Volume 626 Week 90 - Tuesday 31 May 2005 
Volume 626 Week 90 - Tuesday 31 May 2005 
[Volume:626;Page:20791] 
Tuesday 31 May 2005 
Madam Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Questions to Ministers 
Iraqi Immigrants—Saddam Hussein Regime 
1. Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Minister of Immigration 
: Is he aware of a Amer Salman of Bucklands Beach Omar Ali of Howick and a man named Jazwan and whether they have connections to the murderous regime of Saddam Hussein; if so what are they doing here? 
Hon DAMIEN O'CONNOR (Acting Minister of Immigration) 
: 
 At this point I am unable to confirm whether the individuals referred to by the member are living at the addresses or whether the member’s claims are true. I invite the member to meet with me directly after question time and I will be happy to receive any further information he has on these individuals. 
Rt Hon Winston Peters 
: Why on earth would any member of Parliament do that given that with regard to the Ali family and 16 fraudulent cases in this country brought to the Prime Minister’s attention by a person outside of this Parliament in April any official whatsoever has yet to visit that family and despite the comments from his colleague Mr Paul Swain the Minister of Immigration that this matter is in the hands of the Serious Fraud Office if after 6 weeks nothing is done why would I confer with him? 
Hon DAMIEN O'CONNOR 
: Many claims are made in this House. If we do receive any information from anyone be they members of Parliament or the public we look at it very carefully. I remind the member that there is a danger for individuals in raising information in the public arena at times as was pointed out to that member last week by a lawyer who said that identifying the person in question allowed that person greater access to refugee status. 
Dianne Yates 
: What has the Government done to strengthen border security? 
Hon DAMIEN O'CONNOR 
: We have done heaps. The Immigration Service has recently brought decision making on visa applications on shore beginning with the highest-risk applications. A new category of undesirability is being developed to allow staff to better judge the suitability of applicants. We have added more than $30 million over past years to strengthen border security. We have established a fraud unit. We have introduced an Advance Passenger Processing system which has stopped 650 people from entering New Zealand. This Government is committed to proper border protection for this country. 
Rt Hon Winston Peters 
: Why would the Minister repeat the shyster views of a lawyer who knew full well when he said them that the man he was talking about had already before he was named gone to see Ahmed Zaoui’s lawyers for the purpose of lodging a refugee application; why would the Minister against all the chronological evidence repeat that sort of view? 
Hon DAMIEN O'CONNOR 
: Because the facts are that if one raises people’s names in the public arena be it in this House or outside it adds weight to their claims that they may be persecuted if they are sent back to their country. That adds to their case for refugee status. It is not something that this Government wishes to condone at all. 
Rt Hon Winston Peters 
: If the former Minister for Agriculture and Agrarian Reform in the Saddam regime came from Kuwait and not Iraq why would he have to be sent back to Iraq and not Kuwait where he happily lived for 10 months when he came here for the purpose of bringing his son as well? This is the real point: what is a former chief person in the police of Saddam Hussein Omar Ali doing here and what are two Baath Party group leaders—key apparatchiks in the Baath Party—Jazwan and Amer Salman doing here? 
Hon DAMIEN O'CONNOR 
: As I said first up I cannot confirm those claims at this point but if the member wants to pass on any further information about these individuals I will welcome that information. I am happy to meet with the member straight after question time. 
Rt Hon Winston Peters 
: If a member of Cabinet is given the names and locations of people whose entitlement to be here is in question why is that not enough information for all the agencies of the law in this country to act; or will we see the same thing happen that has occurred in respect of the Ali family—even though they have been challenged to have DNA tests no one at this point in time is verifying anything about their fraudulent applications? 
Hon DAMIEN O'CONNOR 
: The member has provided very little information. He has provided three names one a man named Jazwan. That is not sufficient to accurately identify people let alone to work out whether the accusations and claims the member makes are true. 
Rt Hon Winston Peters 
: How many Iraqis from the Saddam Hussein regime has the Government caught thus far since this issue was brought to the Minister’s attention many years ago? 
Hon DAMIEN O'CONNOR 
: I cannot answer that question but if the member wishes to forward a written question I will be more than happy to answer it. It would help if the member could provide more information around his claims. I am happy to meet him after question time to get that information. 
Hon Tony Ryall 
: Is it possible for a Middle Eastern man who is facing very serious criminal charges in New Zealand to be granted refugee status? 
Hon DAMIEN O'CONNOR 
: I cannot answer that question without knowing the details of the individual his so-called convictions and on what grounds he is claiming refugee status. There is an international protocol around the allocation of refugee status to anyone and we abide by that process. I am more than happy to meet with even this member after I have met with Mr Peters to get more information about that case. 
Rt Hon Winston Peters 
: Would the Minister take up this offer that we have a meeting after he has spent at least a week with his own officials and all the other agencies of law enforcement that he should be using with regard to this matter rather than putting up a pretentious hopeless defence in Parliament on a daily basis? 
Hon DAMIEN O'CONNOR 
: If those officials were provided with more accurate and detailed information it would save this country a huge amount of taxpayers’ dollars. If Mr Peters would provide more accurate information we would all be better off. 
Rt Hon Winston Peters 
: I seek leave to table four documents. Firstly I seek leave to table a report from the Prime Minister that she has put the Ali family case in the hands of the various agencies. 
Document not tabled. 
Rt Hon Winston Peters 
: Secondly I seek leave to table the report from Paul Swain last week that he had put the matter in the hands of the Serious Fraud Office. 
Document not tabled. 
Rt Hon Winston Peters 
: Thirdly I seek leave to table a very illuminating article in the  
New Zealand Herald 
 seeking to defend this family that has been put upon. 
Document not tabled. 
Rt Hon Winston Peters 
: Fourthly I seek leave to table another article in the  
New Zealand Herald  
which sets out that the Ali family has been challenged to a DNA test that at this point in time no official has been to see them and that there has been a deafening silence since the DNA challenge was put out to the Ali family as to whether they will go through the process of finding out whether they are here legitimately. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is. 
Genetically Modified Organisms—Cartagena Protocol on Biosafety 
2.  
JEANETTE FITZSIMONS (Co-Leader—Green) 
 to the  
Minister for the Environment 
: Did New Zealand support the imposition of strict liability on manufacturers of genetically modified organisms during the meeting of parties to the Cartagena Protocol? 
Hon MARIAN HOBBS (Minister for the Environment) 
: 
 There was no such proposal at the second meeting of parties to the Cartagena Protocol which is under way in Montreal. The focus of a working group on liability and redress that met last week was mainly on process—brainstorming possible elements of a regime. New Zealand wants all options considered. 
Jeanette Fitzsimons 
: Why did New Zealand sign and ratify a protocol that has already agreed to set rules for liability and redress for damage if it now intends to undermine the treaty by suggesting that rules on liability may not be necessary? 
Hon MARIAN HOBBS 
: We suggested that the consideration—amongst another five considerations—that there be no rules for liability ought to be added in order to put it inside the tent to be considered. 
David Parker 
: Why did New Zealand sign the Cartagena Protocol? 
Hon MARIAN HOBBS 
: We signed the protocol because we are committed to comprehensive biosecurity and to countries sharing information about what is imported and what is exported. Ratification put us inside the tent allowing us to influence the development of the rules—not to sign up to the rules but to take part in the development of the rules—to protect our economic interests as an agricultural exporter. This means ensuring that rules do not become a barrier to trade. 
Jeanette Fitzsimons 
: When the Minister says she is taking into account our economic interests as an agricultural exporter is it code for a Government plan for New Zealand to become a producer and exporter of GE foods; if not how can the lack of liability possibly help exporters of non-GE products? 
Hon MARIAN HOBBS 
: No it is not code for our developing GE exports. 
David Parker 
: Would New Zealand support a strict liability regime under the protocol? 
Hon MARIAN HOBBS 
: New Zealand has a very effective domestic regime which includes general liability and penalties around breaking stipulated rules. If a similarly effective regime were proposed internationally we would be interested. 
Hon Brian Donnelly 
: Would the Minister confirm that if strict liability were to be applied to either GE or non-GE substances no new products would ever be used in New Zealand and we might as well go back to a Neolithic society—the prospect of which is cold comfort to all New Zealanders with the exception of the Greens? 
Hon MARIAN HOBBS 
: I would confirm that strict liability in an international regime might very well deter activities that are socially beneficial and would consequently stifle innovation and economic growth which is contrary to Government policy. 
Ian Ewen-Street 
: Why does the Minister believe that the New Zealand taxpayer is better able to cover the risk to our food producers from GE contamination than the worldwide insurance industry which refuses to cover such risks because a catastrophic event would be beyond its combined ability to pay for? 
Hon MARIAN HOBBS 
: The insurance industry is as I understand it equally worried about the Kyoto Protocol and about storms and in fact is very loath to take risks it cannot measure. 
Ian Ewen-Street 
: I raise a point of order Madam Speaker. I do not think the Minister made any attempt to answer my question at all. The question very specifically asked why the New Zealand taxpayer is better able to cope with the cost of a catastrophic event than the worldwide combined insurance industry. She did not address that at all. 
Madam SPEAKER 
: The Minister did address the question in the sense that she addressed the reasons why the insurance companies were not taking that risk. That was part of the member’s question. 
Jeanette Fitzsimons 
: Why in opposing strict liability is the Minister turning her back on New Zealand producers and exporters like Pacific Seeds and Sunrise Coast NZ whose market depends on their being GE free and who have already lost substantially from GE contamination outside their control; and should she not be demanding under this protocol that overseas producers that contaminate businesses here take responsibility and compensate? 
Hon MARIAN HOBBS 
: We will support our importers and exporters by ensuring the development of rules that are scientifically based. There is nothing currently in New Zealand law that prevents those New Zealand importing companies from suing the company from which they received exports. 
Budget 2005—Taxation Thresholds 
3.  
JOHN KEY (National—Helensville) 
 to the  
Minister of Finance 
: What will be the weekly increase in after-tax income from 1 April 2008 for an individual earning under $38000 per annum as a result of the adjustments in tax thresholds announced by him in the Budget and what effect does he expect this increase to have on the economy? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 Through the threshold change an extra 67c per week. 
John Key 
: Sorry? 
Hon Dr MICHAEL CULLEN 
: Yes for the member that would be sorry but for the person on $38000 per year with two children and rent of $300 a week with the Working for Families package that will come to $129.44 a week. As someone in this circumstance currently pays only $7410 a year in tax the 19.5 percent rate would have to be cut to 2 percent to deliver the same increase through the tax system. A tax cut of this size—roughly $10 billion a year—would be disastrous for both the economy and society but would make Mr Key and his mates very happy indeed. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. You have been very firm with the House about trying to get to the heart of the issue of Ministers answering questions appropriately. I do not want to trifle with you but perhaps it would be useful for the Minister to clarify that amongst all the plethora of numbers he just threw out there the actual answer was 67c. 
Hon Dr MICHAEL CULLEN 
: The numbers include all the changes that the Budget is paying for which for that family comes to $129.44 a week and for Mr Key comes to $10.24 a week. 
John Key 
: Was the 67c tax break the deep dark secret Labour Party president Mike Williams was touting before the Budget; and does the Minister think the president’s comments played a significant part in the Budget being so soundly rejected by all New Zealanders? 
Hon Dr MICHAEL CULLEN 
: No. I think that what happened was that certain print journalists interviewed their own typewriters decided there was going to be a big tax cut and as the poor benighted press gallery journalists must be earning a great deal more than I thought they earned got very disappointed when the tax cut did not appear. 
Gordon Copeland 
: Why did the Minister in wisely picking up on United Future’s call of a bracket adjustment for inflation defer its commencement to 1 April 2008 when by his own admission further inflation of about 6.12 percent will have occurred by then? 
Hon Dr MICHAEL CULLEN 
: The adjustment to thresholds is 3-yearly for administrative reasons. It starts from the start of the current tax year and therefore will come into force in 2008. I note of course that the National Party had tax cuts by Christmas that were gone by lunchtime. 
Dr Muriel Newman 
: What is the Minister’s response to those hard-working Kiwis who feel angry that a Government sitting on unprecedented surpluses has revealed that the so-called deep dark secret of the Budget is actually nothing more than a packet of Wrigley’s PK chewing gum a week in 3 years’ time? 
Hon Dr MICHAEL CULLEN 
: What that hard-working battling family will have if it is a low to modest income family is far more through Family Support changes than what tax cuts could ever deliver. It is only that party’s mates and funders who would gain significantly from tax cuts. That party is building expectations it cannot deliver on as we saw last week. 
John Key 
: In relation to the Minister’s first answer then does he agree with the Prime Minister that the  
New Zealand Herald  
put the words “deep dark secret” into Mike Williams’ mouth or does he agree that the tape of the interview shows Mr Williams stating unprompted that there was some deep dark secret in the Budget? 
Hon Dr MICHAEL CULLEN 
: If Mr Williams said that he forgot to tell me what it was. 
John Key 
: Oh—yeah right! That is a choice billboard—[ 
Interruption 
] 
Madam SPEAKER 
: I know it is the first day back but quiet please! 
John Key 
: If the Minister was not using Mike Williams as some sort of Amway salesman for tax cuts why did he not just come straight out and denounce the comments immediately after Mike Williams made them and well before the Budget was actually delivered? 
Hon Dr MICHAEL CULLEN 
: As I had no idea what deep dark secret was being referred to it was hard for me to do that without releasing the Budget. At least I did not promise tax cuts by Christmas and then back off from that within a matter of days as the National Party did. 
John Key 
: At what point did the Minister inform United Future members that the changes to tax thresholds would not take place until 2008; and were they grateful for those changes or did they react with a combination of laughter shock and disbelief—as the rest of the country did? 
Hon Dr MICHAEL CULLEN 
: If there is a mass outbreak of insanity and that member ever becomes Minister of Finance he will find that people are never grateful for what is in the Budget. 
Budget 2005—Fiscal Proposals 
4.  
CLAYTON COSGROVE (Labour—Waimakariri) 
 to the  
Minister of Finance 
: What reports if any has he received on alternative fiscal proposals to those contained within the Budget? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I have seen reports calling for a lot more spending on police and a lot more spending on justice reports asking defence officials and staff exactly what toys they want—and proposing buying them all for them—and reports asking for very large cuts in revenue. All those reports have come from the National Party within the last 12 days. 
Clayton Cosgrove 
: Could the Minister advise the House what the consequence would be of cuts in revenue? 
Hon Dr MICHAEL CULLEN 
: Without increasing borrowing and therefore interest rates every billion-dollar cut to revenue requires a 2.1 percent cut to expenditure. If evenly spread that would include 497 fewer primary school teachers 394 fewer secondary school teachers 154 fewer sworn police 112 fewer hospital doctors 422 fewer hospital nurses and 23 fewer front-line workers as well as a cut of roughly $9 a week in New Zealand superannuation for a married couple. 
John Key 
: What has the greatest impact on inflation: a dollar spent by the Government or a dollar spent by the private sector? 
Hon Dr MICHAEL CULLEN 
: What has the greatest impact is if the Government borrows money to increase demand in the economy which is what the National Party is proposing because if National was not to increase demand it would have to cut expenditure by an amount equivalent to the revenue. The National Party cannot have it both ways. It has already promised to borrow money for roads; it cannot borrow the same money again for tax cuts. 
Rodney Hide 
: Can the Minister of Finance confirm that the net worth of the Government is to increase by $5.5 billion each and every year over the next 5 years that there is plenty of room for tax cuts and that his argument that there is not is just another example of his getting his facts wrong—like he did this morning when he attacked journalists for obtaining information under false pretences and then had to issue an apology and a correction so that the Prime Minister and the Deputy Prime Minister of New Zealand would not be sued in court for defamation? 
Hon Dr MICHAEL CULLEN 
: In fact Prime Television did engage in deception to gather evidence in cahoots with that member. Secondly the member needs to do a little more basic economics. The Crown’s net worth includes the growth in the Superannuation Fund which he would abolish. It also includes revaluations of State assets such as Archives New Zealand roads and various other things. That can be used to fund tax cuts only if we are prepared to flog those things off. 
Gordon Copeland 
: Would the Minister give consideration though to funding earlier tax cuts by selling down up to 40 percent of selected State-owned enterprises including the New Zealand Superannuation Fund to investors or would his party’s statist dogma and ideology again become a block to a common-sense win-win opportunity? 
Hon Dr MICHAEL CULLEN 
: No. The Labour Party stays true to the views espoused by Mr Dunne when he was a member of it—that is if State assets are sold they are sold to reduce debt not to fund current consumption. 
Budget 2005—Taxation Changes 
5.  
RODNEY HIDE (Leader—ACT) 
 to the  
Minister of Finance 
: What is the total annual fiscal cost in 2009 of the tax changes announced in Budget 2005 and what is this as a percentage of total Government spending? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The fiscal cost of the business tax package and personal threshold changes is $456.4 million—some 0.8 percent of Government spending—which is offset by $319.2 million of revenue from carbon charges making a net cost of $137.2 million or approximately 0.2 percent of total core Crown spending. 
Rodney Hide 
: Is this 0.2 percent reduction in Government spending to be returned to hard-working Kiwis the extent of the “deep dark secret” that the Labour Party President Mike Williams hyped up to the  
New Zealand Herald 
 or was the “deep dark secret” just another example of this Minister of Finance getting his facts wrong as he did this morning when he had to issue a correction and an apology to avoid being sued? 
Hon Dr MICHAEL CULLEN 
: I repeat again that Prime Television was engaged in underhand tactics in cahoots with that particular member; we are well used to his tactics in those respects. No in fact the deep dark secret—which is out there in the public arena if members care to look—is that on 1 April next year many working families will get another $50 or more a week from the in-work payment plus changes to family support. 
Kenneth Wang 
: Does he realise that his failure to cut tax rates has led to the lowest level of business confidence in 70 years; if he does not accept that which Government policy has caused such a huge drop in confidence? 
Hon Dr MICHAEL CULLEN 
: As I am sure Dr Brash could inform the member the purpose of monetary policy in situations such as the present is to slow down the economy. If the Government then chooses to re-inflate the economy by borrowing for tax cuts the Reserve Bank will simply put interest rates up higher. That is how a modern Western economy works. 
Gordon Copeland 
: Does the Minister not agree that a second-round effect of using proceeds from the partial sale of State-owned enterprises to retire debt is that the Crown accounts are left with a great deal more cash which could be used for tax cuts? 
Hon Dr MICHAEL CULLEN 
: No. What happens of course is that if assets are sold the future dividend income stream is lost from those assets and that further has to be taken into account. The notion that one would sell off assets in order not to retire debt but to fund tax cuts does not make fiscal sense at all. The Government’s accounts would significantly deteriorate as a consequence of that. 
John Key 
: Is not the real truth around the Budget that the Prime Minister recognised that this Labour Government was miles behind in the polling on taxation; that she had to force the Minister of Finance begrudgingly to give some pathetic tax cuts in 3 years’ time; that the Prime Minister then dispatched the president of the Labour Party to go on his Amway sales course to pump up the Budget; and that now that it is an absolute disaster everybody in the Labour Party is blaming everybody else and the truth is that this will be the longest resignation letter of the Minister of Finance? 
Hon Dr MICHAEL CULLEN 
: No no no no no and no if I can quote the French. But also I think that member could do with a public relations person to sell National’s tax policy. It has been a disaster over the last week. 
Deborah Coddington 
: Will his proposed tax changes mean that families can double their net worth in the next 6 years as the Government is proposing to do—going from $35 billion to $63 billion? If not what does he say to families who are now complaining about “rich Government poor people”? 
Hon Dr MICHAEL CULLEN 
: Many families have doubled their net worth over the last few years but what they have learnt of course—and the member should take note of this—is that in terms of a household budget just as with a Government Budget net worth does not pay the weekly bills. 
Hon Ken Shirley 
: Does he concede that his Government’s carbon tax will be inflationary to the extent that it increases the consumer price of both electricity and petrol; if he does not concede that it is inflationary could he explain to the House why not? 
Hon Dr MICHAEL CULLEN 
: Yes indeed. Clearly the carbon tax will increase the consumer price index on a one-off basis presumably by somewhere around or just under 0.2 percent. 
Heather Roy 
: Why has he denied hard-working Kiwi families this $40 basket of groceries every week instead giving some only this measly packet of chewing gum in 3 years’ time? 
Hon Dr MICHAEL CULLEN 
: Firstly I hope the member will return the plastic basket to the supermarket that it came from and secondly could I point out that the scale of the tax cuts that that member’s party was talking about would lead to both a massive increase in interest rates— 
Hon Member 
: Oh no. 
Hon Dr MICHAEL CULLEN 
: —$5.7 billion—and a massive decline in funding for services that the very same family relies upon unlike the people who fund ACT who do not worry about health-care and education costs. 
Rodney Hide 
: Why should New Zealanders believe anything the Minister of Finance says when he went up to Hong Kong in April 2000 and promised that the Government wanted to reduce the 33 percent company tax rate when it could afford to; when he continues to make up stories about my friend Dave Henderson when under attack; when he attacks TV3 journalists by making things up and accusing them of operating by false pretences; and when he continues to make things up by accusing me of working in with some Prime Television journalist whom I have never heard of and as far as I know have never spoken to; why does he not actually tell the truth? 
Hon Dr MICHAEL CULLEN 
: Like why does the member not apologise for his false accusations against Mr Tamihere which he has never actually had the gumption to face up to and apologise for? I certainly made a mistake about TV3; it was Prime Television and I make no apology to it for its behaviour in that respect. That member of course is well known for trying to dig up dirt on everybody around the place. The trouble with digging up dirt is sometimes it comes back to rest in one’s own boots. 
Crimes Act—Repeal of Section 59 
6.  
SUE BRADFORD (Green) 
 to the  
Minister of Justice 
: Will the Government introduce legislation to repeal section 59 of the Crimes Act 1961; if so when? 
Hon RICK BARKER (Acting Minister of Justice) 
: 
 No decision has yet been made by the Government on whether to repeal section 59 of the Crimes Act which provides a defence for parents who use “reasonable force” in disciplining their children. The Government is funding a campaign to provide information to parents on effective alternative ways to discipline their children without the use of physical force. A decision on the future of section 59 will not be made until that campaign has been evaluated. 
Sue Bradford 
: Why is the Government not prepared to repeal section 59 immediately when results of the court case in Timaru last week so clearly showed that this law still allows parents to assault and beat their children—in this case with a horse crop and a cane? 
Hon RICK BARKER 
: The law does not give parents a right to assault their children; it gives them the right to a defence that “reasonable force” was used. “Reasonable force” can be used as a defence against accusations of assault and the judgment of what is reasonable is determined by the jury. 
Tim Barnett 
: Why has the Government decided to implement an information programme before considering changing the law? 
Hon RICK BARKER 
: Because changing the law without first addressing attitudes to discipline and educating parents as to effective alternatives is likely to be ineffective. 
Murray Smith 
: In light of the fact that the Ministry of Social Development SKIP: Strategies with Kids—Information for Parents report released just this year indicates that two-thirds of parents surveyed had used physical discipline but most had done so only as a last resort does he agree that the most appropriate legislative response at this time is to clarify section 59 so that parents understand what constitutes reasonable force as proposed by my member’s bill rather than criminalising the actions of most New Zealand parents by banning smacking; if not why not? 
Hon RICK BARKER 
: The member will be pleased with the results of a recent  
New Zealand Herald 
 poll which showed quite a significant shift in the attitude of parents. In 1993 25 percent of parents did not use physical discipline whereas the latest poll showed that 49 percent did not. So there is a significant change in attitude and that is a good thing. The best alternative will be decided by the Government once the evaluation has been completed. 
Sue Bradford 
: Is not the Timaru court case a sign that the $11 million SKIP: Strategies with Kids—Information for Parents programme which the Minister has just talked about to stop parents using excessive force against children and young people is actually ineffective without the legislative support that repealing section 59 would provide? 
Hon RICK BARKER 
: No I do not agree with that and I repeat the figures for the member. A recent  
New Zealand Herald 
 poll showed there has been a significant shift in the attitude of parents. In 1993 25 percent of them said they did not use physical force. In the latest poll 49 percent said they did not use force. I would have thought that that was a dramatic shift in parental opinion. 
Sue Bradford 
: Is it not true that repealing section 59 would not mean that every parent who lightly smacked a child would suddenly be prosecuted any more than every adult who touches another is prosecuted right now for assault; and is it not true that the main effect of section 59 is actually to prevent early intervention in cases where parents have begun to brutalise their children? 
Hon RICK BARKER 
: No and no. No one condones any situation where a parent brutalises his or her child. The law will be very effective in those cases. 
Sue Bradford 
: Why is the Government happy to introduce legislation to protect animals and adults such as animal welfare criminal justice domestic violence and counter-terrorism legislation while remaining unwilling to repeal section 59 of the Crimes Act so that our children might be protected against beating? 
Hon RICK BARKER 
: The member focuses entirely on the law not on the behaviour. I again draw to the member’s attention that the figures show a dramatic shift in parents’ approach to disciplining their children. The programmes are working. A significant change is under way. I would have thought that that member like all the rest of the members in this House would welcome a huge dramatic shift in parental opinion and attitude as demonstrated by the  
New Zealand Herald  
poll. 
Question No. 7 to Minister 
Hon Dr NICK SMITH (National—Nelson) 
: 
 I note that George Hawkins the Minister of Internal Affairs is not in the House so I seek leave for the question to be set aside until the next sitting day on which he is present. 
Madam SPEAKER 
: Leave is sought. Is there any objection? There is. 
Weathertight Homes Resolution Service—Claims Resolution 
7.  
Hon Dr NICK SMITH (National—Nelson) 
 to the  
Minister of Internal Affairs 
: Are owners of leaky buildings getting access to a “speedy” and “cost-effective” resolution of their claims as promised under the Weathertight Homes Resolution Services Act 2002? 
Hon RICK BARKER (Acting Minister of Internal Affairs) 
: Generally yes. The service established under this Act is now allocating an assessor within 1 month of claims being accepted. Assessments are generally completed within 4 months. Following assessment the claimant electing mediation and identification of the parties mediators are ready to proceed immediately. Mediations are being completed within an average of 6 months from the date that the claimant elects mediation. 
Hon Dr Nick Smith 
: How can the Minister describe this service as “cost effective” when on average each settlement is costing $108000 of which not a dollar is spent on repairing the home and the average adjudicated settlement is $68000; and is that not just a classic example of the Government wasting money on bureaucracy rather than repairing the homes? 
Hon RICK BARKER 
: That member obviously knows the price of everything and the value of nothing. The price of justice is in fact to have a fair and an accurate process. The cost of an assessment is about $7000 to $10000 which is free to the person making the application. I would say that that is a very good deal for the people who have the problem. 
Russell Fairbrother 
: Do people with leaky buildings have options to use other means of dispute resolution? 
Hon RICK BARKER 
: Yes. The service is an alternative dispute resolution system to the court system. Assessments are free. Homeowners can opt either for mediation at $200 or for adjudication at $400. I would have thought that to be a very low-cost process as an alternative to the court system. 
Hon Dr Nick Smith 
: Why did the Minister say on TVNZ’s  
Sunday 
 programme that most people are getting solutions from the Weathertight Homes Resolution Service when the record of his own department shows that of the 3260 cases only 325 have been settled 2½ years later; and since when under this Government has 10 percent been “most”? 
Hon RICK BARKER 
: The point the member needs to appreciate is that the service started from zero. There were no staff. A workforce had to be built up and the programme had to start. Of the current claims before the service 569 have been closed or found to be ineligible. The service currently has 215 mediations 23 adjudications and 91 claims under progress. I would have thought that was a very good start. 
Hon Dr Nick Smith 
: What does the Minister say to the thousands of leaky-home owners who are going into their third winter with rotting and unhealthy homes when— 
Hon Chris Carter 
: Who caused the problem? 
Hon Dr Nick Smith 
: Actually George Hawkins. What’s the story Madam Speaker? 
Madam SPEAKER 
: Who intervened when the question was being put? Would that member please leave the Chamber. 
Hon Chris Carter withdrew from the Chamber. 
Hon Dr Nick Smith 
: What does the Minister say to the thousands of leaky-home owners who are going into their third winter with rotting and unhealthy homes when at the current rate of settlement under this Government’s policy it will take 20 years to resolve the cases; and is it little wonder that leaky-home owners are declaring bankruptcy and leaving New Zealand? 
Hon RICK BARKER 
: The member’s maths is wrong. In my initial answer I told him that the assessments of leaky homes are generally done within 4 months. Following the assessment people can choose to go into mediation and the mediations are being completed in on average 6 months. Currently 444 mediations and adjudications are in process. There is a very good rate of work here and things are moving very rapidly. I can accept that from the beginning there were issues about speed and process but that was because the service was in start-up mode. It is now working much more effectively and much more efficiently. 
Hon Dr Nick Smith 
: Noting that the average number of claims being lodged this year—2½ years after the service was established—is 80 claims per month that on average this year the service has achieved 10 settlements per month and that there is a backlog of over 1700 claims how can the Minister possibly say that that is the quick and speedy resolution promised by the Government 2½ years ago? 
Hon RICK BARKER 
: The advice I have is that the current rate of claims is 71 per month not 80—the member always inflates things. The second thing is that the process does not have absolute control over that. The fact that people enter into a process does not mean that it will go all the way through. It may be found that there is no case or people may find that there are other alternatives. There is a range of reasons for that not occurring. The point I want to make is that on average the mediation process is getting settlements within 6 months. That is a significant improvement and an outstanding result. 
Hon Dr Nick Smith 
: I seek the leave of the House to table the annual reports and Budget estimates that show that the Government is to spend $99.2 million on the bureaucracy of the Weathertight Homes Resolution Service not a penny of which will go on fixing homes. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Hon Dr Nick Smith 
: I further seek the leave of the House to table the latest report of the Weathertight Homes Resolution Service dated 26 May which shows that less than 10 percent of claims made 2½ years after it was established have been settled. 
Madam SPEAKER 
: Leave has been sought to table that document. Is there any objection? There is. It will not be tabled. 
Working for Families Package—Benefits from 1 April 2005 
8.  
MOANA MACKEY (Labour) 
 to the  
Minister for Social Development and Employment 
: What reports has he received on how many New Zealand families have benefited from the 1 April changes to the Working for Families Package? 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 The initial uptake figures show that around 200000 families with an estimated 385000 children received family income assistance in April. This figure is set to exceed 260000 families by April next year and to reach 300000 by the time the programme is rolled out. The average Inland Revenue family assistance payment was up $113 a week—a 33 percent increase on April last year. In addition 3500 more people are receiving an accommodation supplement and 8500 more people are receiving childcare assistance than they did in April last year. 
Moana Mackey 
: How many New Zealand families are predicted to benefit from the 1 April 2006 introduction of an in-work payment? 
Hon STEVE MAHAREY 
: An estimated 136000 working families—nearly 30 percent of all families with children—will receive an in-work payment from 1 April next year. Around 75 percent of them will get the full $60 a week or more and they will be better off by between $15 and $45 than under the current child tax credit. Smaller families in particular will benefit from the move to the in-work payment. It will cost $192 million a year and ensure that thousands of families are better off by making the step into paid employment. I am told however that the National Party does not like this kind of support for people moving into work so we can expect it to axe the in-work payment as well. 
Apples—Australian Market Access 
9.  
DAIL JONES (NZ First) 
 to the  
Minister for Trade Negotiations 
: Why did he reportedly say on 23 May with regard to getting access for New Zealand apples into Australia that he is waiting on the result of both Australia’s import risk assessment and a World Trade Organization compliance panel investigating Japan? 
Hon JIM SUTTON (Minister for Trade Negotiations) 
: 
 Because those two events are clearly relevant to the resolution of this issue. The Japan-US case turns on a similar point. That is why New Zealand participated in the case as a third party. But that is not all we have done. We continue to argue strongly New Zealand’s case for apples access at every appropriate opportunity with the Australian Government. I can assure members that the Government will maintain these efforts until access has been gained. 
Dail Jones 
: Why does the Minister persist in referring to the America-Japan case when as long ago as November 2003 that case was decided in favour of the United States; does the Minister not see the irony in Australia chairing the Cairns group of agricultural nations supporting free trade when Australia is blatantly blocking access for our apple growers based on no scientific evidence whatsoever; and when will he ditch his softly-softly approach to Australian protectionism and use the World Trade Organization to uphold our right to free access to the Australian market for our pipfruit growers as New Zealand First plans to do as part of its 2005 election policy on trade? 
Hon JIM SUTTON 
: I shall confine myself to the first of those questions. The reason I continue to refer to the Japan-US case is that despite an initial decision in 2003 no apples have yet flowed across the border and there is still a dispute over the implementation of the finding. So that is a very important precedent to the case many of us anticipate will eventually be taken by New Zealand against Australia. We have been assured by the Australian Government however that it will take into account the outcome of the Japan-US case in forming its import risk assessment. 
Dr the Hon Lockwood Smith 
: Does the Minister think that Australia just might be giving both him and New Zealand apple exporters the run-around; if not how long will he allow Australia to complete its import risk assessment which it seems to recommence or extend every time a general election looms before he does take Australia to the World Trade Organization? 
Hon JIM SUTTON 
: I point out that the World Trade Organization disputes settlement is a legal process and things have to be done in the right way if one hopes to get the success one needs. As the member will appreciate legal processes can be frustratingly slow. I would also remind the member that this dispute went on throughout the 9 years of the National Government and that it did not do a blind thing about it. 
Dail Jones 
: Now that the Minister has confirmed that in almost 6 years the Labour Government has not done a blind thing about it when will he adopt the approach the Australians have adopted with regard to these matters—for example the Tasmanian state Government Minister for Primary Industries and Water Steve Kons who wishes to probe New Zealand’s use of chemicals in vegetable production which is really just another smokescreen for protectionism—and when will the Minister actually commence a World Trade Organization case because the sooner it is started obviously the sooner it will be finished and we do not want to wait another 6 or 15 years for New Zealand First to have to commence one as soon as possible? 
Hon JIM SUTTON 
: I am really surprised that a New Zealand political party should advocate shonky protectionism against our trading partners. I remind the member that we are a small country. We cannot bully our trading partners. We rely on the rule of law and the member would do well to remember that. 
Misuse of Drugs Act—Proposed Changes 
10.  
JUDY TURNER (Deputy Leader—United Future) 
 to the  
Associate Minister of Health 
: Is he satisfied that proposed changes to the Misuse of Drugs Act 1975 will provide greater protection for our young people from harm associated with low-risk substances with psychoactive effects and other controlled drugs; if not why not? 
Hon DAMIEN O'CONNOR (Associate Minister of Health) 
: 
 Yes it will provide greater protection for our young people from both high and low-risk drugs. 
Judy Turner 
: Can the Minister confirm that any move to decriminalise or lower restrictions on controlled drugs such as cannabis now has to happen through a full process of parliamentary scrutiny that involves the New Zealand public in the consultation process rather than by slipping it through by Order in Council and affirmative resolution which is simply inappropriate for changes that would have such disastrous implications for our young people; if not why not? 
Hon DAMIEN O'CONNOR 
: I can confirm that and I support the good work that the Health Committee did to come up with that outcome. I say once again that this Labour Government has made a commitment that there will be no change to the legal status of cannabis. We stand by that and welcome the support of our coalition colleagues. 
Barbara Stewart 
: Why is the Minister satisfied that the level of protection offered by the bill in its present form is adequate given the absence of any research into the long-term effects of benzylpiperazine party drugs and other psychoactive substances? 
Hon DAMIEN O'CONNOR 
: We acknowledge the fact that there is still more work to be done on those drugs. This Government is aware that it is a growing problem in the community. That is why we moved through this bill to regulate the sale or output of those drugs. No one under the age of 18 will legally be able to consume those drugs at all. We consider that to be progress but there is still more work to be done in that area along with an improvement in the attitude around alcohol tobacco and other drugs used in this country. 
Judy Turner 
: Will the Minister give a commitment to developing stand-alone restricted substances legislation that would replace these current changes at a later date and also include the regulation of other substances such as butane gas and aerosols which have legitimate uses but are abused by many young people; if not why not? 
Hon DAMIEN O'CONNOR 
: It is inevitable that we will have to take a serious look at all those growing problems. A stand-alone bill would I understand have taken a long time to go through the parliamentary process and this Government is committed to looking at that prospect and possibility in the future. 
Nandor Tanczos 
: Can the Minister confirm the accuracy of the statement last week that United Future had threatened to withdraw support on confidence and supply unless the Government supported the amendment of Judy Turner and can he also confirm that when Judy Turner said at the time that her amendment would stop cannabis from being declassified by a “mere ministerial sign-off” she was factually incorrect—which is what the press release by the Progressive Party stated; if he can confirm those two things should this House take it to mean that the member simply did not understand the law she is trying to change? 
Hon DAMIEN O'CONNOR 
: I cannot confirm that. What I can confirm is that United Future has consistently advocated for the improvement in laws around unwanted substances in this country be they legitimate or illegitimate drugs. We will continue to work with United Future to try to improve the situation in this country. 
Foreshore and Seabed—Ownership East Coast 
11.  
GERRY BROWNLEE (Deputy Leader—National) 
 to the  
Deputy Prime Minister 
: Does the Government intend to recognise “legal ownership interests” in parts of the East Cape foreshore and seabed claimed by East Coast iwi as outlined in the terms of negotiation with those iwi? 
Hon Dr MICHAEL CULLEN (Deputy Prime Minister) 
: 
 The Foreshore and Seabed Act gives the Crown full legal and beneficial ownership of the public foreshore and seabed. The terms of negotiations set out each party’s perspective of its foreshore and seabed interests. The terms also include a statement that the Crown maintains its legal ownership interest in the foreshore and seabed. The way in which these interests will be reconciled will be a matter for substantive negotiations. 
Gerry Brownlee 
: If the Government is maintaining that it has ownership what is it negotiating about? 
Hon Dr MICHAEL CULLEN 
: It is negotiating around a number of matters. Clearly both Ngati Porou and Whanau-a-Apanui have particularly close linkages to the foreshore and seabed not least because in terms of Maori land that is owned down to the foreshore and seabed the great majority of it is actually within those two iwis’ areas. Therefore we are talking about how we recognise what in effect if they had gone the High Court route would have been their territorial customary rights. 
Gerry Brownlee 
: Have either of those iwi accepted the Government’s position that the Government on behalf of the people of New Zealand owns that foreshore and seabed; if so what are they negotiating about? 
Hon Dr MICHAEL CULLEN 
: The issue is not whether they accept the Crown’s assertion of its legal ownership; the issue is what kinds of processes will be in place to enable the genuine customary interests of Ngati Porou and Whanau-a-Apanui to be worked through. Even the member’s leader said that there were customary interests that should be properly recognised. 
Gerry Brownlee 
: Why is the Government continuing to negotiate with a group that will not accept the Crown’s ownership of the foreshore and seabed? 
Hon Dr MICHAEL CULLEN 
: What is recognised by Ngati Porou and Whanau-a-Apanui does not affect the actual legal position which is that the Crown does have legal and beneficial ownership of the foreshore and seabed. In the same way the Crown is not recognising that Ngati Porou or Whanau-a-Apanui own the foreshore and seabed; we recognise that they assert they have ownership interests. Ngati Porou once used to be strong supporters of the National Party; they have tended to change their minds on that matter but I am sure that their hospitality would still extend to trying to explain exactly to the member their connection with the foreshore and seabed should he care to go there. 
Question No. 7 to Minister 
Hon Dr NICK SMITH (National—Nelson) 
: 
 Earlier with regard to a question on weathertight homes the Acting Minister of Internal Affairs said that my figure of 80 claims per month was incorrect. I seek leave to table the answer from the Hon George Hawkins to written question No. 3973 which shows that the Acting Minister’s figures given to the House today were contradictory to those of the Minister. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is. 
Budget 2005—Defence Policies 
12.  
MARTIN GALLAGHER (Labour—Hamilton West) 
 to the  
Minister of Defence 
: What defence policies were announced in the recent Budget and has he received any other reports of other defence policy initiatives? 
Hon MARK BURTON (Minister of Defence) 
: 
 Yes I announced the Defence Sustainability Initiative which totalled $4.6 billion of new expenditure in Budget 2005. This is the fourth stage of a systematic approach by this Government to restore the capacity and capability of our Defence Force after it was savaged and run down throughout the 1990s. I have also received a report of the Royal New Zealand Returned and Services Association’s response that this announcement represents a “very carefully thought out and measured approach”. 
Martin Gallagher 
: What other reports has the Minister received on defence policy initiatives? 
Hon MARK BURTON 
: I have received several reports. One shows that after 5½ years in Opposition there is a party whose leader has no defence policy. His defence spokesperson will have a chat and think about what his party’s policy could be but it will spend more anyway on whatever comes up. That party’s finance spokesperson will cut 2.1 percent annually from Government spending. This would result in abolishing the entire helicopter fleet or tying up the frigates or putting aside the entire army engineering corps. This is the National Party’s policy for defence. 
Hon Ken Shirley 
: I raise a point of order Madam Speaker. I draw your attention to Speaker’s ruling 145/5 made in 1993 by Deputy Speaker Gerard. It makes it quite clear that a Minister when responding to a question that asks whether he has received a report may not refer to hypothetical situations about other parties’ policies. That is exactly what we just heard from the Minister—a direct contravention of that Speaker’s ruling. 
Hon MARK BURTON 
: The member suggests that it was a hypothetical situation. I therefore seek leave to table the following document: a transcript from Paul Holmes’ show on Newstalk ZB on 27 April in which in response to the question: “So you don’t have a policy?” Dr Brash said: “Not right now.” 
Madam SPEAKER 
: I will deal first with the point of order. The Minister did not breach the Speaker’s ruling in his answer to the question. I understand he now seeks leave to table a document. 
Hon MARK BURTON 
: Yes I do seek leave. 
Document by leave laid on the Table of the House. 
Hon MARK BURTON 
: I also seek leave to table a transcript from  
Focus on Politics 
 on Radio New Zealand on Saturday 7 May in which when asked by the presenter: “Are you going into the election with an election policy that says you will review defence? Is that going to be the substance of your policy?” John Carter said: “Yes. That’s the substance of our policy.” 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? Yes there is objection. It will not be tabled. 
John Carter 
: Does the Minister think that being the chairman of a Taupo peace group for 10 years qualifies him to be the sole judge of our nation’s defence policy and is his background the reason why Labour has moved towards an isolationist policy which has resulted in a serious exodus of trained personnel from our army? 
Hon MARK BURTON 
: I think the advice streams to the Minister of Defence including this one come from the Secretary of Defence the Chief of Defence Force and the experts who are there for that purpose. As the member has apparently noted it is not his job or mine to pretend to be the leading expert. I advise the member to read the joint statement from Senator Robert Hill and myself from last week at our very successful joint Ministers meeting in which we further advanced the closer defence relationship between Australia and New Zealand. 
Ron Mark 
: Has the Minister read the article that appeared in the  
Dominion Post 
 this morning that stated that the Army is currently suffering 19 percent attrition rates that the biggest shortages are in the junior ranks lance corporals—[ 
Interruption 
] I raise a point of order Madam Speaker. I really am— 
Madam SPEAKER 
: There was no interjection. Members are chattering but unfortunately members frequently chatter during question time. The member will please continue with his question. 
Ron Mark 
: Has the Minister read the article in the  
Dominion Post 
 this morning that highlights that the Army is suffering a 19 percent attrition rate that the biggest shortages are in the junior ranks lance corporals corporals and sergeant areas and that almost all army units are under-strength and there are critical shortages; if so would he not agree that the reason the nation is in this situation is threefold: firstly because Jenny Shipley the former National Government Prime Minister refused New Zealand First’s request to increase pay bands for junior ranks— 
Madam SPEAKER 
: I am sorry to interrupt the member. This is not a speech. The member will please come to the point of the question. That is why people chatter. 
Ron Mark 
: Secondly that this Government took 4 years to implement pay rises that it should have done in one fell swoop in 1 year; and thirdly that junior ranks have finally accepted that this “peacenik” Government will not deploy the infantry battalions overseas on operations except if they are in the SAS? 
Hon MARK BURTON 
: In response to that very very long speech— 
Hon Trevor Mallard 
: It was more of a job application than a speech. 
Hon MARK BURTON 
: Perhaps it was a job application. In response to some of those questions let me say to the member that this Government responded in year one and in its first Budget and in every Budget since by putting more money into pay and salaries for defence personnel. Secondly in this year’s Budget $4.6 billion has been allocated to the Defence Force all but $209 million of which is going into the building and rebuilding of capacity and capability. It will take 10 years to absorb the sort of money that this Government is pumping into support. Thirdly the Defence Force is having to compete like every other industry within a buoyant economy in which there are so many job options that it is competing for our best and brightest. I am confident that the Defence Force will be successful in building and rebuilding its capability. 
Ron Mark 
: I raise a point of order Madam Speaker. I am not sure: was that a “Yes” or a “No”? 
Madam SPEAKER 
: I call on Government order of the day No. 1. 
Budget Debate 
Debate resumed from 19 May on the Appropriation (2005/06 Estimates) Bill. 
Hon DAVID CUNLIFFE (Minister of Communications) 
: 
 It is said that Budgets are complex matters but in the end they are really simple. This morning on the way to caucus I was pleased to meet with a group from Blockhouse Bay Intermediate school. I asked them a simple question: “Do you think your parents would want cuts to health and education or do you think they’d rather have a tax cut?”. The answer was that they want schools and hospitals. That is what New Zealand wants. 
When I went around the country last week talking about the Budget—and I have been all the way to Invercargill and right through the Waikato and the Bay of Plenty—the answer was consistent. When people know the facts their choice is clear. They want good Government not cheap Government. They know three things about this Budget: one it is good for New Zealand; two it is good for Kiwi families; and three it is good for business. I will explain why. The reason this Budget is good for New Zealand is that there is no such thing as a free lunch. One can see that over 3 of the next 4 years we will be cash-negative. There is no pot of gold. 
 There is no mountain of cash that Dr Cullen can simply find on the seventh floor of the Beehive and distribute around the country to all and sundry. This graph shows that we are spending all we can responsibly afford to spend in order to keep Kiwi families afloat. If we were to promise tax cuts or additional spending any responsible person would ask how we could do that. Dr Brash is promising tax cuts but he will have to borrow money to fund those cuts. Who would borrow in order to give a tax cut? A household could not be run like that. 
Darren Hughes 
: The Tories would. 
Hon DAVID CUNLIFFE 
: The Tories would do it; they would borrow to fund a tax cut. The second thing New Zealanders understand is that if they have a Labour Government then under its Working for Families package they will be better off than having some fictitious tax cut under National. It is really quite simple: a family on around $38000 with two kids will be around $120 a week better off by the time the Working for Families package has been fully brought in. Under National how much better off will they be? About $30 or $40 a week if they are lucky but their mortgage will have gone up because interests rates will be higher. There is no free lunch. National should be asked what it is not going to spend money on. People should ask National what they will not get by the time that party has another Ruth Richardson effort on the New Zealand Budget. 
Families are better off with Labour. Under Labour people will have investment in health care. The health budget has gone up by about 60 percent since Labour was elected. There is another $1 billion a year for hospitals and primary health care which has been an extremely successful strategy that is being rolled out to all income groups. There will be 400 new teachers as part of a half a billion dollar additional investment in education and 1000 new police officers as part of an additional investment in New Zealand security. So people can see that this Government is carefully and prudently balancing the needs of ordinary New Zealanders with the need to run very strong books in order to ensure our future prosperity. That is why next year for the first time since Vogel borrowed for the railways the Government will be a net creditor. The assets in the superannuation fund will outweigh Government debt and the New Zealand Government will be a net creditor for the first time in all those years. 
The Opposition carps about the Government’s net worth increasing. What would the country rather have: a Government with sound Budget finances that provide a platform for the rest of the economy or a profligate Opposition whose spending promises do not add up? Here are a few of those promises. We reckon that the cost of their tax cuts is worth about $2 billion or conservatively $1.75 billion. 
Over 10 years that will be $17 billion. They have already made about $4.5 billion worth of promises in relation to transport over the next 10 years. They want to four-lane State Highway 1 all the way from Wellington to Auckland. 
They are promising $4 billion for defence in order to be level with Australia. For law and order they are promising nearly $1 billion. In education I reckon the sum is about $20 million and for the superannuation fund $2 billion is required. If that is all added up it is about $55 billion worth of spending promises from the Opposition. Where is the money coming from? How can they do all that and still give a tax cut? The numbers do not add up—talk about voodoo economics! I do not think even George Bush would engage in voodoo economics of that kind. 
The other thing I heard is that New Zealanders know that their businesses will be better off under Labour. When I went around the country last week I found that small-business owners know that this Budget fixes a lot of the problems that have been on their minds for many years. Tax cuts of $1.8 billion are targeted for small businesses for Kiwi businesses and that is what matters to them. Fringe benefit tax provisional tax and actively managed funds’ taxation are fixed in this Budget and savings incentives are provided. Depreciation regimes are also fixed. For Kiwis who want to save for their nest egg for their retirement or for their first home under KiwiSaver there is $1000 for each person to get them started and up to $5000 over 5 years for the deposit on their first house. Kiwis know that that matters to them. Kiwi families know that with that initiative with what we have done with mortgage guarantee insurance and with what we are doing with the Working for Families package they will be better off under Labour. That is true both individually and as part of a country that is secure whose books are well managed and that can hold its head high in the company of developed countries the world over as we sail into the new century. 
Business is better off families are better off and the Opposition’s promises simply do not add up. If it is not enough for people to believe us then they should believe the OECD which stated: “Any additional fiscal stimulus beyond that already planned would put the projected soft landing at risk and would be offset by higher interest rates in order to bring the economy back to a sustainable growth path.” For example if taxes are cut what happens? Interest rates go up people with mortgages pay more and the value of the tax cut is gone overnight. So not only— 
Rodney Hide 
: Rubbish! 
Hon DAVID CUNLIFFE 
: “Rubbish!” says that bloke. The members of that bloke’s party could not add to save themselves. They reckon on a flat tax rate of 25c which would need $5 billion to $6 billion worth of spending. Can people imagine what would happen to interest rates if Rodney Hide ever got near Treasury? Good Lord—no wonder they would not open the doors to the guy! Alan Bollard would have a hernia. He would say: “Oh my God! Who taught this guy to add?”. We do not know whether anyone taught him to add; there is no evidence of it so far. This Budget is good for families good for business and good for New Zealand. It is a good Budget. 
Hon KEN SHIRLEY (ACT) 
: 
 We have just heard from the poor poor member the St Marys Bay member for west Auckland Mr Cunliffe. He raised a number of interesting points. Perhaps the most interesting was his statement that we are sailing into the new century. I fear he is right but he has forgotten that we live in the age of jet travel. We are past steam yet he and his party are still in the age of sail it would seem. 
We heard earlier about Mike Williams the President of the Labour Party and the big secret that was going to be in the Budget. We heard from Dr Cullen in question time today that he did not know anything about that. Clearly he did not because if ever a Budget was a fizzer it is this one. All around the country all commentators have called this Budget an absolute lost opportunity an absolute fizzer. 
 The clear message now resounding around the country and across the political spectrum—other than in Labour ranks—is the overwhelming justification and need for a taxation cut. Cutting taxes has been a core philosophy of the ACT party since its inception. We have seen successful economies around the world basing their success on tax cuts but still the Neanderthal socialist Labour Government in New Zealand refuses to accept reality and to deliver a tax cut. 
This week we have seen a response to the Budget. The business community anticipated that perhaps Labour would do something significant and that community is shattered. It is stunned that the Budget was a fizzer. And what have we seen? Business confidence in New Zealand measured this week is the lowest it has been since immediately after the sharemarket crash in 1987. We understand what happened in 1987; there was a worldwide economic crash. But now business confidence is the lowest it has been since then in spite of there being no justification for that sentiment other than disappointment in the lost opportunity of this Government’s Budget. 
Tax cuts are now mainstream. When we hear Jim Anderton actually calling for tax cuts as he has done this year it is staggering that the Labour Government has not heeded the message. Across the Tasman the John Howard Government gave comprehensive tax cuts on the basis of a surplus that is 1 percent of the Australian GDP. The New Zealand Government is sitting on a 4 percent GDP surplus and saying that it cannot afford tax cuts. That is absolute baloney! The New Zealand economy will suffer as our competitiveness against the Australian economy slides further and as opportunities for investment jobs and prosperity are greater across the Tasman than they are at home. We will lose people and we will certainly lose investment. 
There is no virtue in having a surplus per se just as there is no virtue in having a deficit. A deficit essentially means a Government living beyond its means overspending and that it is in a way intergenerational theft. But equally there is no virtue in having a surplus because—other than the fact that a Government might be retiring debt—all a surplus says is that the Government is taking too much money from people. The Government is draining money from people because they pay the tax. It is true. When we look at the surplus figures we see that we in this country have a rich Government—a very rich Government. Unfortunately we have poor people. We have a rich Government but poor people. 
The whole philosophy of this Labour Government is just to take more and more and to take more control of the economy. This Budget provides for an extra $2 billion of spending by the Government. We might say that it is spending the money on health but we have been told that we are not receiving any better health outcomes. The waiting lists are not declining. In other words the Government is squandering the money. It is wasting it. Apart from the wanangas the hip-hop tours and all those overtly wasteful expenditures because of the Government’s crazy philosophical mantras even in the core sectors it is pouring more money into wasteful structures and we are not getting the outcomes that we should be getting. 
What did the Budget actually offer in tax cuts? It offered 70c per week to be delivered in 3 years’ time. Is it any wonder that the average Kiwi out there is a bit cynical when the Government is trying to say it has delivered a tax cut and that tax cut is 70c in 3 years’ time? That is outrageous. We know that the tax cut will be only 0.5 percent of Government spending in 2009. If we look at it as part of business costs we find that it will be only 0.2 percent of Government spending in 2009. So the tax cut for business is infinitesimal at a time when Australia has delivered a significant cut and when successful economies around the world are basing their success on lower taxation attracting investment. 
Again we heard an incredibly confused message from Mr Cunliffe the previous Labour speaker in this debate. He started along the lines of asking how on earth we would fund schools and hospitals if we were to cut taxes. He clearly does not understand the difference between the rate of tax and revenue. There is a big difference between the rate of tax and revenue. We know that when one cuts taxes one gets investment. Investment creates wealth and prosperity. There is more wealth and more people are paying GST and revenue to the Government. We can get that from the base of a lower incidence of taxation. But the Labour Government does not seem to understand that—or if it does understand it is certainly being duplicitous. 
Jill Pettis 
: Some of us remember the 1990s. 
Hon KEN SHIRLEY 
: Oh it must be market day—the paint stripper from Whanganui is at it again. She is shouting away as usual. She and her Labour colleagues do not understand that basic difference between taxation rates and revenue. 
Then we come to the net worth of government. Today the net worth of government in this country is $35.5 billion—that is assets less liability. In 5 years’ time by 2010 under the projections of this Budget and this Government that figure will have risen from $35.5 billion to $63.1 billion. That is a 12.2 percent per year growth in Government spending—bigger and bigger and bigger government. That is what this Labour Government is all about. To fund that it takes more and more money out of society and from hard-working families who should be able to retain their own earnings and make their own choices. 
Jill Pettis 
: On silly things like hospitals and schools I suppose! 
Hon KEN SHIRLEY 
: But no says Jill Pettis the member for Whanganui. She is defending the taking of more money. On top of that of course we have the new carbon tax. Let us look at how that will work. Let us look at the electricity market. If we burn a fossil fuel like coal the tax is $15 per tonne. Huntly power station is our big coal burner; Huntly will be paying it. But how the electricity market works is that there is an auction every half-hour at 200 take-off points from the national grid and everyone pays the top price. Because Huntly is the biggest generator at 1000 megawatts it sets the price. So the State-owned hydro generators will be paying that same price. That will put up the price of electricity for all consumers. 
The hydro generators of course will get windfall profits because they are not burning coal but they have to charge that price. Their price will be the full rate incorporating the carbon tax even though they are not using carbon-based fuels. Who gets all that money? Who owns the big hydro generators—Meridian Energy Mighty River Power and Genesis Power? Members have guessed it—the Government does. Super profits are all paid back as a dividend to the Government. 
So this is really just an underhand way of imposing extra taxation on the consumers of New Zealand through transport fuels and electricity. The money will go back into the coffers of this Government so that it can throw away $1 billion a time on wanangas hip-hop tours and all its chosen little social engineering programmes and waste the money to the incredible degree that it does. 
The ACT party’s message is very simple: leave that money in the pockets of hard-working New Zealanders. They will make better decisions than the bureaucrats and the politicians in Wellington. New Zealanders will create a better society and generate more wealth and prosperity than this socialist Government will. 
LUAMANUVAO WINNIE LABAN (Labour—Mana) 
: 
 Kia ora talofa lava and warm Pacific greetings to all. Some commentators have said that Budget 2005 was a boring Budget and that no great shock or surprise was announced. We do not need surprises shocks or sensations when it comes to the management of New Zealand’s finances. We do not need to scare the horses or the financial markets. Steady safe predictable prudent and yes even a little boring is good. 
Budget 2005 continues the sound fiscal management that has been the hallmark of Michael Cullen’s capable stewardship of the economy and Helen Clark’s leadership of our Government. This Budget balances economic and social objectives—no surprises there. Fairness and equity are bedrock Labour principles and they are reflected in this Budget. Budget 2005 is based on economic and social policies that respect individuality and diversity and promote equality of opportunity and the right for all citizens to participate fully in the life of our nation. 
Labour’s policies are aimed at ensuring that all people are able to enjoy a fair share of our nation’s wealth. The top priority of our economic policies is growing a sustainable job-rich economy. In the last three Budget debates I spoke at length about the many successful businesses in Porirua City Mana and the Kapiti coast that have experienced a sustained period of economic growth and have benefited from this Government’s sound economic management. One example of such a business is Effuzi which has just scored a $1 million project to provide stadium seating for Jade Stadium. This Budget continues that steady economic growth in Mana and throughout New Zealand. 
Growth has remained broad-based and sustainable. The tax cuts for businesses announced in Budget 2005 will cost $1.42 billion. Around $720 million of that will be recycled from the carbon charge. This is a business-friendly Budget and this is a business-friendly Government. We see that the Government has an important role to play in the marketplace: encouraging and supporting New Zealand businesses using influence to open up markets and using diplomacy to negotiate fair and free trade agreements. 
Over the last months in my role as parliamentary private secretary to the Minister for Trade Negotiations I have been working with the private sector and New Zealand businesses to establish and develop the New Zealand Pacific Business Council. The council is now up and running. It is made up of people from the private sector who are keen to expand two-way trade with Pacific nations. There is tremendous potential for two-way trade in the Pacific and this Government is promoting trade with the Pacific and the importance of a win-win for all nations in our region. 
Last year I led a trade delegation to Fiji with Jim Sutton and then went on to Papua New Guinea and then Guam. Recently as part of Phil Goff’s Pacific trip I led another trade delegation to New Caledonia and French Polynesia. Both these missions returned to New Zealand with millions of dollars in orders. New Zealand does $1 billion of trade in goods and services with our Pacific neighbours. They are very important markets for us and we can only grow the potential for markets there. Of course beyond the Pacific we look forward to celebrating the benefits that the New Zealand - Thailand Closer Economic Partnership Agreement which Minister Sutton has recently negotiated will bring to our businesses and our economy. The Government is investing in trade and Budget 2005 continues that investment with a number of export initiatives: $31 million dollars over 4 years for international trade negotiations; $9 million to promote New Zealand as a tourist destination; and $3 million to promote relations with Asia. As well as export initiatives Budget 2005 provided $204 million for research science and technology $100 million over 3 years for land transport and another $10 million to build management and business capability bringing to around $250 million a year the Government’s investment in regional support. 
Economic growth is only part of the equation for Labour. Social policy is on the other side of the ledger. Income and social support should expand in Labour’s view only when there is the capacity to sustain them. Dr Cullen’s careful fiscal management has allowed Labour to deliver a Budget that allows more New Zealand families to share the benefits of economic growth. Over the next 4 years there will be $4000 million for Vote Health; $1430 million for education; $134 million to build more State houses; and $149 million to advance the social development agenda. This year’s Budget invests responsibly in the health education and the safety of the people of Mana and all New Zealanders. 
Our economy has done well under this Government enabling us all to benefit from improved public services. The record continues with new funding this year for health care early childhood education schools and the police. The health funding will rise by an unprecedented $4 billion over the next 4 years. This includes money to extend low-cost primary health care establish a Cancer Control Council offer free breast-screening for more women phase out asset testing for older people in rest homes pay nurses more and fund more hip and major joint operations. 
Investment in education is focused on improving quality from early childhood care to the tertiary sector. Childcare centres are getting more funding to pay for better qualified staff. Schools are being funded to employ more teachers increase their operating budgets and invest in new technology. New funding for higher education is targeted at better-quality teaching in vital subjects including science trades information technology technical subjects agriculture and horticulture. There is also more money for Modern Apprenticeships and industry training while tertiary students will benefit from new scholarships and changes to allowances. 
Increased funding for the police will ensure that the force has the resources necessary to keep on top of crime rates which are the lowest in decades. New money in the Budget will pay for an estimated 245 more police nationwide in the coming year. I am really proud of New Zealand’s police force. It does a great job. The Royal New Zealand Police College is in my electorate and I am impressed with the young and mature recruits I see about town. The police have a difficult job to do and I am sick of those who criticise the police to score cheap political points in election year. 
 Budget 2005 creates new opportunities for people to improve their financial security with the introduction of the KiwiSaver workplace savings scheme. This will help Kiwis to save for their retirement with a $1000 kick-start from our Government. People struggling to save for their first home will also be able to take advantage of KiwiSaver. Many will be helped with an extra contribution towards their deposit. 
While delivering better services the Government continues to take a responsible approach to public spending. Forecasts show that Budget surpluses will continue to cover the contributions to the New Zealand Superannuation Fund keep the national debt down and enable investment in essential infrastructure like roading. But we know we need to do more. When driving through Mana one sees the investment made in improving safety and reducing congestion on State Highway 1. Of course there is more to do but we are making progress. 
This is the story of Budget 2005: living within our means and making steady progress. There is more to do in the future. We cannot have it all today; we must build a sustainable economy for the future. Budget 2005 provides substantial tax relief for business and the changes made to personal income tax thresholds will protect people’s income against inflation. Altogether it is a balanced investment in the nation’s social and economic future. The Labour-led Budget continues our Kiwi values of maintaining a strong and credible fiscal stance being fair and inclusive and helping Kiwis build a stake in the country. 
JOHN KEY (National—Helensville) 
: 
 There was a deep dark secret in the Budget. It was buried in there pretty deep and this was it. Budget 2005 was a loser an absolute loser for this Government. It will go down in history as the longest resignation note from a Minister of Finance. If it were a movie it would be catalogued in the horror section. It does not get any better than that. 
I noticed something very interesting on Budget day. When I looked across to the Labour front-bench members I saw them nodding off to sleep. That reminded me of something I saw when I was leaving the lock-up to come into the Chamber. The junior Government whip Darren Hughes was giving out No Doze tablets so that back-benchers would not fall asleep. Unfortunately the front-bench members snuck in from the side and did not get their top-up. They had to rely on the coffee they had at lunchtime. 
Budget 2005 was a shocker. Even Michael Cullen looked bored when reading the thing out. That is how bad it was. If he was bored when reading the Budget—and we will assume he was bored when putting it together because there was not a helluva lot in it of interest—he sure as earth was not bored when he read the reaction in the newspapers in the past 12 days post-Budget. It is fair to say that Dr Cullen is under a fair bit of pressure at the moment. He was under a lot of pressure around that Budget. We all know the story: the Prime Minister picked up the poll results—she does her polling every couple of days—and went down to the seventh floor pulled up a chair and said: “Michael we’ve got a problem. The Nats are absolutely taking us to the cleaners over taxation. You’ve got to do something Michael. Help me! I want a third term. It will mean so much to me. Please Michael show me the money.” 
So Michael Cullen thought: “No no. I like spending. Boy can I spend! I’ve spent $50 billion worth of additional taxes in the last 5 years.” Helen Clark looked at him with that steely-eyed gaze and said: “Michael make it happen. I’m off to the Amway salesman—the President of the Labour Party Mike Williams—to tell him the good news that you have found some cash.” And so it was. Mike Williams went out there in his dark glasses and coat and rang the journalists saying in a quiet voice: “It’s Mike Williams here from the Labour Party. There’s a deep dark Tory secret buried deep in the Budget. Ha ha ha! Wait till it all comes out.” 
We had seen Dr Cullen in the House not answering any questions about tax cuts not saying anything. We watched him day after day as we asked him whether there would be tax cuts in the Budget. He said: “I can’t answer that. The member will have to wait until Thursday.” Well what came on Thursday was an absolute shocker. I could not believe it. I must admit I plead guilty. The press gallery wrote that I looked a bit too happy after I had read the Budget. I plead guilty. I could not believe it when I picked up the  
Dominion Post  
on Friday morning and saw the headline: “Is that it?”. Six years of good economic weather under Labour and is that it—67c? It would not have paid for the  
Dominion Post  
that morning and people have to wait for 3 years—until 2008. It was a shocker. 
John Armstrong is one of the finest political journalists in the country. He is a man who calls it the way he sees it. When one gets it right he says so. When one gets it wrong he says so. When I picked up my  
New Zealand Herald  
in Auckland on the Saturday morning after the Budget I was greeted with the words: “To the catalogue of great disasters—the Titanic the Hindenburg Michael Jackson’s marriage to Lisa-Marie Presley—can be added the words ‘Michael Cullen’s sixth Budget’.” John Armstrong went on to say that Michael Cullen “has done the seemingly impossible: turning wine into water.” He said also that his Budget is an election-year flop. No wonder— 
Lindsay Tisch 
: Who said that? 
JOHN KEY 
: John Armstrong. No wonder the rumour mill is absolutely rife that Mike Munro is on the way out. He has had a complete stoush with the Prime Minister with Michael Cullen and with Mike Williams. They are all fighting amongst each other because they know a shocker when they see one. They are sitting around with their hands over their heads saying: “How on earth did we get it so terribly wrong?”. Then they realised that the  
New Zealand Herald  
put those words into the mouth of Mike Williams. The Prime Minister was in a really snarly mood at her press conference on the Monday. She also made a personal attack on me and I took umbrage but anyway let us not worry about that. I am bigger than that and I will move on. But she said to Ruth Berry of the  
New Zealand Herald 
: “You put those words into Mike Williams’ mouth.” I will not repeat what Ruth said but she pointed out that she had not done that and asked that the Prime Minister play the tape. The tape would say there is a deep dark secret in the Budget and we are going to smash the Tories with our 67c tax cut! It was an absolute shocker. 
The great tragedy though about the whole opportunity in Budget 2005 was that it was not that dissimilar to Budget 2004. It was a sensational opportunity to be a game-changer for New Zealand. We had a $7.4 billion operating surplus an unbelievable position to fix two of the major problems in New Zealand—that is a low-wage economy and a brain drain. We should be worried. Michael Cullen should have come into the House on that Thursday afternoon and said to the people of New Zealand: “I’m not happy that 600 of you are leaving this week to go to Australia.” 
I see the Minister of Immigration walking into the Chamber. He will be the “Minister of Emigration” soon because more people are leaving than are arriving. That is the truth of it. More people want out. He will be the only “Minister of Emigration” in the world. People will have to go to the “Minister of Emigration” to get their air ticket to get on the plane. He will be leading the charge. He is not a bad Minister of Immigration so maybe he can become the “Minister of Emigration” because that is the way it is going to work. 
Lindsay Tisch 
: He will be the tour leader! 
JOHN KEY 
: The tour leader! That is right; a sort of “Damien Dazzler” to South Australia. Last week 600 people left New Zealand for Australia. The day after the Budget more of them lined up at the Travelex office to get their ticket out of here. Not one thing changed after the Budget. Michael Cullen had $7.5 billion available to fix that situation and he did not care. What he cares about more than anything else is having a whole lot of money to give away and try to buy some votes in election 2005. But the people of New Zealand have said: “We know when enough is enough.” They are thinking: “We gave him a chance in 2003 we gave him a bigger chance in 2004 but by crikey in 2005 show us something.” 
 It was an election year lolly-scramble with the Minister of Finance throwing the lollies so far away that the kids are still looking for them. He threw them as far away as 2008—so far that people cannot see them. In an ownership society what on earth will people buy for $5000 in 2012? One will not be able to get a pup tent. I am sorry but people have to hear it. They will not be able to get a pup tent to put up somewhere. It was an absolute shocker. 
Then there were the changes—and I will quote from John Shewan of PricewaterhouseCoopers who said: “If ever there was a time when tax cuts could have been offered it was now.” Can members imagine the look on the faces of United Future members? They now believe everything John Tamihere told them because there it was a one-word change—2005 to 2008. I guess it is a number really. But from that 2005 opportunity they went their way. United Future must have done an unbelievable job of negotiating with the Government because on Saturday it rolled out its tax plan and it was $3 billion. The Government gave it $360 million in 3 years’ time and it came out with its tax plan of $3 billion. It was an absolute shocker. 
This morning when I picked up the  
New Zealand Herald  
I did not expect to see good news—because there is never good news for this Government; it is just one bad day after another—and sure enough there it was the business confidence survey showed we have slumped to a 17-year low. The member opposite Jill Pettis may shake her head but there it was—a 17-year low. We have not seen it as bad as this since the 1987 stock market crash and there had been an amazing opportunity. 
If anyone is under any illusion whatsoever about this Government’s agenda when it comes to taxes it surely is not to reduce them because low and behold buried in the Budget was the carbon tax. To add insult to injury those poor people who are getting 67c a week will have to pay their carbon tax a year earlier. National when it assumes the Treasury benches in a few months’ time will do so much better. 
Hon ANNETTE KING (Minister of Health) 
: 
 All I can say about that speech from the National spokesperson on finance is “Baloney!”. It is no wonder he attracted the grand audience of one of his colleagues to listen to it. New Zealanders should look out because a scythe held by Dr Brash hangs over our public health systems should his party ever be elected back to Government. National’s policy of borrowing to give tax cuts then cutting public services will have a devastating impact on the health sector of New Zealand. We are just starting to get somewhere in the fight-back after the destruction of the health system in the 1990s. Now those members opposite want to take us back to the bad old days. They want to slash $1.6 billion from the health budget. New Zealanders know there is no such thing as a free tax cut. The previous National Government in its last Budget in 1999—and I want New Zealanders to remember this—legislated for a tax cut. At the same time as it legislated for a tax cut it cut superannuation. That is National’s record. There is no such thing as a free tax cut. 
This Government has spent almost 6 years rebuilding the staffing and infrastructure that was undermined by National when it took a market approach to our health system—an approach that was hated and ridiculed up and down New Zealand and that saw the National Government change its Minister of Health five times in that period. By the end of the 1990s hospitals had been closed were under threat of closure or were crumbling. Communities were forced to join hands around buildings to protect their hospitals. Let us name just a few of them: Masterton Kaitaia Thames Wairau—and many others. We are not closing them; we are rebuilding every one of them. We are investing in the infrastructure of hospitals. 
Hon Ken Shirley 
: What about Murchison? 
Hon ANNETTE KING 
: Murchison will get a new hospital. I thank the member who was the member for Tasman before he was tossed out. Yes Murchison will have a new hospital under this Government. 
By the end of the 1990s doctors and nurses were heading overseas as fast as they could find jobs because New Zealand’s health system under National’s heartless and ruthless approach to health services was recognised by health professionals as being no place for them to work. One of the most ruthless things the National Government did was in the provision of cancer services. It was an example to hundreds of New Zealanders. In 1996 the National Government was told there was a looming crisis in cancer services unless it increased the number of trained personnel and the number of linear accelerators. It ignored that advice. 
We have had to spend 5 years trying to sort out that debacle because it takes years to train personnel and years to build the infrastructure. The latest report on cancer service waiting times shows that we have finally reached a point within the guidelines. It is fragile; anything could go wrong at any time. That is how long it has taken. It takes 3 years to train one radiation therapist. Radiotherapists were not trained under the National Government. National was told it should train them and it did not. I have no doubt that the same approach would be taken by the National Party if it were to come into Government again. Radiation therapists would have to say goodbye to the excellent wages and conditions we have built up for them since 2000. We pay them to train and that would be one of the first things to disappear. That would go. So would the linear accelerator and so would the investment in this vital part of our health services. 
No wonder New Zealanders were disillusioned at the end of the 1990s. A  
National Business Review 
 survey published last week showed that 12.2 percent of New Zealanders thought that health was the most important problem facing them. In the DigiPoll last week 18.8 percent thought that health was the top issue. Let us put those figures into perspective. Let us compare that with a TV3 poll in the mid-1990s. [ 
Interruption 
] The member who is interjecting might want to listen to this. Of course he will not want to believe these figures; he wants to believe only his own. Seventy-five percent of respondents thought health services had deteriorated under a Tory party health policy. Three years later in 1999 54 percent of New Zealanders wanted more money put into health. Well those bad old days are well and truly over. I am pleased to say that we have invested in the health sector of New Zealand. If members opposite get the chance they will be back slashing and burning health once again. 
I say to the member from ACT who was interjecting that I feel sorry for ACT’s poor old health spokesperson. She often gets things terribly wrong. I felt sorry for her this week when she complained about the deficits. She was forecasting a rise in the deficit to $100 million. In reality our deficits have been falling. It is not so long ago that National presided over deficits totalling almost $300 million. Even if she was right about the $100 million how does $100 million as a percentage of almost $10 billion in Vote Health compare with a $300 million deficit as a percentage of a $6 billion vote? Deficits reached 5 percent of total Vote Health under National; now they are around 1 percent. That is real progress. 
Where has the $4 billion that we have put into health gone? Let us look at operations first—although they tell only part of the story because we have put a lot of investment into primary health care. The total number of medical and surgical casemix discharges increased by 7.6 percent in the 5 years from 1999. There are now 44000 more procedures a year. That is only part of the story. From 1998-99 to 2003-04 the number of day procedures increased by 19.5 percent. That is an extra 27500 cases a year. In the past before technological improvements many of these cases would not have been performed as day procedures. But that is not all either. There has also been a steady increase in the number of outpatient procedures since 1999. In one area alone in publicly funded accident and emergency events the number of procedures increased from 740000 then to 844000 in 2003-04—an increase of 14 percent. 
All this is on top of the success stories of projects such as the orthopaedic project and the cataract project—all receiving sustainable funding. Money has gone in year in and year out. It has not been one-off money as we saw throughout the 1990s. But that is only part of the story. The efficiency of our public hospital system is demonstrated by the average length of stay of patients. The average length of stay in December 2001 was almost 3.5 days. It is now 3.1 days. No wonder we are doing better in terms of total medical and surgical case-weighted discharges. 
Patients like what we are providing; patient satisfaction ratings in all the surveys that are carried out across the district health boards show that 88 percent of patients are very happy with the services they receive. It is going in the right direction. It is also clear that our health workforce is happier than it was in the 1990s. We are training more health workers. We are paying them more. Nurses have had their biggest pay increase ever doctors are paid more radiation therapists are paid more and medical radiation technologists are paid more—all aimed at keeping them here in New Zealand. [ 
Interruption 
] The member may not like this but staff turnover has been steadily declining in the health sector. Staff turnover in the health sector is now less than 4 percent—much much lower than in the National Party caucus. 
There has been a worldwide shortage of health professionals but we are holding on to them and increasing the number of doctors and nurses in our health system. I would like the National spokesperson to hear this: since Labour came into Government the number of doctors in New Zealand has increased by almost 1000 and the number of nurses by over 3000. That is what has increased in New Zealand. When that member takes his $1.6 billion out of the health sector it will be doctors and nurses— 
John Key 
: 20000 bureaucrats! 
Hon ANNETTE KING 
: I will take the smirk off the member’s face when it comes to bureaucrats. If that is where he is going to save money the health sector will get a piddling amount of money under a National Government. I am proud of what we have done with this Budget. It is a continuation of our good work. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 In this Budget Labour has taken the first tentative steps towards ecological tax reform—an approach the Greens have been advocating since well before any of us came to Parliament. The principle is that for a given revenue tax is shifted off the things we want to encourage like work incomes innovation and enterprise and on to the things that are harmful like waste pollution and overuse of scarce resources. In short we need to tax the bad things more and the good things less. The Government has begun this shift with a carbon charge on the carbon content of fossil fuels. 
Burning coal oil and gas is primarily responsible for the human-induced climate change that we are already experiencing and which is the greatest threat to our economy and our way of life. That is without mentioning the lives of many other species that may become extinct as their habitat changes with the climate. The Government’s intention is to make it more expensive to burn fossil fuels and correspondingly cheaper to invest in renewables and energy efficiency. We applaud the charge but not its delay until 2007 by which time New Zealand’s contribution to climate change will have grown even further. 
Like the Greens the Government says it wants the carbon charge to be revenue neutral but the way it is going about this is very different from our policy. First we need to look at who is going to pay. The highest carbon emissions per unit of energy are from coal so coal-burning power stations the steel industry and the dairy industry with its coal-fired processing plants will have the greatest incentive to change. The big incentives here are for power generators to shift to wind and other renewables and the dairy industry and other industrial users to investigate waste-wood cogeneration as a number of industries have already done. 
Oil with the next highest emissions per unit energy is used mostly in transport. The incentives here are to buy a more efficient car or truck send more freight by coastal shipping or rail and use the bike or one’s feet to go down to the corner store. Gas with the lowest emissions is used in power stations and industry and homes but it is a higher value fuel and the tax on it will be relatively low. 
So far so good. But where we differ from the Government is in how the revenue should be recycled. We are told the average household will pay another $4 a week for its power and fuel. The Government proposes no revenue recycling for them unless we believe that the carbon charge is paying for the change in tax thresholds in 3 years’ time. The Greens propose that a package of eco-taxes including the carbon charge should be offset by removing tax altogether from the first $5000 of personal income. The carbon charge itself would not be enough but would be part of a package that could include taxes on other waste and pollution. 
Removing tax from the bottom band of income treats all taxpayers the same. It gives them all the same rebate but they will feel it differently. One dollar to someone on $9000 a year is more valuable than $1 to someone on $100000 a year but it is still $1. What the Government and United Future have done instead is make the gap between the haves and have-nots even wider. They have given people on the lowest incomes 67c a week and themselves on their MP salaries $10 a week. Yet it is often those on the lowest incomes who drive the old cars live furthest from town and have old poorly insulated homes. As the Council of Trade Unions has commented removing tax from the bottom $5000 of income is a fairer system than these changes in thresholds which increase the gap. 
 There are some of course who will be exempt altogether from the carbon tax. Very large energy users like the refinery mining companies and eventually steel and cement companies are able to negotiate an exemption if they would be made uncompetitive by the tax as long as they move to industry best practice over the period. This is not a silly idea. It may lead to substantial savings in greenhouse emissions if the firms have to meet high standards in terms of world-best energy efficiency and use of renewables. But it is not a transparent process. We are not told how much greenhouse gases will be reduced by these companies so we cannot work out how much per tonne of carbon saved the rest of us are paying in order to exempt them from the tax. It may be that we are getting a bargain with major carbon savings for little cost or it may be that they are and that they have to do very little in order to be exempted from a tax that the rest of us have to pay. We just do not know. 
Householders of course could easily save $4 a week by keeping their cars better tuned keeping the tyres inflated walking or cycling occasionally instead of using the car turning their computers off when they are finished for the day and a host of other measures that save energy very easily. If power prices rise this will increase the savings from energy-efficiency investments. One of these is the obvious opportunity of using the heat of the sun to heat their water. 
Last Wednesday the Greens launched a comprehensive energy policy showing how we could move much faster to a sustainable energy future based on energy efficiency and renewable forms of energy. One of our initiatives is a competitive tender to supply and install half a million solar water heating panels over 5 years. This would use the market to bring the price down by at least a third with economies of scale and competition and that would be passed on directly to householders. It would build the industry sustainably and provide security of quality and of work for newly trained installers. The very next day the Minister of Energy launched his policy on solar water heating. Trevor Mallard announced that two peanuts were to become four peanuts. He announced that funding for the solar water heating loans scheme would be increased from $200000 to $400000—basically from almost nothing to twice almost nothing. 
This is when we learnt of this Government’s deep commitment to recycling. Bereft of new ideas it has dredged up Pete Hodgson’s release of 23 May last year when the budget for solar water heating was doubled from $200000 to $400000. We can only guess at what has happened in between. What has actually been spent of last year’s budget? Has it been underspent or does this year’s announcement amount to saying that this year there will be no change in this pitiful commitment to the energy of the future? It is the most extraordinary recycling of a Budget statement from one year to the next that I have ever seen. 
Last year I criticised the Government for getting it so wrong on oil price predictions. It was rather an embarrassment really. 
There was a prediction of $19 a barrel by late 2004 and remaining stable at that level in the long term. It was already way out of date by the time the Budget went to press and by the time it was finally passed the price was actually $57. This time at least they have understood that the several-fold price rises of the last year and a half are not a flash in the pan but an indication either of a new permanent state or more likely of a period of constantly escalating price as we reach the peak of oil production and begin the decline. 
This year the Budget forecast that prices will rise back to $56 in the third quarter then drop to $47 and remain at around that level. There is a recognition though that uncertainty around oil prices is a risk to inflation and to our terms of trade. It is quite heartening to see that after a year of the Greens making statements about the closeness of peak oil and after those statements being borne out in the reality of the price increases that went steadily right through last year Government is now admitting that the days of oil costing $19 a barrel are gone forever and that we have to adjust to a new state. However there is still no analysis of the effect of permanently higher oil prices on the New Zealand economy or on our trading partners. It is still assumed that they will be able to buy our current exports and that we will be able to continue to afford to ship them. There is no plan to reduce our vulnerability or to help us weather the shock. There is no investigation of which sectors of the New Zealand economy will prosper under this new scenario which sectors will lose and what Government ought to do to assist with an adaptation. That it seems must wait for the Greens to enter Government and if that is what the voters decide this year we are ready. 
Hon DAMIEN O’CONNOR (Associate Minister of Health) 
: 
 This year New Zealanders will have a clear choice: whether they want to continue with the prosperity growth vision energy and innovation of this coalition Government—Labour United Future and Progressive—or whether they want to go back to the failed policies of the 1990s under the National Party. I tell members that every New Zealander appreciates what we have done in the last 5 and a bit years. I do not think that they want to go back to the failed policies. But they have been offered a wonderful tax cut—a big benefit for them so they are told by Don Brash because we have had a Budget surplus. It is true that we have had a surplus and I applaud Michael Cullen’s management of this economy over the past 5½ years. It has been absolutely outstanding. He has not bowed to the pressure of every economic group in the country that comes to this Government saying it needs more money. We have spent money where we have deemed it necessary—in health education infrastructure and police. But Michael Cullen has managed this year to budget for a surplus. 
For those National Party members who fail to understand it the analogy is that if a household is getting $500 a week and it costs $400 a week to live to continue to pay for the kids—that is what a lot of our constituents have to live on—and there is $100 left over the $100 is not a surplus to be squandered around the place. It is usually allocated to things like putting new tyres on the car painting the house concreting the driveway and doing the kinds of things that every sensible New Zealander does to protect the assets they hold dear to their hearts. They want to move into the future through sound management. So the surplus on paper that Dr Cullen has accumulated is there to spend for the future—to invest in superannuation to put into roading and health and to drive this country forward with certainty and security. 
When Labour came into office in 1999 we saw clear examples of lack of vision and lack of planning and foresight because the previous National Government thought—and the National Party still does—that the markets would deliver to everyone that the trickledown theory worked. I do not know whether what we have now from Dr Brash is a promise. Frankly we are not quite sure what he is saying because he does so many flip-flops. He is saying that he will offer tax cuts—that we will have a mini-Budget before the end of the year with benefits for everyone. But hold on—John has tapped him on the shoulder and asked whether he realises that that might fuel inflation. Don Brash says that that is a very good point. John Key now says that perhaps they had better stagger the tax cuts. Whoop-de-doo! 
Don Brash should wake up. If he wants to find out something about managing the economy he should take a leaf out of Michael Cullen’s book. He should not promise what he cannot deliver he should be fiscally responsible and he should plan for the future. That is exactly what this Budget does. The so-called surplus is nothing more than the money left over from a household budget that needs to be put towards tyres for the car school fees for the kids—[ 
Interruption 
] That is right; we have a free education system we hope. That money needs to go towards painting the house saving for the future and all of those sensible things. I think New Zealanders understand that. They have not been hoodwinked by Don Brash’s promises. They also understand that if we are to invest in the future we must ask how Don Brash will fuel and fund his tax cuts. It is quite easy. Will he take the $1.6 billion from health? Where from health will it come? It is all very easy to say that it can be taken from the bureaucrats. The reality is that we have increased spending on the health system from $6 billion to almost $10 billion. 
Dr Paul Hutchison 
: Squandered! 
Hon DAMIEN O’CONNOR 
: Dr Hutchison says that we have squandered it. I say that we have put money into the pockets of nurses we have built hospitals and we have put money into the pockets of physiotherapists and radiologists. Do members know why? We know that we depend on those people. They deserve a fair wage and we are in a very competitive international market. If we do not increase their wages and salaries then they will pack their bags and go. From where within the health system will Don Brash take $1.6 billion? I can tell members that the cuts to services will be very very acute. 
He will cut superannuation. He along with Dr Hutchison and John Key—all those fairly well-heeled people—believes that people should look after themselves. He believes that he can simply cut the rate of superannuation. The fact is that many many New Zealanders have invested their lives in growing this country. They assumed that they would get reasonable care in their retirement years and we are committed to delivering that—not to cutting it as the National Party will along with its ACT mates to deliver tax cuts on the old disproved theory that trickle down will deliver to everyone. One can guarantee that the tax cuts will do all right for Dr Hutchison Mr Key and Don Brash. But what will they do for the people at the bottom? If we look at what happened through the 1990s we see that the disparity the gap between the rich and the poor in this country became a huge chasm. 
Hon Annette King 
: And it did in health as well. 
Hon DAMIEN O’CONNOR 
: It did. It was all right for those who could afford medical insurance like most of the National Party but for those who rely on the public health system there was only one option. That is why we fund it properly and will continue to do so into the future. How else might Dr Brash fund his tax cuts? He will sell assets. If he had picked up the papers about 2 months ago he would have read that 82 percent of New Zealanders are sick and tired—have had a gutsful—of the sale of State assets. They do not want that. I tell Don Brash and Dr Hutchison to read the papers. New Zealanders do not want it. If the National Party wants to sell off State assets—and we have a whole list of them—New Zealanders will absolutely reject that. 
The other thing the National Party will do—and this is taking a leaf out of Mr Muldoon’s book—is borrow the money. It will borrow and load up every New Zealander with a debt so that it can provide tax cuts for its wealthy mates. Well I do not think New Zealanders will buy into that. They are not that stupid. Mr Muldoon did it. Lindsay Tisch should know Mr Muldoon—he was a good friend I am sure. Mr Muldoon promised tax cuts and huge benefits and destroyed what would have been the best superannuation scheme we ever had. 
Just when this Government is getting New Zealand to the point of moving ahead with funding for innovation growth capital infrastructure health and security the National Party is putting up a bribe to this country that it will deliver tax cuts. When? Initially they were to be delivered by Christmas; now of course they are to be staggered. The people of New Zealand will not be fooled. They should ask every National Party candidate on the hustings up and down this country how National will pay for tax cuts and when it will deliver them. The truth is that National will not deliver tax cuts to each and every New Zealander; it will deliver them as it always has to its mates. It will deliver them to the privileged few who are earning over $100000—and some of us here are among them. But what will it deliver to a struggling family on $36000 a year? Through Working for Families Labour will deliver to those families well over $100 in direct payment as a thankyou for their commitment to this country. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 It is somewhat dismal to hear the Labour Party fearmongering once again when in health over the last 5 years it has overtly failed. [ 
Interruption 
] There is an unmitigated cacophony coming from the back benches and the Minister Annette King is not even in her own seat. In this year’s appropriations an extra $824 million—or 9.3 percent—over last year’s amount is going into health. At a superficial glance one may indeed think that that is good. It probably would be good if this Labour Government did not have the dismal record of pouring $3.3 billion extra into health with no measurable improved outcomes. The public of New Zealand showed what they thought about health spending in yesterday’s  
New Zealand Herald 
. A survey showed that 73.8 percent of New Zealanders believe that hospitals are offering the same or worse services than when Labour came into office in 1999. Despite $3.3 billion more being spent on health 38.3 percent of respondents considered the health services in New Zealand to be worse than ever before. That was reported just yesterday. 
Hon Annette King 
: Baloney! 
Dr PAUL HUTCHISON 
: The Minister says: “Baloney!”. Labour and the Minister of Health have presided over massive bureaucracy gross inefficiency and unfulfilled expectations in the area of health. As I said before Labour’s record is of massive spending but of no measurable improvement in outcomes. 
Let us look at that record. What have we had over the last 5 years? There has been a 40 percent increase in sickness and invalids beneficiaries. Now let us look at this statistic: infant mortality has plateaued over the last 5 years. I think the Minister should listen to this: infant mortality which normally has a downward trend has actually plateaued over the last 5 years. That is very very serious. That information has just been published by Statistics New Zealand. Not one chief executive officer of a district health board has been able to tell me in the Health Committee when I have asked whether he or she could measure or demonstrate any improved outcomes in health under Labour—not one. Labour promised the earth in health while in Opposition during the 1990s and during its 5-year term in Government it has just failed to deliver improved outcomes in health. What has Labour done? It has increased the bureaucracy. 
What has happened this week? We heard at the weekend that breast-screening patients aged 45 to 50 who were promised by Mrs King that they would have breast screening are waiting 2 to 3 years before the screening occurs. Last week the hospital benchmark information report showed that 14 out of 21 district health boards failed to see seriously ill patients within the recommended time. Those are patients who “have a potential or imminent threat to ‘life or limb’”. Those are patients with suspected heart attacks massive bleeding and serious head injuries. Fourteen out of 21 district health boards failed to achieve the triage times expected of them and that is how it has been for the last 3 years. [ 
Interruption 
] We hear again that cacophony of unmitigated warbling from the Minister of Health. She is not willing to accept the fact that 14 out of the 21 district health boards failed to achieve satisfactory triage times. 
All the money that Dr Michael Cullen Mrs King and Miss Clark—the grand designer of the Labour system—have poured into health has been sucked up by Mrs King’s bureaucracy. [ 
Interruption 
] 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I refer members to Speakers’ ruling 56/1. 
Dr PAUL HUTCHISON 
: In 2001 Mrs King said that when funding was devolved to the 21 district health boards from the Ministry of Health the ministry would reduce in size by 25 percent. What is the reality? It has increased in size by 25 percent—from 900 to 1100 employees. I ask Mrs King what improved health outcome has come from the massive bureaucracy she has created. 
Hon Annette King 
: There were 500 people in the Health Funding Authority. 
Dr PAUL HUTCHISON 
: That is absolutely right. Mrs King has answered a parliamentary question for me and admitted that in the last 5 years the number of employees in the Ministry of Health has increased from 900 to 1100 - plus and not one improved health outcome has come from that. 
Let us now look at the 76 primary health organisations. Yesterday a report was released about those organisations. That report from the health services research centre at Victoria University showed that there has been not one improved health outcome. Despite the complex bureaucracy and the millions put in no improved outcome has been shown. Let us take a look at what the research found: “Concerns were also raised by some informants about the targeting of increased funding with claims that it had been imprecise and that money had been ‘wasted’ on those who could afford to pay while affordable care was not as available for some groups who did not meet increased funding criteria.” That is the legacy of the first research on Mrs King’s 76 primary health organisations. 
Hon Annette King 
: Read the rest of it! 
Dr PAUL HUTCHISON 
: Well here is another point: “Some were concerned about the moves towards greater perceived control of general practice by government and about the long-term financial implications for themselves and their practices.” For 5 years the Labour Government has bleated that the problems in the health sector were not its fault. It has put in $3.3 billion yet it is perceived by the New Zealand public and it is the reality that the New Zealand health services are worse than they were before Mrs King came into power. 
How have the general practitioners reacted to Mrs King? They have sent her a red letter because she and her ministry have broken good-faith bargaining by cajoling them and by deciding that she would control their prices. That is why she has the red letter. She has let down the primary health care sector that is so important to us. Mrs King and the ministry have broken good faith with general practitioners in the negotiating round. The Labour Government is not prepared to admit the reality of the costs in the primary health care sector. There has been a 20 to 30 percent increase in the award to the nurses. That is absolutely great but then Mrs King has screwed down the general practitioners. She does not realise that in the land of primary health organisations there is a reality of cost. The nurses will have to be paid by the organisations. What does Mrs King do? She screws down their charges. There is no doubt that the agenda of Prime Minister Helen Clark and Annette King is to create a system in New Zealand that is similar to the British National Health Service—one of the most inefficient health services in the world which is characterised by the queuing that we know that Mrs King has chopped. 
I will finish on the topic of waiting lists which has been one of the worst deceptions in the history of New Zealand’s health services. Mrs King was so embarrassed by how bad the waiting lists were in New Zealand in 2003 that she took 25000 patients off the lists and sent them into the community with no certainty that they would ever be treated. 
Hon MITA RIRINUI (Minister of State) 
: 
 I sat listening for a few minutes to the previous speaker as he made his contribution to the Budget debate. I can tell when I am listening to a party that does not have a policy because it does everything it possibly can to find something that is going wrong in the world but does not come up with one solution—not one solution. 
Dr Paul Hutchison 
: What do you know? 
Hon MITA RIRINUI 
: I raise a point of order Mr Speaker. I am not sure whether you picked up that the member Dr Paul Hutchison said “What do you know?”. I am sure you know quite a lot Mr Speaker. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Thank you. I remind members that they must not bring the Speaker into the debate. 
Hon MITA RIRINUI 
: I am sure he would not do that deliberately. Once again this is another brilliant Budget from Dr Michael Cullen. It is his sixth Budget and is again focused on New Zealand families. New Zealand families are the backbone of this country—something that some people tend to forget from time to time. 
I wonder whether the previous speaker would be aware that today is World Smokefree Day. He did not make one mention of it. I happened to be at a celebration in my electorate in Tauranga this morning at the Bay of Plenty Polytechnic. Young people were celebrating what they called Mana Maori. 
Their definition of Mana Maori is being in control of one’s circumstances. They are taking control—not looking at the Government for every solution and criticising anyone including the Government or the Opposition when they do not find it. They go out looking for solutions for themselves. At the occasion this morning a lot of young people were uptown and upbeat. They were celebrating with singing and entertaining anyone who came to the event to listen to what they had to say about being in control of their circumstances. Certainly they do not need habits like smoking. 
Throughout this Budget debate all the Ministers have touched specifically on their portfolio areas so I will not go into every area of this brilliant Budget of Dr Michael Cullen. But I will spend some time looking at an area in which I am very very interested for obvious reasons—the area of treaty settlements for which I am the Associate Minister. Settling historical grievances is one way of accelerating Maori development. We have seen that in the past with Tainui in the Waikato with Ngai Tahu and with a number of iwi around the country who have gone through this arduous but necessary process. We have seen that with their achievements—the economic initiatives they have put in place since they received those settlements. I will recap on a few things that have happened in the last year and also look forward to the 2005-06— 
Darren Hughes 
: All those good Maori health initiatives too. 
Hon MITA RIRINUI 
: Yes I will get to that. I do not want to brag about the brilliant things that this Government is doing. I do not want to go over the top. There are so many brilliant things and there is so little time to talk about them. I will talk about the three main issues that revolve around treaty negotiations: firstly what has been achieved in the past financial year; secondly the money that has been sought through the estimates and how it is intended to be used over the next year; and thirdly the achievements that we anticipate in the coming year. 
I congratulate the Office of Treaty Settlements on the brilliant work it did in 2004. Not only did it meet its targets for the last financial year but it exceeded them because it worked very well with this Government. I am confident that the office can keep up this work in the future. There have been a few settlement milestones that I will touch on. The Office of Treaty Settlements was expected to have two settlement bills ready for introduction to Parliament in the last year. Two bills have been passed—regarding Ngati Awa and Ngati Tuwharetoa Bay of Plenty—and a third was introduced regarding Nga Rauru Kitahi. So the office is as I said exceeding all expectations. Two deeds of settlement have been initialled to date—Ngati Mutunga and the Te Arawa lakes. The Te Arawa lakes group that we met over the weekend has had its claim ratified by the claimant group and signed. We were fortunate enough to join with them in celebration earlier this year. 
Of course in the far north the deed for Te Roroa part of the Muriwhenua claim is also very close to being ratified. Two agreements in principle have also been signed with Te Aupouri and Te Roroa. Although I would have hoped for a third the two that we do have are major breakthroughs in negotiations. We have been working with these groups for some time and will continue to do that. 
The Crown has signed terms of agreement with four groups bringing the number of groups negotiating towards an agreement in principle to a total of 10. Fifty-five percent of the vote or $15.5 million will be spent on the purchase management and depreciation on improvements on properties held in the Office of Treaty Settlements land bank which I will talk about a bit more later on. The remaining 5 percent will go towards interest on the Nga Rauru Kitahi Te Arawa lakes and Ngati Mutunga settlements and advance payment on notionally accrued interest. These are technical aspects of any claim but it is important to highlight those matters in the House so that members get a better appreciation of the process. 
In 2005-06 the next financial year we will be concentrating strongly on policy advice and negotiations. Settlement and implementation is measured by a number of factors as members will appreciate. They are set out on pages 54 and 55 of the statement of intent which I advise members to read as it is an enlightening document that we all need to be aware of. The achievement of a specified number of settlement milestones is a major and tangible factor as I am sure members will appreciate. 
In the coming year the Office of Treaty Settlements aims to recognise three deeds of mandate. The office is already in pre-negotiation discussions in Tauranga with my people and with Ngati Toa in Wellington and at the top of the South Island and we are looking to achieve quite considerable milestones with those groups. Those groups whose mandates were recognised in the past year will be preparing themselves for negotiations. The Office of Treaty Settlements aims to sign three terms of negotiations with them. 
I also want to look further into the future. There are other areas of Dr Cullen’s Budget this year that we also want to highlight in the House: the areas of Maori employment Maori health Maori tertiary education Maori education in general kohanga reo Maori television and Maori broadcasting overall. We acknowledge the achievements of the Ministry of Maori Development Te Puni Kokiri and also the hard work of the Minister of Maori Affairs who spent some time during the adjournment travelling the length and breadth of this country and explaining in detail what the Budget package would mean for families in the various urban and rural areas around the country. 
Although I have heard considerable unfounded criticism of this Budget it is important for the House to note that Maori unemployment is at 8 percent and falling. In the 28 years since we have been gathering this type of data Maori unemployment has never been as low as that. 
Ron Mark 
: They’ve all gone to Australia. 
Hon MITA RIRINUI 
: There are more Maori in tertiary education than ever recorded in this country. The member on the other side of the House called out that they have all gone to Australia. Well I have been to Australia and come back. Many people go to Australia to do their OE and come back. They travel around various parts of the world but they always come back. I know that Ron Mark has spent a considerable amount of time overseas and he came back. So there is nothing unusual about New Zealanders travelling the world enjoying what other countries have to offer building on their own experiences and bringing those experiences back to this country. 
Ron Mark 
: They came back to fix it. 
Hon MITA RIRINUI 
: I don’t know about fixing it but it certainly adds to the richness of this country. A lot of positives have happened over the last 6 years of this Government. This Budget tells us that New Zealand families continue to grow stronger and stronger. Into the future they will still grow stronger. 
RON MARK (NZ First) 
: 
 It is indeed a pleasure and a privilege to be able to rise as New Zealand First’s spokesman on police to speak to this Budget. My pleasure is in being able to rise and speak on behalf of New Zealand First; it is not a pleasure to speak to this Budget. I look at the press release from the Hon George Hawkins the Minister of Police for this Government who is the best man Labour could find to represent the fine men and women in blue. Helen Clark deemed George Hawkins to be the best man for the portfolio in the entire entourage of that overinflated Cabinet. Among a number of things he has produced a press release that states how wonderful this Budget is. Let us look at it piece by piece. 
The press release refers to an increase to the police budget of $73.6 million. That is pathetic. New Zealand First does not believe in any way shape or form that this Government has a hope in Hades of getting on top of serious crime of the nature that we are now witnessing under investigation in Feilding. This Government has no hope of getting on top of serious crime with a pathetic injection of $73.6 million into this Budget—that at a time when “Uncle Scrooge” the Minister of Finance brags to the country that he has historic record surpluses to play with. He has a surplus of $8 billion and the best he can do to placate mums and dads and nanas and granddads who are worried about safety and security for themselves and their children is an extra $73 million. Let me remind the House that the same Government gave $40 million to Indonesia to help it to run education programmes. That tells me that the Government thinks that the education of Indonesian citizens and nationals is almost as important as the safety of New Zealanders in New Zealand. That is patently wrong and the Government will suffer the consequences of it at the polling booth. Indeed it is already suffering the consequences in the polls that are now being run nationwide virtually every week as it watches the support from the public plummet away from it. 
The next line of the press release states: “The total over the next four financial years of new Police initiatives is $172.9 million.” That will prove to be wrong. The next 4 years will see a Government that will occupy its seats only because of New Zealand First. If Labour members think that with the aid of New Zealand First they will get away with putting only an extra $172.9 million into policing over the next 4 years they can forget it—they are dreaming. New Zealand First believes that if we are to get on top of crime and deal with drugs methamphetamines and violence we must put more money into policing. Let me talk about violence. The Government never talks about reducing violent crime. It has given up on that. It brags that it has got recorded crime down. It is easy to get recorded crime down because all that needs to be done is to destroy the public’s confidence in the police and members of the public will then stop reporting crime. Therefore recorded crime is down. Every police officer says that that is precisely what is happening. 
The area about which New Zealanders have been increasingly concerned for the past 5 years is violent crime—homicides murders and rapes—and what do we see from this Government? We see an extra $73.6 million going in this year and we see that Mr Clarke has been let out of prison to do home detention—a man who kidnapped and raped a 15-year-old girl. That is the Government’s answer to violent crime. What is its answer with regard to methamphetamines? It is to pull the drug investigative squads—to not have drug squads any more—and to tell the officers not to focus on methamphetamine investigations because the evidence cannot be processed through the Institute of Environmental Science and Research quickly enough and the police do not need to find any more. That is the Government’s answer to violent crime. 
Let me give members an example of a man quite independent from New Zealand First who does understand what needs to be done: Chief of Police Bratton of the Los Angeles Police Department formerly the Chief of Department of the New York Police Department who implemented strategies based on the “broken windows” policy and zero tolerance. In 1 year with the policies that New Zealand First advocates and supports that man has reduced violent crime in Los Angeles by 23 percent and he now says that he can reduce it by a further 43 percent. Homicides are down by 18 percent in Los Angeles. What is this Government’s answer to violent crime? It sits there and tut-tuts as the body bags containing an elderly couple are brought out of their home and that is shown on television. The Government has no answer or strategy. It simply turns a blind eye and tries to tell the public—who are not fooled—that crime is going down. Yeah right! That would make a damn good Tui advertisement. 
There is funding for an extra 245 police positions. Well what a joke that is! One hundred of those positions have been earmarked to prop up and rebuild a failing 111 system. That has been deemed necessary by an independent inquiry team brought in from overseas. But no that is to fix a problem that did not exist. It is to fix a problem that was brought to the personal attention of Mr George Hawkins 3 years ago by a police officer—a uniformed member who risked his career his livelihood and the security of his family by daring to write to the Minister of Police in September 2002 to tell him that the 111 system was failing: that it was understaffed that it did not have the resources it needed and that police officers who were not real police officers but traffic officers were turning their radios off. George Hawkins denied that. For 3 years he said it was not true that the Opposition was making it up and that it was not happening but he had the written evidence in his desk. 
 Not only did George Hawkins have the information but so did the Commissioner of Police whom this Government rewarded for his silence by extending his contract for another 2 years and giving him a $40000 a year pay rise. Let us just remind ourselves that included in this Budget for the police is the salary being paid to the Commissioner of Police who is now the highest-paid civil servant in this land. He oversaw the 111 system but denied that a problem existed and the disaster in that system cost Iraena Asher her life. The question on the hustings during this election will be: why did Iraena Asher have to die in order for the Government to finally accept that the 111 system was falling over? Why did she have to die—because dead she probably is? 
This Budget is appalling. It talks about hundreds of extra police officers but it does not tell us how many new front-line real police we will see on the streets. It talks about youth services and Youth Aid. It talks about having more of those people whom police officers call shiny bums: people who sit on their backsides or police officers who do not staff the patrol cars walk the beats or make the arrests. They are the shiny bums—they got the ticks in the boxes but they did beggar all time actually on front-line duty. That is the area where police numbers will increase. This Minister has failed; he has failed the people of New Zealand. This Government has failed. This Prime Minister has failed the people of New Zealand. 
When New Zealand First members are on the Government benches we will not be talking about hundreds of extra police; we will be talking about thousands. We firmly believe that the police to citizen ratio in this country is so appallingly bad that the only way we will get on top of crime—serious crime violent crime the rampant drug industry the methamphetamine problem and the gangs that are earning $600 million a year through pushing drugs on to our kids—is to double the size of the uniformed police force rather than tinker around with it. What an insult it is to our intelligence to tell us that for the first time the police ranks will be over 10000 in number. The Minister has just lumped in all the non-sworn staff. That sort of deception will not be forgotten. It will be remembered at the polling booths and New Zealand First will enjoy reaping the benefits of it. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 At least the previous speaker had some policy compared with the lack of policy announced by the National Party spokesperson. He is 23rd on the National Party list so perhaps health is not a high priority for the Opposition—as has already been manifested. 
This Budget that I will speak about is a fair responsible and inclusive Budget not a “What’s in it for me?” Budget. That is the disturbing trend we find as we go around the country; we find that those who can well afford cost of living expenses are saying there is nothing in that Budget for them. They ask only what is in it for them. But when I go to my electorate and to the ordinary people I meet on an everyday basis I find they are very happy with the increases relating to health education and services for their families. I have never heard them ask me: “What’s in this Budget for me?”. They know we have built on superannuation certainty; they know we are building on the Working for Families package for relief; and they know we are now turning to developing a culture of savings for the future of this country. 
As a health spokesperson on the Health Committee I am delighted with the aspects of health spending in this Budget. We will hit an unprecedented level of spending in health of $9.68 billion. That is 20 percent of Government spending the largest sum ever and it will deliver more services than ever. The Minister gave us item after item of services that will increase under this Government—not of cuts like those we suffered in the 1990s under that mean former National Government. 
We are giving security and confidence to all New Zealanders about the quality of and access to the health service in New Zealand. As Dr Bengoa of the World Health Organization said just this month New Zealand is in the first division in primary health care. If National ever came back to office we would be playing relegation matches in the third division. It would be worse than I could ever bear. 
As a result of 6 years’ leadership in health we have delivered huge health gains for this country. We have had one Minister of Health not the five Ministers whom I had to work with as a health manager in children’s and women’s health. We had five Ministers in 9 years who played with us who tampered with us and who told us we had to manage to the red line all in the name of profit-driven services. They drove boards to actual despair—boards that had to return a profit on investment in the health spend when patients were seen as relative-value units and not people in need of a health service. People were sheer commodities in an economic game of health policy. We have returned community confidence in the health service and that confidence is showing in surveys the Minister has alluded to. 
We are hearing some interesting words from the Opposition about burgeoning bureaucracy costs and we will hear more of that. 
Hon Dr Nick Smith 
: Absolutely! 
STEVE CHADWICK 
: Well it is rubbish. In the Lakes District Health Board that I know well bureaucracy accounted for 11 percent of costs in 1999; that figure is now down to 6.4 percent. Let us look at that bureaucracy that so-called burgeoning bureaucracy. Opposition members have forgotten about the Crown Company Monitoring Advisory Unit and about the former Health Funding Authority. Let us measure apples with apples if we are talking about bureaucracy in health. 
In relation to the ability to fund those National Party tax cuts of $1.6 billion which will have to be found from somewhere we have to ask: what is going to go? How will those cuts be “re-prioritised” as Dr Brash referred to? “There will be just a simple little re-prioritisation of the health service.”! Well they are cuts and members should not forget that they are cuts. New Zealanders will not forget it. With the help of this Budget there will be 3300 more nurses. Will those nurses be cut—and their wages with them? No? There will be 1000 extra medical staff 1250 non-clinical staff helping to service patients’ needs and 398 social workers. 
If we found that $1.6 billion to fund tax cuts the entire early childhood education budget for 2 years would have to be cut out of the Budget. That sum is the entire vote for early childhood education for 2 years. It would be gone—gone by lunchtime. Those would not be minor changes at the margin; Dr Brash said he would need a major slash-and-burn approach. There is no free tax-cut. 
What else will go? I am hearing about mergers of district health boards again. I was on a working-party when the Lakeland Health Crown health enterprise was told by the former Minister Mr English to merge with the health provider in Whakatane. We worked and we spent thousands of dollars on investigating a merger but it would not work. Why would it not work? The communities of interest were different and the merger did not stack up economically. So that demand went very very quiet. But I am hearing the Opposition come up with—zip! Nothing! There is no reference to policy and when we are 16 weeks from going to the polls it is a disgrace. 
Lindsay Tisch 
: Oh is it? 
STEVE CHADWICK 
: Yes it is about that much. Mergers are looming again and they will be enforced just as they were imposed on us in the 1990s. We do not forget that and neither do health managers or doctors and nurses in the profession. The primary health organisation structure is really strong. I was at a meeting along with the Prime Minister with 300 Grey Power members in Kawerau last week. She got a standing ovation with regard to the cost of going to a doctor and the cost of prescriptions. In Kawerau 300 old people will not forget. We have 77 primary health organisations with 3.8 million New Zealanders enrolled who love the low cost of going to a doctor. I warn Dr Brash not to take that away from them. 
What else might go? The meningococcal B vaccine which is being rolled out at present—will that be suddenly stopped because it is not significant? 
Hon Dr Nick Smith 
: No we’ll do it properly. 
STEVE CHADWICK 
: Well we do not know; we have not heard any policy I tell Dr Smith—another “Dr” in the slash-and-burn game. Will smoking cessation programmes go? I know how poorly the Opposition supported the Smoke-free Environments Amendment Bill but New Zealand support for a smoke-free environment is growing rapidly now with 42 percent of the public saying they like that legislation and with more and more joining their ranks every day. 
 What about other health and wellness initiatives such as nutrition and physical activity programmes? Will they be gone for a wee trot or gone by Christmas? Health professionals need to think very carefully and they need to remember the pathetic wage increases they received in 9 years and the constant stoppages in our sector from that cruel Employment Contracts Act regime. There was no such thing as fair bargaining. 
What about the Hands Around Our Hospitals campaign and the campaign to save our public health service? There was no workforce development plan no training and escalating student fees. There were no scholarships and bonding for doctors. When we came into Government there were run-down cancer services—with shortages of staff and capital—that were a disgrace. 
We want to be fair responsible and inclusive. That includes valuing our workers in the health sector and bringing them with us—not alienating them. We do not want to see any more of the “What’s in it for me?” syndrome that Opposition parties seem to suffer from. 
I am proud about the increases in funding in this Budget for aged care home-based services and disability support. Young disabled who are sitting in rest homes with the elderly can now be properly supported in some dignity which is something that is being very well received. Mental health funding with $22 million going into increasing and escalating the implementation of the blueprint for mental health is a very exciting initiative. 
We will get there. This Budget is not just about cataracts hips and knees—which is what the Opposition still thinks health is all about—it is about wellness of our community and it is about having confidence that the health service that people need will be there when they need it and that people will be given high-quality health services. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 I have a simple message for the member for Rotorua: she should listen to what the public is saying. A poll reported on the front page of the  
New Zealand Herald 
 asked people whether they believed that the services offered by their hospital had got better or worse since Labour came into Government. In that poll of 1000 people two to one New Zealanders said that health services in New Zealand had got worse—and they are right. When it comes to schools what did the public think? They were asked whether they thought standards in education had got better or worse. Forty-four percent of New Zealanders said that standards had gone down the toilet and 16 percent said standards were better. That says it all. The Government has poured billions of dollars into the bureaucracy but the standard of services for the public has deteriorated and New Zealanders have said “Enough is enough.” 
The most telling part of this Budget was the embarrassment on the faces of the Labour members. I have never seen Government members look so glum while a Minister of Finance delivered a Budget. I remember the very difficult Budget of 1991—the “mother of all Budgets”—and yes it was hard yes it was difficult but there was enthusiasm from the National Government members. The moment that Michael Cullen said the phrase “67c a week” the members of this Government knew that they were dead and buried. They were gone! What is so telling about the 67c a week tax cut in 3 years’ time is that Labour thinks it can spend the public’s money better than citizens can. 
Opposition members are absolutely united on the point that New Zealanders need to keep more of their hard-earned money. [ 
Interruption 
] The member for New Plymouth is chipping in. I know that the people of New Plymouth would think exactly the same thing as the people in this poll. When asked whose tax policy they preferred—Labour’s or National’s—80 percent of New Zealanders said that National was right. What is extraordinary is that the policy has not yet been announced but people know that members on this side of the House are committed to doing the detail and committed to affordable tax cuts. What is even more extraordinary is that United Future members who are the Government’s mates and friends and who have access to the financial data have said overwhelmingly that tax cuts are affordable. That is what Harry’s mates have said. That is what the people who are supporting the Government on confidence have said. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member will use the member’s full name or title. 
Hon Dr NICK SMITH 
: I challenge Mr Duynhoven and I say that his own coalition partner United Future says that this country can afford tax cuts. The most remarkable thing of all is that even Jim Anderton the former Alliance leader supports tax cuts. Well if the Progressives and United Future support tax cuts and believe they are affordable why does Labour not support them? 
Hon Harry Duynhoven 
: Just tell us what you would cut. 
Hon Dr NICK SMITH 
: Mr Duynhoven wants to know what we might cut. Let me give him some ideas. I want to talk about my own portfolio. Do people know what this Government budgeted to spend? It budgeted $100 million to be spent on the Weathertight Homes Resolution Service—$100 million—but not one dollar was budgeted to be spent on fixing a home. That money was to be spent on bureaucracy. Do people know how much the Government has spent to date? When it set up the Weathertight Homes Resolution Service it promised that the service would be speedy fair and cost-effective. Well how cost-effective is this: on average it is costing over $100000 per leaky home just for the bureaucratic process—the mediation and the expert reports. Not a dollar is being spent on fixing a single dwang a single joist or a single stud. I say to the member for New Plymouth that one of the reasons he is going down the tube is that New Zealanders have had a gutsful of that sort of wasted money. Members on this side of the House would have spent the money on fixing homes not on the mad bureaucracy. The members opposite said that the system would be speedy. Michael Cullen said that the Government would speedily fix up this tragic problem for thousands and thousands of New Zealanders. Do people know how many homes the Government will fix? The Government has said that in the next year it will fix 120 homes. Well at that rate it will take 20 years. 
Darren Hughes 
: Baloney! 
Hon Dr NICK SMITH 
: I know that the retiring Government member for Otaki has difficulty with numeracy but if we have 3400 cases and we are settling 120 a year it takes well over 20 years to settle all the cases. That is a tragedy; that is anything but speedy. 
We go to the area of education and again I say to Mr Duynhoven and the member for Rotorua that this Budget gives more money to the education bureaucracy than it gives to schools. That is where this Government’s priorities are. It wants to look after its mates in the Public Service Association and the Ministry of Education. There is more money in the Budget for the Ministry of Education than there is for schools. That is tragic. 
Darren Hughes 
: The member is talking baloney. 
Hon Dr NICK SMITH 
: No it is a fact. I will bet that member—the retiring member for Otaki who is soon to be gone after Nathan Guy’s election—the best bottle of Nelson wine that this Budget gives more money to the Ministry of Education than it does to schools. I ask whether the member will take me on. He is very loud and chirpy. I bet a simple bottle of wine that this Budget provides more for the bureaucracy than it does for schools. That is a statement of fact and he will not take me on. Suddenly he is silent because he knows that I am right. He knows that Labour members think it is more important to give another $45 million to the Ministry of Education than it is to give money to schools. 
Members on this side of the House have a very different point of view. Our view is that money is best spent closer to the children. It is better spent by the schools. It is better spent on the teachers. When I was the Minister of Education I had 1000 staff in the ministry. Do members know that that number is now over 3000? There are over 3000 people employed in the Ministry of Education and we have according to the public the biggest drop in standards. That is one of the reasons we need a change of Government. 
New Zealanders know that the economy has been growing well but they also know that the Government has taken all the money and does not trust New Zealanders with it. Ordinary New Zealanders are saying in their thousands what they want. I have been to Otaki and met Darren Hughes’ constituents and they said that they wanted a tax cut. Yesterday I was in Taupo and constituents there were saying that they wanted a tax cut. Up and down this country people have had a gutsful of a Government that is more interested in keeping the money in its own pocket than letting hard-working New Zealanders enjoy the fruits of their hard work. There will be a change of Government because New Zealanders do not want a nanny State. New Zealanders are strong and individualistic. They want to be able to get on with their lives without the bureaucracy and without the excessive tax that this Government is taking out of ordinary New Zealanders’ pockets. 
Hon Harry Duynhoven 
: Excessive tax! 
Hon Dr NICK SMITH 
: Excessive it is. I ask the member one last question. This Budget provides for a carbon tax of $400 million. How many members here believe that the carbon tax will reduce the amount of emissions? It is a joke. It is nothing more than an excuse for Dr Cullen to get his sticky little fingers into the pockets of ordinary New Zealanders. 
It is time for change. New Zealand needs a fresh start. We should reject this Budget. We should provide for tax cuts because ultimately New Zealanders are far better at spending their money than any incompetent Labour Government. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I guess in my lifetime there have been some memorable Budgets. I remember as a little kid listening on the wireless with mum and dad—or mum and dad were listening on the wireless I was probably not taking a great deal of notice—and I remember it so well: Nordy’s “black” Budget. Some in this House like the retiring member for Otaki are not old enough to remember Nordy’s ‘black” Budget— 
Lindsay Tisch 
: 1957. 
Dr the Hon LOCKWOOD SMITH 
: 1957 indeed! I was in this Parliament when Ruth Richardson delivered the “mother of all Budgets”. But what about this Budget? What will this one be remembered as? Will it be as some in the media have suggested “Cullen’s crumbs”? Some have suggested maybe “Cullen’s damp squib”. I think this Budget should be remembered as one of those really memorable Budgets as “Cullen’s deep dark secret”. Because the question is why on earth did he do it? Why on earth come to this House and read out a Budget that offers working New Zealanders 67c a week in tax cuts? Why would one do it? Why on earth would one insult working New Zealanders like that? 
The new Labour member Lesley Soper is so embarrassed by what Michael Cullen did in this Parliament that she missed her call in this debate. It is most unusual for two National members to speak one after the other to reinforce how disgraceful this Labour Budget is. Labour members are so embarrassed. Do members blame them for being embarrassed? That was the 21st Budget at least that I have heard read to this Parliament and I do not think I have ever heard a finance Minister’s Budget greeted with such derision by the Parliament. 
When Dr Cullen read out the 67c a week tax cut there was just derision from this side of the House. What I guess was derisory about it was not the fact that it was just 67c—and I do not think it does buy a decent packet of chewing gum—but hard-working New Zealanders will have to wait 3 years for it. Does one blame people for treating that with derision? That is why I suggest that this Budget could be remembered as “Cullen’s deep dark secret” because I suspect that he wants out; I suspect that Labour wants out. 
The Government has had a great economic tailwind this last 3 years. When Labour came to office there was such a loss of investor confidence in New Zealand that $3 billion fled the country just like that. The exchange rate dropped to 39c in a matter of days and members will well remember it. Sure that gave our export sector a huge boost and that started to filter through the economy. but just as the exchange rate started to come up again what happened? It was 9/11! Some crazed Arabs flew passenger jets into the World Trade Center. It created a massive wave of immigration back to New Zealand and gave our domestic economy a huge boost. I am picking that Labour does not claim that it did that! I am sure it does not claim to have engineered the disgraceful outrageous attack on the World Trade Center. 
Then just as immigration started to fall off in the last couple of years our commodity prices rose to world record highs for the last 20 years. I guess Labour cannot claim credit for that. Helen Clark tries to control most things but she sure cannot claim that she controls world commodity prices. 
All of that is now changing. The projections are that growth will fall from a 3.8 percent average over recent years down to what? Half of that! I suspect that the deep dark secret is that Michael Cullen wants out. He knows that the massive increase in spending—the amount this Government is spending—is almost 50 percent more than when National left office just 6 years ago. That is an extraordinary increase in Government spending. I suspect that Dr Cullen knows that if economic growth halves he cannot keep up that huge increase in spending. I suspect that the deep dark secret is that Dr Cullen and the Labour Party members actually want out. That is why they insulted New Zealand workers so much with that absolutely insulting tax policy in this Budget. 
Some in Labour have claimed that this Government has been fiscally prudent and that there is no room for tax cuts. That is garbage. Because as I said a moment ago I do not recollect a Government that has increased spending by as much as this Labour Government has done—almost 50 percent in 6 years. What have we seen for that increase in spending? My colleague Nick Smith pointed out the massive increase in spending on health—no more operations and the massive increase in spending on education. I see the member for Otaki shaking his head. There have been no more operations delivered in our hospitals despite the billions more dollars spent on health. As my colleague Nick Smith pointed out in this year’s Budget there is more money for the Ministry of Education in percentage increase terms than for schools’ operating grants. Those are this Government priorities. 
The quality of this spending is breathtaking. In education the Government funds programmes such as COOL IT. It funds homeopathy for pets. There has been a massive increase in wananga funding. I have never seen such fiscal largesse and it has to stop. I think Dr Cullen knows that the deep dark secret is that Labour cannot continue what it has been doing. 
I think this Budget more than any other defines the difference between National and Labour and that difference is this. Labour believes that it knows best how New Zealanders should spend money. Labour believes that it knows best how New Zealanders should run their lives and National does not. National believes that decent New Zealand people deserve the right to stand on their own feet. They deserve the right to keep more of their hard-earned wages. That is why National believes that the Government should take less of the hard-earned wages of the New Zealand people. 
Today Dr Cullen said: “Ah but the Working for Families package is so important. Working for Families will deliver for hard-working New Zealand families.” I want to tell this House and those Labour members opposite like the retiring member for Otaki and the new member Lesley Soper who is too embarrassed to take a call what Working for Families will really do to our hard-working families. [ 
Interruption 
] Darren Hughes should listen. If an ordinary working family—a traditional family of say mum dad and three children with dad working and earning $30000 living in Auckland and receiving the accommodation supplement—wants to earn another $1000 to try to do something for their children then under Working for Families they will get to keep only $228. This Labour Government will take the rest.  
A middle-income family on $40000 would keep only $108 of that extra $1000. [ 
Interruption 
] Lesley Soper should listen. If that family is on $65000 does that new member know how much they get to keep if they earn another $1000 under Dr Cullen’s Working for Families package? They get to keep $48! If by hard work that family earns another $1000 to do something for their children under Working for Families they keep $48. It is not $480 but $48. These figures were provided by the Inland Revenue Department in respect of parliamentary questions. That is why the people of New Zealand want to see this Labour Government gone.  
LESLEY SOPER (Labour) 
: 
 This Budget is one of the reasons that I am proud to stand here as a Labour member of Parliament. It is a strong and credible fiscal document. It is about fairness and inclusiveness about helping Kiwis to build a stake in this country and about securing the future for all New Zealanders. Securing the future actually means improving the long-term economic and social health of New Zealand. That is something this Labour Government can do because our careful financial management has meant we can afford to invest in health in education and in the social services. 
I contrast that achievement with that of the so-called Opposition which cannot come up with any policies for the present let alone the future. It has no new ideas but just promises that do not add up. National’s employment policy and its education and social welfare policies are all just a rehash of its failed policies of the 1990s. The previous speaker—a former Minister—broke every promise he made in the 1990s. Where is there any health policy at all from the National Party? We have not seen even a rehash of the bed-night charges and “CHEs” for supper. No but among the mithering and baloney we do have a host of promises about Government spending and tax cuts that simply do not add up. There is no such thing as a free tax cut. From National there are only indications of slash and burn. What would a National Government cut first? Would it be the 3300 extra nurses the 950 extra medical staff the 1250 extra non-clinical staff the 398 extra social workers the 820 extra prisoner officers or the more than 1000 extra police—or perhaps superannuation as we saw last time? 
We need to remember where Labour started from nearly 6 years ago. We had seen hospitals closing or crumbling away around us. We saw bed-night charges Crown health enterprises the Health Funding Authority and doctors and nurses disappearing overseas. It was a bankrupt market-driven health model. It has taken our Labour-led Government almost 6 years to rebuild the staffing and infrastructure in health which had been undermined by that long-dead National Government. “Let the market rule.” the National members said. As I said in my inaugural speech a large part of the rebuilding in the health sector is down to a change in health philosophy. We are putting the public back in public health by concentrating on a wellness rather than a sickness model providing health promotion and preventive measures and establishing primary health organisations able to offer reduced fees and better public health programmes. I went to a Southland primary health organisation’s annual meeting last week. Those people are looking at positive results better services and a better future. They are looking forward. There is also in our policies an increasing awareness that the disabled have rights and needs that they can contribute and that we should be delivering decent mental health services. So the real deal in this Budget concerns the health and social policies. 
The Budget is providing $969.7 million of new spending on health and $4.09 billion over the next 4 years. That is a huge investment in fair equitable and sustainable public health services. Vote Health is now 20 percent of all Government spending. What does that mean? It means that from 1 July the cost of a visit to a primary health organisation will be lower and charges will be lower on most prescriptions for 18 to 24-year-olds. The Government has already done the same for some other age groups and there are others to come. It means that $74.4 million is allocated over the next 4 years to roll out the next stages of the Primary Health Care Strategy. There is an additional $59 million for disability support services $18.7 million for home-based care services additional baseline funding for care for older New Zealanders—and that is in addition to what the Government delivered for residential care for the aged in December 2004—and $36 million for the nationwide travel and accommodation policy that assists mainly rural New Zealanders to access specialist health services. We have provided new funding of $22 million for implementing the mental health blueprint $70 million for health research $35 million for cancer initiatives funding for the meningococcal B vaccine programme $17.2 billion for up to 4000 extra cataract operations to join the $73 million we have already put in for the doubling of orthopaedic joint operations and new funding to improve occupational health. And we are rebuilding and upgrading hospitals around this country. 
Let me tell members that I spent 4 years as an elected health board member under this Government. During that time we built a new Southland Hospital on time and on budget. Are we proud of that? Yes we are because what we now have is not a crumbling badly designed facility but a state-of-the-art hospital for the 21st century offering first-class secondary hospital facilities and services. Because of the fiscal sense shown by this Government other hospital projects are under way and the more than $500 million allocated in Government funding for those projects will benefit areas like Dunstan the Wairarapa Kaitaia Tauranga Counties-Manukau and Wellington. 
Speaking of buildings I say that one of my other passions is housing. Every New Zealander has the right to a decent-quality healthy home. After the drought years under the previous National Government where we saw State house sales income-related rents and the destruction of the apprenticeship system this Budget is doing great things for the Healthy Housing programme. It will provide $134 million over the next 4 years to build up the Housing New Zealand stock for the continuation of the Healthy Housing programme for a hand-up to home ownership through the brilliant Budget 2005 extension of the Mortgage Insurance Scheme a housing deposit subsidy available through KiwiSaver and for a home ownership education programme. That will help real New Zealanders to get into real first homes and will help with the fulfilment of the Kiwi dream of owning one’s own home. 
This Budget is a brilliant Budget a proud Budget a Budget for the future and a Budget of values: Labour values and Kiwi values. This Budget is the long reviving cool drink of water that New Zealand needs in 2005. 
GORDON COPELAND (United Future) 
: 
 I would like to begin by referring to the workplace savings scheme. In the Budget it is now called the KiwiSaver scheme. United Future welcomes this scheme. New Zealand must lift its savings level. Let us look at the figures. We have negative household saving. We have very high levels of overseas debt—in fact 88 percent of GDP. The important thing to grasp is that all that money is owed by New Zealand households and businesses. In net terms the Crown itself owes nothing. We have a continuing high balance of payments deficit. A price is attached to all that—not only the fact that we are so reliant on overseas investment to keep our economy going forward but also that we now have a risk premium attached to the New Zealand interest rate. 
I was very very disappointed to hear that as a result of the “Economics ‘R’ Us” policy—the “R” standing for Roger and Ruth—in the late 1980s and early 1990s many probably most of New Zealand’s major corporations wound up their staff superannuation schemes. Why? The reason was some ill-conceived Chicago school doctrinaire economic theory that had no reference whatever to the realities of human behaviour. No thought was given to the fact that if we discourage humans from doing something they will probably follow our lead. That is exactly what Roger Douglas and Ruth Richardson did. They adopted a highly theoretical tax / tax exempt situation based on the approach of no jam at all on day 1 but plenty when one retires in 20 30 or 40 years’ time. What a dopey system that is if the idea is to encourage people to save. In other words Roger Douglas and Ruth Richardson between them set out to discourage long-term savings through diversified savings schemes. And can members guess what happened? People stopped saving. It is like night following day. If we discourage something we get less of it. 
The KiwiSaver scheme therefore is the beginning of a reversal of those truly disastrous policies and it is well overdue. I wholeheartedly congratulate the Government on at least—at last—acting to reverse the trend and take some initial steps to encourage savings. Before leaving the KiwiSaver scheme let me mention a couple of aspects of it. First of all the Minister told United Future in his briefing—it was not in the Budget papers—that the KiwiSaver scheme will enable people to use their savings to repay mortgage debt. That is a vitally important component of the KiwiSaver scheme because obviously people who have mortgages are way better off to repay their mortgages than to try to save money. With a mortgage interest rate of 7.5 percent one actually needs to earn about 12.5 percent pre-tax in order to have about 7.5 percent after tax. Such returns are simply not available so the wise thing to do is always to repay one’s mortgage. If that mechanism is put in place—and I support the Minister’s resolve in that regard—it will actually ensure that people can stay in the scheme and will be encouraged to join it. 
The second aspect of the KiwiSaver scheme is the housing deposit point initially suggested to the Government after the Harris report came out. I make the point that the Harris report was completely silent about using the KiwiSaver scheme to put a deposit on a first home. That suggestion was put to the Government by the United Future party. It has been taken up in this Budget to the extent that a Government subsidy of up to $5000 per saver will be granted to people who have been in the scheme for 3 years. Potentially that is up to $10000 for a couple to help them to buy their first house. We believe that is a very very worthwhile and long-overdue initiative. We come back to the same point: if we encourage something we get more of it. If we encourage people to buy their first house they will be able to do that. Let me make this very very clear: it is United Future’s policy to see realised the old Kiwi dream of as many New Zealand families as possible being able to have the security of owning their own home. It is the route to an ownership society; it is the route to long-term security. 
There are also some other initiatives that United Future took to the Government concerning savings. First of all we asked that the earnings on superannuation funds be taxed not at the flat 33 percent tax rate which overtaxes 45 percent of all savers but instead at the marginal tax rate of the saver. If we lower the tax rates that will obviously encourage savings. I am pleased to say that the Government accepted that bid and it is included in the Budget. The second thing we suggested to the Government—in line with Craig Stobo; we were not the only ones to suggest this—was that the capital gains tax on domestic share investments through managed funds be abolished. Again the Government accepted that recommendation and that is also a very very worthwhile step forward. We not only have to save but also to ensure that our savings go into high-quality investments. It is also a problem in New Zealand that so much of our savings has gone into low-quality investments. One of the reasons is that no capital gains tax has been put on residential property investment but a capital gains tax has been put on domestic share investments through managed funds. That is crazy. It is an anomaly and we are very very glad to see the back of it. 
I want now to talk about the so-called deep dark secret concerning tax bracket adjustments for the effects of inflation. As is well known in this House I have banged on about that matter for 2½ years including last year when I brought into the House an amendment to a tax bill providing for an adjustment to the tax bracket—a 13 percent adjustment I might say—which I wanted to take effect from 1 April 2005. At the time the Government vetoed that but I am glad to see that at long last—although it is too little too late—it has acted on it. This is actually an historic moment that breaks the logjam with regard to fiscal drag. Never before has a New Zealand Minister of Finance committed to a regular adjustment to the tax brackets to offset inflation. The fundamental unfairness of fiscal drag has been pointed out by many people since the days of Rob Muldoon when he cynically used high inflation rates to boost his coffers at the expense of taxpayers. He was caught; he was found out. Yet in all the Governments we have had since whether they were Labour or National Governments no adjustments to the tax brackets have ever been made except once and that unfortunately lasted for just a little time. It was when my leader the Hon Peter Dunne was Minister of Revenue that we last had a tax bracket adjustment. Unfortunately however when the National - New Zealand First coalition Government came in it reversed that very sensible step. 
United Future will adjust the tax brackets by $5000 from 1 April 2006—from $38000 to $43000 and from $60000 to $65000. Under United Future no tax at all will be paid on the first $3000 earned by all taxpayers. In combination that will lead to a saving of $11.25 per week for those on $20000 of $16.44 a week for those on $40000 and of $30 a week for those on $65000. However the jewel in the crown under the United Future tax policy is income splitting for couples with dependent children. That yields huge gains. For example a single-income family on $45000 will be better off by $40.67 extra per week. At $55000—which is the income bracket of the Gilbert-McLachlan family in Waihi who featured in the media last year—families will be better off by $66.63 a week and at $80000 which is about the average income for a household headed by a couple in New Zealand the amount will be a massive $154.62 per week. Those are fundamental gains; they are very real gains for New Zealand families. It is fundamentally unfair that although self-employed people in farming and business can already income-split for taxation purposes those people who earn salaries and wages and pay PAYE cannot do that. 
Also income splitting is the answer to the problem of high marginal tax rates alluded to earlier by Lockwood Smith. John Key has done some tables on that. There are high marginal tax rates but if we put income splitting into the equation the problem disappears. So that is also the answer to the high marginal tax rate problem. Income splitting dovetails in beautifully with the Working for Families package. It starts at about the middle-income bracket and goes up. It would be a very very positive step forward for New Zealand families. Unfortunately United Future is the only party in this House that is yet proposing that policy. 
Hon MARK BURTON (Minister of Defence) 
: 
 What a pleasure it is to take a call in this 2005 Budget debate—I was going to say it was the 19th Budget of Michael Cullen—because never ever have the contrasts been so clear and never have the alternatives been so stark in the area of defence. This Budget is all about maintaining core Labour values. It is about maintaining a strong long-term credible fiscal stance being fair and being inclusive. It is about helping Kiwis to build a long-term stake for themselves their children and their grandchildren in the future of our country and it is about putting in place and building on conditions for growth. 
This Government is committed to securing a future for future generations of New Zealanders—and we mean all New Zealanders not just the handful at the top of the pile who would get their hundreds of dollars a week in extra tax breaks from the likes of John Key at the expense of so many other things in the economy. I will come to a few of those things that would pay for John Key and his mates at the top of the pile to have the big tax cuts. 
I am proud to be part of a Government that has continued to make the long-term investment in those things that Kiwis care about—not only for themselves but for their neighbours and for their kids. Labour’s long-term investment in our health system is $4 billion of additional spending over the next 4 years. That will be pumped into a health system that is getting better and better in terms of the provision of services—reducing the times that people are waiting for key procedures despite an ageing population and giving our older people access to the joint surgery and cataract operations that are so important to their quality of life. 
But as the Minister of Defence I will spend most of my contribution talking about the good news for defence in this Budget. It comes after 5 years of rebuilding from the wreckage left behind by the negligent National Government of the 1990s. That wreckage started with the “mother of all Budgets” which thankfully many Kiwis have forgotten. They have blanked it out of their memories because it wreaked so much chaos and suffering on New Zealanders and New Zealand families— 
Georgina Beyer 
: We’re talking about psychological damage here! 
Hon MARK BURTON 
: That is right—psychological damage. Along with so many other parts of the New Zealand economy and along with so much of the infrastructure of support to low-income families and the vulnerable defence took the hit too. Over $112 million in that Budget was stripped out of the defence budget and for years afterward the decline continued—more and more was stripped out. Occasionally a promise was made that the National Government would do something but there was never money there. 
I will give members an example. Members on the other side of this House bang on about the C130 upgrade that they were going to do. I challenge any National MP to stand up and point to where the funding was ever voted or allocated for any such project. Like so much of what we have seen more recently that was hot air—talk but no commitment. What we have seen each year since Labour became the Government is money pumped into pay increases for personnel. In 2000 we put in place for the first time a coherent defence policy framework. In 2001 we put in place a defence statement that defined the structure of our forces. In 2003 we put in place a 10-year development plan to rebuild for the first time in this country in a coordinated cross-service way a defence policy and structure based on a rational policy framework. Then we put in place a long-term funding package built into a cross-service coordinated acquisition programme to build up the equipment across the three services that are required for a coherent defence force. 
In addition to that $3 billion commitment made over the first 5 years in this Budget there is $4.6 billion of new expenditure. With the exception of $209 million that is additional capital for the back-end of the long-term development plan for acquisitions almost $4.4 billion dollars—$4380 million—will go into defence over the next 10 years to increase personnel numbers enhance training and retention and maintain and develop the infrastructure so much of which was neglected and run down right through the 1990s. 
We are paying the price for that now. This Government has made the commitment to fix the mess left behind by the former National Government. We are increasing the stocks and reserves of equipment and ammunition. Anyone who has an interest should go back through the annual reports of the Defence Force. Some of the platitudes that we hear uttered from members on the other side of this House about some of the treasured acquisitions and capabilities that they were allegedly so committed to could not operate year after year because the defence force did not have the means to get in the air and did not have the ammunition to practise with. That was the legacy of the 1990s for this country. This Government set about fixing it from day one— 
Georgina Beyer 
: As it usually has to. 
Hon MARK BURTON 
: And we have continued to do so as—as the member says—we usually have to. Labour is always having to fix things—it is in the history of this country. Right through the last century Labour Governments have had to come in and fix up the neglect and shambles left behind and nowhere more so than in defence. I challenge the members opposite not to whinge and whine and not just to take cheap shots and flicks at the men and women who are our defence force when because they push themselves and their equipment to the absolute limit of their capability things occasionally break. Well that is not a surprise if they push a piece of equipment so hard because they are out there doing humanitarian aid and recovery work. 
When something goes wrong what does the defence force get from the members opposite? It does not get support. Those men and women are out there putting their lives on the line working to the absolute limit and pushing themselves and their equipment and they get cheap nasty political point-scoring. No other country does it. During the tsunami crisis every country doing airlifts as part of that humanitarian effort had planes with “unplanned maintenance issues” as our engineers like to call them—in other words something broke and they had to fix it. They were not sitting in a nice international airport with all the engineering kit lined up where they needed it; they were out in very difficult circumstances. Did we hear a single word of cheap political point-scoring from the US the Australians or the Canadians? There was not a word. Only New Zealand Tory politicians stoop to that level—they put down their country and put down the men and women who are out there actually doing the work we should be so proud of. Our defence forces are earning our country a high reputation everywhere else in the world but back here they get “quipped” and are subject to cheap nasty political point-scoring. 
What does National offer in return? I shared the alternative with the House during question time this afternoon. National has had 5½ years of quipping and of showing all sorts of criticism of what this Government has done with billions of dollars of investment and a strategic plan for defence. 
Darren Hughes 
: So what have they come up with? 
Hon MARK BURTON 
: Well Dr Brash said 4 weeks ago that no National did not have a policy at the moment but that it would have one before the election. Well it does. I have to say that the National members made progress and within 10 days they had their policy and had announced it. Dr Brash came through. His defence spokesperson announced the policy on National Radio—I was in the room at the time. He said that National will have a “Hone hui”—a bit of a talk—after the election. After nearly 6 years of planning National will have a review. National will ask people in the defence force what they want and it will get it for them. National does not know why or what it will do but it will have a “Hone hui”. That is the sum total—a review. New Zealanders can go to bed tonight feeling safe that if they vote for a National Government they will have a review to defend them. 
I say that this country deserves better. I know that it is a hackneyed phrase but there was a once-great National Party whose members would have been shamefaced to come in here or go to a radio station and say that its defence policy was a “Hone hui.” Labour can do better and we are doing better. New Zealanders deserve better and that is why they will not have a bar of a Tory-led Government. 
R DOUG WOOLERTON (NZ First) 
: 
 It always saddens me to speak in the Budget debate because there is never anything for the people in this country who earn the money. I know that everybody assists our exporters but the Government does not and that saddens me. 
I am looking at the Associate Minister of Agriculture the Hon Damien O’Connor who is sitting across the aisle. He is a man from the land. He is one of only two such people that the Labour Party has. He was brought up on a farm and he understands farming. He comes from a tough area of the country where dairying in particular is making great strides. I held out great hopes for him. I thought thank heaven above Damien O’Connor will surely get something for our downtrodden farmers. 
But what did I see? I searched the Budget. I looked through page after page late into the night. My wife had to wake me and send me off to bed. I went through the Budget once and then through it again. Could I find anything that would assist farmers? I found nothing—not a word not a sentence not a paragraph nothing. So I am deeply disappointed in Damien O’Connor. However the one thing going for him is that he is relatively young. I would hope that we can keep working on this Minister—that is if he stays there of course—and hopefully he will come up with something better in the future. He knows as I know that it is agriculture forestry and all of those things that earn the money for this country. It is those things that set the standard of living for the 4 million point whatever people we have in this country. 
People could be forgiven for not knowing this fact but this Government has overseen a time of record commodity prices record prices for dairying record prices for wool sheep meat and so on and so forth. Prices are being wrecked at the present time by the high dollar and high interest charges and I had hoped that something would be done about that in the Budget but there was nothing to ameliorate that problem either. Our exporters cannot compete on world markets with the dollar up around US70c-odd. We will see Fonterra with a lower price and 25 percent of our exports are right there going through that one successful company. Right across the export sector we are seeing the dollar wrecking our exports and making them uncompetitive. What would it be like if we could turn that around and have a competitive dollar that would admittedly make things more expensive to import but which would certainly help with our exports which is what guides our standard of living? 
The proof of what I am saying was in the March statement that said we now have a $9 billion trade deficit with the world. That is just staggering and it would be bad enough and serious enough if it was at a time of low commodity prices or some oil shock or some other crisis that might be around that this country has seen over past years but it is doubly serious when it is at a time of record commodity prices and we will be talking about that in our campaign. One would look to the so-called “farmers’ party” of past years the National Party to be yelling and screaming about this but we do not see that either unfortunately. 
We hear National members talk about tax cuts. My lasting impression from the other night was of one very dashing Mr John Key in front of a particularly handsome house with a particularly inviting swimming pool—many many millions of dollars worth I am sure—telling the poor average middle-class people of this country that the answer as far as the National Party was concerned was tax cuts. While I am sure that for Mr John Key with his flash house his flash car and all the rest of it the answer is tax cuts as far as he is concerned but for the farmers I am talking about the answer is not tax cuts. First one has to earn the income then one can decide what to do with it and tax cuts are a part of that. It is the dollar that is crucifying the farmers in this country at the present time and tax cuts will not fix that. 
Not only are tax cuts being talked about but our “friends” in the ACT party are running around stirring up apathy in the provinces talking about access issues. I must say that when and if access issues come before Parliament we will have things to say about that too. But the bill is not even before Parliament and we have ACT rushing around ranting and raving about access to streams saying that it will be an election issue and that people will be running all over farms. I am sure that will not be the case. All that the members from those two parties which profess to represent farmers in this country can do is rave on about access issues and tax issues when the real issue is the earning of the dollar which is not only good for farmers but is vital and important to the living standards of every single person in this nation. We simply cannot go on with a situation whereby the dollar or the circumstances within a country are making our products uncompetitive. 
I know that it is tempting to talk about issues surrounding the cost of doing business the Resource Management Act and all of those sorts of things and from time to time we will talk about those issues as well—in particular my colleague Jim Peters is attending to those issues—but first one has to earn the money and that is what I am talking about tonight. In this Parliament we pay far too little attention to those things that earn the money for the country. We can put off the day when the chickens come home to roost we can postpone that day we can gloss over that day we can borrow and we can do all sorts of things but at the end of the day when we are in a situation of a deficit and we have a situation where the imports in this country are far too great in quantity and in cost it is back to the farmers that we will go for the money to pay for not only our living standard but also to pay off past debt. What will we say to the farmers then? Will we say to them that we have appreciated them in the good times? Will we say to them that we will make things better for them? Will we say to them that we will give them a tax incentive or a tax break on their machinery? Will we increase the rate of write-down on their plant and equipment? No we do not say any of those things in this 2005 Budget. The 2005 Budget is about expenditure; it is not about earning money for this country and to that degree it is irresponsible. 
TIM BARNETT (Labour—Christchurch Central) 
: 
 Budgets come and Budgets go and I judge each Budget both as a Labour member of Parliament and as the elected representative for Christchurch Central. From both of those viewpoints I am very happy indeed with the 2005 Cullen Budget. I will give just 10 reasons why and in doing that I will credit the National MP who said earlier that this Budget defines the difference between Labour and National. So it does and so it should and that is why I as a Labour MP like it so much. 
First this Budget is honest. That is healthy for our democracy. Budget 2005 does not pretend that x equals y or that good public service and big tax cuts are compatible. If the Opposition combined its incessant calls for lower taxes with the other side of the coin—if it explained that tax cuts mean fewer hospital operations worse-equipped defence forces larger school classes—I would be the first to commend its honesty. It does not do that. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
TIM BARNETT 
: It is an inspiration to stand here and see members stream into the House with appetites whetted by the first 1½ minutes of my speech and looking forward to the last 8½ minutes. I was just giving the House 10 reasons why I think this is such an excellent Budget. 
The first point I was making was that the Budget is honest at its heart. It does not pretend that x equals y and that good public services and large tax cuts are compatible. I was challenging the Opposition to explain what it would cut in order to afford long term the tax cuts it is now promising. Indeed National has made specific costed new commitments that would mean about 12.5 percent growth—over $5 billion—in current Government spending. On top of that National loudly and incessantly bemoans what it sees as underspending in other areas while at the same time it promises tax cuts of something over $1 billion. It simply does not add up. It is voodoo economics indeed. 
Second this Budget is visionary. It recognises that most of us have aspirations for our retirement from paid work that will not be met just by State superannuation. For the first time through the KiwiSaver initiative this Budget gives every New Zealander the right to save and the easy ability to do that. It also recognises that for many people homeownership is an unaffordable dream. It offers a way forward to the many people in my Christchurch Central electorate who are caught in that cycle of expensive inadequate and insecure rental property. 
Third this Budget will improve the health of my electorate. In 1999 Labour inherited a truly dreadful legacy of high-cost primary health care and free hospital care. Primary health organisations are the key tools to transform that. National started by opposing them and now it has flipped. This Budget includes $1 billion of new money for health—$250 for every person in our nation. I was also delighted that the Minister of Finance noted that health spending here and worldwide is growing faster than wealth creation. I welcome the root and branch examination of how we as a nation will handle that. 
Fourth this Budget is good for Maori. Christchurch Central contains the highest number of Maori of any general electorate in the South Island. Maori are on average younger and are more likely to be parents than the general population. The plans in the Budget for early childhood education school spending health economic development and Working for Families are particularly relevant to the Maori community. This Budget is a winner for them. 
Fifth this Budget is good for the arts. My electorate contains the nation’s best collection of heritage buildings and also its premier art gallery. Our museum is more visited than that of Auckland. All of that requires public investment to match and incentivise private support. Under Labour that has happened. This Budget expands support for significant new and renovated public buildings and also deepens the grassroots partnerships and investment from which have emerged Canterbury winners like Scribe and Yulia. 
Sixth this Budget is good for older New Zealanders. New plans include reform of the driving test. Older people have understandably a real fear of losing their independence and the current testing system does not lessen that fear. Also Budget 2005 puts much more money into rates rebates which is particularly helpful for older people. We should compare that with National’s Budget in 1999—a sad end to an embarrassing Government. That Budget presented a double whammy of tax cuts plus superannuation cuts. That still haunts older people in my electorate. Labour reversed the superannuation cuts in 2000 and since then the “Cullen fund” has become the guarantee for us all to have a secure future in old age. Of course National started by opposing the fund and now again it has flipped. 
Seventh this Budget is good for New Zealand families who are seeking security—not the security of a handful of dollars coming from a tax cut but instead the security of Working for Families which means real new income for families in need. That scheme is a perfect illustration of the difference between Labour and National. Labour puts the money where it is needed; National wants to use it as a reward for earning a lot. The security that comes with real jobs is vital to people in my electorate. In Christchurch Central the number of people on the unemployment benefit has dropped from 7100 in March 2000 to 2100 in March 2005. It has gone from 7000 to 2000 in just 5 years. The number of people on the domestic purposes benefit has dropped from 4400 to 4000. In the last year the number of people on the sickness benefit has also dropped and the number on the invalids benefit has risen just a little. Overall there has been a dramatic turn-round. Each of those falling numbers means that families are better off they have more pride and happiness and they are saving the Government from spending. 
The other side of security is safe communities. Again on every count Labour is winning. Recorded crime is down. The homicide and murder rates are down to half the level of the late 1980s and early 1990s the burglary rate is down and crime resolution rates are up. Budget 2005 lifts the police budget to over $1 billion per year. Certainly more police resources are needed in some areas but surely a time of falling crime is a chance to put the money into prevention better education and early intervention. 
Eighth this Budget is good for refugees and migrants. I well remember in my inner city electorate the stories of the 1990s of people attracted to New Zealand under false pretences and given not 1c of support. Now we offer settlement education more understanding of the traumas of migrating across the world and specialist health and job support. Why set people up to fail when we could—and should—set them up to win? Budget 2005 builds on our success in that area. 
Ninth this Budget is good for education and training. Since 1999 Labour has increased school funding by an average of $348 for every child—one-sixth growth in real terms. We have 2700 more teachers than roll growth demands. Budget 2005 adds to that. In early childhood education the story is inspirational. Sixty-five new childcare centres are funded in this Budget and from July 2007 all 3 and 4-year-olds will be eligible for 20 hours of free community-based early childhood education. 
Tenth and last this Budget continues the good story. Why offer tax cuts in election year—the oldest trick in the political textbook—when we all know that clever Government spending can bring help to those in most need? Private sector provision of basic services which is at the heart of National’s solution is dreadful for many delightful for the fortunate few and not an answer to any question I have heard my constituents asking. Margaret Thatcher once claimed that her greatest achievement was to reform the Labour Party in order to bring it closer to her vision of the world and to move the centre of politics in her direction. Just occasionally National shows a rare flash of common sense in supporting what Labour is doing but true to type its response to this Budget shows just how hard our task is and just how unreformed National is at heart. I commend this forward-looking Labour Budget to the people and to this House. 
Debate interrupted. 
Amended Answers to Oral Questions 
Question No. 7 to Minister 
Hon RICK BARKER (Acting Minister of Internal Affairs) 
: 
 I seek to correct the record in respect of my answer to question No. 7 today when I advised the House that the current rate of claims to the Weathertight Homes Resolution Service is 71 per month. The figure of 71 should have been in respect of the month of May and of part of the month of May—up to the 16th. I withdraw the associated comment I made with that. 
Budget Debate 
Debate resumed. 
 JUDITH COLLINS (National—Clevedon) 
: 
 We have heard from Mr Tim Barnett who said that he was proud of Labour’s Budget. My colleague Dr Wayne Mapp said that he must be the only one. But no I read the other day that Kerre Woodham said David Cunliffe telephoned her radio show on Newstalk ZB and made the most extraordinary toadying comments about the Budget. Kerre Woodham is normally a bit of a lefty but she said that she was nauseated by this. How could this man even as a Minister in this Government possibly say that 67c a week in 3 years’ time will keep the public happy? Why does he not just say “Let them eat cake.”? In fact what he said was “Let them chew gum.” because that is all people can buy with 67c a week. 
Mr Barnett has been talking on and on and on about how spending more money gets better results. We all know that that is absolute nonsense. Members should look at the health spending. Under this Government it has gone up about 50 percent from the days of 1999. What has happened to the number of operations performed in the public sector in that time? It has gone down or occasionally it has stayed the same. 
Hon Marian Hobbs 
: What happened to nurses’ wages? 
JUDITH COLLINS 
: I am not one of Labour’s members. I can behave myself in the House. What has happened to nurses wages? Nurses are only now starting to get the pay that the Labour Government has been promising for 6 years none of which was factored into the health budget last year. That is what has happened. Nurses have been underpaid for years. The Government has promised them money for 6 years and it is only now starting to get the pay system working. That is what it has done. Unfortunately the poor old nurses have been the ones to miss out. The Government let them wait and wait and wait while it built up the bureaucracy in the Ministry of Health so that the bureaucrats could push around their little pens and the Government did not give a toss—the Prime Minister has used that term so I will too—about the poor old nurses at the coalface. What about the nurses in the private sector such as the ones working in rest homes? We know that the great reward that Marian Hobbs is talking about has not gone to them. We know it has not. 
Let us talk about some of the waste in the health sector. Let us talk about the number of Treaty of Waitangi indoctrination courses that the nurses of Otago are forced to go through. Let us talk about the indoctrination into the Treaty of Waitangi that midwives have to go through. Midwives from Australia cannot practise here unless they get themselves indoctrinated with the Treaty of Waitangi. We know what is happening to the money and it is not going to where it needs to go. 
The people of Otago who find themselves in hospital have to have pillowcases that are a different colour to sheets. That is so that they can be washed separately because of protocol. Jill Pettis looks very puzzled. The  
Otago Daily Times 
 ran that story on its front page and I am sure that as the chief Government whip she would know about it. What about the money wasted on that sort of nonsense? 
Let us talk about education spending. This Government talks ad nauseam about how much money it spends. What about seeing some outcomes for our people? Let us look at Te Wananga o Aotearoa. When National was in Government the wananga was getting $4 million a year. That was fair enough. Last year the Labour Government gave it $239 million and the wananga is still going broke. The wananga had the Government’s own commissioner on the board for 18 months and it is still going broke. The Government simply attacks the people running the wananga. It should be looking at the Ministers who were in charge of it. We know who was in charge until he had it removed from his responsibility—Steve Maharey. 
Dr Wayne Mapp 
: Smarmy. 
JUDITH COLLINS 
: I understand that the staff called themselves “Smarmy’s Army”. He let it go just as he did with the Families Commission. He just let it go and the wananga could do whatever it wanted. This Government has been conning people particularly the media to think that spending more money means getting more. That is not true—we have got less. That has been shown over and over again. Teachers in decile 1 schools are saying that they cannot get even the most basic things for their kids. They need better reading-recovery programmes. The few things that this Government has done for kids started with National—for instance introducing social workers into schools. The Government has only now started to increase the numbers a little bit. Who brought that policy in? National brought it in. The Government is talking all the time about giving our children Family Start. Who brought in concepts like that? National did. 
What is in the Budget that is so wonderful? There is nothing that is so wonderful. Here are some examples of quotes from the media about the Budget: “What we knew was that there was going to be this deep dark secret. We knew there was going to be a deep dark secret because Mike Williams the President of the Labour Party said so.” The deep dark secret of the Budget. It was a deep dark disappointment because it was 67c a week for working New Zealanders to get in 3 years’ time. It was worse than an insult; it was a disgrace and every commentator up and down the country whether that commentator was left right middle or any other form said what a disappointment it was. We can see what has happened to Labour—it has absolutely lost the plot. Has there ever been anything like Dr Michael Cullen in the last few weeks? He has lost his temper in Parliament—he lost it again today. He has lost his temper at the media accusing one TV station of doing something naughty and then apparently it was another TV station. He has been losing it all the time. The reason he is losing it is because he knows that this is just about the worst Budget that anyone has ever seen. 
We were sitting here listening during the Budget speech and waiting for the big one. We were wondering where the big one was and what the Government would do to show some vision. What did we find? We found that the depreciation of laptop computers can now be reduced a bit more quickly. I sat there reading the Budget speech and listening to Dr Cullen and I turned to my colleague Dr Wayne Mapp and said: “Laptop computers will be able to be depreciated at a quicker rate. My goodness isn’t that a big one.” 
Dr Wayne Mapp 
: It’s like a tax lecture. 
JUDITH COLLINS 
: Dr Mapp said it is like a tax lecture. I asked Dr Mapp whether he could imagine George Bush Margaret Thatcher or Tony Blair saying in their big Budget speeches: “You’ll be able to depreciate your laptop computers. That’ll bring you round.” It will not and this Government hates the fact that people like John Armstrong from the  
New Zealand Herald  
have termed this Budget the  
Titanic  
the  
Hindenburg 
—one of the great disasters of our time. John Armstrong is a very experienced commentator and he knows a thing or two. He certainly knew that this one was a booby. It was a booby from the time that Dr Cullen refused to have his photo taken with the Budget as it was coming off the press. That was the telltale sign that Dr Cullen had been rolled by his own caucus. He was forced to go ahead with this pathetic little tax cut to try to make it look as if the people of New Zealand were going to get something. But of course all he got was the big booby prize and he had to front it. 
Poor old Dr Cullen he must be very disappointed. My goodness he lost his temper today when he was put on the ropes by John Key. He lost his temper time and time again. This is one of the most appalling Budgets of all time. We all remember the talk about the “black” Budget. This is the “blank” Budget. It is a blank Budget from a Government that has lost all idea of what to do other than spend spend spend. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 That was a very disappointing speech from the previous speaker. I know from her oration skills in this House that she is capable of better than that. She needs to go back to some of her research people in the National Party research room. I would not rely on the research notes if I were her. I am sure she would have done much better if that speech had really come from her heart; in my view it lacked a degree of passion. 
I am very very proud to be part of this Government and I am certainly proud to rise and speak in support of this Budget. I want to make some observations. The Budget builds on the very strong fiscal position the Government has created. The cash surplus for the current year is forecast to be $2.4 billion. This reduces however to a cash surplus of $30 million for 2005-06 but changes to an average cash deficit for the following 3 years of about $1.9 billion per year. It is obvious if one looks that there are no magical rainbow sums in the kitty. 
In my view we are very lucky to have a very prudent and cautious Minister of Finance. Notwithstanding his prudence and caution there have been huge gains in this Budget for a number of sectors. For example this year’s Budget commits additional resources to heath which will total over $1.9 billion per year by 2008-09. A good part of this reflects—meeting in full—the costs of maintaining real population-adjusted spending for the health and disability sector. 
In terms of education it is really good to see that this Government is increasing its investment in early childhood education by $152 million over 4 years as it continues to deliver on its commitment to making early childhood education more affordable more accessible and of the best quality possible for all New Zealand families. Our commitment to more and better-paid teachers in our schools continues with a total investment of $1.43 billion since the 2004 Budget. 
One of the areas that I think we need to talk more about in this country is the whole issue of saving particularly for retirement. I believe that in time the KiwiSaver scheme announced in this Budget will be seen as being equally historic in a range of ways as the so-called Cullen fund. The new KiwiSaver scheme is intended to begin operation on 1 April 2007. It is designed to help New Zealanders save and build a stake in their country. It is designed obviously to be a personal supplement to the New Zealand Superannuation Fund. KiwiSaver will be linked to a new scheme to assist modest to middle income families with a deposit for their first home. I remember hearing people reflecting on the assistance they received in the 1950s and 1960s to make that magic and important start towards home ownership. Those people who are KiwiSavers for a minimum of 3 years will qualify for an additional subsidy of $1000 a year up to a maximum of 5 years at the time of the purchase of their first home. This is an excellent Budget. 
Let us talk about some more good news. There will be $173 million in funding over the next 3 to 4 years for police which means that we will be adding to the record number of police that this country now has. 
It is very interesting when we talk about defence. I reflect on a question that a member of Parliament—myself—asked Mr Burton today on defence in terms of the recent announcements. I am very pleased to see that extra money will go towards purchasing vital capital equipment for our defence budget over the next few years. It was really interesting that there were no supplementary questions from Opposition members around the total amount that this Government plans to spend on defence. There was one question from the Opposition member from Northland about Mr Burton’s history and his passion for world peace—I do not think that is a major crime; I think that shows great foresight in terms of what we all want to achieve—and also a much more creditable question from a New Zealand First member about the whole issue of pay and conditions for defence staff. But no question was related to the total defence budget and defence package. Quite clearly as the Minister indicated Opposition parties are now rewriting their defence policies on the back of a postage stamp because the wind has absolutely been taken out of their sails bearing in mind their scandalous record of defence expenditure during the 1990s. 
I also take the opportunity to highlight how well the Waikato has been doing under this Government. Of course there has been more good news for the Waikato in terms of the Budget particularly in terms of the roll-out of the Working for Families package. I mention two projects that would clearly be targeted should there be a Brash-led Government. One is the Waikato technology park which my colleague Dianne Yates played a leading role in promoting. Considerable central government money and input in partnership with local government and industry was provided for that particular project which would be knocked on the head if the Opposition were in charge. More recently the Prime Minister and Jim Anderton came for the roll-out of the aviation park which has an aircraft manufacturing component a flying school that has come out from the UK and a whole range of airport and aviation-related industries. Again that has recently received assistance from New Zealand Trade and Enterprise grants. 
If we look at the Opposition promises of tax cuts—from the National Party in this case—we see that they will clearly have very very little impact when they actually roll out to average working families. What National members are not telling us is that they will be paying considerable attention to the Working for Families package. Obviously they are not telling us the whole story. How on earth they can balance a series of tax cuts with the spending plans and promises they have made is extremely interesting. 
We on this side of the House wait with considerable interest and focus to see the so-called alternative Budget that National members are to put up. They said there would be tax cuts by Christmas. Then of course it dawned on them that that could have a significant impact on mortgage rates etc. and now it is tax cuts by Christmas—but maybe not or probably not. Who knows when and in what quantity the tax cuts will be. Yes there will be certainly be tax cuts for some of their more wealthy friends but there will absolutely not be significant tax cuts for working people in this country. That is not “maybe not”; it is “absolutely not”. 
I believe this has been a very responsible and positive Budget. 
Ron Mark 
: A Scrooge Budget! 
MARTIN GALLAGHER 
: A Scrooge Budget—no. A responsible Budget—yes. It is a responsible Budget which will not squander and mortgage our children’s future. It will not go back to the Muldoon era when it was spend borrow and hope. 
We will not be part of a grubby grotty election bidding auction because we care too much about this country. Dr Cullen is to be commended for introducing a very fiscally responsible and excellent Budget. 
Dr MURIEL NEWMAN (Deputy Leader—ACT) 
: 
 I would like to recommend to the previous speaker that he takes his pills. He seemed to be getting very very het up. I would like to start by saying that I fully support the motion by the leader of ACT Rodney Hide that this House has no confidence in the Labour minority Government which has provided no vision or ambition for New Zealand no 10-year plan to make New Zealand a freer more prosperous and proud nation and no policy to drop the excessive tax burden on hard-working New Zealanders. That really does sum it up. When we look at the Labour Budget in election year 2005 we see that it really is a wasted opportunity. Where is the ambition for New Zealand? Where is the vision? Where is there any plan at all? The reality is that this country is being run by a pack of hopeless Labour politicians who probably could not run a proper booze-up in a brewery. That is the reality and the Budget simply confirms that stance. 
The Budget shows that after New Zealand has had the best economic conditions in a decade its growth will drop to an average of 2.9 percent over the next 4 years. We all know that in order to raise our standard of living we need to be growing at over 4 percent but this Government has managed to mismanage the economy to such an extent that this country will start to sink further and further down in terms of our standard of living. Our trading partners average growth of 3.4 percent and other countries around the world are managing to go forward. Why is New Zealand going backwards? Well I am sorry but the finger has to be pointed at the Government. It sets the policy it sets the tax rate and it sets the spending promises. The Government is directing this country and it is doing that badly. We are slipping behind other countries and the legacy that Labour will leave when it is defeated at the next election is one of wasted opportunity. Labour took a great little country and has run it down. 
The reason why Labour does not know how to run this country properly is that it is anti-business. It has not figured out that small business is the engine room of any economy. Small business creates the jobs and it creates the growth. Labour during the 6 years it has been in power has essentially killed off enterprise and killed off the dynamic growth plans and ambitions that small business had through things like the destruction of labour market flexibility. It is too hard to employ people now because if things do not work out the employer cannot get rid of the employee. The Government has introduced stealth taxes—some 33 during the period it has been in power—which have added enormous costs to doing business. A tax like the petrol tax is spreading costs right through the whole economy. Of course in the Budget Mr Cullen signalled that we are going to have a carbon tax which will add to our costs as well. There are silly regulations at which small business just throws up its hands in horror and basically asks what is coming next—and it hesitates even to think about that. 
John Tamihere did the country an enormous favour when he explained to us that the four forces running this country are the forces in the Labour Cabinet made up of feminists Maori unionists and gays—people who are looking at those agendas. Now those terms are not my terms; they are John Tamihere’s terms. He was a Minister who sat around the Cabinet table and he said essentially that the feminists who are anti-business and anti-men want to get women out of the home and into the workplace. It is quite a good idea to get more people into the workplace but why did the feminists not pick on the welfare recipients? If they are serious about getting people back into the workplace to fill the shortage gap then something like 200000 able-bodied New Zealanders who are on the dole or on the domestic purposes benefit could be helped to move back into the workforce over time. Instead of picking on those people the feminists have happened to pick on mums at home who are trying to bring up their children. 
Mr Tamihere talked about Maori and he said that the privilege being introduced by the Labour Party was at every level. There are now elite groups in communities throughout New Zealand who are running the country but ordinary Maori do not like that. Ordinary people who are working for a living do not like elitism and they do not like to see privilege. Many Maori on benefits see no benefit from Labour’s policies at all. John Tamihere talked about unions and about how they had a strong agenda. I predict here that if Labour does happen to fluke it and win the next election then compulsory unionism is around the corner. That will be for workplaces up and down New Zealand and the small business sector should take heed of that and be very worried. I can tell members that if compulsory unionism is brought in at a time when the country is struggling to keep up with its trading partners any competitive advantage that we might have had will be destroyed. 
The average working family with its own household budget would have done better than Labour did in the Budget. The first thing families do is to cut out waste. If we had a look to see whether Labour was cutting out waste in this Budget we would see that the answer was no. Labour has grown the size of the bureaucracy in this country many-fold. It is an absolute disgrace that for every dollar of health spending the large majority of it—probably almost the whole lot—goes on bureaucracy instead of patient care. If we look at every dollar that goes into the education system and ask how much is actually helping our kids to do better again we see that that sum is only a small proportion of every dollar put in there while the rest is wasted. If we looked at all the stupid politically correct programmes that this Government has introduced at every level of governance in this country we would simply shake our heads in horror. That is without even talking about things like the dog laws which will mean that when Mrs Brown’s chihuahua from down the road has five puppies they will all have to be microchipped—as they are clearly a danger to humanity. I ask: what level of madness will this Government stop at? It seems to know no bounds at all. 
In Australia the Labour Party brought in tax cuts in its Budget. It also brought in welfare reform and I think that many people were hoping that Labour would do the same in New Zealand. Well it has not. It has brought in an insulting tax cut that will be worth 67c a week in 3 years’ time and I say that New Zealanders deserve better than that. That is why the ACT party will be going to the election proposing major tax cuts to give a tax rate of 15c in the dollar for anyone earning up to $38000 and of 25c in the dollar for anyone earning over that. That proposal is affordable. It will help to drive growth in this country and the propaganda put out by Labour that the country cannot afford it is total rubbish. We can afford it out of the $7.4 billion surplus that this Government this greedy Government has collected from hard-working families. For the first time polls are now showing that the majority of New Zealand workers want to be given a tax cut. That is what this Government should have delivered in this Budget. In Australia for the last 3 years the Government has delivered tax cuts because it was overtaxing Australians. This Government is overtaxing New Zealanders way above anything that Aussie was doing but instead of giving money back in tax cuts it is pocketing it to use the money for its own stupid schemes. Any talk about tax cuts being inflationary is complete and utter rubbish. The things that are inflationary in this country are things like petrol tax increases carbon tax increases and local body rates increases all of which are things driven by this Government. 
This Budget is a disgrace. Workers in New Zealand deserve to have a tax cut. 
Hon MARIAN HOBBS (Minister for the Environment) 
: 
 I am very proud to be a member of this New Zealand Government and I want to put on the record that I do not want to be an Australian. The Australian Budget did deliver $6 a week to the average worker but it also delivered to the average worker the news that their health system had had its funding limited in order to finance that $6 a week—and Australians for that still face higher tax rates. They pay 30c in the dollar on income above NZ$23000 and from 1 July 42c in the dollar on income above A$63000. That compares with our 33c rate which kicks in at $38000. 
So I am proud to be a member of this team and proud to be part of a team that trusts the people. There is no need for sudden surprises or for “black” Budgets and that sort of hyped-up stuff. There is no need for photographs of a Budget. This is a steady-as-you-go trustful group of people. I am proud to be prudent but most of all I am proud to be associated with a Minister of Finance and a Budget that maintain a strong and credible stance. 
By contrast let us go back to 1999. State assets like TVNZ were being stripped down ready for sale. In 1999 legislation had been passed that allowed both a tax cut and a cut in superannuation and the date set was 2000. So when people hear “tax cuts” they should be very very careful. “Tax cut” may mean “superannuation cut”—or anything else. 
Dr Richard Worth 
: Oh! 
Hon MARIAN HOBBS 
: Well that is what has happened before in 2000. In 2005 National is out there promising tax cuts again—just like it has done before. It is really good to look at the cartoons of 1999 and see that National is saying the same old things. 
But what would those tax cuts cost? If one brought the corporate rate down to 30c and brought those on 39c and 33c in the dollar down to 30c that would cost $1.725 billion a year. One would not do it for a year; one might do it for at least 10 years—and that would be $17 billion. OK to do that would mean that one would have no spending at all. But that is not what National Party members have said. We are struggling to get consistent policy out of them—in fact we are struggling to get policy out of them at all—but they have been saying things like: “Well we will give $4.5 billion over the next 10 years in transport $540 million for the Waikato expressway $120 million for Northland roads $110 million for a toll-free harbour link in Tauranga.” and they want us to be like the Australians and have a strike air force. They want us to have law and order which would require at least seven prisons—most of those of course would be privatised—and they have said that they have locked into the Superannuation Fund but have they? I can remember some broken promises around that area before. 
So when are the tax cuts coming? And here comes the other problem because we have not had any consistency from John Key versus Dr “Baloney Pony” Brash. Dr Brash said that National would have a Budget before Christmas and there would be a prospect of good tax relief for all mainstream New Zealanders. John Key said: “It would be my hope that the mini-Budget would give a Christmas bonus to all working New Zealanders.” Then they changed their minds. John Key conceded that tax cuts would have to be rolled out over the longer term to avoid inflation which probably means between 6 and 9 years. That is a very long time until Christmas. So are these tax cuts real and are they coming? We do not think so. 
Therefore it must be about borrowing again. I wonder whether anyone remembers little Olivia and the debts that she had to pay. She had to pay debts because we had Governments that borrowed and that went out there and said: “We will borrow! We will borrow for this we will borrow for that we will borrow for your tax cuts and that’s OK because we can do this!”. That is what they went on about. But Olivia had to see half her taxes go on interest payments for the borrowing that was done by those Governments. In contrast we have had a Minister of Finance who has reduced our debt and who has freed up taxes not to be spent on interest but to be spent on health education and special education in particular. 
Dr Richard Worth 
: Wasted! 
Hon MARIAN HOBBS 
: You say that special education is a waste of money? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! 
Hon MARIAN HOBBS 
: I must have that conversation with Mr Key again Mr Assistant Speaker because I am sure that you did not say that special education was a waste of money. But if one cannot have tax cuts and one promised expenditure then one must borrow and I never saw Don Brash “Baloney Pony” as Muldoon the big spender who would let inflation go. Of course we could go back to borrow and hope—that is what it was in those days—but it does not make sense because Dr Brash was the man in charge of the Reserve Bank. He promised a tax cut. Taxes would pay for interest; they would not pay for health and education. We would get a tax cut have fewer services and pay more in interest on our credit cards and our mortgages. It gets worse because a theme is emerging: tax cuts borrow for roads borrow for private prisons—not State prisons; private prisons—cuts to the public service. 
There I come to the wondrous quote I got from Dr Cullen today. Dr Cullen said: “Every billion cut to revenue would require a 2.1 percent cut to expenditure on 2006 numbers.” That is 497 fewer primary school teachers 394 fewer secondary school teachers—wiping out all the workload gains and other concessions that we had gained for primary and secondary schools. There would be 154 fewer sworn police staff. Well I wonder how the National candidate in Wellington Central will deal with that? 
Today Dr Nick Smith accused the Government of wasting money on bureaucracy. I ask which bureaucracy and which public servants? I challenged the National candidate for Wellington Central to specify who will lose their jobs and that candidate said: “The majority of public servants are doing a good job.” The problem is that he did not specify what the majority is. Is it a 51 percent majority? Are we going to have a 49 percent cut in the public service? Which public servants will it be? Judith Collins when she was going on about health before talked about Treaty of Waitangi cover and about the things that were really important for people whom I regard as being really special such as Irihapeti Ramsden. She talked about making a Maori elder comfortable in a hospital by not having to share his or her pillowcases with other people who had been in the hospital before. That is very important in the health of that person—I do not regard it as being stupid or a waste of money. But even if we cut that out that would not produce $1.75 billion. Will National reduce the health wages that have been put in there? Will those members go back to the rundown on radiotherapists? What will be closed down? Will they close down and review what happened in the Ministry of Foreign Affairs and Trade? How many embassies will be closed? Will those members lock out the consular section? 
We come back to the environment. When I inherited the Ministry for the Environment it was a very small core ministry but it spent tens and hundreds of thousands of dollars on consultants and that is what we have saved money on. We have cut the consultants and put in public servants who are connected to local government Fonterra and the people in the Packaging Accord 2004 and who are out there solving problems and working with industry. This Government has formed those partnerships. Before when it was contractors writing policy yes that was very doubtful. That is the kind of change that maybe those members want to go back to—short-term and expensive. 
Would a National Government cut aid? Would it go back on what the people of New Zealand did when they dipped into their pockets for the tsunami aid? Would it cut that? Is that expenditure safe? I am scared for our commitment to overseas aid. I am scared for our commitment to clean water. One cannot give tax cuts and pay for roads privatised prisons and a strike air force; maintain our international commitments such as NZAID and our peace contributions; continue our environmental clean-ups like Mapua and the Tui mine; and continue our commitment to clean rivers. 
If I listened to the Opposition I might be afraid but then I remember the New Zealand voters. I trust their common sense and their fairness. They want credible commitments in the Budget they want fairness they want money for things like special education and they want social justice. They want a New Zealand to be proud of and so do I. 
Dr RICHARD WORTH (National—Epsom) 
: 
 I am always a little distrustful of people who read from notes in a fully prepared way. 
Hon Marian Hobbs 
: You can read them if you want. 
Dr RICHARD WORTH 
: The honourable Minister has just offered me her notes to read. I will not take advantage of that but I can see that they are very fully scripted. I think that on occasions it is really important to speak from the heart. National is running some very simple lines. They are lines that the Minister for Ethnic Affairs in whom I repose great confidence and trust has offered and they are very much lines that are part of National Party philosophy. 
 I would like to talk about some aspects of justice that this Government seems prepared to overlook. They are not tricky issues. They are issues that this Government for some reason has chosen to ignore utterly. Now this is not an opportunity to talk about National Party policy and I will refrain from doing that. However I will try for a moment to accentuate the differences between the sorts of positions that Marian Hobbs espouses and that so divide National and Labour. People ask: “Well what’s the difference between the two parties?”. The difference is palpable. It may not be on the issues Minister Carter espouses; it is not. But on issues of law and order and justice which I am tasked to talk about the difference is huge. I look at what this Government has done in the context of law and order and justice and against a background of my experience on these issues I pause to reflect on where these guys are going. The answer to that rhetorical question is that they are going absolutely nowhere—in fact nowhere good. So I thought I would talk about these issues in the short time I have remaining although it is my hope that the House will permit me extended time to talk on them in greater depth. 
This is a Government that has spurned opportunity. One talks to people in the street and they say that this Government has lost an opportunity. I think it has and certainly the economy drifts down in a setting where it has been healthy and is now destined to be less so. But I would like to talk about a couple of issues on the law and order programme. It seems to me that one of the challenges that faces any party is to say: “This is where Labour is at.”—nowhere I would say—and “This is where National is at.” I will talk about where National is at on law and order and about the funding the Government has provided for justice. 
There are some players who do not believe that justice is really important and I understand that. I look at the Hon Michael Cullen an economic historian. He has no interest in this stuff. It is not his stuff. He has been made Attorney-General by default. There are competent players whom the Government deliberately decided should not be chosen to fulfil that role. I look at the Minister for Courts Rick Barker—a very prominent tough trade unionist on the East Coast—and wonder what he knows about the court system. Members of Parliament and listeners know the answer: absolutely nothing. Then we have the third player Minister Goff. After calling himself Phil Goff since he began in Parliament he is now calling himself Philip Goff. I guess it is all part of an agenda advancement programme. However it is great that he is calling himself Philip Goff His background is in political studies. There are crunchy issues in justice and a whole lot of really simple propositions. [ 
Interruption 
] I see Mr Jones resplendent in his red and black tie leaning back and looking for advancement in his party—and he is probably about to be granted it. But there are some very simple propositions in justice. One of the key things is access to justice. The Government espouses that—at least it pays it lip-service but in reality no way. 
So what will National do? Well I will talk about just one thing—about a guy called Abe Wharewaka. Some members may have heard of him; others may never have heard of him. 
Hon Chris Carter 
: I went to school with him. 
Dr RICHARD WORTH 
: The young Minister across the way said that he went to school with him. I do not know whether he is trying to be part of the Wharewaka team; maybe he is. I do not know about the Wharewaka story in terms of what the Hon Chris Carter has to bring to that debate but I say this: we know the facts. The facts are very simple. He was convicted on charges of possessing manufacturing and supplying methamphetamine. What was the penalty? It was 8 years. What did the judge say? The judge said: “Mm OK—minimum sentence under the Sentencing Act of this Government: 3 years 4 months.” Is that reasonable? Do the guys across the Chamber from me in the Labour Party think that is reasonable? Would that not be a 20-year sentence? I shall leaven it with a bit of factual material. That particular person in the period the charges ran over had made $13 million in revenue. I think we need to reflect on those aspects of sentencing policy. 
So what would National do? People ask: “What would you do? It’s all very well criticising others but what would you do?”. We are absolutely determined—and we have costed this into our budget policies—that there will be no parole for those types of people. 
Dianne Yates 
: No what? 
Dr RICHARD WORTH 
: I am saying that there would be no parole. That would mean that someone who was sentenced to 8 years in jail would spend 8 years in jail not 3 years 4 months. I am completely undeterred by those comments coming from Government members. I know that Government members do not understand the issues. I tell them that methamphetamine is a real curse and that this Government needs to get very serious about dealing with the problem. That is the first thing we will do. We will deal with the issues relating to parole to organised crime and to the whole raft of issues that flow from that. 
Another one of the justice issues relates to DNA testing. [ 
Interruption 
] I think this is really interesting because as one looks across the debating chamber one sees the interflow of intervention and interjection and a young woman from Whanganui—or from wherever her electorate is; it is probably Whanganui—who knows nothing about anything. The only thing she can say to her credit is that she married into the Navy. That is pretty meritorious; I am not condemning her for marrying into the Navy. 
National will deal with parole. We will deal with this stuff relating to organised crime. We will pick up the issues covered in the Western Australian Proceeds of Crimes Act and we will go for it. We will run a very simple line because I think members of the public know that the two things that burden a criminal are first being caught and second being imprisoned. We will quietly deal with that and very determinedly so. 
Hon CHRIS CARTER (Minister of Conservation) 
: 
 I was very fascinated by the presentation from the member for Epsom a member whom I have always had very convivial relationships with but a member often described in this House as “Lord Worth”. I am not surprised that that member has been given that title because his speeches do remind me somewhat of the speeches one might hear in the House of Lords—speeches by individuals who are totally out of touch with the reality of the lives of most people in New Zealand society or in British society for that matter. 
Dr Richard Worth 
: I raise a point of order Mr Speaker. I have refrained from gratuitous abuse. I am not aware that this particular member has any knowledge of what goes on in the House of Lords. I suggest he confine himself to the facts. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: That is not a point of order. It is a debatable issue. 
Hon CHRIS CARTER 
: It is with a lot of pride that I speak about the Budget that was presented in the House. It is a Budget that addresses the issues of growth addresses the issues of infrastructure and addresses the issues of social justice. 
I have just put around my electorate of Te Atatu a letter with a summary of what has happened in the Budget. It has gone out to 21000 households. I had a lot of pleasure in helping to deliver them in the weekend. I shall read a summary of the letter because it encapsulates what the Budget has been about and it addresses some of the criticisms of the Budget we have heard both in the House and during the last few days about the Budget. 
It begins: “To the residents of Te Atatu electorate. Dear resident The National and ACT parties talk a lot about tax cuts. Labour has wisely put more money into core community services such as health and education rather than spending the Budget surpluses on tax cuts. Across the Tasman the last Australian Budget delivered a vast $23 billion of tax cuts which resulted in most Australians getting no more than a mere $6 per week. To achieve that the Australian Government had to slash spending including major cuts in public health spending. Tax cuts are like borrowing on your credit card to give yourself a pay rise. Dr Brash talks about $2 billion of tax cuts. For most workers in Te Atatu and the rest of New Zealand this would mean a handful of dollars more a week in their pay packets in return for a likely combination of huge cuts in health education and superannuation spending and a return to the Government borrowing heavily from overseas—a little bit like President Bush has been doing in the United States: funding a war by borrowing from future generations. It is our children who would have to pay off any debt that was so incurred. 
“In contrast the Labour-led Government has delivered a carefully balanced Budget which invests more in public services. Over the next 4 years Labour will invest an extra $4.9 billion more in health $297 million more in tertiary education $57 million more directly on students $169 million more on schools plus $30 million more in IT for schools $152 million more in early childhood education and $47 million more for at-risk kids $173 million more in the police and $410 million more in defence $131 million more in State house construction $300 million more in land transport. 
“As your member of Parliament I am proud to be part of a Government that continues to increase funding for core Government services that has created a strong economy. If you would like to find out more information about this year’s Budget check it out on the Government website www.beehive.govt.nz or call into my electorate office at 300 Great North Road Henderson and find out some more in person.” 
That letter has gone out to the constituents of Te Atatu but what it does is encapsulate why this was a great Budget why it was a Budget that delivered for New Zealand. As part of the Government I have the privilege of being conservation Minister and in this Budget $24.6 million more was delivered for core conservation work around New Zealand. That money helps to do work—from saving the endangered kakapo to delivering more for recreational assets and ecotourism opportunities that bring $2.45 million tourists to our country. This additional funding is a measure of the Government’s commitment to the New Zealand environment our endangered species and the recreational opportunities of Kiwi families. 
Dr Richard Worth 
: I raise a point of order Mr Speaker. I suddenly become concerned that a valuable document has been referred to in the House that could appropriately be tabled and that is the letter that the honourable Minister has read from. I just wonder before he goes further whether he might be prepared to table that letter with all the stuff that is in it. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Can I just say that frivolous interjections or points of order designed to break up a speech are out of order. The member knows that. Such tactics actually lead to disorder and are unacceptable to the progress of business through the House. The member should consider Speaker’s ruling 19/8. 
Hon CHRIS CARTER 
: In addition to that $24.6 million for core conservation work around New Zealand this extra spending $2 million was given for conservation work on the seven Hauraki Gulf islands adjacent to Auckland. That is a fantastic and exciting project where Motutapu and Rangitoto will be made pest-free. They will become not only an incredible venue for biodiversity protection but will be an amazing tourist attraction and only 15 minutes’ drive by boat from downtown Auckland. That is $2 million for Project Hauraki. We call it “Project Doorstep” because it is on the doorstep of Auckland. 
We have another half million dollars in the Budget for the eradication of pests from the Auckland Islands. That will be a ground-breaking project which will attract international interest. Those incredibly important subantarctic islands which are unique in their biodiversity will for the first time be made pest-free will become the breeding ground for vast flocks of albatross and will be a resource and a heritage for all mankind.  
Time 
 magazine has already expressed an interest in covering this project. It will be great for New Zealand great for the Department of Conservation and great for biodiversity gains in our country. 
In addition to the half million dollars that is going to the Auckland Islands another $1.5 million goes into telling the story of New Zealand. So five historic sites—Ship Cove for example in Fiordland—will be given interpretation and opportunities for visitor usage which will be able to tell the story of the history of New Zealand. Finally as part of this wonderful conservation package in the Budget a new visitor centre will be built at Mount Cook. 
Dr Richard Worth 
: I raise a point of order Mr Speaker. I am just a bit worried that listeners may have been misled because Ship Cove is not in Fiordland; it is in Marlborough Sounds. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I refer Mr Worth to Speaker’s ruling 19/8 by Mr Speaker Steward in 1891 and tell him he has his first yellow card. 
Hon CHRIS CARTER 
: I thank the member for his geography lesson. Going back to the list of achievements for conservation a new visitor centre is being built at Mount Cook. 
That in a nutshell is the conservation package. It is fantastic and I am proud to deliver it as Minister of Conservation. 
I turn to local government which is another of my portfolios. The Budget delivers two incredibly important packages. We have put aside $136 million over the next 10 years for a subsidy of up to 100 percent for small rural communities to improve their drinking water. It matches the sewerage subsidy of a similar amount coming through in last year’s Budget and also a new rates rebate funding package of $70 million which should allow 300000 New Zealand households to apply for a rates rebate which will be incredibly important for people on fixed incomes. I am really proud to deliver that. 
Building and housing is my third portfolio and the Budget delivers $22.6 million into that service— 
Dr Richard Worth 
: Leaky homes. 
Hon CHRIS CARTER 
: —which will provide surety for New Zealanders. I heard the member for Epsom call out “leaky homes”. I do not need to remind the House that it was a National Government that deregulated the building industry that created leaky homes—something that the Hon Dr Nick Smith seems often to forget in this Chamber. 
I realise that my time is almost up but finally in my fourth portfolio of ethnic affairs the Budget provides $4 million more to create job positions on the ground for people who will be working with ethnic communities helping them settle successfully into New Zealand demonstrating that this Labour-led Government is committed to supporting all New Zealanders regardless of their ethnic religious or social background and this $4 million for ethnic affairs will help to strengthen that department established under this Government to work for all Kiwis to settle successfully in this country. 
Dr WAYNE MAPP (National—North Shore) 
: 
 The Budget: dead on arrival. Dr Cullen: the nation’s newest undertaker. Dr Cullen’s funeral service: the Labour Government. It is no wonder John Tamihere has joined a radio show. He knows what the future is. It is not in this Parliament so he is out there getting a new job. 
I wonder about some other members in this House. What about for instance David Parker a well-known lawyer in the south? I tell him that he should hang up his shingle because practising law is precisely what he will need to do. What about Dianne Yates who is in the House this evening? I understand that she was a teacher and that in fact she visited President Mugabe in Zimbabwe. Maybe she will have the opportunity to go back and work for him. I heard Martin Gallagher speak in the House earlier. He is also a teacher. Maybe he will have the opportunity to go back to teaching. And what about Jill Pettis the chief Government whip? I think we can kindly say that she is heading for a job in interior decorating and that we know precisely why that would be. Marian Hobbs is also in this House. She was a distinguished principal and frankly that is her future. Even the member for Northcote the neighbouring electorate to mine—Ann Hartley the member’s colleague who is in the Chair—had a distinguished role in local government and was Mayor of North Shore. I say to her that she should join her colleague Jenny Kirk and get back to that job because it is the only one she will have. Jonathan Coleman a fine very talented young man will be knocking on doors in Northcote sweeping in the votes and rolling out Ann Hartley. 
One knows when the Government is in trouble because Dr Cullen stands rants and shouts. When he is in control he uses an even a restrained and a calm voice. That is Dr Cullen—the man who is in control. When it is all drifting he begins to shout and he rants and raves. That is what we heard in question time today. We know Dr Cullen is a man under pressure and frankly he should be because by his very own actions he has buried this Government. Let us be honest: the Labour Government actually had a chance to make it very difficult for National. It had a chance to reach out to middle New Zealand. Instead what has it done? In 3 years’ time people will be able to buy two-thirds of a packet of chewing gum—that is it. As the newspapers stated that was not a tax cut; it was an insult. It was derisory. The irony is that Dr Cullen had real choices and the choice he made was to spend more money. 
I want to analyse that particular aspect of the Budget. Dr Cullen says that National has no opportunity to give a decent tax cut to hard-working middle New Zealand families because he says he has spent all the money. Actually that is somewhat true. Government spending today is $45 billion. In 3 years’ time it will be $54 billion—an increase of $9 billion. That is an increase of 6.5 percent each and every year. What is the projected rate of economic growth—2 percent 2.5 percent? What is the projected rate of population growth? It is 1 percent. So the Government is spending more and more of the nation’s money squeezing out the dollars and denying the possibility of any tax cut. That is the choice Labour has made and I predict that the people’s verdict will be: “Thanks but no thanks.” 
There was another option. Let us say for instance that Government expenditure had gone up by 4 percent per annum—still substantial and covering population growth and economic growth. What would the difference be in 3 years’ time? The difference would be a $6 billion increase in expenditure. This Government has a $9 billion increase. The choice that confronts New Zealanders is between either reasonable expenditure on essential services or reckless out-of-control expenditure by this Government. That is their choice. This Government cannot possibly pretend that all its expenditure is thoughtful and wise. I refer for instance to the $250 million spent on the wananga. What Government member will defend that sort of expenditure? Will I see even one Government member stand up and say that that was wonderful thoughtful good expenditure on behalf of New Zealanders? I am listening but not a single Government member is responding. Government members know that that is not true. They know it is false yet they will spend more and more money on that kind of wasteful expenditure. The Government has not even increased the number of operations—that is the scandal of it. Dr Paul Hutchison has proved in this Parliament and outside it that no improvement has been made to our health services. 
I turn to issues around the Department of Labour. I have here the Estimates document. In it I guess are the proud things—the things Labour members want to boast about. What do they say about productivity? They are all for productivity. The Government is all for productivity. It has increased it—actually it is New Zealanders who have increased it—by 1.4 percent per annum. That is what the document states. What is the case in Australia? Productivity is increasing by 2.5 percent per annum. What is the rate of productivity increase in the United States? It is 2.7 percent per annum. That is how one gets real growth in the economy. The Government’s approach is to increase its share of the economy. What happens? Private investment is squeezed out and productivity and the growth of incomes are crushed. 
I want to turn the House’s attention to the fact that business was looking for something from this Government. What did it get? It got a depreciation allowance on computers. That is what it got. One might say that that is useful enough— 
Simon Power 
: Not really. 
Dr WAYNE MAPP 
: Not really. What did business want? It wanted 30 percent corporate taxes. I listened to  
Morning Report 
 2 days before the Budget. On the programme were two leading accountants from the major firms in the country who were asked what they were looking for in the Budget. They said they did not want a complicated set of allowances depreciation provisions or compliance costs. They wanted something simple: a 30 percent tax rate for business. Did they get it? The answer is no. 
Hon Damien O'Connor 
: So? 
Dr WAYNE MAPP 
: We have just heard from the Hon Damien O’Connor. He is trying to defend the Government’s wasteful expenditure. He is trying to say that business does not know what it is talking about. He is trying to say that businesses should be thankful for a depreciation allowance on their computers that they should ignore their request for a 30 percent tax rate that they should ignore even Jim Anderton who talked about it and that they should ignore Dr Cullen the undertaker who said some time ago—overseas I note—that a 30 percent tax rate for business was possible. 
I say as has already been said by other members on the Opposition side of the House that this Budget is Dr Cullen’s last Budget. This Budget is the undertaking service for the Labour Government because in 3 months’ time or less New Zealanders will have a real choice. They will have the choice to give themselves a real break to boost their own incomes and preserve public services—crucial public services—and that choice will be a National-led Government for the benefit of our country. That is the clear choice and that is why members on the Government side of the House know that Dr Cullen has written their funeral service. 
Dr ASHRAF CHOUDHARY (Labour) 
: 
 I see the member for Epsom quite regularly at a number of Indian community meetings in Auckland. He often invites himself. He actually rings around and finds out where the meetings are happening and writes letters to my good friends— 
Dr Richard Worth 
: I raise a point of order Mr Speaker. I take great exception to what the member has said. Any Indian event that I have attended I have always been invited to. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: That is not a point of order. 
Dr Richard Worth 
: I seek leave then to make a personal explanation. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: Leave has been sought for that course to be taken. Is there any objection? There is none. 
Dr Richard Worth 
: I would just like to say to Ashraf Choudhary that I think it is singularly unfortunate that he has chosen to start his speech with those comments. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: A personal explanation must rebut what was said. 
Dr Richard Worth 
: It is absolutely wrong that I have canvassed on any occasion an opportunity to speak to the Indian community and I am shocked and dismayed that those comments have been made. 
Dr ASHRAF CHOUDHARY 
: Despite what the member has said I actually like the member. I personally enjoy his company when he attends with me meetings with some of the community. What I would like to say is that although he has attended many meetings I wonder whether he has learnt anything from the community whose functions he attends. If he knows anything about that community there are two things I hope he has learnt. One thing is about savings. Something that is well known about the Asian community and particularly the Indian community is that they save. I am often told that if these people earn $2 they will try to save $1. I came to New Zealand 28 years ago and bought my first home after years of work because of a scheme from the Housing Corporation that gave a grant to encourage people to buy homes. I hope my worthy friend over there has learnt that our community loves saving. The KiwiSaver scheme in this Budget is about something that is part of our nature. It is part of the Kiwi nature for people to save for a rainy day. I am delighted that this Government has started the KiwiSaver scheme which will encourage people to save for their first home. Not only that but of course they will be saving for— 
Ron Mark 
: When does it start? It doesn’t start for 3 years! 
Dr ASHRAF CHOUDHARY 
: It does not matter when they start; the issue is that there is a scheme for people to put some money aside to buy their first home. I am delighted with that scheme. It does take some time for people to save money but once they start saving and with a Government contribution after 3 years the time will come when there is enough money for them to buy their first home. So I am delighted with the scheme. 
The second thing I hope my good friend over there has learnt from the Indians is about self-dependence. Indian people have always tried to depend on their own resources rather than to borrow money and live on someone else’s money. This country has lived on somebody else’s money—whether it has come from Asia or America or Europe—for too long. We have to have a sustainable economy and part of having a sustainable economy is being self-dependent. I am delighted with our policies in the Budget that Dr Cullen has presented—as opposed to what is being promoted from members opposite who want to borrow money to pay for tax cuts. I believe that self-dependence is very important for all people in this country to make sure we do not live on money borrowed from somebody else to pay for tax cuts. 
 I hope my good friend opposite has learnt some of those traits from the people he goes to meet and mingle with. I am delighted that he thinks he has often been invited to those meetings rather than his trying to get invitations for himself. 
I want to touch on a number of areas. Although the worthy member opposite goes to meetings with ethnic communities I was really surprised—in fact shocked—to see on the National Party’s list that Pansy Wong has been demoted from No. 10 to No. 20. That was shocking. What will my good friend Dr Richard Worth tell the Chinese and Indian communities that National has done for those ethnic communities in terms of its list rankings? It will be really shocking for him the next time he goes out to meet those people. 
I have a couple of other things to say about this Budget particularly in relation to the environment. My good friend Marian Hobbs has mentioned sustainability and the environment. Our national identity is tied up with our love of the land. Our love of the land is part of what makes us proud Kiwis. Labour believes in protecting the environment. It is important to act now with good regulations to look after the environment so that all New Zealanders can continue to enjoy it. Labour believes in cleaning up the environment. We live with a legacy of polluted air land and water that need restoring to their clean safe state. Labour believes that a clean and healthy environment sits alongside economic growth and social opportunity as the keys to an improved quality of life for all New Zealanders. We call this sustainable development. 
Labour’s approach is based on partnership underpinned by central government leadership. We want to work with local government businesses iwi and other communities. This Budget has allocated $12.4 million over the next 4 years for initiatives that promote sustainable business practices. The funding reinforces the success and progress of the ministry’s new way of working with industry and organisations. Underpinning this new way of working is the Government’s emphasis on quality economic growth through sustainable development. Since early 2003 the ministry has focused on partnership with industry players to support them in becoming more sustainable with the overall outlook of better economic and environmental outcomes. The funding allows core programmes set up over the last 2 years to grow and new initiatives to be actioned. Most of the core programmes are the result of industry action and are based on voluntary contributions. Those programmes are about finding practical solutions rather than unnecessarily imposing regulations and legislation. 
I want to say a couple of words about the Sustainable Farming Fund under this Budget. The Sustainable Farming Fund has a secure future. The Budget shows that the fund has moved from being a vulnerable add-on to the budget of the Ministry of Agriculture and Forestry to being a core output. The fund has been baselined which means that it should have a much more secure future where its funding is assured rather than funding being allocated specifically every few years. In this year’s Budget the fund is set to receive $8.44 million in the 2006-07 and the 2007-08 financial years and $9.422 million in the 2008-09 financial year. The Sustainable Farming Fund has proved its worth to rural New Zealand. More than 300 projects have been funded with the goal of ensuring the social economic and environmental viability of rural communities. 
DAIL JONES (NZ First) 
: 
 I intend to speak on trade matters for New Zealand First but perhaps in passing I can touch on Dr Ashraf Choudhary’s comments on the Indian community and his unfortunate remarks I thought with regard to Dr Worth who is in good spirits tonight. We all enjoy the camaraderie of our members from time to time. 
It is true that people who come here from South Asia work hard and save money. But they take advantage of the New Zealand way of life. What happens in India? One cannot borrow money in India but if one does want to borrow money in India the daily rate is 56 percent and if one does not pay it back a Pathan debt collector collects it from one. Mr Choudhary agrees with me. It is a totally different way of life in India and I do not think we can compare what happens in India with what happens here. They are two different things. I just make that point. 
Mr Choudhary all Indians and everyone who immigrates to New Zealand have a wonderful opportunity in New Zealand and everyone shares in that opportunity—New Zealanders and others. Indians are no different from Chinese UK people and whatever all of whom were entitled in those days to State Advances Corporation loans—subsequently called Housing Corporation loans—at 3 percent for 25 years. I myself never got one of those loans because I worked a bit too hard but they were available to all New Zealanders. That is the New Zealand way of life everyone has the advantage of it and it was unfortunate that Mr Choudhary adopted the line he did. 
However moving on to other issues and looking at New Zealand’s trading way of life and what is happening at the present time especially as far as the Budget is concerned I must say that one of the most disappointing features of the Budget was Dr Cullen’s admission that New Zealand’s trade situation would be in difficulties in the coming years ahead and especially in the short term. We would have thought that a Budget that had such a prediction in it would try to do something about that. What did this Budget have in it for exporters? The Opposition is silent now. The Government is silent now. This Budget had nothing in it for exporters. There were no policies to encourage exporters to get some sort of tax advantage or export credit as a result of breaking into new areas and doing the hard yards which is so important in that area. 
I spoke to a manufacturers association last year and we discussed how many of today’s companies that are doing so well got their start way back in the 1970s and the 1980s by getting export incentive grants to encourage them to go overseas to develop new markets and to grow New Zealand’s produce development and exports from there. That does not happen now. It should be happening now and New Zealand First intends to make sure it can happen in the future. A feature of New Zealand First’s policy is to aid exporters and to encourage trade. Without trade we do not survive. Trade is our lifeblood and New Zealand First’s economic policy prescription is based on a partnership with people in promoting sustainable export-led economic growth that will lead to job creation and enable the savings that will facilitate our social progress. 
Of course those are fine words but what do they actually mean? New Zealand First will implement a tax abatement scheme that will reduce the tax rate on new export net profit to 20 percent to ensure that exporting opportunities and innovation are not lost. I shall repeat that: our tax rate on new export net profit for companies and businessmen will be 20 percent—not 30 percent not 33 percent or whatever. We want to make sure that we continue to have new markets and new development in the export area to ensure that New Zealanders have a future. This Budget has nothing in it for exporters—nothing at all. This Government has survived on the back of exporters who have spent their money and tried desperately to improve their companies’ situation in very difficult times and all they have got is a high New Zealand dollar and low overseas currencies. That is not helping their businesses terribly much. 
What happens? They come back to New Zealand the wage rates are not good enough and the staff they have trained go off to Australia. Again that is a disadvantage to our exporters. We have to make sure that our exporters are earning enough and get enough in the way of tax breaks so that they can pass something on to their employees who will stay in New Zealand. 
Of course one of the areas that is causing great concern at the moment in the community is the export to Australia of pipfruit—apples and pears. New Zealand First in its policy is making it clear that we will review all current and future bilateral free-trade agreements including the Closer Economic Relations agreement with Australia. We are saying that in reviewing the Closer Economic Relations agreement we will give priority to gaining access for New Zealand apples to the Australian market and if necessary advancing that by referring the matter to the World Trade Organization. 
There was a time in this House when Labour at least stopped to listen to apple growers or pipfruit growers in Nelson or Hawke’s Bay and took notice of what they had to say. I remember that because when I was in the House from 1975 to 1984 one of the biggest problems in trying to change the practice of selling apples in 2-kilogram bags to selling an apple a time was that it was opposed by the Nelson and Hawke’s Bay growers and even the Central Otago growers. They somehow saw a disadvantage to them if a customer could buy apples singly rather than in 2-kilogram bags. That law persisted for a long time because the Nelson Hawke’s Bay and Central Otago growers wanted it that way. Well that law finally went but it survived for as long as it did only because Labour listened to those growers—and to some extent the National Party at the time although when I was in the House I was opposed to that and Jo Gurbac and others in the Kumeu-Henderson area will know of my opposition to that attitude. 
However things have moved on and I note that with regard to growers in the Nelson area their picking is a little bit late and they want the opportunity to sell their applies in Australia. The member for Hastings the member over there for the Central Otago area and Damien O’Connor who puts up his hand too should all be doing something to make sure that we can sell our apples in Australia. 
Hon Damien O'Connor 
: We are. 
DAIL JONES 
: Mr O’Connor should have been listening to the Minister for Trade Negotiations today. In 6 years this Labour Party Government has done absolutely nothing at all. The rules were changed; in 2003 a decision was made in so far as the access of American apples to Japan was concerned—the same situation as New Zealand’s situation with Australia. What has Labour done? Nothing. Time and time again we ask the Minister for Trade Negotiations Mr Jim Sutton what he is doing and he says he is doing something but all he ever does is talk and talk. He has done that all the way through and that is symptomatic of so many things in the Labour Government. Whether it is the Minister of Police the Minister of Education or the Minister of Immigration they are all just dithering. 
In my view as someone who is a trade spokesman and who is taking close notice of what Mr Sutton is not doing Mr Sutton is one of the biggest ditherers of the lot. He has had a good 6 years in which to resolve this issue but he is more willing to listen to the Tasmanian apple grower than to the Nelson Central Otago or Hawke’s Bay apple grower. He cares more for the people of Tasmania than he does for the people out in the provinces of New Zealand. That is the way this Labour Government seems to work today. It does not give two hoots any more about the people in the provinces. If it did it would simply have stated to the Australians at a meeting probably 3 years ago that unless our apples got access to Australia the issue would go to the World Trade Organization now. It is as simple as that. That is what New Zealand First is going to do. The issue would go to the World Trade Organization now—no ifs no buts no maybes. 
We get fruit crops and other products from Australia that are riddled with pests. Pears tomatoes strawberries grapes oranges and rock melons have all had pest interceptions in New Zealand since 2000. Let us consider rock melon. There have been 2037 pest interceptions on rock melon imports from Australia. We should be saying to the Australians that if they want to get smart and use some sort of biosecurity means to not allow our apples into Australia then quite simply we will do the same to them. It might be tit for tat and it might be schoolboy nonsense but if the Australians recognise only schoolboy nonsense then that is the game we have to play. We have to go back into their courtyard. If they want to bowl underarm we have to bowl underarm as well. This Labour Government’s attitude towards this issue is a total failure. New Zealand First will fix it. 
DAVID PARKER (Labour—Otago) 
: 
 Labour will not fund tax cuts from borrowings. Since this Budget has been delivered we have already seen United Future’s tax policy. United Future promises tax cuts that are probably more modest than the bribe the National Party will offer yet already it acknowledges that to fund its proposed tax cuts it will have to sell up to 40 percent of State-owned enterprises. In other words United Future cannot fund the tax cuts it proposes other than by borrowing cutting services or selling State-owned enterprises. 
Labour will not fund tax cuts from borrowing unlike National under Mr Muldoon which just about bankrupted this country. That Government had New Zealand at its knees having borrowed to fund the affairs of this country. It left the economy in tatters. New Zealand’s Government debt equalled 70 percent of GDP and $1 in every $5 of tax collected was spent on interest. When this Government took over debt had gone down to 35 percent of GDP. We have reduced it further to 23 percent of GDP. We cannot reduce Government debt if we are not running a surplus—that is basic economics. If we fund tax cuts from borrowings debt will go up. 
The other underlying premise in this tax debate at the moment is some suggestion that New Zealand is overtaxed. New Zealand’s rate of taxation as a percentage of GDP went down between 2002 and 2003—the last date for which there are comparable figures with the rest of the OECD. The tax rate did not increase—it went down. 
Where do we sit in relation to other OECD countries when we consider taxation? 
Hon David Carter 
: Compare us with Australia! 
DAVID PARKER 
: I tell Mr Carter to listen—he will probably learn something. New Zealand’s taxation rate in the year ended 2003 was 34.8 percent of GDP. 
Hon David Carter 
: Too high! 
DAVID PARKER 
: They were high were they? What was Canada’s rate? Canada is a wealthier country than New Zealand. Their rate was 33.9 percent. That is pretty much the same as us. 
Hon David Carter 
: What about Australia? 
DAVID PARKER 
: I will come to Australia if Mr Carter will just hold his horses. Austria’s rate of taxation was 43 percent of GDP compared with our 34.8 percent—let us call ours a round 35 percent. Belgium’s rate was 45 percent—it is another wealthier country—Denmark 49 percent France 44 percent and Germany 36 percent. Canada’s rate as I have already said was 34 percent. The taxation rates of Norway and the other Scandinavian countries were between 43 and 50 percent and the United Kingdom was at 35 percent. 
Hon David Carter 
: What about the United States? 
DAVID PARKER 
: The United States rate is quite significantly different. Australia was not significantly different. Its rate was 31.5 percent compared with our 34 percent. The big difference is the United States. 
Hon David Carter 
: That’s a big difference. 
DAVID PARKER 
: I agree. The United States’ rate was only 25 percent of GDP but it has no universal public health-care. The level of public provision of health care for most people is low. There is no superannuation such as we have. The United States’ situation is completely incomparable to that of New Zealand. If we look at the OECD group of wealthy countries we see that New Zealand’s rate of taxation is in the lower part of the range for OECD countries. It is not in the higher part. When Bill Clinton was famously asked by journalists what the most important issue facing the USA was he did not say that it was taxation. He said to those journalists what was obvious. He said: “It’s the economy stupid.” It is not taxation; it is the economy. The same is true in New Zealand. 
In recent years New Zealand has had one of the highest growth rates in the OECD—higher than that of Australia. Our unemployment rate is the second-lowest in the developed world. It is not the tenth-lowest and it is not the third-lowest—though that would be impressive enough. It is the second-lowest in the developed world. We in Labour are immensely proud of that. “It’s the economy stupid.” It is not about taxation rates. We are within the band of reasonable taxation rates around the world. Taxation cuts cannot be afforded unless we increase borrowings decrease savings or flog off State-owned enterprises as United Future is proposing to do. 
The unemployment rate is good in New Zealand but the drop in Maori unemployment has been even more impressive. In 1999 unemployment stood at 15 percent for Maori overall and 32 percent for young Maori. Under National an appalling 32 percent of young Maori were unemployed. Overall under Labour that has dropped to 8.7 percent. That must bode well not just for Maori but for the social cohesion and prosperity of the nation as a whole. There are 250000 more people in jobs than when Labour took office and the vast majority of those are in full-time jobs. 
We can say “250000 extra jobs” quickly but let us reflect on that. That figure is more than the combined populations of Cromwell Alexandra Dunedin Queenstown Oamaru Balclutha Gore and Invercargill. In fact it equates to about the same number of people as the total population—not just people of working age but including children and superannuitants—of the lower half of the South Island. As many extra jobs in this country have been created under this Labour-led Government as there are people south of the Waitaki River. “It’s the economy stupid.” 
The number of people on domestic purposes benefits and unemployment benefits is down. There has been a moderate increase in sickness and invalids beneficiaries. The largest cause of that is our ageing population. People get more illnesses as they age but we have introduced programmes to do what we can to get people who are able to work back to work. Overall including sickness and invalids beneficiaries 100000 fewer people are on benefits than when Labour took office. What has happened to the wages and salaries earned by New Zealanders in the same period? Well they have increased from $45 billion in 1999 to $59 billion in 2004. We often hear meaningless statistics quoted by the National Party that show that the average wage has not grown as much. That is true. But when we take the people who are least employable—because they are the last people to get jobs—and put them into employment they generally move into low-paid jobs not high-paid jobs. So the more meaningful statistic is not the average wage but the total wages and salaries paid to New Zealanders. That amount has increased by a phenomenal 32 percent from 1999 to 2004. In just 5 years the wages and salaries earned by New Zealanders have increased by 32 percent. 
Now I will look at what we have done in terms of taxation. It is important to record why our focus on tax and income relief has been for low to middle income earners and their children. Put simply after restoring the baseline for superannuation health and education services our view was that need was greatest amongst low to middle income families with dependent children. They were the ones on whom we wanted to focus our tax relief. Why? We know that raising children is the most important job any parent undertakes. How well we do this determines not just the prosperity of our own family but also the collective prosperity of our nation. That is why this Government has directed a substantial proportion of its spending through tax cuts and subsidies to families with dependent children. 
It is not true to say that this Government has not introduced tax cuts. It is true that we have directed those tax cuts to families with dependent children. We have done that because they are the ones who suffered in the 1990s when the gap between rich and poor households increased hugely. Between 1988 and 1998 the gap between the rich and the poor increased hugely. The gains from New Zealand’s increased economic output fell into the pockets of the top 20 percent of families. Indeed it was really the top 10 percent of families that benefited most. The bottom 20 to 30 percent went backwards the middle 50 percent of families stayed static and the top 10 percent charged ahead. That is why our tax relief is for low to middle income families not disproportionately for richer people. 
Hon DAVID CARTER (National) 
: 
 I start my contribution by wishing David Parker all the best for his job search when he departs from this place in the next couple of weeks because while he spent 10 minutes reading notes from the Labour research unit Jacqui Dean was out door-knocking and has probably been to another four households in Oamaru. She will be the next member of Parliament for Otago and the people there will finally get the representation that they deserve. 
I acknowledge the motion of no confidence expressed by the leader of the National Party Don Brash in Dr Cullen’s “blank” Budget. In supporting the no-confidence motion of Don Brash I note that 32000 New Zealanders also support the same motion of no confidence in this Labour Government because that is the number of New Zealanders who left New Zealand last year and who ticked the box on the immigration form to say that they were off to live in Australia permanently. That is the equivalent of half of David Parker’s current electorate leaving for Australia in 1 year alone because they have no confidence at all in the future of this country under Labour Helen Clark and Michael Cullen. But help is on the way in the not too distant future because those people who have voted with their feet still have a chance to vote at the ballot box. Those people did not leave New Zealand because they wanted to leave; they care deeply for this country. When they see that a Government is prepared to concentrate on real wealth creation they may be inspired to come back. 
There is a common misconception that the 32000 New Zealanders who have left are young motivated competent and qualified New Zealanders. I recently had the occasion to meet a person who was from the electorate of Otago. That person who was about 46 years of age was a truck driver who had returned from Melbourne quite recently and is currently driving trucks and trailers up and down the main route of the South Island. He receives a gross wage of $13.50 an hour. Before he left Melbourne where he was doing exactly the same work he was receiving a gross wage of $22.50 an hour. That was before Peter Costello delivered a Budget with significant tax cuts and before Dr Cullen delivered his “blank” Budget about 10 days ago. That person is leaving New Zealand again and this time he will leave permanently because his prospects in Australia are substantially better than they are here. 
The Labour Government has done nothing at all to address those concerns. Dr Cullen has now delivered six Budgets in this House and the best he was able to do in his sixth attempt was to offer that truck driver 67c a week provided he hung around for 3 years. The audacity and arrogance of that move has not been lost on the people of New Zealand. 
Two other initiatives that Dr Cullen mentioned in his Budget were a savings initiative of $1000 per saver and a home ownership initiative of $5000 for new homeowners provided the recipients hang around for the next 5 years. But in both cases no details were given of those schemes at all. Dr Cullen is incompetent. He came into this House after 6 years as Minister of Finance floated two schemes and then said that the details would be worked on in the future. He has failed New Zealand yet again. 
I managed to catch the news at 6 o’clock tonight. The first item on Television One was exactly what we can expect from State television—another photo shoot of Helen Clark out of New Zealand. She is touring the world and meeting with world leaders. Flicking to TV3 I saw that the first item should have been of interest to New Zealanders. It was Dr Cullen losing his rag again and falsely accusing TV3 of unfairly implicating David Benson-Pope in a bullying scandal. Dr Cullen was losing his rag yet again—he is the very Minister who should be receiving anger management counselling by the day. I acknowledge that he is under a lot of pressure. I accept that. Only a couple of hours after making those statements he came out with another arrogant and half-hearted apology to TV3. He said he had got it wrong. He should be apologising to every New Zealander for the arrogance and insincerity he has displayed by coming into this House to promote tax cuts which his own party president had said were the “deep dark secret” of the Budget. They were subsequently revealed to amount to 67c a week providing taxpayers waited around for the next 3 years. 
I thought it was very interesting that Mike Williams the party president was the person who led the charge on the tax cuts. Yet after the issue had been floated in the media Dr Cullen did nothing to lower the public’s expectations. He thought that 67c in 3 years’ time would be received generously. That is how out of touch this man is. He thought that 67c would be received enthusiastically by the voters of New Zealand. I have news for Dr Cullen—New Zealanders know that it was an outrage. 
I was particularly interested in Dr Cullen’s response to Mike Williams after the presentation of the Budget. He said: “Mike was speaking not the Labour Party.” Is Mike Williams not the president of the Labour Party? Is that not the same Mike Williams who is a board member of Transit New Zealand and who picks up the phone rings potential donors and those involved in the roading infrastructure and says: “By the way I am at a Transit meeting”—considering where the contracts might go—“and I just thought I would take the opportunity of speaking to you about a donation to the Labour Party.”? That man is the president of the Labour Party. When he seeks money he speaks for the Labour Party. When he mentioned tax cuts he had inside information. 
I will close by speaking about Mr Sutton who will not debate the public access walking policy—nor will any other Minister in the Labour Government. Yet it has put a further $2 million a year in the Budget document to develop walking access policy. I challenge Mr Sutton to table the legislation that has been sitting in his in tray over the last 2 years and to let Federated Farmers and other interested people in New Zealand debate the real issue. Even Mr Sutton’s ally Bryce Johnson of Fish and Game New Zealand refuses to debate the issue. He used to be the greatest proponent of public access. He has been told to shut up as the Government tries to downplay this issue. Yet it has stuck it in the Budget. 
The message is clear to all New Zealanders particularly landowners: if we are unfortunate enough to end up with a Labour Government after the next election land associated with water will be confiscated. That is what will happen. Public access will be taken from people. The right of farmers of this country to keep their land for their own production will be taken from them by a future Labour Government. But I will not allow that to happen. 
DAVE HEREORA (Labour) 
: 
 I want to contribute to this debate by supporting my previous colleague’s comments surrounding tax cuts. We do not support tax cuts. They are a thing of the past. They are the National Party’s policy mindset of the past. 
Maori are better off under this Budget and overall better off under this Government. This Government is committed to supporting whanau hapu iwi and Maori communities. It delivers help so that whanau get ahead with added security for the future by building on the progress introduced to public health and education services with extra support for businesses and for families with children. The recent Hui Taumata made it clear that the path to development is through education employment and enterprise so that it is Maori enterprise. Maori are reversing the narrow-minded cul-de-sac of dependency and are therefore meeting the challenge that enterprise offers. The Government is very conscious of this and welcomes those initiatives as the Budget allows supportive measures that reinforce Maori enterprise. 
Many Maori in business will benefit from the business package of the Budget of 2005. This package makes changes to tax and depreciation laws in order to encourage savings ensures a more productive use of capital improves access to overseas capital and skills and reduces compliance costs. 
More New Zealanders are in work and more are back at work than ever before. In fact unemployment is at just 3.6 percent—the lowest recorded in two decades. With Maori unemployment dropping from 18.9 percent in March 1999 to just 8.7 percent this is the first time in over 20 years that the Maori unemployment rate has been down to single digits. I bet that National wishes that that was a deep dark secret! 
But let us not take things for granted. That did not happen on its own. It did not just fall out of the sky. It certainly was not caused by the National Party. No let us give credit where credit is due. It happened through careful considerate policy planning by Labour. We accept the value and the importance of providing a real platform of change of being inclusive and of inviting people into processes that deliver. 
One of the major programmes that continues to be funded in this year’s Budget is the Working for Families package. A family with four children and on a single income of $55000 a year will be better off under the package by nearly $150 a week once it is fully implemented by 2007. By contrast that family would gain just $39 a week from a reduction in income tax to a 20 percent flat rate. The fiscal cost of a flat tax at that rate would be around $5.5 billion. How would the National Party fund that? That means every cent knocked off the top personal tax rate of 39c in the dollar would cost $115 million dollars; every cent off the upper-middle rate of 33c would cost $95 million; the lower-middle income rate of 21c would cost $325 million for every cent and every cent off the bottom rate of 15c would cost a further $215 million. The approximate cost of changing the personal rates from 33c to 30c is a total—listen to it—of $1725 billion. 
One does not have to be a rocket scientist to work out that tax cuts are expensive. How does the National Party intend funding that proportion of tax cuts? Would it slash them from health? Labour will not. We are investing into health by committing $109 billion a year by 2008-09 meeting the full costs of maintaining real population-adjusted spending for the health and disability sector. 
 Does National intend to fund tax cuts by cutting funding for education? This Budget does the reverse. We are increasing our investment in early childhood education by $152 million over 4 years as we continue to deliver on our commitment to make early childhood education more affordable more accessible and of the best quality possible for all New Zealand families. Will National take it out of housing? Or will it go back to its dismal failed policies of the 1990s by selling off assets? New Zealanders are absolutely fed up with the National Party compromising health education and housing. Or do we just agree to the sale of our assets for the sake of National using tax cuts as a policy plank for the coming election? That is not surprising; that is how hopeless National is. 
This Labour-led Budget maintains a strong credible fiscal stance. It is fair and inclusive. It helps Kiwis build a stake in their country and it builds the conditions for growth. It secures the future for the nation as a whole and for New Zealand families. With careful financial investment it means we can afford to invest in health education and social services. 
It is a Budget for the future that saves for the future. The new KiwiSaver scheme is intended to begin operation on 1 April 2007. It is linked to a new scheme to assist modest to middle income families with a deposit for a first home. Those who are KiwiSavers for a minimum of just 3 years will qualify for an additional subsidy of $1000 a year up to a maximum of 5 years at the time of the purchase of their first home. 
This is a Budget with vision which builds the conditions for growth and it could have been achieved only by sound fiscal management. If the National Party had its way it would fund tax cuts by cutting spending on health and education by selling off State housing stock and by returning to failed old archaic policies that it tried in the 1990s. It has no new ideas no surprises no vision—nothing new. 
The Budget further creates solutions boosting New Zealanders’ capacity and choices through skills and training. Who cut the apprenticeships scheme? Who cut Maori Trade Training? It was National. We are doubling the industry training funding—$136.7 million will be invested annually. Modern Apprenticeships has been successful. Our target is 8000 Modern Apprentices by 2006 and industry training—those upskilling on the job—to nearly 140000. Our target is 150000 in industry training organisations this year moving to 250000 by 2008. That is a real commitment. 
The new Kapohia nga Rawa initiative provides funding of $14.8 million over 4 years for outreach and community workers to work with whanau to provide information and advice on education career planning financial management and housing. That will certainly assist Maori development and enterprise. 
In terms of promoting an understanding of the Treaty of Waitangi the Budget invests $1.2 million to develop and stage a major touring exhibition focusing on the treaty. The exhibition will be created by the Treaty of Waitangi Information Unit. It will visit 35 locations around New Zealand where it is estimated over 250000 New Zealanders will see it. That is about investing in our nationhood. 
 To improve the quality of life for kuia and kaumatua the Budget increases funding for cataract hip and joint operations. Over the next 3 years we aim to fund an extra 7500 cataract operations and we will fund ongoing increases in the number of hip and joint operations. 
The Government’s primary health strategy focuses on prevention and primary health organisations and clusters of health service providers are an all-important part of our strategy within this Budget to give cheaper doctors’ visits. There are now 77 primary health organisations able to offer lower-cost health-care for many of the 3.8 million New Zealanders enrolled with them. 
I finish by saying that we are supporting the celebration and preservation of Maori culture. Budget 2005 increases funding for kapahaka to help with regional planning and projects. We are also making housing more affordable. We are increasing State housing stock thus helping to reduce waiting lists and waiting times in the areas of high-housing need especially in Auckland. Other Government programmes to ensure better housing include programmes of income-related rents for low-income State house tenants rural housing programmes to address substandard housing community renewal programmes to improve housing and social conditions and healthy-housing programmes to reduce health risks in overcrowded homes. I extend my commitment to our Minister of Finance Dr Michael Cullen and thank him for a very stable managed way of presenting our Budget 2005. 
RON MARK (NZ First) 
: 
 I raise a point of order Mr Speaker. I wish to achieve a bit of brevity. I recall in my time here as a whip which was some time ago listening to the Rt Hon David Lange lamenting how members in the House had lost the ability to orate with skill. Might I suggest that rather than subject the House to readings of speeches pre-prepared by Ministers Government back-bench members might like to save us time by tabling those speeches and letting the Opposition get on with the real debate. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: I thank the member but that is an issue for another place. 
PANSY WONG (National) 
: 
 I do not thank the Labour member for sending the public to sleep; I will try to remind them that we are speaking in the Budget debate. Hundreds of people packed out venues in Auckland Christchurch Hamilton and Napier to listen to National’s leader Dr Don Brash and the shadow finance Minister John Key in their post-Budget tour. It was obvious that the crowds were angry about the total loss of touch of the Labour Government with the public. The crumbs that were being thrown at them through the much-trumpeted tax cuts of 67c a week in 3 years’ time angered the public. Labour has forgotten that the largest slices of tax come from personal incomes and GST. Hard-working New Zealanders were told by the Labour Government that people were not to be trusted to know how to spend their own money wisely. 
It is not as though those taxes were put into good use. Let us look at education at health and at the police. We see they are in crisis because of the lack of political management and leadership. But where are the taxes going? As the shadow Minister of Revenue I will share with members a piece of information. I am amazed at the increased personnel expenses for the Inland Revenue Department. The sum is going up by $33 million—$33 million for tax collectors. But can members guess how much police personnel expenses are going up by? It is a mere $41 million in comparison with the tax collectors. Our nation is crying out for protection and safety and the Labour Government’s answer is to give us more tax collectors instead of a larger police force. The public will send this Labour Government packing because it is arrogant and incompetent. 
Another area of concern is border security. The New Zealand Immigration Service has lurched from crisis to crisis since 2002 under the previous Minister of Immigration Lianne Dalziel. The legislation she rushed into the House in 2002 to lapse 10000 immigration applications and her incompetent management of the skilled migrant category has seen New Zealand’s reputation of having a transparent and consistent immigration policy plummet. Lianne Dalziel apparently apologised in a Christchurch Chinese language media “messenger” for raising the English language requirement for business migrants in 2002. Then I asked the Hon Paul Swain whether he agreed with that apology. In his written answer he stated that he knew nothing of the apology. 
Hon Member 
: They lied! 
PANSY WONG 
: Oh it is more than that. It is typical of the Labour Government which tailors different messages for different communities. That tightly targeted and secretive apology was aimed only for the benefit of Chinese New Zealanders in an election year no doubt to seek their votes. The continuing incompetence of the Labour Government’s handling of the immigration portfolio has seen it allocate only an additional $12 million in total to the whole Immigration Service but it has increased the funding for tax collectors by $33 million. 
Let us put that in perspective. That lack of a sense of priority gives rise to Winston Peters’ race card immigration platform. It is said that there are only two things in life that one can count on: taxes and death. But to that we can add Mr Peters playing the race card in election years. To make statements such as: “We are being colonised without having any say in the numbers of people coming in and where they come from.” in conjunction with assertions that the size of the Asian population will overtake that of the Maori population is to incite racial disharmony. I have pointed out previously that Statistics New Zealand’s projections—[ 
Interruption 
] If the member listens he may learn something—are based on long-term arrivals which include people who come here on work permits or student visas for more than 12 months. But Mr Peters will never let the facts get in his way. 
The proposal of Mr Peters to set up patriotic squads routinely seeking out overstayers will see non-European and non-Maori residents and citizens being put under surveillance and their loyalty to New Zealand being questioned. People from the ethnic communities have to defend their right to be here and account for their contributions constantly. One can imagine they would be well advised to carry their passports—like the one in my hand—in future when facing those patriotic squads. 
Lianne Dalziel 
: Is the member starting a coalition? 
PANSY WONG 
: The previous Minister of Immigration who lied to the media and was sacked from her portfolio and who put up English language requirements to shut out Chinese migrants has no room to speak. She should take the call and apologise to the Chinese community. I challenge Lianne Dalziel to apologise to the Chinese in Parliament not in a Chinese language paper. [ 
Interruption 
] I invite the honourable ex-Minister Lianne Dalziel to take a call to apologise properly in Parliament to the Chinese community rather than through a Chinese language newspaper. 
How much longer will it be before the time comes when people from the ethnic communities and others may be required to wear a yellow band—like the one on my arm—with their passport numbers on it? Some may think that that is being too dramatic. But let us remember after all that it was only in 1927 that the Wellington Indian Association had to fight against the Wellington City Council’s ludicrous insistence that Indian bottle collectors were to wear straps on their sleeves. And in 1937 Asian New Zealanders had to protest against a recommendation of the fruit and vegetable committee for the compulsory registration of Asian fruiterers’ thumb prints under the then Labour Acting Prime Minister Peter Fraser. 
The ethnic communities are either angry or resigned. But many have chosen to speak out. I am confident that the majority of New Zealanders are fair-minded and will speak up at the ballot box. The debate on immigration policy should happen but it should not be used as a disguise to raise fear and contempt against any particular community. The incompetent handling of the immigration portfolio has left the ethnic community vulnerable to exploitation yet Labour sees fit to increase the immigration vote in total by only $12 million when the tax collectors’ personnel expenses alone will be increased by $33 million. It is time for Labour to go. 
I would like to reply to the statement made by my parliamentary colleague Dr Ashraf Choudhary who seemed to be concerned about my list ranking. I can assure that member that no matter where I rank I will be highly visible in the Indian community compared with him. There have been cries in every edition of the  
Indian Newslink 
 asking where Dr Choudhary is. When will Dr Choudhary speak up when the Indian and Asian communities are under attack by the so-called immigration policies? Where was Dr Choudhary when the Indian information technology workers were not recognised by the Labour Government’s immigration policy? 
Hon MARK GOSCHE (Labour—Maungakiekie) 
: 
 That was a Budget speech by a National Party MP who is on the way out. Did New Zealand get any wiser as to National’s policy? Did National pronounce on what its Budget would look like? 
Hon Members 
: No. 
Hon MARK GOSCHE 
: No. That is because it still does not have a policy on anything. I thought National was going to have tax cuts by Christmas—but maybe not Christmas this year as Rodney Hide said; it will be sometime in the future and maybe only a little bit at a time and maybe not at all because the Leader of the Opposition might not feel comfortable with it! 
So let us hear about what is in this Budget we are debating. It is nothing but good news. There is $4.09 billion for vote Health. What is in there? There is half a billion dollars for nurses’ pay. This Government actually puts its money where its mouth is. We support nurses. We do not throw them out in the cold as the National Party does. We are not going to scrap 3300 of them to pay for some miserable tax cut. We are not going to sack 2700 teachers to pay for some nebulous tax cut that might come some Christmas in the future from National. 
Will that member get up and tell us how many teachers will lose their jobs and how many nurses will lose their jobs? Will nurses expect a half a billion - dollar pay increase when Sandra Goudie has to get a tax cut and when John Key cannot afford to live in New Zealand without a tax cut? Don Brash who put up New Zealanders’ interest rates year after year needs a tax cut but the workers who look after sick people have to go to pay for the tax cuts! That is National Party voodoo economics as it has been labelled. It is not even that. 
They want to go and tell the prison officers and the police staff how many of them are going to lose their jobs. We have provided an extra 1080 police staff 2700 extra teachers and 3300 extra nurses. They do not work for nothing; they have to be paid. 
I turn to the care of the elderly. Members opposite who do not like members to read their speeches talked about asset testing of the elderly. Did the National Government do anything? Did New Zealand First do anything? No they did not do a thing. This Budget gives $93 million to implement that policy in the first year. 
What about people in rest homes? They had a legitimate gripe with the National Government year after year but it gave them nothing. But this Budget provides $71 million next year for residential care. What about people who want to stay in their homes—the elderly or younger people who are ill? The Budget provides $18 million next year to address that very big need to improve the quality of care and the wages of those who look after such people in the community. 
Sandra Goudie is supposed to be the Opposition spokesperson on disabilities. What did she say about the $59 million extra for disability support services? Would she do away with that when she takes the tax cut for herself? Yes she would. She will say to them: “I am only a poor MP. I need some more money. I need a tax cut. Blow those workers! They can go to hell.” What about the extra teachers provided by this Budget? What about the fact that this Government since 1999 has increased for every child in every school the operations grant by 348 bucks? That is 15 percent in real terms over and above inflation. But that provision would have to go in order to pay for tax cuts for members opposite. 
What about the madness of the National policy on roading whereby it says it would borrow to build roads? Now this Government happens to have found $18.9 billion—a miserable $18.9 billion!—for roading and transport over the next 10 years. But National says that that is not enough; that it would borrow money and make people pay tolls as well. Where is the ghost of Muldoon when we need him to come and remind members opposite about the effects of such stupid economics! That suggestion was made by a fellow who was once the Governor of the Reserve Bank. We know what Mr Muldoon thought of that sort of economics. 
Lianne Dalziel 
: Baloney! 
Hon MARK GOSCHE 
: He would have used much stronger words. I was shaking in my boots when I saw that speech! I was frightened! 
Lianne Dalziel 
: Baloney! 
Hon MARK GOSCHE 
: No no! I think Mr Speaker should rule that word out as unparliamentary—because it was in 1901. But seriously in my community the important things are more money for education health and industry training; more apprenticeships for our kids more teachers in our schools more money to run the schools. I could go on and on. I love driving around Auckland at the moment and seeing the work that this Government has undertaken. It is all about building a new hospital building new roads getting the railways going getting more buses more roads. What does Wayne Mapp want to do? He wants to take holidays away from workers—before Christmas. That is his policy—to take away those holidays. What an unimaginative dead-brained bunch of Opposition members! What a pathetic Opposition! No wonder the media are having to do the job for the Opposition! No wonder the media are saying: “There is no real Opposition to this Government. We had better do the job for them because nobody on the Opposition side has a brain.”! Not one of them can come up with a policy not one of them can stick to a story for more than 5 minutes. There will be a tax cut by some Christmas in the future but not much. Because John Key and Don Brash cannot agree on that policy we are none the wiser. But we on this side know that we cannot have spending for schools education and health if we have a tax cut. 
Debate interrupted. 
The House adjourned at 10 p.m.