Financial Review Debate — In Committee 
Text is incorporated into the Bound Volume 
Financial Review Debate — In Committee 
[Sitting date: 12 March 2013. Volume:688;Page:8412. Text is incorporated into the Bound Volume.] 
Financial Review Debate 
In Committee 
The CHAIRPERSON (Lindsay Tisch) 
: The House is in Committee on the Appropriation (2011/12 Financial Review) Bill. The financial review debate is the Committee stage of the Appropriation (2011/12 Financial Review) Bill. The time allocated for this debate is 4 hours and comprises two distinct elements. The first is the debate on the annual Financial Statements of the Government as reported on by the Finance and Expenditure Committee. Once this has concluded the Committee debates individual financial reviews of departments Offices of Parliament and non-departmental appropriations as reported on by the select committees. The debate on the Government’s financial position may be a fairly wide-ranging one but the debates on the individual financial reviews of departments Offices of Parliament and non-departmental appropriations should be relevant to their performance in the 2011-12 financial year and their current operations. 
The compendium of financial reviews and non-departmental appropriations available for debate is on the Table. A member other than the responsible Minister may have no more than two calls on each financial review. At the conclusion of the debate a single question is put on the provisions of the bill. There is no amendment to or debate on this question. The Chairperson then reports the bill to the House and it is set down for third reading forthwith. There is no debate on the third reading. 
Will members please turn to the report of the Finance and Expenditure Committee on the annual Financial Statements of the Government. The question is that the report of the Finance and Expenditure Committee on the annual Financial Statements of the Government for the year ended 30 June 2012 be noted. I note that this report also relates to the Finance and Expenditure Committee’s financial review of Treasury so the performance in the 2011-12 financial year and current operations of Treasury may also be debated. 
Treasury and the Financial Statements of the Government of New Zealand for the year ended 30 June 2012 
Hon DAVID PARKER (Labour) 
: 
 The Finance and Expenditure Committee report details that this year net Crown debt is increasing substantially as it says from $40 billion 20.3 percent of GDP to $50.7 billion 24.8 percent of GDP. This shows that Government debt is still rising sharply as we go into the fourth—coming up fifth—year of this National Government. 
The Labour Party has not been critical of the fact that the Government has been running a deficit post the global financial crisis. Indeed one of the reasons why the Government can do that relatively comfortably compared with other parts of the world is that it inherited Government debt that was amongst the lowest in the developed world from the outgoing Labour Government. Indeed gross debt had been reduced from about 40 percent of GDP to 18 percent of GDP and net debt was down to virtually zero. 
What we do say though is that the financial review of Treasury and of the Financial Statements of the Government shows that the Government has not met the undertakings it made to the electorate when it was elected in 2008 and I want to comment on a couple of those. First of all we had the promise of the Government that it was going to rebalance the economy towards exports. It was going to grow exports from approximately 30 percent of GDP to 40 percent of GDP. National came to Government when exports were virtually 30 percent of GDP and they are still virtually 30 percent of GDP having gone up or down in any 1 year by 1 or 2 percent but not having moved from the underlying position of 30 percent of GDP. There goes a failure. 
We also had the Government saying that it was going to close the wage gap with Australia. We know that it has been refusing to agree to any sort of milestone by which it can be judged on this because its performance on that is even worse than it is on exports. Not only has it not improved the position; it has actually gone backwards so much so now that the gap between New Zealand wages for a median wage earner in New Zealand and an Australian on the median wage is $180 per week using the purchase price parity measure that the Prime Minister and the Minister of Finance have both previously said they prefer. For a median wage earner in Australia adjusted for New Zealand spending the wage is $1067 per week. For New Zealand it is now $887—a gap of $180 per week. That is an increase during the term of this Government of $60 per week—$60 per week worse rather than getting better. No wonder record numbers of people have left for Australia. It has now reached the point that an Australian working 4 days can earn the equivalent of what we earn in New Zealand whereas a New Zealander has to work 5 days. So there goes another symbol of the failure of the economic policy of this Government. 
I raise a point of order Mr Chairperson. Am I to use that microphone so I can be heard externally? Because if it is just internally— 
The CHAIRPERSON (Lindsay Tisch) 
: Yes—no it is externally. 
Hon DAVID PARKER 
: Externally? OK. 
The CHAIRPERSON (Lindsay Tisch) 
: Unfortunately we are still having problems with that. 
Hon DAVID PARKER 
: Right. Is this on? How do I tell? 
The CHAIRPERSON (Lindsay Tisch) 
: It should already be on—just try. 
Hon DAVID PARKER 
: It is going? Yes—OK. Thank you. In addition to other problems that we have in the New Zealand economy the fact that the economy has not rebalanced towards export-led growth is evident not just from the failure to grow exports as a percentage of GDP but from the perennial current account deficit. New Zealand maintains a current account deficit that according to the IMF this year will be the second-worst in the developed world at an astounding $10 billion. That $10 billion external deficit is funded either by selling more previously New Zealand - owned assets to overseas buyers or by borrowing from overseas. As a consequence New Zealand’s balance sheet if you like as a country gets worse as we are hollowed out as an economy owing more to overseas and with more of New Zealand’s assets being owned by overseas people. Treasury and the Reserve Bank forecast this as continuing to increase to about 6.7 percent of GDP in 2016. 
The Government turns round and says: “Well look this is not as bad as it was during the heady days of the 2000s.” It is true that in two of those years it got higher than that. That was not a good result. The problem for the Government is that it promised to fix it yet it refused to pull the levers of power that would enable it to do so. The lack of economic policy from this Government to make a true difference can be simply evidenced from the fact that its biggest economic policy for this term is the sale of minority interests—up to 49 percent—in State-owned enterprises. 
The CHAIRPERSON (Lindsay Tisch) 
: I understand members that this microphone in front of me is the only microphone that is working and that the handheld microphone is not actually working either. What I propose members—[ 
Interruption 
] Order please. What I propose is if the member—although we can hear in here it cannot be heard externally other than through this mike here. So I am going to invite members to come forward and speak from here and we will just turn this microphone round until we get something— 
Hon Annette King 
: The Speaker’s Chair would be better. 
The CHAIRPERSON (Lindsay Tisch) 
: No we are in the Committee stage so we cannot go up there. I am inviting another member to take the call. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 It is great to be speaking on the Government’s financial position because there has been quite a lot of debate about that today. I would particularly like to draw attention to the cost of the asset sales programme and the big impact that that is having on the Government’s books. According to Treasury the cost will be about $441 million over 5 years. That is the net cost and that is the result of the fact that the dividends or profits that the Government earns on these assets are much greater than the cost of debt which is being replaced by the sale of the assets. Treasury estimates that the net cost of the Government asset sales programme is $441 million. That is a giant hole in the Government’s books. When you add to that the $100 million that the Government is proposing to spend at least initially on the asset sales programme you end up with a $541 million hole in the Government books as a result of the Government asset sales programme. 
So the question to the Government is: with a half-billion-dollar hole in the Government’s books as a result of the asset sales programme what is it going to cut? Is it going to increase revenue or is it going to borrow more in order to cover this giant hole in the Government’s books? If your aim was to protect the Government’s finances then you would not go down this path because this path according to the Government’s own figures is going to cost at least $541 million. 
On top of that we have the share giveaway programme which at the moment is unquantified. If the Government persists in its share giveaway scheme it could cost tens of millions of dollars on top of that depending on how large it would be. It could be $100 million. We do not know because the Government has not announced what the programme looks like and also because the Government itself does not know what the uptake of the share giveaway or the loyalty bonus scheme will be. The question for the Government is why this is worth spending half a billion dollars on. Why is it worth half a billion dollars to go down this path? 
This comes against the background of the broader economic management of the Government which is very problematic. We have the current account deficit which is 5 percent and rising. When the Minister of Finance first came into office he talked a lot about rebalancing the New Zealand economy. By that he meant reducing the current account deficit amongst other things yet now we hear very little from the Government about rebalancing the economy because essentially it has failed. We have a 5 percent current account deficit and it is growing and projected to increase further down the track. That seems to me a fundamental failure for the Government in terms of the current account deficit. 
Hon Maurice Williamson 
: Can we turn it off? 
Dr RUSSEL NORMAN 
: The Government does not want to hear about this. The Government does not want to hear about this. It wants the sound system to be off but the reality is that when you look at the numbers the current account deficit is 5 percent and growing and is guaranteed to get worse under the current economic settings. Of course on top of that we have very high rates of unemployment under this Government. We have had the highest and second-highest rates of unemployment since National was last in Government—around 7 percent—and that itself is I think a real indication and really a fail mark in terms of the Government’s economic strategy broader than just the fiscal strategy. The Government has told us that it has 300 initiatives and so forth around its economic management—and good on it—but when it comes down to these macroeconomic indicators you would have to say that 4 years in you cannot blame the last Government for it. Four years in the Government itself has put itself in a big hole and has created the big problem—not to mention what I think is one of the underlying problems which is that the attempts with the Resource Management Act reforms and others to degrade the environment will undermine the long-term performance of the New Zealand economy. They will undermine the environmental capital on which we all depend for the long-term sustainability of the New Zealand economy. 
So it is not just the fiscal performance that is in trouble. It is not just the broader macroeconomic performance which when you look at the current account deficit you see is in trouble or the unemployment numbers; it is also the underlying environmental or natural capital on which our economy depends long term. And if we continue to degrade that natural capital as National is proposing to do then the long-term economic picture becomes very difficult as well. 
We have also been discussing the manufacturing inquiry and looking at what is happening in the manufacturing sector which we in the Greens believe is very important. We are very interested in the development of the green manufacturing sector in particular. We have seen the loss of 40000 jobs over 4 years. This is a long-term trend. It is not simply a result of what this Government has done. It is a long-term trend but under this Government it has continued to get worse. We think that what happens in manufacturing is important because it is a high-value sector and because it is critical that if we are to rebalance our economy the manufacturing sector performs as well not just the primary sector. 
The CHAIRPERSON (Lindsay Tisch) 
: I am going to call Paul Goldsmith. The member must use the handheld microphone. 
PAUL GOLDSMITH (National) 
: 
 It is my pleasure to speak on this bill here the Appropriation (2011/12 Financial Review) Bill. We have heard many tales of woe from the other side of the Chamber. I suppose one of the puzzles I have is why given the problems that have been outlined by the two previous speakers this Government 4 years into its period of office is retaining the levels of support that it is. They are at historic levels. You have to go back to Michael Joseph Savage I think back in the 1930s—dear fellow that he was—to see this sort of support from the public 4 years into a Government. You ask what the reason for that is. I am sure the Prime Minister’s— 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry to interrupt the member. Can you just hold the microphone up a little bit. 
PAUL GOLDSMITH 
: How is that? Thank you Mr Chairperson. The reason we continue to have this high level of support is the Prime Minister’s leadership which is a big part of it. What I want to talk about here is the consistency and the clarity of purpose that this Government has brought to its economic programme. We have talked about the four priorities: first getting the books back in order. This Government is making very good progress on that as the figures here outline. We have halved the deficit in the last year and are on track to be back to surplus by 2014-15 which is no small achievement in a very difficult time. 
Secondly we have been focusing on improving public services. Again during a period of 3 or 4 years of tough Budgets without significant improvements it is very remarkable that all the surveys that have been taken in the public sector have shown that the public has been seeing an improvement in services notwithstanding the tight Budget constraints. 
Then we are looking at rebuilding Christchurch—everybody understands the rationale for that—and finally building a more productive and competitive economy. That has been the real challenge because getting books back into order on its own is not helping us. You need also to have that growth in productivity which is the key to our enterprise and success. So that has been about getting the incentives right. It is about rebalancing the tax system which was done in the first Budget about the welfare reform programme which continues to get incentives correctly responded to and about the Business Growth Agenda which is the core of the Government’s programme in terms of building productivity. All this is working quite well when we look at the state of the economy. Treasury forecast in December real GDP growth from 2.3 percent in 2012-13 to around 3 percent in 2013-14 and there are signs that growth has picked up in recent months. For example the volume of building work undertaken has risen in the December quarter after gaining 9.8 percent in the September quarter. Manufacturing volumes are rising notwithstanding all the heat and light that we have heard from that sector. So this Government continues. We are not giving away any gimmicks in contrast to what is being offered from the other side. 
And then we look across to what the Greens continue to talk about which is to make it difficult to either close or stop most of the industries that will grow the economy yet they blather on about the green economy as if somehow this is going to magically replace all the jobs that they will stop. Then we talk about quantitative easing. We hear a lot of talk about pulling various levers. I am not quite sure what those are other than the capital gains tax. I am quite sure there are plenty of respectable economists who will argue for a capital gains tax and plenty of other countries have it. If I could have any confidence that Labour would not introduce that just as an extra new tax on everything else and have more and more taxes then we might be more open to talking about it but I am quite confident that it will be just more and more taxes—significant taxes—that Labour is piling on right at a time when we need to be rewarding innovation and investment. A capital gains tax does not seem to be a good way to increase investment in this country. 
These figures that we have got here in the financial review are encouraging figures at a difficult time globally. New Zealand is holding its head up high and has a very clear path forward for progress. Thank you. 
Hon JOHN BANKS (Leader—ACT) 
: 
 I am pleased to be working with the Minister of Finance and I am very happy that Dr Norman and his printing press are not around the chairs of the purses of public expenditure. 
What we are looking at today of course and considering is an excess in spending and a structural deficit that the Government has had to deal with—a structural deficit that the Minister has had to grapple with. The report shows that spending growth must be held to 2 percent per annum to restore a fiscal surplus by 2014-15. Holding spending growth at 2 percent is tough; for the last decade spending growth has averaged 8 percent a year. Spending growth in this economy has averaged 8 percent a year over the last 10 years. It needs to be brought back to 2 percent a year. It does not make sense that every day every week every month and every year we borrow from savings from offshore to spend locally on programmes that we simply cannot sustain that we have never been able to afford and that are not as good for investment growth and jobs. 
We are still cleaning up for instance Labour’s KiwiRail mess with $6.6 billion in value of the network being written off to date—$6.6 billion in value of the network being written off to date. We are still dealing with that legacy. As someone who has been in business for 50 years all I can tell you is that you get Dr Cullen as a buyer only once in a lifetime Minister—once in a lifetime. 
So here is where the country needs to go. We need top-down control of expenditure like ACT’s spending cap measure. We need spending cap measures so that we do not have to borrow every day every week and every month from the savings of others to fund expenditure programmes we simply cannot afford. We need much more rigorous programme-by-programme scrutiny. This Parliament needs to do line-by-line and programme-by-programme scrutiny of every single piece of expenditure on its worth. 
We need to do much better at asking questions and asking whether programmes satisfy the OECD’s five basic questions. The five basic questions that the OECD puts to us and that the Minister is prescribing to are these. Does the programme still serve a clearly defined public purpose? Is it an appropriate role for the Government? Would we establish the programme today if it did not already exist? Is it desirable to maintain it at current levels? And can it be delivered more effectively or more efficiently right now? That is the slide rule that the OECD put across all expenditure programmes and we should be doing it today because it makes sense and they are timeless propositions. 
This is the wrap-up: the finance and expenditure report observes that we can look forward to only moderate growth of 2 to 3 percent and continuing high unemployment. Moderate growth and continuing high unemployment—and the other side of the Parliament wants to continue to borrow to tax and to spend. That is the proposition coming from the other side of the Chamber: borrow tax and spend. If we want to grow faster and get more investment and more employment we have to reduce the burden on the private sector so we should pass the slide rule over all regulation on the private sector coming through this House. Is it good for or is it bad for investment growth and jobs? If it is bad for them do not do it; if it is good for them we get on to it. 
Investment growth and jobs—this means less wasteful or unnecessary spending lower taxes and less red tape and regulation. Do you hear that from the other side of the Chamber? How often have you heard it from the other side of the Chamber? Never. We never hear it. So this means less wasteful and unnecessary spending lower taxes and less red tape and regulation. 
I am pleased to be in partnership with this Minister of Finance in this National-ACT - led Government which is committed to less government lower taxes more opportunity world-class education jobs for everyone and a growing economy that pays its way and where all regulation is tested in this House to see whether it is necessary. If it is not necessary we do not want to know about it because we are committed to a programme of getting this country back into surplus and paying its way so that we do not have to borrow from the savings of other citizens of other countries every day every week and every month to make ends meet. I finish as I began— 
The CHAIRPERSON (Lindsay Tisch) 
: I call the Hon David Parker. I understand that the Leader of the Opposition’s microphone is working if you would prefer to take a call on that. 
Hon DAVID PARKER (Labour) 
: 
 Shall I try that? 
The CHAIRPERSON (Lindsay Tisch) 
: You can try that. 
Hon DAVID PARKER 
: The Leader of the Opposition for 5 minutes. Is that working? It is not working. [ 
Interruption 
] Mr Chairperson is that working? I think that was meant to be. That short-lived promotion to the position of Leader of the Opposition was obviously not my calling. It is always amusing to follow John Banks in this House. He stands up and lectures the Opposition on fiscal responsibility when in the last 3 years of his mayoralty he tripled council debt. He tripled the Auckland Council debt. That is even excluding the extra debt that was taken on for the so-called super-city. He tripled council debt. This is the man who cannot even count up his own electoral expenses accurately lecturing us in the Opposition on prudent fiscal management and economic policy. This National Government is propped up by John Banks and it must be a very uncomfortable experience to be propped up by that man low as his standards are. 
We have got high unemployment in New Zealand. We have had 180000 people go to Australia. We had the Government when these statistics came out saying that it cannot reconcile the unemployment benefit with what is happening in the economy on other measures. So the Government says that the household labour force survey overestimates unemployment because there are not that many people on the dole. Well the reason for that is that most working people now need two incomes to survive. When one of those people is made redundant they are not entitled to the unemployment benefit. That is one of the things that we have heard in the manufacturing inquiry that the National Party blocked through select committee but that Opposition parties have held anyway outside of the select committee process with full public submissions. We have heard time and again that people when they lose their jobs in manufacturing are not entitled to the dole because they have one person in the relationship who is still working and so they are unemployed. If you want to look at the true measure of how much work there is in New Zealand look at the total hours worked under the household labour force survey. The total hours worked is down. There is less work in New Zealand than there was last year. Four years into this Government despite the fact that it is spending all these billions of dollars of reinsurance money that is coming in from overseas the number of hours of paid work that is available in New Zealand has decreased. 
This Government is mismanaging so many things—whether it was the Crown guarantee which cost hundreds of millions of dollars extra because the Minister of Finance did not do any supervision of Treasury and Treasury did not check whether there were increases in lending under those guarantees or whether it is Solid Energy where the Government is so hands-off that it ignored the problem until it became one of gigantic proportions. In fact the reason the Government did that was that it did not suit its election agenda. The Government received reports prior to the election showing that Solid Energy was in trouble but it pretended that was not the case because it wanted to take to the election the promise to sell State-owned enterprises including Solid Energy and did not want to acknowledge that under its term in Government it had become a dog. So the Government hid that until after the election. 
The scarcity of decent economic policy can be gauged from the number of people going to Australia the fact that incomes are flat the fact that unemployment is high and the fact that our current account deficit is amongst the worst in the world and not getting better. The fact that the Government has as its central plank of economic policy for this 3 years the sale of State-owned enterprises selling what already exists does not improve economic output one iota. The fact that that is the central part of this Government’s economic agenda for these 3 years shows how bereft of ideas it is. In the last few weeks what has it said? Oh it will look to loan-to-valuation ratios—Labour Party policy. It will look at tidying up Government procurement. It is not going nearly far enough but it is going to do something there—Labour Party policy time and again. I bet in this Budget it is going to do something about a warrant of fitness for homes—Labour Party policy. This party on the National Party side has not—[ 
Interruption 
] Sorry? 
Jan Logie 
: And a Green Party policy. 
Hon DAVID PARKER 
: Labour and Greens. The Greens also agree that that is very sensible yes. Yes we will give some credit to the Greens for that. But the National Party—the johnny-come-latelys to those ideas the visionless party on the other side of this Chamber—has got no decent policy to lift us out of this problem. Exports are not increasing and the current account deficit is getting worse. 
HONE HARAWIRA (Leader—Mana) 
: 
 Kia ora tatou. Tena koe Mr Chairperson. Kia ora tatou e te Whare. This Government’s line about spending the money it makes from the sale of State assets on new schools and hospitals is a myth that is very quickly exposed by a simple reading of this financial review of Treasury and the Government’s Financial Statements for 2012 which shows a number of things. One even though the Minister of Finance talks up his Government’s target of 170000 new jobs he has no plan to create jobs except to point to a market place that is dumping Kiwi workers and shifting our manufacturing sector overseas. Two even though the Minister says not to read too much into our skyrocketing unemployment figures not only did external agencies correctly predict our current level of employment when the Government could not but those same agencies also predict another 25000 unemployed in the March quarter. 
Three even though the Minister says he cannot understand why unemployment is up but the number of people on unemployment benefits is down he happily votes for welfare reforms that are forcing people off benefits out of their homes and on to the streets. Four even though the Minister says he is optimistic about our future the review shows that Crown debt will go through the roof over the next 4 years and that according to the IMF our external debt is the second-worst in the developed world and will be worse than Greece’s by 2014. 
Five even though the Minister is talking up the sale of Mighty River Power the review itself says that the Crown is unlikely to maximise its return from a public offering of shares in the current economic climate. Such is the climate in which this Government is preparing to sell off assets that we already own. When it says to us: “Hey guess what folks! You know that house that our grandparents built? Well we’re going to sell the kitchen because we need some money to fix the toilet. But don’t worry we can rent the kitchen back for the next 1000 years.” can you see how dumb that sounds? This is our house but we have got to rent back our own kitchen for ever at a rent that will keep going up every year for a kitchen that our grandparents built. 
The fact is that this country is in an economic hole with the second-worst external debt in the developed world and that moneys from the sale of State assets will be used to repay that debt—not all of it; just some of it. And is that not a good idea I hear you say in order to repay debt? Well no because what happens when we have sold off the power companies? The debt will still be there and then what are we going to sell? Schools—oh too late. We have already privatised education. Health? Well we have already privatised health services as well much to the joy of the overseas private health insurance companies making a killing off our pain and misery. And houses—State houses are already being flogged off as we speak today as witnessed by the communities of Glen Innes Porirua and Maraenui. 
The fact is that the rape and pillage brigade has already gotten its grubby little hands on most of the family jewels so this Government is now trumpeting our Third World status and our low wages in an attempt to sell our labour to the world. That is the climate in which this Government is planning to flog off our assets. That is why Mana stood with the New Zealand Maori Council which won its case to ensure Maori rights to water were recognised and to delay the sale of Mighty River Power until today. That is why Mana will support the council’s effort to clarify the extent of those rights when the case comes back before the Waitangi Tribunal later this month. That is why Mana supports Pouakani’s bid to stop the sale of State assets until their interests in the water that drives Mighty River Power have been properly clarified and protected and that is why today Mana was proud to stand alongside Labour the Greens New Zealand First the unions Grey Power and the Union of Students’ Associations in receiving the petition of nearly 400000 people calling for a referendum on asset sales. 
On matters of principle people have to take a stand because despite widespread disapproval from the public over the pending sale of Mighty River Power despite every respected economist questioning its financial viability despite several court cases being brought by Maori over water rights and despite the Government already admitting that the shares will be sold cheaply and that it cannot guarantee that those shares will remain in New Zealand hands this Government still plans to sell Mighty River Power. Today I stand alongside those hundreds of thousands of New Zealanders who signed the petition and challenge the Government to put its claim that it has support for asset sales to the ultimate test. A straight referendum one simple question: “Do you support”— 
ANDREW WILLIAMS (NZ First) 
: 
 I take a call on behalf of New Zealand First in this debate and again today we have witnessed another example of a clueless Government that basically has run out of ideas. The purler that we have had today is the latest imposition of fringe benefit tax on car-parks for companies in Auckland and Wellington to raise something like $18 million in revenue. You really have to be scraping the barrel when this Government which says it is going to try to help business try to help grow the economy and try to increase New Zealand’s business environment comes out with things like: “Let’s start charging them fringe benefit tax to park their cars as well.” It sort of follows on from other miserable taxes like the taxing last year of schoolboys and schoolgirls delivering their newspapers and all sorts of other miserable little taxes around the edges that really are showing that the Government has run out of ideas and run out of substantive ideas to get this economy really moving again. 
It is very interesting. I have been one of the members of Parliament sitting on the manufacturing inquiry over the last 6 weeks which has been held in Wellington Auckland Christchurch and on Monday Dunedin. It is very interesting to hear from some very significant manufacturers and exporters in this country—iconic names like HamitonJet; we all know HamiltonJet you know one of the greatest manufacturing companies that has come out of New Zealand—and for them to be saying how much they are really struggling and finding it difficult to compete in world markets with the New Zealand dollar where it is today up around US83c US84c or US85c. They are saying that it is so difficult and that this Government is really not coming up with any ideas. Not only is it not coming up with any ideas but also it is not prepared to listen to the ideas that are being suggested by some of these very reputable companies. Ideas— 
Hon Gerry Brownlee 
: Give us one. 
ANDREW WILLIAMS 
: Yes I will. Thank you Gerry I will give you one. There are ideas such as in the United States where they were seeing a huge vacuum of companies disappearing off to China to manufacture in China. In the United States they have brought in a 40 percent write-down on new technology and equipment in the first year. As a result of bringing in that new policy in the United States they have seen a regeneration of productive US companies that actually are now finding that they are more competitive with their plants in the United States as a result of having those write-downs on new technology and equipment. They are actually gearing up and retooling in the United States and are moving their production back onshore. 
Hon Gerry Brownlee 
: Name one. 
ANDREW WILLIAMS 
: So there is one. There is one. Is it not interesting? When you have a proper inquiry when you do not stay up on the ninth floor or the eighth floor or the seventh floor of the Beehive and ignore the country but you actually go out and listen to the companies and the manufacturers and you sit down and you listen to some of their suggestions it is quite amazing. You also hear that manufacturing provides stable long-term good employment with good wages—reliable wages that a family can take home and bank they can go to their bank manager and get a mortgage and they can have a house and work. Many of these jobs that are being lost in manufacturing are turning into precarious jobs such as part-time jobs—jobs that are not giving any reliability—and time and time again we have heard of downscaling and downsizing of companies in New Zealand retrenching and laying off staff. And those very staff who supposedly do not go on to a benefit—as we heard if they have already got one partner working they are not counted as going on to a benefit so they do not appear in the statistics—often then go to precarious part-time semi - part-time work which then does not bring into the family sufficient income which they have been used to. 
Hon Gerry Brownlee 
: That’s not right. 
ANDREW WILLIAMS 
: It is right. It is right. I am sorry Mr Brownlee but we have heard that from many many many sources. And when you hear it from some manufacturers in Auckland and you hear it from manufacturers in Dunedin who are 1500 kilometres apart and who have no connection between the two of them there is obviously something going on there. It is going to be interesting that when the results of this manufacturing inquiry come out they will point a direction for New Zealand that we can uphold. And if the Government is smart it would actually embrace the findings of that inquiry. It would say: “Yes we can learn from this and we should not be that arrogant”— 
Hon BILL ENGLISH (Minister of Finance) 
: 
 I would be happy to respond to some of the issues raised by members of the Committee. First of all I simply outline the fact that the accounts that we are looking at here show the benefit of the Government’s continued focus over a 3-year period since it has been in office on a considered and consistent change in the economy. We have had considerable headwinds in the aftermath of the global financial crisis. That has made it difficult for the Government as well as households and businesses to achieve the aspirations that they have but the Government has stuck right through that period to a straightforward plan which we have every confidence is bearing fruit now and will continue to do so. 
There are any number of examples I could give but one example I will use is around infrastructural investment where despite difficult times for the Government’s books the Government committed early on to a range of investments in transport broadband and energy and it stuck to that plan. The projects are funded they are under way and some of them are completed. The industry and the country know that that process will continue with some confidence. 
Just to pick up a few of the comments made by the members of the Committee I was interested in the member from the far north being worried about the Government’s—in his words—lack of interest in creating jobs. He is a member who spends a great deal of his time in the far north making sure no jobs are created—leading the movement that opposes for instance the exploitation of minerals oil and gas not just in the far north but also off the East Coast of the North Island. The fact is that jobs flow from investment. If you do not have investment you do get jobs and that means your 17-year-old in Kaihohe has less prospect if there is less investment. It would be worthwhile the member spending a bit of time just seeing how that linkage works. Wishing for jobs does not create them. 
We also heard from the member for New Zealand First about the so-called manufacturing crisis. If there was a crisis of the sort that he was describing then I could understand the level of concern that the Opposition is showing. However it is not the case. Of course it is difficult for manufacturing and not just manufacturing—it has been difficult for everybody in an economy that has had a significant recession with a relatively moderate recovery from that recession. What the members should be learning I think from that inquiry is the resilience that so many manufacturers and exporters have shown. If they had not been very resilient we would not have the revenue that is flowing through the accounts that we are discussing today. 
If fact manufacturing is growing moderately. In the last quarter the most recent employment numbers show a drop-off in the total jobs in manufacturing but what is surprising through the last 4 or 5 years is not how much manufacturing has shrunk because it has not but how well it has held up given the difficulty of markets where demand is shrinking including now Australia and the headwind of a high exchange rate. It does not mean that some are not shedding jobs. They are. Some businesses are going out. What is less visible is the large number of manufacturers and exporters who are actually expanding their investment and expanding their employment. 
One of the contributions as I said that they have made is a contribution to fairly steady growth in tax revenue. The Government has set out to reduce taxes on work investment and savings. That was done back in 2010 and these accounts are starting to show the fruits of the improved incentives in the economy. As we see taxes continue to grow and in fact grow just slightly faster than we might have been expecting and that is why we remain on track to surplus. 
TODD McCLAY (National—Rotorua) 
: 
 It is a pleasure to stand to speak in this debate and I want to commend the last speaker the Minister of Finance Bill English and to thank him for the great job he has done on behalf of New Zealanders over the last 4 years. You see there is a member opposite who has just stood up who was a member of the Finance and Expenditure Committee. Actually as far as most Labour members are concerned he was a quite hard-working and reasonable member of that committee—he has since moved on to the Commerce Committee—and he is occasionally heard to say in this House “the worst of this and the worst of that for 50 years”. Well I have done a quite bit of research and when Bill English became our Minister of Finance we inherited some of the worst economic conditions in 50 years. [ 
Interruption 
] That is right. There we go. So on the Opposition side of the Chamber not only are they Hobbit-haters they are global financial crisis deniers as well. When we came into Government the global financial crisis hit and the Government books went in the opposite direction. And what happened to members opposite? Well they said there was no global financial crisis nothing was wrong New Zealanders had made a mistake and they would wake up soon and then 3 years later we had another election— 
Hon Annette King 
: All the Labour Party’s fault the global financial crisis! Labour caused the global financial crisis of course. What a pathetic argument! 
TODD McCLAY 
: That is right Mrs King you are still on that side of the Chamber after that last election—exactly. So let us have a look at what Treasury is saying about the job that has been done by this Government over the last 4 years in extremely difficult circumstances for New Zealand and New Zealanders—and we must recognise that—and let us then compare that with what is happening in other parts of the world which the Labour Opposition seems to want to be so much like. 
Well the Treasury forecast in December that GDP would grow 2.3 percent for 2012-13 and 3 percent for 2013-14. So many other countries of the world would like that to happen. Indeed if we look around the world at the countries that have between 0 percent and 1 percent interest rate at the moment which are responsible for over 60 percent of the world’s production many of them are still in recession and their unemployment rate is so much higher than ours. Members opposite have spoken about unemployment at great length in this House and almost everywhere in the country. But let us compare what is happening in New Zealand with other countries. The unemployment rate in New Zealand at the last survey stands at 6.9 percent down from 7.1 percent last year and we all accept that that is a high number. But let us compare it with Europe because we hear so much about the policies of parts of Europe and that New Zealand should emulate them and be a lot more like them. Well in the 17 eurozone countries the 17 countries that have the euro— 
Hon Member 
: Do they count their statistics in the same way? 
TODD McCLAY 
: It is a good question but members opposite count statistics however they want to just so that they can go up to the House and confuse New Zealanders. But 11.9 percent is the average unemployment rate. Of the 27 countries in the European Union their average unemployment rate is 10.8 percent. In the USA—we heard earlier from New Zealand First about what is or is not happening around manufacturing in the USA—7.7 percent is its unemployment rate which is the same as the United Kingdom. And in the two countries in the rest of the world that the Opposition wants us to be so much like—at least one would come to that conclusion when we hear the policies that it would be putting in place for this country if it was on the Government benches—Greece has 27 percent and Spain has an unemployment rate of 26 percent. 
 I again say to our Prime Minister John Key and to our Minister of Finance Bill English thank goodness New Zealanders decided that they trusted the judgment of these two men that they saw through very difficult difficult times that New Zealand was going in the right direction and that certainly they wanted good economic management at the same time. 
So what does the Opposition say about this? Well really it is to oppose. I accept that when you are in Opposition at the front of the title it says “oppose” but everything this Government has come up with to help the New Zealand economy to give New Zealanders a better chance to grow business and industry and to create jobs the Opposition has opposed. The first would be to build a convention centre in Auckland. It is against that every step of the way. Jobs will be created. People will travel from all around the world to come here but the Opposition does not want it at all. It opposed the changes that were made to allow the  
Hobbit 
 movies to be made in this country. It did not want the movies to be made here. I am very proud they are made here by hard-working New Zealanders. I am very proud this Government was able to put in place a regime that was fair and that brought to this country those movies and the billions of dollars that flow over time because of that. The Opposition opposed our changes to the Resource Management Act. 
BRENDAN HORAN (Independent) 
: 
 Under review is the performance of the Ministry of Transport and what a shambolic year 2011-12 was for transport in New Zealand. Minister Brownlee is supposedly in charge— 
Hon Gerry Brownlee 
: I raise a point of order Mr Chairperson. 
The CHAIRPERSON (Lindsay Tisch) 
: I think I know what you are going to say but I call the Hon Gerry Brownlee. 
Hon Gerry Brownlee 
: Mr Chairperson—oh I cannot be heard. 
The CHAIRPERSON (Lindsay Tisch) 
: I am sure I know what you are going to say. What we are on here this debate is not about—if you want to specifically talk about the Minister of Transport and transport matters that comes later in the debate all right? We are on the Financial Statements of the Government for the year ended 30 June. That is what we are on. Brendan Horan. 
BRENDAN HORAN 
: Thank you. I will wait for later in the debate. 
The CHAIRPERSON (Lindsay Tisch) 
: The member has already spoken and that is a call. [ 
Interruption 
] Order! You have taken the call. You have actually used up your 5-minute spot. 
Report noted. 
Canterbury Earthquake Recovery Authority 
Report noted. 
Ministry of Transport 
The CHAIRPERSON (Lindsay Tisch) 
: Now I am just going to clarify with Brendan Horan whether—I think the member has used his call. 
Hon Gerry Brownlee 
: No that’s not the way it works. 
The CHAIRPERSON (Lindsay Tisch) 
: Order! If the member wishes to take a call he will have to get a call allocated from another party. Of course as I indicated before to the member you have exercised your right to the call and you are not entitled to another call in this 4-hour debate. But it may well be that another party would actually give you the call. I do not know whether the whips of other parties wish to. Otherwise I am sorry I cannot give the call to the member. You have exercised your right. 
JULIE ANNE GENTER (Green) 
: 
Tena koe Mr Chair. Tena koutou e te Whare. Do I need to wait? Is my microphone— 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry you are going to have use the handheld microphone. 
JULIE ANNE GENTER 
: Tena koutou e te Whare. I rise to speak on the financial review of the Ministry of Transport. I just wanted to start with this incredible piece of work that was released just before Christmas that the Ministry of Transport co-funded and collaborated on which is the City Centre Future Access Study. 
If members recall last year when the National Land Transport Programme for the next 3 years that is 2012-15 was announced I asked the Minister of Transport in this House what new public transport infrastructure projects were planned for Auckland. At that time the Minister could not name a single public transport infrastructure project that had not been committed under the last Labour Government. So electrification station upgrades the new electric multiple units that have all been ordered for Auckland which are highly anticipated and will be very effective—all of that is infrastructure that was committed under a previous Government. There have been no new infrastructure projects. 
At the time the Minister announced—because he was not able to name any infrastructure projects that are planned any time in the next 10 years that will be funded by this Government—this particular study which was co-funded by the Ministry of Transport. Of course the terms of reference were signed off by the Minister himself. This study like the 2010 business case before it and all the very thorough work and studies that the Auckland Regional Transport Authority completed since 2006 stated conclusively that the Auckland city rail link is an essential piece of infrastructure. It is the only way to meet the needs of a growing Auckland. 
Hon Gerry Brownlee 
: No it isn’t. 
JULIE ANNE GENTER 
: The transport needs of Auckland. It is the only way— 
Hon Gerry Brownlee 
: No it isn’t. 
JULIE ANNE GENTER 
: —to keep people and goods moving in the Auckland region and to avoid gridlock such as we saw last week in Auckland becoming the norm every single day. 
The Government continues to say no as the Minister is saying right now to this vital piece of infrastructure which the business community knows that Auckland needs. The Government will not even fund half—not even half—of this piece of essential infrastructure even though its own studies show that it is the only way to avoid congestion. So it is very ironic or perhaps wilfully ignorant that the Government claims that its motorways of madness which will suck up the vast majority of transport funding over the next 10 years will somehow reduce congestion or improve transport efficiency when its own studies show that they will do no such thing. 
In the National Land Transport Programme which was announced last year by the New Zealand Transport Agency we see that 87 percent of all the funds on new transport projects is going on road projects and a tiny portion is going on public transport walking and cycling even though those are the most cost-effective ways to meet the growing demand. Of course it is road users and the economy that benefit from investment in public transport walking and cycling because that is the best way to reduce pressure on the roads. It is the most cost-effective way to move more people at peak hour. More road users and the economy will benefit from investment in the city rail link than will benefit from the $1 billion Puhoi to Wellsford “Holiday Highway” or the $600 million Kapiti Expressway. Very few road users will benefit from these projects which are sucking up the vast majority of new funding under this Government’s policy. 
The Government is going to borrow and put up fuel taxes to pay for its pet motorway projects motorways of madness which will carry only a tiny proportion of daily vehicle trips—4 percent. This is not a good use of road users’ money. Many road users especially road freight will benefit far more from projects that give commuters the opportunity to leave their cars at home because that is the most cost-effective way to reduce peak congestion. Nowhere in the world do you see cities trying to reduce congestion by building a motorway out of the city. That is ridiculous. It is ridiculous and insane that the Government can claim that it is going to reduce congestion by throwing billions at motorways out of cities. 
I would just like to sum up by saying that the Government has to be pretty mired in ideology to not seize the opportunity provided by smart green transport because that is a better approach for the economy it is a better approach for road users it is a better approach for consumers and it is even better for the environment. 
In the responses to financial review questions the New Zealand Transport Agency very helpfully gave me this table which shows the benefit-cost ratio percentage split. That is the benefit-cost ratio percentage of all the different infrastructure projects that were conducted over the financial year under review. One hundred percent of the projects— 
The CHAIRPERSON (Lindsay Tisch) 
: Is the member taking another call? 
JULIE ANNE GENTER 
: No. 
BRENDAN HORAN (Independent) 
: 
 I seek the leave of the Committee for another call. 
The CHAIRPERSON (Lindsay Tisch) 
: The member is seeking leave to be able to take a call. Is there any objection to that course of action? There is objection. 
BRENDAN HORAN (Independent) 
: 
 I raise a point of order Mr Chairperson. Given the communication problems within this Chamber I thought that the Chair had actually said a member could have two calls and it is quite understandable with these communication problems— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! How this works is that this is a 4-hour debate and each party is allocated a number of speaking positions. In your case you were given—and I understand that was an agreement with a party—one call. You have exercised that right to the call so you will have no other calls available to you in this 4-hour debate. Should you wish to take another call then you would need to seek a call from the whips of one of the parties who may be able to give you one but at this stage unfortunately I have to decline. You do not have any opportunity under the current rules that we are operating. So are there any further speakers on this part? 
Hon GERRY BROWNLEE (Minister of Transport) 
: 
 I just want to make a few comments in relation to the somewhat narrow comments made by the previous speaker Julie Anne Genter and in particular the rather nasty assertion that the Government is not taking public transport seriously. The reality is that public transport is a very big chunk of the spend and we are going to continue that. The member might like to reflect that although a previous Government spent a lot of time promising projects it did very little to deliver them. It is the current Government that has actually funded them. 
Julie Anne Genter 
: Ha ha! 
Hon GERRY BROWNLEE 
: The member may find that slightly amusing which is somewhat typical of how you get a particular persuasion in New Zealand’s politics behaving. The reality is that the transport network in New Zealand is a great deal bigger and a great deal more complex than just saying: “Let’s put a tunnel from Britomart up north of Albert Street for about 1.5 kilometres to create a bit of a loop.” There is in fact very little evidence that there would be any effect from a project like that beyond perhaps 1 or 2 years at the end of this decade. So we do have to look at all of these things in quite a broad perspective. 
There is also I am sure quite a strong opinion in Auckland that the roads that have been built there—over the last 10 years I would like to concede—in particular things like the Victoria Park project have made a difference to the way traffic moves through that city. 
Julie Anne Genter 
: It was gridlocked last week. 
Hon GERRY BROWNLEE 
: Well the member says it was gridlocked last week. Let me tell you if a train became derailed in a tunnel it would be a great deal more gridlocked than a car accident on a highway. Those are things that cannot particularly be helped. I guess if we are all on bicycles or horses or some other sort of past transport mode like those then we might not have such a degree of congestion but then we would not have the pace in our economy that people expect today. 
There is a need for roading to be fair and appropriately applied across the country and we do have a programme that sees of those seven roads of national significance two very important South Island roads. One of them which is now open is the Christchurch Southern Motorway link and the other of course is the western ring route which is being put in as well. Further south it is going to be rather like the Auckland rail loop where you have actually got declining patronage on the rail in Auckland—declining patronage on the rail in Auckland—and therefore there is a much weaker case for even considering what might be done in the future. 
Hon Member 
: What about the cost benefits? 
Hon GERRY BROWNLEE 
: One member just suggested there that we look at some of the cost-benefit ratios. Well this is where our opponents really get upset because some of those cost-benefit ratios are very very good for those various projects that I have just mentioned. The sad thing is that it would not matter how good they looked; ideologically there is going to be opposition to them. The reality is that New Zealanders like their cars. New Zealanders like to be on motorways. New Zealanders like to move around with the freedom that automobiles give them. And New Zealanders pay for those roads through their excise tax and through their road-user charges and they should have a right to expect that there is good planning around them. So I think that this year has been a very good year for New Zealand’s Ministry of Transport and the transport agencies that sit underneath it including all of those agencies that are engaged in safety of various types in making sure that consumers who are using our networks are doing so in a safe manner. 
Finally I want to say that no one should underestimate the huge commitment that this Government has continued with KiwiRail. The $750 million that has gone into that company over the last couple of years to recapitalise it has been extremely important for making sure that we get more freight on the rail therefore taking some pressure off the roads. Of course there is going to need to be an ongoing capital commitment to that company for some time to come. All in all I think our transport network is in good shape but it needs constant improvement constant investment and constant commitment to it. 
Report noted. 
Ministry of Economic Development 
GRANT ROBERTSON (Deputy Leader—Labour) 
: 
 The Super 15 rugby season is under way and there is all kind of interest in that with the Hurricanes on their way to their triumphant first win in Super 15 rugby. One of the things that people may have noticed is an occasional change in the rules when it comes to rugby and one of them is around what happens when a maul collapses. I think the Government should take note of the change in rules. Here is what John Key said in 2009: “we are continuing to put in place our Jobs and Growth Plan. This is a ‘rolling maul’ of initiatives aimed at retaining and growing jobs and preparing the economy for future growth.” Well the Government has collapsed its own maul and that is currently against the rules in Super Rugby and it is not what New Zealand needs either. The rolling maul of initiatives of this Government has fallen apart and it is left with two economic plans: sell assets and sell laws. They are the two plans this Government has got: sell off assets and sell off the laws of New Zealand. Gerry Brownlee is looking quizzically at me. The problem Mr Brownlee is that an economic development plan for National is a big night at Skycity. That is an economic development plan for National but it is not good enough for New Zealand. Selling things off is not going to grow the economy and it is not going to grow jobs. 
If we look back over this year of achievement from this Government when it comes to jobs the achievement that we find is another 50000 people going to Australia 163000 people unemployed and an unemployment rate of 6.9 percent. But bear in mind that that rate of 6.9 percent is there only because 33000 people just left. They left the labour force. They either left for Australia or they gave up looking for jobs. If we actually include those people the real unemployment rate is 8.4 percent which is actually the worst since the mid-1990s. So the real unemployment rate under this Government is as bad as it was in the middle of the 1990s and that is because this Government has absolutely no plan for job growth. 
But this is not just the Labour Opposition saying this. This is businesses saying this and we saw it in a survey that Ernst and Young did that was published in the  
Sunday Star-Times 
. There were several interesting elements to that that this Government needs to take on board. The first of those was that nearly 80 percent of the businesses surveyed said that job creation was a partnership between Government and business and community— 
Hon Gerry Brownlee 
: That’s right. 
GRANT ROBERTSON 
: Gerry Brownlee says that that is right but we see no sign whatsoever from this Government of a partnership of it rolling its sleeves up and saying: “We’ll get involved and we’ll help grow jobs.” We do not see that. What we see is hands-off Government from this Government saying: “We’re not involved.” [ 
Interruption 
] Gerry Brownlee is continuing to interject from the chair. I will take a few more seconds for that thank you Mr Assistant Chairperson. Gerry Brownlee knows that this Government could be more hands-on. It could get in and take initiatives that actually help grow jobs. It could support our export sector by doing something about monetary policy. It could do something useful in procurement rather than the words that we are hearing at the moment. But no this Government sits back and it is hands-off and that is what businesses said in this survey. 
But the other thing was that those businesses were asked to rate from one to 10 the National Government’s record on job creation with one being very poor and 10 being outstanding. Well 70 percent of the businesses rated the Government average to very poor below average essentially—a fail mark as the  
Sunday Star-Times 
 called it on job creation. This is not just the Opposition. These are businesses who want to get on and employ people. They are struggling and they are looking for a Government that wants to help them out and it is not happening; it is hands-off. 
The Government and Mr Joyce have been particularly excited. There has been a lot of time spent this year on the Business Growth Agenda—the six glossy documents that have been presented to New Zealanders as some kind of growth agenda. Well unfortunately that did not go down very well with business either because in the same survey 70 percent of businesses ranked the Government five or below on that scale of one to 10 for whether it could actually develop and implement a Business Growth Agenda. So business has given up on this Government. Businesses have said that the Government is not there to help them create jobs and it has not even got the capacity to develop and execute a Business Growth Agenda. That is the loss of confidence that has happened under this Government. That is the loss of confidence that has happened because there is not a real plan for sustainable economic growth. It is not a plan to simply sell off assets and sell off laws so that a casino can have a few more pokies. That is not actually an economic growth agenda. 
An economic growth agenda would say that it was a moral shame on this country to have 90000 15 to 24-year-olds not in employment not in education and not in training. Once upon a time we had Governments and National Ministers who said that we cannot afford to let generations fail. Yet that is exactly what they have done and those numbers go up and they go up. For all the flash programmes and the Job Ops and the Youth Guarantee programmes when we actually go out into the community and we talk to training providers and we talk to the polytechs what we hear is: “There’s so much bureaucracy. We don’t even know if we’re actually able to deliver what the Government wants. It changes every week.” That is not good enough. We have to have as an absolute priority in this country that young people in New Zealand do not fall off a cliff face at the end of secondary school and that we actually actively involve ourselves in making sure there are opportunities not for just one small group picked off at a time but to say that for all of those young people we will give them opportunities to get skills to be able to get into employment. And that is missing from this Government. 
Clare Curran 
: It’s called hope. 
GRANT ROBERTSON 
: Clare Curran says to me it is called hope and that is exactly what is missing at the moment for young people in New Zealand who see their future in Australia not here in New Zealand because this Government has not been prepared to invest in skills and training and in giving them job opportunities. 
In response to the Ernst and Young survey Phil O’Reilly was asked by the  
Sunday Star-Times 
 about what the Government should do and he said that what the Government needs to do is help subsidise employers so that they can take on young people so they can get skills and training. 
Dr David Clark 
: There’s a good idea. 
GRANT ROBERTSON 
: And that is a very very good idea from Phil O’Reilly. I knew he would have a good idea eventually and he has had it because that is the policy that the Labour Party took to the election. The National Party did not want to know about it. It did not want to go in there and say to businesses that it will help out. I remember when Labour announced that. We said that for 18 and 19-year-olds we would take that money that has been paid for the dole and give it as a subsidy for apprenticeships. I had employers in my electorate ringing me up and saying: “If you did that I’d take two today. I want to bring people on board. I’m struggling. I need the Government to get in and help out.” This is not the Government doing everything for businesses. It is rolling up its sleeves and being a hands-on Government that gives them a helping hand. That is what is missing from this Government’s approach at the moment and that is what the Labour Party will bring. 
I want to just refer in terms of the economic development ministry back to the question of Skycity because I do think it is important. If this Government has anything to think about back over this year it is the fact that it has mucked around in this space so much that it got a warning from Treasury that the probity of the process in the Skycity deal was questionable and yet it ignored it. Actually the Minister in the chair is the one Minister in that Government who can at least look at the report of the Auditor-General and say that he did something because when he came in he looked at it and he said: “This is an absolute disaster. Why is the Prime Minister’s chief of staff all over this negotiation with Skycity?”. But unfortunately for Gerry Brownlee the damage was well and truly done. The Skycity convention centre sums up this Government. It was a corrupted process. This Government thinks that it can be hands-on by corrupting the process and that is what the report said. 
Hon Gerry Brownlee 
: Rubbish. 
GRANT ROBERTSON 
: It is very clear Mr Brownlee. The Auditor-General said that up until August 2009 everything was going OK in the negotiations about a convention centre and then along came the Prime Minister who wrote: “Let’s cover off the Skycity angle.” on his briefing paper and from that moment on officials in the Ministry of Economic Development and across Government began behaving in ways that were not appropriate and the Auditor-General said that. They did that only because they had had that direction from the Prime Minister. New Zealanders are getting sick and tired of the cronyism of this Government and they want Government members to focus on job initiatives on rolling up their sleeves supporting businesses to employ people giving people hope in New Zealand and giving people a future. This Government needs to hear the lesson. Young people in New Zealand want those opportunities they want to stay here and they want to work but unless there is a Government that is prepared to be a partner with business then that will not happen. 
New Zealand is a country with great ideas great innovation and great entrepreneurial skills. It needs a Government that is prepared to pull the big levers like monetary policy and the smaller levers like getting alongside a small business and saying: “We’ll make sure you have an apprenticeship in place.” This Government has failed on job creation—that is the view of business and it is the view of the Labour Party—and it must do far better. 
Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery) 
: 
 I think one of the things that that speech misses is that no business can thrive unless there is a dynamic in the economy that allows it to grow those business opportunities. And that is not about the Government standing up and pouring huge amounts of subsidy into here there and everywhere— 
Dr David Clark 
: That’s not there; that’s the problem. 
Hon GERRY BROWNLEE 
: —as the reverend over there would have us believe; it is about a Government that looks at a wider economic policy that is about ensuring that the country has a base wealth. So let us start with the first point. This first point is the exchange rate which we hear from the Green Party and the Labour Party is too high and we have got to knock it down somehow. The Green Party along with the Labour Party wanted to get out the printing presses and start printing so much money that the value of our exchange falls. That hurts every consumer in this country because that is about saying to New Zealanders “We are the deciding to make you poorer.” and that is not an acceptable thing at all. It also rips out from consumers the purchasing power that they have with their wages. So real wages not subsidised wages is what it has to be about. 
I will tell you something else. When it comes to supporting business the tax rates that we have brought in do encourage business and businesses to expand to do more and to grow. There is also the issue of market access. An unrelenting desire to get New Zealand into different markets so that we can have export choices has been a hallmark of this Government so far. When it comes to employing people it is no good saying “Here—look. Here’s a subsidy for this person. Take them into the business that you’ve got operating here.” when in fact that person may not have the incentive they need. So getting people who want work— 
The CHAIRPERSON (Lindsay Tisch) 
: Sorry to interrupt the member. The time has come for me to leave the chair for the dinner break. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I am not sure whether the sound system is operating fully so perhaps I should— 
The CHAIRPERSON (Eric Roy) 
: We have people with mikes. 
Dr DAVID CLARK 
: —avail myself of a microphone as I have a very—is that coming through? I do not believe it is coming through. Perhaps I will wait. 
Hon Member 
: Turn it on. 
Dr DAVID CLARK 
: How do you turn this machine on? 
Hon Member 
: It’s 104. 
Dr DAVID CLARK 
: 104? It is 104? The number 104 is on it? I shall carry on and allow those operating the sound room— 
The CHAIRPERSON (Eric Roy) 
: Well we will get another mike to you. 
Dr DAVID CLARK 
: OK we will wait. 
Hon Member 
: We want to give you the blue mike. 
Dr Rajen Prasad 
: That won’t work. 
Dr DAVID CLARK 
: It will not work. Thank you Mr Chair. I shall perhaps endeavour to continue despite the absence of the microphone. I fear other members may miss my contribution because my quiet and retiring voice may not travel across the Chamber. But the members opposite already know that I will say loudly and clearly to them that I am disappointed with economic development progress because this Government has the worst record of any Government in New Zealand in the last 60 years. 
Hon Members 
: 60? 
Dr DAVID CLARK 
: It has the worst economic development record in the last— 
Jonathan Young 
: 60 years? 
Dr DAVID CLARK 
: I should say 50 years. I must correct myself. It probably is 60 years but I should not exaggerate. So we will stick with 50 years—the years are adding up but it certainly has a poor record over a long period of time. The Government’s promise to deliver on a Building a Brighter Future plan that would create 170000 new jobs over 4 years sounded great but the reality has proven to be something altogether different. It is a hands-off Government and I think that its hands-off approach to creating jobs in this country is really really really showing through in the absence of progress. 
Nowhere is this approach better epitomised than when we look across to “Mobie” the Government’s new creation— 
Hon Annette King 
: The whale! 
Dr DAVID CLARK 
: —the big white whale which is an agglomeration of many other ministries. The interesting thing about the Ministry of Business Innovation and Employment is that the Government is so hands-off that the ministry has no Minister in charge. I do not know whether this is unprecedented—some more mature and experienced members may wish to comment—but I think it is very unusual to have a Government ministry that has nobody in charge of it. That is truly hands-off. That is taking hands-off to a whole new level. 
Perhaps that is a picture—something that we can look to in order to understand how this Government is approaching the job crisis that we see developing in New Zealand. We know that the unemployment rate at 6.9 percent is as bad as it has been. It is the worst it has been for a very long time. It is getting back to levels we saw in the 1990s when National was last in power. We know that 1000 people a week have been leaving for Australia. I guess that is for the Government a positive thing because it brings that unemployment rate down. But it is not a positive thing for New Zealand’s future—40 percent of those people permanently leaving New Zealand for Australia every week are young people. They are our future. They are the people who will increase our GDP and who will grow our economy in the future and I am afraid those young people are fleeing from this country because there are no prospects here for them. 
The wage gap which National promised to close when it took office has grown 50 percent—a full 50 percent the wage gap with Australia has grown. That is an embarrassment surely to this Government when it has said that it would close the wage gap and stop the loved ones heading offshore. 
So the economic development record of this Government is in tatters. Steven Joyce’s Business Growth Agenda has proven to be nothing more than a year of spin. There have been no substantial announcements in that Business Growth Agenda—an awful lot of re-announcements of policy already in place much of it introduced by previous Governments. We have seen wasted resource in my view merely re-announcing old plans and dabbling in the old meek idea here and there. 
What is very clear is that that will not work because if we do not change anything nothing will change. If we carry on with the policies of the 1980s that this Government is so comfortable with we will not have jobs created. We will see the ongoing pattern that we have now of skilled people heading offshore and more and more and more young people ending up on the scrap heap because they have not got any prospects. Glossy brochures will not fix that. We need a real plan for the economy and that involves doing bold things such as pro-growth tax reform. Let us see some research and development tax credits. Let us see some capital gains tax that neutralises the investment signals so that we actually get some investment in our export markets—those businesses that would produce for our export markets. Let us see universal KiwiSaver so that we actually start to get some depth into our savings so that there is some resource to support our businesses. Let us see some pro - New Zealand procurement policies. 
We saw this week Steven Joyce announcing effectively that he was going to announce current policy— 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I am very pleased to stand and speak on the financial review of the Ministry of Economic Development which actually is a ministry that has now been folded into a new ministry called the Ministry of Business Innovation and Employment. The ministry was established back on 1 July 2012 and it brought together a number of the Government’s business-facing functions under one agency. It aims to support New Zealand businesses in order to create a more prosperous economy. 
Is it not great that Treasury forecasts in December showed a real GDP growth from 2.3 percent in 2012-13 to around 3 percent in 2013-14? So while all the prophets of doom on the other side—normally David Clark is a happy member but what a depressing speech. Normally we are able to very easily just rebuff such depression that comes from the other side of the Chamber. We can see that New Zealand is forging ahead. 
We know that this country relies upon its export markets. We know that that is the real lifeblood of our economy. It is great to see that our Prime Minister has been very active in Latin America visiting four nations that are exceedingly big in their GDP with $4 trillion between them—Mexico Colombia Chile and Brazil—to build closer trading relationships with these nations which is going to enable New Zealanders to be able to export and earn more overseas exchange. New Zealand Trade and Enterprise reported to us that over the last financial year New Zealand business presence in Asia and Australia showed the biggest growth and grew substantially as well in South America. So the Prime Minister going there leading a trade delegation is very much part of the strategy that we are building in this nation to be global traders with our commodities. 
Latin America’s middle class is growing rapidly and now represents 30 percent of the population—the World Bank tells us that. This group has more disposable income and is fuelling demand for better infrastructure and an improved quality of life. That is where New Zealand can provide commodities to this market. New Zealand’s exports to Latin America were worth $1.36 billion in 2011. We believe that we can substantially increase that. What that means is jobs for New Zealanders and greater overseas exchange for this country that is going to lift the quality of life for New Zealanders here but also is going to bring a quality of life for our trading partners. 
Our dairy products are a significant export earner. New Zealand has major investments in dairying and farm production in the region particularly in Chile Brazil and Colombia. So this is a good-news story. It is a good-news story of what New Zealand is doing and continues to do led by this National Government which is forging relationships with our overseas trading partners. All of this is building the strength that we have in the international market place. 
Around that area innovation is such an important area of economic development. If we are going to see a lift innovation is one of those key areas where a lift can happen. Productivity lift does not just happen because you are doing more of the same. A lot of the time it is doing something new and doing things better. What the Government has done is establish Callaghan Innovation a new Crown entity charged with accelerating commercialisation of science-based innovation in New Zealand firms particularly in the manufacturing and services sectors which include food processing and beverages by better connecting those sectors with science technology and support that they need in order to develop and commercialise their ideas. 
It is great to see that that is happening—increasingly so. We are seeing real signs of growth. There are signs that the pace of growth has picked up in recent months. For example the volume of building work undertaken rose by 1.8 percent in the December quarter which was seasonally adjusted after gaining 9.8 percent in the September quarter. We know that the construction sector can create tremendous uplift for the economy because there are so many different sectors and trades that are involved in this particular area. Manufacturing volumes rose by 1.5 percent in the December quarter. 
Looking ahead employment growth is expected to pick up due to the Canterbury rebuild improving business confidence. Although we are still sailing into headwinds internationally New Zealand’s economy has become more resilient more efficient and more productive. Thank you. 
The CHAIRPERSON (Eric Roy) 
: Just before I call the next speaker we are working under reasonably adverse conditions. Although some acceptance of interjections will be tolerated I think if we get into the incessant thing—we are all in the same boat here so let us have a little bit of recognition of the circumstances. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 Thank you Mr Chair. I raise a point of order Mr Chairperson. It appears that the microphone is not working. 
The CHAIRPERSON (Eric Roy) 
: No it is working and it is going out on television. It is the audio in here that is kind of struggling which is why I have suggested that we recognise the situation a little bit. So you are live and you are on air. 
CLARE CURRAN 
: I am very happy to do that. 
The CHAIRPERSON (Eric Roy) 
: You can hold another one if you like as well. 
CLARE CURRAN 
: If it is working—it is not working. 
The CHAIRPERSON (Eric Roy) 
: If you come close to the mike. 
CLARE CURRAN 
: There is another debacle that is happening on the Government’s very doorstep that is the Government’s own doing and that is poised to explode in its face. It is a debacle of economic development—of the economic development that was promised in 2008 when National won the election when it became the Government. It was going to be the step change in our economy—Steven Joyce’s ill-thought-out ultra-fast broadband scheme John Key’s grand ultra-fast broadband idea Chorus’ inability to deliver on the ultra-fast broadband scheme and Crown Fibre Holdings’ negotiation of the contract between the Crown and Chorus to build the $1.5 billion taxpayer scheme. It has been botched. It is a giant stuff-up—it is a giant stuff-up and they know it. 
Just before Christmas the Commerce Commission announced a draft decision and a well-signalled review of the way that the wholesale price of copper broadband is calculated to one based on the actual costs for the services to be provided. It was well signalled. It dropped the wholesale price per line per month from $21 to almost $9. But the problem for the Government is that people are not taking up fibre and they are not moving across to fibre. As a result Chorus held that its drop in income on its copper network would undermine the company and that it just could not keep on building the Government’s fibre network. So how did this happen? How did we get to this point? How did Chorus not know that this was likely? The telecommunications companies did. How did the Government not know? Now we see the Government’s much-vaunted broadband scheme coming unstuck and the Government does not know what to do about it except to try to stick its finger in the dyke. It will do this by bypassing the Commerce Commission. “Forget about them.” it said. “They don’t matter. Let’s change the law.” said John Key. He said it twice before Christmas and one of those times was in this House. 
Ross Patterson is the former Telecommunications Commissioner for the Commerce Commission. He was respected and highly regarded across the industry and in Government circles. He has described the Government’s response as unprecedented. He said: “It is a fundamental principle of our telecommunications regulatory regime that the regulator is independent and is left to carry out its statutory role without interference or undue influence from the Government.” He said the Government had crossed that line. Does that sound familiar? Think of the Skycity deals; think of the $43 million loans to MediaWorks; think of the change of law to suit Warner Bros in making  
The Hobbit 
 in New Zealand; think of the conflicted role of Stephen McElrea the Prime Minister’s electorate chairman on the board of New Zealand on Air; and think of the Prime Minister’s knowledge of and involvement in the illegal surveillance of Kim Dotcom by the Government Communications Security Bureau and the FBI. This Government will do what it likes. It will abuse the law. It will abuse the contract processes. And if it does not like the law it will change it. It will ignore it or it will change it and then pretend it cannot remember or it does not really matter. 
Two years ago Steven Joyce forced through changes to the Telecommunications Act to allow Chorus to be given $1 billion to roll out the bulk of its ultra-fast broadband network. Labour opposed many of those changes and the bill in its entirety because it considered that the Government was using a law change to allow it to favour one business over another in awarding a huge taxpayer-funded contract. There were two major bidders: Chorus which was part of Telecom and Vector the Auckland-based electricity lines company. Chorus won the job as we predicted it would not because it was the best bidder but because the Government had already decided that it would get the job. Chorus knew the terms and conditions of its contract. It was well signalled at the time that there would be a review of the copper pricing system by the Commerce Commission by 2014. It was well signalled that copper prices would fall. And what happened? We are now into the fifth year since this Government was elected. Just 3806 households have been connected. Not one major telecommunications company has announced a retail package to attract people on to fibre. 
Report noted. 
Ministry of Justice 
SCOTT SIMPSON (National—Coromandel) 
: 
 As the new chair of the Justice and Electoral Committee it is my pleasure to stand and have a call this evening on this financial review. One of the hallmarks of any civilised society is a robust judicial system—a justice system in which people can have confidence that is not corrupt that is efficient and that is one that dispenses fair and equitable justice that people are by and large happy with. I am pleased to say that here in New Zealand of course we have a very good justice system and we have a very good Minister of Justice. In the very capable Judith Collins we have a Minister of Justice who has a big agenda ahead of her for my committee and for this Parliament in the months ahead. We have one of the very best performing justice systems in the world. There is very little corruption—in fact I would dare say minimal corruption—we have a strong judiciary and we have high public confidence in our institutions. Of course this is of huge advantage to us as citizens of New Zealand. And the approach that Minister Collins is taking in terms of justice is working. Total reported crime has fallen by almost 6 percent. 
Dr Cam Calder 
: How much? 
SCOTT SIMPSON 
: Almost 6 percent—6 percent. Youth crime itself has fallen by about 4 percent and reoffending by nearly 6 percent. That is something like 21000 fewer crimes. We had 3000 fewer violent crimes over the past year and that means therefore thousands and thousands fewer victims. Members will be pleased to know that the rate of homicide and related offences such as attempted murder and manslaughter has dropped by a whopping 22 percent. The rate of serious assaults resulting in injury has dropped by 8 percent. So this Government’s plan for better public services within tight financial constraints is working very well. This is a Government that has ambitious targets for justice. Reducing the crime rate by 15 percent violent crime by 20 percent youth crime by 5 percent and the reoffending rate by 25 percent—these are targets that are aspirational and ambitious. 
The CHAIRPERSON (Eric Roy) 
: Order! Sorry to interrupt the member. Members may have just entered the Chamber but we are working under duress without amplification inside the Chamber. We have broadcasts going outside and I have asked members to be conscious of the fact that our environment is not what we are used to and to curtail their desire to incessantly put in interjections. 
Hon Annette King 
: I raise a point of order Mr Speaker. Could you just confirm which vote we are discussing? I felt the member was talking about Vote Police rather than Vote Justice. 
The CHAIRPERSON (Eric Roy) 
: Ministry of Justice. 
SCOTT SIMPSON 
: I am speaking about the Ministry of Justice and the very capable and wonderful job that the Minister of Justice the Hon Judith Collins is doing. You see justice results are very important. Delivering better public services to New Zealanders within tight financial constraints as I said earlier is the sort of thing that this Government is all about. 
Within the justice sector we have various departments working more closely together. So we do have police and corrections working more closely with justice—more closely than ever before—and that helps us achieve targets. That is a good thing in my view and something that we will be encouraging on this side of the Chamber. For instance crime when it is down means that our court numbers are down our number of sessions is down and appearances in court are fewer. So we have a unique opportunity—[ 
Interruption 
] 
Louise Upston 
: That was brief! 
SCOTT SIMPSON 
: —a brief but unique opportunity—here we go again. [ 
Interruption 
] This is good—yes. So we have a unique opportunity—hello? Can you—no I will go back to this one. Any minute now if I were Brendan Horan I would burst into song. I am going to resist that urge to burst into song. We have within justice an opportunity to work differently to focus more on the underlying causes of crime and of course crime prevention. We have a unique opportunity to—[ 
Interruption 
] Down? Oh I was just getting into the really good bit! We have a unique opportunity to work differently to focus more on those underlying causes of crime to modernise and improve our operating justice model and to build I suspect a more customer-focused lower-cost and more accessible justice system. 
One of the areas that my select committee is exploring at the moment is the Family Court Proceedings Reform Bill which is going through at the moment. That is a very good piece of legislation being put through at a time when we can reform the Family Court in a way that focuses on the most serious cases while at the same time putting children and vulnerable people first. It is this putting children and vulnerable people first rather than those with just relationship problems that is a very important part. 
Report noted. 
Ministry of Health 
Hon ANNETTE KING (Labour—Rongotai) 
: 
 The ministry at the 2011-12 financial review made the claim that the health sector was well managed and although some OECD countries were forced to cut Government health spending New Zealand had slowed expenditure growth without needing to reduce health services or cut the numbers of clinical staff. That was what was written in the financial review. 
So let us examine those claims that were made in the financial review. It is not easy to get the information that I would like to share with you because unfortunately we have a Minister who has been very very clever at keeping information very quiet. I did receive a letter that I thought might put it into perspective. This letter is from someone who works in the health system who wrote to me and said: “There is a climate of fear bullying and intimidation from the Minister and the national health board personnel that is destructive and into micro detail and management.” That was followed up by a comment from the Association of Salaried Medical Specialists who said recently that the Minister had in fact intimidated a doctor into not speaking. So we do have this climate of fear that exists in the health system. 
I think it is important that I read to you from this letter what this person said about our health system. It reads: “The absolute focus on the Minister’s health targets and the counting numbers is unwinding much of the improvements that have been made previously. Most of the increase in elective services was the result of work done under the Labour Government and was just starting to work. The health target comparisons by DHBs are so totally meaningless they do not reflect anything to do with real care or quality of outcome. This will only get worse as financial pressures build in the last quarter of this financial year.” That comes from somebody who works in the health system. 
So let us go over those things that were said in the financial review. It was said that the health system is well managed. What did the Health Committee itself say in its report to this House? It said this: “We were concerned about the ministry’s capacity for delivering projects and meeting output targets as reflected in the 7.6 percent reduction in operating costs and the 21 project delays that occurred in 2011/12. We note that almost half of these delays were because of staff vacancies and redundancies.” 
So is our system working well and is it well managed? Well if the way to manage it is to delay up to 21 projects because there are staff vacancies and redundancies it does not seem to me to be a very good way to manage it at all. Then you have a look—and I know Dr Hutchison will be interested in this—at what some of those 21 projects are that we were told at the select committee had been delayed. 
Well when I looked at this list an alarm bell went off for me because unfortunately I was the Minister of Health in February 2000 who was required to present the report on the under-reporting of cervical cancer rates from Gisborne. A ministerial inquiry had been carried out because of failures in the cervical screening programme. So one of my first duties as a new Minister was to present a damning report on our cervical cancer screening programme in New Zealand where New Zealand women had died. But what has been delayed in 2010-11 and 2011-12? These are the projects: the National Cervical Screening Programme monitoring data—why was it delayed? Because there are vacancies not filled—the development a review and the update of the policies and standards within the national screening programme; the monitoring and improvement of the quality of ethnic data on the National Cervical Screening Programme register; and the high-grade analysis report on women with high-grade lesions on the National Cervical Screening Programme. Those are examples of some of the 21 projects that have been delayed in the financial year that is under review—delayed all of those delayed—because of vacancies because they have to save money. Dr Hutchison you will know that it is not acceptable to put on hold important monitoring and evaluation of a programme like the Cervical Screening Programme. Have we not learnt from what we did in the past? So when it comes to saying that the Ministry of Health and the health sector are well managed they not well managed when those vital programmes are delayed because the vacancies have not been filled. 
Then let us look at “no cuts to services”. Well that is blatantly untrue—blatantly untrue—and anyone who lives in provincial New Zealand in particular will know that that is untrue. The ministry is required to save $700 million over 5 years covering the financial area we are looking at. So I want to give you just one little example of a cut in health services. It comes from a little place called Westport. What has happened in Westport? They have had no orthopaedic clinics at Buller Hospital for the last 6 months—none. Why? Because there is nobody to send there. And did the Government tell the people that the clinics had been cut? No it did not. The people of Westport did not know that their orthopaedic clinics had been cut. It was withheld from them and they found out only when the  
Westport News 
—the little newspaper down there—looked to see what was happening. I could give you many examples. I am sure Minister Goodhew knows quite a few of them because quite a lot of them are actually in her area of responsibility. She shakes her head but I am happy to share them with her at a later date. 
We also have from this Government what I call smoke and mirrors. Let us have a look at the claim that we have more doctors in our health system. That has been claimed by the Prime Minister and that has been claimed by Tony Ryall. Well what does the Association of Salaried Medical Specialists say? Of course members opposite are scoffing at it. It is a union I suppose. 
Dr Paul Hutchison 
: That’s it. 
Hon ANNETTE KING 
: Of course I suspect Dr Hutchison that you were once a member of that very good union. It said at this repeated claim by Minister Ryall that there are 800 senior doctors that the doctors “erupted with disbelief and anger.” The association said: “this 800 number has been completely discredited and disproven by using official DHB and government data.” There are no extra 800 doctors in our hospitals. That is absolutely wrong. In fact we have 373 over the 3-year period. “Hospital specialist numbers have increased but not fast enough to keep up with increasing demands … Furthermore” said the Association of Salaried Medical Specialists “in the three year period Mr Key referred to”—as has Mr Ryall—“the rate of hospital specialist increases fell by 25% from the three years immediately before his government took office.” So there you have it. The claims that there are more doctors and that the Government has not cut the numbers of clinical staff are not to be believed. 
We also have the claims that the Government has reduced costs. Well let us have a look at some of the costs it has reduced because when you look at them you will find that it might have reduced costs in the ministry but it has now extended costs into some new organisations: Health Workforce New Zealand—how many people are employed there—the Health Quality and Safety Commission Health Benefits Ltd and so on. So when you start to look at the bodgie figures—OK so they might not be in the ministry but they have been moved into other areas. Let us take the Minister’s own office. He has got only the same number that we had when we there: eight ministerial staff. When we were there they were paid a total of $349000 in salaries. What are they paid now 4 years on? There are $746000 in salaries in the Minister’s own office. So all this talk about cutting costs does not apply to the people who work for him but it certainly applies to those who work in the home-care sector who have not seen increases in their salaries. 
So I have to say that when I look at what the ministry said about the health sector and what it claims were the things that were happening and when you examine them in just a little more detail you will find they are based on smoke and mirrors some bogus figures and fiddling and twiddling with those figures. You will hear much more about the health sector over the next year or so because at least people know that we are prepared to stand up for them in places like— 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 It is an absolute pleasure to talk about the health service review in New Zealand. Investment over the last year has come to a record high of $14.1 billion. I must say that this health system has been better managed in the last year than ever before and it is getting better and better. Compared with the regime under Labour where over 9 years the Budget went from $6 billion to $12 billion with no real increase in output the last 4 years have been quite extraordinary in their success and should be celebrated. 
I want to tell you just for one moment about the Bay of Plenty District Health Board financial review. I happened to look at a little paragraph about Te Kaha a small isolated rural community on the East Coast. There it reported that almost 100 percent of women were having cervical screening almost 100 percent of women were covered for breast screening and almost 100 percent of children aged 2 were fully immunised whereas 5 to 6 years ago that would have been less than 60 percent if not 50 percent. That record under National is something that should be celebrated. One can then extrapolate it to the record of National right around New Zealand. Whereas 4 or 5 years ago immunisation coverage was 67 percent under Labour now it is over 93 percent and going up. In terms of extra operations 35000 more electives are done per year in New Zealand than 4 years ago. That has got to be celebrated. So when we hear Annette King having the gall to suggest that our health system is not well managed she ought to look at herself very carefully in the mirror. She was the very lady who culled up to 30000 patients off the waiting list and sent them back to the general practitioners to wallow. Today as I said before there are 35000—35000—extra electives per year than there were 4 years ago under that extremely inefficient regime. 
I would like to point out that some of the new initiatives over the last year that have been shored in are incredibly important for sustaining the affordability of our health services in New Zealand because right around the world sustaining health services has become problematic particularly under the very very difficult position after the financial economic crisis. The initiatives have included cementing in the National Health Board which is a national purchasing agency to ensure that every health dollar counts. Secondly Health Workforce New Zealand—and we heard Annette King saying that the Association of Salaried Medical Specialists was querying the figures of Mr Ryall and the Prime Minister. Well the facts are that it is talking about only hospital doctors not about doctors in primary care. We learn from the Ministry of Health that the greatest gains in health will come from health promotion disease prevention and the integration of primary and secondary care. That is where we need the new doctors and that is where National has delivered 1000 new doctors and 2000 more nurses and has reduced back-office staff by 1000. That has got to be pretty good. That is the fact of the matter and I think Annette King has been very very selective when she has used— 
Hon JO GOODHEW (Associate Minister of Health) 
: 
 It gives me great pleasure and pride to rise this evening in the Chamber to talk about the progress that has been made under this National Government as we address the financial review debate. But I want to begin by speaking briefly about the previous Opposition speaker Annette King who conducted herself in a way that could best be described as dealing in personal attacks on the Minister of Health. She signalled that she would deal in personal attacks and nameless gossip. Lastly I think the best descriptor of that member’s claims—and they have been going on now for a couple of weeks—is simply “wildly imaginative”. 
I want to deal first with the claims she has made repeatedly about the Ashburton Hospital facing cutbacks. This has really pained the people of mid-Canterbury because they are on edge. They have lost their theatres because of earthquake damage and they are waiting for the date when these theatres will be rebuilt. The Minister himself has signalled that they will be rebuilt— 
Sue Moroney 
: When? What date? 
Hon JO GOODHEW 
: —repeatedly and in print I say to the member. The Minister has signalled that and the chief executive of the district health board has said that it pains him greatly to have to come out again and say in the newspaper: “There is no doubt. Nothing is being cut. Nothing at all.” The people of mid-Canterbury are saying: “Well clearly we cannot trust this Labour Party spokesperson who is simply feeding us wildly imaginative tales and worrying us about our health services.” Absolute bollocks it is—absolute bollocks. 
Sue Moroney 
: Be honest. That’s not what they are saying at all. 
Hon JO GOODHEW 
: I am finding it really difficult to not laugh out loud right now. 
So let us go back to what we saw under the previous Labour Government and then move on to the good news under this National Government. Waste and bureaucracy—those 30000 patients who were culled off the waiting lists. Patients waited for up to 15 weeks for cancer radiation treatment. Many were sent to Australia. Do we remember those front-page headlines of those patients who went to Australia? I certainly do. One story close to my heart was that funding for PlunketLine was cut despite demand from parents but National reinstated it. And during all those years the Labour Government said that rheumatic fever was a priority. Yes well we do not really imagine that we saw any evidence of action on that front. 
Just to briefly go over some of the things that have been achieved—because I think that members of this Committee particularly Opposition members should remember that when we talk about numbers we are not talking about just figures on a piece of paper; we are talking about human lives. We are talking about children we are talking about mums and dads and babies and these are the very New Zealanders who are gaining from the National Government’s performance. E-health is an important one. The Ministry of Health continues to facilitate e-health and we have got 14 district health boards already transferring patient records electronically to new general practitioners. 
But I want to talk about some of those numbers. Shorter waiting times in emergency departments have risen from 80 percent in 2009 to 94 percent of patients being seen treated or discharged from hospitals in 6 hours by the end of 2011-12. In terms of improving access to elective surgery in 2007-08 there were 118000 procedures completed and in 2011-12 there were a record 154000. The numbers speak for themselves. They are real people who had procedures done on them. The percentage of patients receiving radiation treatment within 4 weeks—100 percent achieved. Members that is a stunning achievement because what that means is people getting treatment for their cancers. Immunisation of 2-year-olds has risen from 82 percent in 2009-10 when we started measuring the performance to 93 percent in the 2011-12 year. It has gone so well that we have changed the target to the earlier target date of 8 months meaning babies’ lives will be saved. Better diabetes and cardiovascular services—by 2014 90 percent of the eligible population will have had their cardiovascular risk assessed within the last 5 years. 
We are helping smokers to quit smoking. In 2007 only 18 percent of smokers in hospitals were offered assistance to quit. By 2011-12 84.6 percent— 
Report noted. 
Ministry of Education 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I do not know how to turn it on. There we go—the microphone is working. I tell you what it may be karaoke night here at Parliament but there is no one singing from the Government’s song sheet in the education sector this evening. Nobody in the education community is happy with this National Government tonight and the people who are most upset tonight are the people who have had debt collectors set on them by Steven Joyce. To rub salt into the wounds having not been paid having been overpaid and underpaid and having had Steven Joyce talking to them for maybe 6 weeks now about how he was going to get the problem solved Steven Joyce’s idea of solving the problem has been to stick debt collectors on to people who have been overpaid. 
I am aware of at least one teacher in my electorate who was overpaid by Novopay in one fortnight and the fortnight later they were underpaid and now they have debt collectors chasing them for the overpayment. They rang me up and they said: “Am I allowed to send debt collectors back the other way for the underpayment that I got in the following pay period?”. No they are not. Are they allowed to send debt collectors to Steven Joyce to find out where their KiwiSaver payments have gone—the ones that have been deducted from their pay cheques but never paid over to the KiwiSaver providers? Are they allowed to send debt collectors to the Government for that? Apparently not. What about the child support payments that the Government has taken but has not paid over? Should they be sending debt collectors to the Government for those? 
Kris Faafoi 
: The heavies. 
CHRIS HIPKINS 
: The heavies. That is right. The National Government put heavies on to people. 
It is through no fault of their own—bear in mind that these people did not claim this money. They did not take the money. The Government just gave it to them and in some cases did not even tell them that it had given it to them. It just put extra money in their accounts. It was Christmas-time. It is very convenient to put extra money into someone’s account at Christmas-time. Some people did not even know they had been overpaid and suddenly the Government turns round to them and says: “Oh pay the money back. Pay it back right now and if you do not pay it back right now we are sending the debt collectors around.” What a disgraceful thing for this Government to do. It is absolutely offensive that having made this mistake having overpaid people who in good faith have gone out and spent that money not knowing they had been overpaid—for the Government to now put debt collectors on to them is absolutely shameful. 
I am not surprised that every member of the National Government in the Chamber is hanging their head in shame right now and that they have nothing to say about that because Steven Joyce with 6 weeks in the job to fix Novopay— 
Maggie Barry 
: Not at all. 
CHRIS HIPKINS 
: Oh Maggie Barry is not allowed to comment on this. She was not underpaid by Novopay so according to Maggie Barry’s standing orders she should just sit there quietly because she is not allowed to comment on this. But I tell you what. Steven Joyce said he was going to fix the Novopay problems and 6 weeks on he is telling teachers that there are 3 months to go before the Novopay problems are going to be solved and he is still putting the debt collectors on to people. A competent Minister a Minister who was actually getting on top of this would have said to the Ministry of Education: “Whatever you do do not put debt collectors on to people until we actually know what is going on—until we actually know whether they have been overpaid or underpaid or whether they owe us money or whether we owe them money.” But oh no that has not stopped Steven Joyce. He has still got the debt collectors going to people to collect money that they have been overpaid and that is an absolute disgrace. But of course this Government has absolute contempt for people working in education and it has contempt for the New Zealand public. 
It is not willing to tell the New Zealand public why Lesley Longstone got a $425000 payout—oh no. And when Jonathan Coleman was asked about that in question time today what was Jonathan Coleman’s response? “Well how should I know?”. “How should I know?”—that was his actual answer—“How should I know?”. That was from the Minister of State Services the guy who is responsible—the guy who actually signed the pay cheque effectively. When asked why it was that she got the $425000 payout his answer was: “Well how should I know?”. That shows an absolute contempt for the New Zealand public. 
It shows how arrogant this National Government has become. It thinks that it can pay people large sums of money. It thinks that it can set debt collectors on to other people—people who are not being paid at all. It can set the debt collectors on to them but it is not willing to justify why it is that it paid $425000 to the outgoing Secretary of Education who incidentally had been actually doing the job for only about a year. That is a phenomenal amount of money. I think it was something like $1600 a day over the time that she had actually been in the job that she got paid out. 
Tracey Martin 
: How do you get lieu in notice when you’ve quit? 
CHRIS HIPKINS 
: Yeah well I tell you what. It would have been a lot cheaper if Hekia Parata had gone and something like 60 percent of New Zealanders when polled by Television One said that Hekia Parata should have been the one who had gone. I absolutely agree with them on that—I absolutely agree with them on that. 
There is no accountability in this Government. All of the decisions all of the things that it is blaming Lesley Longstone for were all Hekia Parata’s decisions. It was Hekia Parata who thought bigger class sizes were a good idea. It was Hekia Parata who initiated the school closures in Christchurch. It was Hekia Parata who decided to close Salisbury School. 
Dr CAM CALDER (National) 
: 
 Look the Government realises that the Novopay issues are hugely frustrating and we wish to thank the school sector and administrators and other staff for their patience and hard work while we address the issues. The issues are complex—we have not made any secret about that—and there is no quick fix but everything is being done to resolve the issues as quickly as possible. As Steven Joyce has said if there was a button to be pushed that could fix it right away we would have pushed it. I am looking at you Mr Hipkins. I am looking at you. OK we are on watch now but you know if you want to look in your own mirror back then with Mr Mallard and yourself you put it together in the first place. 
The Government measures we put in place to address the issue of Novopay include $5 million under a remediation plan covering work on bug fixes and boosting the number of call centres and data processing staff. We have instigated a technical review to look at the stability of the system and its data and it is expected to be released in a couple of weeks after it has gone to Cabinet. A ministerial inquiry will look into all aspects of the Novopay project as it is doing now from the outset to the present day and we are in discussions with the former payroll supplier Datacom on a backup plan. 
But let us get on to something more general and that is our overall spend on education. We are investing $9.6 billion in early childhood education and schooling in 2012-13—the most ever. We are wanting to achieve our goal of getting five out of five kids achieving and we want that to happen sooner rather than later. It is all very well to say that four out of five are doing well but we are aiming for five out of five. So we are setting targets for early childhood education and at secondary school level and we have also set targets of national standards in between. So we are holding ourselves to account. 
We want to see 98 percent of all school entrants having participated in early childhood education by 2016 and 85 percent of all 18-year-olds having achieved National Certificate of Educational Achievement level 2 or an equivalent education qualification by 2017. We are investing $1.4 billion in early childhood education the most ever of which $47 million is targeted towards priority kids and we are trying to engage the kids in Maori and Pasifika communities and in low socio-economic areas who are currently missing out. It is all very well to talk about a 95 percent average overall nationally but we know that Maori and Pasifika participation is significantly less than that. At the moment around about 70 percent of kids are able to read and write and do maths at or above their year level but overall boys are trailing girls and Maori and Pasifika are trailing everyone. 
Having said that I want to pay credit to some outstanding teachers in Manurewa. Manurewa is a vibrant and diverse community—33 to 34 percent Maori and Pasifika 20 percent Asian. At decile 2 Redoubt North Primary School with the outstanding work that Jane Milner and her management team are doing their students are leaving school with a reading age at on average 2 years above their chronological age. That is an outstanding result. The teachers at Manurewa High School—in 2011 over 90 percent of the students in year 13 had level 2 qualifications. That is an outstanding effort. The Education Review Office report of Manurewa Intermediate School—Iain Taylor the principal talked of a principal providing dynamic inspirational professional leadership for the school staff and community. It is a high-trust Education Review Office report. The school will not be seen again until 4 to 5 years’ time. 
Principals like Judd McLauchlan and Shirley Maihi are doing an outstanding job in our schools. But what is happening nationally? This is not happening all over the country. We look at our PISA results for 2009. In reading New Zealand got seventh—seventh in the world. PISA stands for the Programme for International Students Assessment and is run by the OECD. If we disaggregate the results Pakeha are at level two—second in the world—Asians are seventh Maori are 34th equal between Slovenia and Slovakia and Pasifika are 44th just above Mexico. This is not acceptable and we are instituting strategies to improve this. We were last equal— 
METIRIA TUREI (Co-Leader—Green) 
: 
 I do not know where the countries “Selenia” and “Solakia” are. I suspect there were some educational failings on that side of the Chamber at some point. 
Tracey Martin 
: Charter schools. 
METIRIA TUREI 
: A charter school—that is what you get from charter schools. Hekia Parata must go. Either she should be sacked by the Prime Minister or—what I would prefer her to do actually—she should take a dignified exit and admit to her mistakes and step down because she has clearly failed and failed and failed as a Minister. It is awful to see it happening to a perfectly nice perfectly smart woman but it is worse to see the impacts on our kids. It does not matter what you might think about Hekia Parata at the end of the day it is our kids who suffer from her failures. 
The financial review for 2011-12 that was undertaken by the Education and Science Committee actually sets out those failures in quite a lot of detail. In fact the committee looked at only those failures and wrote a great deal about them. Novopay the Christchurch schools restructuring the class sizes debacle charter schools—all of these are set out because those failures were so significant that the Education and Science Committee highlighted them as particular areas of concern and those are certainly the areas of concern to the New Zealand public. 
It has already been said of course that the majority of New Zealanders do not believe that Hekia Parata is competent enough to be the Minister of Education and I agree. We must make sure that we protect our kids from incompetent Ministers who have such authority over their lives not only now as children in the education system and over their school but more important over how their life trajectory will roll out—their capacity and their ability to do well in their future. 
We need to look I think at charter schools and that is my particular focus for my contribution this evening. Charter schools are certainly the best way for the Government to suck money out of the public school system and hand it on to private hands. Along with the sale of our public assets it is just another form of privatisation of public assets but it is the privatisation of our most critical children’s institutions—their schools the places where they spend most of their time the institutions that are the most dedicated to their well-being and to their future. 
The charter schools debate really is a debate about the poor versus the rest and about why it is that this National Government is so committed to providing substandard alternative schools to our most vulnerable learners. 
 To say that charter schools offer poor parents a comparable choice is an insult. John Banks has always maintained that charter schools will be an alternative and not compulsory in any local community but let us just think about what that means in practical terms. This means that the ACT Party board which will decide where charter schools go will be running two schools in areas. So where the Government would never normally build a second school in an area where there is already sufficient capacity or overcapacity the ACT Party board responsible for choosing the charter schools will be doing exactly that and that has very serious financial implications particularly when you look at the application documents for charter schools that were released last week. They stated that these charter schools these private schools should be funded on the same basis as brand new State schools—effectively sucking money out of the public system to establish schools where there is already capacity or overcapacity. 
Let us just have another think about what that means for Christchurch for the Christchurch community and others around the country who have had vibrant successful schools set for closure so that money can be sucked out of them only to be funnelled into private schools where there is already overcapacity. Teachers—rich people do not send their kids to private schools because the teachers are untrained and unregistered yet these are the kinds of schools and teachers who will be in front of our most vulnerable learners under the charter schools model according to the ACT Party board. 
Why should poorer kids be subject to this experiment? That has been the big question that has certainly been raised in the select committee looking at the legislation. Where is the evidence that this will work for these kids? In fact if you look at the evidence there is none. The evidence shows that these schools will harm our kids and certainly not help them. Not only that but these schools will have 3 years to experiment on our kids. 
Hon NIKKI KAYE (Associate Minister of Education) 
: 
 I am very pleased to speak in this debate on the Appropriation (2011/12 Financial Review) Bill. Can I start by saying that what our Government is focused on in education is actually results and learning opportunities for children but also we have demonstrated in our education budget that we are prepared to invest in the children of New Zealand. You can see that with the fact that we are spending $9.6 billion—more than any other Government across the world from the OECD perspective. You can see that when you look at how much money we are spending in terms of early childhood education: $1.4 billion which is the second-highest in the OECD. What is very clear is that when you look at our Government we have absolutely improved funding across four Budgets and we have absolutely shown that we can demonstrate we can fund education—more than any other country in the world in terms of OECD countries. 
The second thing I would like to say is that when you actually look at outcomes in accountability—because we heard tonight from Chris Hipkins the word “accountability”—I want to make it clear that these are the things that actually matter in terms of accountability. We as a Government have an early childhood education target which is 12000 more children enrolled. We are making good progress with that: an additional 2300 children enrolling last year and a further 2661 places being made available. These are the accountabilities that New Zealanders really care about—that is kids particularly disadvantaged kids in early childhood education. When it comes to national standards data we have a target of 85 percent of 18-year-olds having achieved National Certificate of Educational Achievement (NCEA) level 2 or an equivalent qualification. We hear often from the Opposition about disadvantaged children in New Zealand. Well under our Government Maori and Pacific Island achievement rates for NCEA level 2 are up. So what you can see on this side of the Chamber is the funding and the accountability—actual targets bringing to account both schools and also the education sector and saying that if we do not have targets and if we do not have the investment then those children will not get the learning opportunities. And when you look at our record it is very clear. 
Tonight we have heard about infrastructure issues. I am a Minister who is responsible for property school transport and digital literacy and what I want to say is that we do have challenges in lifting our school system into the 21st century. Any Government at this stage in my view would have those challenges. We are working through the Novopay issues. We recognise what that means for many teachers around the country—but to say that we are doing nothing when we have just put 100 staff into the clearance unit and when we have put $5 million in! 
Also today in Parliament we heard about other issues that the Opposition is focused on. Again we are focused on outcomes and ensuring that we fund our education system. But we heard about the issue of Lesley Longstone and I just want to raise that with Chris Hipkins who has been particularly interested in that issue. I want to take him back and remind him of when he was Victoria University of Wellington Students Association president and what he said back then about a $420000 package to get rid of a former vice-chancellor. I quote from the  
New Zealand Herald  
in 2000: “Victoria University Students’ Association president Chris Hipkins said … while he did not like the idea of paying people money to go away it was money well spent.” So all I would say on this side of the Chamber is that members who are standing up on that side of the Chamber and want to raise issues like this need to go back and remember their previous positions. 
We are focused as a Government on education funding. We have actually got results in terms of what we are spending. We are focused on outcomes in terms of early childhood education. And what we have from the Opposition is a whole lot of issues that do not focus on how you raise achievement for young people in New Zealand because the Opposition opposes national standards. It has actually also opposed partnership schools. What I want to say to members across the Chamber is that we have choice in early childhood education—the private sector is involved in the delivery of early childhood education centres. I was recently in Botany where I got to see a private early childhood centre on school grounds. The advantage of that is that we get to see children—and this was supported by the teachers in that school—right throughout their journey. The private sector is involved in tertiary education and it is involved in early childhood education so the fact that we are offering some communities a bit of choice is a great thing because parents deserve choice in education. So I think there is a very clear difference on this side of the Chamber in education between a Government— 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
Tena koe Mr Chair. Kia ora tatou katoa. I would like to focus my korero if I can in my call on the very last paragraph of the 2011-12 financial review of the Ministry of Education—the one that is entitled “Achieving educational success as Maori”. It is probably timely to do so given that there was plenty of international attention given to this issue by the United Nations Committee on the Elimination of Racial Discrimination during its 82nd session in Geneva. 
On 21 and 22 February this year the Government’s performance in implementing the international Convention on the Elimination of All Forms of Racial Discrimination was considered. One of the key recommendations from the committee was that “the State party consider strengthening its special measures to increase the level of educational attainment of Maori and Pasifika children in particular by focusing its measures at addressing the root causes of absenteeism and the high dropout rates in schools.” 
We know that Maori students make up about 22 percent of the total school population and that is a very significant reason on its own let alone the Treaty argument that I could suggest for the protection of all of our taonga with one of them being tamariki the upholding of article 3 relating to citizenship rights and the requirement of article 1 for an effective and responsible Government. 
So it is pleasing to see in New Zealand’s report to the United Nations that support from family and whanau can influence educational achievement. Whanau are more likely to feel alienated from the mainstream schooling system and are less likely to engage with educators due to their own negative educational experiences of schooling so engaging whanau and parents in ways that support children’s learning is definitely a priority as I understand it for the Government and the Maori Party absolutely supports that. 
The Government report also recognises the persistence of inequalities that face Maori and Pasifika in education as spoken to by the Hon Nikki Kaye and that it is essential for the future of New Zealand that these inequalities be addressed. That I hope is going to be the focus in the next couple of years left in this term. 
 So with all that good intent there are some things that we need to address. It is pretty disheartening that a few pages on from the reference that I made earlier we read that 74 percent of European students leave school with National Certificate of Educational Achievement level 2 or above and less than half of Maori students—47.8 percent to be precise—enjoy that same status. Under those circumstances we have got a lot of work to do still and a lot of things are still to come. There are still concerning trends with regard to absenteeism including the above-average rates of truancy absenteeism and early departure from the school system very often without any qualifications at all. 
I want to come back to the financial review in which the ministry told the Education and Science Committee that its approach requires schools to engage with whanau in ways that are culturally appropriate by adopting the culture of the learner and reflecting it back to the school. It is also committed so says the report to helping boards of trustees in schools in implementing that vision. 
Under those circumstances we need to know then how effectively and actively Tataiako the guidelines on cultural competency is being implemented. This is a programme that was developed through the relationship between the Maori Party and the National Party. It has plenty going for it. It was developed over a year ago and yet we still need to have the full implementation of that particular programme. 
To highlight the whole involvement of whanau within the education system I want to bring to the attention of the Committee one particular kura called Te PihipihingaKakano Mai iRangiatea Kura Kaupapa Maori. It is located in New Plymouth. It was the kura that my wife and I were associated with when it first started. It celebrated 20 years last year. Like many other kura what came about was that the first 2 years of that kura were very much in fact without Government funding. It did not have any. The whanau fund-raised to keep the school going. I remember folding newspapers the  
Taranaki Daily News 
 in New Plymouth and getting those ready to be dispersed to try to get money to pay our teachers. 
I think that shows just how much dedication whanau are prepared to give towards providing total immersion education for their tamariki. We must continue to attempt to mobilise whanau and not to make them work just simply to keep the kura alive. But in fact at the end of the day it is about improving Maori education. 
SIMON O’CONNOR (National—Tamaki) 
: 
 Thank you very much. I will just project my voice. Why not? Let us just talk out loud. It was great to hear what we have heard from the Maori Party and I think it will be very pleased to hear the work that is happening around the partnership schools which is going to allow our families to engage. I raise a point of order Mr Chairperson. Do I need the microphone? 
The CHAIRPERSON (Eric Roy) 
: Yes. You are not going out over the networks. 
SIMON O’CONNOR 
: We will have to start again. Thank you Mr Chair. To the World Wide Web listening in I am now online. I think the Maori Party will be pleased and this Committee should be too because with partnership schools we have heard in select committee meeting after select committee meeting whanau family from Pasifika communities and Maori communities saying: “We want this.” That puts the left in a terrible terrible bind. To someone like me it is quite funny to watch but they said person after person whanau after whanau that they want this opportunity. I think that is really important to hear. 
One of the things about education is the importance of having a broad education so I actually want to turn the attention back to the tertiary sector. I noted that the  
Listener 
 recently picked up on a number of us including the Minister who were at the O-Weeks. The National Party was certainly out in force in the O-Weeks supporting our young people who have been signing up hundreds of people who are committed to that brighter future which National is interested in. One of the things that I have found as someone who goes through the tertiary sector quite frequently and not just in O-Weeks is the optimism we have in our young people. Arguably some of that can be accounted for by the successes that this National Government has had. 
So I want to pick up and continue—broaden if you will—what the Minister was outlining earlier around successes in education to talk about the successes in the tertiary sector. Between 2008 and 2011 course completion rates in New Zealand increased from 76 percent to 82 percent and qualification completion rates from 64 percent to 71 percent. These are undeniable facts and realities. This has been the commitment of the National Government from 2008 and we have seen an increase in completion rates. We have seen an increase in qualification rates—measurable success in the tertiary sector. We have seen with student loan repayments that these have increased by 11 percent. The initiatives that this Government has put in are breeding success—tangible measurable success. The scientific method if you will: you can test it you can show it you can prove it and that is what the National Party is doing. 
We have seen that the cost to the New Zealand taxpayer to the Crown has come down. It used to be 47c before this Government took power for every $1 lent. That was the cost of the student loan scheme. Now it is down to 39c—tangible real visible facts around what this Government has achieved. We know now too there are 1000 more engineering places in our universities and our institutes of technology in 2013. We are on track to make sure we are producing an extra 500—that is 500—engineering graduates by 2017. This is incredibly important. 
I had the great privilege last week of going out to an amazing New Zealand company called Altitude Aerospace Interiors which is leading the way in interior design. It is an excellent excellent company—hey I can turn right around with this microphone; this is great—doing amazing work with aircraft engineering designs. The company is crying out for further engineering graduates from this country and it wants them. It knows that graduates from the likes of the University of Auckland are fantastic graduates as they are from other institutions throughout New Zealand. This Government has heard that cry and is putting money where its mouth is. 
I have had a lot of—again I have mentioned it in this Chamber before—friends and others in my electorate talking around student allowances and so forth around the changes there. We have seen the spending on student allowances. Context is important. In any discussion like this we can pick up on absolute particulars and exceptions and try to argue from it but the context is important. Our expenditure has increased significantly. In 2007 and 2008 the Crown spent about $385 million in student allowances. In the last year that was $620 million. Whether we like it or not this is simply not sustainable. So this Government has worked to promote an allowance system that focuses on giving that opportunity to those in low-income families in early years of study and I think rightly that these are things we can be proud of. 
Report noted. 
Ministry of Pacific Island Affairs 
ALFRED NGARO (National) 
: 
 I rise and I will wait for the microphone. I am proud to take a call here on behalf of the Government to talk about the Ministry of Pacific Island Affairs. I am somewhat disappointed though that other members of other parties such as the Labour Party spokesperson for Pacific Island affairs are not taking a call. Mr Kris Faafoi is not taking the call. 
Sue Moroney 
: How do you know? 
ALFRED NGARO 
: That indicates to us quite clearly they are saving their calls for other things that they deem as being important. But for this Government we deem the Ministry of Pacific Island Affairs and our Pasifika community to be of absolute importance hence the reason why we are taking a call. Miss Moroney if you are interested if it is important to you take a call. The Ministry of Pacific Island Affairs is the premier adviser on policies and interventions to promote the social and economic well-being of our Pacific peoples of New Zealand. It is around policy advice. It is monitoring communication and engagement. 
Our Pasifika communities are sick and tired of being labelled impoverished and underprivileged. A good example of that is that some 4 weeks ago over in Porirua—that is right in the Mana area of Mr Faafoi—there were some young people talking about Pasifika success in education. This is what they said. An 18-year-old Samoan girl stood up and said this: “I am sick of being called underprivileged. I am sick of being called impoverished.” This is what she said: “I am privileged because my parents support me. They encourage me. They allow me to go into education and this year I am at Victoria University. If I get a B average I will then be able to obtain my scholarship to head over to Scotland to Dame Kiri Te Kanawa’s college over there and to be a world-class opera singer.” There were two young twins who turned up. They go to St Patrick’s College. This is what they said: “We’re sick of being called underprivileged. We as Pasifika are successful and this is what we’re doing in education: dream believe and achieve.” They are currently the Australasian 100 and 200-metre champions. 
This Government is about promoting success not continually putting down our Pasifika communities. I went to consultations of the Child Poverty Action Group with Dr Airini. Dr Airini said that in Napier and in Hawke’s Bay the Pasifika community said this: ‘Stop those people saying that we’re impoverished. Stop them using us as their poverty statistics. Why? Because we are successful. Why? Because we know we are succeeding.” We are starting to see this under this Government. So here is some of the vision of successful Pasifika that is coming through. 
The annual report of the Ministry of Pacific Island Affairs says that the ministry was “in much better shape to catalyse positive change.”—positive change—for a very small ministry punching above its weight. Why? Because for Pasifika communities we know that is what we are about despite the fact that the ministry has been without the benefit of any increase in funding or staffing for several years. And may I say this—and it is to the shame of the former Labour Government. The Minister of Pacific Island Affairs and its portfolio was established in 1984. In fact Richard Prebble was the first Minister. The ministry began in 1990. From that time on never has that portfolio been out of Cabinet except under a Labour Government. So how important is the Pasifika community to that party? I tell you what—it is not important because no one has taken a call. Maybe Mr Faafoi who has just entered the Chamber may take a call to talk about what success you have had. But this is what we are doing—this is what we are doing. Education youth skills and employment are very important. Our young Pasifika community is important to us. 
Kris Faafoi 
: What about the unemployment rate for Pasifika? 
ALFRED NGARO 
: Mr Faafoi will always talk about the unemployment rate but what he does not talk about is the alternatives—what we are doing and the difference that we are making. [ 
Interruption 
] Yes they are excited now. Why? They may just take a call. If it is important take a call. If it is important stand up and take a call. Tell us what you have been doing. This Government is making a difference through the Ministry of Pacific Island Affairs. 
In regard to housing we are seeing improving economic well-being and living standards with housing alternatives through the Ministry of Pacific Island Affairs. What is it? It is the Tongan churches and the Tongan communities up in Auckland getting $4.3 million for alternatives to social housing. Why? Because what this Government wants is for our Pasifika communities to have opportunities to develop their own solutions. That is the difference that this Government is making to our Pasifika communities. Stop labelling them as underprivileged. Stop labelling them as impoverished. You do no service to our communities. It is time to stop. If you have got any alternative then give us the solutions that make a difference. Under this Government we have increased early childhood education participation. Under this Government we are addressing all the social health issues such as rheumatic fever. That is what this Government is doing. 
Report noted. 
Ministry of Social Development 
JACINDA ARDERN (Labour) 
: 
 It is my pleasure to have an opportunity to speak briefly to the Ministry of Social Development financial review. I just have to say that social development is picking up the hard end of the rhetoric that we heard from that side of the Chamber just now. I have to say to that member who just took his seat Alfred Ngaro that to block your ears close your eyes and pretend that everything is fine is to do a complete disservice to the community that that member purports to represent. So while that member was sitting there and saying “Don’t call us underprivileged.” he was blocking his ears to the fact that there is 16 percent unemployment among the Pasifika community right now. He was claiming that the Government has done something on behalf of Pasifika people whilst at the same time ignoring the decline of Pasifika languages in this country; whilst at the same time allowing our early childhood education system to be deprived of basic materials for Pasifika languages. That apparently is what a Government that supports Pasifika people does. Well I would like to see what a Government that does not support Pasifika people does. 
No one is arguing that we should sit here and not have aspiration on behalf of our Pasifika community. Of course we should but aspiration starts with opportunity I would say to that member—and where is the opportunity for that community right now? Where is the opportunity for that young woman to get the future that she wants when social mobility under this Government is as shocking as it has ever been in the history of New Zealand? The gap between rich and poor in this country is wider than it has ever been. You tell me how the Pasifika community the Maori community or any community under those circumstances has the ability to move—the social mobility—that New Zealand prides itself on when gaps like that exist. We have all the research and the evidence in the world to back up what we are saying on this side of the Chamber—that if you want to support communities and social cohesion one of the things you need to be mindful of is the growing gap between the rich and the poor. 
 That side of the Chamber might be quite content for the Don Elders of this world to sit at home earning a bucketload of money for doing absolutely nothing while solo parents in this country struggle on $293 a week raising children. That might be absolutely fine on that side of the Chamber but on this side of the Chamber we have a little more aspiration for the people of New Zealand. It matters to us that that gap exists because of what it means to the community. If we want to look at what is happening within social development we should start with inequality. We should start with the plight of the unemployed and that 16 percent of the Pasifika community who cannot get work. We should start with the increasing cost of living and the fact that the material deprivation in this country under that Government has gone from 15 percent to 21 percent. That is not just a statistic; those are the people who cannot afford to go to the doctor cannot afford to send their kids on school trips so that they can get the same opportunities as everyone else and cannot pick up their prescriptions. It is meaningful stuff; it is not just rhetoric. It is the stuff that matters to whether or not families can get ahead and do what that side of the Committee claims it wants families to do but in reality it just cannot—not under this Government. 
It is also about what is going on for the kids in this country. As much as we stand up in this House and say that everything is fine—well at least they do on that side of the House—the statistics say something else. The 270000 kids living in poverty do not have a choice to stand up and make all the claims that that side of the House seems willing to sit back on. They are the ones who are going to suffer if we do not invest in the early years. They are the ones who not only suffer the health effects of poverty down the track but suffer the educational effects as well. If this Government wanted to make a difference to those kids it would be addressing child poverty. Government members can talk about targets as much as they like. They talk about them in education until the cows come home but will they set a target on poverty? Will they set a target on poverty? They will not even agree to measure it. They will not even agree on what a measure is even though the international community is pretty clear on it and that is because they have no intention of closing that gap. They have no intention of addressing child poverty in this country and until they do as far as I am concerned they have no intention of fulfilling the potential of the poorest kids in this country—because that is what it will take. You can talk about parental responsibility all you like but until those families have the tools they need they will not succeed. 
Peseta SAM LOTU-IIGA (National—Maungakiekie) 
: 
 It is a privilege and an honour to speak in this debate on the financial review of the Ministry of Social Development. Before I talk about the substantive achievements that this Government has done in this portfolio area I just want to say to the member who just spoke Jacinda Ardern that if that member thinks that turning up to Pasifika Festival on a Saturday afternoon gives her an insight into Pasifika children and the vulnerabilities that they have and their families have then she is mistaken. She is mistaken if she thinks that turning up to the Grey Lynn festival gives her some sort of insight into how Pasifika people are living in this country. 
It was a disgrace to hear that member talk about how Labour members are aspirational and yet they deny the fact that National Certificate of Educational Achievement levels 1 2 and 3 for Pasifika people have improved over the last 12 months. They deny the fact that pass rates for Pasifika people inside our tertiary education institutions are going up. They deny the fact that the number of people employed in this country of Pasifika descent has gone up under this Government. So they might want to deny those facts but certainly I will not. 
It is not about rich and poor but I will tell you what it is about. It is about the Ministry of Social Development. I want to thank the Minister the Hon Paula Bennett for the work the bold leadership and the hard work that she has put in to bring about the reforms in this country. We all know about the investment approach. We know about budgeting services and the investment that we are putting up front into vulnerable families parenting services wraparound services budgeting services—those are the things that matter to people who are in need. 
We know about our other welfare reforms in terms of social obligations: the re-categorisation of unemployment benefit as well as work testing and testing for those who are on drugs and want to work. But I want to talk about the 9300 staff of the Ministry of Social Development who are out there many of them on the front line dealing with vulnerable families and children—1.6 million people whom they are servicing every day. It is massive. In terms of its scope this ministry deals with the care and protection of vulnerable children. It deals with income support superannuation services and funding for community service providers. This Government believes that pushing our services out into the community just as the Maori Party does through Whanau Ora—[ 
Interruption 
] Louisa Wall knows this because she is a supporter of these types of services community services that actually interact with our whanau and our families out in the community. Those are the sorts of services that our communities are demanding. 
This budget is one-third of the total Government spending across the whole Government portfolio. It is $21 billion a year so this is not to be underestimated in terms of its importance. One of the things that I think has worked is certainly Future Focus which was introduced in 2010 as a precursor to those reforms that I have just spoken about. What it did was that it allowed unemployment beneficiaries to reapply if they remained on the benefit for over 12 months. It also provided for domestic purposes benefit recipients with children over 6 to look for part-time work. That is a particularly important reform because what we are seeing is that when solo parents see their kids going out into school they are able to get part-time work. They are able to get part-time jobs. It is good for them it is good for their kids it is good for our communities and it is good for our economy. 
What has happened under these reforms is that we have saved taxpayers $74 million since these reforms were put in place. That is $74 million. That is nothing to be sniffled at. That will be applied to services that are needed in our communities. What it has meant is that 21400 people have left the unemployment benefit as a result of this policy and half of those did not actually complete the reapplication form that was part of our reforms. 
I support the reforms that we have done over the last 4 years in Government. They have made a huge difference to the people in our communities. They have serviced a lot of families that have been in need during this global financial crisis. It has meant that they are able to go out and get jobs— 
MELISSA LEE (National) 
: 
 Mr Chair—can you hear me? Oh now it is working. Fantastic. I would like to first of all start off by congratulating the Minister for Social Development the Hon Paula Bennett on the immense amount of work that she does in this very very difficult and challenging area. This particular portfolio—as my colleague Peseta Sam Lotu-Iiga who is the chair of the Social Services Committee has mentioned—through the Ministry of Social Development administers around $21 billion a year. It is the largest of the Government’s spending. It is actually a third of all Government expenditure and provides services to more than 1.6 million people. The range of work that is actually carried out by the ministry is really huge and varied from the care and protection of vulnerable children to student allowances and fees so the workload is actually quite humongous. 
I want to talk a little bit about the Government’s Children’s Action Plan because I know that everyone around this Chamber cares about our vulnerable children. Our children mean so much to us. This Government’s Children’s Action Plan is such a positive initiative that targets support and services to our most vulnerable children through more than 30 new initiatives introduced in the White Paper for Vulnerable Children. These initiatives are the result of months of research discussions and policy development. There were roughly around 10000 submissions sent in on the Green Paper for Vulnerable Children. I went to some of these meetings and there were lots of heated and vibrant discussions around the green paper as well as consultation with key experts in health justice education and social services and what international best practices show keeps children safe from harm. As part of a Government team that actually went right around the country to talk about the White Paper for Vulnerable Children I was very heartened by talking to the people in the districts actually because every time I met people talking about the white paper they were passionate. They were very positive about doing something. I guess it is because they are sickened by the fact that you know we have not done so well in terms of neglected children. Some of the children have been so abused in this country and we should be ashamed. This Government is doing something about it. 
It is time for fundamental change and this Government is doing that through the Children’s Action Plan. The white paper and the Children’s Action Plan go beyond politics. They are not only for the generation of children who are growing up now. They are for the generations of children to come. The Children’s Action Plan will be the basis of the most significant advancement in child protection that this country has seen. It gives us clear easy direction on how our child protection system will be reformed and on the new measures that will be implemented over the next 10 years. 
Many people are concerned about children but are reluctant to call Child Youth and Family about their concerns. The new Child Protect line will be the first point of contact to call to ensure the right response. The Vulnerable Kids Information System will be set up to hold information on children in one place so that relevant professionals who work with children will be able to access all the information from one place. Would it not be fantastic if teachers who deal with children and notice that children are being abused can actually pick up information and realise that that child has been to hospital with broken bones has been abused and has been beaten and that people can take action as a result of this shared information? It is great to see the new children’s teams which are going to be created right across Government agencies working together with regional directors to coordinate locally the responses to individual lives. This regional ownership of the teams is a crucial element in this trial because the evidence is that local solutions work best to meet local needs. 
We are responsible for the welfare and well-being of our children. The Government’s Children’s Action Plan will mean tough new restrictions for abusers through child abuse prevention orders that will allow judges to stop child abusers from— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! [ 
Interruption 
] Order! Is the member seeking another call? No. Well sit down then if you are finished. 
Report noted. 
Ministry of Defence 
Hon PHIL GOFF (Labour—Mt Roskill) 
: 
 What the review of the Defence Force at the Foreign Affairs Defence and Trade Committee showed was that the last year under the stewardship of Minister Jonathan Coleman was the worst year in the modern history of the New Zealand Defence Force. There is plummeting morale. The morale in the Defence Force crashed from 58 percent when Minister Coleman and his Government took over to 35 percent—the lowest morale rate in the history of the survey of the Defence Force under Minister Coleman. And then there was the question of attrition which soared to 21 percent. That is more than one in five of our most skilled and our most experienced members of the Defence Force quitting in 1 year. And then look at the numbers of the Defence Force. They crashed by over 1000 in 1 year. Minister Coleman— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! Just to remind the member we are actually not on the New Zealand Defence Force. We are on the ministry—[ 
Interruption 
] Order! We are on the Ministry of Defence. The next appropriation is the Defence Force. So if the member—[ 
Interruption 
] Order! I am on my feet. We are focusing on the Ministry of Defence so if you want to focus on that—otherwise you will have to wait. What you are talking about is the New Zealand Defence Force. 
Hon PHIL GOFF 
: Well Mr Chairperson the Ministry of Defence has responsibility for policy governing the Defence Force and I am sure that the Ministry of Defence is utterly shattered that the policy that it set out cannot be carried out by the New Zealand Defence Force because it is no longer capable of doing so. The Minister of Defence pretends that there is capability to carry out the policy of the Ministry of Defence. That is denied by the Auditor-General. The Auditor-General says that there has been damage done to the Defence Force and there is reduced capability. Minister how can you say that there is no reduced capability when the Auditor-General contradicts you absolutely? The Ministry of Defence relies on having a Defence Force to carry out the policy. Yet in a recent court of inquiry into the death of Corporal Douglas Hughes that court of inquiry found that the Defence Force was unable to simultaneously carry out the tasks required of it by the New Zealand Government—it could not sustain the Rugby World Cup at the same time as sending a force on deployment to Afghanistan. In fact the Minister should explain why it was that that force went there with 40 percent less training than was required. The warrant officer said that— 
Hon Dr Jonathan Coleman 
: I raise a point of order Mr Chairperson. I would just like to reiterate your point for the second time in less than 5 minutes that Mr Goff is on the wrong vote. 
The CHAIRPERSON (Lindsay Tisch) 
: Order! I will determine that. 
Hon PHIL GOFF 
: The Minister did pathetically at question time and he will not do any better now. What the Minister needs to understand is that there is no point in having a Ministry of Defence unless it has got the capability to carry out the policies that are set out there. What that report showed was that we were putting our people at risk by not adequately preparing them for the deployment. When a warrant officer of the New Zealand Army says our people are not prepared but it has no choice but to send them that is an indictment on the New Zealand Government. The main responsibility of any Government deploying people overseas in pursuit of Defence Force and Ministry of Defence policy is to keep our people safe. How can you keep people safe when you cut their training? You cut their training for example in terms of management of stress and identification of stress. 
Is it any wonder that the family of Corporal Douglas Hughes said that this Government should hold an inquest because there were things sadly lacking in the preparation of our people before they went into a zone where their lives were at risk? The New Zealand Ministry of Defence has to have a Defence Force that is capable of carrying out its policy. It does not have that when the attrition in the Defence Force is so great that 1000 people leave and we cannot even put our ships to sea. The Ministry of Defence acquired new ships for the Defence Force. Brand new inshore patrol vessels acquired by the Ministry of Defence sit idle at the wharf in the Minister of Defence’s electorate because they cannot be put to sea because they do not have the personnel to sail them. How humiliating that we have to go to the Australian Defence Force to borrow Australian sailors to put our ships at sea. Minister you have failed the New Zealand Defence Force and the Ministry of Defence. You have no right to hold that position. You should resign. 
Report noted.  
New Zealand Defence Force 
Hon Dr JONATHAN COLEMAN (Minister of Defence) 
: 
 I want to begin—and I want to do it actually on Mr Goff’s behalf as well because I know he would intend this to be done—by paying tribute to our service people in the New Zealand Defence Force. They have served very very bravely over many many years and who are just coming out of three very stressful and dangerous deployments in Afghanistan—Afghanistan where 10 New Zealand Defence Force personnel gave their lives—East Timor and the Solomon Islands where our people have served with distinction. My first priority as Minister of Defence is to support our people overseas. They face extremely dangerous circumstances and I think the start of any speech on defence should be to graciously acknowledge the risks that our people face in the name of the New Zealand public. 
I just need to say Mr Goff that that speech was an absolute unpatriotic disgrace—an unpatriotic disgrace. When I go around New Zealand Defence Force bases what they say to me is that they are absolutely fed up with traitors like Phil Goff talking down the morale of the New Zealand Defence Force. Mr Goff—the one thing I know about him is he will constantly misrepresent the facts. I have been in Parliament for 7 years. My experience of that man when he was a Minister and now as the Opposition defence spokesman is that he will constantly misrepresent the facts. I think it is a total disgrace that rather than actually taking the opportunity to praise our people he went on to trash our Defence Force. Actually Mr Goff asked whether morale has ever been lower. I can say that it has Mr Goff—it was lower when you were Minister of Defence. I can say today that four out of five New Zealand Defence Force personnel rate their morale as very good or better—four out of five. I can say that if you had 80 percent of people in the Labour Party rating their morale as very good or better you would be frankly totally shocked. 
So what I can say Mr Goff is we need people New Zealanders from across the House—and I am sure there will be many people in the Labour Party who will agree—who will back our people and who will say our Defence Force people are doing a good job. It is no good for Mr Goff to constantly harangue me with meaningless interjections with drivel. As Charles Chauvel said Mr Goff is the enemy within. He is the enemy within the Labour Party and frankly he is the enemy within for the New Zealand Defence Force because he does not back our troops. I was just listening to this man actually using the court of inquiry into a brave New Zealand soldier who died in Afghanistan to make a political point. That Mr Goff is a complete disgrace because you have broken a suppression order— 
Hon Phil Goff 
: Stop the hypocrisy and answer the question. 
Hon Dr JONATHAN COLEMAN 
: I invite you to go out into the foyer and say that again because I do not think you would have the balls to do it. I do not think you would because Mr Goff is all talk but no action. He has been here tonight lying and misrepresenting— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! Minister there is a Standing Order that says that you cannot say that a member is lying. I know this is a robust debate but I will just ask the Minister to be very careful about that and also some of the language. 
Jami-Lee Ross 
: I raise a point of order Mr Chairperson. There are also Standing Orders about a constant barrage of interjections. 
The CHAIRPERSON (Lindsay Tisch) 
: No I will be the judge of that. 
Hon Dr JONATHAN COLEMAN 
: Anyway I think we have had enough on that particular topic. 
What I do want to say is that when you look at the savings programme that we have instituted across the New Zealand Defence Force it is not something that is unique to New Zealand. If you go overseas and you talk to the French you talk to the British or you talk to the Americans defence force reform is the response to the global financial crisis. It is an absolute fact. The New Zealand Defence Force has the best reform programme across the New Zealand Public Service. Last year— 
Hon Phil Goff 
: Come on—the highest attrition rate across the Public Service. 
Hon Dr JONATHAN COLEMAN 
: —across defence we saved $140 million and that is quite remarkable. Mr Goff speaks about attrition. Well I can say— 
Hon Phil Goff 
: Yeah if you speak of not paying the Defence Force a pay rise for 4½ years. 
Hon Dr JONATHAN COLEMAN 
: Well if you would listen for a moment: the attrition rate today is 17 percent. It was 19 percent in 2001 under Labour. That is a fact. Army attrition is less than it was in 2005 when Phil Goff was Minister. 
Hon Phil Goff 
: That’s not true. That’s a lie. 
Hon Dr JONATHAN COLEMAN 
: Air force attrition is less than half of the 24 percent reached in February 2002. 
The CHAIRPERSON (Lindsay Tisch) 
: Order! I have just brought the Minister to account for using the word “lie” and the same applies on this side. Now it is even so we are starting off again. Sixteen seconds remain for the Minister. 
Hon Dr JONATHAN COLEMAN 
: In summary I back our personnel. They do an excellent job. I call on Labour to back them as well. Our people need support. They take massive risks. We have lost 10 people in Afghanistan. Phil Goff needs to man up stop trashing the Defence Force and back our people. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 It is a great pleasure to speak on the financial review of the New Zealand Defence Force. Indeed I must say that I was appalled to hear that old neck-bulging shroud-waving revisitation from Phil Goff that we got once again which demonstrates his absolute lack of integrity. But I too would like to join my colleague the Hon Jonathan Coleman— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! I know this is a pretty robust debate but you cannot say that a member does not have integrity. 
Hon Phil Goff 
: Tell the truth Paul. 
Dr PAUL HUTCHISON 
: I withdraw that. He might— 
The CHAIRPERSON (Lindsay Tisch) 
: Order! I am going to ask the member to stand and withdraw and apologise for that comment. You cannot say: “Tell the truth.” 
Hon Phil Goff 
: I withdraw and apologise. 
Dr PAUL HUTCHISON 
: I withdraw that comment about him not having any— 
The CHAIRPERSON (Lindsay Tisch) 
: No no. No comment about my ruling. Now you had better withdraw that comment. 
Dr PAUL HUTCHISON 
: Of course Mr Chairman. I withdraw. 
The CHAIRPERSON (Lindsay Tisch) 
: Let us get on with it. 
Dr PAUL HUTCHISON 
: I too would like to join the Hon Jonathan Coleman in paying tribute to our defence forces and the incredible work they do not only in the active field in which they have had many very important missions over the last few years but also in the field of peacekeeping in the field of aid throughout the Pacific and of course in the field of civil service where they have shown incredible dedication and commitment down in Christchurch over the last few years. 
We heard from Phil Goff that he considered there were problems of morale. That does seem a little rich when we look back to what happened under his watch when he gutted the air combat wing in New Zealand and then said just prior to the 2005 election with Dr Cullen that he would be able to sell off that whole wing at a reasonable price and nothing happened. Not one thing happened until finally the National Government has recently been able to sell off those planes. 
But the other issue that I think is really important to point out if we are talking about management is that of the light armoured vehicles that were purchased under Phil Goff to the tune of $100 million or more and very many of them were absolutely irrelevant and redundant and have not been used to this day. That is the sort of management that former Minister Phil Goff had over those 9 disgraceful years. 
I would agree with Minister Coleman when he says that the saving and investment programme has shown some very positive results. In fact the very fact that we had to undergo a white paper in defence was due to the abysmal mismanagement under the 9 long years of Labour. But it has had some very positive results. The New Zealand Defence Force has achieved savings of more than $150 million over the last year with an aim of $350 million to $450 million over the next few years. But every dollar saved has been reinvested back into front-line capabilities. And despite the tight fiscal constraints these savings have funded a significant pay increase right throughout the forces and that has been extremely well received. 
To go on to morale and attrition as I said before the changes needed were as a result of the mismanagement of Labour over many years. We had the attrition rate back in 2001 that the Minister mentioned. But what we do know is that over each one of the last three quarters morale has improved. Four in every five of our people indicate they do not have an issue with their morale and nearly four in every five of our people express satisfaction with their job. Morale was not measured until 2003 so it certainly does not cover the air combat capability review that occurred under the Labour Government. It is absolutely relevant to note that those who feel committed to the Defence Force outstrip— 
Report noted. 
Ministry of Foreign Affairs and Trade 
Report noted. 
New Zealand Police 
JACQUI DEAN (National—Waitaki) 
: 
 The Minister of Police Anne Tolley is committed to New Zealanders being able to feel safe in their homes and feel safe in their communities. National is also committed to providing better public services so this Government has set Public Service targets in the fight against crime. We want to reduce overall crime rates by 15 percent we want to reduce violent crime by 20 percent and we want to reduce youth crime by 5 percent by 2017. In order to achieve these targets the police are getting the tools they need to spend more time on crime prevention and less time on paperwork. 
Police now have new ways of working with the Prevention First and Policing Excellence programmes. Prevention First is the operating strategy for the New Zealand Police that puts prevention at the forefront of the organisation and puts victims at the centre. The strategy focuses on targeted policy aimed at reducing reoffending and reducing victimisation. Gone are the days when a couple of cops would drive out of the cop station and toss a coin to decide whether to turn left or to turn right to proceed with their night’s work. Prevention First requires police to work with community services and with community networks to protect vulnerable people to act with urgency against priority and prolific offenders and to use innovative and practical solutions to manage crime hot spots wherever they occur. 
Last year several of us saw for ourselves the actions of Counties Manukau police in managing gangs in neighbourhoods where the shopping centre was besieged by a gang in this street and another gang in this street and yet another gang in another street with community members and kids wanting to access the local dairy having to first negotiate those warring gangs. Counties Manukau police with their Prevention First strategy take that issue very seriously. Together with the local community and networks they have now made that particular corner of Auckland safe again for those people who live there and make that neighbourhood their home. We also saw Counties Manukau police do a tin can collection so that they could deliver food to local kids because it was the school holidays and the police knew that hungry kids were kids who tended to get into trouble. That approach is part of Policing Excellence a series of initiatives that will enable the Police Commissioner to better manage crime and offending within New Zealand. 
Front-line police patrols have risen by 70 percent in the last year. That is more officers on the beat being deployed more strategically in areas at times when police know there is a greater risk of crime taking place. Police are now trialling the use of smartphones and tablets so that they can access input and share information immediately without having to travel back to the station to access databases or to write reports. That not only provides for efficiency within the New Zealand Police but also enhances the safety for our New Zealand Police as they are able to quickly and efficiently access information that they may need about an alleged offender whom they are dealing with out on the street. So the police will be able to provide a better more efficient and more visible service to the public. 
Offenders I might suggest are now on notice. There are 600 more police on the front line focused on having the right people in the right place and at the right time to prevent crime. Thanks to the work of the Minister the Police Commissioner and serving officers we now have the lowest crime rate in 30 years and we are on track to achieving those Public Service targets. In the past 2 fiscal years we have seen crime rates drop by 5.6 percent and 7 percent respectively. Thank you. 
Report noted. 
Department of Corrections 
MARK MITCHELL (National—Rodney) 
: 
 It is an honour to get up and speak in support of the Department of Corrections. I would like to just briefly touch on two areas. Tonight in the Chamber we have spoken a fair bit about youth and education so I would like to talk about the programme that is being implemented by Minister Tolley and if I get time I would also like to touch on Serco. The mix of public and private sectors working together is I think going to be a very successful model for New Zealand for the Department of Corrections for the prisoners and of course for our taxpayers because we are going to see a great mix of ideas and exchange of information between a very good private sector company and a very good and efficient Public Service. 
Corrections Minister Anne Tolley has officially opened a young offenders unit at the Hawke’s Bay Regional Prison that will deliver a much more structured approach to dealing with young prisoners. The under-20-year-olds will be required to take part in a daily routine that includes education vocational training and a rehabilitative programme. We do not want these young teenagers to get used to a life of crime and to continue creating victims in the years ahead. While they are being punished for committing crimes we can give them the opportunity to turn their lives round so that when they are released they are better equipped to contribute to society enter employment and be much less likely to reoffend. We will also be saving the taxpayer $96000 a year for every offender who does not return to prison. This is no easy task as young prisoners are often aggressive destructive and antisocial but if we can address these issues while they are under 20 and still impressionable while giving them education and skills training then we can make a real difference and ultimately we can make our communities safer. 
The 30-bed refurbished unit replaces the previous youth unit which was closed in 2011. The department has now strengthened its links with Child Youth and Family youth justice and police youth aid to better tackle youth offending. Under this Government and under Minister Tolley and Minister Collins we are seeing a model that is being rolled out throughout the country where there is much better cooperation and communication between the different agencies that are touching and having to deal with these offenders. This youth offenders unit has a major contribution to make in reaching that goal alongside our other important targets of a reduction of the total recorded crime rate of 15 percent a reduction in the recorded violent crime rate of 20 percent and a reduction in the youth crime rate of 5 percent. 
Two thousand prisoners are to be enrolled in an education programme leading to National Certificate of Educational Achievement (NCEA) qualifications over the next 2 years as a result of a new partnership that has been formed between the Department of Corrections and The Open Polytechnic. The partnership will help the department reach its Better Public Services target of a reduction in reoffending of 25 percent with 18500 fewer victims of crime each year by the year 2017. Offenders will receive 2 hours of coaching a week on top of 8 hours of distance learning as part of the Get Ahead with NCEA programme and will be able to study for an Open Polytechnic certification in career and self-development a national certificate in employment skills and a certificate in work and life skills and NCEA levels 1 and 2 will become available to them. 
We know that a lack of education is a major driver of crime. Education and qualifications are powerful tools in helping steer offenders away from criminal activity which leads to fewer victims of crime and ultimately safer communities. The reality is that around 90 percent of prisoners cannot read or write properly—90 percent of prisoners cannot read or write properly. Most will be released back into our communities but while they are inside prison they are the ultimate captive audience. If we can give them access to an education while inside the wire or just after release into the community they can learn literacy and numeracy skills and earn qualifications which will help them to hold down jobs and make a positive contribution to society instead of returning to crime. 
Report noted. 
Vote Climate Change 
Dr KENNEDY GRAHAM (Green) 
: 
 This year’s financial review I think reveals as little about the Government’s budgetary policy on the issue of climate change as they did in previous years. The stated purpose of the Appropriation (2011/12 Financial Review) Bill is “to confirm financial matters relating to the 2011/12 financial year;”. The bill retroactively confirms expenditure incurred by the Government for that year. We are about to approve expenditure already incurred in excess of the appropriation then existing or even without appropriation so it is important that such confirmation be laid before the House with accuracy and transparency. After all as the bill explains in the explanatory note “It is a basic constitutional principle that the Government can spend public money … only in accordance with [parliamentary legislation] and in an otherwise lawful manner.” Yet public funds pertaining to climate change are spread across a number of Government departments—the Ministry for Primary Industries the Ministry for the Environment the Ministry of Foreign Affairs and Trade and Treasury—so transparency tends to suffer. 
The Vote Climate Change non-departmental output classes shown in the Local Government and Environment Committee report are twofold. Allocation of New Zealand Units shows net surplus of $1.2 million and issue of New Zealand assigned amount units under the Permanent Forest Sink Initiative showed net surpluses of $7.6 million. Why is this? Because the demand for New Zealand Units declined following the weakening of the emissions trading scheme by this Government in 2009. The final gutting of the emissions trading scheme was in late 2012 after the period under review but we can all see the effect on New Zealand’s climate policy from the 2009 actions. 
The fact is that New Zealand has never had a genuine climate policy. We have lurched around since the 1990s between trading and taxation. We have never developed a pathway for a quantitative cap up to 2050 or a series of 5-yearly Budgets. We gift free allocations without auctioning. We allow in cheapened international credits that force down the domestic price to absurdly low levels. We consciously witness the dysfunctional outcome of a climate policy in the name of the purity of the free market yet we drop that ideological purity when it suits us such as imposing a price cap and choosing sectors and corporations for special favourable treatment except forestry which has been left twisting in the wind. 
Meanwhile the scientific findings on climate change plus the continuing growth in global emissions make it clear that we are moving from a dangerous to a “cataclysmic” future as the World Bank puts it on current emission trends. It is not just Australia or Russia or Pakistan with their fires and their floods. It is not only the Philippines Samoa and the United States with their hurricanes. Climate Change has hit New Zealand. We have extreme drought now. The New Zealand drought like any other extreme event is part of a pattern of weather events consistent with climate change yet this Government displays an endearing political reticence over use of the term “climate change”. The Acting Prime Minister in the House this afternoon spoke airily of long-term change in weather patterns—it will not pay to frighten the voters! He speaks as if we are confronting a natural phenomenon and the change will be over a long term so New Zealanders not least the farmers will be able to adapt. This is consistent with the Government’s refusal to adjust New Zealand’s emissions trading scheme settings to the level required for behavioural change. That is why the financial review of 2011-12 reveals a drop in activity pertaining to the issuance of New Zealand Units. 
The Acting Prime Minister wittingly or otherwise conveyed a breathtaking indifference to intellectual honesty and political integrity this afternoon. He affirmed governmental support for farmers in distress from extreme weather in the short term but in the long term the farming community must adapt as it has in the past. He then lumped in households and businesses just to round the point off. In this he refuses to acknowledge that the changes in weather occurring around us are unprecedented in scale and that the occurrence of climate change is to cite the scientists incontrovertible yet Mr English wishes to assuage the voters by saying that all they have to do is adapt. 
Report noted. 
Ministry for the Environment 
Hon MARYAN STREET (Labour) 
: 
 The financial review of the Ministry for the Environment for the 2011-12 year contains in the report of the Local Government and Environment Committee a reference to work that the ministry was doing at the time. I have to say to begin with that I think this ministry is both under-resourced and undervalued. But it seems to me that it is just as appropriate to talk about the work that it was doing that has come to light in the last 10 days or so because it is apparent that when it comes to the environment the only thing that National is protecting is its own agenda. There is this complete failure to recognise and understand that the economy and the environment are not two rival forces to be balanced against each other but are in fact two sides of the same coin and are interdependent. 
But National’s development agenda has seen us weaken air-quality standards rush through some flawed exclusive economic zone legislation and fail to sign up to a second commitment of the Kyoto Protocol among a host of other failures. Most recently we have seen the release of a discussion document on the Resource Management Act. There is going to be a lot more that needs to be said about the proposals and the discussion document before that matter is over. Then most recently we saw the National Government release proposals on freshwater quality and management. These proposals were meant to reflect some of the 4 years of work that the Ministry for the Environment has been doing in conjunction with the Land and Water Forum. Well that forum in particular and now the Ministry for the Environment has to become involved in the Minister’s application of those reports. 
What I am concerned about is that we are getting contradictory messages from the Government and I do not know how the Ministry for the Environment is to implement contradictory policies. First of all in the Resource Management Act discussion paper the Minister for the Environment Amy Adams is pushing for more ministerial control—less power vested in the Environment Court—over local decisions which are more likely to affect individual people who want to build a deck on their house than anything else. But in the latest proposals for the quality and management of our waterways the Minister is pushing for local councils to make the decisions over waterways that are in fact national treasures. They are not simply the province of the people who live beside them but they are in fact taonga they are treasures they are facilities that all New Zealanders hold dear. So on the one hand the Minister has got the reach of Government wrong in the Resource Management Act proposals and wants to override local councils and in the second proposal she has got it wrong again by wanting to leave decisions on quality and management of waterways to local councils without any cognisance of the nationwide significance and the need for national environmental standards applying in respect of these waterways. 
So we are really pressed to understand how it is possible for the Ministry for the Environment to enact two contradictory directions from the Minister for the Environment. The only conclusion we are left to draw is that the Minister’s agenda is simply a narrowly focused development agenda—beyond all else a narrowly focused development agenda—that does not take into account the larger significance of the environment. For all of the blue-green protestations it is entirely clear from this contradiction that there is only a small number of people who are going to benefit from these proposals and they are the ones this Government traditionally supports. 
EUGENIE SAGE (Green) 
: 
 The Ministry for the Environment spent nearly $51 million in 2011-12 and a major appropriation within that allocation and a major work stream for a number of the ministry’s staff is a programme called improving resource management. The ministry may have received a very good rating from the Office of the Auditor-General on its financial information systems and controls but the suite of changes that this ministry has been directed to make to the Resource Management Act by the National Government is receiving a thumbs down and a very poor rating from anyone who cares about our lands our waters our coasts and our air and from anyone who understands that a healthy environment is the basis of economic success. It is a key plank of the National Government’s pro-development anti-environment agenda that it has directed the ministry to dismantle the concept of sustainable management that has been in the Resource Management Act for 20 years; to strip out five of the key environmental criteria in Part 2 the core of the Act; and to put in provisions that would see economic effects emphasised over environmental ones so that the playing field is tilted very much in favour of development regardless of how destructive or poorly planned that development is. 
When the Parliamentary Commissioner for the Environment released her submission on the Resource Management Reform Bill which is before this House she said that it would “unbalance” the Resource Management Act. She criticised the ministry’s policy work on the bill and the plans to increase the influence of economic concerns. She said: “There is a sense in the changes that the environment is considered the enemy of economic progress”. That is certainly something we have seen in the discussion paper that was released last month and that the ministry is now taking around the country in a very rapid roadshow. Groups like the Environmental Defence Society have called the proposals in the discussion document “deeply troubling”. So what did the Minister do? She moved to shut down the discussion almost immediately by describing groups such as the Environmental Defence Society and the Royal Forest and Bird Protection Society and their criticisms as being “out of touch” and being “scaremongers” when it is those groups that provide a thin green line to protect our environment with their work— 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry to interrupt the honourable member. The time has come for me to report progress. 
House resumed. 
The Chairperson reported progress on the Appropriation (2011/12 Financial Review) Bill and no progress on the Student Loan Scheme Amendment Bill (No 2). 
Report adopted.