and 1996 when the dollar rose by 26 percent. That was disastrous for exporters. What does this Labour Government do? Nothing whatsoever. 
So we are an economy in decline—but I want to say this: our economy has one feature that is totally repugnant and unparalleled anywhere in the world. It is the propping up of an economy by a process of imported consumerism. In the 12 months to the end of January this year 70700 non-New Zealand permanent arrivals came to this country. I repeat: there were 70700. I ask those Maori members opposite what on earth they think they are doing in allowing this to happen in their country. What on earth do they think they are doing being slapped around the ankles and the head—and the pants no doubt—by the Prime Minister and told to keep quiet? When will they rise and do something for their constituents on this matter? When will the so-called working-class representatives who purport to be Labour members do something about their membership and stop this absolute abysmal fiasco of a so-called immigration policy? This policy of imported consumerism is a bubble that is bursting in front of us as we speak right now. That is why all the projections as to where this economy is going have been rapidly modified—and dramatically downwards. We will not have the so-called services that the Minister of Finance prides himself on; all of which I might add came about for no reason at all to do with the present Government. In fact the only reason that it was happening was a very very export-sympathetic dollar—a low dollar. The Government is allowing it now to take off disastrously. 
The other day a Japanese student died in New Zealand. As it turns out—as the Minister of Immigration admitted when answering questions in the House—the person came here as a visitor in July 1997 and further investigation showed that seven of the other eight people who are subject to a court case came here on visitor permits. I know of no country so reckless in its approach towards immigration and visits from people abroad. Those people—all eight of them now—came here and filled out at the airport or on the plane a visitor tourist arrival card. That is all they did. 
David Cunliffe 
: This is supposed to be the Budget policy debate! 
Rt Hon WINSTON PETERS 
: Oh johnny-come-lately the new boy on the block says that this is a Budget policy debate. Why? Because I have struck a nerve and it is hurting. We are going to get out amongst his so-called supporters amongst blue-collar New Zealanders and make them patently aware of the absolute scandal that is going on in their name by so-called people who put their personal ambitions and their future careers above all else. [ 
Interruption 
] It is not rich coming from me. I am a person who was sacked from Cabinet twice and I never shut up and I never apologised—did I? I never apologised unlike the members opposite. When the Prime Minister says “Jump” they ask “How high?”. 
Darren Hughes 
: Are you proud to have been sacked twice—laid off twice? 
Rt Hon WINSTON PETERS 
: Yes because it was a matter of principle. One of the issues was a failed economic plan which the National Party was pursuing and a scandalous issue to do with this country in respect of Sealord’s. 
Let me come to the point. There are eight people here who say they are visitors and 6 years later they are still here. But this is my point: last week I asked the Minister of Immigration how many people came here as immigrants last year. Do members know what she said? She said: “I don’t know.” Lianne Dalziel is a byword for indolence sloth incompetence and massive disinterest. She does not know. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. You might have been slightly distracted at the time but I think that the level of personal abuse which was occurring just then was certainly unparliamentary. 
Rt Hon WINSTON PETERS 
: The words “incompetence” “disinterest” “inertia” and “sloth” are all apt and acceptable descriptions of this Minister according to the Standing Orders and that member knows it. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: In recognition that this is an open and robust debate I just ask the member to be careful with the use of parliamentary language. 
Rt Hon WINSTON PETERS 
: Oh no I will not! I am not going to stand by while 70000 strangers come to this country and we are told by the Minister that that is the accurate figure. The reality is she has no idea because those eight people—just a random eight people—do not enter the stats. They then applied for student permits but where in their application procedure did they get on to our records and stats as long-term permanent arrivals? Well they did not. So we asked the Minister how many overstayers we have. She said that we may have 14000 or we may have 20000. That is a byword for incompetence. 
David Cunliffe 
: Ha ha! 
Rt Hon WINSTON PETERS 
: He laughs now but if there is a terrorist outbreak in this darn country he will not be laughing then. We are looking at the guilty party. It is just plain irresponsible. Incompetence is what we are seeing every day in the House. The Minister has no idea whether 70000 people arrived permanently or 200000 for that matter. She has no idea. But worst of all she admits it. I have never seen an administration with so many useless Ministers—just plain useless. The Minister of Maori Affairs every day drags the image of Maoridom right down to the gutter. It is not an image that Maori young people can be proud of. We have young Maori out there who look up to parliamentarians yet that Minister would not survive in any other administration I have ever seen. Then there is Lianne Dalziel—totally incompetent. 
RODNEY HIDE (ACT NZ) 
: 
We are here debating the Budget Policy Statement for this year and I ask members to reflect on the fact that this process is set out in the Fiscal Responsibility Act and in the Standing Orders so that the citizens of New Zealand can have a sense of where a Government is going firstly in terms of its own Budget and secondly in the sense of its economic policy. So the first thing that a Government would want to do is to be very clear about the goals that it is setting for the economy and the second thing it would like to do is to be very clear about the plan it has for the economy. Now I ask someone from the Government when taking a call in this House to explain what this Government’s economic goal is because that is not clear to anyone on the Opposition side of the House. It certainly does not seem to be very clear to Helen Clark either because it keeps changing. How would one feel if one was the organiser of or a contributor to the knowledge wave conferences? Government members went along to those conferences hyped up and looking at how to achieve and put New Zealand in the top half of the OECD— 
Darren Hughes 
: Who’s gone to Waiheke? 
RODNEY HIDE 
: I raise a point of order Mr Speaker. It is quite OK for Mr Hughes to sit there and interject but to do so continually is out of order. I think you should suggest to him that if he thinks he has a contribution to make to this debate he should wait his turn and take the call. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I thank the honourable member for bringing that to my attention. I have mentioned before that running commentaries are out of order and I refer members to Speaker’s ruling 51/5(3). Could members please look at that. 
RODNEY HIDE 
: Parliament is about debating the issues and while a Government might not like the fact that it does not have a plan and has been shown to come up short on its economic goal that means that in a parliamentary democracy Opposition members can stand in the House and point out those failings. I know that Dr Cullen does not like it and we know that the Prime Minister Helen Clark does not like it. But it is certainly a bit wrong for them to send their back-bench members down here to try to shut down the debate.  
Let us look at what has happened here. We see that Helen Clark wrote this in a foreword: “These results are greatly encouraging for our goal of economic transformation and a return to the top half of the OECD ratings by 2011.” That foreword has Helen Clark’s signature. When someone speaks like that as a Prime Minister would members business people and the voters and citizens of New Zealand not think that that was the Government’s goal? The Prime Minister said that and signed it. She then turned around a year later and said the goal she had set just a year ago was totally unrealistic. Imagine that! A Prime Minister sets a 10-year goal for the country and a year later says that it is totally unrealistic. 
John Carter 
: She forgot she had said it. 
RODNEY HIDE 
: Well we have seen her do that before. Can members remember the last big goal that the Prime Minister articulated for our great nation? It was to close the gaps. Then Helen Clark realised that under her Government’s policies that was “totally unrealistic” so no one was allowed to talk about it and the very phrase “closing the gaps” was verboten—it was not to be said by any member and members will not hear that talked about any longer. [ 
Interruption 
] I know that Tariana Turia will get a turn to take a call. She wants to sit there and chip away because she does not agree with democracy and this Parliament. 
What happened then? Last December Dr Cullen was reported in  
Metro  
magazine as saying to Gilbert Wong that he happily confirmed that the Government’s economic growth goal remained to return New Zealand to the top half of the OECD in 10 years. That was in December last year. 
John Carter 
: Who said that? 
RODNEY HIDE 
: Dr Michael Cullen the Minister of Finance. I notice he has not stood up in this House and denied saying that. Last year the Minister of Finance happily confirmed that the Government’s goal was to return New Zealand to the top half of the OECD in 10 years. Now we know that is nonsense but Michael Cullen said it and the question is why he said it. It was because this Government is all about public relations and spin not about policies plans and a proper approach. 
Let us go back to what Helen Clark said at the opening of Parliament in February 2001. She said: “We can look ahead 10 years and see where we could be.” 
John Carter 
: Where was that said? 
RODNEY HIDE 
: In Parliament. She went on to say: “If we embrace innovation wholeheartedly we can be in the top half of the OECD not falling to the bottom”. Helen Clark first of all said that she had not said that. When she discovered it in  
Hansard 
 and realised that she had said it she agreed that she had said it but added that she had not meant it or had said it because she was advised that it was a good thing to say and then when she thought about it she realised that the Government could not achieve it. Then we wonder why business people in New Zealand are saying to us that they do not know what this Government is trying to do! The very big bold goal that Helen Clark came into this House to set has been deemed a little over a year later by her to be “totally unrealistic”. 
Well what has happened? Does it mean that we have not embraced innovation wholeheartedly? Helen Clark the Prime Minister of New Zealand a month later in 2001 went to Massey University. In a prepared speech put out to all the media and reported around New Zealand she stated: “Could we be in the top half of the OECD in 10 years if we set our mind to it? I think we could.” She answered her own question. So she said it was possible to achieve that goal and now she says that it is totally unrealistic. I would like a member of this Government to explain what its economic goal is. Could any Government member possibly explain why the Government should have any credibility when the big bold goal that was talked about for a year is suddenly deemed unrealistic? So worried are Labour Party members by that that they denied leave in this House for a  
Metro  
article to be tabled. In that article Michael Cullen stated: “I can happily confirm to you that our goal is to get into the top half of the OECD within 10 years.” 
What happened is this. In 2001 Treasury prepared a paper—[ 
Interruption 
] I raise a point of order Mr Speaker. I think the Government members should desist from that but those guys will do anything to disrupt a speech. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I just say to members that if they wish to have conversations there is a right place for that. In the Chamber that can be seen as being unparliamentary and discourteous to the member who is speaking. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Just by way of explanation I noted that two or three members were on the verge of going to sleep because it was a very boring presentation. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: That is not a matter for a point of order. 
RODNEY HIDE 
: I can tell Mr Mallard what is happening: those members are shutting their eyes in pain. That is what is happening in that Government. I saw Michael Cullen with his head back and eyes shut. He was wide awake but he shut his eyes through Mr English’s speech. Why was that? It was because he knows that there is no answer to this Government setting a goal and abandoning it from the very top. Does the Government have a plan? No! Does it have a goal? No! Does it know where it is going? No! This is a failed administration in terms of the economy. [ 
Interruption 
]  
I would like Mr Hughes who has a lot to say to stand up in the House take a call and explain why in 2001 the Treasury said that the economy needs to grow by 4.6 percent to 7.2 percent per person per year. Helen Clark was still going around saying that we could do that. Dr Cullen still went around last year saying that we could do that. That is not 4.6 percent growth per year; that is 4.6 percent growth per person. Last year when we had good growth—according to Mr Hughes—we only grew the economy by 2.5 percent per person. Even when the Government has a good time by its own admission it is not even halfway to achieving that goal. What a useless hopeless bunch those Government members are! 
ROD DONALD (Co-Leader—Green) 
: 
 I ended my speech in last year’s Budget Policy Statement debate with a challenge to the Government. I said it was an indictment on the Labour-Alliance Government that low and middle income earners—those earning less than $38000 per year—were and are being penalised if they are saving for their retirement through an employer-subsidised superannuation scheme. My challenge provoked a response and I am pleased to say that it was a partially positive response because Dr Cullen has finally agreed to stop penalising people who earn less than $38000. That is one small step in the right direction but like so much about this Government it does not go far enough. Dr Cullen admits that he cannot afford to give salary and wage workers earning less than $60000 the 6 percent tax incentive that he is giving to those of us earning more than $60000. I ask Government members how they can be part of a Government that is happy to justify rewarding workers who are already well off but not those who are struggling. How much would it cost to do the right thing by New Zealand workers? The cost would only be $60-80 million per year—not a lot of money. It is not a big price but it is too dear for Dr Cullen. 
Why is that too costly? It is because Dr Cullen has to find $2000 million per year every year for his “think big” superannuation scheme—the New Zealand Superannuation Fund—that is doomed to fail. Dr Cullen is handing that money—our taxes—over to private sector investment managers and he wants them to invest it on the overseas sharemarket. Is that a smart move? No it is dumb dumb dumb. That is not just because the markets are in free fall not just because savvy investors like New Zealander Craig Heatley or international investor Warren Buffet are either getting out of shares or not buying any more just at the same time as Cullen’s superannuation fund intends to buy them and not just because the same investment strategy has already cost the Government Superannuation Fund over $300 million in the 14 months to December 2002—and I suspect it has cost it quite a chunk more since then—and not just because if the New Zealand Superannuation Fund took the same hit at its peak it would lose over $6 billion in one fell swoop. It is simply not a smart move because the casino economy is not the right place in which to stake our future. 
Instead this Government should be putting its faith in the people of New Zealand especially our young people. Now that would be loyal. Everyone has been talking about loyalty in the last couple of weeks. How about showing some loyalty to our own people especially our young people? Will the Government show them that loyalty? Of course it always does a little bit of that but nowhere near enough. There are token gestures to keep the Government’s supporters happy but no bold vision of how to put New Zealand on to an ecologically sustainable economically self-reliant and socially just footing. That is the challenge for this Government and it is failing to meet it. It is failing not only at a time when it is pouring billions of dollars into its “think big” Superannuation Fund but also at a time when it is running large Budget surpluses. 
I say to this Government that a surplus is not real as long as a significant number of children are living in poverty. It is simply not acceptable that a Labour Government with its history of standing up for the poor and downtrodden is happy to crow about $2 billion operating surpluses when 30 percent of this country’s children are living in poverty. If members do not believe me they should consider the submissions we received on the Budget Policy Statement. The Downtown Community Ministry the National Council of Women of New Zealand Presbyterian Support Services Child Poverty Action Group Barnardos New Zealand the Family Planning Association the United Nations Children’s Fund and the Public Health Association of New Zealand all highlighted child poverty. All those submitters called for the Government to tackle child poverty now. They called on the Government to do that not in next year’s Budget but now because that would be humane and because investing in our children today will lead to long-term savings in such areas as health welfare and the costs of crime. It is ironic that the Government says its key priorities for the 2003 Budget include supporting a productive and cohesive society reducing crime and its impacts and investing in the future when it refuses to do the most obvious thing to achieve those goals: to look after this nation’s children. 
Given that Dr Cullen has got around to doing half of what I challenged him to do last year which was to help working New Zealanders to save for their retirement I would like to offer him some suggestions for tackling child poverty. Even if he implemented only one of them it would be a step in the right direction. I challenge Dr Cullen to introduce a universal child benefit. It would be a non – income-tested transferable payment to the primary caregiver similar to the family benefit that my parents relied on when I was growing up which was scrapped by the callous National Government in 1991. We would propose a payment of $15 per week for the first child and $10 per week for every subsequent child. 
We also challenge this Government to review and reform its family assistance policies. International research has shown that family assistance plays a crucial role in reducing child poverty rates. We challenge this Government to extend paid parental leave to 14 weeks for all mothers in the workforce. We challenge it to end compulsory work testing for single parents on the domestic purposes benefit and for partners of beneficiaries whose primary responsibility is caring for dependents. We challenge it to provide support and education programmes for parents. We challenge it to provide additional support for parents in the first year of each child’s life. Like most members in the House I enjoyed Plunket visiting our home. It is time to increase the resources of programmes such as Plunket in order to ensure that every child is seen regularly in his or her first months of life because that is a very effective early warning strategy that solves a lot of problems that might otherwise arise later on. 
In addition we challenge the Government to introduce a tax-free threshold at the bottom of the income scale. That would have a direct impact on child poverty by giving low-income families more money in their pockets and reducing the poverty trap. We challenge it to set benefit amounts at a level that is sufficient for all basic levels. That means some significant reforms to the benefit structure. I would like to refer specifically to the submission from the Downtown Community Ministry which gives us the example of a couple on the unemployment benefit with two children. The current rules state that after they earn $80 per week their benefit is severely abated. The Downtown Community Ministry stated: “For the first dollar they receive from part-time work they have their accommodation supplement abated by 25 cents in the dollar. After $80 gross their unemployment benefit is abated by 70 cents in the dollar. At the same time they are being taxed at the secondary rate making a combined effective marginal tax rate of 93 cents in the dollar.” Not even the rich have to pay that level of tax. The ministry went on to state: “As well their family support may be abated and if they were getting a special benefit they would probably lose that as well.” It is not good enough when we have the Labour Government putting $2 billion per year into the Superannuation Fund for my retirement and running Budget surpluses of $2 billion per year to have families living in those circumstances. It is time that the Government tackled the child poverty issue. 
It is also time that the Government did more about helping people to buy their own homes. I hear that is one of the drip-feed announcements today in the lead-up to the Budget. Let us do it right rather than just tinkering with it. Home ownership is beneficial in many respects. It helps family stability strengthens communities and is the best way for people to save for their retirement. It is something that I believe every person in this House would support and certainly as someone who had the assistance of a home ownership scheme when I bought my first home I encourage this Government to at least reinstate the suspensory loan that used to exist to allow people to be able to buy their first homes. That would be a step in the right direction in so many respects. 
So also would be investing more money in the prevention of illness. Another key submission was the one from the Public Health Association of New Zealand which stated: “invest in health not hospitals”. We entirely agree with that. According to our calculations we would save around $200 million a year if we put more funds into preventing illness. 
GORDON COPELAND (United Future) 
: 
 I begin by saying that I am pleased to note that the 2004-05 forecasts indicate that the Government will be able to make a full contribution to the New Zealand Superannuation Fund. United Future supports that fund. Pension payments to retired New Zealanders are of fundamental importance if all of our elderly without exception are to be provided with at least a basic standard of living. I do not think any of us in this House would wish to contemplate a future where even a minority of our elderly would be left without the financial means to meet basic necessities such as housing heating clothing adequate food and the like. If that is so then I think it is a pity that this matter continues to be a political football with other parties in this Parliament either sitting on the fence or expressing outright opposition to the fund but without in so far as I know proposing a viable alternative. 
I had a personal preference for compulsory private superannuation but as we all know 92.5 percent of New Zealanders rejected that option by referendum. Given that reality I agree with Dr Cullen that the Government would stand accused of negligence were it not to address now the reality of our demographics and the enormously expensive future costs involved in the provision of a basic standard of living for future retirees. 
However despite the positive features of the Budget Policy Statement I continue to have concerns in a number of areas. The first of those concerns the balance sheet of the nation as distinct from the balance sheet of the Crown. I understand that during the Great Depression of the 1930s the Crown’s balance sheet was positive and its Budget was balanced. That historical example suggests therefore that we should not be lulled into a sense of complacency simply on the basis that the Crown’s own books are in good shape. 
I want to spend a moment just examining the balance sheet of our nation. In terms of net external liabilities our net debts—something around $80 billion—New Zealand is the most indebted nation in the OECD. That level of indebtedness is nudging towards 65 percent of our gross domestic product (GDP). The Reserve Bank has told me and the Finance and Expenditure Committee that that level of debt is “very high in comparison to other OECD countries”. So should we be concerned? I think the answer is yes at least in the sense that the owner of a freehold house is patently in a much better financial position than the owner of a house with a significant mortgage. In our case we are by analogy a nation with a significant mortgage. 
If people have a mortgage the first call on their income is its servicing by way of interest and capital repayment. The same is true for a nation. A significant first call on our national income has to be paid overseas to service both the interest on that $80 billion—around $4.8 billion per annum if I strike an average interest rate of 6 percent—and the repayment eventually of that $80 billion in capital. Those figures remain the same regardless of the fact that as is now the case in New Zealand most of that debt is owed by the private sector rather than by the Crown.  
Of course if I knew with certainty that the bulk of that debt had been borrowed by businesses as part of a well-thought-through gearing strategy to increase the wealth of the nation the high level of debt might of itself be a positive rather than a negative for New Zealand. However the Reserve Bank tells me that $23 billion in net terms worth of that private sector borrowing from overseas sources has gone into non–revenue-producing assets such as private cars and housing. To that extent the “mortgage on the house” analogy is therefore a reality and obviously New Zealand’s net worth would be better if that debt could be paid off. 
There is another aspect that should also be mentioned. Since New Zealand has net external liabilities of $80 billion obviously there is ample scope for the New Zealand Superannuation Fund to be invested predominantly into this country. Commentators have said that the New Zealand market is too small but how can that possibly be the case if we have already borrowed $80 billion worth of debt from overseas whilst at the moment the Government Superannuation Fund and the New Zealand Superannuation Fund combined have assets of around only $6 billion or so? 
Furthermore as the borrower always pays interest at a higher level than the lender with the difference becoming the banker’s margin then we increase the nation’s financial risk if in net terms we are borrowing in order to lend. That is the road to poverty not prosperity. 
We can of course also improve the balance sheet of the nation and our net indebtedness by encouraging a higher level of private savings. I believe that front-end incentives will need to be given to change our present low-savings culture. The Minister has voiced his doubts about whether that would be effective. He said in the House recently that the question is not whether people want them but whether they would work. In response I point out that they are a feature of all the other OECD nations where the savings level is appreciably higher than in New Zealand. I believe that the only other exception is Portugal. 
Also I can say that it was tax incentives that tipped the balance for me in my 20s as a young husband and father in favour of joining my company’s superannuation scheme. Joining the scheme involved considerable financial sacrifice as I had in order to attract the employer’s contributions to pay in 5 percent of my gross salary. I would not have done so but for the tax rebate that was then available. 
The Government Actuary’s report for the year ended June 2002 indicates that the percentage of people in the labour force who belong to employer superannuation schemes has dropped from 22.6 percent in 1990 to 14.6 percent 11 years later. I do not believe that we will see those trends reversed without front-end incentives. I hope that the Minister’s doubts can be resolved in favour of boosting private savings by front-end tax incentives. 
I believe that we must look carefully at the issues I am raising. The Budget Policy Statement forecasts a net cumulative increase in the current account deficit of $31.5 billion to 2007—money that the Crown will need to borrow. That will further increase the debt on both the Crown’s and the nation’s balance sheet. Between 2004 and 2007 the cumulative increase in the current account deficit will be around 6 percent higher than GDP growth over that same period—a worrying trend indeed. That alone would see New Zealand’s net debt balloon to 71 percent of GDP. If at the same time private borrowing continues to grow at a faster rate than GDP—and that has certainly been the case in recent years—we will see net debt well over 80 percent by 2007 which is just 5 years away. 
The Reserve Bank has drawn attention to the fact that the high level of external private sector debt in conjunction with a relatively low level of financial assets heightens New Zealand’s vulnerability to adverse events whether of an external or an internal origin notwithstanding the many positive features of the macroeconomic policy framework and the economy. Those warnings were given to us by the former Governor of the Reserve Bank Dr Donald Brash in a speech that he made on 25 January 2002. Now if the Reserve Bank was worried in 2002 when our debt level was about 65 percent of GDP how much more should we be concerned when on the basis of this Budget Policy Statement we are heading towards an 80 percent net debt ratio by 2007. In my view that should signal that the policy changes I have mentioned should be made sooner rather than later. 
Secondly I want to mention child poverty in New Zealand. I believe that this year rather than next the Government should move to adjust family support and family tax credit payments for inflation since 1998. I have some sympathy with the minority view expressed by the Green Party. However I must say that I am delighted to note that the Budget Policy Statement includes the setting up of the Families Commission. Really it is time we stopped pretending that the State can somehow be a surrogate father and we need to begin to rebuild New Zealand families and communities so that the financial surplus which we are forecasting can then be worn as a badge of honour. It cannot at the moment when so many New Zealand children are worse off now than they were in 1998. 
Dr DON BRASH (NZ National) 
: 
 The Budget Policy Statement is a requirement of the Fiscal Responsibility Act. It is one of the very good policies put in place in the 1990s which I am pleased to see the present Government has continued to have in place. It does not really stop a Government from doing anything it wants to do so it is not anti-democratic in any sense. However it does require the Government to be quite transparent and honest about what it is doing and what its intentions are. It provides a very important discipline on Governments. A Government cannot introduce a policy and say that it costs only $10 million if in fact it will cost $50 million $100 million or $200 million in the next 2 or 3 years. This statement is a very important policy and I am delighted that this Government is continuing to issue such statements. 
In the document the key priorities of the Government over the next little while are set out and I want to speak to two of them today. The first one—in fact the one listed first on page 5 of the document—states: “A key focus for the Government is building the conditions for enhancing New Zealand’s sustainable economic growth rate and moving back into the top half of the OECD in terms of per capita income.” It does not state when that objective will be achieved and as my colleague Mr Bill English said recently it is not at all clear that on present policies they will move up at any point although 2049 may be a possibility. 
But I want to report that every single submitter from the business sector who appeared before the Finance and Expenditure Committee to comment on this statement expressed grave concern that the Government’s policy fell a long way short of delivering on its own announced goal of raising living standards and the trend growth rate in New Zealand to get New Zealand back to the top half of the OECD. They wanted to see some attempt to reduce the company tax rate and to flatten the personal tax scale—as the Government’s own specialist tax advisors the McLeod committee recommended. They wanted to see a serious attempt made to reduce the costs of excessive regulation in areas like the Resource Management Act and so on. But there is no indication at all either in this statement or indeed in other documents put out by the Government that it has anything planned in this area at all. 
The Minister of Finance has suggested that if he can reduce taxes next year those tax cuts will be used again to redistribute wealth rather than create more wealth—as if the income tax structure were not already very progressive indeed. I said in this House last night that a person earning $25000 a year with a dependent spouse and two children under the age of 13 pays less than $27 a year in income tax after family tax credit and so on is allowed for. Someone earning four times as much on $100000 by contrast with the same family circumstances is paying more than 1000 times as much—not four times as much not 40 times as much but more than 1000 times as much. So the tax structure is currently penalising the people who are most likely to invest to take business risk and so on. The Minister proposes to exacerbate that situation in any tax cuts he can afford next year. 
Is it any wonder that the Government has abandoned its own goal and reneged on its commitment to get New Zealand back into the top half of the OECD by 2011? The growth projections underlying the December Economic and Fiscal Update are for steadily reducing growth over the next decade. The highest growth rate in the decade projected by Treasury in this document is the growth rate in this year—the year we are now in. 
David Cunliffe 
: They are not forecasts. 
Dr DON BRASH 
: Well I think I know the difference between a forecast and a projection. I have been working in this territory for a while. Certainly they are not forecasts of what will happen this year next year or the year after but Treasury is saying that at this stage there is no evidence at all that per capita growth can exceed 1.5 percent per annum. The reason that growth is projected to decline is that the workforce is expected to grow at a slower rate so that we get about 3.something growth this year and a 2.1 percent growth at the end of 10 years. There is no evidence at all of an increase in the trend growth in productivity and frankly at 1.5 percent we will not climb up the OECD ladder very quickly. 
The second key priority in this document which I want to speak about briefly is to support a productive and cohesive society. That is also clearly a very important objective indeed. Well at the Finance and Expenditure Committee we had a number of submitters before the committee expressing concern as Mr Donald has said about the increase in child poverty. What does the Budget Policy Statement do about that? The statement is based on the assumption that there will be a steady increase from this point on in the number of those on a benefit. In 1975 those on the domestic purposes benefit numbered 17231. In 2002 that number had increased by 532 percent to 108980 and the Budget Policy Statement is based on the assumption that there will be an additional 4000 people on that benefit in 2007. 
In 1975 those on the invalids benefit numbered 9414. In 2002 that number had increased by 586 percent to 64603. The Budget Policy Statement is based on the assumption that there will be an additional 17000 people on the invalids benefit by 2007. We have had no great war involving New Zealand since 1975 we have had a decline in the road toll since 1975 but we have had a 586 percent increase in those on the invalids benefit—in 27 years—and we are projecting in this Budget Policy Statement a further substantial rise in the number of people on that benefit. 
In 1975 those on the unemployment benefit numbered 2894. In 2002 that number had increased by over 4000 percent to 123067 and the Budget Policy Statement is based on the assumption that there will be an additional 9000 people on that benefit in 2007. 
Ron Mark 
: They are all Labour voters. 
Dr DON BRASH 
: That may explain it. The story is similar for the sickness benefit though I will not read out all the numbers. The total number of people on those four benefits—invalids benefit sickness benefit domestic purposes benefit and unemployment benefit—has increased from 37369 in 1975 to 333262 in 2002. It is projected to rise further to 371000 people of working age by 2007. These figures do not include national superannuitants; they include just the people on those four benefits. It seems to me that there is something fundamentally wrong in a system that creates that number of additional beneficiaries particularly at a time when the economy has been very buoyant indeed. It has been very buoyant not may I say from any particular policy that this Government has put in place but because of the reforms of the 1980s and 1990s the very low exchange rate we had until recently and of course good export prices. I ask members how that increase in people on benefits is supporting a productive and cohesive society. 
Hon JIM ANDERTON (Minister for Economic Development) 
: 
 I must say without being too personal about it that I have not been able to take Donald Brash all that seriously since he came to Wellington to take up the position of Governor of the Reserve Bank and advised people not to buy a house in Wellington because it was not a good long-term strategy. I suspect that since he has been here he has decided that that was not quite the advice people should follow. 
Dr Don Brash 
: I raise a point of order Mr Speaker. Mr Anderton is quoting me quite incorrectly. He is perpetrating a myth that is wrong. It is important that he desists from that clearly irrelevant comment in the context of the Budget Policy Statement. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: That is not a point of order. It is a debatable issue. 
Hon JIM ANDERTON 
: Michael Cullen’s fourth Budget Policy Statement is another excellent summary of the Labour-Progressive coalition Government’s progress so far in improving the quality of life of all New Zealanders. One of its greatest values however is that it highlights how the excellent management of the Government’s books will allow us to make further progress to improve the quality of life of all New Zealanders in this and coming years on a very firm financial basis. I know that it is not usual for non-Government parties in Opposition to congratulate the Minister of Finance or the coalition Government on anything much but I think there is something for all of us to celebrate in this Budget Policy Statement. 
The Labour and Progressive members are proud of the Government’s record in steadily improving opportunities for New Zealanders to participate fully in their own society. The Progressives above all else seek a Government that facilitates job creation. We want to see a society where every young person is in work training or education. We need to see the already very sound financial position of the Government made even stronger because we know that this is the best way of ensuring that the dividends will be there to pay for the investment we need in better job opportunities and improvement in the quality of health and education services in this country. I have to acknowledge that in the past under a variety of Governments these have been underfunded and therefore are inadequate to meet the expectations of a First World country like New Zealand. 
The sound handling of the Government’s finances outlined in this Budget Policy Statement has made it possible for us to have among other things a growing economy where New Zealand’s rate of economic growth and therefore its ability to create meaningful work education or training opportunities for our people have been at a level above the OECD average over the last 3 years. The OECD has forecast that New Zealand will continue to outpace the OECD average over the next 3 years. I thought that would be a cause for celebration for all New Zealanders. I know that when in Opposition one has to hope that the country becomes miserable so that an Opposition party has the chance of becoming the Government but in truth the country is not miserable. Things are doing very well. Sometimes I think it would be much more credible of the Opposition to say so because everyone knows it. 
We do not outperform the OECD average unless we have a jobs-friendly Government—a Government that encourages people’s natural innovative and creative ideas. We have more people in real jobs than in the last 15 years. There are 15500 fewer people on the main unemployment benefit than a year ago and 123000 more jobs today than there were in December 1999 when we first came into Government. We are expanding opportunities for people to gain high skills in the workplace. We intend to have over 6000 young people in Modern Apprenticeships by the end of this year—a 100 percent increase over the level last year and a 6000 percent increase on what there was previously because there were none. 
But it is true that any Government can temporarily boost spending on training education and job creation. For example the third National Government from 1975 to 1984 had a big idea based on increased spending which ended in tears because it was not based on sound economic development foundations. The challenge for this Government has been to improve social well-being at the same time as we improve economic opportunity. We believe that that can be achieved only through intelligent partnership with all the sectors of the communities of New Zealand. Partnerships between Government and industry—[ 
Interruption 
] I tell the member for Rodney that this Government has a better relationship with mainstream business manufacturers and creative innovative industry than any Government in my time on this planet. We want partnerships in the community because Governments do not create all the problems and they do not solve them all and partnerships within the Government because coalition Governments are better-quality Governments. The partnerships between Ministers and this Government both in the last 3 years and this term are as good as I have ever known them to be in my experience in politics. 
What this Government’s Budget Policy Statement shows however is that we have those partnerships today and they are working positively for the social and economic well-being of all New Zealanders. I want Opposition parties to dwell just for a moment on one important thing in this Budget Policy Statement. Net core Crown debt after taking into account the accumulated assets of the New Zealand Superannuation Fund is forecast by Treasury to fall to just 2.9 percent of GDP by 30 June 2007 based on current policy settings. That is down from around 20 percent of GDP when the centre-left first took office in late 1999. I would have thought that the National Party and ACT would be cheering all that. But no there was not a word from Dr Brash. I would imagine that in any forecast he made as the previous Governor of the Reserve Bank he would have looked at that and said it was an impossible target yet we have actually met it. We are doing better than anyone could ever have thought. 
I can accept that the ACT party and the National Party which recently adopted ACT’s key policies and values might disagree with the new spending on education and training or the development of work being done in the regions of New Zealand to get industries and firms working together in a more coherent fashion than ever to meet common challenges. I can also accept that ACT and National would much rather sell off taxpayer assets because they have a non-negotiable principle which is that taxpayers should not own anything in this country—not even strategic assets like the national airline. But surely even Opposition parties can accept for themselves some happiness at the Government’s overall fiscal stance as outlined in this Budget Policy Statement. 
Mr Speaker you would be hard pressed to count on the fingers of one hand the number of OECD nations with Governments running as healthy and as strong a position as this Government is. The Budget Policy Statement is a progressive document highlighting a Government committed to investment in the country’s productive capacity in training and education doing so with an eye to the known future costs of superannuation and all the while maintaining one of the most prudent sets of debt and operating positions in the OECD. There are political implications in all this. It means that respectable and intelligent stances are available to Opposition parties to engage constructively with this minority Government to advance legislation through the House. It should be clear to most people now that the New Zealand Labour Party and I say this as a minor coalition partner is going to be the far-largest single party in this Parliament for many years to come. 
Ron Mark 
: Here we go. 
Hon JIM ANDERTON 
: National Party members disagree with that. They will be lucky to be here next time with the rate of progress they have been making. The challenge of the other six parties here is to engage constructively with Labour-led Governments for years to come and to produce the best laws and policies for New Zealand’s future. I am personally delighted with the fact that that is happening already. We hold only 54 seats in this Parliament together which means that no law can pass without the support of at least one non-Government party. In fact of the 17 laws that have been enacted since the July election last year no fewer than 13 have been supported by more than one Opposition party. Seven laws have been enacted with the support of more than two Opposition parties. This shows that this Parliament is working under MMP. There is a positive role to play for every non-Government party showing that there is an opportunity to engage constructively across the floor of this House to support progressive legislation. It is also a sign in my view of the underlying confidence by the whole of the Parliament in the Minister of Finance of this coalition Government and his responsible and far-sighted fiscal management. A word or two of congratulations would not go astray from those who in the past could only have dreamt of the fiscal position that this Government is now in on behalf of New Zealand. 
Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: 
 Page 1 of the Budget Policy Statement sets out the Government’s priorities. The very first priority on page 1 is “Increasing our sustainable rate of economic growth”. There is nothing wrong with that priority. It makes a lot of sense. The only problem is: who can deliver it? I think most members of this Parliament would accept that only business can deliver an increase in our sustainable growth. I think that most people unless they are communists would accept that it is not Governments that deliver economic growth; it is business. So if we accept that argument—that it is business—we need to take some notice of what business says. Business leaders came to the Finance and Expenditure Committee and told us that they agreed with that goal that priority but they said that current policies are not consistent with it. Other business leaders said that there is no sign of policies to support that priority. That is what business is telling us. 
This Labour Government says that growth is its priority and we have just heard Jim Anderton rabbiting on about how his policies in partnership with business are going to deliver it. So how come business people come to the select committee and say: “Your policies won’t deliver it.”? Clearly this Labour Government is not listening. One business leader told the select committee that it seems that their submissions go down a black hole. Last year I remember that Business New Zealand came to the select committee also on the Budget Policy Statement a year ago and said and I quote it exactly: “No other Government on this planet serious about growth is implementing these policies.” This Labour Government can ignore that if it likes. It can say: “Oh well the people who come along to the select committee do not represent New Zealand business.” Business New Zealand represents something like 70000 businesses and I do not know how many tens of thousands Federated Farmers represents. The Business Roundtable certainly represents most of the bigger businesses. 
The  
New Zealand Herald 
 conducted a survey of 120 chief executives of business late last year. Of that 120 three thought that this Labour Government had a credible long-term growth strategy—three out of 120! Yet Jim Anderton says we should be applauding the Government for its growth policies. Business in New Zealand does not believe that the Government has a credible growth strategy. Treasury does not believe that the Government has a credible growth strategy. Treasury’s projections in this Budget Policy Statement show economic growth declining over the next decade not going up. 
The business sector told the select committee that if this Government wants to increase our sustainable growth rate it has to do something about reducing the Government’s spending ratio. Business pointed out that no country of a kind similar to New Zealand has ever sustained 4 percent growth while carrying a tax burden like New Zealand currently carries. No country of our kind has ever done it. But Dr Michael Cullen is far more clever than the collective wisdom of the world! Dr Cullen thinks he can defy gravity. In fact at the select committee Dr Cullen was questioned about not just that concern but other concerns that were expressed—the need to reduce the regulatory burden on New Zealand businesses and the need to reduce compliance costs. Business New Zealand pointed out to the select committee that as it looks ahead it sees that Government policies just next year are going to impose an additional $43000 in compliance costs on the average New Zealand business. 
Do members know what Dr Cullen said to the select committee when he was confronted with those concerns? I quote from the report of the Finance and Expenditure Committee of March 2003. Dr Cullen said: “It is important to recognise that Business New Zealand is an interested pressure group just like the PPTA or any other organisation. Their job is to say ‘Our group should get more money. You have set the law in such a way that it completely fails us.’ In the same way that the PPTA tell us that we do not pay them enough money Business New Zealand say that in effect we do not pay them enough money by way of lowering their taxation.” I am quoting directly from page 18 of the select committee report. 
Let us put aside his insult to Business New Zealand by saying that it is like the PPTA. That quote from Dr Cullen shows that he thinks all business income in New Zealand is Government money. He and his Labour Party mates think that the amount of money they do not take off by way of taxation is Government payment to business. I quote him directly. He said: “Business New Zealand say that in effect we do not pay them enough money by way of lowering their taxation.” It speaks volumes when the Minister of Finance says that we do not pay them enough money by way of lowering their taxation. Dr Cullen thinks that all the money in the economy is owned by the Government and that the Government deigns to leave some of it with business and not tax it all. 
This Government is a bunch of unreconstructed socialists. They know the rhetoric. Dr Cullen and Helen Clark have been around this place for a long time. They know the rhetoric to give the impression the perception that they are business friendly and pro-business. Dr Cullen’s statement speaks volumes. He thinks that lowering taxation is the same as the Government paying businesses. It is not just New Zealand businesses that say that the policies are not going to raise our rate of growth. The most recent OECD analysis on the New Zealand economy says that the Labour Government’s policies are not helpful to growth. 
So how can Cullen Anderton and the like stand in this Parliament and try to tell us that their partnerships with business will increase our sustainable rate of growth? I suppose that Dr Cullen that smart alec thinks he knows better than the whole OECD. That brilliant former history lecturer knows better than all the OECD economists! It is interesting that Dr Cullen has said that New Zealand’s tax burden is not that high. In fact he claimed that most of the OECD countries carry a higher tax burden. I draw to his attention the latest addition of  
The Economist 
. It shows a table that relates to the direct tax burden on industrial workers with a family. Do members know where New Zealand ranks in the OECD for direct tax burden on working families? It is one area where we do rank in the top half of the OECD. We are sixth highest in the OECD for direct tax burden on working families and under Labour it has gone up. It has gone up more than any other country in the OECD other than the Czech Republic. 
Labour members think that sending Jim Anderton around the country for his little photo opportunity on grant handouts will increase our sustainable rate of growth and Dr Cullen talks about improving our investment agencies to attract more investment. That is like trying to make NZL82 go faster by changing the uniforms of the crew. 
The “third wayism” crap from this Government to quote John Tamihere is just that. The Government is trying to hoodwink New Zealanders. It is trying to hide its socialist redistributive anti-growth policies and dress them up in the fancy jargon of partnership. John Tamihere sitting opposite knows that it is just “third way-ism” “State-ism” garbage that is damaging not just to the future growth of New Zealand but to Maori as well. That is why Helen Clark is now trying to distance herself from the growth goal. 
DAVID CUNLIFFE (NZ Labour—New Lynn) 
: 
 It is rather sad to see a member who once showed promise as a young Minister being pushed further and further away from the front bench by his own colleagues but having listened to his speech I understand exactly why that is. Lockwood Smith is nothing more than a trained parrot for the Business Roundtable and Business New Zealand. He gets up in the House and rattles off their submissions like the organisations themselves before the Finance and Expenditure Committee. Guess what Dr Smith—times have moved on. The recipes of the 1990s have been tried and they failed. That is why he is on that side of the Chamber and we are on this side. I will prove that case in my remarks today. 
I welcome the opportunity to speak in the Budget Policy Statement debate today. As the quality of debate in and submissions to the Finance and Expenditure Committee indicated the Budget Policy Statement is indeed a useful part of the Government’s accountability framework under the Fiscal Responsibility Act. As Dr Brash said that is a matter of bipartisan agreement in this House. 
In saying that there are three key points that stand out from the report of the Finance and Expenditure Committee. First that progress of the economy in the last year was not just good; it was outstanding. It was underpinned by sound and prudent fiscal management by this Government. Second we are turning round the social deficit of the 1990s. No the job is not finished yet. There is much more to do. Third there are external risks of a deepening recession which means we have to manage extremely carefully in the years ahead. 
I turn first to the economic results. The Budget Policy Statement shows higher than expected tax revenues with the Government’s operating balance rising on average by $1 billion a year to a 4 percent of gross domestic product (GDP) surplus by 2007. That is an outstanding result. It has not been matched in 20 years in this country. Let us pinch ourselves—no we are not dreaming. [ 
Interruption 
] No I do not want Dr Smith to pinch me. Gross sovereign issue debt is predicted to fall below 25 percent of GDP by 2006 and net debt is predicted to fall below 2.9 percent of GDP by 2007. We are very nearly in credit as a Government for the first time since Vogel borrowed for the railways. The Government has new operating spending of $1 billion a year and it is focusing on reducing social inequality and crime and investing in our future. 
Contrast that performance with that of Dr “Back to the Future” Brash. Bizarrely in his remarks he appeared to confuse the technical growth assumptions in the Budget Policy Statement documents with forecasting. Of all people he should know better. Just because a technical assumption of 2 to 3 percent is in the document it does not mean we will not do better. What it means is that unlike the Opposition this Government does not count its chickens before they are hatched. National cannot get its act together. On the same day that Don Brash called for smaller Government Katherine Rich bemoaned the fact that we were spending only $10 million on the Television New Zealand charter Nick Smith demanded more for State housing and Murray McCully wanted more for the America’s Cup. The day before Roger Sowry wanted a superhighway from Auckland to Wellington. 
Darren Hughes 
: A successful member of Parliament. 
DAVID CUNLIFFE 
: He is a very successful member of Parliament. He lost twice to Judy Keall and once to my esteemed colleague Mr Hughes. 
ACT on the other hand is so busy imploding that Rodney Hide is talking to his counsellor while we are having this debate. As the  
New Zealand Herald 
 says Richard Prebble has many many problems of which Rodney Hide is but one. 
More than anything Don Brash stands for the failed policies of the 1990s. Let us recall what they are. First it is indisputable that real incomes fell for those at the bottom of the heap. Second there was growing inequality. Third there was gross grinding poverty for the children of the poor. Let us look at some facts. In 1989 there were 120000 people on the unemployment benefit. By 1998 there were 152000—the numbers were up by 25 percent. In 1989 the Labour Government spent less than $1 billion on the dole. By the end of the National era $1.5 billion was being spent. We may conclude from that that the worst thing a Government can do is to deny people the opportunity to work—not only does that take away their dignity but also it results in a Government spending a lot on unemployment benefits. 
Here are some more facts. When we took office the unemployment rate was 6.5 percent. Now it is under 5 percent. There are now 123000 people in jobs who previously did not have them. New Zealand has growing inequality. In 1988-9 under National the eightieth percentile of income earners earned two and a half times more than that of the bottom twenty. In 1999 after a decade of a National Government the eightieth percentile of income earners were earning three and a half times more than that of the bottom twenty. That is indisputable. Data supplied by the Ministry of Social Development and by Statistics New Zealand shows that National widened inequality like Robin Hood in reverse—taking from the poor to give to the rich. [ 
Interruption 
] I raise a point of order Madam Speaker. I do not care if New Zealand First is a circus within its own caucus but I resent it here in the House. 
Ron Mark 
: I raise a point of order Madam Speaker. 
Madam DEPUTY SPEAKER 
: I am on my feet Mr Mark. I am dealing with the point of order. The member will withdraw that last remark. It was unnecessary. 
DAVID CUNLIFFE 
: I withdraw and apologise. I raise a point of order Madam Speaker. The point is that the continuous banter and conversation on the far side of the House is interrupting the flow of the debate. 
Madam DEPUTY SPEAKER 
: There has been banter on both sides of the House. If the member wants less banter that has to apply on both sides. 
Rodney Hide 
: I raise a point of order Madam Speaker. 
Madam DEPUTY SPEAKER 
: Mr Hide I have attended to the point of order that has been raised. If this relates to the same point of order I have dealt with it. 
Rodney Hide 
: I raise a point of order Madam Speaker. It is not the same point of order. What we look for in this House is some consistency from the Chair. It is very very important. I will describe for you exactly what has happened here. Mr Cunliffe was on his feet giving a speech when he interrupted his own speech to raise a point of order. The point of order he raised was not a point of order. Mr Cunliffe could have raised a point of order to say “The member is making too much noise and interrupting my speech.” and that would have been perfectly in order. However Mr Cunliffe interrupted his own speech with a point of order to hurl some gratuitous abuse at New Zealand First. Funnily enough it was the sort of abuse that he could have made in his speech without raising a point of order. You have said to me today that if a point of order is raised it has to be a serious point of order. The member’s point of order cannot be allowed to stand in this House. The member interrupted his own speech and raised a point of order to abuse another party. My point is that it is not enough for the member to withdraw and apologise to New Zealand First. He has to apologise to the House. 
Madam DEPUTY SPEAKER 
: It is up to me as Chair to deal with the point of order. I have dealt with it. 
Ron Mark 
: I raise a point of order Madam Speaker. I offer an apology to the young member on that side of the House though I do not have any need to. The point is that I was engaged in a private discussion with an Opposition colleague which had no bearing whatsoever on the sensitivies that that young man may be carrying for whatever reason. To call a point of order in the manner that he did was unnecessary. If he has taken any offence whatsoever and if it has prompted a knee-jerk response from the Labour whip I apologise for talking loudly and for interrupting his speech. However if he comes back with the sorts of comments that he made he should expect precisely the treatment he got. 
Madam DEPUTY SPEAKER 
: The matter has been dealt with. 
DAVID CUNLIFFE 
: It is good to see that the balanced member opposite has a chip on both shoulders. 
Ron Mark 
: I withdraw my apology. 
Madam DEPUTY SPEAKER 
: The member will stand and withdraw that remark. 
DAVID CUNLIFFE 
: I withdraw and apologise. It is a fact that between 1982 and 1998 the disposable income of the richest 10 percent of households grew by 43 percent. In the same period income for the poorest 10 percent dropped by 5 percent. The conclusion is that under National the rich got richer the poor got poorer the gap got wider and we all stagnated. But enough of numbers. What does all that mean for real people in real communities in New Zealand? 
According to the Ministry of Social Development’s Centre for Social Research and Evaluation the poorest 28 percent of the population experienced some or all the following. They could not afford fresh fruit and vegetables to put on the table. Shame! They stayed in bed to keep warm because they could not afford heating. Shame! They put off going to the doctor and therefore got sicker. Shame! They lacked the following “luxuries”—telephones washing machines winter coats decent shoes a decent bed to sleep in books for their children and raincoats for the children to go to school in let alone a bike. Those members opposite may think this is funny because they have never lived in that kind of environment. However many many people in this country live that kind of life. That is the legacy of the 1990s. 
Ron Mark 
: Have you been to west Auckland? 
DAVID CUNLIFFE 
: I have been in Wellington today. What a strange question from that member. That member has been shuffled around from electorate to electorate for the last 20 years and is trying to find one that will have him for pre-selection. That is rich! 
The Opposition attacked closing the gaps but when one looks at the numbers one sees that Labour’s policies are not based on race; they are based on real need. The fact is that Maori and Pasifika are 40 percent more likely to live in overcrowded housing so of course income-related rents benefit them more than others. Are there issues to be managed as we balance the demands of fiscal prudence with the reality of the social deficit? Yes of course there are. The world economic downturn is deepening in the face of an imminent war in Iraq that sadly nobody seems to want. Oil prices are up above US$33 a barrel. The US dollar is sliding in the face of the biggest budget deficit since Ronald Reagan. In the face of that the Kiwi dollar is up above US60c and Deutsche Bank predicts the current account deficit will deteriorate. That is but one of the risks we have to balance. That is why members opposite would do well to note that of the $2.2 billion of extra tax receipts we are getting this year we are spending very little of it. We are paying off an extra billion of debt and we are putting much of the rest aside against the future needs of this possible downturn. That is why this Government is prudent and sound and is managing its way through the rocky waters of the international scene. 
RON MARK (NZ First) 
: 
 To quote a phrase used by a very highly respected New Zealander—a young Maori leader who forged his way in Auckland running a great trust delivering social services—what could one say about the Government speeches today in particular its fiscal policy? I could use three words. “Dumb dumb dumb.” I could go further and quote that same member again and say that this Government should stop “b-essing” the public because nobody believes it. It is simple. Why do we say that? Let us turn to the great Budget Policy Statement that everybody on that side of the House is lauding and applauding themselves over. I tell Mr Cunliffe that there is an old saying in Maoridom: “The kumara never tells you how sweet it is.” The member should think about it. He may catch on sooner or later. But if one is really so good one does not need to tell the nation; the nation will tell one. But the nation is not saying that. The nation is saying that there are things wrong. 
If we look at the Budget Policy Statement and the trumpeting of the great surplus what do we see? It states that Dr Michael Cullen notes that tax revenues have been larger than predicted in forecasts but the reason for this is unclear at the moment. That is what the report states. Hello! We have a man in charge of a national Budget and the best he can say is: “We’ve got lots of money but we don’t know how we got it.” That is the sort of philosophy that people on that side criticised Maori trusts and Maori incorporations for. That is the sort of thing for which members over there got stuck into people like Tuku Morgan and continued to get stuck into people for not running their business affairs—and what do they say? “The tax revenues have been larger than predicted in forecasts and the reason is unclear at the moment.” ! 
I shall tell members why it is unclear. This Government does not want to accept that it is the heaviest-taxing party to ever come on to the Government benches. How will I prove that statement? Let us look at a couple of things. What is one of the first taxes that went up? It was tobacco. Who does that hit? It hits working-class New Zealanders. What is the next one that went up? It was petrol. Who does that hit? It hits working-class New Zealanders. What is the next one that went up? That one hits Maori because apparently so many of them are going into Ngawha jail that they need this. Court charges jumped in some cases by over 200 percent. Then the Government implemented all that legislation. It is all in the Budget Policy Statement. It was told; it does not want to know; it does not want to listen because the great experimentalists—the “spa pool socialists” over there—do not want to listen to anybody else except themselves. 
The Government has increased compliance costs on taxpayers and business through the Local Government Act the Health and Safety in Employment Act that it passed and the Resource Management Act. It has increased it by ratifying the Kyoto Protocol. It has increased accident compensation levies and there is a whole raft of business categories where the Government has whacked up taxes. Does anyone remember that pledge card—that little credit card with the airbrushed photo of the Prime Minister? It is the one where her teeth are straight and she looks like a stand-in for Cindy Crawford. Does anyone remember that? 
Georgina Beyer 
: Cheap shot! 
RON MARK 
: Others in Christchurch say that the election was won on an airbrush not a hairbrush. That is not a cheap shot; that is reality. Members should look at the hoardings. What did it state on that pledge card? The detail stated “No tax increases.” How is it that we have this huge Budget surplus climbing to $3.8 billion this fiscal year and $2.5 billion last year? The Minister said: “For reasons that are unclear at the moment”. It is very clear to New Zealanders who go to the supermarket to buy their groceries. It is very clear to working-class New Zealanders whose real income is on the record as having fallen—not increased—under this Government. It is really clear to Ukrainian labourers who have been brought in under a scam to undercut the labour market. 
Jim Anderton stood in this House and told us that the Modern Apprenticeships scheme is working. If the Modern Apprenticeships scheme is working so well why amongst all the unemployed people in this country are no people being trained to work on dairy farms and to milk cows? Why is that? It is because the Government does not want to do that. It wants to bring in cheap labour from the Ukraine and pay them $20500 a year. Then it will approve the taking of $120 a week out of those people’s wages to pay some shyster in Christchurch for organising the transaction. That is a Labour Government! 
John Tamihere—God bless his cotton socks—spoke the truth. How do I know that he spoke the truth? Even now within days if one wants evidence of how stuffed up this Government’s economic policy is one should simply pick up every newspaper every day and read the headlines. What does this say? “MPs repeat Tamihere call”. These are Labour MPs in a select committee saying that what John says about taking money from the beneficiaries and paying their bills for them is a smart idea. Is this new? No. 
I raised this with the Minister of Housing Mark Gosche—Steve Maharey is the Acting Minister—2 years ago. Landlords in Christchurch were saying beneficiaries were fraudulently taking the accommodation supplement and using it for other purposes and running up rents that they were not paying. Mr Tamihere knew this problem years ago—almost a decade ago—and moved in his private capacity to resolve the issue. He stood here speaking from the heart and said that what is happening with the fiscal policies and strategies of this Government is dumb dumb dumb; and all he gets is told to sit down and shut up or his job is on the line. Then there are the sycophantic few who know he speaks the truth who stand up and spiel that sort of garbage across the House at us and expect us to accept it. 
Labour’s fiscal policy is dumb dumb dumb. What more evidence do I need? Let us look at the police. What are the headlines for the police today? We have the police so well resourced that they now have a backlog of 700 years of leave! Why? Because there are not enough police to allow people to take their leave when they should. What does that do to families? Stress stress stress! Is that a caring sharing Labour Government with a Budget surplus of $2.5 billion? All the nodding puppets sit in Cabinet for fear of Auntie Helen dumping on them and nod their heads and say that yes they will hold the money they will not give money to the police and they will run with being understaffed. The bottom line is that we need more police on the beat. 
Rodney Hide 
: I raise a point of order Madam Speaker. I am sorry to interrupt my colleague Mr Ron Mark but is it acceptable in this House to refer to the Prime Minister as Auntie Helen? 
Madam DEPUTY SPEAKER 
: No. The member should refer to all members by their correct name. 
RON MARK 
: That is right. That is acceptable. Let us look where money is blown. The “Burns unit”: we saw a headline the other day about the “Burns unit”—that Labour Party candidate from Nelson-Marlborough way. I understand that $300000 to $400000 has been blown in that area and that unit has fallen apart. What is it at the end of the day? It is a unit that Goebbels would have been proud of. It is a propaganda unit designed to sell the message that this Government’s strategic plan is working. Rubbish! It does not. 
Mental health is another area. There is another article on the front page—pull out the paper—“Tiger mauls man who scaled fence”. The second paragraph says that a 29-year-old Wellington man who had a history of psychiatric illness suffered severe lacerations. Psychiatric illness—we talk about a man who has been in the charge of the Wellington Hospital mental health unit. Who is responsible for the care in the community programme? Helen Clark is—the Prime Minister. Do we see them owning up to that? That member knows that the biggest workload that MPs face in their electorates is what—accident compensation mental health? Why is that? Because the money is not being spent in those areas. 
Let me take another headline. We will go further here and take any one that comes—“Lone officer for some prisons”. Why will we now have single officers on duty alone at night in prisons? Because this “Scrooge McDuck” Government will not fund as required. So Labour has a $2.5 billion surplus and is boasting of how wonderfully it is doing. Labour is telling the nation that it has the biggest heart of any political party going that it is managing the economy well. Yet it has one man in there who knows the truth—it is dumb dumb dumb. 
I could go on—and I shall because I have the time to do so. But look at the press release today from Pita Paraone about the wastage of money in—where are we talking about—Northland hospital? 
Hon Member 
: Ngawha. 
RON MARK 
: Yes. Well we could go to Ngawha. This is about the appointment of a second chief executive to a Taranaki public health bureaucracy. We have already got one in the job. We have another one there. But look at Ngawha—that has to be the crowning glory. From $40 million to $140 million— a total waste of money. It is irresponsible economic management. 
Motion agreed to. 
Holidays (Four Weeks Annual Leave) Amendment Bill 
First Reading 
Debate resumed from 4 December 2002. 
Hon ROGER SOWRY (Deputy Leader—NZ National) 
: 
 It is interesting on this day when we have debated the Budget Policy Statement that the first member’s bill the Government is supporting—immediately after we have had a debate that has shown that the Government has walked away from its ambition to take this country into the top half of the OECD by 2011—and the very first piece of legislation we are about to debate is Matt Robson’s Holidays (Four Weeks Annual Leave) Amendment Bill. This is the bill that Labour said 2 weeks before the election it would not be voting for. This is the bill that Labour said as it was drawn out of the ballot that it would not be voting for. This is the bill that will be another compliance cost—another cost on business. Business New Zealand has come out today and said that this bill with other measures that the Government has passed will add costs in total of around $7000 to every business in New Zealand. This is not a bill that is encouraging jobs. This is not a bill that is encouraging growth. This is a bill that is an obstacle to jobs and to growth. 
This bill will also be a test for the United Future Party which just a week ago voted with the Government against business against employers and voted for extra costs on employers with the Holidays Act review. Once again we will see in the House today the United Future Party being tested on this legislation. 
This legislation will be considered by the Government as part of the holidays review and will be reported back to the House this side of Christmas. So much for the Prime Minister’s promise to business before the election that 4 weeks’ leave would not be on the agenda—a hollow promise a broken promise! This is like the promise the Government broke to superannuitants that it would deal with asset and income testing last year. It broke that promise last year. There are members in this House—and Mr Hughes is one of them—who wrote to their local Grey Power saying that it would be OK and would be fixed because there would be a new bill before Christmas. 
Well Grey Power is laughing at those members now. Grey Power knows that Mr Hughes and those other members broke their word on that promise just as business knows that Mr Hughes and Labour members of Parliament have broken their word on this legislation. 
We believe it is important that this country grows. We believe it is important that businesses are encouraged to hire staff. We believe it is important that where a business is doing well the businessman or businesswoman thinks that with a bit of stretch he or she can hire a new person. It means taking a risk; it is another wage they are responsible for. Business people know that when they hire staff it is hard to get rid of them but they take the punt and create the extra job. This bill tells business not to do that not to take the risk because if one takes the risk then the cost starts to outweigh the benefit of hiring the extra staff. 
Hon JIM ANDERTON (Minister for Economic Development) 
: 
 Like other members of this House I spend a lot of time in airports often late at night and I see people—usually women usually Pacific Island women at that—who clean those airports late at night. I want members to imagine the way they have to get up in the morning make the lunches for the kids and get them off to school. They might have a part-time job during the day and they have to pick the kids up from school make their dinner then go out to work again cleaning floors and toilets and then try to get some rest before they start over again the next day. This is the life of many people who enjoy no more than 3 weeks’ annual leave. Governments parliamentarians parties and communities need to do what they can for those families. They want to work hard and we should encourage that—and they do work hard. God forbid that I had to work as hard as some of those people as a matter of fact. We should reward their hard work. We should ensure that parents have time with their kids and time to recuperate as well. 
I appeal to United Future members who I understand will be voting against this bill. If they are the family-oriented party I believe they are then I cannot understand why they do not have empathy with the families I see living under the stresses of the workloads they have to take up in order to look after their kids. It is for working families like this that we need to make progress. It is for them that I support this Matt Robson bill and this part of the whole holidays legislation. 
I have not broken any promise on this. I went into the last election campaign and many others committing myself to 4-weeks’ paid annual leave for individual workers and families. The whole point of economic development surely is to improve the social and economic well-being and standard of living of all New Zealanders. It is not possible to develop the New Zealand economy meaningfully without lifting all New Zealanders up in the process. I want all those who oppose this bill to state clearly how much leave they take each year. I want them to state why they deserve 4 or 5 weeks or more while working people with the least bargaining power deserve only 3 weeks. Those are the people whom I Matt Robson and others in this Parliament want to support. Do we work harder than women who raise a family and work in poorly paid jobs early in the morning and late at night? Is that true? If it is not then why do we not support giving those people this chance? 
I make the point that this Parliament in its whole history is the only place that has ever provided for paid holidays for workers—in 1946 1974 and hopefully 2003. The only place where provision has been made for that is right here in Parliament. Interestingly enough it was either Labour Governments or Labour-led Governments that did it. I hope my Labour colleagues are able to convince some of their colleagues that this is the time to do it because I want to be in Parliament to make sure of it either this time or next time. 
If we are serious about supporting families—and all of us say that we are family oriented and that we are for families—then we will support this bill. This bill should be renamed. Instead of being the Holidays (Four Weeks Annual Leave) Amendment Bill it should be the “Holidays (More Time for Working Families) Amendment Bill”—more time for the mothers and fathers who look after their kids and work at the same time to get a break; more time for parents to spend with their kids; and more time for working people to interact with their community their social and cultural organisations their churches and so on. 
Four weeks’ minimum annual leave is part of the solution to two significant problems facing New Zealand workers: overwork and underemployment. It gives workers more time away from the workplace and in a small number of cases employers will hire staff to cover those breaks. I just say to employers in New Zealand—and I was one of them—that I gave all of my workers 5 extra days’ leave a year and we had 5 long weekends right through the winter months. The productivity in my company did not go down; it went up. People were not taking “sickies” and trying to pretend they had something else to do. They knew that the time would be there for them to do it. Productivity rises when wages and conditions are lifted and when one has respect for working people; it does not diminish. 
Every single time that this Parliament has legislated for holidays for workers some employers around the country have said the world would end if we did it. They said it the first time—in fact they said it when Christmas Day was made a public holiday—and they have said it every single time since. I do not see New Zealand being sunk into despond or becoming a Third World country because we have paid holidays. Many countries in Europe have had 6 weeks’ paid leave for years for generations and some of them have the highest living standards and the highest-performing economies in the world. So I say that this is an issue whose time has come. If we want higher incomes then we need to increase incomes not cut them. Improving conditions such as this bill does is part of that methodology. 
PAUL ADAMS (United Future) 
: 
 There is one thing I like about this bill and that is the size of it. It did not take long to get through the paperwork on it. United Future opposes this bill. Many would be tempted to support it. Who would not like 4 weeks’ holiday? Even with provision for 3 weeks’ annual leave in a society where people are working 24/7 very few people are able to get 3 weeks’ holiday in a row especially small-business owners—and 95 percent of our businesses are small businesses. I think they would love to get even 10 consecutive days’ holiday in a row. 
According to public comments from the member who is sponsoring this bill annual leave falls into two categories. The first relates to compatibility across countries. The United Kingdom Ireland Greece Australia Germany Switzerland and Norway give workers 4 weeks’ paid holiday leave whereas France Denmark Austria Spain and Finland give their workers an entitlement of 5 to 6 weeks’ paid holiday leave. About 17 out of 29 OECD countries have more annual leave than New Zealand but that also means that 12 OECD countries have less or equal entitlement. Most of those countries have higher rates of unemployment than New Zealand does and have introduced extended leave periods—and in the case of France a 35-hour week—to soak up some of the excess workforce. Economists call this the “lump of labour” approach. 
If the same logic is applied to the extension of leave in New Zealand to 4 weeks one sees that it would aggravate the skills shortage that currently exists. According to the post-election briefing from the Department of Labour about 95 percent of businesses in New Zealand employ fewer than 10 staff members. New Zealand has the highest proportion of small businesses than any other country in the Western World. In a supplementary question to the Minister last year I made the point that a move to 4 weeks’ leave would increase the total cost of wages and stretch the staffing resources of small businesses in an age when they are expected to operate 7 days a week and in many cases 24 hours a day. Every time a staff member goes on holiday or is away on sick leave a tremendous strain is put on those small businesses and their owners. 
In terms of comparability over time the argument is that previous increases to paid annual leave—to 2 weeks in 1944 then to 3 weeks in 1974—occurred at 30-year intervals. The approach of that 30-year anniversary is not a sound basis for policy making. 
The other argument proposed in favour of the bill is that by giving workers another week’s leave we might actually increase productivity. I agree that a rested worker might be a better worker because I have seen staff members who work 7 days or 10 days in a row become like zombies. They do not know one day from another. That is very common in New Zealand’s workforce. United Future agrees that a better work-life balance is the key to improved productivity but thinks that there are better ways to achieve it without the cost and strain that 4 weeks’ leave would place on employers. People today are placing greater value on a balance between their home life and their work life. Many people I know are taking a drop in income to have a better lifestyle. Firms are moving to alternative arrangements such as flexible time compressed weeks and payment on the basis of productivity rather than the punch-clock. 
The Equal Employment Opportunities Trust hands out awards each year to companies and organisations that it thinks are achieving a good work-life balance. For example the Auckland University of Technology won an award for a scheme that allows staff to work for 4 years at 80 percent of their salary and take the fifth year off. Research shows that a better work-life balance achieved through flexible working arrangements tends to increase staff retention saving employers the significant cost of replacing them; reduce absenteeism; and increase job satisfaction. We think the Government should be encouraging that. 
BRENT CATCHPOLE (NZ First) 
: 
 New Zealand First concurs with the sponsor of this bill Matt Robson when he states that stress both physical and mental has the potential for serious long-term health effects and that long hours increase the feeling of stress and create an environment for high blood pressure to occur. 
Rodney Hide 
: I raise a point of order Madam Speaker. I am sorry to interrupt Mr Catchpole but I do not think it is correct that the honourable member John Tamihere can accuse the Chair of being stressed and not looking too good and I would ask him to withdraw and apologise. 
Madam DEPUTY SPEAKER 
: I did not hear that said. Did the member say that? 
Hon John Tamihere 
: For the benefit of the debate Madam Chair I withdraw and apologise. 
BRENT CATCHPOLE 
: High blood pressure is recognised as having a long-term health problem associated with it and the hours that we keep in this House are sufficient to prove that. The high blood pressure and the stress that took place in the previous debate are testament to it. But I digress. 
The long-term health advantages gained by reducing stress levels in the workplace will result in long-term economic savings particularly if we view them as preventive measures. The resulting reduction in the health bill can only be positive. Why does not the Government spend more of its surpluses on health issues as has been suggested by Mr Anderton? Because of those health issues we welcome this bill into the House. We support qualified areas of it only but we support it going to a select committee for further discussion and development and to enable submissions to be heard from both the business community and the workforce. 
As my New Zealand First colleague Peter Brown said last week when he was speaking on the Holidays Bill some people in this country are in our belief entitled to longer holidays than they are getting. We also agree with Matt Robson that a more rested workforce is in general a more productive one. 
We do not however agree with Mr Robson’s simplistic implication that stress in the workforce is the cause of family problems and is the main factor that damages families. Stress from unemployment has an equally devastating and damaging effect on families. That factor also needs to be kept in the minds of the select committee members when they consider the implications of this bill in the real world of commerce. This bill will have an effect on management’s decisions on whether to take on additional staff or retain existing staff to meet peaks and troughs in production levels. The overall costs including the extra week’s holiday pay will most definitely influence management’s decisions. This may result in the opposite effect to that intended for this bill. Staff will be put under further pressure and further stress either in meeting the increase in production levels or in finding themselves unemployed as management endeavours to cope with the increased wage costs. 
The estimated cost to the business sector in real terms is approximately $500 million. Small- business owners will be the hardest hit because they will not have the depth of staff to cover gaps. These are not the same gaps that the Government was talking about a few years ago; they are the gaps created when a key staff member is away on extended annual leave. 
We have heard a lot over the past couple of weeks about catch-up with the majority of our OECD partners and Matt Robson sees this bill as another step to achieving the Government’s goals and targets. I have a word of caution on this idea. Before we embark on achieving this target the Government must ensure that the economy has also reached its targets; otherwise we are digging a deeper hole for us to try to climb out of later on. 
In conclusion New Zealand First welcomes this bill going to the select committee and I can assure Matt Robson that in supporting it going to the select committee we approach it with an open mind and encourage others to do the same so that a broader view of all the aspects of the bill can be examined. We look forward equally to submissions from the business and employment sectors together with those from employees’ representatives so that this House has a fair and balanced view to consider at the end of the process. 
MARK PECK (NZ Labour—Invercargill) 
: 
 I am delighted to take a call on the bill and to congratulate Matt Robson on introducing it. 
Rodney Hide 
: Why didn’t this member do it? 
MARK PECK 
: This member has the next one coming up so Mr Hide should just hold his horses; he will be able to take part in that debate too if he likes. [ 
Interruption 
] Members might well say that but I could not possibly comment. I do want to congratulate the member on bringing this matter to the attention of the House. We will be supporting the bill going to a select committee because it deserves to be debated. 
I say to members opposite that in a past life as a union official I became very very aware of the argument that is going on now. Let me remind people like Sandra Goudie who is sitting on the bench across from me at the present point in time that the very same arguments that were used to decry equal pay for women are used to decry annual holidays. I was at the tail end as a union advocate of the implementation of the steps towards achieving equal pay for women. If we were to say today that we should have differential pay rates because of a person’s gender we would be before the Human Rights Commission and so we should be. There was no economic argument for women to be paid less than men at all. There was not an economic argument in the world. It was about exploiting those workers. It was about their being of lesser value than their male colleagues. There is absolutely no difference between the arguments about holidays and the arguments about equal pay. 
There is an economic argument that says we should not have 4 weeks’ annual leave right now but I see absolutely no reason at all for the issue not to be debated. 
Rodney Hide 
: Why not 6 weeks? 
MARK PECK 
: In some parts of Europe people have 6 weeks right now. I would hazard a guess that some of those who control our companies have more than 6 weeks right now but they see that as their right as stress leave and so on—as if workers do not have to confront those issues. 
Judith Collins 
: Name one. 
MARK PECK 
: This place is one big holiday to that member. Nobody has ever heard of that member over there doing any work at all—not a skerrick of work. The only thing she has ever been able to do is to make inane interjections. Could I give her some delight: she is never going to have to worry about doing any work because from the way that her side of the House is going it will be the irrelevant rump of Parliament very soon as it is replaced by United Future. 
Rodney Hide 
: This speech is stressing me. 
MARK PECK 
: Rodney Hide said that member is stressing him so she had better calm down. A lot of good work has already been done by this Government to start to restore the relative position that workers enjoyed. I am delighted as well to look at the Holidays Act which was brought in by my colleague Margaret Wilson. When I look through the provisions in that bill it is quite clear to me that the legislation promoted by Matt Robson should be considered in tandem with it. I do not believe that the economic argument around the provision of holidays has been properly examined. For people to say it is a cost ignores the other side of the equation and that side of the equation does need to be considered. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
SUE BRADFORD (Green) 
: 
 It is not so usual to rejoice when another party’s member’s bill is pulled out of the ballot but in the case of this Holidays (Four Weeks Annual Leave) Amendment Bill my Green Party colleagues and I were delighted when Matt Robson managed to win the members’ bills lottery towards the end of last year. 
During both the 1999 and 2002 general election campaigns the Green Party ran strongly on the promise that we would do everything we could if we got to Parliament to work for a minimum of 4 weeks’ annual leave for all workers. It is one of our central policy tenets that everyone should have the opportunity to live a balanced and holistic life in this stressed and hyperactive age. I think most people are all too aware these days that many people work too many hours each week and too many weeks each year while others have no paid work at all or too little to survive on. It has been a great irony that in an age of widely accepted mass structural unemployment we have also as a society persisted in the belief that workers should be forced to work 49 weeks of the year even though adding 1 week’s holiday would improve both their health and their productivity while allowing for more jobs to be created overall and for the work to be shared around more fairly. 
Just a couple of weeks before the election last July both Laila Harré and I spoke along with other MPs of course at a Business New Zealand candidates’ forum here in Wellington. A questioner from the floor asked about the various parties’ attitudes to the question of 4 weeks’ leave and I am sure Ms Harré was as disturbed as I was by Steve Maharey’s assurance that Labour would not consider implementing 4 weeks’ leave during this Parliament. I thought that was an outrageous promise from a senior Minister in a Labour Party that still presents itself as the party most representative of organised workers. I am glad that some Labour MPs who come from a union background have evidently been willing and able to exert sufficient pressure within their caucus at least to allow Mr Robson’s bill to be carried forward to the Transport and Industrial Relations Committee for consideration alongside the Government’s Holidays Bill which went through its first reading last week. Over the weeks and months to come the Green Party is keen to work alongside those MPs and with unions and other groups in the community to try to ensure that in the end the Labour Government will support the extension of minimum annual leave from 3 weeks to 4 weeks. Matt Robson has given the Labour Party a golden opportunity to redeem itself in the eyes of ordinary workers and I hope it makes the most of it. 
I am well aware of the storm of employer outrage that is likely to accompany this bill when it goes to the select committee. However I would like to say to people who are pressing the panic button on this one that 4 weeks’ leave will not really bankrupt business or impact adversely on unemployment rates. Many companies and employers already allow their staff a minimum of 4 weeks’ leave without their operation being brought to its knees. Instead such employers reap the benefits of employees who can enjoy the simple human need of 4 weeks’ rest and time with their families. I am sure that not too many among the employing classes or among members in this House make do with less than 4 weeks’ holiday a year. The Green Party believes that 4 weeks’ leave is the minimum that all workers not just some should be able to expect in this country in the 21st century. 
I would like to note my amazement at the speech made by my United Future colleague earlier on this evening. He made clear that his party will be opposing this bill. I find that approach incomprehensible from a party that talks about the importance of work-life balance and the importance of family. Of all parties in this House United Future should be supporting this bill. 
JUDITH COLLINS (NZ National—Clevedon) 
: 
 I rise to oppose this bill. I certainly understand what Mr Robson is trying to do here. Unfortunately I do not have a lot of sympathy with anyone who wishes to be generous and to take the claim for being generous with other people’s money. That is what this Holidays (Four Weeks Annual Leave) Amendment Bill is all about. 
It may as well be the “Holidays (6.2 Weeks Annual Leave) Amendment Bill” because that is what it is talking about. If we add on the 11 public holidays that employers already have to pay for if we put that into the equation the total is 6.2 working-weeks. That is actually an awful lot of time. 
Sue Bradford has commented that the bill is not necessarily going to break some employers and she has also said that some already provide 4 weeks’ annual leave. Well is that not the point? There is nothing to stop any employer and employee from negotiating to have a 4 weeks’ annual leave provision in an employment contract. That already happens now. But that is a matter of choice and often the trade-off is for those employees not to work as many hours during the day or to have more flexibility in the sort of work they do. Certainly this bill would remove the option for employers to say: “I tell you what: I can’t pay for you to have the 4 weeks’ annual leave that you want but I will allow your school-age child to come along to the place of employment after school and do homework here so that you’re not having to rush home or to worry that the child is at home alone.” There is that sort of provision and it is not silly. It is the sort of thing that happens all the time between good employers and good employees. 
I point out that 85 percent of business in this country is small business. I was surprised at and disappointed in the contribution made by New Zealand First. I always knew it was against big business but I expected it to be for small business. So it was very disappointing. This bill is in fact removing the option for the small-business employer and employee to sit down and negotiate something that works for them. It is taking that away. It is imposing another cost. It is just another one of the costs that this Government along with the Progressive—I cannot recall what those members call themselves now; I am sorry but I cannot remember their name; it is the PC party—impose in whatever they do. They are happy to impose yet another tax and burden on employers and by doing that on employees. It means that any employer with say two staff will have to say: “I’m going to have to get someone else to cover for those extra days. or: “I have to be less generous and flexible in my employment relationship with the other member of staff who now has to cover for you.” There are all those sorts of things. 
How many self-employed people in small business get anything like 4 weeks’ annual leave? The reality is it just does not happen. I see my colleague in United Future agreeing. One of the sad truths is that Christmas time which we are told is a hard time for a lot of working people is a very hard time for a lot of employers. The reason is that employers have to pay for all the statutory holidays around Christmas and often that is also the time for staff to take annual leave. Guess what? Nobody ever pays bills in January; nobody ever pays businesses in January. I see that my colleague who has been in business is nodding. There is no money coming in in January and the employers have paid out a lot of money in December so they have a very very lean couple of months. After that of course there are the tax bills due in February and March. Does anyone ever say to the employer: “Oh gosh poor old you. Let’s give you a break on that.”? No. That is the situation with this bill; it is just making the life of the employer harder. 
Why do that? Employers are not the enemy. They are in fact the people who— 
David Benson-Pope 
: Support the Government. 
JUDITH COLLINS 
: Oh for goodness’ sake Mr Benson-Pope! That member never stands up to take a call. Honestly what is wrong with him? Just take a call! 
Rodney Hide 
: He can’t speak. Helen Clark won’t let him. 
JUDITH COLLINS 
: He cannot speak. All he does is interject. Poor old Mr Benson-Pope. It is the only way the poor man can get into  
Hansard 
. 
RODNEY HIDE (ACT NZ) 
: 
 It is very good to see Mr Benson-Pope for a change seeking the call to make a 5-minute contribution to this House and I look forward to hearing it! 
There is nothing easier for politicians to do than to put their hands up and say: “I vote for more holidays for working people in New Zealand.” The workers would probably love them for it. But who pays? It is not Matt Robson who is reaching into his pocket to pay those people’s wages each week. It is not Matt Robson who is struggling at night with the crazy compliance costs that business people in this country have to face. No no it is not Matt Robson. It is business people who do not get 4 weeks’ holiday. Small-business people can be working 16 to 17 hours a day 7 days a week for 52 weeks of the year providing the entrepreneurial leadership that provides us with the wealth that we enjoy in this country. 
I know that David Benson-Pope scoffs at that. He would not know what it was to have to work earn a dollar pay the bills and find the weekly wage bill. He is like all members of the Labour Party: they would not know how to turn a dollar. They say: “Let’s give everyone an extra week off.” When I called out to Mark Peck: “Why not make it 6 weeks?” he said: “That’s a good idea.” Why not make it 8 weeks? [ 
Interruption 
] I ask Mr David Benson-Pope why we should not make it 10 weeks. Listen to Mr Benson-Pope! He interjects for about 2 hours he gets the call and he is so scared that Helen Clark might hear him give a speech that he sits down quickly without uttering a word. He just wants to be part of the noise in the background. [ 
Interruption 
] We also have the handbag for the Prime Minister piping up from the back row. 
We heard a speech from Jim Anderton today. I have heard Jim Anderton give speeches before and they are all extraordinary but this one was up there. I want to share it with members because it was extraordinary. He said that he was a businessman and he employed people. 
Hon Richard Prebble 
: Making trolleys like tanks! 
RODNEY HIDE 
: His business made trolleys like tanks that never went straight. I do not think his brother is so keen on them any longer. Jim Anderton said that he gave everybody an extra week’s holiday a year and he told this adoring House productivity then went through the roof. If that is the case why do we need this law? He is saying that all the business people who are struggling away are idiots who do not know what they are doing because all they need to do is give everyone an extra week’s holiday and productivity will increase. If Jim Anderton truly believed that he would not need this legislation. 
I beseech this House: the people who will be hurt by this legislation will be low-income people whose small businesses will not be able to afford this measure. The people who will be benefiting from it will be overseas companies which will become at the margin that much more successful. 
It might make Matt Robson and Labour MPs feel good to introduce this measure. But the only way that we can have a better lifestyle and indeed more leisure is to create and produce more as a nation. Michael Joseph Savage knew that—that the wealth is created by the people. Our attention in this House should not be given to trying to pass a law to put wages up and reduce working time; our attention in this House should be given to enabling us to prosper. If we can prosper we can have a better standard of living and indeed can work less. Nothing in this bill creates another dollar for New Zealanders—far from it. This bill is a costly measure. I heard New Zealand First tell the House that the cost will be $500 million. 
DAVID CUNLIFFE (NZ Labour—New Lynn) 
: 
 May I compliment the member who has just resumed his seat. It is nice to see him back in the House and sitting so amiably with his party leader. I am grateful that he could drag himself away from his electorate office to address us on this important matter tonight. And of course I want to recognise the experience that the ACT party has as a good employer! ACT members are obviously well qualified to make a contribution. 
I am reminded of an old story about draught horses in London. A few years ago draught horses worked a 6-day week. I do not know whether it was an ACT member or someone else on contract but some bright spark came up with the idea of running those poor draught horses which collected the rubbish for 7 days a week as a productivity measure. There was only one problem. When the draught horses started working 7 days a week half of them died. They could not keep going. Therein lies the great beauty of the concept of having appropriate leave for workers. Not only is it ethically the right thing to do not only does it have good spin-offs I say to our United Future friends for families who appreciate seeing the working parent home more often but also it is better for productivity than our colleagues on the Opposition side of the House would have us believe. They know and I know that if one gets a bit of time off one comes back to the job refreshed and ready to get stuck in— 
Shane Ardern 
: There is no evidence of it in the member’s case. 
DAVID CUNLIFFE 
: —even if it is in a milking shed in Te Kuiti. That member might have some vague and fond memories of being in a cowshed looking up and thinking that life is good. 
Shane Ardern 
: Has that member been to Te Kuiti? 
DAVID CUNLIFFE 
: Actually I grew up in Te Kuiti so there you go mate! I went to Pukenui Primary School and it was a bloody good school. Te Kuiti is a wonderful place—[ 
Interruption 
] They still have the statue there and I am surprised that member has not been to lay flowers at it. 
I am very pleased to support this bill going to a select committee. The Government’s position is that Matt Robson’s bill deserves support to get it to a select committee so that we get some submissions and some good debate about this issue. It is a process that the Government intends to learn from. It is also the Government’s position that it is not able to introduce 4 weeks’ leave during this term of office although it is a measure that a number of members including myself have publicly committed themselves to supporting over the medium term. 
It is also very important to note that the Government has moved on a number of fronts to improve the conditions of workers during the last couple of years. We recently introduced fuller holidays legislation which restored the right to time-and-a-half pay and a day in lieu if one is forced to work on a public holiday. A niece of mine worked Christmas Day and New Year’s Day this year and for what? Nothing more than her basic hourly wage of about $8 an hour. That is the sort of condition that workers are having to live with after the legacy of the 1990s. We are grateful that we got in in 1999 and were able to stop the other side’s iniquitous holidays legislation. It was going to say you could sell Christmas. You could sell your statutory entitlements for a few— 
Rodney Hide 
: I raise a point of order Madam Speaker. 
DAVID CUNLIFFE 
: I am really looking forward to this. 
Rodney Hide 
: I am pleased that Mr Cunliffe is looking forward to this point of order. The member on his feet cannot accuse the Speaker of selling Christmas or make the other accusations that he made. He should be asked to withdraw and apologise. He is not a new member I think. 
Madam DEPUTY SPEAKER 
: Did the member say “you”? If the member did would he please withdraw it. 
DAVID CUNLIFFE 
: I would be happy to but I honestly cannot recall using that word. In any case I certainly meant to refer to the Opposition and should any other interpretation have been taken I regret that. 
Rodney Hide 
: I raise a point of order Madam Speaker. 
Madam DEPUTY SPEAKER 
: The matter has been dealt with. The member has acknowledged it. 
Rodney Hide 
: I raise a point of order Madam Speaker. When a person is asked to withdraw he or she withdraws. He or she does not get into a discussion about it. The point is—[ 
Interruption 
] The chief Government whip is yelling out. 
Madam DEPUTY SPEAKER 
: I asked the member whether he had said “you”. The matter has been dealt with. 
DAVID CUNLIFFE 
: The point is the Labour Government has done right by working people and will continue to do so. We have a raft of measures to our credit on our record like paid-parental leave which was developed in consultation with our colleagues in the Alliance. A lot of hard work went on over the last couple of years to produce that legislation and we are glad to see that it is in place. And we are glad to see that it is up for review to see whether the number of weeks are actually sufficient. As a new parent myself I take a particular interest in that bill. 
The Employment Relations Act has restored a sense of fairness and balance in the workplace after a decade of the Employment Contracts Act. The point is productivity has not measurably dropped as a result of the introduction of that great revolution in employment law the Employment Relations Act which still allows enterprise bargaining and voluntary unionism and is hardly what the Opposition could paint as a step backwards in time. It is a forward-looking modern piece of law. We have reformed health and safety law with a range of laws that allow no excuses for having unsafe workplaces. Around 500 workers are killed each year in industrial accidents or from work-related illnesses. That is a shame that we cannot allow to continue. 
Hon MATT ROBSON (Deputy Leader—Progressive) 
: 
 The Progressive MPs are pleased that a significant social reform that aims to provide greater quality of life for New Zealanders particularly some of the lowest-paid and hardest-working New Zealanders is now before Parliament for members to decide whether it will go for examination by a select committee. Four weeks minimum annual leave is a reform that a significant number of employees have already either through their collective bargaining ability the far-sightedness of their employers or the scarcity of their skills. Those employees who are not able to achieve 4 weeks’ annual leave require the assistance of their parliamentary representatives to ensure that they too benefit from the better health and well-being that would flow from that step. Even members who have doubts about the bill can send it to a select committee so that it can be examined fairly and thoroughly. 
The bill started out in life with the support of the two Progressive party MPs only although I acknowledge that it is Green Party policy. Once the bill was in we were quickly joined by the Greens—then we were 11. Next came those MPs who were convinced that such an important measure should be scrutinised by a select committee. In that camp were the 52 Labour MPs the coalition partners of the Progressives. Then came the 13 New Zealand First MPs. From two we became 76. New Zealand First’s deputy leader Peter Brown explained to the House last week that New Zealand First recognised that many workers were entitled to a longer holiday than they get. Thus New Zealand First supports voting this bill to a select committee even though its members have expressed reservations. My Labour colleagues have shifted from a “no” to a “yes” vote. I know the fierce debate that has occurred within Labour over this measure but I also know the determination of ordinary Labour Party members the affiliated unions and the majority of Labour MPs that Labour should hold fast to its traditions of acting on behalf of the most vulnerable. This bill will start its life in the select committee with more agreement than disagreement. 
As managers and MPs know a week’s extra leave is a benefit to health and helps to combat stress. Families and those close to employees benefit from the extra stress-free time to build on relationships. There is an enormous economic benefit to some areas of the economy such as the do-it-yourself industry recreation leisure pursuits and tourism. As international experience has shown those benefits do flow through. Healthy workers require fewer sick days. Social equity requires ensuring that more vulnerable employees are raised to the levels of those whose strength has allowed them to achieve 4 weeks’ annual leave. 
The Opposition centres on the one key fear that an extra week would put an intolerable financial burden on business—particularly on small business. I am convinced that the select committee scrutiny will show from both national and international experience that the economic and social benefits far outweigh the costs and that a rational society should concentrate on how and when to bring in this progressive measure rather than if. 
I am not surprised that National and ACT automatically oppose the bill. Those parties do not even want a select committee to probe the issue. That is a short-sighted approach. However it is interesting that two parties that boast of their modernity are so frightened that a layer of business—and a layer only—will castigate them if they support the bill. They do not even want to examine why our major competitors with modern economies have long ago brought in this measure yet are far above New Zealand in the OECD rankings. That is the approach of narrow provincial and parochial right-wing parties who seek short-term advantage. Yet those are parties that boast they want to be at the cutting edge of change. Their thinking is what gave us the 1930s depression mentality that we needed to cut the wages and conditions of New Zealand employees cause deeper and deeper cracks in the economy and worsen the living conditions and health of the majority of the population. It is the thinking of the Don Brash school of economics to have the unemployed gather outside post offices—even if we have sold them—and have them dig holes and fill them. They believe in intervention but it is an intervention that takes the living standard of employees backwards not forwards. 
It was interesting to hear the speech from the ACT member which showed that that party drips with contempt for the contribution of ordinary people to the economy of New Zealand. To suggest that workers would want 8 9 10 11 or 12 weeks if four weeks were introduced shows that ACT members do not take any account of the common sense and the contribution of workers to the employment they have. We could argue the other way—that to improve their profitability there might be employers who would take annual holidays back to 3 weeks 2 weeks 1 week or nothing. Both arguments are ridiculous. 
The opposition of United Future is harder to fathom. It is a party that campaigned on the general slogan of having the welfare of our families uppermost. Its proclaimed goal was to strengthen families. Here is an acid test—a bill that will give families greater time together that will improve the health of employees and that will make sure that we go forward on this important social reform. 
A party vote was called for on the question  
That the Holidays (Four Weeks Annual Leave) Amendment Bill be now read a first time. 
Ayes 76 
Noes 43 
Bill read a first time and referred to the Transport and Industrial Relations Committee. 
Labour 52; New Zealand First 13; Green Party 9; Progressive 2. 
New Zealand National 27; ACT New Zealand 8; United Future 8. 
Status of Redundancy Payments Bill 
First Reading 
MARK PECK (NZ Labour—Invercargill) 
: 
 I move  
That the Status of Redundancy Payments Bill be now read a first time. 
 This bill arises as a result of the closure of the Weddel freezing works and the redundancies that occurred as a result of that. In particular I acknowledge the efforts of my colleague Rick Barker who was the original drafter of the bill and who worked with people from the freezing works involved. 
It is an interesting thing when people are made redundant. All the things that we hold precious in our society—having a family and a home and the ability to participate in society—are predicated on being able to earn a living. Going through periods of reform as we have done over the last couple of decades means quite a lot of dislocation. As a result of that reform workers went through periods of time in their lives where employment was anything but secure. The only way to compensate for the loss of jobs and the time it took people to find new gainful employment was through instruments such as redundancy. Some workers did not get any redundancy at all. Those who did all too often found themselves in a position in which if a company went belly up their wages and holidays were protected to a sum of about $2500—which was subsequently raised to $6000—but no further. Ultimately their ability to put their lives back together again became severely curtailed as a result of the loss of redundancy payments. 
That is simply wrong. Anybody who thinks about it seriously will agree that it is wrong. Reorganisation is not the fault of an employee. It is not the fault of an employee that the economy went through such changes that companies went belly up. Many had given long and faithful employment to their employers during that period of time and subsequently found themselves unable to do anything about the circumstances they and their families faced. The loss of that redundancy payment was for many the last straw. Anybody who has been involved in dealing with those matters in the labour market will tell stories about the effect that the loss of employment has on families. 
The number of men I know—and I say men deliberately in this case—who could not go home and face their partners and tell them that they had lost their employment would normally make one weep. They just simply could not get up the courage to say: “I no longer have a job.” For months on end many of them would deny to their partner that they were not working. That in its own right set up a number of very difficult situations for families and family breakdown during that time was not an unheard of thing. There were also worse cases than family breakdown. When some freezing works were closed in Southland a number of people finally could not cope any longer and committed suicide. It is a matter of concern to this Parliament. I say even to the members of the ACT party—and ACT members champion the cause of property rights to a high degree—that the greatest property right a person can have is the right to earn a living because every other right that comes from that is predicated upon it. 
This bill will protect redundancy as structured in an insolvency. It will amend the Companies Act to make redundancy payments a preferential claim when a company goes into liquidation or receivership. The workers from Weddel had to line up with all other unsecured creditors for their redundancy payments and it is now a matter of record that they did not get what was owed to them. They believed—quite rightly in my view—that should their employment with the company cease they would be compensated in some measure through redundancy agreements for their loss of employment. We are attempting to do that. 
John Carter 
: What about the farmers losing their stock? 
MARK PECK 
: As the member will know the farmers did raise some very serious issues about what happened to the stock in that situation. The member will well understand that. I believe that matter also has some currency but on this particular occasion we are dealing with the issue of redundancy and I ask the member to consider that. 
John Carter 
: I’m more worried about the farmers. 
MARK PECK 
: The member might be more worried about the farmers but he is not the only one worried about the farmers. It is very refreshing—and I note that Shane Ardern is sitting next to the member—that the National Party is worried about the farmers on this occasion. There are things that need to be done. 
I am pleased that there has been some movement in this area and I congratulate my colleague Lianne Dalziel on the work she has done. I also recognise the contribution made by Laila Harré to doing something about the insolvency laws. Some announcements have been made and already movement has been announced whereby the employee priority will now include some measure of redundancy payment up to a maximum of $15000. That is an enormous increase on the position we were at and I pass on my congratulations to the Minister on that. 
There is not much more I want to say about the bill except to conclude as I started: when redundancy occurs it is life-changing and devastating to those involved. The way that workers have been treated through the insolvency laws has in many respects been nothing short of scandalous and has left many people unable to support even their most basic needs. It is time that Parliament addressed the matter. This bill is an attempt to raise the issue. The Government has made some moves on it which I acknowledge. I seek the support of Parliament for this bill to go to a select committee so that we can take the submissions and look at what further work needs to be done to ensure that when workers are faced with that dreadful position in the future they do not face the same problems as the Weddel workers. 
In closing I want to make one final comment. This bill was introduced into the ballot in 1996. When I read through the explanatory note I noticed that there was a comment about the Minister of Agriculture having plans for further meatworks closures. I am pleased to say that it is certainly not the intention of this Minister to close any freezing works at all. However as the bill had been printed it was far too late to change the explanatory note which did of course relate to a former Minister and a previous Government. 
Hon ROGER SOWRY (Deputy Leader—NZ National) 
: 
 The National Party will be opposing the introduction of this bill. First of all it is interesting that in the explanatory note the member states that he is bringing in the bill because he has been told that there are likely to be further meatworks closures. His explanation for that was: “Oh well that is what we said when we were in Opposition and drafted the bill up. Now we are in Government we don’t think there are going to be any closures but we still want the bill.” That does not make sense. If the member is so confident that there are not going to be any more closures of meatworks and that is the industry he is hanging the whole bill off why introduce it? It simply does not wash. 
Again this bill that the Government is so excited about introducing is another that sends every signal to every businessperson who takes a risk who creates a job who enters into something that might be a bit risky but has the potential to provide growth for the country not to do it. Now that the charm offensive is well and truly over every single time this Government can it says to business: “We don’t think you are valuable. We are not interested in you taking risks. We don’t want the jobs.” We are here today with the second piece of legislation in the last 4 hours that is anti-business and sends a signal to business that it is not wanted. 
I say to the member that I have worked with the families of people who have been made redundant as a result of businesses going out of work. In the case of the meat industry which he talked about I have worked with farmers who have also lost a considerable amount because their stock happened on the day to be going through the killing chain. The member nods and says he is worried about those people but where in the bill is the clause for them? Why did the member not put a clause in the bill that gave those people equal preference? Why did he pick out just one little bit? The salary that is due to a worker is given preference. Any salary that is due has a preference call. Any leave that is due has a preference call. Any holiday pay has a preference call. What the member is saying is that when his mates in the unions have negotiated—often by the use of industrial muscle—a pretty generous redundancy deal that should have preference over and above anyone who has stock going through the system for example in a freezing works. That is not right at all and I bet that the member will not go out and defend it in the rural parts of Southland. 
I want to say to the member that it is OK for him to stand up and say that he feels for farmers but he certainly has not put that in this legislation. I had a look to see what is in the schedule in which the member is trying to insert the redundancy clause. After paying the costs of the liquidator the liquidator must next pay the following: “all wages or salary of any employee whether or not earned wholly or in part by way of commission”… So employees get their wages—wages are the first thing the liquidator must pay. The second thing is all holiday pay owed to them at that time. The third thing is any compensation under the Workers Compensation Act. Employees have to be paid that. The fourth part moves on to one of the things that Governments are more interested in which is tax. 
Above all there is nothing for people who have genuine stock caught up in the process. The member is saying: “But above all that I want to put in that any negotiated redundancy gets preference over and above everything else.” If we are to get down to that level if I were a farmer and sending my stock away I would be looking for cash in advance. Business practices will be developed to try to bypass that redundancy clause and that will not do workers any good at all because at the end of the day the freezing works will say: “Well you can have a generous redundancy payment by which point we will have to have terms and conditions for farmers to bypass it; otherwise we will not have any redundancy payment negotiated into the contract at all.” That becomes the choice. I do not think that what the member is proposing is sensible at all. 
The member did not give the credit to the previous National Government that changed the law—I do not expect him to give us the credit either—to make sure that wages salaries and holiday leave were paid before the Inland Revenue Department got its slice. When I came into this House in 1990—Labour had just been in Government for 6 years and had done nothing—a major company in Porirua went into receivership and the Inland Revenue Department came in and had first dibs. The families on the Kapiti Coast in the Porirua area that were owed wages salaries and commission—because it was a clothing factory—got nothing. We changed the law so that wages and salaries did get paid out before the tax department was paid. 
The member would have done himself a service by at least acknowledging that change rather than saying: “That’s not enough; we want the union-negotiated redundancy clause put in there.” What that means is that all other businesses that have stock caught up in the process—it might not be a freezing works; it might be fabric or any of the other commodities tied up in the process—go bust. Their priority falls below the redundancy payment so their staff miss out. If I happen to have a lot of fabric and send it off there I am caught up in the process. My business and my staff miss out so that someone else can get redundancy. 
How good is that and how sensible is it to the process? Yes it is hard for families who go through that but the member should not pass a law that has a ratchet effect right through the economy. That is daft and it is one of the reasons that we will be opposing this legislation. Not only does it send a wrong signal to business it will mean that many businesses will have to move to a cash-upfront option. If someone is thought a bit risky the business will move to cash upfront and that person might be forced to go a lot sooner. It might help the minority in the strong unions that have a redundancy agreement but the people down the track who provide a whole lot of other services and who have stock plant and fixtures caught up in the business are in the category of small employers. They do not have redundancy agreements and when they get caught up in that situation they go under—all because some large firm with a large union has a generous redundancy scheme. I do not think that is right or worthy of the sort of priority the member is trying to give it. In the long run I do not think it will help this economy to grow at all. 
It seems that a lot of Governments long ago abandoned—quite secretly but now quite publicly—any idea of economic growth. I ask the member again and I ask Government members to think about the signal that this bill sends to people who are establishing and trying to grow businesses. This provision would be just another thing to worry about and have to deal with—particularly if they have a medium or small business that is dealing with some of those larger ones and are not sure about their own viability. One might ask them: “What is your redundancy agreement? Because if you have a generous redundancy agreement with your staff then I want to be paid upfront before I deliver any goods or services to you.” I think that is just crazy and we oppose it because of that. 
MARK PECK (NZ Labour—Invercargill) 
: 
 I raise a point of order Mr Speaker. In my speech I forgot to mention that on first reading I want to refer the bill to the Transport and Industrial Relations Committee. 
DAIL JONES (NZ First) 
: 
 On behalf of New Zealand First I say that this is one of a group of bills that seem to have found their way into the House at about the same time. We had Margaret Wilson’s bill on holidays and the way in which payments should be made for holidays which we supported to the Transport and Industrial Relations Committee. Mr Matt Robson recently introduced another bill about holidays and we also supported that being referred to that select committee. 
This bill has been touched on insofar as its position in relation to the Companies Act 1993 is concerned by the previous speaker Mr Sowry. In terms of that Act as he said the liquidator gets paid out for all his or her costs first and then according to this bill the wages and salaries of employees are to be paid out before holiday pay is paid out. As I read the bill—and I tell Mr Peck that I stand to be corrected because sometimes that happens when a bill is being picked up for the first time—I see that that is an amendment to clause 2 of the seventh schedule of the Act that is being inserted as paragraph (ba) so it would be inserted after paragraph (b) and before paragraph (c). That is how I would read it. 
Therefore this bill states that redundancy payments should be made before amounts due in respect of any compensation or liability for compensation under the workers’ compensation legislation. I really find that extraordinarily strange because one of the most hard-fought things that any Labour movement ever achieved was workers’ compensation. Here we have in today’s economy a minority Labour Government saying that redundancy payments which are paid to a few will take priority over workers’ compensation which is paid to many people as of right because of the hard-fought actions of the trade union movement in the 1910s 1920s and 1930s. I find it quite strange that redundancy pay which is available to a few workers in big powerful unions will get priority over workers’ compensation. 
As I said at the beginning a number of these bills have been introduced in the last couple of weeks and it is interesting that if this bill does go to a select committee we will now have a group of bills that will cause a great deal of concern especially to small and large businesses. I would be interested to learn from the promoter of this bill or perhaps from a Government Minister whether it is proposed that that committee will travel. I believe it would be very useful for the select committee to travel to Auckland Hamilton Christchurch Dunedin and to one or two other major towns like Tauranga in order to get the view on the spot of small and large businesses. That is needed in order to expose Labour members of Government—who are mainly trade union officials—to the views of people who are involved in business. 
I gave Mr Peck the courtesy of listening to him but obviously he does not care about the views of other members of Parliament as he stands in the House speaking to the Minister Lianne Dalziel with his back to me. Obviously he has no concern about what is being said about this bill although I treated him with respect. That shows the degree of respect that Labour members have for this legislation—that they are not interested in other members’ views on it. 
In the case of this legislation if we have a plumber working for a freezing company and another plumber who is a self-employed businessperson the plumber working for the freezing company might be paid redundancy but the plumber in business on his or her own would get nothing and would also lose the money that had been put into the job. The plumbing contractor having received no money and having put money into the job would then not be able to pay his or her staff holiday pay if he or she went broke. This bill is anti-paying out holiday pay in the event of a plumbing contractor going broke. 
As there is a raft of bills currently before select committees New Zealand First will support this bill going to the select committee but members can see how sceptical we are about it. We would really like to see all the business groups in the country going along to the select committee and telling the trade union officials who make up the Labour Government and its select committees just what a nonsense this bill could be. As I have shown in that simple case we will be doing the worker in the eye for holiday pay and possibly even for wages so that those workers who come under a big union and who have negotiated a redundancy payment can get paid first. 
PAUL ADAMS (United Future) 
: 
 As Mark Peck has said this bill was inspired by the collapse of the Weddel meatworks in 1994. Those employees found they had no greater protection than other unsecured creditors in respect of their redundancy compensation. Under the Companies Acts of 1955 and 1993 when companies are wound up the order of payment for creditors is as follows: first is the receiver second are debenture holders which are usually a bank that has first call on the sale of the fixed assets third are the employees who are treated as preferential creditors for up to $6000 in unpaid wages salaries and holiday pay and fourth are customers with deposits for layby purchases and the Inland Revenue Department for unpaid PAYE and GST. Therefore after the receiver the preferential creditors—including staff layby depositors and the Inland Revenue Department—have first call on the proceeds from selling company stock collecting unpaid debts and selling assets with a floating charge over them. Almost everyone else who is owed money by a failed company—suppliers contractors landlords staff redundancy payments and the portion of wages and salaries above $6000—are unsecured creditors and are paid if there is any money left. There is a risk there. Company shareholders get their money back only when outstanding creditors have been paid so again there is a risk there. 
Let us evaluate that risk correctly. When companies go broke it normally involves a lot of human suffering for a number of people such as the owners the staff and also various contractors and suppliers. There are normally no winners. The banks may be the odd exception to that because they seldom lose as I have discovered. But life does involve risk. It is a part of life for us and we all have to learn to handle it correctly if we want to get ahead in life. It is a risk to start a company. It may go broke and the owner will lose everything. It is a risk to work for a company. It may go broke and employees will lose their jobs. Likewise it is a risk to do work for a company. Again as we have seen it may go broke and people will not get paid. All companies involve people and people will get hurt if a company fails. But worse would be the situation if people were ever to stop taking risks because we would achieve nothing. I have discovered that most people at the end of their life wish they had taken more risks not fewer. 
This bill amends the Act to make redundancy payments a preferential claim. In other words it gives redundancy payments the same status as wages and holiday pay. When a company goes into liquidation or receivership the bill also removes the $6000 limit on all amounts due to employees. When looking at this bill to determine whether United Future could support it we had to stand back and look at the bigger picture. In itself protecting people’s entitlement to their agreed redundancy pay makes sense. However when we look at it in the light that a company collapse is a disaster for many people we have to ask ourselves whether compensation that is designed to remove some immediate financial worry associated with the loss of a job should take precedence over payment for work already done by contractors and suppliers who also as we have heard have staff and families to look after. We feel we have to say no. Therefore United Future will not be supporting this bill. We believe that work already done and due for payment must be ranked alongside if not ahead of redundancy payments. 
SUE BRADFORD (Green) 
: 
 The Green Party would like to congratulate Mark Peck on having this bill drawn out of the ballot as it deals with a long-neglected aspect of company law that we believe should have been addressed well before now. Like Mr Peck we believe that there should be more protection for employees’ redundancy entitlements when companies go under. When redundancy agreements are negotiated surely the whole point of them is to compensate workers for the situation they find themselves in when they lose their job through no fault of their own. 
Company liquidation or receivership has become all too common a phenomenon over the last 20 years and there have been many examples of workers losing everything they were owed in redundancy even when their former bosses would themselves have wished for a far better fate for their employees. I am sure many employers have themselves felt grief as they have seen the Inland Revenue Department paid out while people supporting families have gone on the dole unprotected by any cushion of redundancy pay no matter how long they have served the company or how loyal and productive a worker they have been. At the moment when an organisation goes under staff who become suddenly unemployed find themselves having to line up with what is usually a huge queue of unsecured creditors to take their chances on whether they will eventually get even a minor percentage of what they are owed in redundancy. This bill if passed will change all that by ensuring that redundancy payments will become a preferential claim in the event of liquidation or receivership. 
A second welcome feature of this bill is the removal of the $6000 limit on all amounts owed to employees and the elimination of the current $1500 limit on what a worker can recover in the event of an employer’s bankruptcy. 
While this is a member’s bill I do hope that Mr Peck’s own party will see its way clear to supporting the bill not only to the select committee but also through all stages in the House to become law before the end of this year. The Government along with individual workers and unions can be assured of the Green Party’s support for this bill. I look forward to the day that workers’ entitlements are given the same protection as those of other preferential creditors when the worst happens and an employer goes under. 
MARK PECK (NZ Labour—Invercargill) 
: 
 I raise a point of order Mr Speaker. I apologise to the member who was about to speak. I have made a mistake in the committee that I wish to refer the bill to. I want to refer it to the Commerce Committee and I will move the motion at the appropriate time. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: Is the member seeking leave to do that? 
MARK PECK 
: As I understand it it is a matter of a motion to the House. I am certainly not seeking leave because I do not think it will be granted. 
Hon ROGER SOWRY (Deputy Leader—NZ National) 
: 
 I understand the matter quite clearly. The member indicated in his speech the committee he will send the bill to—in fact he did so by way of a point of order immediately after his speech. I do not believe that at this point towards the end of the debate the member can now change that. The bill has to be referred to that committee unless he gets the leave of the House. We are more than happy for the bill to go to the Transport and Industrial Relations Committee. That is the appropriate committee for this legislation to go to. If during the debate the member decides that he might not have the numbers on that committee and he wants to refer the bill to another committee that is something for the House or the—[ 
Interruption 
] I am just waiting for Judith Tizard to calm down. If the member wants to move that the bill go to a different committee that is something for the member to do by way of leave or for the Business Committee to decide. But the member cannot just pop up in the House and say that he has changed his mind. 
DAIL JONES (NZ First) 
: 
 You heard my speech Mr Assistant Speaker and during my speech I indicated that I was pleased all three of the bills I mentioned—the Holidays Bill Matt Robson’s bill and this bill—were going before the Transport and Industrial Relations Committee. That was a major premise of my speech; I wanted submissions to be made on all three bills together. That would give the ordinary working man the opportunity to make one submission on three bills to one committee rather than to have to split submissions between two committees. So I take the view that as he has indicated the bill was to go to the Transport and Industrial Relations Committee—and that was a cornerstone of my speech—that is where it should go. If there were any question of leave New Zealand First would oppose the bill going to any committee other than the Transport and Industrial Relations Committee. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 This is actually quite an interesting issue and not one that I hope we will deal with on a partisan basis. It raises quite an important issue in terms of the way bills are dealt with. My understanding is that the member in his speech did not refer to a specific select committee—which might well be regarded as an oversight. He should have referred to a specific select committee. Indeed had he done so in that speech then I think that the point raised by Mr Sowry would be absolutely correct. If he referred to the bill going to a select committee in his speech then clearly the motion would have to be to refer it to that select committee or leave would be required to change that motion. However he did not do so and raised a point of order. It is rather interesting as to whether a statement made in a point of order has the same binding quality as a statement made in the original speech. That raises a further question about whether it is permissible in any case for an amendment to be moved to the motion to refer a bill to a select committee. In other words should you rule that the member has to refer the bill to the Transport and Industrial Relations Committee—if the motion is that—presumably it is within the competence of another member to move an amendment that the bill be referred to a different select committee. 
RODNEY HIDE (ACT NZ) 
: 
 I think that Dr Cullen is absolutely right. We have got ourselves into a very interesting position. Just to pick up on Dr Cullen’s point I believe he is right that if the committee had been named in the speech and in that part of the motion then certainly it could not be changed. But I make this point: I think that raising the matter as a point of order gives it a greater significance because I thought that the point of order was to correct the speech. I absolutely thought that that was the motion we were debating and discussing. I think that we have to take a bit of time to get this issue right because it could set a dangerous precedent. I am not sure what the answer should be but I do counsel that we need to take a few minutes. Maybe I could give my speech then there could be a ruling that was well considered rather than made on the spur of the moment. I think that this is setting a potential precedent that could be quite dangerous. 
Hon ROGER SOWRY (Deputy Leader—NZ National) 
: 
 Just to pick up on Dr Cullen’s point Standing Order 281 states that the member in charge of the bill determines where the bill is to go. The member did not follow the correct procedures but acted by way of a point of order immediately following and stated his intention about the committee to which he intended the bill to go. I feel quite strongly that the member is bound by that. Dr Cullen is right in saying that another member can move an amendment but that must be done before the first reading. So that amendment needed to be put on the Table before the bill was read for the first time. I have to say that I myself have tried to do the same on several occasions and have had exactly the same ruling from the Clerk which was that if I had not lodged an amendment before the Clerk called the bill then the amendment could not be moved. I do not think that we should start a precedent now to the effect that during the whole process members may table motions to have things moved around. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: I thank members for helping the House through that issue. It is arguable as to how we proceed given that it was not raised in Mr Peck’s first motion. But the member may seek leave and we will test the House. 
Mark Peck 
: I do not want to seek leave. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: If the member does not want to seek leave that is fine. There are other remedies and we will move on through the speakers. 
By way of addressing the issue that the Hon Roger Sowry raised I point out that notice may be given before the first reading of the bill—which does not mean before the matter is addressed. It means before the House decides that the first reading has taken place. 
Hon ROGER SOWRY (Deputy Leader—NZ National) 
: 
 I raise a point of order Mr Speaker. This is very important and I want to make it quite clear because I have tried that device before and clearly people may well now wish to use it. If a motion does not have to be lodged before a bill is read the first time—I point out that that is something I myself have tried to do and the Clerk of the House Mr McGee who was at the Table at the time indicated to me that the amendment had to be lodged before the bill was called—and if in fact you are determining now that at any stage during the introduction speeches on a first reading members can lodge amendments to move bills around to different select committees then I am happy to accept your ruling. But I want you to make sure that that is the appropriate ruling because I envisage now that we will get ourselves into situations where we end up with a new procedure—lots of votes at the end of a first reading. We have not done so before because those amendments have not been able to be lodged once the first speeches were given. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 Standing Order 281(4) is quite clear. It states: “An amendment to substitute another committee or to alter any proposed special powers or instruction may be moved if notice of such an amendment is delivered to the Clerk at the Table before the bill is read a first time.” That is not the calling of the order of the day. The bill being read a first time occurs after the vote on the first reading of the bill. Logically if one thinks it through one would see that an amendment could not possibly be moved before the order of the day is called because at that stage it is not known which select committee the member is going to move that the bill be referred to. The member is supposed to do that in the first speech given in the debate. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: I thank the member for his assistance. The amendment that has been alluded to can be made at any time during the first reading speeches. I am aware of the Standing Order. The way I read the Standing Order is that a bill has not been read a first time until all speeches are finished and the bill is announced as having been read a first time. That is the way I believe the Standing Order will be interpreted. It is certainly the way I would interpret that Standing Order. An amendment can be made at any time during the speeches. After all the motion is put not before the first reading as in Mr Sowry’s interpretation; it is put once those speeches have commenced. So let us proceed and we will see what happens. 
RODNEY HIDE (ACT NZ) 
: 
 I thank colleagues for a very interesting insight into the Standing Orders. I do not think that Labour Government members will be surprised to hear that the ACT party will be opposing this bill. But I do want to say this: I think that the member in charge of this bill Mr Mark Peck is one of Parliament’s better parliamentarians. It was good to see him sit in this House listen very intently to what Mr Roger Sowry had to say and actually take it on board. I think that we have had a rare moment in this House. I always like members’ day and today there have been three excellent speeches following Mark Peck’s speech from Roger Sowry Dail Jones and Paul Adams. I have learnt something from every speech about this vexed issue. I was also very conscious that we had in Mr Peck someone who was listening to the concerns of members and taking those concerns on board. I found the concerns raised by those speakers to be overpowering and overwhelming. 
I hope that Mr Peck does not mind me saying this but when I went across the Chamber and asked him whether this was his bill originally he said it had been in Rick Barker’s name. I knew that this was not Mark Peck’s bill from the start because when one reads it one sees that it has a political statement in the commentary at the front of it. It states that a terrible thing happened with the Weddel meatworks closure back in 1994 and it goes on to state that the Minister of Agriculture was predicting more closures of meatworks. That is a political statement. Mr Peck recognised it as such and said it was a reference to the former National Minister not to the Minister in this Government. Yes he agrees with that. What we have here is a bit of fun in Parliament dating from the time when Mr Barker was in Opposition. The bill has wound its way through the ballot and now Mr Peck the parliamentarian has had to take it over. 
Following on from the previous three speakers I have some questions for Mr Peck. He might not be able to answer them immediately but I want him to consider them when this legislation is going through the Commerce Committee. First what is the cost of this bill? What will this bill cost New Zealand? Will it cost nothing a little bit or a lot? I do not think we know the answer to that. We have no idea what this bill will cost because we cannot perceive its full impact. It will not cost taxpayers anything but in reshaping the parties who carry the risk in the event of a business collapse there will certainly be costs. The cost will not just relate to the shifting of preference from one creditor to another; it will be a cost in terms of changed and potentially damaging behaviour. When Mr Peck as chair of the Commerce Committee considers this bill I ask him to give hard consideration to what the economic costs will be to New Zealand. 
Second I ask him who will pay those costs. I do not know the answer to that question. I do not know who will pay for the cost of this bill. What we do know is that workers’ redundancy payments are to shift up the list of creditors when there is a collapse. But who loses out? If workers who were to have lost out will now receive a redundancy payment someone else has to lose. I ask Mr Peck not to treat this legislation as a free lunch for working people—much as our hearts might go out to them. Who will actually front up and make the payment? I heard Jill Pettis and Damien O’Connor call out that I do not have a heart and that might be true. However I ask them to consider whether they have a head. If they have heads could they apply them to answering the question of who will pay? It appears to me that Mr Peck thinks this legislation is somehow a free lunch. But someone will pay. 
I now ask Mr Peck to consider my third question: what will be the ripple effect of this bill on the economy? 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I do not think that the honourable Rodney Hide realised he had 2 more minutes to go. After last night everyone has become used to calm collected and friendly Committee stages. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: The member should make her contribution by way of her speech. She was late in rising to the call. The bell indicated the termination of the previous speech. 
Hon LIANNE DALZIEL 
: I was not aware that there were only 5-minute speeches in first reading debates. Obviously I have not spoken during members’ night for a while. What has brought me down to the House to speak tonight after a long long time is Mark Peck’s bill. As Minister of Commerce with responsibility for this area I have come here to signal the Government’s desire to have this bill referred to the Commerce Committee so that work can commence on the policy that we have been working on as a Government since 1999. I have to pay some tribute to the National Government of the day when it agreed back then to review both the personal and corporate insolvency laws. I say good on National for that. I am glad that it started that process which we were very happy to pick up when we became the Government. We followed through the objectives that were set by the Government of the day for that review. 
We were asked to look at a predictable and simple regime for financial failure: one that can be administered quickly and efficiently imposing the minimum necessary compliance and regulatory costs on its users without stifling innovation responsible risk-taking and entrepreneurialism by excessively penalising business failure and one that distributes the proceeds to creditors in accordance with their relative pre-insolvency entitlements unless it can be shown that the public interest in providing greater protection to one or more creditors’ priority debts outweighs the economic and social costs of any such priority. That is what we are talking about here tonight. We are talking about the public interest in providing greater protection to one or more creditors with regard to the social cost of that priority not being accorded. 
All that this bill does is to remove limitations. The Government has already decided to increase the amount that can be paid in the way of wages holiday pay and those other things we have talked about. That amount has been increased from the figure of $6000 in the current legislation to $15000. I would like the select committee to look at that in some detail. The bill proposes that there be no cap on the amount that can be paid and I think the select committee should hear some argument on that. The second decision we have made is that redundancy compensation can be included within the cap. This bill makes it absolutely clear that wages holiday pay and redundancy compensation are all included within the concept of that priority. 
It is important that we do give workers the ability to do something that they cannot do themselves. What sets them apart from some of the commercial interests is that they cannot secure themselves against company failure. The previous National Government was very much responsible for improving the situation back in 1993 and this is another chance for National to come on board and to help to improve the situation even further. The whole point of the legislative framework is to provide protection for people who cannot protect themselves. Workers cannot secure the liability of wages or holiday pay earned or indeed of redundancy compensation that is due and payable. I believe that is an important issue that does need to be addressed. 
As I said before a number of decisions have already been taken on the insolvency law review. We owe the tier one decisions to my former colleague Laila Harré and I congratulate her on her work in that area. I announced the tier two decisions about a week ago. We have to remember that all those decisions are significant. There is no way that we could draft bills and introduce all the provisions refer them to a select committee and pass them through all the remaining stages by the end of this year. I therefore welcome this member’s bill in the House at this time so that we can address this issue with due speed and ensure that the sorts of examples we have heard from members on the Government side of the House and from the Green Party are not repeated in the future. 
JOHN KEY (NZ National—Helensville) 
: 
 I am pleased to follow my colleague the Hon Roger Sowry in opposing this legislation. It is a matter of commercial reality that in the years to come some companies in New Zealand will fail. They will go into liquidation and they will leave some employees who simply will not be paid their redundancy payments. That is a fact under the current legislation. The question we have to ask tonight is whether we should reconstruct the Companies Act 1993 in order to accommodate a scenario whereby redundancy payments rank ahead of secured creditors and there is no cap on those redundancy payments—where the $6000 cap in the current legislation is removed. Should we make that legislative move? I say no to that on a number of fronts. I say that not because we are unsympathetic to those New Zealanders who might find themselves in that position but because of the massive implications that it will have for economic growth in this country and for the security of hundreds of thousands of small businesses across New Zealand. 
Life is all about choices. As Mr Hide said there is no such thing as a free lunch. This issue is all about choices. As legislators we face this simple choice. Is it more important to protect a very small group of New Zealanders those employees who find themselves in the position of not being paid redundancy payments when the company that they have worked for is put in liquidation or is it more important to protect hundreds of thousands of small companies all around New Zealand? I was in Auckland this morning and I looked at some data there. I saw there are 109000 small businesses in the Auckland region alone that employ 4.7 people or less. All those companies will be severely challenged by this legislation; let us make no mistake about that. I say that for one very serious and simple reason: if this legislation is passed in the event that any small company deals directly with a large organisation with an extensive redundancy liability it is very unlikely that the small company will be paid and it risks the entire financial solvency of that company. Is that worth it? I say no. 
The ramifications of that are huge. Members should think about that from the perspective of financial institutions. Which bank or financial institution in this country would want to lend money to small companies knowing that they will be dealing with large organisations that will not pay them causing their whole businesses to go down. In my electorate of Helensville there are many farmers who deal with large meat companies. They will be risking their entire businesses if this legislation is passed and I simply say that that is wrong. What is so much more important for New Zealand is not to pass legislation that looks to protect a very small group but to provide a playing field that will generate the highest level of economic growth so that we can employ all New Zealanders. We need to employ not just the New Zealanders who are in work today but also the other 400000 who are currently on a benefit. That is what we need to do. 
We need to encourage entrepreneurship and small businesses. The message we have to send to small businesses is that if they set up a business and deal with large and small companies in a mature and well-thought-out way their position is protected. That is absolutely critical to the integrity of the New Zealand business psyche. I believe that passing this legislation challenges that and I will be opposing it. 
JILL PETTIS (NZ Labour—Whanganui) 
: 
 I rise to speak briefly obviously in support of this bill. I congratulate my colleague and former bench mate on his initiative in bringing this bill to the House. This bill is important. It is about the rights of workers but it is also about employers as well. As will have been stated by other colleagues from the Government side of the House in their contributions this bill is about fairness. 
I was very interested to hear Mr Key’s comments before he resumed his seat that we all have the right to make choices. I suggest to Mr Key that he has never been made redundant because there is no choice when one is made redundant. Unfortunately that happens to too many workers in the world and not just in New Zealand. In the 1980s my husband and I were made redundant within 3 weeks of each other. Neither of us had any choice over that. 
Shane Ardern 
: Under a Labour Government? 
JILL PETTIS 
: Yes it was. Neither of us had any choice over that at all. I tell Mr Key that it was a traumatic experience. No matter how hard we feel that we have worked ourselves for a short period in our life we have a sense— 
Hon Roger Sowry 
: The member is about to be made redundant again very soon. 
JILL PETTIS 
: Mr Sowry has not made me redundant twice yet and I do not expect that he will do so in the future. During a short period of time in our life when we are made redundant we feel that we have no control over our life. I ask the member to reflect generously on what that situation can be like for people through no fault of their own. In many instances when businesses go under it is not because the employers want them to go under but because of a whole range of conditions and situations in the market at that time. 
I am pleased to support this bill to go to a select committee. I look forward to a large number of submitters giving their views to the committee. I wish the bill a speedy passage through Parliament. While it may not be apparent at this stage the bill is in the interest of both employers and employees. 
MARK PECK (NZ Labour—Invercargill) 
: 
 I thank members for their contribution to the debate. First I shall deal with Roger Sowry’s point that National started it and yes perhaps I should acknowledge that. It is not being disingenuous. It was good work that—[ 
Interruption 
] That is life but at least I have an opportunity to repair it so I thank Mr Sowry for that. 
I say to Mr Dail Jones that I am aware of the history of workers compensation. Indeed one of the solicitors in my town was one of the best exponents of ensuring that workers got the justice they deserved when they were injured prior to our having an accident compensation Act. I would hazard a guess that in the situation where a person was made redundant it would be most unlikely that that person would be on workers compensation. In fact if we did the figures we would probably find that the number of people in that situation was zero. But the speech was interesting and I did enjoy it. Certainly he raised some important points that will need to be examined by the select committee. 
I say to the United Future member that I understand his position. I would ask that he come along to the select committee with an open mind. Let us hear the submissions because I am mindful of the issues raised by my colleague Jill Pettis and which I raised in my speech about how people feel at the time they are made redundant. Until one has been through it oneself one just does not know. Going home fronting up to one’s family and saying “I’m sorry but I can no longer pay our mortgage or put food on the table for the family.”—whatever gender the worker might be—is just the most— 
Jill Pettis 
: Gut-wrenching. 
MARK PECK 
: That is the word. It is the total loss of economic power to look after one’s family. All that I ask of that family-friendly party is that its members on the select committee think about that because it is a matter of some real concern. 
I thank Sue Bradford for her comments and I assure her that we will put in the work. 
Rodney Hide raised three questions—the cost who pays and the trickle-down effect. Those issues will need work. I hazard a guess that the cost will probably be zip but the trickle-down effect is an important one. The bill will have an impact. It is quite clear that if money is put into redundancy payments then it must come from somewhere else. That is work that does need to be done and I am looking forward to submissions on that. 
I have a couple of comments to make to John Key who is obviously a rising star in the National Party. 
First I say to the member that it is useful to use correct statistics when quoting them back. Just sitting here and using my own “Peckometer” I have worked out it is highly unlikely that there are 400000 people on a benefit. [ 
Interruption 
] It is a debatable point. The member has made his speech. There are 4 million people in New Zealand and of that 4 million probably a good third are not of working age and then there are senior citizens. If members are looking at those on a benefit then I think they really need to do the figures as to the number on an unemployment benefit. 
An Hon Member 
: It’s 125000. 
MARK PECK 
: I will accept that figure as a more empiric figure and say to the member that it is in fact the lowest unemployment level we have had in a long time. [ 
Interruption 
] Fifteen years actually. I am hopeful that the bill will not be needed. 
Furthermore I acknowledge that any reform in this area does have an effect on companies. But I say to that member that my experience of 16 years as a union official taught me that businesses of the size he is talking about with fewer than five employees will not have redundancy agreements anyway. 
Shane Ardern 
: That’s right; they lose their jobs. 
MARK PECK 
: The member is interjecting; he should let me finish the point I am making. I am taking this point seriously so let me come to what I want to say about it. In those situations those companies do close and when they close the employees get nothing. 
It has been a good debate. I thank members for it and I am looking forward to the debate at the select committee. 
A party vote was called for on the question  
That the Status of Redundancy Payments Bill be now read a first time. 
Ayes 74 
Noes 43 
Bill read a first time. 
Labour 52; New Zealand First 13; Green Party 9. 
New Zealand National 27; ACT New Zealand 8; United Future 8. 
MARK PECK (NZ Labour—Invercargill) 
: 
 I move  
That the Status of Redundancy Payments Bill be referred to the Transport and Industrial Relations Committee. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: An amendment has been received from Dr Michael Cullen to omit the words “Transport and Industrial Relations Committee” and substitute the words “Commerce Committee”. 
A party vote was called for on the question that the amendment be agreed to. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I raise a point of order Mr Speaker. I consulted the United Future members in the House at the time about their voting for the amendment. The indication was that they were going to vote for it. I think they might be confusing it with their opposition to the bill itself. 
PAUL ADAMS (United Future) 
: 
 We should have voted in favour of the amendment. My apologies. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: There is confusion. We want certainty so I will ask the Clerk to call the vote again. 
Hon ROGER SOWRY (Deputy Leader—NZ National) 
: 
 I raise a point of order Mr Speaker. I wonder how there can be confusion when my understanding is that all the parties that voted to oppose the resolution to change the committee had talked about it and had decided that they were going to vote against it. Confusion arose only when the Deputy Prime Minister came in and started sending signals to United Future that it was to toe the line with Labour. If United Future votes the way that it feels that vote should stand. United Future should not come in here and be bullied by Labour all the time. That is not very appropriate at all. The vote had been conducted and people had voted freely in Parliament as is their duty. That party should not now be given an opportunity to change its mind after being pressured by the Minister. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I am certainly not attempting to apply any pressure at all. I simply raised the issue because I thought there might have been some confusion about the vote given that United Future is opposing the bill. A procedural motion about which select committee the bill goes to is a different matter. It is not at all out of order for a party to change its vote before the vote has been called on the basis that it was confused about its position. That has been done a number of times. 
RODNEY HIDE (ACT NZ) 
: 
 I think we are in a very tricky situation because I do think United Future is genuinely confused over this. [ 
Interruption 
] I am being helped by the Hon. Roger Sowry. I went over and spoke to Paul Adams and he said that no United Future did not want the bill to go to the Commerce Committee; it wanted it to go to the Transport and Industrial Relations Committee. I think Dail Jones was saying that also. I consulted the Clerk about how the votes would be put and I had an assurance from the United Future Party that that was how it would be voting. That is absolutely correct; I do not see anyone there who is going to take a point of order to disagree. 
This is important. United Future cast its vote as it intended. As it cast its vote Dr Cullen—I do not think it was intimidation; he is not a very scary guy actually—did go red in the face and did start waving his hands in a circular motion indicating that United Future had got it wrong. I do not think he will deny that. Then he started to mouth—I could pick it up from here—“You voted the wrong way; we are upset.”; that is what I understood the mouthing to be. Then he took a point of order to say that he thought there had been some confusion on the part of the United Future Party. The United Future Party members quickly looked confused then one of them jumped up and changed the party’s vote. That is a corruption of the voting process. I do not think there was any mistake whatsoever. United Future had told three political parties how it was going to vote 5 minutes before it voted as it had said it would. Then it wanted to use a point of order to change its vote. 
LARRY BALDOCK (United Future) 
: 
 First of all I do not think it is appropriate for the deputy leader of National to suggest that we have been bullied into something. We are fully aware of what is going on and we wish to amend our vote. There are no underhand tactics implied here. 
Dr MURIEL NEWMAN (Whip—ACT NZ) 
: 
 I seek some clarification. I was of the understanding that once a vote is started it cannot be interrupted. I wonder whether the Assistant Speaker would mind clarifying that point. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: I have heard as much as I need to hear and I thank all the members for their contribution. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I raise a point of order Mr Speaker. I take strong exception to the direct statement made by Mr Hide that there is corruption of the voting process. If he believes that there is another way of raising that issue as I am sure he is well aware but to raise it in the House is highly offensive and I take offence at it. I think he should be required to withdraw and apologise. 
DAIL JONES (Junior Whip—NZ First) 
: 
 I think Mr Hide was telling the truth. He was perfectly entitled to say what he did. If Mr Cullen does not like it that is just too bad. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: Let us settle down. I too took exception to the use of the word “corruption” by Mr Hide but I think in the context it was not all that offensive. I will not require him to withdraw it. 
Rodney Hide 
: I will withdraw and apologise if you took offence Mr Assistant Speaker. Then we can move on. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: Thank you Mr Hide. Where we are at is that at some stage there was confusion in the House and there can be confusion in the House or a particular member or party can indeed be confused. These matters can be dealt with and should be dealt with before the vote is declared. The vote had not been declared and because of the confusion and all the help that the Chair has had I will ask the Clerk to conduct the vote again. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 60 
Noes 57 
Amendment agreed to. 
Labour 52; United Future 8. 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Green Party 9. 
A party vote was called for on the question  
That the motion as amended be agreed to. 
Ayes 60 
Noes 57 
Motion as amended agreed to and bill referred to the Commerce Committee.. 
Labour 52; United Future 8. 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Green Party 9. 
National Certificate in Educational Achievement Moratorium Bill 
First Reading 
DONNA AWATERE HUATA (ACT NZ) 
: 
 I move  
That the National Certificate in Educational Achievement Moratorium Bill be now read a first time. 
 I propose to have this bill referred to the Education and Science Committee. The past year has been a roller coaster year for fifth form students who sat level 1 of the National Certificate of Educational Achievement (NCEA). It has been a roller coaster year for teachers of level 1. It has been a confusing year for parents who cannot understand how the new exams work. It has been a stressful year for the first group of students who have gone through the system. They are the ones who have been on the back end of a mad scheme set up by a small group of bureaucrats determined to cut down our academic tall poppies and level them all down to the lowest common denominator of mediocrity. 
The NCEA moratorium bill is not a big bill. It does not say to do away with the NCEA. It does not say to turn back the clock and stop level 1 from proceeding. It does not even say for us to go back to School Certificate and Sixth Form Certificate. It is saying that we should stop for a minute and reflect on what is happening here because there is no doubt that what is happening is a disgrace. 
The Post Primary Teachers Association (PPTA) which represents 14500 secondary school teachers has resolved that level 3 which would replace bursary should not go ahead before 2006 at the earliest. It is saying that schools and teachers need time to bed-in level 2 to get it right to iron out the problems and that schools should be given next year and 2005 to do that. It is also saying that there needs to be greater flexibility and I agree with it. I predict that we will look back in 5 to 10 years’ time and rue the day that we let a fundamentally flawed exam system leach its way into the school system—leach its way into cutting down the tall poppies taking away their incentive to excel. 
The irony in all this is that it is not the future potential of the well-off or those lucky enough to get into our top schools that is at risk. The ones most at risk are those students in the poorest areas who have no choice but to go to a school where students have traditionally underachieved. Anyone who thinks that an employer or a university is going to think that NCEA qualifications gained at a decile 1A school like Flaxmere College or Tangaroa College is the same as that gained at Havelock North High School or Samuel Marsden Collegiate School for example is being an optimistic Pollyanna. That is my view—an optimistic Pollyanna. Saying that the qualifications are the same does not make them so. 
Let me make it quite clear: the students who will be most seriously disadvantaged from the NCEA especially with this mix of internal and external exams will be the very students whom the social engineers have tried to help—the ones who leave school without any qualifications other than unit standards. But employers are not going to look through all the paperwork to find out whether the paper was largely internally or externally assessed; they will look at the name of the school and jump to their own conclusions. That is exactly what will happen and that is why students from decile 1A schools and the lower decile schools will be disadvantaged by NCEA in the long run. 
The aim of this bill is very simple: it is just to provide a 1 or 2 year breathing space. We need some breathing space because the implementation of the NCEA has been frantic muddled and confusing in this past year. I have to say that the Minister’s decision to delay the start of the NCEA until 2001 was a good decision but even then the Education and Science Committee’s hearing last year into the implementation of level 1 of the NCEA uncovered a litany of problems—the sorts of problems that occur when the thinking behind the exams is wrong in the first place and when the time and the resources simply were not set aside to ensure a smoother less troubled first year. That is the problem with NCEA I contend: it is the thinking behind it that is flawed. 
My bill is a bit too late to do anything about level 2 which was pushed ahead this year and I think I have made it pretty clear that while I am not a great supporter of the NCEA I believe that we can yet avert a greater tragedy than the loss of School Certificate. Sixth Form Certificate has also gone but many believe—and I am one of them—that it is not much of a loss at all. 
However bursary is another matter. Bursary is quite a different matter. Bursary is a gold-plated exam. It is gold-plated. Twenty years have gone into getting bursary to the point where it is today. It is now gold standard and I cannot understand why we would want to tinker with it. Of course there are things we can do to improve it. Of course we can refine it. Of course there are many suggestions already on the table suggestions from teachers that should have been followed years ago. Maybe now is the time to do it but throwing the baby out with the bath water is I believe a retrograde step. At the end of the day employers know bursary. Tertiary institutions know bursary. It is gold standard. It is internationally recognised and I believe very strongly that we should keep it just as it is. 
The advantage that my bill presents to us tonight is that it gives us an opportunity to evaluate where we are to date with NCEA in its totality but best of all it will give us the breathing space we need to make sure we do the right thing. Let us just take one example. Why can level 3 and bursary not coexist? There is no reason that level 3 and bursary cannot coexist—no reason at all. The Minister’s argument that there are not two teachers per subject good enough to be chief examiners is insulting to 14500 secondary school teachers and to every single senior subject teacher in this country. The Post Primary Teachers Association has called it a laughable excuse and I agree with the association. 
I could accept NCEA if there were credible research to support it but there is none. There is no peer review or published research that shows the benefits and advantages of NCEA. A small pilot was held yes but no quantifiable outcomes were defined upfront no analysis was undertaken and no research reviewed and published. If the research had been done I believe that the kinds of bungling and resource issues that were brought to light by the NCEA inquiry last year would never have happened. So when parents claim as they have that their children are guinea pigs in a giant experiment they are quite right. 
It gets worse. No plans are in place yet for a major evaluation to be undertaken or for a major research project to be even begun. The Minister and his bureaucrats have said to us that they will wait until the exams have been in place for a few years. By then it will be too late. Habits will be in force and loopholes found and problems that are unacceptable now will no longer seem as bad. In my view it is time to have a breathing space and I commend this bill to the House. 
HELEN DUNCAN (NZ Labour) 
: 
 I am pleased to have the opportunity to speak in the first reading of this member’s bill. The Government fundamentally opposes the bill. We are committed to the ongoing implementation and development of the National Certificate of Educational Achievement (NCEA) and I do not expect that to come as a surprise to anybody here in the House. I expect that the National Party will also be opposed to this given that NCEA was developed by National in Government and in fact would have been introduced a year earlier had it continued to be the Government. We believe that to impose a moratorium would be to waste the time and the energy of teachers students and schools as well as the money of the taxpayers of New Zealand. We actually do not need a moratorium. NCEA is here to stay. Level 1 has been successfully implemented and that was one of the good things that we noticed with the exams: the level of problems with the exams was I think less than we normally have had with School Certificate. There have always been problems with the exam system but in fact things went remarkably smoothly. Given the level of discussion beforehand it was amazing how little complaint there actually was about the conduct of the exams. 
NCEA replaces an outdated qualifications system with a system that is flexible has clearly defined standards and recognises what the students in our secondary schools can do rather than what they cannot do. I do not think anybody in this House can get up and credibly argue for the retention of a School Certificate system that automatically failed 50 percent of students. I cannot see that anybody can argue that that is a system that is good for our students’ self-esteem self-worth or even their likelihood of employment or being able to carry on to tertiary education. NCEA is the product of over 15 years of deliberation by the profession employers and politicians and as I said before it was developed by the previous Government which had intended to introduce it in 2001. It is interesting that educational professionals by and large are still absolutely committed to NCEA in principle even though they complained about the problems there were with implementation. 
I think it is time for ACT to move on and be positive about the opportunities that NCEA offers. It was really interesting on the select committee that when we had just settled on having the inquiry and had not even seen the submissions Deborah Coddington as a new member came along replacing Donna Awatere Huata and said that ACT would be putting in a minority report. 
Deborah Coddington 
: Not a chance! 
HELEN DUNCAN 
: We said it was usual to wait until— 
Deborah Coddington 
: I raise a point of order Mr Speaker. I am a new member and I seek your guidance on this but if the member is reporting something I said to the select committee that is incorrect is that acceptable? 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: It is not a point of order but I will ask the member who has the floor to come back to the bill please. 
HELEN DUNCAN 
: The point that I— 
Dail Jones 
: I raise a point of order Mr Speaker. I am disappointed Mr Speaker that while Deborah Coddington was trying to raise her point of order Helen Duncan stayed on her feet throughout in a mark of disrespect to you. I ask that in future you just keep an eye on that because I believe it is out of order. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: Thank you Mr Jones. I take that on board. 
HELEN DUNCAN 
: As I said the whole point is that it is usual to get the submissions in listen to them and then make a decision about whether a minority report is needed. It did indicate to us that the mind of the ACT party was made up before the inquiry had even got under way. But in fact I do hope that the ACT party will for the good of the students of New Zealand support the continuation of NCEA. There were some problems with its introduction but that is not unusual. Some of us in our investigation looked back at what had happened when School Certificate was first introduced and the problems there were then. 
Hon Brian Donnelly 
: We can’t look back that far. We weren’t even born then. 
HELEN DUNCAN 
: We looked back at evidence about it. We know also that in the education system whenever there is change there is upheaval because teaching is inherently a stressful occupation and when we add in change particularly the level of change that came with NCEA of course it puts stress on the system and on the people involved in it. Because there was last year a considerable amount of industrial unrest that added to the stress. But we have as a Government committed resources to assist with the ongoing implementation of NCEA. The Government has looked carefully at the recommendations that came from the select committee and is indeed committed to ensuring that there is a smoother transition to the new NCEA system in the next 2 years. 
More training for levels 2 and 3 has been made available this year and will be made available next year. We will review NCEA before the end of 2005 and the Government will listen to the views of education stakeholders at that time. But this bill provides a moratorium of 2 years and I cannot see that this will be of any use to anyone. It is simply going to delay the implementation and cause more stress. It would not affect the continuation of NCEA for fifth form students but simply put a hold on things and stop the smooth progression. 
As I said the select committee listened very carefully to the submissions from a large number of people who were involved. t was really interesting that although they saw problems with the implementation process they had no quarrel with the actual system. In fact every single submitter was clear that the NCEA was an improvement on the system that was there before; that it was going to be better for education and for students and they commended the system to the Education and Science Committee. Yes there were problems with resourcing training communication with the ministry—all those sorts of things. I am not trying to play down the issues that were very rightfully raised with us on the inquiry into the implementation of the NCEA but in spite of that the net result was that everybody said: “It is a good system. It just needs to have the implementation improved.” 
As I said the select committee made some recommendations to the Government and we as a Government are taking them to heart. But the committee also wrote in its report: “It is to be noted that the three key education stakeholders affirm their belief in the NCEA and ask only that lessons are learned from its implementation in 2002 and that the requisite resourcing is provided for its ongoing development and delivery.” That is the final conclusion of the report from the select committee inquiry into the NCEA. Therefore I ask members to listen to that and to vote against this bill. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: The remaining speeches are 5 minutes. 
Hon Dr NICK SMITH (NZ National—Nelson) 
: 
 We know how far away the Government is from reality when we hear a speech on a key issue such as this from that member. I nearly choked when Helen Duncan told us that the National Certificate of National Achievement (NCEA) had been successfully implemented. Where was she when we heard submission after submission at the Education and Science Committee? The Secondary Principals Association of New Zealand said it was one of the worst examples of poor change-management that it had ever experienced in its existence. The School Trustees Association said it was a hopeless implementation; so too did those good union mates of the Labour Government—the Post Primary Teachers Association. All of them said it was a failure and I just ask that member to connect with reality and admit that the NCEA has been one bureaucratic botch-up after another. 
I also have to say to the member who just spoke how can members opposite go around this country and give speeches about the importance of free education—one of Labour’s heartfelt founding principles—and then put up the fees for sixth form students this year from $25 to $150? That is a sixfold increase. When did Labour say that to the electorate last year? When we were in Government we increased the fees by 6 percent and we were told by Labour that this was a threat to the principle of free education—despite the fact that it was less than the rate of inflation. Now Labour has increased the fees by 600 percent and it expects parents to be silent. National says: “Not good enough.” 
In respect of the NCEA it is time Labour fronted up and told the public honestly what changes it has made since it became the Government. Because the NCEA we have in schools today is not the NCEA that was ticked off by National in Government in 1998. There are two key changes that this Government does not want to talk about. The first of those is the Cabinet paper signed off by National which said: “Let’s give students a mark out of 100; let’s tell students how good they are or how not-good they are; let’s not put students into these crude bands where we don’t care whether they got 66 percent or 99 percent.” Because 66 percent is not the same as 99 percent. 
The second politically correct manoeuvre from this Government is that the record of learning to be held by the Qualifications Authority is no longer to record failure. Is that not just another dose of Labour political correctness? We are not allowed to mention this word “failure” when it comes to education. We have this politically correct dishonesty and members on this side of the House say: “Not good enough.” But members on this side of the House are committed to a qualifications reform. We are we were in Government and we still are. We say that we want a standards-based system and we say we want a system that is committed to external examination. 
That brings me to this bill and I have to say to the ACT party that this puts a freeze on Sixth Form Certificate. This House has to front up and say that Sixth Form Certificate is the worst of our school qualifications. There is no external exam. We in the National Party believe in external exams. So why would we want to keep the Sixth Form Certificate? It has no external examination. In Government we were proud to move on from that and we still say that Sixth Form Certificate is not an appropriate qualification and we can do better. National says we are committed to a standards-based assessment and we are committed to external examinations. 
We also want to be constructive and I have to ask this question: this bill would freeze Sixth Form Certificate into this school year 2003. We are 6 weeks into the school year I have to say to the ACT party. How fair is it to our 50000 sixth form students who are in the middle of starting— 
Jill Pettis 
: 80000. 
Hon Dr NICK SMITH 
: That is not correct. I say to the member opposite: “Get your numbers right!”. There are 50000 students in sixth form not 80000. We know that the Labour Party is no good at maths and she proves so again. I say to the House how fair is it to those 50000 students who are 6 weeks into an NCEA programme to change the rules suddenly? I say it is not fair. That is why National says we welcome the debate on the bill but we cannot support it in the form that it is before this Parliament. 
JILL PETTIS (NZ Labour—Whanganui) 
: 
 I am pleased to contribute to this debate and to indicate as my colleague Helen Duncan has that Labour will not be supporting this bill. The National Certificate of Educational Achievement (NCEA) is a success. I do not say that lightly and that is backed up by numerous newspaper reports which I read with a great deal of interest during the January period because I was taking a particular interest in this issue. Comments have been made that the NCEA has been terribly disruptive to the schools: that the schools themselves and the principals and senior teachers involved in the implementation of the NCEA are not supportive of it. I completely refute those claims. 
I am very pleased to say that I have a press clipping from the New Plymouth  
Daily News 
 dated 14 January in which a very very good principal Josephine Mikaere from Okato College is quoted as saying: “the spade work was really done when level one came in. Implementing level one was huge but I think it was timely. The world is changing and our needs have changed and so have opportunities for students”. I know Mrs Mikaere well. I know what a good-quality teacher she is; she taught my daughter when my daughter was at school. So I know that that is a very experienced senior teacher making those comments. Okato College itself voted to go ahead with level 2 and that school is representative of many secondary schools throughout New Zealand. 
I draw the House’s attention to the fact that the NCEA was not introduced on a whim. Fifteen years of intensive deliberation took place between the teaching profession and the whole school community. As has been said National itself developed the NCEA. Tragically National underfunded the NCEA and when Labour became the Government it increased that funding by several million dollars. There are 80000 students in the sixth and seventh forms today—far far too many young people for National to be playing petty party politics with when their education is at stake. We want our best and brightest young people—and so many of them are our best and brightest—to be able to go forward in their educational advancement with some surety and security. We do not need to muck them around any more as we try to implement the best possible form of an educational system for them. I do not say this lightly: those young people are our future. We do need to protect them and we need to make sure that we have a system in place that will be in their best interests. 
Let us dispose of this bill quickly because we need our teaching profession and our young people to be able to go forward with confidence and with security. 
Hon BRIAN DONNELLY (NZ First) 
: 
 I first have to comment on the statement made by Helen Duncan that we looked back to the introduction of School Certificate—that certainly must date her because School Certificate was introduced in the 1930s—and to the statement by National’s education spokesperson the Hon Nick Smith that National believes very strongly in examination at the sixth form level. The question has to be asked as to why for 9 years National left in place an internally assessed Sixth Form Certificate if it believed so strongly in examinations. 
If this bill provided for a moratorium on the increase of National Certificate of Educational Achievement (NCEA) fees New Zealand First would vote for it because the comments that were made by Dr Nick Smith are absolutely correct. The worst feature about the implementation of the NCEA has been the horrendous increase in fees locking out the very students whom the NCEA was designed to accommodate. The members on the Government side of the House need to hang their heads in shame on that one. 
However this particular bill to put it bluntly is a nonsense. The horse has bolted. Level 2 of the NCEA has already commenced; it is well under way. This bill is simply an ACT gimmick. I draw members’ attention to its introduction date: 5 December 2002. How did ACT ever believe that it could get this bill through the parliamentary process before the end at the very best of the year 2003 when level 2 of the NCEA will have been in action for a whole year? Are we then to stop it after that year and go back to Sixth Form Certificate for which we will have no grades to base it upon? This bill is simply an ACT gimmick. It should be noted in fact that only 14 schools out of 336 are not doing level 2 of the NCEA even though they have the option of doing transitional Sixth Form Certificate—only 14 out of 336 schools. It is those 14 schools and the people who surround them that in fact ACT is trying to curry favour with. 
But there is an exquisite irony in the situation that we find ourselves in. It is pretty obvious that Donna Awatere Huata is passionate about this bill and it is also pretty obvious that ACT is totally opposed to the continued implementation of the NCEA. I want to know—and I will certainly be listening to hear this—how many votes ACT will actually cast. Will ACT cast its full complement of votes to record both Donna Awatere Huata’s opposition to the NCEA and the full ACT caucus’ opposition to it? 
If ACT does not cast the nine votes that its whip carries that will demonstrate that the only reason ACT is hanging on to Donna Awatere Huata is to have the $110000 per annum that it is able to achieve by doing so. ACT can demonstrate how much integrity it has by the number of votes it casts because ACT holds Donna Awatere Huata’s vote in its whip’s hand. 
The Minister Mr Mallard delayed level 1 of the NCEA for one year and there were still tremendous implementation problems. No one can deny that there were serious implementation problems and serious underfunding. There are still serious implementation problems that have to be overcome. But it is interesting to note that England has announced that it will throw out the A levels and O levels and will introduce a system almost the same as the NCEA. I also point out that the conceptualisation and design of the NCEA was not National’s. It came about through the National - New Zealand First coalition. New Zealand First is proud of its involvement in the NCEA because we believe that in the next couple of years people will understand the full profound and positive effect that the NCEA will have on our education system. We certainly do not pull away from it; as I say we are very proud of it. 
The system that existed prior to the introduction of the NCEA was far far worse than the NCEA. People talk about percentages. Let me tell members that virtually no one understood what a percentage in School Certificate actually was. 
BERNIE OGILVY (United Future) 
: 
 I rise to express United Future’s opposition to this bill. No one not even the Minister could deny that there have been some problems with the realisation and the implementation of the National Certificate of Educational Achievement (NCEA). I am hopeful that the Minister will take the findings that we have given him on board. However our review was not intended to inquire about the efficacy of the NCEA as a qualification. There can be no doubt that School Certificate and Sixth Form Certificate have as others have expressed tonight become outmoded. The NCEA does give students parents and employers much more information about the skills students have acquired than before. 
There are still many bugs to iron out but should we really do what the bill suggests and delay the implementation of level 2 of the NCEA for another 2 years? After previous delays to level 1 and a decision to make level 2 optional this year schools and even teachers have decided that it is better just to get on with it and to try to make the system work as it is. The staggered take-ups have been disruptive to students. The current senior school year groups will potentially hold an array of different qualifications over different years for different subjects. I ask why we should prolong that instability for twice the number of students over an even longer period. A better option would be to review and revise levels 1 and 2 as schools work through them. 
In the case of level 3 though United Future believes we have a brief window of opportunity for scrutiny before it is introduced. Our concern is that level 3 must balance the consistency of skill-based education against the need to ensure a rigorous entry-level standard for tertiary education. United Future wants to ensure that level 3 has real academic value and rigour. One approach is to favour an initiative to restore the potential for bursaries and scholarships to encourage excellence among our children. We think the introduction of level 3 is an excellent opportunity to change the very low value and esteem that is associated with bursaries and scholarships by markedly increasing their value. That will depend on giving level 3 some grunt as we go through the process. Moreover United Future would want to look at the possibility of making level 3 credits available towards tertiary education. That would also help students to borrow less and thus not to get as much into debt as they do now. 
We take the very practical approach that it is better to accept that the NCEA is here to stay and to work towards making the best possible system for our children rather than to throw out the baby with the bath water. United Future opposes this bill. 
ROD DONALD (Co-Leader—Green) 
: 
 The kindest thing I can say about this bill is that it has missed the boat. The year 2003 has already started and the National Certificate of Educational Achievement (NCEA) level 2 is under way. I should know that; my daughter is in the sixth form this year. Therefore the moratorium is pointless and this bill is redundant. Indeed it is counterproductive. The kindest thing I can say about the member is that I am sorry that the ACT party refuses to cast her vote in favour of her own bill whilst still collecting all the entitlements that go with her presence in Parliament. 
Dr Muriel Newman 
: I raise a point of order Mr Speaker. This debate is about the NCEA. The member as have other members is straying off the topic. I ask that you direct him back on to the subject. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: I thank the member for raising that point. She is quite right. A number of members have drifted right off the bill. 
ROD DONALD 
: I have actually almost finished Mr Assistant Speaker. The NCEA is far from perfect and I was surprised to hear a Government member claim that it was. The Government is on notice to address the deficiencies in the NCEA. As I mentioned earlier one of my daughters is in the sixth form this year. That meant she was in the fifth form last year and I was not impressed with either the implementation or the outcome of the first year of the NCEA. But imposing a moratorium on it is not the way to fix the problems. I hope that the Government does address them. We certainly will not be supporting this bill. 
RICHARD WORTH (NZ National—Epsom) 
: 
 It had not been my intention to take a call in respect of this very important bill but I would like to say on behalf of National members in the context of opposing this legislation that in terms of where Donna Awatere Huata stands and where National stands there are significant points in common. National stands for educational excellence. We do not see in the National Certificate of Educational Achievement (NCEA) structural frameworks anything that is reflective of that position. 
The bill itself may be without merit. That is certainly the position that National has taken. But the underlying ethos of the bill which is all about choice and a commitment to not dumbing down our system is something that we passionately believe in. It is a source of sadness that a number of schools have chosen to desert the NCEA framework and instead to pursue other options in the context of achieving favourable outcomes for pupils at their respective schools. If I look at for example what has gone on in the schools in my electorate that have opted for non-NCEA options I see it is readily apparent from schools of excellence like Auckland Grammar and other schools that there needs to be a commitment given to standards in education that stretch and challenge pupils to higher standards. 
I simply say that in seeing the end of this bill we should all do so with a sense of sadness that we have been committed to a pathway that is consistent with dross and not with excellence. 
DEBORAH CODDINGTON (ACT NZ) 
: 
 I rise to support Donna Awatere Huata’s bill. I do not think it actually goes far enough. I think we should go further and allow schools that want to dump the National Certificate of Educational Achievement to do so. It is always such a delight to return to this House and find that the standard of debate is as high as ever and that members are so concerned about standards of education that they use a debate about such an important thing as a national qualification for petty point-scoring nasty bickering and misrepresentation of other members. [ 
Interruption 
] Yes I did go to the Education and Science Committee; it was one of the first select committees— 
Darren Hughes 
: Once. 
DEBORAH CODDINGTON 
: I am not on that committee; I was a substitute. It was one of the first select committees I went to and I did say that I would be putting in a minority report—I did not say that it would be a negative report—and they all had a good cackle at my expense. I hope it made them feel very proud of themselves that they were so helpful to a new member. But I suppose that that is just typical of the cackling crones in this House. 
I find it appalling that members who were considerably advantaged by national examinations like School Certificate and bursary are now forcing the National Certificate of Educational Achievement (NCEA) on to New Zealand youngsters. It is what a leading secondary school principal in New Zealand John Morris has called the most dangerous experiment ever foisted on to New Zealand’s children. The NCEA—the name just about sums it up. It is just an “achievement” but the Minister calls it a triumph. 
I wonder whether any of those members who speak so knowledgeably about it have read this article by Warwick Elley an emeritus professor of education who is writing in the latest  
Education Review 
. He writes that the assessment system does not pass and that our students deserve better. Now Warwick Elley is not some right-wing ideologue. He is not even political about this issue and as I said this is an issue that is above politics. But he writes that despite the Minister being pleased with the first NCEA results “a cursory glance at the summary statistics is enough to show how arbitrary and basically incredible the whole system is.” In that article which I think every member of this House who is interested in education should read Warwick Elley systematically sets out exactly why the NCEA is a shoddy sub-standard subjective non-qualification. 
All this bill is trying to do is delay implementing the NCEA. Yes it possibly is a bit late for level 2 but what about level 3? I notice that none of those people who use that excuse to oppose the bill bothered to pass an amendment to draw it out further. All this bill is saying is that we should proceed with caution. There is no need to rush this qualification on to secondary schools one year after the other because that is dangerous. It forces level 2 and level 3 on to the same students who sat level 1. Those students are being used as guinea pigs and they will leave school not with School Certificate or Sixth Form Certificate or even bursary but a smorgasbord of nebulous qualifications that look like this sheet. Nobody can make head or tail of this record. There are no percentages. There is no clear direction to students to employers or to parents of how well the students did. It just describes what they did: “interpret historical sources” or “estimate and determine probabilities”. 
Helen Duncan says there has been very little complaint about the NCEA. Well she should have come to the ACT select committee inquiry that we took around the country. We heard from people like Martin Cooney the ex-Post Primary Teachers Association president who damned this qualification as a social engineering experiment foisted on to New Zealand children by the left-wing ideologues in the Ministry of Education and the New Zealand Qualifications Authority. [ 
Interruption 
] That was from one of Labour’s guys—not from one of ours. Byron Bentley the principal of Macleans College in Auckland calls it the biggest fraud perpetrated on New Zealand schools. A teacher at Macleans College said that the NCEA was like a new drug being dumped on the market with no trials and no peer reviews. 
DAVID BENSON-POPE (NZ Labour—Dunedin South) 
: 
 I am delighted to rise and reinforce the Labour Party’s opposition to this bill. 
Debate interrupted. 
The House adjourned at 10 p.m. 
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