Appropriation (2003/04 Estimates) Bill — Third Reading Imprest Supply Debate 
Appropriation (2003/04 Estimates) Bill — Third Reading Imprest Supply Debate 
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Appropriation (2003/04 Estimates) Bill 
Third Reading 
Imprest Supply Debate 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I move  
That the Appropriation (2003/04 Estimates) Bill be now read a third time and the Imprest Supply (Second for 2003/04) Bill be now read a second time 
. This marks the final stage of the Budget process for 2003-04 in terms of the first round of the Budget—that is the Budget itself—and of course the standard Imprest Supply Bill presented at this stage of the year. At the time when the Budget was presented in the middle to the latter part of May the fiscal position outlook was strong. We were expecting for the year just ended a fiscal surplus on an operating balance excluding revaluations and accounting changes basis of just over $4 billion per year and a final operating balance of roughly $1.4 billion per year. We were also expecting a forecast operating surplus for the year that we are now in of roughly $3.7 billion. We were expecting both gross debt and net debt figures to be falling as a percentage of gross domestic product. 
The economic outlook at the time of the Budget was for a slow-down in the economy with economic growth slowing to round about 2 percent per annum or just over for the 2003-04 March year— 
Dr Wayne Mapp 
: What about next year? 
Hon Dr MICHAEL CULLEN 
: Dr Mapp should never lead me a straight line like that when the next line is a good one: growth should be picking up in 2004-05 but with very significant downside risks. At that stage we were still terribly uncertain about the outcome of the severe acute respiratory syndrome (Sars) epidemic. We were still facing the prospect of a very dry winter and the impact that the electricity shortages were going to have the outlook for the American economy was still extremely uncertain and so on and so forth. 
A number of things have changed since then. The main change is that the downside risks in the economy have abated. The Sars epidemic is now by and large under control and we have seen a rather more limited impact on tourist numbers in New Zealand than was perhaps first feared. The numbers have already started to pick up from the point to which they had dropped by April and May when they bottomed out. 
Secondly in one of those little examples of fate that are a lesson to all of us about the point at which the Government finalised its plans for reserve capacity it started raining which perhaps is God’s commentary upon our political processes in New Zealand and elsewhere. We are now back on track for an average year in terms of lake storage—thanks very largely to the savings made voluntarily by New Zealanders otherwise we would still be below the average lake level. Rain has continued to come at reasonably frequent intervals in the key catchment areas in the South Island and the central North Island and we will now certainly get through winter with no disruption at all but there are still long-term questions surrounding security of supply and the necessity of ensuring a greater margin than the market has left us with by the middle of this year. 
That has not affected the central economic forecast at all. Of course Treasury would not at this stage be updating economic forecasts unless there had been signs of some very dramatic changes which have not occurred. Certainly the advice I have is that there is no reason at this point for those central forecasts to be changed in any case. So we are still expecting the slow-down which obviously we have been seeing over the last few months—that is bottoming out at about the 2 percent or so level—but with the downside risk now very very much less. So it is not the central pattern that has changed; it is the risk that we might have been coming out well below that 2 percent level. 
The key feature that has emerged more clearly although it was already emerging by May is the contrast between the domestic and external sectors. The domestic economy is remaining very strong. In May it looked as though the number of dwelling approvals was starting to fall away in a reasonably significant and classic cyclical pattern. Since then the numbers have tended to flatten out again at a high level. The construction sector and the building sector remain very strong. The domestic economy in general remains very strong but because of the appreciation of the New Zealand dollar or more accurately the depreciation of the United States dollar the tradable sector and exporting sector are under significant pressure at the present time. We are seeing that reflected in the closures of some firms and also in the generally reduced returns in New Zealand dollars to the New Zealand exporting sector. That is reflected in the figures today when in New Zealand dollar terms exports have continued to fall as a reflection of the rising New Zealand dollar. 
The reality is that New Zealand cannot do much to affect the level of the United States dollar. However effective monetary policy may be in New Zealand it has absolutely no impact in Washington at all. A United States dollar fall is a product of the US current account deficit and the ongoing US federal deficits. The present United States Government which is following policies very similar to those advocated by the National Party has seen a turnaround in the operating surplus since it took office of $1.2 trillion New Zealand dollars a year—moving from a substantial surplus to a substantial deficit. It also believed in this strange theory that if taxes are cut the economy will grow fast and become self-funding. What used to be called the Laffer curve is now more commonly known as the “laughable curve” amongst most sensible economists and results in exactly the same product that President Reagan produced by following exactly the same policies of very substantial deficits that are forecast to continue into the long-distance future. It is likely to place continued downwards pressure on the US dollar. Equally it is clear that the US economy is probably starting to recover but the numbers continue to be somewhat contradictory almost from day to day and certainly from week to week. 
The likely fiscal out-turn for the year just finished will not be very far different from the Budget forecast. I do not have the final numbers yet—only a preliminary estimate. The figure for the operating balance excluding revaluations and accounting charges is likely to be somewhat higher than the $4 billion forecast on Budget night; it will probably be more in the region of $4.5 billion. But the final operating balance is likely to be about the $1.4 billion mark. It could be somewhat lower because further reductions in interest rates have led to significant further revaluations on the Government Superannuation Fund and the Accident Compensation Corporation which are offset by gains on the equity markets in bodies such as the Government Superannuation Fund. So in general terms the final operating balance will be the same order of size as that forecast at Budget-time. 
The problem that the Government faces in this respect is explained to people by saying that a surplus of $4 billion - plus in the operating balance excluding revaluations and accounting charges is not a cash surplus at all. It does not reflect cash in the pocket which can be spent on other items of Government spending. Out of that come the contributions to the New Zealand Superannuation Fund and a great deal of Government capital spending in a whole range of areas. So if we look at it in terms of the Government’s cash surplus it is modest but by no means large for the 2002-03 year. 
Moreover Government revenue continues to run well ahead of Government receipts. What that means to people who do not understand accruals accounting is that what we think we ought to be getting in is running well ahead of what we are actually getting in in terms of cash which means there is some reason for caution. [ 
Interruption 
] No receipts—actual cash—are lower than revenue. So that means we need some degree of caution about what will actually happen to actual receipts as we move on through over the next year. As I have said many times in the House over the last 6 months or so because receipts ran ahead of forecasts for much of the last 2 years there is a desirability of being somewhat cautious. What may happen is that the economy will slow down and there is a possibility that Government receipts will run under forecast during that period. It is a bit late if the money has been spent already. 
Finally it is worth noting that the Government has a strong record in a range of areas. In health for example the district health board deficits will come in under plan and the number of people in primary health organisations is running at some six times the level forecast when the programme was first set up. We are seeing a strong fiscal position and an economy that is going through a small downturn by international standards. If we manage a 2 percent growth rate in the current year that will be much better than that of the great majority of our trading partners who are looking at rates of between 0 and 1 percent or so growth in the great majority of cases. Only Australia is likely to outstrip us to any significant margin at all in the current year and its forecasts have kept coming back in fact over recent times. 
Against this we have policies that simply give the tired old message of: “Cut taxes for the rich flog off the State enterprises cut pensions cut health spending and hope that somehow or other this will result in a golden age for the New Zealand economy.” Well the last time we tried all of that I think it is fair to say that it rogered the New Zealand economy to a fairly substantial extent and many people are still taking a long time to recover from the pain that that inflicted. We do not need to go through another cycle of self-inflicted pain for no real purpose. The task now in front of us is to decide how to build upon the success so far particularly in the area of skills in the areas of investment in the areas of infrastructure and in a number of related areas that the Government is addressing at great speed with great intelligence and great vigour. Opposite us we see a party that is lacking in vigour almost entirely. Indeed it is a party in which its key strategist Mr Murray McCully now describes a member of another party as “the most effective Opposition parliamentarian” and another member of another party as “the most effective member of the Opposition”. With friends like that who needs enemies? 
Dr DON BRASH (NZ National) 
: 
 We have heard a recital from the Minister suggesting that everything in the garden is rosy and going fine but I want to put the situation in some context. Let me quote a few numbers. Over the last 30 years the New Zealand economy has delivered an increase in per capita income of three-quarters of 1 percent. In the last decade growth has been three times that at 2¼ percent per capita—three times the trend rate of the last 30 years. Why have we achieved that? It is basically because of the reforms that—yes—the previous Labour Government of the 1980s put in place and of those that the National Government of the early 1990s put in place. That delivered a growth rate of three times the trend growth-rate of the last 30 years. 
Now let us look ahead. Two Treasury economists have calculated that for New Zealand to achieve a place in the top half of the OECD in living standards within 10 years it would require a per capita income growth of between 4½ and 7½ percent per annum depending on what assumption one makes about other countries’ growth rates. In other words it will take at least double the growth rate we achieved in the last decade and six times the growth rate we achieved on average over the last 30 years. Even to get to the top half of the OECD in 20 years would require per capita incomes to rise by more than 3 percent—again that is a lot faster than we achieved in the last decade. 
What do we have? We have Treasury projecting that productivity per person will go up at roughly 1½ percent per annum for the next decade. That would deliver an increase in living standards at a significantly slower rate than we had over the last decade and nothing remotely like enough to achieve a place in the top half of the OECD in 10 years 20 years or 30 years. Is it any wonder that this Government has abandoned its objective of getting us into the top half of the OECD in 10 years? It simply cannot be done and on present projections it will not be done in 20 or 30 years either. 
So how does the Government respond to that situation? Let me quote a few things that this Government has done in recent times. First of all it has sanctioned a rather extraordinary attack on high net-worth individuals asking them to supply answers to an extraordinary list of questions about what they have earned what they have given what they have done and what companies they have set up—no matter that many of those have recently been through a clean tax audit. The Government has just sanctioned this extraordinary inquisition into some of our most successful entrepreneurs. 
 There has been almost no media attention given to that except in the business press. Can members imagine the outcry that would have occurred if the Inland Revenue Department had sent a similar request to all those earning below $10000 because it had a suspicion that some of those people might have been evading tax? If the Inland Revenue Department had done that there would have been an absolute outcry; yet when the Government sanctions the Inland Revenue Department doing that to the most successful business people in the country there is not a squeak. How does that measure encourage this country to grow faster? How does it encourage people who can invest to do so? 
Secondly the Government has totally failed to fix Auckland’s traffic problems. The Government has itself acknowledged that traffic congestion in Auckland is costing the economy something like a billion dollars a year. So what has the Government done? Well first of all it has encouraged Auckland to invest in a dopey rail project. At the moment rail carries 0.2 percent of the passenger trips in the Auckland metropolitan area per year. If we spend a billion and a half dollars on upgrading the rail system and provide a hundred million dollars of subsidy annually— 
Dr Wayne Mapp 
: At least. 
Dr DON BRASH 
: —at least we might get that figure to between 2 and 3 percent of total passenger trips in the Auckland region. There is no way that that project can be remotely economically viable. The Government has failed to fix the Resource Management Act problems. The last National Government tried to do that just before the 1999 election and its bill was gutted. We have seen that bill go through the House in the last month or two. What happens? The North Shore busway has taken almost a decade to get the required approvals through and just as the approval process was finished the Government said: “Any project involving the transport sector involving more than $20 million must be subject to central Government review.” 
So not only do we force Auckland into a dopey rail project but we also fail to fix the obstacles that might enable things like the North Shore busway to get on its way. The Government has a Land Transport Management Bill in the works which looks likely to be totally inadequate in dealing with the road problems in Auckland so we will have more obstacles to the economy’s growth. We are not just failing to fix the obstacles that are there; we are erecting more obstacles at almost every turn. 
Let me also talk about the review of the Employment Relations Act that is under way. We have a giant leap backwards in industrial relations law coming down the pike. In the last few months there have been two independent studies done—one by the OECD in Paris and one by the International Monetary Fund in Washington—relating the level of unemployment in an economy to the state of labour market legislation. What did those studies discover? Surprise surprise they discovered that the more rigid and inflexible the labour market laws affecting an economy are the higher the level of unemployment will be. That is totally consistent with the textbooks with our views and with New Zealand’s own experience. 
Those two studies found that labour market reform can drop unemployment by about three percentage points of the workforce—a huge improvement. Is it any wonder that after the Employment Contracts Act was passed in 1991 New Zealand had the highest growth rate of employment in any developed country in the world? What we have now is a steady retreat from that. In the 1990s we saw the Employment Court moving gradually backwards and imposing its own interpretation of the law making it more and more difficult for employers to deal with employment situations. Then in 2000 we had the Employment Relations Act and now we see the prospect of further major changes which employers and employees—and I suspect everybody in this House—know will make it more difficult for employees and potential employees to get or stay in employment. 
We know that because we know that if one makes it more difficult for an employer to dismiss a staff member who is not working an employer simply will not hire anybody whom he or she perceives as risky—which could be anybody whose English is not too good who has a criminal record who is a bit too young or a bit too old. That is what we face if we retreat further from the kind of Employment Relations Act we have got. 
Thanks to the reforms of the late 1980s and early 1990s we have had better growth in the last 10 years than we have had for the previous two or three decades. The sad thing is that what we are looking at now is a gradual slowing-down of that growth to New Zealand’s huge cost and we will all pay for that. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 A few moments ago Dr Cullen laughed at the theory that cutting taxes would advance the economy. I do not subscribe to that theory but I can recall the day when Dr Cullen did and I can recall the day when the Labour Party sitting over there committed everything to reducing taxation to advance the economy. Dr Cullen now thinks it is a joke and says that it is laughable. There is some merit in reduced taxation. For a start I will go on record as saying that I would like to see taxation reduced for the low paid in particular. [ 
Interruption 
] I did not catch the Minister’s point. I will go on record as saying I believe that we should encourage exporters by giving them a favourable tax regime. 
Dr Cullen went on to say that he now realises that the asset sales problems were nothing more than a failure. When Labour was in Government between 1984 and 1990 it sold just about everything it could get its hands on. Labour members point across to Richard Prebble but Richard Prebble was not alone there. He cannot take total responsibility. He was in there up to his neck selling whatever he could but the Labour Party was the Government and it wanted to sell everything. As I recall it sold $11 billion worth of assets and now Dr Cullen can make a joke of it. We have had to buy back Air New Zealand and we are now in the throes of trying to solve the Tranz Rail problems. 
This country is now getting by on its immigration policy. We are living on the backs of immigrants. The time will come—if it has not come already—when members will realise that that policy is just as flawed as the asset sales programme that Labour embarked on a few years back. [ 
Interruption 
] I travel on a New Zealand passport. 
Hon Richard Prebble 
: I am very pleased to hear it. 
PETER BROWN 
: I am very pleased and very proud to travel on it and I have absolutely no intention of getting anything else. 
Immigration policy is basically population policy. [ 
Interruption 
] Who is meant to be giving this speech? That member over there who never speaks or me? 
Madam DEPUTY SPEAKER 
: The member is entitled to a fair go. There is too much cross-interjection. 
PETER BROWN 
: Immigration policy is population policy. I understand that United Future is on record as saying that it wants to see 5 million people in this country within the next 10 years. That is a net gain of 100000 per year. If United Future is the common-sense party then that is the equivalent of 2½ Rotorua’s every year in terms of poll population. If United Future is the common-sense party then I have to say that its members should start thinking a bit more sensibly. 
We should be addressing the immigration question ourselves. I think the Minister of Immigration—and I want to be a little bit charitable here—has somewhat suddenly got the message probably under the influence of my leader the Rt Hon Winston Peters. She has probably taken something on board of some of the statements he has been making. We should be talking about how many people to allow into this country when we want to achieve this level of population—and not ridiculously so as United Future apparently is advocating—where they should live and whether the population should be more evenly distributed. They are reasonable questions. Who should we allow in? Should we be selective; if so whom should we restrict? They are reasonable questions. [ 
Interruption 
] It is too late for me. 
Clayton Cosgrove 
: Never too late. 
PETER BROWN 
: I got through the net but the net was pretty darn tight when I came here. 
Let me be quite clear. New Zealand First advocates that we should reduce the annual number of immigrants into this country and keep it at a controllable reasonable level. We should be careful about who we allow in. [ 
Interruption 
] I think the member is making references to myself but I want to be honest. There would be no great advantage to this country if 100000 of me came in at one time. Over a prolonged period there might be some merit but I would not want to see 100000 of me in one input coming into this country. 
Clayton Cosgrove 
: I agree with the member on that. 
PETER BROWN 
: I am trying to be a little bit charitable here but the member over there keeps heckling. 
I believe that the Minister of Immigration has suddenly taken things on board. We believe that everybody coming here should have a job. She has moved from a points-based system to a job skills-based system. That is in the immigration legislation that is coming in right now and there is merit in it. We believe that everybody coming here should be able to speak English. That seems to be common sense. English is the language of this country— 
Hon Richard Prebble 
: What sort of accent? 
PETER BROWN 
: We are quite relaxed about the accent but we want people to be able to string words together. My accent is no worse than the member’s. We believe that everybody coming into this country should have good health. Let the member tell me that he does not believe in that. We believe that everybody coming in here should have a clean criminal record. We believe that we should have an incentive for immigrants to live outside of Auckland. 
The Minister has recognised many of those points in her bill and she is moving in the right direction but she has no control whatsoever over the numbers. In fact I think she is advocating 45000-plus and we think that is far too many. We believe that there should be a probationary period for anybody coming into this country on a permanent basis. If they offend or are involved in crime within that stipulated time frame then out they go. We must never allow immigration to remove us from the responsibility to train and educate our own people. 
We must also remember that mass immigration as we have been experiencing in the past few years leads to inflation and can put a drain on our health education and welfare and our physical infrastructure such as the roads as it has in places like Auckland. We cannot afford to live on the backs of immigrants for ever. We must recognise that this country does benefit from a positive immigration policy but the one we have right now is too wide—it opens the door far too wide. 
In my last few moments I would like to talk about tax for exporters. If we do not start recognising shortly that exporters are the key to a sound economy it might well be too late. We should be using our tax system to encourage exporters to export more. We should be using our tax system to encourage exporters and manufacturers to set up residence in regional areas rather than all congregating in Auckland. This country will be faced with some tough questions in the not too distant future. We should think about them long and hard in order to do the best for all New Zealanders. 
Madam DEPUTY SPEAKER 
: I call the Hon Richard Prebble 
ROD DONALD (Musterer—Green) 
: 
 I raise a point of order Madam Deputy Speaker. A decision was made yesterday at the Business Committee about the speaking order for this debate. A roster was tabled by the senior Government whip at the Business Committee meeting specifically because of the problems we had in the last time-limited debate. In that debate the ACT party took an extra call and took up an extra 9 minutes of speaking time that it was not allocated plus a lot of points of order which cost our party and other parties dearly. We lost 12 minutes of debating time in that debate. So yesterday a roster was tabled and an agreement was reached by the Business Committee. We expect that agreement to be honoured which means that this call should be a Green Party call. We reinforce that request on the basis that we consistently cast nine votes in this House and the ACT party casts eight votes and therefore we should be speaking before the ACT party. 
Hon RICHARD PREBBLE (Leader—ACT NZ) 
: 
 I realise that Mr Donald is still riled about the fact that the Green Party did very badly in the last election did not meet any of his predictions and got fewer votes than the ACT party. I realise also that his party is about to vote for a measure to have Parliament decide who gets elected but we have not yet done that. We are now required to follow Standing Orders. Standing Order 103 which Mr Donald no doubt has not got around to reading states that in deciding the order of debate: “(b) overall participation in a debate should be approximately proportional to party membership in the House:”. I say to Mr Donald that the ACT party had more MPs elected; it had a greater vote at the last election than the Green Party. The member can do little silly deals with the Government whip as much as he likes but those are the Standing Orders. 
I also strongly object to any suggestion from that member that I have not kept to the correct speaking time. I most certainly have and the remarks made by him I find grossly offensive. The other matter I draw attention to is that once the call has been made it cannot be challenged so the member is wasting the time of the House as usual. 
DAVID BENSON-POPE (Senior Whip—NZ Labour) 
: 
 If I could address the last point first. The reference was not to Mr Prebble the leader of the ACT party but to the member of the party who broke the agreement made on the previous occasion his deputy Ken Shirley. 
If I could speak about the particulars of this matter. What is relevant is the fact that after the dispute and the behaviour of the ACT member on the previous occasion which my colleague Mr Donald referred to there was a request made at the Business Committee 2 weeks ago for me to bring to the committee a proposed roster for the speeches in this debate. I prepared this roster using the normal proportional allocation and distributed it at the committee meeting yesterday. With one change made at the request of the ACT party that roster is the one you see before you. The request made at that meeting by the ACT representative Dr Newman was to move speech No. 20 which you will see is a Labour 5-minute call into that position and shift the other call so that the ACT member who had previously been in the No. 20 position got call No. 17 of 5-minutes duration and was therefore in no danger of losing speaking time because of exactly the slippage that is now occurring. There was no disagreement about any other matter of the roster. It was agreed unanimously by all whips present and others furthermore so that we would not have the sort of dispute that has now occurred for the second consecutive time on a matter like this. I find it totally unacceptable. The consequences are quite obvious. If we cannot have an agreement that is made unanimously—where ACT has indeed been accommodated at the Business Committee the day before—held to then that is an entirely unacceptable position. 
The CHAIRPERSON (Ann Hartley) 
: In ruling on the point of order I can only go by the Standing Orders. I know that the Business Committee did discuss the matter and I know that there was an agreement between parties. However the Standing Orders do stand. 
Hon RICHARD PREBBLE (Leader—ACT NZ) 
: 
 We have just listened to the New Zealand First MP— 
David Benson-Pope 
: What a dishonest party! 
Hon RICHARD PREBBLE 
: I raise a point of order Madam Speaker. The chief Government whip who put up a silly list to put through the Business Committee to try to make some silly point with the Greens is now calling out “dishonest”. He says the ACT party is delaying this House but that is exactly what he is doing. He is trying to cut out other members from speaking—with the help of Rod Donald. A couple of junior MPs are holding up the House. I ask that he be asked to withdraw and apologise for his claim against me in that way. 
The CHAIRPERSON (Ann Hartley) 
: I ask the member to stand withdraw and apologise please for the remark of “dishonest”. 
David Benson-Pope 
: I did not refer to any member as being dishonest. I said the party was dishonest. 
The CHAIRPERSON (Ann Hartley) 
: I am sorry it is the same thing. Please stand withdraw and apologise. 
David Benson-Pope 
: I withdraw and apologise. 
Hon RICHARD PREBBLE 
: Before the interruptions I was rising to speak to the Appropriation (2003/04 Estimates) Bill. But after listening to Mr Peter Brown speaking—and I do not know whether his accent is a north of England accent—about immigration I have to comment that I always find it extraordinary. The gall of that party is just simply amazing though perhaps he regards himself as a personal example of the fact that immigration is a bit of a mixed blessing. 
I want to debate the matter in front of us—and I know that is not usual in these debates. I want to discuss the Appropriation (2003/04 Estimates) Bill and to look at the very interesting question of exactly how much money the Government is receiving and how much it is spending. At the time of the Budget the Government said it was going to have a $4 billion surplus. That is a huge surplus. A surplus of $4 billion dollars is not as the ACT party has commented a matter for praise. It means we are being overtaxed $4 billion. There are approximately 1.6 million workers in New Zealand and that works out at $2500 too much tax each. Well the situation has got worse. In the latest figures I have from Treasury for the year ending 31 May Treasury now estimates from the operating balance before revaluations and accounting changes that the surplus has now become $5.6 billion. For those MPs who have done the mental arithmetic that is $3500 of overtaxation per worker in New Zealand. 
Dr Muriel Newman 
: Dreadful! 
Hon RICHARD PREBBLE 
: It is dreadful. Three thousand five hundred dollars is a lot of money and every worker in New Zealand on average is paying $3500 too much tax so that Dr Cullen can put together a huge fund. And what does he want to do that for? Well this is not election year is it. He will wait until election year then spray it around in order to win votes. 
Deborah Coddington 
: Tax and bribe. 
Hon RICHARD PREBBLE 
: Yes—tax and bribe. The ACT party says that what we need to do is have a tax cut and $5.6 billion is enough to actually go to a flat rate of tax immediately. We could cut the rate of income tax for every worker in New Zealand substantially. 
 I would like to hear from members opposite: do they not believe that if the average New Zealand family was getting another $3500—and if both parents are working it would be $7000—it could do something with that money? Imagine what people could do for their children if they had another $7000 a year of their own money coming back instead of having the Government boasting that it has money to spend on Maori television on sponsoring the America’s Cup on the Ministry of Women’s Affairs on Kiwibank and on all the other nonsense that a Labour Government engages in and still has a massive surplus. 
I say to the Government that it should send back the money. There is also another reason that it should do so. It might enable ordinary New Zealanders to be able to pay their rates. The solution of this Government and of the Minister with responsibility for Auckland Issues Judith Tizard to the rates problem is to say: “Let them eat cake; let them move house.” That is the Labour Party solution to the rates problem. If people’s rates are too great they should just shift house or mortgage themselves to the council. I want the next Government speaker to tell us why the Government should not express some concern about the fact that the survey the ACT party has done shows that although inflation last year was 1.5 percent—so if councils were just moving rates in line with inflation they should have been 1.5 percent—the average increase is 4.5 percent. The Auckland Regional Council rates increase is 34 percent and the increase for Banks Peninsula is 16.64 percent. I do not know why that is. Did it not just win a case against one of its employees? But despite that the increase is 16.64 percent. The Franklin District Council increase is 16 percent. The Marlborough District Council increase is 11 percent. Ashburton’s increase is 10 percent—no doubt that is the effect of Jenny Shipley moving away and not keeping a supervisory note on it. 
When we look at those councils we can see that they are putting in huge rates rises. That is a matter of concern especially when the councils say with a great deal of truth that the reason they are putting up rates is that a Labour Government has increased the responsibilities that they must go through. We now have a nonsense at local body level whereby there is consultation upon consultation—paralysis by analysis. We have planners to burn all of whom cost money and push up the cost of rates to the ordinary New Zealander. But of course the Labour Government’s solution to rates rises is to say that people should move. Judith Tizard said that she had contacted the local citizens advice bureau and it had not had anyone complain to it! I did not realise that people paid their rates to the citizens advice bureau but then the sort of world that Judith Tizard lives in is a very strange one. She of course lives in a State house and the taxpayer pays all the charges for her. She has no real idea of the sorts of costs being met by ordinary New Zealanders. The ACT party has a solution to that. I would like to think that this House will support Rodney Hide’s bill. Let us put in a provision whereby if a council wants to increase rates greater than the rate of inflation a poll is held. We used to have polls if councils wanted to borrow money. If the regional council carried out a poll of ratepayers in Auckland who believes that the ratepayers of Auckland would vote for a 34 percent increase? 
Dr Wayne Mapp 
: That’s right. No way. 
Hon RICHARD PREBBLE 
: Especially those on the North Shore as the member for North Shore is calling out. Of course people on the North Shore are paying extra rates for a rail system. I do not think that the Minister with responsibility for Auckland Issues actually knows that the rail does not go over to the North Shore. I do not think she ever visits the North Shore. 
Shane Ardern 
: She’s never been over there. 
Hon RICHARD PREBBLE 
: She has never been over and would not have a clue. She has never been on the train of course. She has an LTD. 
Paul Adams 
: We’ll get rail soon. 
Hon RICHARD PREBBLE 
: Well it will cost hundreds and hundreds of millions of dollars and it will be paid for by ratepayers the vast majority of whom will not be using it. This Labour Government says that it is a matter for the local people—and we agree with that. Therefore a Labour Government should support our bill which states that any council that wants to increase rates greater than the rate of inflation must hold a poll. Let the local people decide. There are massive rates increases in the central Hawke’s Bay in central New Zealand and in the South Island. The average is 4.5 percent—that is four times the rate of inflation. So far in this debate the only party to speak out on that matter has been the ACT party. That is consistent. We have always been the party in favour of lower taxes and less costs. We say that the things councils are being asked to do are things that the local people would never have asked for. One of them is to do extensive consultation with iwi. Why do iwi need to be consulted more than any other ratepayer? It is just this Government’s political correctness. 
I come back to the point I made earlier and I ask the House this: how can we support giving the Government $5.6 billion more than it says it needs? As I have said and I say it again that is enough money to give $3500 back to every working person in New Zealand and if both partners in a family work that is $7000. I want to know from the Labour Government why we should not give back $7000 to ordinary working people. The ACT party thinks that ordinary working people will spend that $7000 far better than this Cullen-Clark Government with its proposed Maori television and all the other nonsense like the foreshore claims and all the other things that the Government intends to spend people’s money on. Let us have some faith in ordinary New Zealanders. Let us realise that it is morally wrong for this Parliament to take more taxes than it needs. 
GORDON COPELAND (Whip—United Future) 
: 
 I raise a point of order Madam Speaker. I do not ask you to rule here and now on this matter but I would like you to consider it and come back to the House with a ruling. I refer to the decision that has been made to alter the speaking order in the House today. My point is that it is quite clear that at yesterday’s Business Committee the designated representative of the ACT party entered into an agreement—and I stress it was an agreement—with all the other parties in this House. If it is acceptable for the leader of that party to come here today and set that agreement aside then it seems to me it is an inevitable conclusion that that will affect the orderly conduct of this House. I would like you to reflect on that and give us a ruling in due course. 
Hon RICHARD PREBBLE (Leader—ACT NZ) 
:  
I ask you not to reflect on that request because it is grossly out of order. A member should raise a point of order at the time and not later. However since the member has raised a point of order he should set the facts out correctly. Sure a form was put around whereby the chief Government whip thought it would be a funny trick to change the speaking order without drawing it to the attention of the people at the committee. He thinks that it is a sort of agreement when the order is changed from how it normally is and regards that as binding. When the ACT member Muriel Newman realised the silly game that the Labour chief whip was getting into with the Greens and now I understand with the help of United Future—which came to Parliament to lift the standards—she immediately went to see the Speaker Jonathan Hunt. He immediately agreed that of course the speaking order ought to be as it is set out in the Standing Orders. I say to United Future that that sort of silly game is one of the reasons that it is at 0.8 percent in the polls. 
Hon MARK BURTON (Deputy Leader of the House) 
: 
 I agree with Mr Prebble on one thing: if he is to set out the facts they should be correct. Certainly what he just said is not correct. An agreement—no silly games or tricks—was made at the Business Committee meeting which Mr Prebble seldom if ever attends. He is not the member who does that and I do not criticise him. He was not at the committee yesterday so it is difficult for him to speak with such great confidence about the events that took place there. The fact is that a sensible agreement was reached in the manner that is required constantly for this House to work in an MMP environment. It is very very difficult for the House to function on a day-to-day basis if members do not stick to good-faith agreements. That is the beginning and end of it. 
Finally Mr Copeland raised the matter at the first opportunity he had—that is straight after Mr Prebble had taken a call. This is a matter of some serious concern to those of us from all parties who are involved in the day-to-day management of the House. I say to Mr Prebble that it is absolutely essential for every party to be prepared to stick to good-faith agreements when they are made. 
ROD DONALD (Musterer—Green) 
: 
 I start by saying that we are a party that does not usually take points of order but our level of frustration has reached the point where we feel obliged to make an issue of this. We invite you to take Gordon Copeland’s advice and reflect on this matter. In particular you need to look at the minutes of the Business Committee meeting which clearly state that the speaking order would be as agreed at that committee. It is in writing. No stunt was pulled by anybody. There was quite some debate at the Business Committee about the order of speaking today as a result of the chaos that was created by ACT in the 8-hour estimates debate. I request that you reflect on the minutes of that meeting. Otherwise the whole integrity of any decision taken at the Business Committee is undermined if we are to relitigate every decision in this House that the committee has made. 
Hon MURRAY McCULLY (NZ National—East Coast Bays) 
: 
 Madam Speaker I suggest that you do not waste your time by doing any of the things that have been suggested to you by the members who have contributed to this discussion. This seems to me to be a very simple matter. The Standing Order is the Standing Order. Your role Madam Speaker along with the other presiding officers is to apply the Standing Order and I suggest you do that on this occasion. What the Business Committee does is its business but it is a relatively informal arrangement. I am frequently surprised by some of the outcomes that come from that committee but the Standing Orders are there for presiding officers to interpret and apply. It seems to me that the requests that are being made by some of those who have spoken to this point of order are quite superfluous and you should ignore them. 
Madam DEPUTY SPEAKER 
: The Business Committee can discuss the matter again but the situation is exactly as the Hon Murray McCully has said. It is a matter that is in the Standing Orders now. If the Standing Orders are to change then that is another decision that needs to be taken. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 It is with considerable sadness that the Green Party cannot support the third reading of this legislation. Contrary to the views of National ACT and New Zealand First we do not see this Budget as being all bad. It contains some good initiatives and it continues some Green Party initiatives from previous years that have now become baselined. However that is all overridden by this Government’s refusal to listen to the people in their demand that we maintain the opportunity to grow and eat food that is free of genetically engineered (GE) organisms that we protect our environment from the unpredictable harm they could cause and that we protect our economic advantage in producing clean green healthy produce. 
We made it very clear at the last election that genetic engineering was an issue of confidence for us and it remains so. The 35 percent increase in our vote at that election despite the untruths that were told about us at the time was an endorsement of our position and we will keep our promise. That is why I move an amendment to the motion—namely:  
“to omit all the words after the word ‘That’ and substitute the following words: ‘this House cannot express confidence in this Labour-Progressive Government and their United supporters because they are determined to promote the release into our farms fields and environment of unpredictable genetically engineered organisms despite strong opposition from consumers growers food manufacturers exporters economists environmentalists health workers local authorities churches and ordinary people with common sense.’ ” 
It is a pity things have come to this pass because as I said there are some good initiatives in this Budget. This Government is the first to have grasped the nettle of climate change and put in place at least some measures to help us to observe the Kyoto Protocol. Energy efficiency and renewable sources of energy now have a statutory role under the national strategy. Research is under way on agricultural emissions. Two wind electricity projects are planned with the help of Kyoto credits and although that is little and late it is far more than any previous Government has done. 
Sales of public assets have stopped and there is a commitment to returning the rail track to public ownership investing in it and restoring it to a useful state. The Government even though we are not supporting it on confidence and supply has listened to the Greens’ proposals repeated for 2 years now to regain the tracks and it is taking our advice. We have a new land transport strategy that prepares for the 21st century by recognising sustainability as a vital goal and widening the vision to include all modes of land transport. Under our cooperation agreement with the Government we have contributed to that strategy and to the legislation that flows from it. 
We have supported legislation to improve health and safety in the workplace fairer employment rights and the comprehensive re-write of the Local Government Act. With Nandor Tanczos’ Clean Slate Bill we prompted the Government to introduce its own bill on that topic and we have worked with the Government to incorporate much of our position. We welcomed the decision to stay out of the United States’ invasion of Iraq and to support the UN though we are less happy with the decision to send army engineers into a war zone where they are not particularly welcome by the locals. 
There have been negatives too. The global assault on civil liberties that followed September 11 has been one of the more disturbing aspects of the last couple of years. Unfortunately the New Zealand Government has not been immune to the international hysteria and has joined in on the war against freedom. No fewer than four bills have been introduced or passed in the last year that undermine our rights as citizens to speak our minds and to carry out our lives free from the secret intervention of the State security services. The Greens were the only party to oppose those restrictions and to stand up for freedom. Then there was this week’s slap in the face for beneficiaries which seems to have been driven more by focus groups than by any attempt at economic justice. 
My co-leader Rod Donald said in the first reading debate: “The Budget surplus is a fraud. It is built on the backs of Kiwi kids living in poverty hardworking low-income families who need a tax break and young people who are shut out of affordable tertiary education.” I endorse those comments. We are disappointed at the continued refusal to recognise the poverty that restricts opportunity for so many of our people especially when Dr Cullen crows about his Budget surplus. 
But the defining point for us is the intransigence of the Government on genetic engineering and that is why we cannot vote for this Budget. As the only nine parliamentary representatives of the hundreds of thousands of New Zealanders who do not want GE released into their food or their environment we promised those people our vote would be conditional on preserving New Zealand’s GE-free status except for the many beneficial uses of GE in a contained laboratory. Let us remember that the polls tell us we are not representing a minority here. The most recent poll asked about preserving GE-free food production in New Zealand at least until our markets will accept it and an overwhelming 80 percent of New Zealanders supported that policy. Once one gets outside this building with its blinkered views its half-baked science and its political slogans and one engages with the real world of common sense one finds that ours is the majority view. 
Since the Government made its decision to promote the release of GE a lot of evidence has accumulated. There would be no loss of face if the Government were to engage with that evidence and change its mind. There is no shame in allowing the new facts to get in the way of old prejudices. The GE-free movement would congratulate the Government not scoff at it. Let us look at some of what has happened since the royal commission reported and the Government rejected its advice of caution and accepted its advice to proceed—things that no one could have known at the time. 
According to the panel of independent scientists which includes a number of household names GE crops have failed to deliver their promised benefits. They have not significantly increased yields or reduced herbicide or pesticide use. The scientists call to put this technology on hold until we know a lot more is based on the finding that there can be no co-existence of GE and non-GE crops and that contamination is unavoidable. The Ministry of Agriculture and Forestry report recommended by the royal commission found that co-existence can occur only if all non-GE crops accept a contamination level of 1 percent which growers consumers and overseas markets do not want. That independent panel of scientists points to growing problems on the farm with herbicide-resistant weeds and safety concerns that have never been investigated. 
The European Union has adopted labelling rules that will require all New Zealand’s food exports to the European Union to be labelled as containing GE material if we adopt that 1 percent threshold for allowable contamination and the supermarkets there have said that they simply will not buy anything labelled as GE because their consumers do not want it. Although the gene technology regulator in Australia has approved GE canola for growing there none will be grown because all the states where it could be grown have imposed their own bans of one kind or another. They see a market advantage in doing that and if we persist in the foolish plan to release GE food crops we will be at a marketing disadvantage compared with Australia. 
The science has also moved on. Two years ago scientists thought there were some 150000 genes in the human genome; now they have reduced that to just 30000. The point of that is not just that we know so little or we keep finding out we were wrong but rather that the whole basis of genetic engineering the belief that genes alone control inheritance and that each gene codes for only one characteristic is wrong. Thirty thousand genes are not enough to control human inheritance and other factors must be involved. When we transfer genes what else are we transferring without having any idea of its function? 
The Government is not even pretending to implement many of the recommendations of the royal commission such as not using food animals or plants to produce pharmaceuticals allowing councils to establish after consultation with their communities GE-exclusion zones to protect local production and having a strategy to protect bees. The only strategy to protect bees announced by the Ministry of Agriculture and Forestry after months of research is that beekeepers will be responsible for finding out on the Internet where the GE crops are grown and for moving their hives 6 kilometres away from them—great! The period of constraint as the Government likes to call it is supposed to allow research to be done on a key concern of the royal commission the “significant gaps in our knowledge about the effects on soils on native species and on horizontal gene transfer”. A contract has been let to examine those things. When will they be reported on? The report will be years away. What does the Government plan to do if that report comes back with a list of dos and don’ts to prevent the horizontal gene transfer of dangerous genetic material and pollen from GE corn is already blowing all over our farms? 
GORDON COPELAND (United Future) 
: 
 During my contribution to an earlier of Appropriation and Imprest Supply bills for 2003-04 I was subject to an unrelenting stream of interjections and interruptions from the honourable member Rodney Hide. As far as I could work out his concern was that when I pointed out a number of ways in which I believed this year’s Budget could have been improved he was quizzing me continually about why in those circumstances I and United Future would be voting in favour of the bills. I think I owe him an answer to that and it is simply this: we have signed a confidence and supply agreement with the Labour-Progressive Government. 
Should Rodney Hide then ask me why we entered into such agreement again my answer is very straightforward: that is precisely the mandate we sought and received from the voters of this country. During the election campaign we clearly signalled that we would be prepared to work with the largest party elected by the voters in the interests of creating certainty and stability for New Zealand society and the economy. Let me tell members that United Future has no intention of welshing either on the mandate it has been given by the voters of New Zealand or on our confidence and supply agreement with the Government. Accordingly we will continue to support the Government on those issues right through until the 2005 election. It is about time that MMP was made to work properly. 
 The honourable Rodney Hide’s barrage of comment and interjection while I was speaking brought to mind the picture of a bull terrier that when confronted with 119 large trees decided to dedicate 3 years of its life to barking up every single one of them in the hope that somewhere up amongst the branches there may be a Dr Michael Cullen a Clayton Cosgrove a David Parker or a Janet Mackey who could become unnerved enough to lose his or her grip and fall out of the tree. Well I tell Mr Hide that I have not seen anyone fall out yet nor do I expect that to happen before 2005. But far be it from me to discourage him. 
Dr Muriel Newman 
: I raise a point of order Madam Speaker. I think that the member in his speech is being extremely unparliamentary with regard to one of our colleagues and I think he should be asked to withdraw and apologise. 
Madam DEPUTY SPEAKER 
: There was nothing unparliamentary there. 
GORDON COPELAND 
: I hope that spurious point of order does not reduce my speaking time. I really do not want to discourage or to pour scorn on Mr Hide’s hopes in that regard. 
I want now to go back to the appropriations and imprest supply bills. I have already signalled that I believe Dr Cullen would have been wise to adjust the tax brackets for inflation. That would have moved the upper limit for the 19.5 percent rate of taxation from $38000 to $42000 and the threshold for the start of the 39 percent rate from $60000 to $65000. It would have yielded all taxpayers a gain in take-home pay of between $1.16 and $16.50 a week. It would have given the economy a $400 million fiscal stimulus at precisely the point where growth is on the way down having fallen significantly from last year’s 4.4 percent to a forecast of just 2.2 percent for this year. 
In the absence of any fiscal stimulus we are left to rely solely on monetary policy for growth. I do not believe that on its own it will get the job done. Daily now in our newspapers we see people from many sectors of the economy from manufacturers to farmers asking the Reserve Bank governor to fix the dramatic slow-down in value resulting from the high exchange rate of the Kiwi dollar via monetary policy. But the reality is that monetary policy on its own cannot do that. For that reason in my opinion we need both monetary and fiscal policy to kick in at this time and to work in tandem so as to stimulate the New Zealand economy in the interests of both minimising the downturn and turning the growth curve upwards again as quickly as possible. Once again I remind Dr Cullen that it is not too late to take that action. Were he to bring a short bill to the House to increase the tax brackets in the way that has been proposed by United Future I am sure he would have the immediate support of all parties and enormous support from New Zealand taxpayers. 
United Future would also like to see the company taxation rate reduced to 30c in the dollar. By my calculations that would cost about $500 million. Again it would give a much-needed boost to the business sector stimulate the economy and increase economic growth. 
I would like to say too that I agree with Peter Brown when he talks about doing something to boost our exports. I have in mind here particularly exports that add value—for example processed wood as compared with exported logs. I have already put a suggestion to Dr Cullen that he looks for example at maybe making exported logs subject to GST and processed timber not subject to GST as it is at the moment in order to put us on to the path towards adding the value that we so desperately need to have if we are to see our economy grow. 
I would like to comment a little on some of the items that are included in the imprest supply bill. I note that it seeks authority in relation to Air New Zealand’s equity for $150 million—although perhaps a decision in that regard will be delayed until the Commerce Commission has made its final ruling in relation to the Air New Zealand - Qantas alliance. I think though that the Government should also give careful consideration to whether it may be a better strategy to reduce its shareholding stake in Air New Zealand via a rights issue available to members of the New Zealand public. Mum and dad investors would I am sure appreciate the opportunity to take up a stake in our national airline. As far as I know there is no good reason in terms of international or bilateral agreements or otherwise for the Government itself to maintain an 82.5 percent shareholding in the airline. Why not reduce that in tranches if necessary to say 51 percent? 
I would also like to refer to the question of investment in what the new No. 2 bill describes as a capital allowance—an injection of capital for rail. When the first imprest supply bill was in the House we were talking about a deal with Tranz Rail. Of course since that has happened the deal has now shifted to one between the Government and Toll Holdings. That in turn is now somewhat up in the air and it is unclear whether Toll Holdings will be successful in gaining control of Tranz Rail. In any event one way or another the Government looks set to re-acquire ownership of the rail track throughout New Zealand and is accepting responsibility for its ongoing maintenance. 
My information is that the rail track has a long tail of deferred and expensive maintenance. I think it is clear that from the date of its privatisation—and probably before then—until now little has been put back into the maintenance of both the track itself and the associated infrastructure in terms of bridges tunnels stations and the like. It has all been pitifully run down pretty much to Third World standards by a group of shareholders who were intent on stripping every available cent out of the company to put into their own pockets. I spent the earlier part of my career working for large corporations and I support wholeheartedly private enterprise in every way. However it must be admitted that asset stripping represents the ugly and in my view the unethical face of capitalism. 
In any event I urge the Government now to proceed with caution. If I were in the shoes of the Minister of Finance and the Minister of Transport before committing the hundreds of millions of dollars needed to replace bridges rail tracks etc. I would do my sums carefully so as to establish whether rail will remain a cost-effective means of transportation on a line by line and on an area by area basis. I suspect that in a number of areas of both the North and South Islands rail may not be the best and most economical mode of transport over the medium and longer term. If that is the case I believe the Government needs to discipline itself and if necessary to make the hard decisions that would be involved in closing down uneconomic or redundant railway lines. I think that work must be done. I believe that the Government has to rely on much more than simply the ideology of Jeanette Fitzsimons and the Green Party in basically saying that rail is a good thing. The situation is not as simple as that. We should not invest any taxpayers’ money without competent analysis and a commercial justification. 
I want also to touch on another important area that I believe needs to be addressed during this debate. I refer here to the question of skilled labour shortages in the New Zealand labour force which are now a major restraint on our growth. Many of those shortages appear to relate to what may be called the manually skilled section of the workforce. The Government needs immediately through the Department of Labour to undertake an in-depth study of New Zealand firms to establish precisely the extent of those skill shortages by category and by the ages of the people who are needed to undertake the work. I mention age because the chief executive officer of Positively Business Wellington tells me that shortages in a number of areas are occurring as people retire and there is no one available to take their place. A comprehensive well-researched database would therefore assist the Government both in terms of retaining older workers and the like and also of endeavouring to fill those shortages and to fill them quickly through immigration. 
Diesel mechanics are a case in point. Apparently we are short of them but there is a cohort of South African diesel mechanics who would be very keen to migrate to New Zealand. In that regard the Government’s new immigration bill is a welcome step forward. As Minister Lianne Dalziel has said it is a step away from bringing people with academic qualifications into the country simply to drive taxis in Auckland. It is much better to bring in suitably qualified immigrants to plug the gaps in Wellington Southland Taranaki etc. 
Hon MATT ROBSON (Deputy Leader—Progressive) 
: 
 It is very good to follow a speaker from a responsible party in this Parliament that differs often with the Government but supports the Government on matters of confidence and supply. It is in stark contrast to the raggedy old National Party and the right-wing upstart on the block ACT to whom Mr McCully has recently had to go as a Greek bearing gifts. He should beware see the end of that tale and see what happens. But that is OK because in this Parliament we have a working relationship around principle and issues and United Future should be commended. It is also good to commend it for standing up to the silly taunts of the permanent Opposition who want to make sure that the Government does not have the support of the parties in this House who actually want to get things done. 
When we campaign for votes we do so with a commitment that if we are elected we will do our best to deliver the policies and programmes we campaigned on to improve lives and to make our community safer more prosperous and more harmonious. That is why the Progressive party supports this bill. The Labour-Progressive coalition a minority in this House regularly comes to Parliament to seek approval to raise the money it needs in order to invest in New Zealand’s future. Non-Government parties have to consider carefully whether to approve or not to approve that request for the funds we need to invest in our communities. At various times in the past 4 years we have relied on the support and cooperation alternatively of United Future New Zealand First and the Greens on matters of confidence and supply. A key political challenge to our centre-left coalition is to continue to hold the confidence of parliamentary majorities for many years to come. 
I believe that we have experienced the confidence of Parliament in these past 4 years not only because we have a coalition that is not afraid to tackle challenging issues head-on but because we put those particularly challenging issues to the test of what is the best for the people of New Zealand. We have a coalition that is tackling the social and capital investment deficit of the past 15 years or so. That is a deficit that ACT by its selfish policies wants to continue with and to go back to—in particular by pushing programmes that say if one is rich one does not have to pay for any of the social investment in New Zealand. 
In recent days we have heard of Kiwibank’s pilot programme to offer a once-in-a-lifetime opportunity for low and modest-income earners to have their own homes. The response to Kiwibank’s initiative has been overwhelmingly positive. Also in recent days the coalition has unveiled a $105 million jobs package to assist more New Zealanders into employment. The coalition has showed that it is prepared to face up to its responsibilities to address household and business concerns about the lack of security of supply in electricity provision. 
I believe that a political factor that will assist the Labour-Progressive coalition to continue to maintain the support of a majority in Parliament for many years to come is the decision by the National Party earlier this year to adopt all of ACT’s key values and policies. For that we heartily thank them. Those two parties have settled on ACT’s policy prescription—a prescription that has ensured that the ACT party has been an Opposition party since its inception. For half a century until Jim Bolger’s departure from National’s leadership the National Party dominated New Zealand’s parliamentary politics. Under the first-past-the-post system that was often easy to do. A party did not need a majority of votes at all but it could have enough seats to have a majority in Parliament. 
Since the coup against Mr Bolger National and ACT have turned further inward looking. They are now stuck in the rut of all ideologically motivated parties. They are big on philosophical purity and grand theories but out of touch with the vast majority of the community and unable to participate in implementing practical solutions to real challenges. Everyone agrees that the challenge to all parties is to get good things done for people. The question of confidence that needs to be decided is this: would a National-ACT administration do a better job than the Labour-Progressive coalition? That is the question that confronted New Zealand First and the Greens in the 1999-2002 Parliament and that confronts those parties as well as United Future in this Parliament. 
The people of New Zealand have resoundingly answered “No” to the question I posed. [ 
Interruption 
] It seems that in this Parliament there are two members of Parliament for the fading and failing Opposition parties who say “Yes”. Those three parties—that is New Zealand First the Greens and United Future—constantly have to weigh up whether what the Labour-Progressive administration is doing is better for people than what would be happening if we had that National-ACT Government. The political challenge to the Labour-Progressive coalition over this and coming years is to continue to hold the confidence of a majority in Parliament and to continue to inspire the kind of support and respect that I believe the National-ACT bloc is so many many years away from achieving. 
Hon TREVOR MALLARD (Minister of Education) 
: 
 We heard interjections from the “agent for Monaco”. Who was responsible for Monaco’s commercial spy ring in New Zealand? It was that member over there. I do not see how he can sit in this House when he runs the commercial spies the industrial agents and so on. Someone on the other side of the House called Mr Worth is the agent for Monaco in New Zealand and he has the cheek to sit in this Parliament at the same time. What an embarrassment he is to his party! [ 
Interruption 
] He invited it—he interjected the very minute I stood up. I ask members what contribution he has made to New Zealand. He was the agent for Alinghi. That member ran the trust fund for Alinghi and has progressed since that time to running spy rings in New Zealand for the principality of Monaco. I do not know how that member manages to live with his conscience. 
Clayton Cosgrove 
: He doesn’t have one. 
Hon TREVOR MALLARD 
: I suppose so; he is an old Tory. It is no great surprise. One of the things I contemplate when we come to the Appropriation (2003/04 Estimates) Bill is that I look at the alternatives— 
Richard Worth 
: Do you know about it? 
Hon TREVOR MALLARD 
: I did a helluva lot of work on it. To be fair I probably did not do it in quite the way my ministerial colleagues would have preferred—but we shall leave it at that point because we work together. I look over to the other side of the House and ask whether anyone there could possibly put a Budget together. 
John Key 
: Yes. 
Hon TREVOR MALLARD 
: I just about believe that. We do feel sorry for John Key do we not? He agreed to Michelle Boag coming in to be the rising star and spokesperson on finance for the National Party. Then what happened? Bill English asked Don Brash to do the job as well. That was absolutely unfair. When that member was invited in to Parliament as the member was—I mean of course Mr Key the member for somewhere in west Auckland—by the president of the party to be a rising star in the finance area who went in front of him? It was Don Brash. I feel sorry for Mr Key. I think we all feel sorry for him. 
Jill Pettis 
: No! 
Hon TREVOR MALLARD 
: People do not feel sorry for him? Who on the opposite side of the House would if in Government be trying to put together a Budget? We all know of course that it would be Richard Prebble. He is the only person. He is the person who Murray McCully says has more political skills than anyone on the front bench of the National Party. Also he actually said that Rodney Hide is better than anyone on the front bench of the National Party. I tell members that we do not run that tight a caucus discipline on our side but I would be looking for the Prime Minister’s ruck marks if I made a comment like that about my leader. 
Of course we are lucky that we have a great leader who deals daily to National to the point where today National members are too scared to ask the Prime Minister a question. In Opposition we used to itch for it when Jenny Shipley and Jim Bolger were Prime Minister. We thought: “What questions can we ask the Prime Minister today?” We wondered how we could hold him or her to account. But what do we have here? We have a National Party whose members do not even have the spine to ask the Prime Minister a question. Not one of them was prepared to front up today. 
We could go along National’s front bench and point out people like Gerry Brownlee—[ 
Interruption 
] Well he has stretched buttons at the moment. There is a lot of hot air over there. They do not ask me questions either and that is not fair because I quite like questions. As Minister of Education I think I should have my fair share of questions but unfortunately no one in the National Party— 
Richard Worth 
: There should be a question mark over you. 
Hon TREVOR MALLARD 
: I would like there to be a question mark as a result of a bit of pressure from Parliament. But it needs an Opposition. As for Nick Smith I would like him to ask me a question. This is a relatively sad Opposition. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Hon TREVOR MALLARD 
: As I left the House we were contemplating who other than John Key with 10 15 or 20 years’ experience could possibly put a Budget together. It is quite clear that the sad wrung-out dish mop Dr Brash could not possibly do it. He has given up already. He has been here a year and he has given up. Now he almost says he is sorry before he asks questions. 
Hon Dr Michael Cullen 
: He is a sort of Mary Batchelor of the National Party. 
Hon TREVOR MALLARD 
: I think that is bit rough on Mary Batchelor and Danny Kaye for that matter as well. There is a little bit of talent left on the National Party side. There is Mr Power who is sort of threatening but I do not think he will ever make it in the financial area because it requires a bit more work than the gentleman rural member is prepared to do. Therefore what is obvious and sort of delightful and what people who are being polled this very night by UMR Insight will be saying is: “We really know that if the very very weak Leader of the Opposition was ever involved in Government again with ACT as the coalition partner Richard Prebble would be Treasurer.” Everyone knows that there is no way that someone as weak as Bill English would ever be able to stand up to someone like Richard Prebble. I wonder now how much longer anyone with any self-respect would stay in the job in the position Bill English is in. Every now and again—and it is very hard because he is a Tory—I start feeling sorry for him. Clearly he is someone who was promoted before his time. He is someone who had a whole pile of potential and never delivered and now he has a mutinous bunch around him and there is no sign at all of any policy direction. 
I ask members to look at the issue of the beaches. What a fundamental mistake he has made. He has ended up attacking his rich mates and their private beaches because he said there should be one rule for everybody—access to those beaches even if it has not been there in the past. I happen to agree with him. There are matters of property rights and things like that to work through but I never thought I would hear from a National Party leader about confiscating the rights of people who have private beaches. But he said it and I congratulate him— 
John Carter 
: I raise a point of order Madam Speaker. We had this debate earlier on and Minister Tamihere made the same claim. It is just not correct. The member Wayne Mapp has given his word and the Leader of the Opposition would if he were here. Members are honourable members and their words are to be accepted. The Leader of the Opposition has never said that. The Minister should not be allowed to repeat it because it is not correct. 
Hon TREVOR MALLARD 
: Speaking to the point of order Madam Deputy Speaker. I think you know and I know that Bill English may be able to come to the House and make such a claim but someone else cannot make it on his behalf. It is a matter for debate. 
John Carter 
: The fact is that the member cannot come into the House and make misleading statements. That is against the Standing Orders as well and the fact is that if he continues he could be before the Privileges Committee. 
Madam DEPUTY SPEAKER 
: No that is debatable. The member would have to come to the House himself to make a statement. 
Hon TREVOR MALLARD 
: Let us just make it clear. We have someone who says there should be one standard for everybody and the absolute consistent point flowing from that is that his mates’ beaches have to be confiscated. We all know that. What we have is a sad little man running around looking for some policy thinking he can scratch a few itches. [ 
Interruption 
] I think it is disgraceful too. Bill English of all people is deciding that it is about time to kick a few brown people. I think it is outrageous. He thinks he can make progress on something that comes right up to the edge of being racist. 
John Carter 
: Oh! He’s worried about it if he’s talking about it. 
Hon TREVOR MALLARD 
: Well I am—and do members know what? I thought he was better than that. I thought he had a conscience and I thought he cared. What is clear is that we now have a leader of the National Party who is a very sad case. He is now like a poor old wrung-out tea towel about to be cast aside as a wet little thing in the kitchen by the National Party. I say that it would be a much better thing for the country if those members just got on with it and did not keep him there. I do not really care whether it is Mr Power who goes or who holds on and loses the next election and whether John Key then comes in whether they go in as a team or whether they do the logical thing and go straight to John Key and cut out those who are sitting in the middle. I do not think it is that relevant for politics in New Zealand for the next 4 or 5 years but it is a very sad thing to watch. 
KATHERINE RICH (NZ National) 
: 
 What a pitiful speech that was from a member we used to hear a lot from! We used to hear a lot from him but he has gone all quiet under Helen Clark’s thumb. He is laughing but that was one of the saddest slowest speeches I have heard with the least amount of content. What we are supposed to be talking about of course is the Budget. When like many members I got to read the Budget I had great expectations that we would see something in the welfare area. But no I thumbed through the Budget and did not see any expenditure that will make a difference to people at the front line. I think the Government realised it did not have enough in its Budget for the welfare area so it quickly moved to make the announcement that next year would be welfare’s chance to get some expenditure. 
But as we know Labour—through its polling I imagine—then realised that it was on the wrong side of the welfare debate and we have seen an about-face this week. We have seen a rush to announce a number of new policies with great fanfare. The Government has presented them all as new. The policy is called the Jobs Jolt renamed the “Jobs Joke”. The Government reannounced a whole set of things that were already in place. Some of them had been in place for the last 10 years—no one had told the Minister. The Government dressed up existing programmes and tried to sell them as new ways of trying to get people into work—and so it should try to get them into work. One of the questions Government members have failed to answer is why the number of people on welfare has gone up not down even though the Government has had the best economic conditions in a very long time. If we look at total figures in this country we see that the number of people on welfare dependent on the State has increased not decreased. That is something the Government should be very very embarrassed about. 
This is a Government that was going to make huge changes to the welfare area. What it did was to take a backward step by undoing a number of things that had been done by National in the last 5 years. We have seen a large increase in certain benefits. The number of people on the sickness benefit and the invalids benefit has skyrocketed in the last few years. No one can explain that yet. The numbers on both those benefits have increased at rates that cannot be explained by levels of disability within the community and they certainly cannot be explained just by saying we have an aging population or that it is due to population growth. 
 The culture within Work and Income has changed all right but it has changed for the worse. Some of the initiatives that have been reintroduced as new were there already. They are some changes within Work and Income to do what it should have been doing in the first place. The Minister announced a new initiative for intensive new services in isolated areas. Case managers have always had the right to call people in for interviews and they have always had the ability to provide one-on-one advice and support to individuals. That was the whole theory of that case-management approach. In terms of special assistance for sole parents the Minister has often said that no assistance was provided to help women in particular to get back into the workforce but that is absolute rubbish. Each year there were interviews training programmes and all sorts of support such as the Compass programme which was brought in by Jenny Shipley. Once again what is being proposed is not new. 
My personal favourite looking at the Jobs Jolt is the information technology training something called “cyber communities” which will help 140 long-term unemployed people back into work through information and communication technology. That is a fat lot of use for the 6000 New Zealanders who have been on some form of welfare for the last 10 years. The amounts of money we are talking about are pitiful: $2.5 million over 3 years. That department spends $3.5 million a day so $2.5 million over 3 years is not a drop in the bucket. It is not even one drip and it will make little difference. There is an idea that suddenly there will be greater support for the Mayors Task Force for Jobs. For the last couple of years Work and Income New Zealand has provided staff members for that task force so what has been announced in the last couple of days is not new. 
The next thing the Minister has introduced as new is the idea that people could potentially have their benefits cut if they move to remote locations. Once again Work and Income New Zealand had the ability to do that. What was new yesterday was that when Sue Bradford asked a question about whether Maori would be asked to relocate from papakainga or ancestral lands the Minister confirmed that they would not be included. It seems that everybody else will be asked to move from remote areas to look for work except Maori. Once again we are seeing two standards of citizenship develop in this country and Steve Maharey agrees with that. 
Finally it is rather ironic that when the Minister tries to talk tough on welfare he does not focus on the under-25s which is the group on the welfare register that is of most concern to New Zealanders but picks on the 55-59-year-old New Zealanders—those who are nearing retirement. When he talks tough on welfare the first thing he does is to try to kick those who are about to retire in the shins. I ask the Minister where it states in the third-way manual that the first people one picks on are people aged 55-59. Most of us know that those people are the sector of the welfare register who are very motivated to get work but face a wide range of barriers into employment that should be recognised. So that is kind of funny—he talks tough on welfare but the first thing he does is talk tough in respect of those who are close to retirement. That is really kind! I am sure Tony Blair would be very proud of Steve Maharey and that announcement. The thing is that someone forgot to tell the Minister that people in the 55-59 age group are already work tested. Yesterday he seemed to think that that was something new. I say to the Minister that what was removed was the ability to apply for an exemption. People apply for those exemptions not usually because they want to but because their bodies may have worn out from a lifetime of hard work and they are unable to work. 
I can see that members on the other side of the House are getting really uptight about this because they know we have seen through this plan—a plan they announced as being some sort of cunning plan. I remember the story of the emperor’s new clothes. I say to the House that Steve Maharey has no clothes. What he announced yesterday amounts to absolutely nothing. It is a rehash and a reheat of policies already in place not just in the last couple years but in some cases in the last 10 years. Some policies were in place when we had the New Zealand Employment Service. Somebody forgot to tell the Minister that many of those things were already being done. 
Tonight we heard about welfare fraud. We heard about a staff member who after 2½ years has managed to extract $1.9 million out of Work and Income New Zealand. It comes as no surprise. Benefit fraud on both sides of the ledger is something that has been truly neglected under this Government. That Minister can shrug his shoulders as he did tonight and say that that was an operational issue but if National were in Government we would not think it was just an operational issue. We would think the Minister would have to get involved in an issue of $1.9 million. We are talking big dollars. We have an expectation of those on welfare that they will not defraud the system. 
The Minister poor thing puts out his press release and has to ring around because nobody has followed up on it. I can see why he is feeling under a bit of pressure with his “Jobs Joke”. Everybody knows that it is a joke and that it is not designed to make one iota of difference to those who are unemployed or to bringing down welfare numbers—numbers that Treasury have projected to increase over the next few years. We have the best economic conditions in a generation and welfare numbers will be going up. That is because that Government has undone many of the things that were being done in Work and Income New Zealand to bring numbers down. It was working. The Government has a problem. Its polling is telling it that it has a problem and that it had better make some decisions. That is why Steve Maharey has had to swallow a dead rat and start to bring in some things that he feels deeply uncomfortable about. 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 I was going to say as the beginning of my comments on the Appropriation (2003/04 Estimates) Bill that that speech was like listening to someone on Mogadon and that it was “Kath without the Kim” but the problem is that I quite like Katherine Rich. On this side of the House we regard Katherine Rich as being one of the better members of the National Party and it is easy to see why because that was 10 minutes of inspiring insightful stuff that really went to the heart of this debate. Katherine Rich is someone whom I regard as being in the wrong party. She is intelligent and she does not believe the stuff she is required to say as a member of the National Party which largely consists of warmed-over policies from the 1990s. I do not think Katherine Rich was born then—I am not really sure whether she was—as she is such a young person. 
Mr Carter remembers all those horrendous policies of the 1990s which even he did not believe in finally. Even he cracked under the pressure of the kinds of policies that the National Party tried to introduce. Even he knew that they were wrong and that they were on the wrong track. But Katherine Rich comes from an intelligent legal background and from the very very forward-looking town of Dunedin in the Otago region. She has come to Parliament and been given the job as spokesperson on social security. The National Party has asked her to do all sorts of things—to beat up on beneficiaries; to carry on with that 1990s way of doing things—and one can tell when one sees her here tonight talking quietly into the microphone to herself that she does not have her heart in it. She does not believe it and therefore it leaves us on this side of the House once again to map out what will be happening around these issues. Sue Bradford I am sure will either viciously attack me later in the debate or has already done so. I am not sure whether she has got to it yet. 
Budgets are normally a time when members get up in the House and talk about what they would like to do. At present there is a real litmus test going on in the House of potential Governments because the only two parties in the House that have really presented a Budget are the Labour Party and the Progressive Coalition. When the Labour Party was in Opposition with people like Mike Moore who went off to the World Trade Organization—we have so much talent in the Labour Party we can afford to send people off to run the World Trade Organization—followed by Helen Clark what did we do when the Budget came around? We put out vision statements and policies— 
Darren Hughes 
: Alternative Budgets. 
Hon STEVE MAHAREY 
: —we wrote alternative Budgets we came to the House and talked about them and we went around the country and held meetings about them. What people got was a strong impression that there was an alternative Government. 
 But when we come into the House and have this kind of debate what do we get? We get all the Opposition parties coming down and whingeing and whining about what the Government is doing. They never once put the discipline on themselves and rather than talking about all those little wild schemes they have say that if they had this amount of money how they would bring it down to hit between the pages of a Budget. That is what people vote for at election time. They may enjoy Rodney Hide getting up and going on about some little issue. They may really like the fact that Mr Carter gets up and talks about some case in Northland. They may like to hear criticisms of various people in this House but in the end what will they vote for? They want somebody to get up and actually run the country. They want somebody who can run the country. [ 
Interruption 
] I can hear Mr McNair saying that people vote for New Zealand First. Well a few of them do. The New Zealand First Party has only three policies so it gets about only three votes. That is the problem. People do not want the New Zealand First Party in Government because it does not have a plan for the country. It has only three constant whingers who go on and on about what we are doing about immigration crime and whatever else they are worried about which is on New Zealand First’s big posters. But New Zealand First cannot run the country. 
That is why the only party that is polling well—the only big party in this Parliament any more—is the Labour Party. We are the only group that actually looks like a Government. I have said before that what has happened in this party is that what one might call the Scandinavian approach to life is starting to emerge in New Zealand. From now on there will be one big party which will be called the Labour Party— 
Darren Hughes 
: Very good name. 
Hon STEVE MAHAREY 
: I think it is a very good name as my neighbour from Horowhenua says. It is such a good name and it will be the Government’s name before long. It will be a little like the way in which a fridge became known as a Kelvinator. People forgot about the notion of fridges and just started to call them Kelvinators. In the future we will find that people will say “the Labour”; they will not even bother with “the Government”. They will say “the Labour” because our party will be synonymous with the Government. 
I say to people that this is no criticism of Helen Clark but if members cast their eyes around the House tonight they are probably looking at a future Prime Minister. He is in this House now. I am talking about the young man back there. We are grooming him for 25 or so years’ time when he will come into his prime and “the Labour”—in other words the Government–will move smoothly to its fourth or fifth Prime Minister while in office. That is what we are looking at simply because the small parties on the other side of the House along with the shrinking National Party are held together by the fact that they won some votes last time. If there were an election today National members would fit even further down the other part of the Opposition benches to squeeze into a little bit of foreshore over on the side there which would give them customary access only as part of that. We would not give them any title or right to it because of course they are being squeezed off but they could get a bit of Queen’s chain access to it. Then we might give them a little bit of customary use of the seats because of their long history since 1936 in opposing Labour. So they would have a customary right to those few seats over on the side there. 
So that is what it is coming to. We are the only people who bother to put up a Budget. We are the only people who actually say how to run the country. We are the only people who have policies on everything. Everybody else now is going into his or her wee niche and as time goes on we will find that Labour members will move further and further around the Chamber. The Opposition parties will then fit into nice little niches on the other side as they pick out their little issues to argue with us about—but they will never be the Government because they do not bother to write Budgets. 
Mr Hide over there who pretends he is an economist could at least spend some time on what is supposed to be his core discipline instead of chasing ambulances all the time. He looks a bit like one of those people off the old shroud-waving kinds of American crime shows chasing one little ambulance after another. Why does he not do some serious work on saying exactly how the ACT party would run a full Budget to give people some choice? Well I do not think that party will and therefore we are looking tonight at the only game in town. 
I was proud to sit in the Chamber and listen to the fourth Budget presented by Dr Michael Cullen who I think personally—and this is not just because he is close to me in the Chamber and all the rest of it—has now presented four Budgets that have given him total credibility in this area. That has reflected extraordinarily well on the Government so that people know as the old saying used to go that the chequebook is safe with the Labour Party. The chequebook is safe with this Government because we have a person in Dr Cullen who has earned the respect of all parts of our community. Whether one is a welfare beneficiary a business person or somebody who teaches in a school wherever one may be one is able to look at Dr Cullen and say: “That person knows what he is doing with the chequebook. He will spend it responsibly. We ought to keep him there Budget after Budget to make sure that what he is doing is spending the money wisely.” 
I was proud to be part of that and I say that as a person who is trying to spend more and more in the social area because there are so many things to do in this country. I have to go along with Dr Cullen I have to fit in with the kind of plan that he is putting forward for this country and I am able to understand what he is doing. I am able to see how welfare budgets education budgets and housing budgets are fitting together into the broad plan that he is putting forward. As someone who wants to spend this amount of money on people in this country I have been able to work with Dr Cullen knowing that our budgets are in the safe hands of someone like him with his expertise. I have been proud of that. I know that I am surrounded in the Chamber because I can feel the warm glow by comrades amongst the Labour Party who feel exactly the same about Dr Cullen. They have that warm suffused beam of pride that comes from knowing that the country’s Budget is very well managed. 
I want to finish on that note. It is hard to debate in the Chamber this evening with a series of parties that are not really serious about running the country. This is just a little whinge session for them on their own little issues that they want to get on with. The country knows that. People hear them chipping away at their little issues but they know that however entertaining that might be or however that might scratch a little itch it does not constitute a sound visionary policy and Budget which means they can get up each day and know that their lives are taking place in the context of a Government that knows how to run this country. That is what Labour can do. 
SUE KEDGLEY (Green) 
: 
 As our leader has already pointed out earlier today the Green Party will not be able to support the third reading of this bill because this Government which projects itself as seemingly cautious sensible and pragmatic is defying common sense simple logic and the wishes of the vast majority of New Zealanders by lifting the moratorium on genetic engineering (GE) so that New Zealand can climb on the GE bandwagon and grow GE foods that no one wants to buy or eat. 
I have just come from listening to a Labour Minister the Rt Hon Michael Meacher who was the Minister for the Environment in the Blair Labour Government until he was recently tossed out because he questioned genetic engineering. No doubt if he had been here in New Zealand he would have suffered a similar fate. The Rt Hon Michael Meacher said that he was genuinely puzzled about why an export-oriented nation like New Zealand—arguably the world’s leading producer of agricultural products which has an outstanding branded image of being clean and green—would put at risk our brand and our world export markets to grow food for which there are no markets no consumer benefits and no economic benefits and for which even the claimed producer benefits have failed to come to pass. 
Michael Meacher confirmed to a very very large audience across the road—I have just been there—that the attitudes in Europe to GE food and let us remember that Europe is our largest single premium market show no sign of shifting and if anything are strengthening in their rejection deep suspicion and distrust of GE food. He predicted that that situation would continue for the foreseeable future. He pointed out that the new GE labelling and traceability laws of the European Union which will require every single GE ingredient in food to be labelled will require first of all guaranteed GE-free food supplies. The European Union will require any New Zealand exporter who is exporting to Europe to segregate food containing GE from GE-free food and to provide the Europeans with full traceability all the way through the process to prove that the food we are exporting is GE-free. 
 So why would we want to imperil our premium market? We have already had a warning with the latest GE corn contamination the Sunrise corn fiasco that even a tiny amount of contamination can imperil our markets—in this case the Japanese market—which want nothing less than guaranteed GE-free food supplies. 
Michael Meacher spent last week in Canada. I think it would be a wonderful idea if our Minister of Agriculture took a little visit to Canada to see just what the experience of the Canadian farmers has been with GE. They wholeheartedly embraced GE when it was introduced there. They believed the hype that it was going to introduce higher yields herbicide-resistant crops and so on and so forth. Now all of them from the major Canadian Farmers Union down are totally opposed to GE. Indeed the head of the Canadian Farmers Union went to England to say to the farmers there: “Don’t touch GE.” The contamination has spread throughout Canada yields have not increased and farmers in Canada are being sued by GE seed companies. They are now taking out full-page advertisements in the newspapers and waging a major campaign against Monsanto which is trying to introduce GE wheat there. The National Farmers Union GE Agribusiness and the Canadian Wheat Board are all implacably opposed to it. A court case has even been taken out saying: “Please we beg of you don’t grow genetically engineered wheat. What has happened in Canada has been a fiasco and we do not want any further disasters.” 
Why will our Government not listen to the former Environment Minister of the United Kingdom when he says that it will be a disaster for New Zealand and that there is no market for GE foods? He cannot understand what on earth this Government is doing. 
Hon MARK BURTON (Minister of Defence) 
: 
 I just want to say it is a pleasure to join this debate and to acknowledge that the foundations for a secure long-term future for New Zealand have now been well bedded in over the last three Budgets by Dr Michael Cullen. I think now is a time for ensuring that we stay the course and work our way through. There are periods of uncertainty and we are in one now but I think we have a coherent and highly credible programme for 2003-04. The foundations are there and we have to build on them. 
I will take the time I have in this debate to talk about defence because over the last few days in what was once a credible national newspaper and more recently in comments made in this House by one or two members we have had what has passed for some sort of critique of defence policy. It is a critique that is appalling in its lack of quality substance and indeed accuracy. So I think it is about time we put the record straight a little. 
Before getting into the real detail of it I have to say that yesterday I was stunned to hear Dr Wayne Mapp claim that this Labour Government had cancelled the third frigate which I think is a good example of the complete lack of memory on the part of the National Party. That might have been a good decision but I think Dr Mapp must be suffering from severe amnesia. In 1998 the decision to axe the frigate was made by the National Party and it was well covered in the media. I can only assume that Dr Mapp was doing something else that month. I will quote him a little bit of his own party’s defence policy from 1999: “National will not be proceeding with the replacement of our last Leander-class frigate with a third Anzac frigate.” I think the member’s comment about the frigate is therefore about as credible as the National Party’s comments about it caring about personnel and pay rates. 
We need go no further than those in the National Party who do at least have some memory and I refer Dr Mapp to his colleague Simon Power the defence spokesperson for National. Mr Power said in a recent speech made only in the last few weeks— 
Jill Pettis 
: Not much firepower there. 
Hon MARK BURTON 
: No but at least he got this right: “A National-led Government did not allow defence spending to keep pace in the 1990s.” That is from a recent speech made by National’s current defence spokesperson. Perhaps if Dr Mapp is not satisfied with that if he wants an older wiser head he could go to Richard Worth—that well-known doyen of the legal profession and camel rider. He is a wise man and he spoke recently on National’s time. He said 9 years of neglect had left New Zealand’s Defence Force “perilously low in capability and short of the funds to correct this.” Clearly neither Mr Worth nor Mr Power suffers from amnesia. 
Anyway let me move on. As I said earlier in recent days accusations and assertions have been published in a once-credible newspaper. There has been a series of big articles based on selected bits of recycled questions. The newspaper calls it an investigation which I think is a grandiose term for a bit of recycled question material and self-interviewing. Let us have a few facts in this ill-informed debate. 
In 1999 this Government inherited a Defence Force that was by National’s own admission—and I have given quotes from Mr Worth and Mr Power—suffering from 9 years of neglect. It was Mr Worth said “perilously low in capability and short of the funds to correct this.” and he was right. As I said before Mr Power in his comments made recently in a well-publicised speech reinforced that. So by 1999 we had the Army Navy and Air Force actively competing against each other for the crumbs of what was left after 9 long years of neglect—neglect that dated back to the 1960s. Pay rates had lagged behind and there was a seemingly bleak future all-round. 
When we took office in 1999 we said the time had come for a new way to run defence issues in this country. Contrary to the sorts of nonsense that we have seen published for the first time a Government did what it said it would do. It was based on the Foreign Affairs Defence and Trade Committee’s Inquiry into Defence Beyond 2000. There had been plenty of opportunity for discussion and debate about setting a course. We said we would build a policy on that and we did. Within 6 months the defence policy framework had been published and released. Within a year we had a force structure document in place. It said: “Here’s the policy. This is the force structure that logically you need to implement that policy.” Last year before the election we released the long-term development plan which is the plan that will put into practice the equipment resources materials and tools for our men and women in the Defence Force to do the job we ask of them which is clearly laid out in that policy framework. We have committed $3 billion over the next decade. That plan was updated just last month. It is a continuing rolling-out document and there will be $3 billion over the next decade to put that plan into effect. In other words we defined the need we laid out the policy we looked at how it can be achieved and we are doing it which is the rarest thing of all. Unlike the National Government we are actually getting on and doing it. 
National has the gall to say that it is policy made on the run. It has been frustrating for me to have to take the time to do it but we have done it right and now we are rolling out the policy and Mr Power tries to call that running around with a shopping list. We have built an acquisition programme based on a clear policy framework and if that is running around with a shopping list then I am guilty because frankly what National is asking for is another white paper. Do National members know what another white paper will actually mean? It will mean a stop to the acquisitions a stop to the replacement of that old equipment which those members criticise daily just as they daily insult and offend the good men and women of our Defence Force. Do National members know why a lot of our equipment requires work on a regular basis? It is because of the pace of the work that our people are involved in. They are working hard. They are doing a lot of things with that equipment. 
Clayton Cosgrove 
: Unlike them. 
Hon MARK BURTON 
: Exactly. They do not get it; they just do not understand. On Monday I had the great privilege of getting out and greeting the men and women on  
Te Mana 
 as they arrived back in New Zealand. They came back second to none. They have the accolades of the international community. The Canadian commander who had command of that interdiction force said that they are second to none. They had the highest rate of operation of any ship in that force. Of course when operating in 45-degree heat they will have some maintenance issues that are quite unusual. Should we attack and criticise them or their equipment? No we should admire them. They have shown ingenuity and initiative of the sort that New Zealanders are famous for. 
 The thing that saddens me is to have a once-great newspaper wheeling out that claptrap for a whole week. It is absolute nonsense. It does not insult me and it does not affect me; it insults the men and women who are our Defence Force. It is an absolute affront. I get out and about and I talk to the NCOs people who have spent 25 or 27 years training some of the finest personnel in the world. They are now being told their training is useless. Well it is not; it is fine. They are the best people anywhere; they are second to none. When they go out they deserve to be properly equipped and that is what this Government is doing across all three services. 
We have committed $1 billion to upgrading the Air Force’s capabilities. I see Dr Cullen breaking out into a sweat even as I mention it. We have $120 million worth of new radio and communications equipment for the Army and Air Force. Why? Because I am not prepared to send out young people with 60lbs on their back with three radios because they cannot trust the old clapped-out radios in their packs to work when they need them. That is why we have made that commitment. That is why we are spending $600 million on up to date 21st century equipment to move them around. The old Vietnam War equipment served us well but its day is done. That is why Project Protector will provide a fleet of modern and appropriate vessels to complement what we already have so that our Navy can do the roles alongside many other agencies that we require of it. That is why we are engaged in numerous other projects in the long-term development plan: so that the young men and women who are the current and future Defence Force of New Zealand are properly equipped and are properly supported to do the job that they are doing for us. 
I challenge the Opposition just once to stop whingeing to stop whining and to stop attacking those young men and women. When you do that when you slag them off when you attack the Government’s defence policy you are not hurting me and you are not hurting us; you are insulting them and they deserve better. They deserve better from this Parliament. 
Rodney Hide 
: I raise a point of order Madam Deputy Speaker. Do I need to explain this point of order? I do not think it is acceptable that the Minister of Defence spends his speech attacking the Speaker. 
Madam DEPUTY SPEAKER 
: I am sorry but I did not hear that. 
Hon MARK BURTON 
: If I inadvertently used the second person I unreservedly apologise. My comments were directed entirely at the sort of nit-picking that member just engaged in which was a great example of not actually engaging the real issues. 
CLAYTON COSGROVE (NZ Labour—Waimakariri) 
: 
 I suppose this is a debating tag team in one respect. Rodney Hide would know about that being a big-time wrestler from way back. I want to pick up where the Minister of Defence left off. Mr Hide’s contribution showed exactly how bereft of any spirit he is. This is the man who we should never forget attacked— 
Rodney Hide 
: I raise a point of order Madam Speaker. My point of order was ruled on and it was ruled in my favour. It is not acceptable that this member—I forget his name—then gets up and uses his speech to discuss my point of order. That is outside Standing Orders. 
Hon Dr Michael Cullen 
: That is a very good point and it is one that I think we should follow on every occasion. Once a point of order has been ruled upon a member should not be commenting on that ruling in a subsequent speech. 
Madam DEPUTY SPEAKER 
: That is quite correct. 
CLAYTON COSGROVE 
: My apologies; I will not transgress your ruling. Let me say this in respect of Vote Defence. Mr Hide’s career is littered with attacks as our Minister of Defence said on our defence personnel. He is known in this House to wear a Returned Services Association associate’s badge and to parade about as though he were a friend of our armed services. Yet this is the man who got stuck into the Private Leonard Manning affair to the point where the dead soldier’s family told the Minister to get him to back off. Mr Hide is the man who attacked the Air Force because it had decided to pick up—I forget from which island; was it Samoa—a person in distress after a request by a responsible Opposition member who I think was Katherine Rich. The old blunderbuss Mr Hide never gets up to back our armed services. 
There used to be a protocol in this Parliament that when our men and women were overseas peacekeeping fighting protecting others and protecting our country we backed them in unison. I believe that most National Party members generally observe this protocol but not the grubby Mr Hide; if he can smell a bit of a scab to pick off he will be in there. One has to say—no I would breach Standing Orders if I did say it but words like “patriotism” come to mind—that those members who do not engage in his sort of activity are the patriotic ones. 
I turn to the Appropriation (2003/04 Estimates) Bill. We now look at the state of New Zealand in the light of the positive economic statistics that we have in this country in an environment of international uncertainty. If we look at the good economic news—and I know that certain members opposite hate it—we see that a household labour force survey shows an unemployment rate that is one of the lowest in the OECD. That is undisputed. Our gross domestic product growth rate is one of the highest in the OECD; in the last quarter there was an increase of 0.6 percent and there was an annual increase of 4.3 percent. Those are solid economic platforms from which we can build. The  
ANZ Job Ads  
series increased in June by 5.6 percent. We have the lowest unemployment I believe for 15 to 20 years. Those are all solid achievements that are good for our people and good for our country. From those we can provide further opportunities for New Zealanders. 
I remind members of Parliament that the last Government raised the white flag on regional development. The last Government sold out the regions sold out places like the West Coast and the Bay of Plenty. It got rid of the business development agencies. I think the Minister at the time— 
Georgina Beyer 
: That’s right. 
CLAYTON COSGROVE 
: My colleague says that is right. It was Max Bradford. It is interesting that we are the first Government to have a Minister for Small Business. We know that small business provides 85 to 90 percent of the jobs. We have a Minister for Small Business but what did the last crowd do? How did those members advocate around the Cabinet table for small business? Let us look at the regional growth rates around the country. I am proud to say that my own province of Canterbury leads the South Island at 4.9 percent and is second only to the Bay of Plenty which is at 5.1 percent. I think they are solid achievements. I think they are the things that people listening here tonight and people around the country want to hear about and want to talk about rather than the sort of flummery and posturing we have from people like Mr Hide. How do I know that people want to talk about development and growth in this country? I say just look at the polls. The polls are a reflection of the support this Government has and I do not say that arrogantly; I say that with a high degree of respect for our people. 
Georgina Beyer 
: It is a matter of fact. 
CLAYTON COSGROVE 
: It is a matter of fact as my colleague says. Let us look at some of the key achievements. Let us look at our progress in health. There are now 1.7 million New Zealanders enrolled in primary health organisations. There were 157000 elective operations in 2001-02 up from 151000. There has been progress in education. We said we would put more teachers into schools and we have created an extra 774 teacher positions for next year. We have invested $78 million in information and communication technology in schools. In the tertiary area we are widening eligibility for student allowances so that we can make tertiary institutions and universities more accessible and more affordable for our young people. Why? Because we value education. What do we get from education? More skilled New Zealanders. What do you get from more skilled New Zealanders? Jobs and tax revenue that we can then redistribute and redeploy to those who need help within our economy. In terms of the progress in law and order we hear a lot of bleating from the ACT party and from—I think his name is Ryall; he reminds me of a jug of beer with big handles. 
Rodney Hide 
: I raise a point of order Madam Speaker. 
Madam DEPUTY SPEAKER 
: The member will refer to the member by his proper name. 
CLAYTON COSGROVE 
: My apologies. Mr Ryall bleats on again about police numbers. Here is a fact that members should have etched in their memories: there are more police in New Zealand than in any other time in the history of this country and this is the biggest police budget in the history of this country. 
John Carter 
: Not true. 
CLAYTON COSGROVE 
: I say to the member that I remember that just before the last election Bill English—and my colleague will refresh my memory—put up a paper before Cabinet to cut it by $120 million. 
Hon George Hawkins 
: 540 police jobs. 
CLAYTON COSGROVE 
: My colleague tells me the proposal was to cut 540 police jobs. Had the country not put the sword into Mr English and that Government we would be 540 police down today. National’s biggest contribution to the police was chewing up hundreds of millions of dollars of the police budget not on batons pepper spray cars and those sorts of things and not on personnel but on INCIS a silly computer system that never worked. That was its contribution. [ 
Interruption 
] I invite that member to get off his chuff take a call and justify that. 
Let us take a look at social development which is important within our country. The sum of $153 million will be spent over 4 years to help people move off welfare and into work. I would have thought that was something even Rodney Hide—the tsar of the zany in the ACT party—would support but no those Opposition members will not talk about opportunities for New Zealand; they put the boot in because that is their specialty. 
I want to contrast that with some of the geniuses in the National Party. I ask the House to look at some of the contributions that have been made by National Party members. I want to conclude briefly with Bill English and the National Party on the foreshore and seabed issue. I made a general debate speech this afternoon and I said that their politics of scaremongering is one of the lowest points I have seen in this Parliament. This is an issue that has perplexed and worried a lot of New Zealanders. For some that is through a lack of understanding and I pay no disrespect to people who do not understand the issue. They get most of their information through the media and it is often skewed by members opposite. But the National Party had a chance on this issue to show some leadership. Instead what we got was grubby politics from a grubby party and grubby members opposite. Where has the leadership of that party been on this issue? Instead of scaremongering what it could have done was to say to New Zealanders: “This is an issue that transcends politics. This is an issue where we need to join together and get it sorted out.” 
Well I say to the House tonight that we will sort it out. It is a tough issue it is complex and it will take some time but this Government will sort it out. Why? Because this Government is the only one that can sort it out. It is the only one with the guts to confront the issue head-on and deal to it. The only thing we get from Opposition members is: “You are not moving fast enough. Where is the plan where is the strategy?”. Well unlike the slogans the billboards and all the rubbish that they come up with we are going to get this right. We are going to get the framework up and get the consultation done then we are going to put the issue to bed. All New Zealanders will know thanks to us that they will be able to take the kids to the beach and as John Tamihere said have a barbecue play cricket volleyball or whatever take some fish and have a good time. They will have access as they have today. I finally call on the Opposition to make a decent contribution. 
Dr LYNDA SCOTT (NZ National—Kaikoura) 
: 
 What an absolutely pathetic speech from Clayton Cosgrove! Members can tell that the seabed and foreshore issue is absolutely hurting this Government and it is not going to sort it out; it is just going to do deals. The issue is a very easy one. I come from Marlborough and the line in the sand is the Marlborough foreshore and seabed. That is the line in the sand and New Zealanders know it. It is not a complicated issue. It is not complicated at all. The Maori Land Court should apply to land—not foreshore not seabed; just land. All the Government has to do is define “land” as land. If the Government did that then when it wanted to talk about it title would remain in Crown ownership. It is very easy to solve that problem. Government members talk about other issues but the problem of title is easy to solve. Yet this Government cannot do it. Helen Clark came out and said she would but she has backed off every day since because they cannot sort out a deal with the Maori caucus. The Government can spin this all it likes but people throughout New Zealand know that this is a line in the sand and they are not going to tolerate it. 
 But actually I came down to the House tonight to talk about health. I am going to talk about primary health organisations because $165 million is being allocated in the 2003-04 year to that experiment. Every superannuitant out there who cannot get a hip replacement cannot get a cataract done and has been bumped off the waiting list—every one of the 25000 people in the 2003-04 year alone; every one of the 10000 in Christchurch—has to wonder where the money is going. Why have the points—the hurdle that people have to get over to get an operation—been put up? It is because a lot of the money is going to primary health organisations. The Government is also pouring money into district health boards which is like pouring money down a black hole because the governance structure and the management structure are failing New Zealand. That is why we had the highest ever deficits last year and it is why they will be higher this year. 
But I come back to the issue of primary health organisations. The Minister of Health has actually stated that she wants to be remembered for primary health organisations. What are they? They are untrialled they are rushed they are uncoordinated they will not deliver on expectation they are expensive they are heavily bureaucratic they are hated by general practitioners and they are race-based. That sounds a bit like the Minister of Health actually. A problem list as long as that takes a major increase in the number of health officials to sort it out. We have to wonder why the Government decided not to build on the independent practice associations that were developed by doctors who thought they were doing a good job for New Zealand. All the things that the Ministry of Health says it wants to achieve with primary health organisations—better diabetes treatment better access for Maori better screening programmes more immunisation better management of pharmacies and laboratories—were being done by independent practice associations. 
So why destroy a system that was working just to create a race-based system of targeted funding on location? How can it possibly make sense to put $165 million into funding based on location? Ten main issues have been raised regarding the establishment of primary health organisations. Funding is based on location not on need. A primary health organisation needs 50 percent of Maori Pacific Island or low deprivation but the fact is that the other 50 percent do not have to have high health needs or be Maori Pacific Island or low decile. In the South Island there is nobody on cheap health-care whereas other areas get cheaper care. It does not make sense and when we ask the ministry it says that over 10 years it will roll it out to everybody. But what will happen during those 10 years? People in the wrong location will not get cheaper access to care whereas wealthier people in the right location do get that access. It is ridiculous. 
The Government did not build on the independent practice association model. Instead a whole new system was set up. The public has to enrol but nobody actually knows about enrolment. People have not been told that they are supposed to enrol with just one general practitioner practice. So what happens? People move—they live in one area and they work somewhere else and if they get sick they go to the local doctor down the road. What happens to the funding? The funding does not stay with the general practitioner they normally see; it gets moved. Capitation funding is causing massive funding flows for general practitioners and it is affecting their ability to practise. So with capitation the cross - primary health organisation flows are really detrimental and people are finding it very difficult. 
The fluctuations that are occurring in the incomes of primary health organisations is huge. The ministry has allowed small primary health organisations of 5000 to 7000 patients to develop. 
 They know that they will not survive. They know that they cannot continue on the funding that they have. They know they will fail. Why were they allowed to be set up in the first place when the management and administration costs are so high? Every primary health organisation has to have a board and there is concern from the ministry that there is not enough Maori involvement in the governance. That is what this is about. It is more about getting Maori and Pacific Islanders involved in governance structures than about delivering care on objective measures. We have to look at how much it will actually cost to have the bureaucracy and the administration of these primary health organisations. It will be huge. In the past we have had deficits in hospital-level care. We have never heard about deficits in primary care but that is what we will get. 
The Government is pouring $165 million in $20 million of it for primary health organisation establishment funding and a whole lot of that will disappear and primary health organisations will be back to the Government with their hands out asking for more money. That has not happened in the past. The general practitioners have worn the cost and they have delivered because they have done it on a public and private system. One gets public money plus private money. That pays for primary care. Funding can be an issue. No one denies that funding can be an issue for people when they need to see their doctor but why not target it on need? In relation to the independent practice associations the doctors all got together and said that there should be a care-plus system where those with high health needs and low incomes get better access. The Ministry of Health agrees with that but how much money is it putting into them? It is putting in $2 million as opposed to $165 million into primary health organisations. No one disagrees with more money going into primary health care but the way it is being done is confusing to the public. It will not deliver on its aims and unfortunately it will be waste a huge amount of money. 
Today I talked to a consumer of mental health services. Mental health services have continued to be a problem in this country. The lady I am talking about lives north of Auckland in the Waitemata area. Waitemata looks after all the forensic services for Auckland. She said that the doctor who was to discharge her brother was not signing his discharge letter but was instead signing his death certificate because there were no acute beds for her brother to stay in. This man had tried twice to kill himself but out he was going that day because there are not enough mental health beds. If the Government wants to do some good it should put more money into mental health beds. We have gone too far with our lack of beds for those who are acutely unwell. The police have had enough. They were trying to help. People were being kept in police cells—illegally actually—and the police have now been told that they have to stop doing that and that 6 hours is enough. However there are no acute beds for those patients. That means that they are a risk to their family and to themselves. We need more mental health beds. The situation is so stressful that the staff leave because they are under so much pressure. We are nowhere as near to the blueprint funding as we should be. This is one area where we could be looking at putting more money. Also if we look at how much funding Phamac has been allocated we see that its funding has reduced. That means lack of access to new medications. Primary health organisations get all the money and they will not deliver. 
LUAMANUVAO WINNIE LABAN (NZ Labour—Mana) 
: 
 Kia ora talofa lava and warm Pacific greetings. As a proud member of this Labour-led Government I have much pleasure in standing to participate in this debate. The strong foundations for long-term sustainable social and economic development have been laid in the last three Budgets. This bill continues that good work. The fine leadership and economic stewardship of our Deputy Prime Minister and Minister of Finance Dr Michael Cullen is to be applauded. He continues to be a safe pair of hands and our country can feel reassured by his leadership and commitment. 
I want to give the House some examples of Labour’s ongoing commitments in the Mana electorate with a strong focus on achievement and positive outcomes. I will talk about progress and jobs in the economy and progress in education health law and order conservation and environment and social development. 
Economic growth in the Wellington region has improved. As of July 2003 Porirua City currently enjoys an economic growth rate of 5 percent and the Kapiti Coast district a respectable 3.1 percent. Unemployment continues at its lowest levels and that is complemented by the significant reduction of unemployment in the Mana electorate. Porirua out-performed the region with an unemployment level of 4.6 percent. There are now 16200 more people in paid work since Labour formed the Government in 1999. The partnership of the various stakeholders including Positively Wellington Business—formerly the Wellington Regional Economic Development Trust—Business Porirua the Porirua City Council and the Kapiti Coast District Council together with central government agencies is a good working model of partnership collaboration and consultation. It ensures that resources are utilised for good planning so that we can maximise the outcomes and benefits for the people of the Mana electorate and of course for the people of New Zealand. We all know that we need dollars to make it happen. Innovation Greenhouse Porirua has been awarded a business incubator grant of $80000. Innovation Greenhouse Porirua will be assisting start-up businesses in the area to grow without making some of the mistakes that businesses normally make within the first 3 years. 
We are committing an extra $23.6 million to expand the Gateway programme which is currently being piloted in 63 schools to reach all decile 1 to 5 secondary schools by 2007. Mana College in Porirua is a current Gateway school. In our electorate there are an estimated 12 extra teaching positions in 2003 and there will be a further 15 extra positions in 2004. Schools in that area will also get an extra $298000 for operations funding in 2004. 
With the boost from the number of businesses and workers involved in industry training we will get an extra 7000 trainees in the Wellington region including those in the Modern Apprenticeships scheme. The Government has also given the go-ahead for a major redevelopment of health services in the Wellington region including the construction of our new regional hospital in Newtown the remodernisation of Kenepuru Hospital and the provision of more health facilities for Kapiti. Primary health organisations were set up to target populations with the greatest health needs. In our area these include the Porirua Plus primary health organisation which enrolled 11768 people Tumai mo te tangata which enrolled 48497 people and the Kapiti PHO which enrolled 33189 people. 
In February this year we were involved in the opening of the new Kapiti police station which has become a striking addition to buildings on the Kapiti Coast. Senior Sergeant Mike Coleman who heads the 38 sworn police officers and four civilian staff based at the Kapiti police station says that his staff members are delighted with the new building. There has been a significant drop in reported crime in Mana which parallels the drop in unemployment and shows the clear link between the improved economic situation and social indicators such as crime statistics. 
Mana Island and Kapiti Island are two beautiful jewels of the Kapiti Coast. The Department of Conservation manages those two major assets of New Zealand’s conservation estate. I have visited both of those islands and have seen at first hand the tremendous work of the Department of Conservation. Native birds plants and other aspects of New Zealand’s heritage have been preserved and restored to those islands. In relation to some of the money that has gone into projects for example $26000 has gone to the Pauatahanui Inlet Community Trust to guide rural landowners on restoring biodiversity. It is important that this Government continues to manage sustainably both the conservation estate and the financial resources of New Zealand in order to provide for future generations. 
The Labour Government has also achieved a good balance between prudent financial management and sound social development. Partners Porirua is to run one of two new pilot programmes focusing on improving employment prospects for 15 to 24-year-olds funded by the Ministry of Economic Development. The pilots to be run in Porirua and Waitakere are a part of a whole-of-Government drive to improve the transition of young people from school into quality employment. 
In Mana State-house tenants are receiving income-related rents with average weekly savings of $30 per week which is $1560 per year. Porirua is also one of the pilot areas for our Government’s new Stronger Community Action Funds which help local communities to meet local needs. 
In conclusion I say that this bill continues to build on the strong foundation established by this Government’s prudent financial management. I have listed some of the fine outcomes achieved in the Mana electorate. These outcomes have been repeated throughout New Zealand. The Labour-led Government is committed to managing New Zealand’s economic performance so that we can all provide a good quality of life for all of our citizens. Most Saturday mornings from 7 a.m. to 9 a.m. I spend time at the Porirua market. Many people have come to me over the last few weeks and told me how well this Government is managing the economy. The word from the grassroots is that things are going well. 
RON MARK (NZ First) 
: 
 I rise unfortunately to pour a little bit of cold water on top of that speech. It is wonderful I have to say to have a member who is so dedicated so loyal and so devoted to the leadership of her party that she is prepared to put on blinkers read out a speech such as that and ignore the realities. All I say to that fine member is that I know she will one day become a Cabinet Minister; she just has to keep making speeches like that. She will be rewarded for her loyalty in some way. 
The reality is that things are not going well. We could talk statistics all day we could talk numbers all day and we could have words words and more words but at the end of the day it is the reality on the street that determines whether a Government is achieving the goals it set out to achieve. 
I remind this Government of the many many things it has said in the past. It had 9 years in Opposition and had plenty of time to make it very clear to the nation what it would do. I have here a George Hawkins press release which states: “ ‘Known offenders are getting away scot-free because police neither have the time nor the resources to apprehend them’ says Labour’s police spokesman George Hawkins.” That was in 1997. We had press releases coming out from Mike Moore saying: “Of all the crazy justification for legalising decriminalising cannabis the idea this would remove a profit centre for gangs is bizarre. Why would it?”. He is going on here about gangs and what a scourge they are on society. 
Edwin Perry 
: Who said that? 
RON MARK 
: It was Mike Moore in 1997 giving us a good flavour of what this Government would deliver. “New Zealand can destroy gangs and organised crime within 5 years if we have the will.” Who said that? It was the Rt Hon Mike Moore in 1997 working hand in hand with the honourable George Hawkins on a campaign to bust gangs. Do members remember that campaign? I do; I attended the select committee hearing in Christchurch and made a submission to it. There they all were— 
Rodney Hide 
: The member was a Mike Moore supporter in that electorate. 
RON MARK 
: I was absolutely. And George Hawkins and Phil Goff who now sit here as Ministers were total supporters of those views. One could not say what those guys were not going to do to gangs. 
Rodney Hide 
: Oh you’re making it up! 
RON MARK 
: I have it here in writing. This is the party that was going to destroy gangs and organised crime within 5 years if Parliament had the will. Well I am sorry but this Government has been on those benches for about 4 ½ years—it will not be quite 6 years because it did not go the full term. According to its own press releases in 1997 we should not be dealing with the nonsense that we are seeing in Taneatua that we are hearing of in Whakatane and that we have been witnessing in Palmerston North. 
Rodney Hide 
: Who went there? 
RON MARK 
: I did not see one Labour Party member at the meeting in Taneatua. I saw three New Zealand First people but I did not see any Labour Party people. All this about statement of intent having the will and everything that is espoused by this party means nothing. Mr Hawkins and Mr Goff who espoused the view that we could see the destruction of organised crime in 5 years have been in Government for coming up to 5 years yet we are dealing with exactly the same problems they were criticising back then. 
The only thing to get rid of gangs that we have seen in the expenditure of this Government is that it has given gang members State houses. Good law-abiding Kiwis thousands of them with families—some of them as we now know living in garages—are queuing up for State houses and the Government is giving them to Mongrel Mob and Black Power members. State houses? I ask you! Where is United Future’s head? How could United Future members possibly vote for this Government to appropriate money when that is the way it is spent? I am looking forward to the election because I have no doubt that United Future has some good explanations for that. 
The proof of the pudding is in the eating and I am sorry but none of this Government’s Budget none of its past Budgets and none of its actions match up to its own words in its own piles of press releases on law and order for the 9 years those members were in Opposition. On the contrary while I was sitting up in my office listening to the radio I heard criticism about parties that do not have any alternative. Well I say to the member who made that speech and to Labour that there is a party that has alternatives and that has more I say to Mr Maharey than three issues on its plate. But they are the three big ones. [ 
Interruption 
] 
Those members over there should take their pills and calm down. I know it is hurting. They should just pinch their noses and swallow the medicine because they need to. I refer to deferred sentencing and all the money that this Government has spent on ramming through legislation about sentencing and parole. What happened here? New Zealand First raised the issue originally through the  
New Zealand Herald 
 highlighting the plight of a Christchurch couple who saw a person given 18 months’ jail out roaming free the next day. Labour denied it and then eventually Mr Goff came out and said: “New Zealand First is right. We have to amend the legislation on sentencing and parole.” So I say to Mr Maharey that there are things we do here proactively. We are fixing it from the Opposition benches. Imagine how much more effective New Zealand First could be if its members got the salaries that many of those members are getting for doing nothing.  
We exposed the fact that 470-odd people got deferred sentences but that there are hundreds of people who should not be on home detention. It is our job to expose the weaknesses in this Government’s plans and what it is doing. Home detention is proving to be a disaster.  
I refer now to Mr Paul Swain. I have to take my hat off to that Minister. He gives a nine-page speech on corrections and actually admits to some of the faults that New Zealand First has found and he admits he will have to make some corrections. But the accolades this man must get for mentioning victims in only two paragraphs out of the 120 paragraphs in his nine-page speech! He talks a lot about Maori focus groups. He talks a lot about the offenders and their repatriation. He talks a lot about horrible people who want to punish offenders. He talks a lot about the wonderful initiatives. But he mentions victims only twice in the 120 paragraphs of his nine-page speech. The joke is that he gets a headline out of it. He gets a headline in the press stating: “Victims may be consulted”.  
 Well I have news for this Government. Victims should be consulted. Victims must be consulted. In the situation we had in Auckland under this Government where a little girl of 4 years old was killed by an Asian driving a car that he should not have been driving because he did not have a licence that driver had his sentenced reduced by half through the payment of blood money without any consultation with the victim’s mother her father her grandparents or her family. That is absolutely appalling. And what does Mr Swain say? “Victims may be consulted.”! Here are 120 paragraphs and nine pages on corrections recruitment and what Mr Swain is doing in the prisons. It is a load of rubbish actually. We know the problems that exist inside the prisons because we have visited them. New Zealand First I would say is probably the only party in this House that has taken half of its caucus up to meet people in Paremoremo prison and been up to the remand prison. I have personally gone through the Christchurch Prison. I tell this Government and Mr Swain that if he thinks this rubbish in this press release is taken on board by the majority of the prison staff his feet are not on the ground—he is not in touch. The big joke is that when one talks to the offenders they know it is rubbish too. They will actually tell people to their face that they know that this is rubbish. 
This Government has a long way to go if it is to live up to the aspirations that it gave people be they Maori non-Maori victims of crime or whoever. The statistics speak for themselves. The headlines such as those appearing in the Minister’s own electorate are there to be read by everybody. 
RODNEY HIDE (ACT NZ) 
: 
 What a pleasure it is to follow Ron Mark in that very fine speech. He is a man who does do the work and knows what is going on in the prisons out in the communities of New Zealand in the police force and in our military. I think it says much about this Government that on this side of the House we have Ron Mark who was a serving officer in the New Zealand military up against a Minister of Defence whose claim to fame is that he was a peace activist in Taupo. That summarises this Government and the Opposition—the next Government. Of course Ron Mark is also up against George Hawkins. Here we have on this side of the House a man who has carried a gun and used it up against a man trying to run the police force who was an art teacher in a secondary school. Again that shows the difference. 
But I want to talk about Dr Cullen’s economic policy. What is it? Well Jim Anderton announced it. It is hands-on economic management. That is Mr Anderton’s hands in everyone’s pocket grabbing all the cash that he can and spraying it around supposedly for the good of New Zealand. Well the jury is in. We have heard the result: Sovereign Yachts! Remember Mr Anderton and Helen Clark trumpeting Sovereign Yachts? When I questioned that I was a naughty boy! How many people are working in Sovereign Yachts now? How many boats have been built? [ 
Interruption 
] Steve Chadwick is yelling out and saying something unparliamentary. I think she is saying “not very many”! 
Remember The Warehouse? The poor hard-working taxpayers who pay their taxes are unable to get a cop when they call for help unable to get their varicose veins fixed and unable to get any attention from this Government and The Warehouse says it needs $75000. The Government wrote a cheque with taxpayers’ money. 
Ron Mark 
: Everyone gets a bargain! 
RODNEY HIDE 
: Yes everyone gets a bargain! I came down to this House and said “This is wrong.” and Ron Mark and Michael Cullen will back me up. The Government members came along to the select committee and said: “No it meets all our funding criteria.” Oh yes Jim Anderton told this House that it met all the Government’s funding criteria and that Mr Hide was bad-mouthing business. 
Hon Member 
: New Zealand - made! 
RODNEY HIDE 
: Oh New Zealand - made! [ 
Interruption 
] Steve Chadwick now says that she agrees with me. Well I am pleased to hear about that because at the time they gave me a hard time. The Auditor-General’s report came out. 
Ron Mark 
: What did he say? 
RODNEY HIDE 
: He said that that funding was outside the Cabinet criteria and that is a nice way of saying “outside the law”—[ 
Interruption 
] Yes outside the rules. So then the Government had to go to The Warehouse and say “We are very embarrassed could you pay the money back please?”. 
Hon Member 
: That’s a bargain! 
RODNEY HIDE 
: Yes The Warehouse where everyone gets a bargain; but has anyone got a bargain out of this Labour Government yet? Have Auckland ratepayers got a bargain out of Judith Tizard? Have hard-working middle-income New Zealanders in business got a bargain out of Helen Clark? Did the art market get a bargain out of the Prime Minister when it bought the painting? No siree no bargains out of the Labour Government; it is pay pay pay. I heard Clayton Cosgrove give a speech. 
Pita Paraone 
: Did he? 
RODNEY HIDE 
: Yes the media paid attention to him once and then they realised that what he was saying was not true. Then they wanted to interview him about his secretary and it is the last time he has been seen on television—it was his backside running up the stairs and running away from the public of New Zealand. Does that not summarise this Government? [ 
Interruption 
] Oh then we come to this one. We will give $40 million to the Hollywood big film producers. Yes $40 million. 
Hon Damien O'Connor 
: Tell me about the Fiji scam. 
RODNEY HIDE 
: Well if Damien O’Connor sits still I will tell him about this scam—$40 million. I have the Treasury reports the Inland Revenue Department reports and the Ministry of Economic Development reports. Damien O’Connor has not been given them and they are shocking. 
DAVID PARKER (NZ Labour—Otago) 
: 
 Listeners can turn their radios up again now after being shouted at with that diatribe. I expect most of them turned their radios down. I would like to speak to the Appropriation (2003/04 Estimates) Bill that we are considering tonight which is the mechanism through which Parliament authorises the Government to spend the money needed to meet the governmental programmes. Firstly I would like to thank both the Progressive party and the United Future party for their support in the passing of this legislation. We are reliant upon them and without that support the legislation would not pass. The Labour Party—and I am sure I speak for all of my colleagues—is grateful for that support. 
The appropriations that are met by this bill include some important additions to the funding of the areas that are at the heart of the concerns of most taxpayers: health and education. Health gets $737 million which is a 9 percent increase in funding—well above the rate of inflation. Education too does well with $481 million of additional funding which represents a 6 percent increase—again well ahead of the rate of inflation. This is being done in a context of a Government that is managing the Budget very well. Dr Cullen deserves to be congratulated on managing to report a $4 billion surplus before capital obligations. Those capital obligations include $1.8 billion being pre-funded into the Superannuation Fund in order to more sustainably fund it into the future leaving a surplus of about $1.4 billion after those adjustments. 
Against that background growth is running at about 4 percent—amongst the highest in the OECD—and probably coming off that high but still very healthy in comparison with other countries. Our gross debt which at the time when the Labour Government took over was about 36.8 percent of gross domestic product (GDP) is dropping. In the next year or two that will drop to 23 percent of GDP which is a vast improvement—a substantial decrease. Net debt drops even further to 14 percent of GDP so one would wonder against that background what Dr Brash and the National Party would be saying. 
It is interesting to look at Dr Brash’s comments reported in the  
Dominion Post  
on Thursday 15 May 2003 around the time of the Budget. He was talking about the rate of growth in New Zealand and comparing the projected New Zealand growth rate with Australia’s. He said: “This is too slow a rate to narrow the large gap in living standards between New Zealand and Australia that emerged during the 1970s and 1980s.” I thought to myself when I read that on 15 May 2003: “What happened to the 1990s the years of the National Government?”. 
So I thought I would go and have a look at the statistics. Those statistics make interesting reading. I am referring to the OECD GDP per capita rankings. Those OECD figures compare the relative performance of Australia New Zealand and the rest of the OECD countries. If one looks at 1980 and the time between 1980 and 1990—which was by and large the period of the Labour administration when our Labour predecessors were responsible for our economy—during that period Australia started at No 10 in the OECD rankings and ended six places back at No 16. During that same period New Zealand went back one place from 18 to 19. So in comparison with Australia under the stewardship of the then Labour Government New Zealand did far better. 
Members should look at the 1990s. One would expect from Dr Brash’s comments that the National period of stewardship had been an improvement on what had passed before. Curiously the 1990s the period that Dr Brash ignores in his article of May this year had Australia going forward from position 16 to 12 while New Zealand went backwards from 19 to 20. So in the 1980s under a Labour administration New Zealand went forward compared with Australia or at least not backwards as fast as Australia was going backwards; whereas in the 1990s New Zealand went backwards while Australia went forward. It is no wonder that Dr Brash ignored the 1990s when he presented his views on the Budget of Dr Cullen. 
What then do Dr Brash the National Party and ACT for that matter have to offer us for the future? What they offer is a return to the past. They offer a return to the neoclassical fundamentalist policies that failed during the 1990s as is clear from the OECD statistics that show that New Zealand performed badly when compared with Australia which had more moderate economic policies similar to those the Labour-led Government is now running in New Zealand. 
But will they admit that wrong? No they will not. They still cling to the purity of their neoclassical fundamentalism. It does not matter to the National Party and ACT that there are great big disparities in wealth and income. They do not think that the gap between the haves and the have-nots was growing. They say that it does not matter. They think the economy performs just as well with those disparities. We disagree. Our philosophy is that social cohesiveness and equality of opportunity are important to economic prosperity and to personal security. We think the failed neoclassical policies that widened the gap in wealth and income in New Zealand undermined our security and threatened our economy. 
That is evidenced by the fact that during the 1990s under the stewardship of the then National Government New Zealand went back one place in the OECD rankings per capita while Australia went forward four places. The lost decade—the decade that not only Dr Brash lost but New Zealand lost and can never catch up with—is the decade when New Zealand charged backwards from 19 to 20 when Australia was forging forward from position 16 to position 12 in the OECD rankings. 
I am pleased to say that so long as the Labour Government remains in power we will not see a return to those failed neoclassical economic policies or the stringency and the austerity that strangled the economies in provincial parts of New Zealand. I am pleased that we will have a continuation of the sound stewardship that members see under the control of the purse strings by Dr Cullen which puts us in the happy position of having a $4 billion surplus before capital obligations and being able to fund $1.8 billion into the Superannuation Fund and to audit it and more sustainably fund it in future leaving a surplus of $1.4 billion. As I said before that is after contributing to the areas that taxpayers wish to see properly funded by the State—namely an additional $737 million to health an increase of 9 percent well ahead of inflation; an increase of $481 million to education a 6 percent increase: again well ahead of the rate of inflation. 
Another area being funded is an increase of $76 million to enterprise and industry development. That increase is quite substantial in proportionate terms albeit $76 million is a smaller amount compared with the likes of health and education as it should be; but it is an important part of the increased focus that the Government has on industry and regional development. This supports the growth and innovation framework that is assisting New Zealand to develop higher-value exports to increase the value of our exports overseas and therefore improve the wealth of our country. 
It is one of the reasons New Zealand’s unemployment rate has been decreasing remarkably with unemployment now at a very low 5 percent against a background where labour force participation is at an all-time high. Again that 5 percent unemployment rate compares very well with most of those in the OECD and reflects the same confidence that people can have in the Crown accounts with low debt both gross and net debt and a substantial Budget surplus. 
A party vote was called for on the question  
That the amendment to omit all the words after the word “That” and substitute the following words: “this House cannot express confidence in this Labour Progressive Government and their United supporters because they are determined to promote the release into our farms fields and environment of unpredictable genetically engineered organisms despite strong opposition from consumers growers food manufacturers exporters economists environmentalists health workers local authorities churches and ordinary people with common sense.” be agreed to 
. 
Ayes 9 
Green Party 9. 
Noes 110 
Labour 52; New Zealand National 27; New Zealand First 13; ACT New Zealand 8; United Future 8; Progressive 2. 
Amendment not agreed to. 
A party vote was called for on the question  
That the Appropriation (2003/04 Estimates) Bill be now read a third time and the Imprest Supply (Second for 2003/04) Bill be now read a second time. 
Ayes 62 
Labour 52; United Future 8; Progressive 2. 
Noes 57 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Green Party 9. 
Appropriation (2003/04 Estimates) Bill read a third time and Imprest Supply (Second for 2003/04) Bill read a second time.