Estimates Debate — In CommitteeText is incorporated into the Bound VolumeEstimates Debate — In Committee[Sitting date: 30 July 2013. Volume:692;Page:12037. Text is incorporated into the Bound Volume.]Estimates DebateIn CommitteeThe CHAIRPERSON (H V Ross Robertson):Nō reiratēnā koutoutēnā koutoutēnā koutou katoa. Honourable members the House is in Committee on the Appropriation (2013/14 Estimates) Bill. The Standing Orders provide for 8 hours of debate on these estimates. Each member may have no more than two speeches of 5 minutes on each vote. The estimates debate should be relevant to the Government’s current spending plans as contained in the Estimates of Appropriations. All votes are available for debate and will be called in order of seniority of Ministers commencing with the Speaker’s votes. A compendium of the reports of select committees on the votes is available on the Table.Vote Auditagreed to.Vote Office of the Clerkagreed to.Vote Ombudsmenagreed to.Vote Parliamentary Commissioner for the Environmentagreed to.Vote Parliamentary ServiceGRANT ROBERTSON (Deputy Leader—Labour):The Parliamentary Service plays a critical role in establishing the environment in which we work and in which members of the public and members of the media work in with the parliamentary process. We have today heard of a most serious incident—that is the release of information about a journalist’s activities in Parliament and in particular the question of phone logs. The role of the media in relationship to Parliament and Parliamentary Service is an important part of our democracy. No matter what we all might think from time to time from how the media portray parliamentarians there is no doubt that their role in Parliament and in these precincts is vital to New Zealanders’ understanding of what happens in our democracy.Today we learnt that phone records—3 months’ worth of phone records—of a journalist had been handed over to the David Henry inquiry. That is one of the most serious and disgraceful actions that could take place in this Parliament. The media acting as they do on behalf of the citizens of New Zealand need to know that their communications are sacrosanct and that has been breached. That is an incredibly serious matter for this side of the Chamber. We condemn the release of that material. We condemn the fact that it has come out because we believe that the media’s role is essential.The question has to be asked of how that material came to be released. It appears that David Henry the person leading the inquiry did not want it. He did not want the information and he sent it back so who requested the Parliamentary Service that that material be released? If we look through the history of this matter of the Henry report there are two people who are at the centre of this: John Key as Prime Minister who called for the inquiry and his chief of staff WayneEagleson. They are the two people who have been at the centre of this inquiry. At the outset of the inquiry John Key did not want to know about it. He said that it was the inquiry of AndrewKibblewhite the Chief Executive of the Department of the Prime Minister and Cabinet and Ian Fletcher the Director of the Government Communications Security Bureau. It was their inquiry. John Key did not want to know about it. He went as far as saying he was as in the dark as anybody else about this inquiry. Well that is clearly not true.What appears to be the case from written questions and from oral questions in the Chamber is that the Prime Minister through his chief of staff has put pressure on Parliamentary Service to release material about the activities of parliamentarians and about the activities of the media. That is what it appears. WayneEagleson was as far back as the beginning of May in contact with Parliamentary Service about email metadata release. We have contradictory answers about this within the written questions that have been given out but what we can clearly establish is that Parliamentary Service spoke with WayneEagleson during the afternoon of 9 May about whether or not there was cooperation from parliamentarians including Peter Dunne about releasing phone records.The question is this: was that simply a conversation about agreeing or was that a conversation in which the Prime Minister’s chief of staff asked for that material? If we look at the answer to written question 8179 this is what the Prime Minister said: “My office directly asked Parliamentary Services to provide the material”. That is what the Prime Minister said in reply to a written question. That means that the Prime Minister and his office are up to their necks in the release of this information which would have been considered private certainly by the journalist and possibly also by Mr Dunne who I now read says that the information that has come out today about what Parliamentary Service did is in contradiction to what he was told at the end of May.We have a situation here where Parliamentary Service the organisation that the Speaker leads on behalf of all of us which is separate from the executive—which is deliberately separated out from the executive to ensure that we are fairly treated as parliamentarians right across Parliament—appears to have come under pressure from the executive branch. That is completely unacceptable. In this democracy we should know that Parliamentary Service acting as it does on behalf of all parliamentarians can act on our behalf not on the executive’s behalf. John Key is donkey deep in this.Dr RUSSEL NORMAN (Co-Leader—Green):This is an incredibly serious matter that we are dealing with now in the Chamber. It strikes at the heart of our democracy. If we are to have freedom in New Zealand if we are going to have a democracy if those things mean anything—and if the people whose names are inscribed on the walls of this Chamber fought for anything they fought for freedom and democracy and freedom and democracy rely on a free press. But we now have the situation where the Prime Minister’s office is menacing anybody who dares to disagree with the Prime Minister and forcing them to release information. We have the situation where the chief of staff of the Prime Minister’s office was leaning on Parliamentary Service in order to get it to release information about members of Parliament and about the phone records of New Zealand journalists.It is an extraordinary turn of events where the Prime Minister’s chief of staff is in phone contact with Parliamentary Service is sending emails to Parliamentary Service telling it to release the parliamentary emails of Peter Dunne and for all we know—and we have not managed to get to the bottom of it yet—is having something to do with the phone records around New Zealand journalist Andrea Vance and certainly around the building movement records of that journalist. We are now in the situation where the head of the executive the Prime Minister’s office the Prime Minister’s chief of staff the Prime Minister’s closest staff member in the entire Government—there is no closer staff member to the Prime Minister than the chief of staff—is in contact with Parliamentary Service in order to pressure it to release the email logs of a member of Parliament.Let us remember that those email logs were parliamentary email logs not ministerial email logs. Let us remember that Peter Dunne—the subject of this—never gave consent for his email logs to be handed over from the Parliamentary Service to John Key’soffice. That is the situation we now find ourselves in. The chief of staff WayneEagleson John Key’s closest ally and the closest member in the Government to the Prime Minister pressured Parliamentary Service to hand over the private parliamentary email logs of Peter Dunne and Parliamentary Service did it. That is the situation.Who now is safe from the Prime Minister’s office? Who now can protect their records from the prying eyes of the Prime Minister—the bullying menacing Prime Minister who will come down like a tonne of bricks on anyone who dares disagree with him? The Human Rights Commission—oh well it is going to have its funding cut because it dared to disagree with the Prime Minister about the Government Communications Security Bureau Act. We now have a menacing frightening Prime Minister who is determined that the only way he can win the next election is to crush all opposition to make sure that all journalists know that if they do not do what John Key likes then he might pull their phone records just like he did to Jon Stephenson in Afghanistan and just like he did to Andrea Vance here. He will pull their movement records to find out whom they are talking to. And if there is a member of Parliament whom John Key does not like then John Key will get their email logs to find out whom they have been emailing. It is a matter of fact that the Prime Minister’s chief of staff leaned on Parliamentary Service to obtain Peter Dunne’s parliamentary email logs.What kind of freedom and what kind of democracy do we have now when it is the Prime Minister’s office that is engaged in this kind of menacing behaviour and menacing anyone who disagrees with him? It ties into a persistent theme from this Prime Minister of menacing anyone who disagrees with him of removing the democratic rights from the people of Canterbury and of removing people’s right to go to court to get a judicial review of the Government’s legislative agenda. It is a persistent attitude that says: “I’m the Prime Minister. I get to decide. The rules and regulations don’t matter. Parliamentary Service must hand over the email logs of members of Parliament. Parliamentary Service must tell us where journalists have been moving about in the building.”When it is all revealed the Prime Minister says: “Oh it’s nothing to do with me. I had nothing to do with it.” Of course his chief of staff was leaning on Parliamentary Service to release the information but John Key says: “Oh I knew nothing about it—nothing to do with me.” We ask him in the House whether he was aware of it and oh well—Hon TREVOR MALLARD (Labour—Hutt South):When the Prime Minister was involved in the Banks inquiry he said: “When you talk to my chief of staff you talk to me.” That is why when WayneEagleson asked Parliamentary Service for the phone records—and we now know that it must have been him because David Henry did not—we had the force the voice of the Prime Minister demanding the records of a journalist. As members point out to me every now and again I have been around this House for some time. I can remember the reasons for dividing up the old Legislative Department into the Parliamentary Service and Ministerial Services. The reason for that was to take away from political control from party political control and from the Prime Minister the ability to access records and to put it in a place that is independent. This year that has been severely breached and it appears to have been breached on at least between four and six occasions.The fact that a member of Parliament’s access logs—when they went in and out of the building when they moved around the building—were made available by Parliamentary Service to an outside body without a warrant is a disgrace. It is not the sort of thing that happens in any democracy. The fact that Parliamentary Service went further and supplied the access details of a journalist is even more disgraceful. It is fundamental to our democracy that journalists have the ability to move freely aroundthese buildings and to talk to whomever they wish. The idea that if members of Parliament go to the press gallery that is recorded and reported to the chief of staff of the Prime Minister is wrong as it is absolutely wrong for journalists moving in and out of whichever doors of the building going to and from outside appointments to be recorded and reported.There has been a lot of discussion over the years about the relationship between the gallery and Parliamentary Service—the offices what is paid for what is not. There has always been an assumption that the phone records that go through Parliamentary Service—but I understand that in the end the extra bills are paid by the employers of the journalists—are sacrosanct and that they would be accessed only in the—Hon Christopher Finlayson: Accessed.Hon TREVOR MALLARD: Oh there he goes again. There he goes again—Hon Annette King: Who’s that?Hon TREVOR MALLARD: Your cousin. The assumption that we have is that the phone records will be accessed only under warrant. What we have now is the chief of staff of the Prime Minister the person who appears to order the Government Communications Security Bureau to spy on people now using Parliamentary Service to get information that would be obtainable only under warrant—under warrant—and approved by the Attorney-General. What we have here is an appalling state of affairs where journalists and members of Parliament are not allowed to have discussions with each other and with their own groups. I mean where does it finish? If Peter Dunne wants to have a discussion with another member of Parliament are the records of that member of Parliament going to be made available to the Prime Minister’s office as well?Hon Members: Yes.Hon TREVOR MALLARD: Yes. Yes say two members opposite. I think it is approved of by both the backbencher—whose name I have forgotten—from King Country and Russel Norman. That is what happens in this Parliament and that is totally unacceptable. I think the Speaker has done the right thing. Obviously this is not the right vote to discuss the fact that the Speaker has referred the matter to the Privileges Committee but there are a lot of questions that he should answer now.Rt Hon DAVID CARTER (Speaker):It gives me no pleasure at all to have had to have a meeting earlier today with a journalist and to apologise on behalf of Parliamentary Service for the fact that her phone records were released. I agree that this is an issue that is very serious. All members who have contributed so far have remarked on how serious this issue is. We all have a love-hate relationship with our press gallery but it is an absolutely essential part of this democracy. There has been a breach of trust and I will do all in my power to get to the bottom of it. At this stage although a number of members who have contributed to the debate have suggested that those phone records were released under pressure from the chief of staff of the Prime Minister’s office WayneEagleson I can find absolutely no evidence of that whatsoever. In my opinion—Grant Robertson: But who asked for them?Rt Hon DAVID CARTER: The member interjecting said “Who asked for them?”. It appears to me that no one asked for them to be released. [Interruption ] It appears to me that no one asked for them to be released but they were released perhaps by somebody who enthusiastically overrode what he should have done.Hon Annette King: How can they just appear?Rt Hon DAVID CARTER: Sorry?Hon Annette King: How can they just appear if no one asks for them?Rt Hon DAVID CARTER: How can they just appear? Well I am sure that when this matter is teased out before the Privileges Committee that is likely to be what theHon Annette King will find out. The phone records were released. They should never have been released. Having been released they were never accessed. I have seen an email from the David Henry inquiry saying: “Whilst we received this information we never asked for this information and we returned it immediately.”This whole issue of the David Henry inquiry has opened up some very serious questions about what information should be accessed in the event of a security situation. I believe there is going to be huge difficulty sorting out whether an email is a ministerial email whether it is a parliamentary email or whether it is actually a personal information email and whether it should be released. That is why it should go to the Privileges Committee.All of us who have our swipe cards to carry around this building and all of us who use our emails need to know the protocols and the rules by which in the future in the event of a serious breach of security that information may or may not be made available. I can think of no better committee to establish the protocols for this to occur than the Privileges Committee. Although I accept there is a lot of heat around this argument today I passionately believe it is best to go to the Privileges Committee and the sooner it can report back so that the rules are clarified then the better for us as members of Parliament the better for the operation of the press gallery and therefore the better it is for the democracy of New Zealand.Dr RUSSEL NORMAN (Co-Leader—Green):This is about the separation of the powers of the Government. Under our system of Government there are three branches. There is the executive branch headed by the Prime Minister; there is the parliamentary branch headed by the Speaker; and there is the judicial branch headed by the head of the Supreme Court. It is fundamental to protecting our freedom and our democracy that those three branches are kept separate.That is why the intrusion by the Prime Minister’s office into parliamentary affairs is fundamentally a threat to our democracy. The chief of staff of the Prime Minister’s office sent an email to Parliamentary Service authorising the release of Peter Dunne’s parliamentary emails—these are not his ministerial emails; these are his parliamentary emails on his parliamentary email server—about a report that he received as a parliamentarian. That is a report he received as the leader of the United Future Party. He never received it as a Minister. We are dealing with an intrusion by the Prime Minister’s office—in fact by the Prime Minister’s agent the chief of staff—into the affairs of Parliament and an attempt by the Prime Minister by the executive branch of Government to intrude into the affairs of the parliamentary branch.That is fundamentally important to the system of checks and balances in our democracy. If members of Parliament cannot protect their email accounts from the Prime Minister if we cannot be sure that the Prime Minister cannot come in and read our emails—and we cannot be sure any more because the Prime Minister has just done it—if we cannot protect our email accounts from the Prime Minister’s office then it becomes very difficult for us to perform our function of keeping the executive accountable. The executive has massive powers of surveillance and intrusion into our lives. The Prime Minister has special agencies called the Government Communications Security Bureau and the SIS which report directly to him that have the ability to break into our email accounts and find out what we are up to. This is fundamental to our system of democracy and freedom.It applies to the case of the journalist as well. Let us remember that the New Zealand Defence Force categorised journalists as subversives—right? That is how it categorised them in its manual. That is relevant to this case because under the New Zealand Security Intelligence Service Act the SIS’s functions are “to obtain … intelligence relevant to security” and “security” means “the protection of New Zealand from acts of espionagesabotage and subversion”. If you can be defined by the Government as a subversive as journalists are defined by this Government—the New Zealand Defence Force defines them that way—then you become a legitimate target for the SIS to break into your email account and read your emails. If that happens to journalists trying to keep the executive responsible then there is no way that we can have a functional democracy. If it happens to members of Parliament because the Prime Minister’s chief of staff decides that he has some—[Interruption ]The CHAIRPERSON (H V Ross Robertson): Order! Order! I have a debate going on in the Chamber and I have two going on either side of me.Dr RUSSEL NORMAN: If the Prime Minister’s chief of staff decides that he has the authority to authorise the release of a member of Parliament’s email log then it fundamentally undermines our democratic process. There could not be a more serious breach than the Prime Minister’s office authorising access to a member of Parliament’s email log. It goes to the very heart of why this institution exists. If we are going to stand here and actually say that for all those things for which all those people fought—for freedom and for democracy—we cannot be bothered to fight this fight and if the Government of the day says “Well we’ve got every right to read everyone’s emails.” then we simply are not doing our job. We have a fundamental duty to the people of New Zealand to protect freedom to protect democracy and we can do that only if Parliament itself protects its right not to be intruded on by the executive by the Prime Minister’s office.That is what this debate is about and that is why Peter Dunne’s parliamentary email account is so important to this debate. The fact that the Prime Minister’s office the Henry inquiry authorised by the Prime Minister’s office saw fit to break into Peter Dunne’s email account without Peter Dunne’s consent—remember Peter Dunne never gave his consent for the David Henry inquiry to do it—Vote agreed to.Vote Communications Security and IntelligenceDAVID SHEARER (Leader of the Opposition):Our democracy depends very much on the trust that we have in our intelligence agencies and the functioning of the Government. Today that functioning has had a huge knock because we have learnt today that the telephone records of journalists have been passed through to the Prime Minister’s office. We do not understand exactly why but this strikes at the very heart of the confidence that we have in this Government. The Prime Minister refuses to answer the questions of exactly what is going on at the moment and who asked for these documents. Who asked for these records is the question that we wanted answered. MrEagleson we understand asked for the overall metadata but where did that go to and why are we now questioning the absolute right of journalists in this Parliament not to have their telephone records tampered with or sent on to the office of the Prime Minister?This is yet another blow to the way that we operate in this Parliament. We have had the New Zealand Defence Force in the last couple of days accused of spying on one of our journalists as well. It comes on the back of the Government Communications Security Bureau and Related Legislation Amendment Bill which has been rushed through a committee process without the due attention that it absolutely needs. Instead what we have got is a bill that is going to creep across the line sold by somebody who is a willing seller to the Prime Minister who is a willing buyer. That is what it was all about. The Prime Minister has the audacity to say to me: “What we want is a broad party agreement on this.” We went to him and I said: “Look in August last year we discovered that there was this spying that was going on on New Zealanders by theGovernment Communications Security Bureau (GCSB) which was illegal. If since that time the security of this country and the citizens of this country are in any way at risk we will look with you to see how we can close that loophole until such time as we can have an independent inquiry in and around this issue.” There was no evidence. There was absolutely no evidence to give me any cause to have to go to him and take that any further. Instead what we have seen is the Prime Minister so adamant that he wants to get this bill just across the line that he would do absolutely anything. He is not willing not interested in engaging with the Labour Party or any other party in this Parliament. He wants this off his books. Then when people disagree with him and I am talking about the New Zealand Law Society the Privacy Commissioner and the Human Rights Commission he calls them misinformed—misinformed.Well he is out of touch with New Zealanders here because they have lost trust in our intelligence agencies and lost trust in him as the head of our intelligence agencies. I can tell you that when people look at exactly the oversight that is going on here we have Mr Key who appointed his friend as the head of the GCSB who reports only to him and does not even need to meet with anybody else when the two of them get together. Mr Key sits on the Intelligence and Security Committee—the oversight committee—chairs that committee sets the agenda and has the casting vote. On top of that he appoints the Commissioner of Security Warrants and the Inspector-General of Intelligence and Security and today we hear that his office has been implicated in obtaining and reading a journalist’s telephone records. Does that give us any trust or confidence in Mr Key or our intelligence agencies? This is a disgrace. We need as we have been saying for months now an independent inquiry into our intelligence agencies not just into the GCSB but the Security Intelligence Service the defence forces and the police and how they work together. Thank you.Hon PHIL GOFF (Labour—Mt Roskill):Today the Committee is about to decide whether to vote $57 million to the Government Communications Security Bureau (GCSB) and to the security and intelligence agencies. I wish the Prime Minister was in the chair because we expect accountability from this man. This man on his own is meant to be holding the GCSB accountable and I have got to say that this Committee has no confidence that he is doing so. We are voting $57 million to an organisation that after the Kim Dotcom debacle was found in theKitteridge report to be incompetent and to have a poor culture and to have underperformers. It is not doing its job and what is more the Prime Minister comes to this Chamber with the legislation and says that he wants to extend the powers of the GCSB. He said in the true spirit of arrogance and of a leader who is becoming increasingly autocratic that the critics are misinformed and the critics are always wrong.Well let us look at who the critics are. According to TV3 40 percent of New Zealanders do not have confidence in this organisation—40 percent. Let us look at the submissions against extending this body’s power. The Law Society the Privacy Commissioner and the human rights commissioner all say that the legislation and the decision to extend the powers is wrong. If they are all misinformed perhaps David McDowell the former head of the Department of the Prime Minister and Cabinet is also misinformed when he says that the surveillance is being extended and that potentially undermines the rights of New Zealanders. From his experience as the head of the Prime Minister’s department he is saying there is too much power the Prime Minister might not be being told everything and if he is we would not know because he does not tell anybody else. Mr McDowell says that there needs to be better oversight of the GCSB both within and outside this House. That is from the former head of the Prime Minister’s department.The Prime Minister wants to extend the power to include its right to spy on New Zealanders on behalf of groups like the New Zealand Defence Force. Well I have got to say that New Zealanders’ confidence in that took a real battering over the weekend. I have got in my hand here the New Zealand Defence Force security manual. I have never seen it before but I can tell you what it says. It describes subversion as releasing information that might bring the Government into disrepute. That is what New Zealanders are worried about. Any individual any organisation—for heaven’s sake even Her Majesty’s loyal Opposition—who says anything that brings the Government into disrepute can be subversive. Worse than that it says that investigative journalists are subversive. TheDominion Post  hardly a liberal outlet of the news said in this morning’s paper that it has changed its mind. It opposes the bill because any organisation like the New Zealand Defence Force heads who confuse any criticism of them as being subversion should not have that power.I want to know why it is that this organisation has been further degraded by a Prime Minister who does a dodgy process of appointing its head—a process that even the State Services Commissioner feels obliged to come out and oppose. How can we have confidence in that organisation? How can we have confidence in it when we see what the National Security Agency in the US in recent months and the Government Communications Headquarters in the United Kingdom in recent months have been doing? They have been overstepping the mark and abusing their powers. And this Government instead of taking those trends and those concerns on board wants to increase the power of the GCSB.John Key said he did not know about the Kim Dotcom debacle until September but we know that the bureau knew in February that it had acted illegally. Was the GCSB absolutely incompetent and negligent in not telling the Prime Minister or is the Prime Minister being dishonest with New Zealanders in saying that he did not know about it until September? Who was right in terms of the ministerial certificate to suppress what the GCSB had done? Bill English as the Acting Prime Minister signed it. John Key said he was never told. Here he is Bill English Acting Prime Minister using a unique power probably for the first time in this country’s history in the absence of John Key and he did not tell John Key?Hon CHRISTOPHER FINLAYSON (Attorney-General):Well I need to make a contribution after that pedestrian effort from Phil Goff because I think a little bit of legislative history is required. In 2003 Helen Clark’s legislation was introduced—and I can understand why they are going; they do not like the truth. In 2003—Hon Trevor Mallard: I raise a point of order Mr Chairperson. I know that the Attorney-General is a relatively new member but he should know that you do not draw attention to members leaving the Chamber and you especially should not do it when you are acting for someone who is too gutless to be here.The CHAIRPERSON (H V Ross Robertson): Well the member was on good ground but it ended up being one-all.Hon CHRISTOPHER FINLAYSON: I do acknowledge that I should not have said that but I have not been here for 35 years like that member. In 2003 the Labour Party was in Government—52 seats—and it introduced the Government Communications Security Bureau (GCSB) legislation. The National Party had 27 members and yet instead of taking a purely oppositionist approach to important national security issues the National Party in Opposition supported the Labour Government’s legislation.What was the position of the Greens? Well the Greens were opposed because Rod Donald and the others were so far left they had left New Zealand. They were not interested in national security; their loyalties resided elsewhere. New Zealand First took a principled approach and was in support of that legislation because of the importanceof national security issues. It recognised that national security is more important than politics. Then there has been the much-heraldedKitteridge report and I am not going to talk about that this afternoon. We will have plenty of time over the next few weeks to look at that legislation in a careful and methodical way.But I come to the GCSB legislation and as expected the Greens oppose it and we know why they oppose it. They oppose anything to do with the defence of New Zealand. I am very disappointed in the New Zealand First Party because 10 years ago it understood the importance of these issues and I am sure its constituency does. But Mr Peters—the right honourable Mr Peters—is more interested in political games than in principled debate so he is going to oppose just for the sake of it. People like the New Zealand First member in the Chamber this afternoon should be very worried about that.But my strongest criticism is reserved for the Labour Party because it knows the importance of these issues and in a sense if you like even though it is in a similar position to the position we were inin 2003 the two big beasts of politics have to be able to agree on important issues of national security. It is very disappointing that the Labour Party is not agreeing this year. Instead it is adopting the extraordinary approach of supporting the people who were at Parliament over the weekend—jumping over fences even though the gates were open which gives you an insight into their brains—and making all sorts of protests such as “Long live the republic of New Zealand” “Long live the united nations of the world” and “Long live HugoChávez.” Well it is about 6 months late for that because he has been in his mausoleum for about that period.What we are trying to do in this legislation far from expanding the powers of the GCSB is clarify what Helen Clark was too lazy to clarify in 2003 and at the same time provide and strengthen safeguards and oversight and provide moreover for regular reviews—[Interruption ]—I say to that fellow from Rimutaka who got all petulant in question time. These are important questions and the loyal Opposition should carefully consider its position get away from the hyperbole get away from all the waffle concentrate on the substance and read the bill.These are important issues. Labour’s attitude in this debate to this important issue of national security may work well in a student union debate which is where Mr Hipkins shone before he became a member of Parliament but in the real world these are big questions. They need careful and mature consideration and that is something that on the face of it Labour is simply incapable of doing.Vote agreed to.Vote Prime Minister and Cabinetagreed to.Vote Security Intelligenceagreed to.Vote TourismLOUISE UPSTON (National—Taupō):I am very pleased to take a call in the Appropriation (2013/14 Estimates) Bill debate on tourism because very specifically it is a critical part of the economy in theTaupō electorate. If we look at what we actually contributed in the Budget this year it was really significant: $158 million in tourism over the next 4 years to help put an even greater focus on international growth because that is where the jobs come in the electorate—that is where the jobs come.Tourism is one of the most significant contributors to theTaupō economy. But if you look at New Zealand if you look at what the contribution is across New Zealand in terms of revenue in the year to March 2012 tourism generated $9.6 billion in revenue. It equates to 6.2 percent of our workforce and 15.4 percent of our export earnings. This Government is committed to growing our exports and tourism is a critical part of that. Increased investment in tourism obviously will result in more visitors to New Zealandspending more money. It was great last night to see such a superstar as our young Tom Cruise on the New Zealand boat in the America’s Cup and fantastic to see that here is someone who is now being clearly associated with New Zealand contributing in films here and clearly wanting to continue that association with New Zealand. I think that is a fantastic benefit for New Zealand.We often hear the Opposition talk about jobs and tourism clearly results in jobs. If we look at what this Budget this new investment is focusing on it is high investment and high net-worth visitors to New Zealand because—and it is a bit of a no-brainer—they spend more when they are here whether it is in retail in shops and cafes or whether it is on activities like bungy jumping or partaking in many different activities. Of course at the moment skiing is just absolutely stunning. For those of us in the North Island as well as the South Island we have some of the best skiing and the best scenery around.I want to talk about some of the other areas that affect tourism because clearly we have invested this $158 million into getting more international visitors but there are other parts of the Budget. This is a Government that sees things holistically. We have recognised that through spending in conservation for example in assets and building up infrastructure in the Tongariro crossing. We have also improved the water quality in LakeTaupō. This is a Government that has through Vote Environment put significant investment into cleaning up LakeTaupō. This is a Government that looks holistically at the opportunities to improve our revenue as a country and to grow our jobs whether it is the additional $3 million to further protect LakeTaupō’s water quality or whether it is the $35.5 million that is there. Since taking office we have committed $101 million to cleaning up our waterways. That is five times more than the former Labour-Greens Government invested so it is always a bit of a joke to hear Opposition parties talk about this Government’s record on water when it is pretty clear that we are investing five times more than they ever did.We have also just recently announced another significant opportunity inTaupō and that is with the Minister of Conservation Nick Smith’sTaupō sports fishery review. Clearly a lot of people come toTaupō for the sports fishing. It is recognised to be worth $29 million a year to the region in fishing alone. That is 300 jobs. So the more visitors that we can bring to New Zealand whether they come toTaupō whether they go to Skycity in Auckland or whether they come and attend an international convention the more revenue is generated and every one of those dollars is valuable to our economy.Hon CHRIS TREMAIN (Associate Minister of Tourism):On 14 February to 29 March 2015 this country will be joint-hosts of the international Cricket World Cup 2015. This is an exciting tourism and sports announcement for this nation. It is one that I think the Committee as a whole would join together in congratulating the people who have coordinated this bid on bringing it together. I congratulate ChrisMoller as the chair of the board but can I particularly acknowledge Therese Walsh who led the bid committee in bringing the games to New Zealand. Just think about this for a minute—Hon Trevor Mallard: I beg your pardon? She worked for rugby then. Just get your facts right.Hon CHRIS TREMAIN: Mate you understand this: she has done a wonderful job. Here is the man over there denouncing the work of a woman in this country who has done an outstanding job for New Zealand.Hon Trevor Mallard: I raise a point of order Mr Chairperson. I am reluctant to do this but Therese Walsh is an honourable New Zealander who worked very hard to get the—The CHAIRPERSON (Eric Roy): Order! [Interruption ] Order! [Interruption ] Order! Please sit down. That is not a point of order. It is a debating point. The membercan take a call if he wishes to make a correction. We are not going to use points of order for debating.Hon Trevor Mallard: I raise a point of order Mr Chairperson. You are meant to call him up when I think you know he is telling lies.The CHAIRPERSON (Eric Roy): No that is not correct. The member will now stand withdraw and apologise for using the word that he just used. He criticised the member by implication. He will now withdraw and apologise.Hon Trevor Mallard: I withdraw and apologise.Hon CHRIS TREMAIN: The member is somewhat confused. He was at the launch event where Therese Walsh stood on the stage and announced the events. What were you thinking? Thatthat person was not Therese Walsh? That she was in a mask of some kind? Get with the programme. You were at the event.The fantastic point is that there is a woman from this country who is standing up for our nation and who has brought 21 games for the Cricket World Cup here. This will be wonderful for tourism in this nation. That is 21 games around this country throughout New Zealand bringing regional growth to this country—from Auckland to Nelson to my own home town of Napier to Dunedin and to Christchurch at Hagley Park where there will be the opening game conditional on getting that facility up and running in time which is absolutely fantastic. Auckland will have the semi-final and I believe that Wellington will hold a quarter-final. That is a superb opportunity for tourism in this country.It goes to the heart of the Government’s announcement in this year’s Budget of an extra $158 million for tourism as the honourable member fromTaupō mentioned. That is $158 million added to the budget for tourism in this country. Let us put that into perspective because the current budget is around $90 million per annum which we spend on promoting this country—our second-largest industry. That is $158 million over 4 years—sort of $30 million to $40 million per annum—which is a 40 to 50 percent increase in the budget for that industry.The budget has been allocated in ways that will genuinely grow tourism opportunities. One of them is clearly the Major Events Development Fund. In the case of the international Cricket World Cup I do not think it will be part of that particular fund but those are the kinds of events that we can bring to this nation to bring huge growth.Just as a point of interest from a tourism perspective the point was made at the function that 70 percent of the rights revenue for the Cricket World Cup comes from India. In fact the next biggest earner for the rights revenue for the Cricket World Cup is not from a nation that you would think it would be like the United Kingdom Pakistan or Australia. It is actually from the United States of America. That is something that you would not think about. But that is what these tourism opportunities bring to this nation leveraging our profile internationally and leveraging the beautiful “100% Pure New Zealand” brand that we have which the Greens always try to mock internationally to bring this country down when in fact that “100% Pure New Zealand” brand is fundamental to taking this country forward.Of that $158 million—if I could just reflect on that in the last minute or so of my speech—$44.5 million is going into emerging markets. What we have seen is that traditional markets are continuing to stay strong for us and slightly growing again. We have seen the Japanese market come back and obviously China is very strong and growing. But where we have focused this $44.5 million portion is on emerging markets—that is India Indonesia and South America. These are markets that we think are going to grow quite significantly over the next few years so there is a big focus on those. Certainly when you leverage it with an event like the Cricket World Cup whichwas led by Therese Walsh in terms of helping to get that bid into New Zealand it is a superb opportunity to leverage the brand and to grow tourism. Another part of the $158 million is for international business events. Again we will be able to really look at events such as conferences to leverage off the new conference facilities we are getting around this country.Tourism is in an exciting phase at the moment. I see that we are at the start of a huge growth period. I am really excited about the future of tourism and excited about the future of New Zealand. Thank you very much.Vote agreed to.Vote FinanceHon DAVID PARKER (Labour):Treasury and the Minister of Finance are funded through Vote Finance and it is Treasury and the Minister of Finance who control the shape of the New Zealand economy. I want to talk about two sides of that same coin which are both related—the demise of manufacturing in New Zealand and the increase in speculative investment in the non-productive part of the economy which is so hurting Aucklanders especially who are paying ever higher housing prices.This Government came to power promising to rebalance the economy. In the last year primary product exports dropped by 2.5 percent and processed primary products dropped by 3.7 percent. Worse still manufactured goods in other parts of the economy went down another 5.5 percent. Simply transformed manufactures have gone down 17 percent in real terms since this Government took office and elaborately transformed manufactures have gone down 18 percent since it took office.You would think that in response to that the Government would be trying to reshape the economy by getting the investment signal right by universalising KiwiSaver to get deeper capital markets and by introducing a capital gains tax to stop people investing so much in speculative residential land investments. It will not so the consequences of that are being borne by first-home buyers.Let us look at what is happening in Auckland. Totally inept management by the Government over the last 5 years in respect of housing has led to double-digit house price inflation not enough houses being built and no response from the Government on either the supply side or the demand side. [Interruption ] Let the Minister in the chair the Minister for Social Development take a call on this. I bet she will not have anything meaningful to contribute on this because the reality is that the Government is opposed to supply initiatives.The Government is now saying that the Auckland Plan should be given effect to by legislation after its earlier Resource Management Act reforms being the reason why the transitional plans of any council—including the Auckland City Council—were not given effect to during the transitional period. Labour has been saying that yes land supply is important and so are rules inside the city boundary.Hon Dr Nick Smith: What did you do for 9 years?Hon DAVID PARKER: Actually we reformed Auckland City and it was this current bunch of incompetents on the National side who stopped Auckland City’s plans to increase land supply from having effect. We have also introduced a plan to introduce a capital gains tax so that instead of pinging first-home buyers we would ping speculators. If you want to address demand pressures you should take out some of the demand drivers like a tax bias that drives investment into a speculative second house instead of the productive parts of the economy—Hon Dr Nick Smith: Speculators pay tax now.Hon DAVID PARKER: —that grow such as manufacturers and exporters. Nick Smith still thinks that the public is so stupid that it believes we have a capital gains taxwhen we do not. We have a trading tax for traders but not many traders are caught and most people who own second third and fourth houses do not pay tax on their capital gains. That is why the OECD and the IMF said that it is probably the most important economic reform that a Government could bring forward. It would help first-home buyers because we in Labour would be backing first-home buyers not speculators.The second part of our remedy of course is to build some affordable houses. Not enough houses are being built in Auckland full stop and of the houses that are being built not enough of them are the smaller affordable houses that are suitable for first-home buyers and people at the lower end of the market. National does not care about that. That is why it feeds these pressures for more speculative housing does not introduce a capital gains tax and gives 40 percent of its income tax cuts to the top 10 percent of income earners feeding those demand pressures while it does nothing about supply.Now National members are coming along and saying: “Look you know Australia might be wise in introducing a ban on the sale of houses to foreigners but it would be silly for us to do it in New Zealand.” Well Labour is willing to back New Zealand home buyers over foreign buyers of New Zealand homes so we have said that we will ban the sale of New Zealand houses to overseas people but not if they are here on a work permit not if they are coming here to be a resident and not if they are a citizen.Hon Dr Nick Smith: That’s most of them.Hon DAVID PARKER: “It is most of them.” says Nick Smith. He does not get it. You actually have to deal with things in a range of ways. You have to deal with supply and you have to deal with demand pressures. What this Government does is nothing—nothing—and that is why we have double-digit house price inflation at a time when our manufacturing—PAUL GOLDSMITH (Chairperson of the Finance and Expenditure Committee):It was interesting. Once again we have the Opposition spokesman on finance David Parker focusing on one little issue but he does not want to talk about the economy more broadly because the results for the Government have been very positive indeed. This Government is making very good progress. There has been 2.4 percent growth in the last year higher than that of many other developed countries. After-tax wages are up 22 percent since 2008—that is more than twice the inflation rate—and that is why New Zealanders are feeling upbeat and positive about their chances in this world. They have more money in their pockets during what has been a very difficult time internationally. We have the lowest mortgage rates in 50 years and if you are interested in housing affordability you do pay attention to mortgage rates and the fact that people are saving a lot of money by paying less interest and are much more easily able to afford a house. The tax reforms that we have seen are encouraging savings and investment. We have also seen inflation at its lowest level in 50 years and we have tight discipline which will see the country brought back to surplus next year.I came across an interesting quote from Cicero actually from 55 BC which I will refer to just to show that nothing has changed. He advised that the budget should be balanced the treasury should be refilled public debt should be reduced the arrogance of officialdom should be tempered and controlled and assistance to foreign lands should be curtailed. People must again learn to work instead of living on public assistance. So the basic recipe of good governance is not new. It is not complicated. It is about living within your means—John Hayes: Did he mention a capital gains tax?PAUL GOLDSMITH: —no he made no reference to a capital gains tax—so that is what we are getting on with doing.There are concerns about housing in Auckland. Nobody denies that. This Government is very focused on actually having some workable solutions to that rather than having dog whistles and extra capital gains taxes which have not served to deal with any housing affordability issues in Sydney or San Francisco or London or in the many other places in the world that do have capital gains taxes and also have very high housing costs. There are lots of theories about what is going on in Auckland but I do not think anybody could deny that if you really wanted to get on top of the issue it is fundamentally about increasing the supply of new houses—Hon Member: That’s right—and land.PAUL GOLDSMITH: —and that is what this Government is focused on doing. Well you need land to build houses on. So I certainly support and salute the efforts of Nick Smith and the team who are getting focused and working with the council.It is interesting that the Opposition refuses to deal with that as the biggest issue. It refuses to rein in its ideological soulmates who dominate local government in areas and who are determined to use land controls to constrain development and make it as difficult as possible. Instead of giving into that this Government is working constructively particularly with Auckland Council to come up with housing accords and find a way just to increase that supply. Overall there is no question that as we build more houses the pressure will come off house prices in general. Then elsewhere beyond that we are focused very much on reducing elements of the costs that we are having to deal with. Again we hear that you never get any support or encouragement from the other side of the House when it comes to dealing with Resource Management Act reform reducing the regulatory burden that we see is adding to the cost of concrete and all sorts of other raw materials which is what this Government is focused on.But all in all I am very pleased and this appropriation debate is revealing time and time again the good progress that this Government has made on getting back to surplus. When we look at the support for businesses ultimately we make progress only if businesses have the confidence to go out and invest their money and employ people and create things that the rest of the world wants to buy. That is why with our 28 percent company tax which is lower than Australia’s we are in good shape here in New Zealand to get out there and encourage enterprise and people to grow their businesses.What about the infrastructure investment that we talk about? We are putting $12 billion into roads over the next little while $1.5 billion in ultra-fast broadband and the Rural Broadband Initiative $5 billion is being invested in the national electricity grid—all these things are fundamental to having the environment and the infrastructure in place for New Zealand businesses to succeed. We are also working on quality trade agreements because it is not much use if you have got brilliant products but you cannot find anybody to sell them to because you are facing all sorts of restrictions. That is why it is so important that we maintain good relationships with our neighbours throughout the Asia-Pacific region so that we can continue to trade successfully.JULIE ANNE GENTER (Green):The National Government is failing the economy in a number of respects so I am going to talk about the different ways in which this National Government has failed as the economic manager of this country. Firstly there are the imbalances in the economy. This is clear in the statements—the evidence is right there in the forecasts delivered to us by Treasury. We already have the worst current account deficit in the developed world. We are worse than Spain worse than Greece and worse than Ireland and this is a real worry because it means that we are buying more than we sell to the world. So if you look at “New Zealand Inc.” and want to see whether we are actually going to achieve an economy that is going to sustain us into the long term we have to look at the current account deficit not just at the Government’s own accounts. This Government the National Government is tryingto distract from the issue that the current account deficit is bad and is going to get worse under its stewardship.What the documents and forecasts from Treasury show us is that that we are going to go from having a $10 billion a year current account deficit to having a $17 billion a year current account deficit. If you were to look at “New Zealand Inc.” in the way that you might look at a company and we were going to go from making a loss of $10 billion a year to making a loss of $17 billion a year in 5 years’ time then I think that most sensible people would want to fire the board of directors—which is essentially the National Government—because that is what Treasury’s numbers show us. The National Government is failing on its own priorities of rebalancing the economy; therefore it has stopped talking about rebalancing the economy and it is trying to distract New Zealanders by focusing on the Government’s own balance sheet rather than looking at the country’s balance sheet.The only way to deal with the fact that we are buying more than we sell to the world is going to be to borrow more or to just sell off assets and neither of these two strategies is a sustainable strategy. The National Government is also failing to take the opportunity to transition to a clean green economy that works for all New Zealanders. The Green Party has a number of sensible evidence-based policies that would give us the means to not only reduce our current account deficit but to develop clean green jobs that are actually going to be very very useful in the coming decades. What the National Government constantly talks about is growing our economy by drilling by fracking by building a convention centre and with more gambling. All of these things may look like they are leading to economic growth but it is just that—it is just growth. It is not actual productivity gains. It is not actually going to translate into higher standards of living for most New Zealanders.There are only so many years left in which we can dig up our resources and sell them off and expect to make money off that so in the future we need to be thinking about how we can develop jobs that are going to enable us to thrive in a carbon-constrained world. That is the real world. That is the real world which this National Government is failing to confront—the hard scientific evidence that there is a limit to how much carbon dioxide humans can burn before we have to stop. If we do not fully decarbonise our global economy by 2030 there will be nothing. There will not be a stable climate or opportunities for our children and grandchildren and I know New Zealanders care about the future of their children and grandchildren and want that opportunity for them to live on a planet with a stable climate. It is entirely possible because the National Government frames it as a trade-off. It says that either you can have money or you can have a stable climate—either you can have money or you can have a pristine conservation estate. It is not a trade-off like that. In fact our natural advantage is our clean green environment. We stand to get richer precisely by protecting our conservation estate. We have nothing to gain from opening our conservation estate to foreign companies that are going to mine our natural resources pay very little in royalties and then bugger off.The Green Party has a vision for a clean green New Zealand and an economy that works for everyone and it is entirely achievable. We can reduce our current account deficits through smarter spending on transport infrastructure that would also reduce our greenhouse gas emissions and that is just one example. We also have aHome for lifeproposal that we have put forward which can increase housing affordability without increasing land supply and increasing urban sprawl. So there are many smart green ideas.MAGGIE BARRY (National—North Shore):I rise with pleasure to talk about this Government’s economic record as the deputy chair of the Finance and ExpenditureCommittee. We had the Minister of Finance through talking to us recently about appropriations and of course I paid close attention to the Budget and the triumphs that have emerged from the way that we have managed our spending. This is a Government that is responsibly managing its finances. We have a clear plan in difficult times to manage the finances to get on top of debt and return to surplus and we are doing it. We are delivering.Look at our results so far. A growing economy with 2.4 percent growth. That is higher than in many other developed countries. We have got after-tax wages up 22 percent since we took office. That is more than twice the inflation rate. We also have the lowest mortgage interest rates for 50 years—Andrew Little: What’s happened to the median wage? That’s gone down. You’re failing working New Zealanders.MAGGIE BARRY: —the lowest interest rates for 50 years. That is a tremendous achievement and people on this side of the Chamber understand and realise exactly what kind of a difference that makes to people’s lives unlike the bozos and the angry birds over the other side who bray and heckle from the backbenches without any idea of what they are doing. Tax reforms are another area where we have achieved encouraging savings and investments.What have we done with jobs? Over the past 2 years 50000 new jobs have been created—pay attention to that why don’t you. The 90-day trial period was introduced to give employers incentives to hire another staff member and that has resulted in tangible results: 13000 jobs have been created. There have been thousands of jobs created throughout the Government’s infrastructure investment and there are thousands that are needed and are going on at the moment to help rebuild Christchurch.What have they done on the other hand—Labour and the Greens thenaysayers the people who say no to everything? They say no to 13000 jobs and the 90-day trial period. They say no to a thousand jobs through the International Convention Centre and thousands of jobs on the roads of national significance. Labour’s failings over the time that it was on the Treasury benches have been well documented.I look at health for example. Health was one of the big real spenders actually in this Budget. The Hon Bill English delivered on the promises and when it came to putting up and allocating money the Government has been able to save and really reprioritise spending in the health area. That has made a huge difference in for example the area where I come from the North Shore. Under the Labour Government of 9 long years we saw that theWaitematā District Health Board was one of the very worst performing in the country. People were in corridors for days. They went to Australia to get treatment. It was a woeful and dreadful situation and understandably people in my electorate were unhappy about that.What we have done with the reprioritised health spending—some $88 million in the current year and over the next 5 years—is to redeploy it. When I look at North Shore Hospital I see a new elective surgery unit that opened last month. We have a renal unit. We have far better cardio care than we have ever had before.Taharoto Mental Health Unit which was in a woeful state of disrepair consistently ignored by the Labour Government has now had more than $20 million allocated to rebuild that facility. It is very much needed and a very much wanted resource.I look at theWaitematā District Health Board and I see a hospital in particular that is really benefiting from the medicines being made safer by electronic prescribing. The Hon Tony Ryall was in the electorate a couple of weeks ago and he was looking at how staff are prescribing and administering medication electronically using mobile computers called “COWs”. These “COWs” which are computers on wheels are doing a wonderful job. It is being trialled at North Shore Hospital. It has cut down on theaccidents and it has cut down on incorrect medication. It has been a triumph. Electronic prescribing eliminates the risk of errors. It has been very well received and very well trialled in my area and will be rolled out to others.In fact just last month the prescription team at North Shore Hospital was named the hospital pharmacy performer of the year. That was in the 2013 Pharmacy Awards—The CHAIRPERSON (Eric Roy): Order! We should focus the debate on the area that the estimates are on which is finance. I think the member by all means can make comparatives but we should come back to that and much of what the member is saying is for another vote. So if we can focus on finance—I would really like to keep us on track.MAGGIE BARRY: Thank you Mr Chair for that timely reminder. I was carried away enthusiastically by the wonderful achievements that have happened as a result of the successful Budget reprioritising which the Minister of Health did speak to us about at the select committee and which I questioned him on—but point taken.When I look at what we have done in terms of responsibly managing the finances my colleague Paul Goldsmith has actually gone into some detail around our books being in good shape. I have talked about jobs. I would like to look at how we are getting back into surplus as well because under our strong economic management we are very much on track to return to surplus in the 2014-15 year. New Zealand will be one of the very few developed countries that can do that.Hon DAVID PARKER (Labour):It sounds like the National Party has just discovered email. One of the recent speakers from the National Party Paul Goldsmith said that we on the Labour side have not addressed the broader economy enough in the contributions we have made in this debate on Vote Finance. He said that after-tax wages are up. Well the truth is that median wages have gone down. So when he says that after-tax wages have gone up on average that is correct before you take into account GST which paid for the income tax cuts. In truth it is only the rich who have got richer. It is actually not even just the poor who have got poorer; it is middle-income ordinary New Zealanders who are worse off as well proven by the fact that the median wage—the median wage—has gone down in real terms under this Government.In terms of growth we had Paul Goldsmith say that it was 2.4 percent this year but there was a current account deficit of close to 5 percent. So although the New Zealand economy has grown by 2.4 percent it has actually grown at a time when New Zealand’s current account deficit—that is our deficit with the rest of the world—is a lot higher than 2.4 percent; it is very close to 5 percent. We have got rampant house price inflation. We heard from Maggie Barry that there were 50000 new jobs. That is at a time when the Government is breaking its promise about more jobs. You have new jobs but you have also had jobs destroyed in the economy under this Government and its promise at the last election of 170000 more jobs is not being met. Two-thirds of earners get less than the average wage. This Government is not delivering for ordinary New Zealanders.Nowhere is this truer than in respect of power prices which have continued to go up at more than twice the rate of inflation for 15 years. This year they have gone up at about five times the rate of inflation. That is not going to be fixed except by a Labour-led Government which would come in and say: “The pricing model is wrong.” The Government is privatising the value of the public water that is used to power 60 percent of New Zealand’s electricity generation through hydro. The value of that free public water is increasingly being extracted now for private shareholders given the privatisation agenda of this Government.The Labour Government would reform the electricity market in a genuine way that would bring down electricity prices for the average consumer by $230 to $330 perannum and for businesses by 5 percent to 7 percent. There is a cost to that which would be diminution in the valuation of some of those old hydro stations which is falsely high because they are extracting for private benefit the value of the public water resource. The Labour Party says that is not good for the economy and it is not good for everyday New Zealanders and that is why we will change it.I have got time probably for only one final point and that is about this crowing on the other side about returning to surplus. Well the Labour Government would have done that in the coming year as well. We did it for 9 years in a row. We ran surpluses of 6 percent of GDP and paid down net Government debt to zero leaving it amongst the lowest Government debt in the world at the same time as we had very very low unemployment. It is only because of the good stewardship of the prior Clark-Cullen Government that New Zealand had low Government debt. Every one of those surpluses was opposed by National. It called for tax cuts. If we had done that—the same as America had done or the United Kingdom or those European countries—New Zealand would be in the financial doo-doo.Because the last Labour Government was fiscally responsible as we always are and always would be this Government has managed to get back into surplus after five deficits in a row following nine surpluses under the Labour-led Government. That is the truth of that history. The last fiscally irresponsible Government in this country was a National one under Muldoon and no one really seriously believes we have had a fiscally irresponsible Government since then. Growth rates under Labour have averaged 3.7 percent since World War II when statistics were first gathered; they averaged 2.9 percent under National. We need to get this economy growing. We need to get the cost of living under control through lower power prices. We need to deal with housing. And of course we need a balanced Budget which the Labour Government would also achieve. This Government is failing in the promises it makes.JOHN HAYES (National—Wairarapa):Nine years of fiscal responsibility? I have to say to you that that is not true Mr Parker because you ran profitably for 7 of your years and the last 2 years you were in recession and you spent up large employingsquillions of public servants whom the country could not afford. I listened to the negativism from across the Chamber today and I have to report to the House that I had lunch this afternoon with a visitor a member of the European Parliament Derek Vaughan along with some Labour members too. He was telling us as a group that in southern Europe at the moment they have unemployment levels among youth of 60 percent—exceeding 60 percent. And you think that we are not running this economy well? I have got news for you. This Government is building a more competitive and productive economy that is going to give New Zealand companies the tools they need to grow invest and hire more staff. New Zealand is an exporting nation and we are supporting business to successfully compete on the world stage in emerging global markets. When businesses have confidence that our economy is in good shape and in strong hands they will create real jobs that support families.In addressing the country’s finances in this section of the debate can I point out that it is critically important for New Zealand companies to be able to export and the Agreement between New Zealand and the Separate Customs Territory of TaiwanPenghuKinmen andMatsu on Economic Cooperation or ANZTEC is increasingly important to this economy. Chinese Taipei is already New Zealand’s eighth-largest export market—our third-largest market for New Zealand beef and the fourth-biggest for fruit—and an important source of investment. Over 4 years the agreement delivers the complete removal of tariffs on 99 percent of New Zealand’s current exports to Chinese Taipei. Full duty-free access is provided for in the agreement.On entry into force the agreement will immediately take the percentage of New Zealand goods entering tariff-free from 25 percent to 70 percent saving New Zealand exporters more than $40 million in the first year. These are real figures not the illusory green mist that I heard Ms Genter talking about before. Virtually all New Zealand exports including milk powder cheese and butter and all New Zealand apple cherry and wine exports will be duty-free on entry into force. Tariffs on beef will be eliminated in 2 years—a grateful help to our New Zealand farmers. On kiwifruit the tariff will be eliminated in 3 years. In 4 years sheep honey and fish product tariffs will be eliminated and 99 percent of New Zealand trade to Taiwan will be tariff-free.This agreement is going to deliver jobs. In addition to eliminating tariffs on goods the principal gains include increased access and improved quality of access for New Zealand investment and an open skies agreement that removes the cap of seven flights a week between New Zealand and Taiwan—the first international trade agreement incorporating aviation for this country. We have a disputes settlement arrangement. We have commitments on trade and labour and trade and the environment. We have the elimination of tariffs on environmental goods enhanced cooperation on indigenous peoples’ issues and new film and TV cooperation production arrangements.The Government is also making progress on other trade agreements. The Prime Minister’s recent trip to South Korea has added new momentum to the free-trade agreement. The free-trade agreement can help both our countries to achieve economic growth and improve the finances of our economies and will create prosperity as greater levels of trade and cooperation will make us stronger and more efficient. We both want to promote growth opportunities for small and medium sized enterprises. They are the people who deliver jobs. Removing tariffs and other barriers to trade is a great way to improve the margins and spark new business. Investment is critical and crucial for successful business growth. A Korea - New Zealand free-trade agreement would help create the right environment for businesses to flourish commercialise their products and go global. We have examples of Zespri kiwifruit which is now producing there in Korea thanks to commercial collaboration with New Zealand.This Government has a very proud record of running this economy well. It is very sensibly spending. I totally support this bill.DAVID BENNETT (National—Hamilton East):The Labour Party members over there realise that they are going to be in trouble now because the Labour Party has been spreading malicious rumours about this economy for far too long in this country and in this Chamber. The National Government has delivered a strong economy that has delivered the right prospects for New Zealand going forward. We have not come up with silly ideas like a capital gains tax which will hurt the economy and which will not deliver the initiatives that have been proposed by the Labour Party and we do not follow the silly policies of one Russel Norman who thinks he is the economic guru but is not actually here to deliver the Greens’ speech today. Julie Anne Genter is doing it instead. I have got a lot of time for Julie Anne Genter. I think that Julie Anne Genter was the star performer in the parliamentary soccer team. Well done Julie Anne. It is good to see that you are now the star performer in the Greens’ economic policy. Just change the record read a different book from Russel and you will find that there is an economic reality out there that is different from what the Green Party and the Labour Party put forward.Let us look at some of the facts. We have a growing economy. We have reducing unemployment. We have a country going into Budget surplus. We have some of the lowest interest rates on record for this country. What is the matter with that? Nothing. That is the perfect combination for growth and you add to that the country’s investment in infrastructure and the New Zealand economy’s position in the Asian dynamic of theworld and this country is set up for growth and a strong and prosperous future ahead. The public out there understand and acknowledge that and they will not put that at risk. They will not support the Opposition which will put the New Zealand economy at risk.That is the key fundamental that is happening out there. The reason is that New Zealanders know what it is like. New Zealanders got the wake-up call in the world recession. They understood what it was like when you could lose your job and where your house was going down in value. They understand how the modern economy of the world has changed. The Labour Party and Green Party do not understand that. The Labour Party put New Zealand into recession before the rest of the world went into recession. That is what bad economic managers those members were. In the best of times they still managed to stuff up the New Zealand economy. They left us with years and years of big expenses going forward so that you would never get a Budget surplus. David Parker has the cheek the absolute cheek to come into this Chamber and say that Labour would have looked at having a Budget surplus as well. Tell me how that would have happened. Tell me how Labour would have had a Budget surplus as well. David Parker could not even say that with a straight face. He was standing there and he knew he was saying something that was not true. He was saying something that he should not say in this place but he still said it anyway because what does it matter? When you are at 29 percent in the polls does it really matter what you say? Anything to get you above 30 percent is good value.But the Labour Party knows that it would not have got New Zealand into surplus. It knows in its heart of hearts. Even Mr Robertson there—the man who is feeding Mr Shearer such great advice at the moment—is smiling knowing that Mr Parker was not true in what he said.Grant Robertson: Does John Key listen to this member?DAVID BENNETT: What was this member saying?Grant Robertson: Does John Key listen to this member?DAVID BENNETT: This member here he is getting very smart is he not?Grant Robertson: His closest adviser David Bennett.DAVID BENNETT: Well you know nobody listens to you Mr Robertson if they want to get anywhere do they?Grant Robertson: So nasty.DAVID BENNETT: Yes I am sure it is very nasty. The Labour Party will put New Zealand into the economic mire as it did last time. It will take Labour 3 or 4 years to unwind the good work we have done but Labour will put New Zealand back into the mire and the public understand that. The public will not risk a Green-Labour Government that is fiscally irresponsible that will put interest rates up and that will bring in silly ideas like a capital gains tax which will not achieve the purpose it was designed for and which Labour said it was going to bring in.New Zealand’s National Party has delivered strong good economic management. It has been balanced. It has delivered infrastructure for the growth of this country going forward. It has delivered interest rates that are some of the lowest—Vote agreed to.Vote Canterbury Earthquake RecoveryNICKY WAGNER (Chairperson of the Local Government and Environment Committee):The appropriations for Canterbury earthquake recovery are good news for Cantabrians. I think we have always understood that both the Prime Minister and the Government have stood behind Cantabrians. They have supported us and the rebuild of Christchurch and Canterbury is one of the four major focuses for the future for this Government. These appropriations provide the funding to get on with the job.The rebuild of course is the biggest most complex and most challenging construction project ever proposed in New Zealand. Vote Canterbury Earthquake Recovery provides the funding to support the Canterbury Earthquake Recovery Authority in its coordinating role in the earthquake recovery effort. The earthquake recovery will be funded in many ways from numerous sources. The first of course is insurance along with investment—both local and international—local government funding as well as our Government appropriations.We are still in early days for the rebuild so estimates planning and budgeting need to be flexible. There has already been an escalation of costs as more damage has been identified and as final decisions about many buildings are still to be made. Treasury recently revised its estimates of the overall cost of the post-earthquake rebuilding from $30 billion to $40 billion. It is believed that the final cost may be still higher than that but at this stage it is accepted that about $15.2 billion is the best estimate of the Crown’s share of the rebuild and about half of that about $7.6 billion has been set aside to cover the Earthquake Commission’s estimated shortfall.The remainder of those funds will be appropriated through several different votes—things like justice like health and like education. We are already seeing the benefits of expenditure in these areas. The new police and corrections hub is working extremely well and that has been reflected in the fall of the crime rate from the pre-earthquake rate. What they have done with the hub is co-located the police and corrections. That is a new idea. It has provided new synergies and improved processes and they are translating into far better results for the justice system. I think one of the things that the earthquake has allowed Canterbury people to do is to think differently. In many cases we are developing hubs of like-minded organisations. The way that they interact means that we can deliver a far better service.Planning for the new hospitals in the Canterbury area and Christchurch area is already well under way. We have got Burwood and Christchurch hospitals. Again those changes there have been driven by the damage during the earthquakes and how we have changed our way of looking after health care. What that has done is it has led to different ways of thinking in different configurations and different methods but they are all designed to deliver better sooner and more convenient health care. Certainly in terms of keeping people in their own homes and looking after their health care there we are leading the country.The increased expenditure in Christchurch is driving business confidence and economic growth and I think the people are beginning to recognise the opportunities for the city in the future. ThePress told us this week that every day 22 new migrants are coming to Christchurch. They are coming to Christchurch for the work and they are coming to be part of the rebuild. But there is a real understanding there that Christchurch will be growing and developing for at least the next decade and that it will be a very positive place for people to live and work in. There are probably very few cities in the world where that growth rate can be expected for that length of time. People are coming from all across New Zealand and skilled workers are coming from international jobs to us.I would just like to thank Gerry Brownlee and the Canterbury Earthquake Recovery Authority team for the work they are doing in Christchurch and Canterbury. There is no doubt that it has been an extremely tough time there and there is still an enormous amount of challenges going forward but with nearly 40000 residential houses being repaired and with new houses being built and families moving into them every day we are seeing real development there. Thank you.Vote agreed to.Vote TransportJULIE ANNE GENTER (Green):The National Government is missing an opportunity to invest in smarter transport options. I do not have time in this 5-minute speech to go over in detail all of the ways it is missing this opportunity so I am going to focus on just one area in which it is planning to massively increase debt for transport projects that cost more than their economic benefits. I am not sure that New Zealanders fully understand that when the Government says it is going to go into a public-private partnership—or a PPP—what it is really saying is that it is going to borrow money from the private sector which has a higher cost to capital and that we are going to be paying that back for 25 years at extra-high interest rates. So it is trying to hide its borrowing by calling it a public-private partnership and claiming that there are going to be some special magical innovation benefits from the private sector financing the loan.As soon as you start to examine this loan it becomes very clear that it is just an extra-expensive loan for some very foolish projects that should not be the priority in 2013. In 2013 we know based on 60 years of evidence that expanding new highway capacity does not reduce congestion; it makes it worse. We know that duplicating an existing road link with a more expensive road has diminishing marginal returns. It does not create any wider economic benefits. It is not the best way to reduce transport costs. It is not going to create many jobs relative to the jobs we could create by investing in more jobs-rich infrastructure.First off the block for a public-private partnership is Transmission Gully and we know from documents released from the Ministry of Transport and from the New Zealand Transport Agency that that is going to cost us $120 million a year for 25 years. We are not going to pay anything up front but we are going to be paying back for this project out of future national land transport funds for 25 years. This is a truly phenomenal cost. It basically triples the cost to the taxpayer of this piece of infrastructure. The most recent benefit-cost ratio of Transmission Gully puts it at about 0.35 or 0.4. That means that for every dollar we spend on it we are getting only 40c back. We are basically destroying 60c of worth for every dollar we spend on this and that does not even include the additional cost the extra $2.4 billion it is going to cost because we are going to the private sector for the loan.I can understand if some people are a little bit suspicious. I am a Green Party MP—maybe I just hate cars and roads and that is why I am making these numbers up. Actually University of Auckland associate professor of economics Matthew Ryan has written an entire article about the folly of financing Transmission Gully through a private loan so I think the reality is that the Green Party understands economics better than the National Government does. The Green Party understands that New Zealanders want smart green transport options. We have this amazing opportunity to spend less money and give people more choice. The National Government’s transport priorities—and it is prioritising a few big expensive roads that are going to have very very small benefits—do nothing to reduce the amount that New Zealand households and businesses have to spend on vehicles and fuel to run them.Earlier in the speech on Vote Finance I talked about our current account deficit which is about $10 billion this year and is going to be increasing to $17 billion. Well a big part of that is transport infrastructure because the Government is spending about $3 billion a year on transport and an extra $1 billion is coming from our rates through local government spending. So central and local government are spending $4 billion a year on transport. Households last year spent $11 billion on vehicles and fuel to run them—$8 billion on oil alone. That is a massive contribution to our current account deficit. The Government’s transport priorities do nothing to reduce households’ transport costs. If it deferred some of these projects and made urgent repairs to theexisting roads we could achieve the same benefits at lower costs and have billions to put into smart green transport options like improving our public transport and making walking and cycling safe. That takes cars off our existing roads. It is the smart green approach to transport that unfortunately this Government is ignoring.DAVID BENNETT (Chairperson of the Transport and Industrial Relations Committee):Thank you Julie Anne Genter. That was just another Green member’s speech around transport options which we expected. The Green Party has got a problem with roads of national significance. If anyone was listening to that and did not understand what was actually being said the Green Party does not want to see New Zealand build motorways. It can say that 60 years of research tells you that if you build a motorway then there is going to be more congestion. Perhaps it should look at the population of New Zealand over those 60 years and look at car ownership over those 60 years. We cannot go back to a situation of having a one-lane highway from Auckland to Hamilton and think that is going to be fine that it is going to be OK for New Zealand and that because of some spirited economic analysis done by some Green Party member investing in roads does not need to happen.Let us get in the real world. People drive in cars. Our cities are connected by roads. Our people want to move between our cities. It is the most cost-effective form of transport that you have it is the most available form of transport that you have and it is the mechanism by which we get from A to B in our livelihoods. The day that we do not invest in roads is the day that Green Party members may be able to sleep at night but it is the day that the New Zealand public will not be able to live the way that they expect or want. The National Government is delivering the roads of national significance. I have yet to see one member of the Labour Party or the Green Party—who are so strident in their views around the roads of national significance that they decry those roads day after day in this Chamber—who will come to Hamilton and say that publicly. Come to Hamilton and say publicly that you do not want the roads of national significance. When will the Labour Party and the Green Party actually say what they say in this Chamber to the public of New Zealand in their homes? They will not say it.Darien Fenton: When will this member start talking—DAVID BENNETT: Darien Fenton will not come to Hamilton and say that.Andrew Little: We say it in Taranaki all the time.DAVID BENNETT: Mr Little is now yelling out. He is the man who got up and made a speech the last time we talked about roading. What was his speech about? He wanted a road to New Plymouth did he not? That was his whole speech. It is good enough to have a road to your place but not for anybody else is it not Andrew Little? Yes tell us about that one.The National Government is delivering the roads of national significance. The Waikato Expressway to use it as an example is one of the roads of national significance. It links Hamilton to Auckland and it assists in the link of Hamilton to Tauranga and from Tauranga to Auckland. That is a project of about $2.5 billion. We have been waiting 30 years for it. We are finally getting it within 10 years paid by the Government through our taxes. It is good news for Hamilton. It creates economic growth in the north of my city. It creates economic growth in the east of our city through Tainui Group Holdings developments. The major inland port is a big part of that. It is important for the regions that surround Hamilton like the Coromandel which are very much focused on growth for their citizens and their areas as well. Yet the people in this Chamber who oppose the road will not come and say that to the people in that city. They stay in Wellington where it is cosy and they are safe and they can talk about some kind of economic strategy that came from the last report that they read fromsome academic but going to the people and actually telling the people “No we will not build the roads that you actually want.” is not something they will do.But the public are not that silly. The public see through Labour and the Green Party. They know that they cannot trust them to get those roads built. They know that the infrastructure for which this roading network will be important will actually deliver jobs and opportunities for them. They know that having that infrastructure is important for their livelihoods. The people in Hamilton know that their future is linked to Auckland’s future and every dollar spent in Auckland is a good dollar for Hamilton because that actually builds the strength of our region and that northern part of the North Island. The Labour Party and the Green Party still pretend that they rule the roost.MIKE SABIN (National—Northland):I would like to pick up from where the chairman of the Transport and Industrial Relations Committee left off on the roads of national significance. For my electorate of Northland there can be no better illustration to Parliament or to any who have taken the visionary step of listening in to this particular debate of the importance of roading infrastructure with regard to growing the economy. Northland is an area that is blessed with economic potential across all the primary sectors and across many sectors of the New Zealand economy but it is dogged by underperformance.This was one of the key areas—in fact the fundamental area—that Northland identified when I ran whole-of-region economic summits not long after being elected. There were some 450 people who came together to discuss the enablers and constrainers of our economy who identified the State highway north of Auckland into Northland as being the first and highest priority. The roads of national significance are all about getting ahead of the curve getting ahead of where anticipated growth will be and ensuring that the infrastructure exists to meet that need. I have worked with the Northland Regional Council and others in Northland and they have identified that about $800 million of Northland’s economy—about 15 percent of the GDP of Northland—travels out on that road. I think that is actually understated but certainly it is fair to say that that road is absolutely core to Northland’s economy; to an area that should be one of the fastest-growing regions in this country. I believe with the investment that this party is making into Northland that it in fact will be.The commitment of this Government and the Minister of Transport to the roads of national significance has been echoed by those who some would say are the more left-leaning councillors on the Auckland Council. When the council’s roading committee had to confront this issue and make a decision about where it saw the investment in this road of national significance thePūhoi to Wellsford link its view was 16 votes to four that we should get on and fast track that. That process is now under way. The fast tracking and the consenting process is now under way and we will see activity with the next leg through to Warkworth commencing around mid next year. I think that is a very significant message sent to Northland that this Government this party and this Minister are committed to the economic development and the potential of the region and are actually investing in that. That was met with great joy.I note that on many occasions Labour Party members move into Northland and have a Labour Party policy retreat or something of the sort. They jump around to the odd place for photo opportunities—they often visit the Mangonui fish shop and grab some world-famous Mangonui fish and chips. They all talk of course about what they will do for Northland and what they will do for this country but I do not see them standing on their soapboxes and talking about how they will scrap thePūhoi to Wellsford link. They will say that here but they will not say that face to face to the people in Northland. I think that is disingenuous. I think that really does embody unfortunately what the Labour Party has found itself trapped into. Labour members will oppose thingshere because they actually do not want to see economic success they actually do not want to see job creation but when they go out face to face with the people who they would have elect them into Government they will not of course be upfront and honest about their views and how they view this.The Labour Party has said that it would scrap this road and of course the Green Party would scrap it as well. They would scrap this road. It has been singled out as the single example of what they would get rid of and this Government is fast tracking it. When it comes to the people whom they would rely on to vote them into office who are climbing over themselves to say “We need this infrastructure we need this road and we need this support.” and those parties say here “No we won’t.” the question I have for those parties is: what will they be saying to those people in 2014? They are now in that position. Those parties do not back it but we do. This is good infrastructure. The roads of national significance are something that is about the New Zealand economy about the Northland economy.Vote agreed to.Vote Economic DevelopmentGRANT ROBERTSON (Labour—Wellington Central):Under this Government—under Steven Joyce’s vision of economic development—we can say one thing for sure: if he has got one policy about economic development it is a big night at Skycity. That is economic development in Steven Joyce’s book because that is the big idea of this Government when it comes to economic development.I want to welcome my colleague Meka Whaitiri to the House and I want to note that when we were campaigning around the Ikaroa-Rāwhiti electorate there was one aspect of economic development that came up at every single meeting: the jobs mahi. “Where is the mahi?”—that is what people said everywhere we went. It is no wonder that people in the electorate of Ikaroa-Rāwhiti are looking for economic development because under this Government the two-speed economy says that the Government’s mates get the jobs its mates get the economic development and the people living in that electorate are the ones who do not. The statistics bear it out.There is a two-speed economy in a geographic sense. Outside of Auckland and outside of Canterbury where it is about disaster recovery - led economic development those provincial towns and cities in Gisborne in the Wairarapa and down in the South Island as well—where my colleague Rino Tirikatene spends his time—in Invercargill and on the West Coast are the places that are suffering. They are the places where the jobs are disappearing because this Government has taken its eye off the ball. It is out of touch with the needs of those regions and those regions are suffering. Every time the Labour Party goes into those regions be it up in the Hawke’s Bay last week or around the country that is the message we hear: the National Government has forgotten us. The National Government has forgotten the regions of New Zealand.The National Government has forgotten the young people of New Zealand. That is where the statistics really blow out. The youth unemployment statistics in New Zealand are appalling. The real-life stories that go with that are important. I had a letter from a mother in Christchurch just last week saying that her kids have done all the right things. They have gone in and they have tried to get the apprenticeships. They have tried to make sure that they can stay in the workforce to get the skills and there are no jobs. That mother is in Christchurch in a place where the economy is supposedly booming but because the Government sat on its hands for 2 or 3 years and did not train up New Zealanders we have got David Bennett and people crowing about the fact that we had to import labour. Nicky Wagner stands up and says that it is fantastic that 23 migrants a day arrive in Christchurch to help with the rebuild. Those jobs should be being done byNew Zealanders. If this Government had actually got off its hands and trained up people straight after the earthquake there would be New Zealanders in jobs. Instead we end up with a situation where we have youth unemployment around 15 to 20 percent in all of those regions that I have mentioned. We haveMāori youth unemployment even higher. We have Pasifika youth unemployment even higher than that.That is the record of economic development of this Government of a two-speed economy. But if we really want to see the two-speed economy it is about the gap between the rich and the poor in this country. It is about the growing inequality in New Zealand that will slow down economic development. Mr Joyce thinks that all his trickle-down economic theories will work but the reality is that for the people at the bottom of the heap things are getting worse. This Government started the ball rolling on that with tax cuts that said that 40 percent of the benefits go to the top 10 percent. It set the ball rolling on making that inequality grow and it has just got worse. The OECD has recently said that in New Zealand there is a considerable gap between the richest and the poorest. The top 20 percent of the population earn five times as much as the bottom 20 percent. That is how we end up in a situation where the Australians are saying that it is fantastic and that they are going to move businesses to New Zealand because it is 30 percent cheaper to do that. What that means—what 30 percent cheaper means—is people getting low wages. That is what that means.Steven Joyce says that it is a wonderful investment opportunity. Well that is real estate agent - speak. That is the kind of thing we expect from the speculators in this Government—that it is an investment opportunity that New Zealanders are getting lower wages than Australians. Just imagine if under this National Government we had not exported 200000 New Zealanders to Australia. The unemployment rate of 6 percent would be over 8 percent. That is the economic record of this Government.Hon SHANE JONES (Labour):Kia oraanōtātou. I rise to make a contribution and to remind the New Zealand public and this Committee how gross the failure of the current Government and its partner theMāori Party is in relation to liftingwhānau andhapū out of the doldrums in terms of providing them with decent investment opportunities and employment relief. I only have to go to the area where my fellow Northlander Mike Sabin unwisely referred to transport as being the immediate elixir and the immediate solution toMāori unemployment and additional unemployment in the north etc. Sure no one actually wants to see substandard roads in my area but rest assured an improved roading infrastructure will not go one inch past Warkworth.The reason that it is not going to go past Warkworth is that the major contributors to the whole philosophy of extending thePūhoi road as some kind of economic remedy all happen to have their second third fourth or fifth house in and around Matakana or in and around Leigh. That is an area that we went to recently and we were assured by the localhapū there who were saying goodbye to their rangatiraLaly Haddon that a flash road is actually going to make no difference whatsoever. All it is going to do is shorten the visit for people in Auckland who spend very little money in the area and who are not investors in the Northland economy.What is actually needed is an immediate improvement to the most egregious aspects of that woeful road—which I had the misfortune of driving down this morning in order to catch a flight—not some long sort of pipe dream that the road from Auckland to Whangarei is somehow going to open up new economic vistas. If that is the truth start from Whangarei and go to Auckland. No they do not want to hear that.What actually also needs to happen in regional development in our rohe of Tai Tokerau is for the Government to work with the north and actually open up the potential of Marsden Point replicate what Dr Cullen sought to do and put in the spur fromOakleigh—the land has already been designated—and enable some of the pressure tomove out of Auckland and other parts of the port infrastructure around the country and capitalise on New Zealand’s premier deep-sea port. That would require a level of commitment to rail and a rational transport planning infrastructure which is absent in a very salient away from this particular Minister. I accept that he believes he does know best. I accept that he believes he has a monopoly on whereMāoridom for example should go. Well I suppose we should not be surprised at that because his partner on the other side Dr Sharples exercises no monopoly other than a larger than passing interest in the game. You have only to look at the man’s history in that regard. But he is soon to disappear. He is soon to disappear from this House because of the woeful record on development.I went recently to not only Hawke’s Bay but also Taranaki. I enjoyed going to Taranaki. I reminded all thewhānau up there that sure it is important that incomes and jobs associated with the mineral sector grow but we should observe the law of the land observe the ethic of sustainability and make our own investment decisions.And then I went to Hawke’s Bay to be reminded that there is no rational forestry policy in the country. Forestry is a key part of the regional endowment that New Zealanders rely upon and they look—unwisely in this case—to the Government to actually come forward with not only ideas but interventions. All the Government would need to do to improve some of the earning potential in the forestry and wood sectors would be to reinstate what Mr Anderton did—a fine regional development Minister—when he put an accent on wood first wood as a priority. I mean obviously we are going to do it when we build our 100000 houses—$1.5 billion over 10 years. We will ensure that the wood sector is a key beneficiary of that—a better carbon impact than an inordinate reliance on concrete and steel and an up for the wood industry.Why does the Government not start with all the Crown projects that are inŌtautahi/Christchurch? Why does it not make wood a priority in the rebuilding of that part of the infrastructure and grow the secondary and tertiary segments of the wood industry as more products are developed jobs increase and you are able to showcase actual projects that then grow into export potential? But that is not going to happen unless you have a Government that is willing to show not only leadership but actual interventions that are smart that generate jobs and that improve investment. There is no better place to start in my view than by improving the prospects of the wood industry as we spend $40 billion inŌtautahi and not quite as much in Auckland.DENISE ROCHE (Green):I have some questions that I think are fair to raise in the Committee about the economic benefits of the convention centre deal that the Government has negotiated with Skycity in Auckland. I have been perusing the appropriations and I have also been looking at the 400 or so pages that the Government released that were concerned with the negotiations around the Skycity deal. The most interesting aspect I have found so far in looking through the documents has been the way that the Ministry of Economic Development which is what it was before it was restructured into the Ministry of Business Innovation and Employment did not want to give Skycity any money for promoting the International Convention Centre but then in this year’s Budget there was a fund set aside for promoting conventions. It was about $34 million or so if I remember correctly.What is not clear are the economic benefits to our country of this deal. The Government has constantly inflated the number of jobs that it thinks will result from the convention centre deal. It reckons there will be about 1000 jobs created to build the convention centre and another 800 or so to run it. The thing is though building is a temporary thing. Once you have finished building it those jobs are no longer there. They last just for the duration of the build. I have no idea where this figure of 800 or more jobs for running the convention centre came from because if you compare theconvention centre with an Australian one of a similar size the number of jobs is more likely to be 250 or so.Let us look at the tourism dollars attached to the convention centre deal—the major hype that we have heard from the Government about this. Once more we have had this assertion that the convention centre deal will result in more conventions in New Zealand with convention participants spending up large while they enjoy extended stays in our country. But this is not a certainty. The figures are not tested at all and the assertion that participants will stay longer and spend more has not been borne out by current convention attendees in New Zealand. What we can extrapolate from Australian figures is that it is unlikely that the tourism dollar will be shared evenly. What the Australian Productivity Commission has shown is that every dollar that is spent in the casino is a dollar that is not spent on shopping not spent on restaurants not spent on bars not spent on movies and not spent on other entertainment. The casino will be the main beneficiary of that spend. Skycity will have the monopoly on those tourism dollars.Skycity is pretty voracious about seeking to make profits. You have to just look at its request to have a City Rail Link straight to its premises so that it can freight people straight there. You can see it through its bending of the smoke-free laws which it has already done. You can see it in the special immigration visas it has requested for high roller overseas gamblers who would help facilitate money-laundering at the Skycity Casino.We need to ask ourselves whether having a convention centre attached to a casino is a good bet given that we already know that several international organisations particularly those in the health field are not happy to have their conventions in a casino because of the problems with public health associated with casinos. We really do need to examine the economic benefits of this deal. What for example are the economic benefits of the damage to our international reputation as a corruption-free country? Transparency International has warned us about that with this deal as have various legal experts who are concerned about democracy being eroded by the 35-year compensation deal that the Government is striking with Skycity. We need to ask ourselves about the economic benefits to New Zealand of this deal when the price we will be paying is much higher than what we will get from Skycity. What are the economic benefits of tying the hands of future Governments so that if a Government passes laws to reduce the profits of the casino it will need to compensate Skycity? What are the economic benefits of the increase in crime?Hon STEVEN JOYCE (Minister for Economic Development):Well it is interesting standing in this Chamber talking about economic development. Immediately you see the juxtaposition on the Opposition side of the Chamber where once again we are seeing Green Party members absolutely opposed in this case to a convention centre but fortunately to almost every form of economic development. Meanwhile their friends in the Labour Party desperately try to pretend they are in favour of economic development by rerunning the same load of rubbishywiffle-waffle that they have been running for the last 13 years but ultimately they are completely against economic development.I have a few examples proving that the Labour Party and the Green Party are against economic development—just a few examples. One example is their opposition toThe Hobbit movies which have just wrapped up production in New Zealand—that would not have happened under a Labour-Greens coalition. Other examples are their opposition to all resource management law changes that have helped speed up investment decisions and will help speed up more; their opposition to all the roading projects around the country; their opposition as we have heard to the Aucklandconvention centre; their opposition to oil and gas exploration on the East Coast; and their opposition to mineral resources exploration anywhere—except we are now reliably informed the Labour Party has a new policy on oil and gas exploration which is that when they are in Taranaki they can talk it up and everywhere else they are in the country they should talk it down. That is the new policy—the double-speak of the New Zealand Labour Party. It is a case of “If I am in Gisborne or if I am in Wellington or if I am in Dunedin then I am against oil and gas exploration but if I am in Taranaki then weirdly I am in favour.” That is the approach of the Labour Party.Opposing foreign investment of all types in New Zealand is as we know the latest path for the Labour Party and the Green Party. They are opposing of course Bathurst Resources and supporting the environmental groups who are trying to run a war of attrition against Bathurst on the coast and trying to stop the jobs there. They are opposing tax changes to encourage productive investment. Aquaculture reform is another thing that they are deeply opposed to. These are all things around the country that this Government is working on to encourage jobs and growth in the regions and what are they in favour of? Oh they are in favour of woolly stuff that says we should just hug the regions and say we are doing better. Well this Government is focused on a whole range of initiatives including the ones I have listed.Then of course there is the broader macroeconomic situation of the Labour Party and the Greens Party. We are seeing that this Government’s responsible economic management is delivering better growth than in just about every country in the OECD—Dr David Clark: Worst economic record in 50 years—worst economic record.Hon STEVEN JOYCE: —I see the parrot has started up—and the Labour Party is against all the initiatives. And what would it do? It would slap on a capital gains tax. It thinks the answer to encouraging more capital to be invested is to tax it more. Goodness knows that will work—not! And Labour’s other options are to increase the price on business of the emissions trading scheme and all these other things that it wants to load more costs on to just like it did in the last 9 years. Labour members have not learnt a single lesson. They come down here. They spout rubbish about economic development like “We care—we care but by the way we’d put more costs on business. We’d tax businesses more. We’d stop them doing all these things that are creating jobs in New Zealand and we’d turn back the clock.”I just want to touch on Northland because Mr Jones does not appear to be able to read. I think it is important that he knows the full list of the Government’s initiatives in Northland so that he can refer to them in future when he wants to talk economic growth. I am talking about ultra-fast broadband in Whangarei rural broadband throughout Northland increased Youth Guarantee places and expanding trades and services academies. We have developed New Zealand Apprenticeships which is very popular in Northland. We have been refocusingNorthTec on skills for the region. We have been liftingMāori school-leaver achievement. We have been arranging the petroleum block offers in Northland and the minerals exploration and we are reforming the aquaculture market to allow more aquaculture in Northland.We have also been building thePūhoi to Wellsford road of national significance. We have been encouraging the leveraging of the cultural and asset base for theMāori community in Northland. And most of all we are not saying as the local MPs up there are saying: “Oh you shouldn’t do mineral and gas exploration up there. You should do it over in Western Australia.” We are saying that we are prepared to do that up north. We are also supporting the agriculture sector with the Primary Growth Partnership.All these things are happening in Northland rather than just a few platitudes which is the specialty of Mr Grant Robertson and Mr Jones. They run around with a fewplatitudes and pretend they are interested in economic development. This Government is doing economic development and remember they are opposing the jobs.Dr DAVID CLARK (Labour—Dunedin North):That clearly was desperate stuff from a desperate man. The Minister for Economic Development is spinning so fast that I would not be surprised if there is a hole in the ground there next to the Chairman. This Minister is talking fast; there is no doubt about that. He is good at that—he is good at that. He has a reputation for putting the spin on thick and for selling the story but the facts get in the way and those are what we are here to debate today. We are here to debate a Government that has the worst economic record of any Government in the last 50 years.Grant Robertson: I’ve heard that before somewhere.Dr DAVID CLARK: We have heard that before and it is a fact. This Government has the worst economic record of any in the last 50 years. That is a terrible thing. It has had 5 years to address this problem. It has been in Government for 5 years but it would have you believe that every problem it is currently experiencing was something that came out of the 1980s or the 1970s or the 1960s. It is still trying to address it. It is not the Government’s problem. It has its hands off and it does not want to take control of the wheel because it believes it is someone else’s problem and as soon as that someone else puts their hands on the wheel they will become responsible for the mess we find ourselves in now.This is a Government that has no plan. That is the problem. It is one of the big problems. The Government has said that it wants to create 170000 new jobs. It has said it on several occasions now and it failed in 2010 by 113000 jobs. That is how much it fell short. That is not even an honest effort. That is a terrible terrible indictment on a Government that has no plan to generate economic growth other than to try to talk up the words of Mr Joyce to repeat the lines and to tell New Zealanders that all will get better one day if they just hang on long enough.Well New Zealanders are losing faith in this Government. New Zealanders are disappointed in John Key. He has not lived up to the promises that he made and in fact he has broken more and more promises. New Zealanders are seeing in the Government Communications Security Bureau situation in the Skycity situation in the inaction on housing prices and in the dropping of median wages a Government that is out of touch with New Zealanders and that is making no genuine attempt to rectify the situation. Let us talk a little bit about the casino deal because that is something that is dogging this Government. It is coming back to haunt them as we realise and New Zealand realises just how bad that deal was.Hon Maurice Williamson: Stop reading research notes and answer with some facts.Dr DAVID CLARK: Not only are 8000 more New Zealanders Mr Williamson affected by this deal in a negative way—8000 more New Zealanders affected by problem gambling—but all of that harm comes for very little gain. If a transparent process had been run for a convention centre I think fewer New Zealanders would be concerned. However this Government is determined to do deals with its mates. It seems to lack the ability to do anything transparently. Mr Key denies that he has had any influence but then we find out that he has had dinners with the Skycity executives. He has told people to explore the Skycity options cutting out of the loop those others who would have put in for a transparent process and he has done favours for his mates.New Zealanders see that cronyism. They are growing tired of it. They are growing tired of this Government which is failing to deliver on its promises of more jobs. They are growing tired of seeing their young ones disappear to Australia because the wages are better there. They are growing tired of a Government that fails to deliver on jobs and a Government that has no plan. Mr Key says that New Zealanders are paying a fairamount for their tax. Well very few people in my electorate agree with him. I have tested this with people in my electorate. I ask them: “Do you agree with John Key that you’re paying about the right amount for your electricity?”. And they say: “No we are not.” Well the news is that Labour has a plan to address that and that plan will see businesses pay 5 to 7 percent less per annum. It will give businesses a boost when their electricity bills go down. When average New Zealand families are paying $300 less per year for their power they will know they have a Government that cares. They will know that they have a Labour Government because Labour does care about these issues these issues that the Government is washing its hands of. This Government is interested only in deals for its mates. This Government made tax cuts for the rich and let the rest have a GST increase when it promised not to.This Government does not honour its promises. New Zealanders are growing sick of it. They do not like the casino deal. They do not like the 3 percent rise in Skycity shares that happened immediately—immediately—after the deal was signed when those who held Skycity shares knew who got the right side of that bargain. They agree with Treasury which says explicitly that private benefits are likely to exceed public benefits from this deal. New Zealanders know that this Government has done them a raw deal on this casino deal. They do not like the fact that it is paid for off the back of problem gambling. They do not like this casino deal one bit. They do not like this Government with its lack of transparency.PAUL GOLDSMITH (National):I suppose it is the Opposition’s role to talk down New Zealand’s prospects in some respects. But I have certainly observed over the years that the better leaders avoid that trap and talk up New Zealand’s prospects and talk about the positive things. It is painful to listen to the moral sanctimony and moral superiority coming from members on the other side about how wonderful they are yet this is the crowd who are engaging even as we speak in a very questionable approach in Auckland around immigration and around different groups of people coming to this country who are wanting to make their life here and wanting to invest in this country. The dog whistle is blowing from the other side of the Chamber yet they come here with all the moral sanctimony of the Greens telling us how we should and should not be doing things.Getting back to this question of economic development here we are in an economy that is going well. I was in Taranaki a couple of weeks ago. What a—Hon Maurice Williamson: Paradise.PAUL GOLDSMITH: —paradise. What a great place that is where there are jobs aplenty built upon resources. We always hear from the Opposition good reasons why we should not be advancing or developing those resources any further. It is all going well in Taranaki. But also engineering and supply and expertise have developed there over the years servicing that energy and farming economy and that has been exported all around the world. What a successful region that is.I never cease to be amazed at the enterprise of New Zealanders. They get out and they do things. They employ people they come up with ideas and what they need most of all is for the Government to get off their backs and out of their pockets. What they certainly do not need is for the Government to come along and say to someone who says “I’ve started off with nothing. I’ve built a business from nothing from my own ingenuity out of the back garage. I’ve toiled hard. I’ve mortgaged the house to the hilt. I’ve built a business. We’ve survived all the depredations of the taxman. We’ve dealt with competition from overseas. And 10 years later I’m ready to retire. I’ve built my business.”—“Whammo!Boomfa! You’ve got a capital gains tax to pay for all your hard-earned efforts.” Somehow that is supposed to be encouraging enterprise. What a strange approach that is to me. I have never been able to understand it.Then I suppose their other guru is Geoff Bertram. I think he is the other guru of the left wing. He thinks we should be putting a cap on all salaries. Well I am also a little bit perplexed and I struggle to understand how that is going to encourage enterprise in this country when that is not what we need. What businesses in New Zealand do need is the Business Growth Agenda. That is what this Government has put forward over the years and it is focused on the number of things that we are working on to improve the environment in which entrepreneurs can get out there and do their thing in this country. Those aspects of the Business Growth Agenda are I might just remind the Committee export markets—increasing exports by increasing our access to markets. It is no good having a brilliant idea if you cannot actually sell your products around the world because you are facing high tariff rates. So this Government and particularly Tim Groser has been indefatigable in its efforts to go out there and find new markets and pursue trade negotiations.Then there is the issue of innovation helping businesses access the latest research and development. The Minister in the chair at the moment the Minister for Economic Development has been exceedingly generous indeed very generous in the support that has been given to research and development investing $100 million a year in an internationally focused growth package providing extra research and development assistance to businesses and funding for tourism. All these things are developed around trying to grow businesses in the economy.When we talk about skills those are the other things that businesses need: access to skills and access to affordable employment. The starting out wage is something that was opposed vehemently on the other side of the Chamber and yet what are we seeing from that? The greater employment of young people giving people a chance to get their foot in the door and have a job. When I was a youngster on a lower wage I had the opportunity to go out and work down at the markets at 3 o’clock in the morning. I was not paid as much as the adults and I probably was not worth as much but I got out there delivering the Indian vegetables and the tomatoes and advancing the economy in the little way that I could. Those opportunities have been taken off young people.GRANT ROBERTSON (Deputy Leader—Labour):For all the bluster from Steven Joyce and Paul Goldsmith about this wonderful set of economic plans that they have it does pay to ask the question: what has it actually delivered? What is actually being delivered? Well I can help the Minister out with a few facts. There are 146000 people unemployed. That is what the great National economic development plan has delivered. That is an increase of 41000 unemployed since National came into office. But what has it delivered for young people in New Zealand? Well that would be unemployment at 25 percent for those aged between 15 and 19. One quarter—one quarter—of our young people are unemployed. That is what Steven Joyce’s economic development plan has delivered. But how about for youngMāori? How has it gone for youngMāori? Well 38.3 percent of youngMāori are unemployed. That is the record of Steven Joyce’s economic development. Under this Government 43.5 percent of young Pasifika people are unemployed. Nearly half of young Pasifika people are unemployed.The National speakers in this debate have liked to stand up and say that there is this terrible legacy that was left by the Labour Government. I remember one important legacy left by the Labour Government: the second lowest unemployment in the OECD. That is the legacy—it was down to around 4 percent. Where is it now? It is up over 6 percent and if the Government had not exported 200000 people to Australia it would be well over 8 percent. So that is what the great economic development plans that Mr Joyce outlined have delivered.What would a real economic development plan look like? It would be hands-on. It would say firstly that at the big-picture level the settings are not right. The old trickle-down theories have not worked. The merchant banker’s way of running the economy has failed. The National Party might have failed to recognise it but times have changed. Things have moved on. We need an economy that is based on building not on selling things. We need an economy that is based on investing in young people so that they get training opportunities. Steven Joyce finally woke up to that in January this year and said: “Yes we should train a few people.” Finally he has said we should train people—after 4 years of letting training opportunities go seeing industry training numbers collapse and not investing in apprenticeships so that there are not enough people to take on the work in Christchurch and we have to find people from overseas to come in and do it.This is what a real economic development plan would look like. It would say that if we are going to have $30 billion of Government contracts in a year we are going to give Kiwi firms a fair crack at that. We are going to make sure that Kiwi firms get a fair go and that if they do get those contracts they will take on apprentices. We are going to make sure that we will convert the dole for 18 and 19-year-olds into a subsidy for apprenticeships. We are going to make sure that there are real training opportunities so that we have the skilled workforce that will make New Zealand a productive place.We are going to say that we will invest in small businesses. We will reduce the compliance costs in that. David Clark has been touring around New Zealand talking to small-business owners and they have been let down by this Government because they are not the big end of town—they are not Skycity. They are the people who are toiling away. Paul Goldsmith stood up today and said that they are the people we need to look out for. What those small businesses need is a Government that will actually invest in creating skilled labour make sure that there are opportunities there for them to develop give them a fair go at research and development funding and make sure that they have got the ability to create new businesses.That comes from having a hands-on Government. It does not come from having a Government that thinks it can sit back and allow the old tired trickle-down economics to try to work. That is the failure of this Government. It is locked in an ideology that is 20 years out of date. It is time for the Government to get alongside businesses to get alongside communities and to say that inequality is a drain on our economy. It is morally wrong and it is socially wrong but it is also a drain on our economy.Simon O’Connor: Oh inequality. Talk about immigration.GRANT ROBERTSON: Simon O’Connor wants to do something about inequality. What he should do is say that the tax cuts that National brought in increased it. If he admitted that that would be a start. The reality is that this Government does not want to do anything about inequality. This Government is failing the young people of New Zealand it is failing the regions of New Zealand and it is letting the gap between rich and poor grow.Only a Labour-led Government will have the policies to turn that round to invest in our regions to invest in our young people and to make the changes to monetary policy that are needed. That would be a proper economic development policy.Hon STEVEN JOYCE (Minister for Economic Development):I appreciate that Mr Robertson is doing a leadership application at the moment but it does not change the fact that his intellect continues to be a mile wide and an inch deep. This Mr Robertson just throws masses of platitudes at the world and talks about all this stuff but he does not actually have any sort of plan. He knows nothing about what is going on in the world.To give you a little bit of an example right now 80 percent of all 15 to 19-year-olds in New Zealand are in education—80 percent of them. Mr Robertson does not want to know that. There are actually only 15000—still more than we would like but only15000—people who are not in education and not in employment who are 15 to 19-years-old. That is less than 5 percent of the total cohort of 310000 people. The reality is that we are doing the things that Grant wants to do and he has not actually bothered to look so he just flops around like some platitudinous leadership applicant for the Labour Party and tries to suggest that he could actually do something about it.The other reality is that he says “Talk about the record.” Well as for the record of this Government let us compare our growth rate in 2012 with theEU’s. Well they went backwards we went forwards. Let us compare it with the UK’s. They went backwards New Zealand went forwards. New Zealand was one of the fastest-growing economies in the OECD in 2012 and no platitudinous spin by our dear friend Grant Robertson—applicant for leadership of the Labour Party—can actually hide that whatsoever. Were we faster growing than Japan? Yes we were. Were we faster growing than Canada? Yes we were. Were we faster growing than the US? Yes we were. We were growing faster as an economy. We are one of the fastest-growing economies in the OECD which is actually quite a miracle when you look at the state of the place in 2008.Grant Robertson wants to forget but actually New Zealand went into a domestic recession before the global financial crisis. It was a shameful situation. Before the global financial crisis the Labour Government of the day had sent New Zealand into its own recession over that period. There you have it. You have the Labour Party’s applicant for leader Grant Robertson out there saying: “I am concerned about the regions. What we need is a plan.” He does not read anything that is going on currently he knows nothing about what is happening in tertiary education—which let us face it he was in for his entire life before he went to work for the old Prime Minister Helen Clark—he knows absolutely nothing about it he never does the reading and he never does the work. He spouts on about apprenticeships despite the fact that the Government is actually spending more on them now than ever before and actually tries to pretend that he knows something about the economy. Well I will tell you what the country would rue the day that Grant Robertson was let anywhere near an economic lever—it would rue the day.As for his little parrot friend Mr Clark actually spouting something about the economic record for the last 50 years you actually have to say more than that even though he thinks being apolly actually means being a parrot rather than a politician. Thank you.MAGGIE BARRY (National—North Shore):After that substantial and all-embracing speech from the Minister for Economic Development I would like to talk a little bit about Vote Economic Development—about some of the aspects that have not been touched on. As the Opposition benches do not seem to be aware Vote Economic Development is the entity that funds advice and services that are designed to improve the economic performance.Sitting suspended from 6 p.m. to 7.30 p.m.MAGGIE BARRY: Prior to the dinner break I outlined the role of Vote Economic Development in funding advice at a crucial high level. This sort of advice is needed if we are to improve the economy as a whole and to improve the plight and the future of individual businesses sectors and regions.A big part of this vote funds our Business Growth Agenda which has the laudable aim of improving New Zealand’s long-term growth by strengthening areas important for our international competitiveness. In keeping with our overall economic vision and the plan that our Government’s Business Growth Agenda includes it has targets and it has goals and these are measurable. The Ministry of Business Innovation and Employment has the specific goal of lifting exports to 40 percent of GDP by 2025. It is looking goodso far with our GDP growth last year at 3.1 percent. We compare very well when you look at the UK the US Canada Japan and the eurozone. The ministry has also set a target of achieving a 40 percent increase of real household incomes by 2025. That is what is different about this Government: it has goals it has targets it measures them and it achieves them.This new ministry as we were told by the Minister for Economic Development Steven Joyce when he appeared before the Finance and Expenditure Committee about 6 weeks ago is performing very well. In fact it is a year ago this month that it was formed from those four old Government agencies: the Ministry of Economic Development the Ministry of Science and Innovation the old Department of Building and Housing and the Department of Labour. Businesses—and exporters too—are very well served by New Zealand Trade and Enterprise. That is the main Crown entity for supporting business growth which is funded this year to the tune of about $144 million. Its latest successes are in the promotional activities you might have seen on the television recently around the America’s Cup programme in San Francisco and in wine food information and communications technology as well as high-tech manufacturing.We were told by the Minister when he appeared before the Finance and Expenditure Committee that the main area of new funding under Vote Economic Development is an additional $7.6 million to continue the work being led by the ministry on making Government procurement more effective and more efficient. He has released a new set of streamlined procedure and procurement rules that are actually going to make it a whole lot easier for smaller New Zealand companies to tender for Government contracts and that has got to be good news. If they are not required reading on the Opposition benches these six excellent and informative booklets ought to be. They certainly are readily available in my North Shore electorate office and they are in high demand. They spell out in detail our Business Growth Agenda and create a way that you can actually discuss building innovation for export markets for example and increasing exports to 40 percent of GDP as I said by 2025—that is the goal.For innovation it is about helping businesses access the latest research and development and technology to increase their output. I know in my area of the North Shore we have a company AFT Pharmaceuticals based in Takapuna. Its staff is pretty much a United Nations. They have Chinese Indian and international markets they are developing all the time but they do it from their home base because they like living in the North Shore and who could blame them for that? We gave them a $3.8 million research and development grant and that the company has said is crucial to its development—to lift its business to the next level to allow it to increase its productivity and to increase its market reach. The information in these booklets and the help and assistance that we are giving people is really making a difference.Tracey Martin: $3 million for eels that’s all we need—$3 million for eels is all we need. A million-dollar industry and 3 little million dollars that’s all we need.MAGGIE BARRY: The other areas in our Business Growth Agenda include skills—something that is enormously bereft I am afraid when we hear the squeaking of the New Zealand First person over there. The skills we recommend will help Kiwis to upskill to train and to find work in New Zealand. That includes more tertiary places.Infrastructure is vital as well. That is the fourth of the areas that we are concentrating on as part of the Business Growth Agenda. Infrastructure ensures that businesses can rely on roads on rail on broadband and on irrigation. These are all major targets for improvement by our Government and we are doing it fast and we are doing it very well.Natural resources are vital. Responsibly managing our economic opportunities is a very big part of what we are doing with the Business Growth Agenda and with capitalmarkets. This is long-overdue. They are moribund our capital markets and we need to encourage a lot more investment in New Zealand. When the Minister for business innovation and employment came to talk to us he said he believed that the challenge for us all—Vote agreed to.Vote EmploymentDAVID BENNETT (Chairperson of the Transport and Industrial Relations Committee):It is a great pleasure to talk about Vote Employment. I just want to recognise the very fine Minister in the chair the Minister for Social Development who has done an excellent job in this area. Minister Bennett has I think taken a really impressive approach to the portfolio and to trying to get people into work in very difficult times. I know that on the streets of Hamilton people often come up and say they are very impressed with that Minister’s approach and with the work she is doing.Sue Moroney: No they don’t—no they don’t David.DAVID BENNETT: And Sue Moroney on the other side gets the opposite comments from the people on the street who are not impressed with her approach to this issue at all. That is true—that is true. But this recession which the world has seen has been acknowledged as one where there have been serious employment issues around the world. We all hear the horror stories of—Colin King: Spain.DAVID BENNETT: —Spain and places like that where—Chris Auchinvole: Greece.DAVID BENNETT: Greece yes; that is another one. You hear stories about 60 percent or 40 percent of people under 25 being unemployed—huge numbers. Whole swathes of countries are unemployed and you can actually see that there is a movement. Europe is losing a generation of young people. They are moving because they see that there is no future there—there is no employment. That is a terrible situation for any country and any individual to be in.Being in employment is so important for people’s self-worth for their understanding of their future commitments for their ability to support a family and for their ability to do all the things that are so important—to buy a house in Auckland even. Employment is a huge dynamic in our individual communities and in our individual lives. So for a country like New Zealand to get through the recession remarkably well and do it in such a way that we have managed to carry through as many employment opportunities as we can for our young people and all our citizens is something very special. It is something that I think this Government is very proud of and it should be. It is an important part of our economic and community focus.The Opposition will make noise about the employment issue as always and it will bring out its statistics and say: “Well hey look at the statistics. They are so bad. Why aren’t you doing something about it?”. Well it is a long-term game. A lot of those statistics and a lot of the issues revolve round bigger issues such as education training and those kinds of opportunities. They do not change in 1 or 2 years; it takes many years to get people into the right education formats and to understand that their future employment opportunities are linked with their education and the results they get as they progress through the education system.So the Government has been very careful to look at all those issues and not to look at them from just one perspective. We are looking at them from an education perspective we are looking at them from an employment perspective and we are looking at them from a benefit perspective as well to encourage people into work and that is a crucial part of that process. We have also looked at all those issues from an economicperspective and we have provided infrastructure opportunities so that jobs were there in the most difficult of times. When the private sector was not building and was not investing in the infrastructure of New Zealand the Government did and through its major projects it provided a lot of employment.We have also taken a very strong approach to employment through our future vision of New Zealand looking forward. We want a strong stable economy that looks forward to the education and economic opportunities that the world will present in the next generation or so in this region. It is important for our young people to feel that they have got opportunities for employment and that is something that we have been very much aware of. So I think that in total we have taken a very balanced approach to employment. It has been difficult and I do not think anybody would dispute that in these times internationally when there has been a lot of tension in the world employment market. But New Zealand has been remarkably resilient through that process.CHRIS AUCHINVOLE (National):It is a pleasure to follow on from the chair of the Transport and Industrial Relations Committee and indeed it is with pleasure that I see we have the two Ministers involved in employment and employment conditions—both are held in considerable respect. The subject of employment relations touches all our lives in some form.Darien Fenton: Wrong portfolio. Wrong vote.CHRIS AUCHINVOLE: It is a very significant aspect of economic growth and employment relations have changed and advanced hugely over the years. I speak unlike the lady member on the other side as one old enough to have worked through the changes and have experienced the results of them as an employee as an employer and as a sole trader.Paul Goldsmith: You’ve covered all the bases.CHRIS AUCHINVOLE: Well not quite because what I have not covered was being a politician and to be a politician provides a much wider aspect of consideration.Paul Goldsmith: Have you been unemployed?CHRIS AUCHINVOLE: No I have never been unemployed. It is funny you should say that but I do not think I ever have.Sure there has been an improvement but we still need to improve further and we need legislation to improve it further and this Government I am very proud to say is focused on a series of steps to produce better results. National’s focus is on creating more and higher-paying jobs for New Zealanders as part of our plan to build a more competitive and productive economy which is only one of our four priorities this term. A flexible and fair labour market is crucial for encouraging economic growth; I think everybody agrees with that. This Government knows that a flexible and fair labour market is crucial for encouraging economic growth. This Government is focused on protecting jobs and ensuring fair wages.The results so far. If we look at our results so far we can pick on just a few items for which I am sure given the consideration of time even Opposition members will see the benefits of them. Our starting out wage is now in force. Young people get the chance to gain experience and job skills where they are currently missing them or have been missing out. The starting out wage we estimate could create up to 2000 new jobs for 16 to 19-year-olds in its first 2 years. We have supported and created jobs.Ninety-day trials have encouraged businesses to take a chance on new employees. Has this worked or not? We say that more than 13000 jobs have been created with that. Eighty percent of employers retained their staff once this trial period was over—80 percent of workers stayed with their selected place of work. I remember we heard somuch that we were going to have “name and shame” examples from the trade unions of companies that were using it as a device to get rid of people after 3 months.David Bennett: Where are they?CHRIS AUCHINVOLE: Where are they? Where is the list? We have not heard it yet. We have not heard it.Nearly 60000 more Kiwis have jobs now than 2 years ago. That is from the household labour force survey. I believe and I am open to correction that there are more New Zealanders in work now than ever before. I am getting nods from Minister Paula Bennett. I am getting agreement from Minister Bridges. These are the people who know.We made the Holidays Act more flexible. We have raised the minimum wage every year. We have taken a careful and balanced approach that prevents workers being priced out of the labour market. We have supported working parents and continue to discuss that—we continue to discuss it. Our next steps include—Tracey Martin: “Continue to discuss it”? You’re going to veto it.David Bennett: There’s a mouse over there somewhere.CHRIS AUCHINVOLE: What is that? Sorry?David Bennett: There’s a mouse over there.CHRIS AUCHINVOLE: Thank you Mr Bennett—thank you. We are establishing several new reforms as our next steps. We are establishingWorkSafe New Zealand and implementing the report recommendations from the Royal Commission on the Pike River Coal Mine Tragedy. I guess the message is clear from the Ministers: if you want to create wealth there had better be full regard for the health and the safety of all involved because that is going to be a priority. The royal commission sat in Greymouth and I strove to be at the hearings whenever the parliamentary calendar allowed. It was a very very sombre part of my life and of the lives of everybody who was there. Since the recommendations have been presented a lot has happened and it will continue to happen. Let us look at some of those things now.Hon PAULA BENNETT (Minister for Social Development):I am reluctant to interrupt the member Chris Auchinvole because he was doing such a great job. He was making what I think is a really valuable point which is that for all of the rhetoric it is businesses that will create jobs for people for families. We are seeing an economic recovery that is gaining momentum and making a real difference. If we think about where we are at we have got the lowest interest rates we have got investment and we have got strong export prices and that is making a difference to the businesses that are out there doing the hard work and they are the only ones. In west Auckland I say that the only way that a young person is going to get a job tomorrow is if a business actually decides that it can take them on. It is not about the Government creating jobs; it is about creating the environment that means that businesses are successful and actually saying that businesses are successful and we will celebrate that success and stand next to them and put it in place as we do. Economic growth is at the highest it has been in 5 years. It is almost the same as in Australia and certainly better than in most of the other countries that we like to compare ourselves with.Sue Moroney: A tsunami of redundancies.Hon PAULA BENNETT: I do want to pick that up because I can hear the Opposition members saying that we have been losing all these jobs and everything. What we do not talk about in the media and which we should be is celebrating our businesses and what they do and those jobs that have been created. So 65000 jobs have been created if you go by the household labour force survey in just the last 3 years. We have seen 1000 new jobs on theWaterview Connection. We see nearly 2000 jobs in the ultra-fast broadband roll-out. We have seen 1000 jobs in building Wiri Prison. Wesee 350 jobs at Marsden Point and 400 jobs through IBM at Unitec and 1500 jobs atFonterra’s new Darfield operation. These are not the jobs that the Opposition wants to talk about but they are real jobs for real people who are raising families in this country and it is making a difference for them.Let us go back to 2008. Certainly when I first became the Minister for Social Development what I saw was the number on the unemployment benefit going up in three quarters in a row under the Labour Government and 30000 more people actually out of work. I think that that was a tragedy. We had to step in and we had to step in fast. We heard projections of the unemployment benefit going to 100000 people or more. We heard all of the horror stories and we heard all of the frightening in going out there for those businesses for those individuals and their families but the truth is that the highest unemployment we got to was 68000 and that was in January 2010. At that point and now when we look at it we have actually got around 47000 to 48000 people who are on the equivalent of the unemployment benefit. In the last year alone we have seen 7600 net come off the DPB to make a difference and go into work and I think that that is making a major difference in their lives—the lives of them and the lives of their children.I see it every day and I have people coming up to me and saying: “I didn’t think I would get a job in this kind of environment and I have.” They tell me very personal stories of them and their families. One story is about a woman who had been on welfare for 28 years. She had been on welfare for 28 years. She went in last year to actually change her benefit because her children had got older and they said to her: “How about we talk about what you can do? How about we put you into some training?”. She got a job. She actually got a job in a customer service role in an engineering firm. She started there in October last year. She is still in that job today and she said that it made a difference for her adult children. All three of them had been on a benefit. Two of them are actually now off the benefit and actually in work as well because of the difference it made for not just her but her entire family and that is making a difference. It makes a difference to people’s income.You want to talk about how you get out of poverty? You are not going to do that sitting on a benefit. So it is about actually supporting those businesses giving them the right economic environment spending taxpayers’ money well so that it actually generates that sort of employment. It is actually giving them assurances that there will be stability and that the right kinds of policies will constantly be put in place. Members opposite can rubbish it all they like but the reality is that there have been significant changes which have really meant that young people in particular are going into work and staying there.Vote agreed to.Vote Science and InnovationDr CAM CALDER (Chairperson of the Education and Science Committee):It is a great pleasure to take a call in this estimates debate on Vote Science and Innovation. The Government understands how important a strong science and innovation base is to our economy. Accordingly Vote Science and Innovation for 2013-14 increased to over $927 million—that is $927 million—from an estimated actual expenditure for the previous year of $800 million. Budget 2013 contained $200 million of new funding over the next 4 years for science and innovation because we recognise that science and innovation are key drivers of economic growth and international competitiveness—Tracey Martin: $3 million for eels. That’s all we need—$3 million.Dr CAM CALDER: International competitiveness and economic growth Ms Martin.To maximise our performance New Zealand needs to develop better linkages with international markets and be a stronger player in research and development. Increasing our funding in Vote Science and Innovation will help support our businesses to grow it will support our businesses to deliver more jobs it will support our businesses to deliver higher-paying jobs for New Zealanders and it will inevitably improve our living standards. As mentioned our estimates for Vote Science and Innovation were over $927 million. In fact the total gross portfolio funding for Vote Science and Innovation is a massive $1.36 billion in 2013-14. That is a rise of 28 percent—28 percent—over the last 4 years.So what is some of the spending? How is it deployed? New funding over the next 4 years includes $75 million for business research and development grants $31 million for repayable grants to start-up businesses $73 million for our innovative National Science Challenges and $20 million for the Marsden Fund just to name a few. Let us look at some of these areas in more detail. This year’s increase for the Marsden Fund reaffirms the Government’s ongoing support for fundamental investigator-led research.Dr Rajen Prasad: He’s reading a speech.Dr CAM CALDER: I know you are excited Mr Prasad and it is very real excitement. As the Minister of Science and Innovation has observed the New Zealand science system is a crucial part of our competitive advantage internationally. It strengthens innovation and our tertiary education sector and as we have talked about provides many international linkages which are so crucial to our success economically.Access to the Marsden Fund is an important factor in attracting and retaining high-quality scientists in New Zealand. Since 2008 we have increased support for the Marsden Fund by 37 percent—37 percent. The funding forms part of a $100 million a year internationally focused package which of course was a centrepiece of the 2013 Budget. The funding will enable our country’s top scientific researchers to conduct quality research in their fields of expertise which will have flow-on effects for many in the New Zealand science community. The increased funding will actually lift the size of the Marsden Fund by 11 percent which will improve the success rate for eligible researchers bidding into the fund which as we said is one of New Zealand’s premier investigator-led research funds.We have thought outside the box. This is an innovative Government. It is a wide-thinking Government. We have thought outside the box and announced the final 10 selected National Science Challenges and given them a $73 million boost over the next 4 years to fund them. What are these? These science challenges will tackle some of the biggest science-based issues and opportunities facing New Zealand and are designed to take a more strategic approach to our science investment by targeting a series of goals that if they are achieved will have a major and enduring benefit for New Zealand.After engaging with the science sector and the public through The Great New Zealand Science Project an independent panel recommended a number of challenge areas to the Government. The challenge is to provide an opportunity to align and focus New Zealand’s research on large and complex issues by drawing scientists together from different institutions and across disciplines to achieve a common goal through collaboration. We believe aligning and focusing research in this way in our small and somewhat fragmented scientific community will help the Government and New Zealand get better value from its $1.3 billion investment in science and innovation. So what are some of these research areas?Vote agreed to.Vote Tertiary EducationDr CAM CALDER (Chairperson of the Education and Science Committee):It is a rare pleasure to rise and address the Committee.Tracey Martin: How lovely to see you!Dr CAM CALDER: Thank you thank you. Vote Tertiary Education increased to $2.881 billion in 2013—$2.881 billion in 2013—from an estimated actual spend in 2012 of $2.745 billion. Budget 2013 commits over $130 million in new funding for investment in tertiary education. We are continuing to make investing in engineering and science a priority as these skills are crucial for growth in our economy and have been the subject of under-investment in the past.Industry demand for skilled engineers and scientists remains high and the Budget has addressed these issues by increasing funding for tuition subsidy rates in engineering and science programmes across the tertiary education system. New initiatives in this area over the next 4 years include an additional $9.3 million for engineering a 2 percent funding increase per equivalent full-time student; an additional $17.9 million to science a further 2 percent increase; $28.7 million for private training establishments to close the remainder of the gap in student achievement and component funding with tertiary education institutions. There is an additional $32.4 million to assist in meeting the Better Public Services target of increasing the proportion of 25 to 34-year-olds with National Certificate of Educational Achievement (NCEA) level 4 or higher to 55 percent by 2017.This Government sets itself targets and we are prepared to be held accountable for the targets that we set ourselves. In this case we believe it is in the interest of our country to see an increase to 55 percent in the proportion of 25 to 34-year-olds with a qualification of NCEA level 4 or higher. We are also aiming at a $6.3 million increase to equity funding pool to maintain the current rates per student confirmation of youth funding rates to support New Zealand apprenticeships and other changes to improve the industry training system. The Government will use a new benchmarking tool in the coming year to determine the relativities between tuition funding of different disciplines that may need to be further changed in the future. We recognise that some higher-cost subjects may still be relatively underfunded compared with low-cost areas like management commerce and the arts.The tertiary education sector is a key driver of New Zealand’s innovation productivity and growth and we are continuing to make significant investments in tertiary education while working to improve the overall performance of the sector. One of the Government’s tertiary education priorities is lifting achievement forMāori and Pasifika students. It was really gratifying for me with my office in Manurewa—the vibrant and diverse community of Manurewa—to hear just 2 weeks ago that the Tertiary Education Commission had announced its support for Auckland University of Technology’s expansion of its Manukau campus with a total investment of around $90 million.This expansion will see the number of full-time equivalent students at the Auckland University of Technology in Manukau increase from 940 to 4100 by 2020 which is a significant increase. This is really important because South Auckland is home to one of New Zealand’s fastest-growing and most youthful populations. Forty percent of its residents are under 25 and the quadrupling of full-time places at Manukau is a very significant milestone in the work this Government has undertaken to make tertiary education more accessible to the aspirational folk who live in those vibrant and diverse communities of Manurewa and Manukau.There is a huge demand for tertiary education in the region—a region dear to my heart as I say as I have my office based there. In 2011 there were 13000 students fromManukau enrolled in universities across New Zealand. That number is expected to reach 18000 by 2021. That is why it is important as the Minister for Tertiary Education Skills and Employment the Hon Steven Joyce observed this afternoon in the Chamber that we make the investment in expansion in the region now. The current Auckland University of Technology campus in Manukau has been successful in improving participation for our priority students and we believe it will continue to do so. Nearly two-thirds of the current students are from decile 1 to 3 schools.Vote agreed to.Vote ACCagreed to.Vote Justiceagreed to.Vote HealthHon ANNETTE KING (Labour—Rongotai):Surprise surprise here we are again. Five years this Government has been in office—five Budgets 5 years of National Party policies 5 years of the Minister of Health and 5 years of his control of the health system. I say to the Minister that it is time he took some responsibility for the health issues in New Zealand because 5 years of blaming the previous Government just does not wash out there with the public any more. It has passed its use-by date and makes him look like a weak Minister. It is just not credible. So it is time for Tony Ryall to man up and to answer some of the growing problems that are in our health sector. You see the “more good news” rhetoric that he rolls out every week is now seen for what it is—nothing but hollow rhetoric.I think it is time that we launched the Tony Ryall BS barometer. This is a barometer that measures his promises against the reality. Have a look at some real evaluation of what is going on in health based on the evidence based on his clinicians his doctors and nurses and their assessment of what is going on in our health sector. Let us start with his health targets. His four health targets are nothing more than political tick-box targets to make him look good. They are his league tables that he has printed every quarter to trumpet about how well the health system is doing. I have no problem with having targets but when they become the major driver of everything that happens in health to the extent that other things are excluded then you have to question those very targets.On Monday this week the director of the Association of Salaried Medical Specialists spoke to the Hospital and Community Dentistry Conference and he had this to say. This is from the representative of our most senior doctors in New Zealand. He said: “Stressed hospital staff being micromanaged to meet targets are putting patients’ lives at risk”. He said that “A combination of increased government expectations on hospitals and diminishing increases in funding meant resources were being stretched”. He said further: “Elective surgery was being pushed through as quickly as possible with shorter operations being given priority ‘so you are in luck if you have a simple fast operation and out of luck if it is complex.’ Post-operative care or post-clinic follow-up is being compromised because specialists are too busy. Mistakes by rushed staff in emergency departments mean patients are being sent to the wrong hospital department delaying treatment. Those with chronic illnesses are missing out. ‘Because chronic illnesses are ongoing and complex they don’t lend themselves to targets’.” He said that senior management and specialists were being bombarded with calls and texts from central government which meant they were constantly distracted to the point that mistakes were being made.That comes from the representative of the most senior doctors in New Zealand. If the Minister was in the chair answering these questions his answer would be: “Well he would say that wouldn’t he because after all they want a pay increase.” Mr Ryall will know that the pay round for senior doctors has now been settled so anything that has been said since the settlement of that pay round cannot be blamed on them grandstanding to get more money.I believe that those specialists in our hospitals are seeing the real financial stress that our hospitals are under and there is tremendous financial pressure. You are seeing it and members opposite cannot deny that they are seeing it. They have constituents who have received letters like the ones that I have in front of me. These are letters from district health boards that say: “Due to the demand of referrals being received for patients to have an orthopaedic assessment and the need forDHBs to honour their commitment to seeing patients within 5 months the orthopaedic service is only accepting urgent referrals.”—urgent referrals. What is happening up and down New Zealand is that thousands of New Zealanders are not even getting a first specialist assessment. They are receiving letters like this telling them that they do not meet the financial threshold.Here is another one from another district health board. This one is from Hawke’s Bay saying that they cannot see this patient within the current resources and capability. When the Nelson clinical director sent a letter to all the general practitioners of that region saying “Sorry with financial constraints we can only see your urgent patients.” the Minister then attacked the messenger.Sue Moroney: He always does.Hon ANNETTE KING: He always does—you are quite right. He attacks the messenger.There is huge financial pressure on our district health boards. What the members opposite might not know is that the district health boards in this Budget in this year received the lowest increase in funding that district health boards have had in a decade. They are not my figures. Those are Treasury’s figures—the lowest increase in funding that district health boards have had in a decade.We have mounting problems with the very staff who are needed to treat our patients in our hospitals. We heard at the select committee that the Minister had to confess that 30 percent of our graduate nurses are not getting jobs at the time they graduate. He likes to trumpet 1000 extra doctors and 2000 extra nurses since National became the Government.Dr Paul Hutchison: It’s true.Hon ANNETTE KING: Of course I actually do dispute the figures but let me answer Dr Hutchison who actually knows how long it takes to train a doctor. It does not take 5 years to train a doctor. It takes a minimum of 8 years to train a doctor and at least 3 years and more for a nurse. So nearly every single addition to our health workforce was trained under a Labour Government—not under a National Government but under a Labour Government.We have some looming problems in staff shortages in specialist areas but also in nursing. Nurses who are graduating and not getting employment is a waste of taxpayers’ money and a waste of a human resource. They had to admit at the select committee when nurses do not get a job 10 percent of them have decided after all that training that they are not going to take up nursing at all.I know that the Minister went on to say how good things were for nurses in the health sector. Maybe he ought to read the email that was sent to him not long after he said that. It was from the husband of a nurse. He said: “I object to your media release that nursing graduates can find jobs. My wife works as a nurse and is very often forced to workhours and hours for which she is not being paid because of low staffing levels. There are shortages of nurses in our hospitals and mistakes are being made because of this.” He went on to say to the Minister: “Your Government’s move to present legislation this year that takes away even our tea breaks shows what you think of our nurses.”Then there was a very interesting story about an A-grade nurse a top graduate nurse in New Zealand this last year who has applied and applied for jobs and has not even got an interview. There is a disconnect here between us having a job shortage and nurses not being able to get jobs. This is something that this Minister definitely needs to address.Then today on the front page of theDominion Post we saw the most disgusting of stories about aged care in New Zealand. This is a whole area that is not of importance to this Government.Dr Paul Hutchison: There were worse 6 years ago.Hon ANNETTE KING: They are not of importance to this Government. They are certainly not of importance Dr Hutchison for all the crocodile tears from the district health boards that say: “We’ve put in another $200000 for aged care.” I have to say then why are old people having their home care cut? Why have the district health boards still not provided proper travel allowances for those who provide the care?Rural Women New Zealand wrote to the Minister only a month ago and said that Rural Women New Zealand requests that district health boards urgently implement a sustainable consistent and fair travel policy for home support workers because they know that the very people who are caring for those older people are the lowest-paid workers who then have to pay for their own travel to get to their jobs. And nothing happens. In terms of quality of care it is time that this Government implemented the recommendations from the Human Rights Commission report.KEVIN HAGUE (Green):I would like to start by endorsing everything I think that Annette King has said in those two contributions and in particular the quotations that she made from Ian Powell’s address. That focus on the goals and targets and the inappropriate use of them by this Government is I think entirely to the point because although goals and targets are very important and they are a very useful tool the Minister of Health must be incredibly careful about choosing the rights ones. The inevitable result of focusing on some particular things is that the system will apply less focus to everything else. This Government has chosen the wrong ones.In this contribution I have got the time to talk about just a couple of things that are relevant to the estimates debate. The first of those is elective surgery which you would think was the Government’s star performer because literally any question about health that is asked in this House is responded to by the Minister saying: “Oh look elective surgery has increased.” And it is true. The number of operations that are being provided by district health boards has increased and actually that does reflect that there is greater investment in that particular area of sector performance. But elective surgery is just 5 percent roughly of what the whole sector does. So that 5 percent has more resource at the literal cost of every other part of the sector.But there is more. Not content with just shifting resource from other health services into elective surgery there is also some game playing going on. There is a measure of effectively complexity of surgery that is used called “case weighting” and one of the issues that I asked the Minister about when he appeared at the Health Committee was declining case weights. The fact is that case weights—the average complexity of the surgery being performed in elective surgery—have been declining under this Government. In 2007-08 the average case weight was 1.299 the following year it was 1.29 the following year it was 1.27 the following year it was 1.252 and then last year it was 1.247. That is not a big decline but it is a steady decline of about 1 percent peryear. Over 150000 operations that amounts to a very substantial reduction in the complexity of surgery that is being performed. It explains why in an environment of increasing elective surgery the person who has serious and complex needs may still be struggling to actually get the help that they need. So even the jewel in the Government’s health crown is actually a pretty lacklustre one.In contrast one of the other areas that I have been asking about is diabetes. We have the PricewaterhouseCoopers estimate that the cost of health services alone for diabetes will in just 8 years’ time be $1.7 billion per annum. We also know that the cost of non-health services coming from diabetes—the other cost to our economy to our families and to the individuals—is more than that again. To any independent observer who is considering those statistics let alone any person with diabetes this is an urgent and catastrophic problem that requires desperate action. Yet when I asked the Minister what the Government is doing to prevent diabetes his answer was—let us see—oh Fruit in Schools nutrition and physical education public health campaignsKiwisport Health Promoting Schools the Green Prescription programme and newborn and toddler nutritional programmes. All of those are certainly programmes with some merit. We would be doing those too. But the fact is that there is too little investment by a factor of probably 100 and what is more the Government is entirely allergic to those responses that we know are most likely to have an effect. Those are the regulatory responses that control the entire environment that drives the diabetes epidemic in the first place. This is a Government that is committed to doing nothing because it believes that that is the best way that it can control its political risk. That is not good enough.Dr PAUL HUTCHISON (Chairperson of the Health Committee):The estimates for 2013 show a record budget of $14.1 billion going into health. This is a remarkable feat—$14.1 billion—following the global crisis 4 years ago. It is extraordinarily rich to hear from Mrs King who doubled the health budget and yet saw nothing more come out after 9 long years. There was decreased productivity and there were huge huge waiting lists. In fact I remember very clearly back in 1998 when she accused Bill English of being criminal because the waiting lists were about 10000. Well 4 to 5 years later they were 40000 to 50000 and she was busily culling them 10000 to 20000 at a time. It is very very rich for Mrs King to get excited and start shroud waving the way she did just a few minutes ago.Annette King feels absolutely upset that under the National Government the health targets are going so well. Only 4 to 5 years ago the immunisation completion rate for 2-year-olds was about 67 percent. Now it is 93 percent. The Health Committee heard at the end of last year from the Bay of Plenty District Health Board about a little town called Te Kaha where it said 100 percent of women had their cervical screening 100 percent of children aged 2 completed their immunisation and 100 percent of women had their breast screening. That is a phenomenal achievement in a low socio-economic rural largelyMāori area of New Zealand. It is something to be celebrated. It is something to be celebrated under an incredibly progressive National Government.I also remember—again under Labour when Mrs King was in power—many women being sent to Australia to have radiotherapy for cancer and the huge dislocation from their homes and from their families. Today 100 percent of women who have radiotherapy do so within 4 weeks. That is absolutely world’s best practice gold standard treatment and it is happening under a National Government. That is how well the targets are doing under this Government. That is why Mrs King is so so embarrassed by the fact that her legacy was so poor during those 9 long years.Mrs King wants to drag up all sorts of things. She goes shroud waving at the first moment she possibly can. Health is a huge and complex sector and overall under National it has done superbly well. One just has to look at waiting times at accident andemergency units throughout the country. Five years ago about 63 percent of people got through without having to wait 6 hours. Today it is something like 93 percent and it is getting better and better as we speak.The programme to help people quit smoking has been a huge phenomenal success. They were not even recording the number of people who were given advice in New Zealand hospitals as to how to quit smoking 4 to 5 years ago. Today we are getting up to 95 percent being given advice in hospitals on quitting smoking and the target has been re-set so that advice on quitting smoking is also being given out in the community.The estimates for 2013 under this National Government recognise very much that if health spending went on the way it had been going under Labour it would be utterly unsustainable. We certainly have made sure that productivity has gone up. We have certainly made sure that we have put in the mechanisms and tools to ensure that every health dollar is spent well. I think that the record under National is like nothing we have ever seen before in the health sector and we can be very proud of it.BARBARA STEWART (NZ First):I am very pleased to take a call in the estimates debate. At this point in time New Zealand First is appalled at the way that the health system is being managed. The focus is totally on outputs rather than on outcomes and this is being actively encouraged by the Government. Ensuring that the numbers are right—and we hear a lot about the numbers—is not the best outcome for people who are waiting for operations and assessments. People are being shifted around on the waiting lists for years. They are having their cases reviewed regularly within the 6 months but there is no action no real attempt to get them off the waiting lists. Yet the overall view—and we have heard it from Dr Hutchison—is that hospitals are meeting their output criteria.There is no thought of outcomes for individuals. One lady I was talking to over the adjournment is waiting for a cataract operation. She started waiting 2½ years ago. She is now fearful that when she goes to sit her driver’s licence later in the year because it needs to be renewed she is going to fail because she is unable to see as well as she should and is unable to see as well as she could if she had a cataract operation.Today I also got a letter from a gentleman who has been waiting for a cardiology test. Semi-urgent is the classification that has come back from the hospital: “Although your referral is semi-urgent we are unable to offer you an immediate appointment. However it is our intention to ensure people do not wait longer than necessary and with that in mind an appointment time will be forwarded to you by mail as soon as is practicable.” When is that appointment time? It is 2 January 2014. This letter was actually written by the MidCentral District Health Board on 16 May 2013. Is there any guarantee that that gentleman will still be around in 2014? As he said he has paid his taxes. He has never been to hospital and asked for an operation but he really believes that he needs this operation and it sounds as if he should get it. This is a totally appalling state of affairs. How many other people are out there in exactly the same situation who have not contacted anybody?New Zealand First would say that many people are sitting and waiting patiently trying and struggling to get the care that they need from the health system. Surely it is far better for people to be able to get out and about rather than be sitting at home with all of the problems that that can create. We need to keep people active and involved in the community. We hear enough about the horrors of rest homes. Making sure that the statistics are right and that they read well is not helping people.The second issue that I want to bring up is the issue of hepatitis C. The Government does not seem to consider this to be a priority which is absolutely horrifying considering the lack of concrete data there is about hepatitis C infections in New Zealand. We acknowledge that the national community support programmes are reallygreat for New Zealanders already infected with hepatitis C and we would like to see these progress but infection control standards for unregistered tattooists and youth-focused awareness programmes on transmission are needed to reduce the number of new infections. The Government is focusing on being the ambulance at the bottom of the cliff rather than on building a fence at the top. The Government needs to take this opportunity to regulate the back-alley tattoo industry rather than sit back and wait for disaster to happen.Basically we believe that people are far more important than statistics on throughput. This seems to be the health record of this Government which is appalling. Just recently talking to some young first-year medical students who cannot get a placement—Dr JIAN YANG (National):According to the OECD Better Life index when asked “How is your health in general?” 89 percent of the people in New Zealand reported being in good health. This is much higher than the OECD average of 69 percent. This report states: “Despite the subjective nature of this question answers have been found to be a good predictor of people’s future health care use.”The finding is not surprising at all. The fact is that while many developed countries around the world are freezing or even reducing health funding National is investing an average of $500 million extra each year in public health services. We are spending $14.7 billion on health in Budget 2013 the most ever. We are making each dollar go further delivering 1000 more doctors and 2000 more nurses with 1000 fewer back-office staff. National has had 4 years of record increases in elective surgery with 35000 more patients a year getting elective treatment than under Labour. Patients who need radiation or chemotherapy treatment begin treatment within 4 weeks. Just last week I visited a former colleague who is recovering from her cancer treatment. She said she had received treatment without any delay.Also more cardiac services are being provided today—faster—and Wellington Regional Hospital is not having people die while on cardiac lists as it did under Labour in 2007. Other achievements under National include that 94 percent of emergency department patients are seen within the 6-hour target. In 2009 many district health boards were seeing less than 70 percent of patients. Eighty-nine percent of 8-month-olds are fully immunised—on track for 95 percent by 2017. Under Labour in 2007 just 67 percent of 2-year-olds were fully immunised.Also the National-led Government is committed to ensuring that New Zealand children get the best start for school and is investing an extra $7 million in the B4 School Check programme so that even more children receive these important checks. A record 52000 4-year-old children had a free B4 School Check last financial year. For the first time we have reached a target of 80 percent of 4-year-old children being offered a check before they start school. This is a significant improvement from a few years ago when only around half of 4-year-old children had received B4 School Checks.This year’s Budget includes a significant boost to funding in the areas of heart disease obesity and diabetes with a strong focus on prevention. There is $35 million for more heart and diabetes checks improved local diabetes care improvement programmes and doubling of the funding for Green Prescriptions. The Government also continues to invest in expanding medical school places. Since National became the Government we have lifted the annual intake from 365 students to 505 students.In this year’s Budget we continue to protect and grow public health services. Prudent management of the health budget has allowed the Government to invest in more new initiatives and the changing needs of our population. I would like to take thisopportunity to congratulate and to thank our most capable Minister of Health the Hon Tony Ryall. Thank you.Vote agreed to.Vote EducationDr CAM CALDER (Chairperson of the Education and Science Committee):It is a great pleasure to take a call in the estimates debate. This Government has worked assiduously and relentlessly to improve education for all New Zealanders. We know that four out of five of our children do well but we are steadfastly concentrating on unlocking the potential of five out of five of our students. We realise that successful education is a tripod: it is the school it is the student and it is also the parent. The estimates funding that we have provided addresses all three of these areas.We are cognisant of the McKinsey report which looked at the reasons why countries like Japan Korea Finland Singapore and parts of China did extremely well with their education. It was clear. There were three common areas. They got the best teachers they got the best out of teachers and they intervened early when children fell behind. Our policies take into account these well-known and proven observations. In fact National is going to spend $12.4 billion in this 2013-14 financial year across the entire education sector—$12.4 billion. We are doing this because we understand that ensuring that a child gets a good education is the most important thing we can do to unlock the potential within that child and thereby raise the living standards of the whole country—so there is a little bit of self-interest in there—and create a more competitive and productive economy which is one of our priorities for this term in Government.For early childhood education and schooling Budget 2013 increases spending on education for the fifth Budget in a row—due to the excellent work of our Minister of Education and her predecessor it has to be said—to $9.7 billion for 2013-14. It should be noted that New Zealand’s education investment in early childhood education and schooling is 7.2 percent of our GDP. That is well above the OECD average which is around about 5.8 percent. It is a significant point to note. Not only that but our investment in early childhood education will be $1.5 billion. I will say that again—$1.5 billion—because I have had the displeasure of going to the Manurewa markets and seeing members of education unions getting folk to sign petitions against spending cuts in early childhood education when in fact no Government has ever spent more. It is disingenuous and absolutely outrageous.Our total investment in early childhood education is $1.5 billion up $660 million since 2007-08. Over 4 years the funding includes $41 million for equity funding and $39 million for universal subsidies to support participation for vulnerable children in our most needy communities which happen to be where I am working so I am very very happy with this initiative.Regarding participation in early childhood education we have set ourselves targets. This Government is not afraid to hold itself to account. In the 12 months ending 2013 the early childhood education participation rate increased from 94.7 percent to 95.5 percent. We are setting ourselves a target to improve that even further—up to 98 percent participation in early childhood education by 2016. We realise that this is not going to be easy. We realise that the Ministry of Education needs to secure participation of the kiddies who are the most difficult to access and the most hardest to reach—those who have proven the most hardest to reach includingMāori and Pasifika and those in lower socio-economic groups. We—Paul Goldsmith: The most hardest? What do you mean?Dr CAM CALDER: Thank you very much. The hardest—the hardest to reach. Thank you. Thank you very much—the hardest to reach.On the select committee we heard of a number of initiatives to help reach these communities including engagement with the Ministry of Pacific Island Affairs Pasifika churches and the New Zealand Rugby League. These are pretty innovative and this is helping to increase the participation from our most difficult to reach communities by thinking a little bit outside the square. They are also funding initiatives—CATHERINE DELAHUNTY (Green):Tēnā koe. The estimates debate on education is a little bit depressing. It is a little bit like Alice has fallen down the rabbit hole and ended up in a parallel universe. I sincerely believe that all of us in this House care about education and see its value. I do not think there is anyone who does not. That is not the problem. The problem is whether we are going to have an evidence-based policy or whether we are going to have an ideology-based policy. It is clear from the estimates priority setting that despite the rhetoric that all children must have access to high-quality education there is actually a narrow focus in the National Government’s policies. There is a narrow focus around assessment and around failed examples of charter schools which lack evidence.I read today some of the OECD’s Programme for International Student Assessment volume 4 report. It makes some very interesting points. The Programme for International Student Assessment now believes that choice and competition have failed to lift achievement. It provides some very substantial examples and studies that show that there is a strong socio-economic issue as well as a strong issue around teacher status and society’s attitudes towards education and towards the profession. So we have this bizarre situation where on the one hand the Government is saying that we need quality teachers and the best teachers and then we have the proposal that some schools will have only a proportion of registered teachers. So there is very much a double message coming out of the education policy at the moment.Recently the Government hosted a gentleman called AndreasSchleicher I think it is from the OECD and I went along to his presentation. One of the things he said was that low-income United States students did far worse than high-income students but poor kids in Finland and Canada do far better despite disadvantage. According to the Programme for International Student Assessment that is because—Colin King: What a lot of rubbish.CATHERINE DELAHUNTY: Well the Government hosted this gentleman from the Programme for International Student Assessment the OECD people and he said this. He said that it is because the focus is on equity or the focus—Colin King: That member misheard him.CATHERINE DELAHUNTY: I am quoting his written statement. He said it is because the focus is on equity or the focus is on the idea of competition and choice which has failed. We can have either a focus on high trust in teachers a broad curriculum quality teaching and a goal of equity which is certainly the model that the Finns are committed to or a model that talks about choice and competition which has actually failed. It is interesting to see internationally—it is a little like New Zealand still trying to build motorways when everyone is trying to stop building motorways—that we are now trying to introduce policies that other people are abandoning because choice has turned out to be no choice. It has failed the children whom we most want to support and we all agree that those children need that support and deserve it. Even when a numbers guru who believes that education is some kind of mathematical formula has conceded that charter schools have not made a difference we carry on like lemmings to the cliff edge of choice except it is our least advantaged children whom we are chucking off the edge to the non-existent ambulance at the bottom which used to be second-chance adult education before most of it was cut. That is not a pretty sight.Today in the House we learnt that charter schools otherwise known to some people as partnership schools will have a significant percentage of registered teachers but we do not know how many. One to 200 kids or 50 percent qualified—who knows? We are relying on the idea that there is such a thing as a limited authority to teach. The limited authority to teach was brought in for people who were going to transition into full registration. It was not brought in as a mechanism for getting rid of qualifications and registration in teaching. I am all for the idea of a limited authority to teach and I am all for the idea of bringing people into schools with different skills to support our children’s learning in a variety of ways. But I do not believe and neither does the OECD that you should put the most vulnerable children in a situation where they do not have people with a pedagogical grasp. If you are going to look at who is missing out—if you are going to look at students with disabilities for example—are you going to put people in front of them who have no pedagogical background in how learning works?These are critical educational questions and the answers have to be evidence-based. We cannot just randomly hope that some experiments that have failed elsewhere will randomly work better over here so long as we meet outcomes and contracts. The language of outcomes and contracts the language of business is not the language of educational success. I think that is what the international work has shown—that we are actually heading in the wrong direction when we come down to who it is who is missing out. It is a fundamental question about disadvantage and about the idea of investing in children in terms of cultural inclusion which is a big issue for this country and equity and quality. So we need to invest in those programmes—and some of them are costly—that are going to make change in schools. That does not mean getting rid of registered teachers.SUE MORONEY (Labour):I would like to take the opportunity to speak on the early childhood education part of the Vote Education estimates for this year. In doing so I just want to correct a statement that was made by a previous speaker who actually I think accused teachers of being dishonest. Again it is the National Government having a crack at teachers. I do not know what it is that the National Government has got against teachers but it was actually early childhood education where it started the war on teachers.The Government started it back in 2010 under the then Minister of Education Anne Tolley when there was $400 million cut out of Vote Education for early childhood education. That $400 million that was cut out at that point has never been reinstated. That is why teachers complain about funding cuts in early childhood education. If any of the National MPs opposite dared to go to their local kindergartens and into their early childhood sector and ask them about whether they are funded to employ 100 percent qualified staff any longer they would be told very clearly that they are no longer funded for that because that Government cut the funding for 100 percent qualified staff.That is where the dumbing down of education started. It started in early childhood education and of course what we know is that once the Government thought it could get away with dumbing down the quality of education for early childhood education it then started to attack the compulsory education sector. The Minister of Education may laugh. She thinks she has got away with it. She thinks she has had a great old time actually dumbing down the quality of our education but New Zealand parents and children are going to be the worse off for that Minister. It is not in fact a joke for those families who immediately faced an 11 percent increase in the early childhood education fees that they paid in the year immediately after the 2010 cuts to qualified staff in early childhood education.We are still waiting to hear the outcome of the Early Childhood Education Task Force report recommendations. It has a recommendation sitting in front of the Minister to this very day that actually says that the universal subsidy for 20 hours’ free early childhood education should be cut. That is what a Government task force has recommended to the Minister. That recommendation has been sitting before the Minister for about 18 months now and the Government has not been brave enough to move on it. So we wait with bated breath to see whether there are further cuts coming up in early childhood education and whether parents will in fact be paying even more in fees. The Minister may find it funny that parents are having to struggle to find more money to pay for early childhood education for their children but I can tell the Minister that families up and down the country do not find it very funny at all.There is a big question mark over where the slight increase in participation is coming from because it appears that it is coming fromunresearched non - evidence-based supported playgroups. We do not know what the quality outcomes are for children using supported playgroups but this Government does not care. All it cares about is whether it can put the numbers on the page and the bums on the seats. It is not interested at all in the quality of the early childhood experience for those children. That is a real problem for the future of this country because all of the research and evidence tells us—yes we on this side of the Chamber look at that—that it is quality early childhood education that makes the difference not fly-by-night early childhood education not a bit here and a bit there—Hon Tau Henare: Name one fly-by-nighter—name one.SUE MORONEY: —and not supported playgroups Mr Henare which we have absolutely no information on. We have no evidence about what the quality is of the outcomes for those children. Yet that is what the Government is pinning all of its hopes on. It keeps going on about the 70 percent increase that it has apparently put into early childhood education funding for about a 2 percent increase in participation. Well I ask the Committee whether that is a good spend of money.COLIN KING (National—Kaikōura):Just to add a bit of history for the benefit of the last speaker Sue Moroney when Labour was in Government the teaching level at early childhood education centres was funded at around 67 percent and what we have at the moment is a funding level under a National Government of 80 percent teacher-led. We have a lot to be very thankful for from the good leadership of a string of Ministers of Education especially Hekia Parata at the moment who is very focused on getting the very very best out of a first-class education system. We have $9.7 billion committed to the compulsory education sector and a Better Public Services goal of 98 percent involvement in early childhood education.I would have to say as a grandparent that I am absolutely delighted to see my grandchildren going ahead at leaps and bounds at quality early childhood education centres in Blenheim with those outstanding passionate teachers. I am confident that my grandchildren will be able to cope successfully in a modern global economy. They will be successful because in 2008—it is surprising how time flies—there was effectively $1 billion spent on the early childhood education sector and today it is $1.5 billion. We have got to bear in mind that this is during a time of incredible hardship and a global financial crisis and yet this Government’s priority under Minister Hekia Parata has focused on ensuring that we spend those taxpayers’ dollars effectively and wisely.I just want to refer back to an earlier policy that was put into effect by this National Government—national standards—and to say how well that has sat today with the good reporting. I am so pleased and delighted that finally we are recognising the importance of measurement and that we have momentum going forward—momentum going forward—around education. For so long the Labour members over there buried theirheads in the sand. Well what did they do? Nothing. We had a whole lot of rhetoric but we had no real substance.So what have we seen here? This Government has initiated some really important reviews and inquiries and I cannot stand here and not mention the digital literacy. That is an area that Minister Hekia Parata has delegated down to Nikki Kaye. It is an area that we in the Education and Science Committee have had the privilege of doing a review on and I am excited. I am so excited to see what is going to come out of that. It is a National Government that is going to drive those initiatives and they are going to benefit many many people. What we are living in today is an exciting dynamic environment. It is quick and changing and there are so many variables to it so we have got to empower our young people with the ability to be able to cope. If we do not we will be underselling them. I am afraid that on the record of the previous Government whose members are now in the Opposition it failed miserably.I just want to mention one of my really pet areas which is around the vocational pathways. What a great situation there that now inside the National Certificate of Education Achievement we have identified vocational pathways. We hear a bit of a mock and jovial approach to the plumbers gasfitters and drainlayers but really when you look at the examination the foundation problem there is that a lot of our young ones today do not have the literacy skills or the numeracy skills to be able to do a distance-learning situation qualification or an exam.There is no doubt about it when you look at the package of policies that this Government has implemented over a series of Budgets we have made a significant difference. We have set up a step change going forward and I am just so delighted about it.So in conclusion we talk about partnership schools—a very very important situation—and you hear the other side lament and talk about the teachers. We understand that the teacher is the inspiration and that that ignites a person’s potential. What I have lamented is that within the teacher qualification it is very very hard to get people in those technical trades and skills in front of kids.TRACEY MARTIN (NZ First):Kia ora Mr Chair. Thank you for the call. Before I start into my comments about the estimates I just want to pick up on Mr King’s comments with regard to vocational pathways that the reason there has been a drop in young people entering those vocational pathways is a lack of numeracy and literacy skills suggesting that it is our teachers who are failing here. He forgets to mention the 2009 cuts of $17 million down to $2 million which meant that those young people could not attend night school to get support while they continued to do their vocational training.The National Government did once have strong vision around education and it did some fantastic work with the education sector. I am referring to the work that was done by the Rt Hon Lockwood Smith in the sector with regard to the New Zealand Curriculum. There are still glimmers of some of that inside the estimates. One of the areas that the Minister of Education should be commended for and the Government should be commended for is $14 million being set aside to support boards of trustees. There is some concern however having seen an internal review document of the School Trustees Association that that $14 million should be used quite rightly to support the improvement of professional development delivery to boards of trustees and to support them in their work but it should not be used as a way to tie the School Trustees Association closer to the Government and therefore be dependent upon its whims as the association seeks to remain independent and represent the views of boards of trustees on education in this country.This Government has been very quick to pat itself on the back and to tell the New Zealand public again and again and again that it is investing more than ever before into the education budget and this may well be true. However it is also highly likely that this Government currently presides over the greatest waste of valuable education dollars New Zealand has ever seen and I would warn the New Zealand public about listening to anybody who uses statistics as there is a great saying “Fill the figures to fit the facts”.Between the 2009-10 and 2012-13 financial years close to $20 million of the estimates was expended on national standards. In these estimates—the 2013-14 estimates—another $8.5 million will be spent on those unnecessary and flawed national standards in an attempt to make them relevant. That is another $8.5 million of taxpayers’ money to support a façade of a crisis in data collection perpetrated on the parents of New Zealand by the National Party during the 2008 election campaign. So that takes us close to $30 million on an untested and an unnecessary set of bureaucratic markers that tell us absolutely nothing we did not already know. Our schools knew those children in the 1 to 3stanine areas of the bell curve—the tail of underachievement. The Minister still uses that term because we knew it then we know it now and $30 million has not changed that fact.But wait there is more. In Budget 2013 there is another $7.5 million to be spent on the introduction of thePaCT tool—a tool that this Government hopes will distract the education sector and New Zealand parents long enough to delay the hard questions around spending until after the 2014 election. If we add this to the leaching away of education dollars on unproven and unnecessary data collection processes and if we add to this the $19 million to be wasted on charter schools wasted on investing in the assets and profits of private trusts and individuals—if we add all those numbers together—we find a figure of close to $50 million. That is $50 million of education money wasted. That is close to 50 million of taxpayers’ dollars that have never touched a single New Zealand child. At the same time we have children sitting in schools in Newlands in schools on theKāpiti coast in reality in schools all over New Zealand that are unable to gain State funding for literacy support while at the same time the bureaucracy around national standards grows daily. That is what the teachers and the schools and the Opposition try to get across to the public of New Zealand: do not accept the rhetoric that is given to you that the collection of data makes a single difference for a child sitting in your school. It does not make a single difference for your child.Hon HEKIA PARATA (Minister of Education):I am absolutely delighted to make a contribution to tonight’s debate. I am extremely proud of this Government’s commitment to education—from early childhood through to primary into secondary and the transition into tertiary opportunities. I am very proud that despite the extreme challenges and the fiscal pressures on New Zealand we have in every year in the past 5 years raised our investment in education. It is $9.7 billion in Budget 2013 which represents a 74 percent increase in the funding for early childhood education and a 30 percent increase in the funding for our compulsory education sector. We put our money where our mouths are.I would like to deal with two or three assertions that are absolutely groundless that have been made by members in the Chamber tonight perhaps through misinformation. I certainly hope that that is the only case. For a start choice in schooling has long been a characteristic of the quality of education provision in New Zealand—a choice as to whether to send one’s child to a full primary or a contributing primary to an intermediate school to acoed secondary school or a single-sex school to a faith-based school or to a total immersionMāori school a total immersion English school or a bilingual school. Choice is a characteristic of New Zealand’s high-quality educationsystem and what partnership schools kura hourua do is add to that choice. There will be no compulsion for any parent to enrol their child in one of the partnership schools.Let us also keep a sense of proportion here. We have over 2500 schools in New Zealand. We are talking about a handful of a new type of school. This Government unlike previous administrations is not prepared to sit on the status quo and accept that 70 percent of our kids will be successful but about 30 percent will not be. We are prepared to investigate and invest in other options and opportunities that can be successful. What we have done is very typical of New Zealanders. We have gone overseas. We have looked at what is happening there. We have cherry-picked the elements that we think will work here and we have indigenised them for New Zealand circumstances. We have long had a tradition of doing that.It is also both specious and selective to assert that charter schools are a failure. It is not the type of school; it is where it practises. There are some significantly successful schools in the UK the United States and Europe that are that kind of model. And actually to be technically correct every school in New Zealand is a charter school. Every school is required to have a charter that sets out what the school will do how it will go about it and then report against it. So I think that people need to be very aware of what we actually are talking about.The second groundless assertion I would like to deal with is that there have been cuts to the early childhood education budget. How the Opposition can assert that there has been a cut when we have gone from a budget of about $800 million in 2008 to one of $1.5 billion in 2013 defies credulity. It is just not possible.Quality—the evidence is really clear in early childhood education—is not ineluctably correlated to 100 percent qualifications. In fact the evidence is really clear that it is a mix of qualification of the ratio of adults to children of parental engagement and of diversity of choice. The sweeping dismissal of supported playgroups as if they do not count is a sweeping dismissal of parents and parents’ choice to have different options in which they have early learning occur for their children.The third assertion I would like to deal with tonight is my alleged constant use of the term “tail of underachievement”. I would challenge anyone to find me quoted as using that. I never have. I think that it is disparaging of those young people who are in the cohort whom our system has not served as well as it could or should and will under this Government. This Government has put its money where its mouth is and will continue to do so because we are absolutely committed to parents having choice and to parents having clear accessible and easy to understand information that allows them to partner with their school with their child’s teacher and with their child in understanding what the next learning step should be and how they can contribute to that.We are committed to the New Zealand School Trustees Association. There again factually the increase to the funding for the association is 84 percent in this Budget. The suggestion that somehow or other this is going to tie an independent organisation to the Government is just not founded in fact. In fact what is happening is the transfer in accordance with the association’s wishes of work that has otherwise been carried out by the Ministry of Education. The association will be even more independent in fact than hitherto it has been.We have invested in Positive Behaviour for Learning which again is a parent-connected programme on how we can improve conduct so that when children go to school they have learnt how to learn so that teachers are able to teach rather than control behaviour and so that parents are engaged in that process.In terms of the profession we know that quality teaching has the biggest in-school effect on raising achievement. We are dedicated to supporting quality teaching and we have reflected that first in our investment and second in creating a data-richenvironment—and again I dispute this nonsense that having data available does not help. Of course it does. It is a characteristic of the top-performing education systems with which we like to compare ourselves. But data without knowledge to apply it is as useless as opinion without data. We are focused on how we can bring those together.We have invested in the transformation of the New Zealand Teachers Council because we believe utterly in the importance of there being a professional body for the profession. We are investing in a consistent appraisal system for the purpose of teachers being aware of what their next professional step could and should be. We are investing over $340 million in professional learning and development so that we can ensure that our teachers get the best development and pedagogicallearnings they need in order to be the best teachers they can be and recognising that kura kaupapa on average have a higher set of outcomes forMāori students. We are investing in supporting kaiako to stay in the kura system and to have the support and resources they need to do that. We have focused on recruiting more teachers into the total immersion mainstream which again is something that the previous Government talked a lot about but did absolutely nothing on.We are focused on performance. As my colleagues before me have said we have set ourselves Better Public Services targets because this Government is unafraid to be publicly and transparently accountable. We are ambitious for every child and young person in this country for themselves and for the better quality of life choices that they will have for themselves for their families and for their communities. As my colleagues have also previously indicated successful young people are a success for this nation. It is in our interests that every New Zealand child and young person has the best possible education.This Government has moved past hand-wringing and iterations of the problem to actually confronting and dealing with those problems. In the time that we have been in Government we have seen every level of achievement go up at every part of the system but not yet enough. We will not be satisfied. We will not rest until we can make it possible for every child to realise their potential and to step out on the pathway of a better life than otherwise would happen. We know the potent transformational power of education and we are committed to it being available to every one of our young people.The final thing is the platform. We are committed to modern learning environments. My associate colleagues are working in different areas. Nikki Kaye is looking at how we can better manage our property the second-biggest asset portfolio on the Government’s balance sheet on behalf of parents and taxpayers; at ourbusing system; and of course at our digital platform because we embrace the 21st century of learning with the tools to do it.CHRIS HIPKINS (Labour—Rimutaka):There was a reasonable amount I agreed with in what the Minister of Education was just speaking about. I agreed with many of her concerns around the students who are not currently achieving within our education system. That is something that I hope all sides of the House and all people in the House would be concerned about. I want to see our education system delivering for every student in New Zealand. But there were also things in that speech that I am sure you will not be surprised to learn I did not agree with the Minister on.I think fundamentally if we go right to the very beginning I do not believe that a Government declaring war on the teaching profession is the best way to improve outcomes in education. Make no mistake that is what this Government has done. We have had a Government with two Ministers of Education now that has repeatedly questioned the competence the professionalism and the dedication of New Zealand’s teaching profession.Tracey Martin: While taking accolades overseas.CHRIS HIPKINS: That is right. I do not believe there is any teacher anywhere in this country who gets out of bed in the morning goes off to school and thinks: “How can I do my job really badly today?”. Every teacher in this country is there because they want to improve the lives of young New Zealanders. They deserve our thanks for that. They deserve our praise for that. Yes there are some gaps in the system. Quite often it is actually the system that lets the teachers and the kids down not the other way round. It is not the teachers who are letting the system down; it is the system that is letting the teachers and the kids down. We should be focused on making sure that we deal with those issues. Simply putting labels on teaching and on the kids who are not achieving in the education system will not do that.Hekia Parata mentioned in her speech that every level of achievement has gone up under the current Government. Well only in the ones that it is measuring. And it is a very narrow range of ones that the Government is measuring. How have kids’ problem-solving abilities improved under this Government? There is nothing. There is nothing because it is not measured because it is actually hard to measure. How have their interpersonal skills improved under this Government? Again there is nothing absolutely nothing because there is no measurement for that. But those are things that are going on in our classrooms every day.Good teachers are not just teaching literacy and numeracy which are very important but also teaching kids all of those other vital really valuable life skills that they are going to need to prosper and succeed in their lives. Because they are not measured this Government is saying to those teachers and to those schools that those things do not matter. Well I think they do matter. In fact they are critical because if we want to turn out kids from our school system who are going to be full and contributing members of society and who are going to be useful employees to future employers those are the sorts of skills they are going to have to have and they are very difficult to measure.But actually when you talk to employers—if we take the National Certificate of Educational Achievement (NCEA) for example. The Government has set a target around NCEA level 2. It is difficult to disagree with the target that it has set but if you talk to an employer and you ask what sorts of things they look for in a graduate coming out of school they will talk about their level of qualifications but they will also talk about whether they are going to show up on time whether they are going to be polite and courteous whether they are going to respect the authority of the person whom they are working for whether they are going to be creative and be able to problem-solve and whether they are going to get on well with the other employees. Those are the things that employers will be asking of their future employees but we do not measure that in the school system at all. But that is actually where the kids are developing those skills.So many of the things that go on in our schools are not measured. We should not focus on managing only what we can measure. We have got to actually have a school system that embraces all of those other things and that says that yes we recognise that those things are vitally important and that they are also going to have a significant impact on a child’s or a student’s future in this country. Yet this Government says those things do not matter. I think that it is totally and utterly wrong with regard to that.So when we talk about education our question has to be not how we deal with this particular set of statistics but how we make sure that every New Zealander—not just the kids who are at school but every New Zealander—has the opportunity through education to reach their full potential in life and contribute fully to the society in which they live. It is not just about kids in school. In fact we need to be thinking about lifelong learning opportunities and vitally second-chance learning opportunities for those who did not do well in schooling in the first place who may not have made it all the way through the schooling system and who have found themselves I guess reallystruggling now and needing that second chance at learning. We have got to be focused on them as well. A good school system would be able to cater for those people yet this Government has cut all the funding to night classes. The Government said that they were hobby courses. Well actually for many people they were actually a foot back in the door to education again. Those courses got them back on the pathway to learning more. Maybe it did start as a hobby but for many people it then went on to something else. For many people what we might look at as a hobby is actually the beginning of a new vocational opportunity for some of those people. I think it is really tragic that the Government has cut that.Let us look at the quality of teaching. I heard Hekia Parata mention several times that she felt that the quality of teaching was the biggest in-school determinant of student achievement. I absolutely agree with that. That is very clear. That is what the research says. So we do have to look at teacher professional development. We have a very very successful teacher professional development programme—or had a very successful teacher professional development programme—in New Zealand targeted exactly at those students who have not been achieving in our system. It was called TeKotahitanga and the Government has cut it. It has cut the funding for it because it was too expensive and it has come up with something that is cheaper. It penny-pinches. It came up with something that was cheaper. Actually what we should be saying is that this is a really successful programme it is working really well it is achieving what we want it to achieve and the long-term investment is much much more valuable to us so we are going to put more money into programmes that work rather than simply penny-pinching and cutting them.When Hekia Parata talked about quality teaching she also neglected to mention the fact that charter schools are not going to have to employ fully qualified and registered teachers. In question time today Hekia Parata made the comment that there is a difference between unqualified and unregistered teachers. If that is the case what is the point of teacher registration in the first place? We have teacher registration because it certifies that somebody is fit to be in a classroom. It certifies the fact that not only do they have knowledge of the subject but they have knowledge about how to impart that subject knowledge on to other learners and that is vitally important. People can be experts in their trade or in their profession; it does not mean that they know how to pass that knowledge on to somebody else. There is an art to teaching that we should make sure that the people we are putting in our classrooms actually understand and actually know how to do. That is what teacher registration is about. It is also about making sure that the people in our classrooms are appropriate people to be there. So there are safety checks in there to make sure we are not putting people who should not be in classrooms in front of kids who are often in very vulnerable positions. That is what teacher registration is designed to achieve. So I think it is wrong that the Government is saying that it does not think that teachers working in charter schools should be registered. Of course they should be registered. Every teacher working in a school should be registered.I hope that we can get back to the point where we have a goal that every teacher working in an early childhood centre should be registered as well. That was what the Labour Government was working towards. The National Government has backed away from that and I think that that was the wrong decision because we should be focused on raising the standard of teaching in New Zealand. That means a focus on a qualified registered teaching profession.So coming back to the issue of charter schools the Labour Party has been very clear. We do not see the need for charter schools. In fact we see many many detrimental elements to the current charter schools model that this Government has put forward.Charter schools will not have to employ qualified teachers. They will not be subject to the same levels of public scrutiny as State schools—for example they will not be subject to the Official Information Act or the Ombudsmen Act. They will not have to teach to the New Zealand Curriculum. Our curriculum is recognised around the world as being an absolute leader yet the charter schools that the Government is setting up will not have to teach to it.So we have made it very clear that we do not see a future for charter schools. We have already got enough schools in New Zealand now. What we should be focused on is making sure that every one of those schools that we have now is one of the best possible schools we could have and that every teacher working in them is a member of a valued and collaborative teaching profession that is constantly striving for ongoing improvement. We will get that by having a partnership between Government and teachers and parents and communities not by dividing and conquering as this Government seeks to do.Driving a wedge between teachers and parents has been one of the most divisive things that this Government could possibly have done and that is exactly what it has been focused on doing. I do trust our teachers. I do believe that they go into school every day wanting to make a difference for students. Yes I accept that in some cases some teachers could be better. All of the teachers that I speak to want to be better—even the really really good ones want to be better. They are looking for ways to be better and they are saying: “Well if you want us to be better why don’t you invest in our professional development? Why don’t you actually support us to be better teachers?”. I think it is a very very reasonable thing for them to ask of a Government—that is that the Government does not label them and that the Government supports them. We have got to work with teachers not declare war on them.Vote agreed to.Vote Education Review Officeagreed to.Vote Pacific Island Affairsagreed to.Vote Arts Culture and Heritageagreed to.Vote Attorney-Generalagreed to.Vote Parliamentary Counselagreed to.Vote Treaty NegotiationsHon TAU HENARE (Chairperson of theMāori Affairs Committee):I want to be placed on record as saying that never before in this House—Hon Annette King: In the history of mankind.Hon TAU HENARE: No. You see the sort of rubbish that comes out of them. You try to make a nice speech you do not want to get too political but what comes even before the first sentence is out of my mouth? They get stuck in. They get stuck in.Hon Clayton Cosgrove: We’ve heard it before.Hon TAU HENARE: Oh they have heard it before. Oh they have heard it before says the man who might want another seat in Christchurch. But look before I was rudely interrupted I was saying that never before in this House have we seen such a Minister for Treaty of Waitangi Negotiations who has been around this country trying to sort out the Treaty deals the Treaty grievances that face this country. In 9 years of the Labour Government—9 years of the Labour Government—how many Ministers of Treaty negotiations did it go through? Three four? I cannot remember because therewere so many. We have had one—we have had one—and that is all we are going to have because he will see the job done.This cannot be some sort of issue that is swept under the carpet. This is an issue about New Zealand’s identity. As we move forward what we are seeing is I suppose the fixing of the grievances that have happened and that is a good thing. That actually not only gives the recipient iwi the opportunities that have been denied them for a very very long time but we have seen in most cases in nine out of 10 cases that the iwi that have got their Treaty settlements have put themselves and their iwi on the right track: the big ones Tainui andNgāiTahu and the small ones—the very small ones. I can tell you that the thing about a small settlement is that it brings a hell of a lot of pride to that small group of people. It brings the community together and the community see that the local iwi the localhapū are getting on with the job.I want to say to the Minister that he has done a fine job. He has done a marvellous job so has the Office of Treaty Settlements and so have the people who have been employed by the Minister and the Office of Treaty Settlements. I hazard to mention one: the Hon Paul Swain. He has played a huge part in getting these Treaty settlements together. A good Labour MP. A pity there are not a lot of them around now but hey you cannot have everything. You cannot have everything. He retired too soon—he retired too soon.But like I said this is an important part. We think that a lot of the time it is getting the economy back on track as we have done. We think a lot of the time that the most important thing is to make sure that the education system is working like I heard my colleague Mr Hipkins say. But there are other things that are important to this nation and one of them is trying to heal the wrongs of so many years ago. I think and I know that the Labour Party and other parties in the House want to pat the Minister and the Government on the back because they have done a pretty good job of getting these deals done and it has not been easy. It has not been easy and I think that theMāori Affairs Committee deserves a bit of a slap on the back as well—all of them every member.Hon Hekia Parata: Including the chair.Hon TAU HENARE: Yeah well the chair is just one of them. The chair is just one of them. I have certainly enjoyed the job that our Minister and our Government have done on the Treaty settlements and I think it goes towards a good future for this country.CLAUDETTE HAUITI (National):Mihi atu ki a koutou katoa. Ewaihoanaēnei kupu heitohumōtātou kitētahitatau pounamu etūtākina atuai e iaonamatawhakakitenga mai etūwhera maianōai hoki ia kingākāwena mai o āmurinei.[I acknowledge you all. Let these words guide our way to a greenstone door that looks back on the past and closes it which looks forward to the future and opens it .]“Let these words guide our way to a greenstone door which looks back to the past and closes it which looks forward to the future and opens it.” These were the words fromTūhoe at the signing of their deed of settlement earlier this year. It means addressing the wrongs of the past and moving forward to an enduring relationship with iwi and the Crown—a sustainable durable relationship; a bond for future iwi-Crown relationships to be built upon.The settlements to date are forward-looking arrangements. They have the potential to produce positive results for both iwi and the Crown. These settlements are not an end but a beginning. It has been difficult at times for both iwi and the Crown but with genuine—genuine—intent and desire they have worked hard to resolve those differences.The Minister for Treaty of Waitangi Negotiations has to be congratulated on his vision and foresight but more so on his understanding ofMāori aspirations—of rangatiratanga—for economic transformation. The Minister is keen to seeMāori-ownedland that is currently idle being utilised to benefit the owners. A review of Te Ture Whenua Maori Act 1993 is in progress. Land bank properties that have been sitting idle for years are also being looked at and the trash building up on these lands will not be passed off as taonga.I visitedNgāiTahu last week. They are assisting in no small way with the rebuild of Christchurch. I visitedNgātiWhātua yesterday who released theirWhaiRawa housing project to their iwi.National has a track record in achieving Treaty settlements to be proud of. In the first term alone this Government and our Minister reached more Treaty milestones than Labour did in 9 years—103 milestones in our first term compared with Labour’s 94 in 9 years.Ewaihoanaēnei kupu heitohumōtātou kitētahitatau pounamu etūtākina atuai e iaonamatawhakakitenga mai etūwhera maianōai hoki ia kingākāwena mai o āmurinei. Let these words guide our way to a greenstone door which looks back on the past and closes it which looks forward to the future and opens it.The Office of Treaty Settlements has made good progress in the last year. Let us keep that going. There is more to do. I congratulate the Hon Chris Finlayson the Minister for Treaty of Waitangi Negotiations on his outstanding work. Mihi atu ki a koutou katoa.Hon NANAIA MAHUTA (Labour—Hauraki-Waikato):Having listened to those last two contributions I just wanted to put on the record that were it not for the collegial nature in which Treaty settlements have been reached we would not have seen the success we have seen. It must be noted that Treaty settlements are the types of issues where unless both sides of the House agree and commit to ensure that they are progressed well then there is no long-term commitment.But can I say that there are some outstanding matters that the Minister for Treaty of Waitangi Negotiations will I am sure be a little bit anxious to sort out such as what is happening with the mediation of the TeKōhanga Reo National Trust claim. That is a very serious question that is before the minds of a number of iwi in terms of the Waitangi Tribunal claim and how the Government is going to put some emphasis on reaching resolution around the undertakings that were given by the Waitangi Tribunal.Also the proof of the pudding for Treaty settlements is in their implementation. There are a number of relationship accords and there are a number of agreements that require the ongoing commitment of not only the Office of Treaty Settlements but also the Ministry for the Environment the Ministry of Social Development—Hon Tau Henare: You’re moonlighting too.Hon NANAIA MAHUTA: —and Tau well knows that there is more progress to be achieved to ensure the proper implementation of many of these Treaty settlements. So although members on the other side of the Chamber have stood heroically and promoted what the Government has done in Treaty settlements the fact of the matter is and remains that the commitment to ensure that Treaty settlements are being achieved well requires both sides of the House to agree.I have been to a number of occasions where the Minister has stood and secured the confidence of a number of iwi in the way he has approached the Treaty settlement process. He is to be applauded like the Labour Minister before him Michael Cullen. We recognise that he did a lot of things too. Although those members on the other side of the Chamber said that Labour took a long time to achieve Treaty settlements we still achieved many. In fact we achieved some groundbreaking Treaty settlements. I look to my own electorate and the Waikato River settlement which was under a Labour Government. It was a landmark settlement that sought to do something very different.What was also done in the period of a Labour Government was moving iwi towards large natural groupings. National well knows how difficult it is to try to get iwi together and come under one umbrella to ensure that a comprehensive claim can be achieved. That was very difficult so I do not accept at all any criticism from members of the Government saying that Labour did not make some progress in this area. I am sure the Minister for Treaty of Waitangi Negotiations will recognise that it is not easy to try to get more than onehapū together sitting at the same table to try to reach their agreement. In fact I am sure he recognises that were it not for some of the work that Labour achieved in its time around getting comprehensive claims and trying to get iwi sitting within the same tent his job would not have been as easy as it has been.I again want to put on the record in so far as Treaty settlements are concerned that some good progress has been made but the proof of the pudding is in their implementation—the proof of the pudding is in their implementation. What we do know is that there are a number of iwi who continue to want to ensure sustained commitment from the respective Government organisations—like the Ministry for the Environment like the Ministry of Business Innovation and Employment like the Ministry of Social Development and like the Ministry of Education—to make some of these relationship accords practical and effective sitting alongside the intent of the agreements that have been set out in their deeds of settlement and in their legislation.The last thing I want to really put on the record in this part of the estimates debate is the good work that the Office of Treaty Settlements has been able to contribute to this process and the ongoing need to ensure that the capacity is retained and the institutional knowledge is retained to be able to ensure proper implementation so that agreements that have been reached under the Treaty settlements can be implemented. Kia ora.Hon CHRISTOPHER FINLAYSON (Minister for Treaty of Waitangi Negotiations):I think I will take a brief call if only because Annette King called out that I was a has-been which is rich coming from someone who has been around here since Peter Fraser was Prime Minister.I think the previous speaker Nanaia Mahuta raised a very important question—Hon Annette King: Why do you tell such big lies?Hon CHRISTOPHER FINLAYSON: Oh she is very snippy today. I think that it is time she considered her future. It is time to move on Annette. There are greener pastures out there. You cannot simply come down to the Chamber and snipe.Hon Annette King: Oh come on. Just because I beat you twice.Hon CHRISTOPHER FINLAYSON: Well of course the honourable member walloped me twice because I was standing in Rongotai. If she stood in Taranaki - King Country she would get walloped as well. I mean there are certain fundamental features of electoral life and one is that if you are a National candidate and you stand in Rongotai your chances of winning are not all that flash. But anyway when it comes to the all-important party vote what was the margin? Labour won the party vote in Rongotai by about 300 votes. One of its most important seats and it won the party vote by 300 votes. The electorate vote is all very flash but the reality of the matter is that the old chook got walloped very badly in the party vote.But anyway let us talk about Treaty settlements. Nanaia Mahuta raised a very important question—it is one that was discussed by Parekura Horomia and me on a number of occasions—which is that the Crown makes a number of commitments to Treaty settlements when it signs deeds of settlement. It is all very well to go along and have lachrymose speeches and sugary speeches when the deeds of settlement are signed but as Ms Mahuta said the proof of the pudding is in the implementation. It is my responsibility as Attorney-General but it flows on from the Treaty negotiations work which is why we have established an office within the Ministry of Justice—and I wantto thank my wonderful colleague the Minister of Justice for her support in this regard—an office if you like of post-Treaty settlements to ensure that these ongoing obligations are honoured not just today not just tomorrow but in 25 years’ time.Ms Mahuta is right. There are a number of accords that have been signed up with the Ministry of Social Development for example and the Ministry for Culture and Heritage. It is very important that these are honoured because one of the problems over the years has been that the Crown does not necessarily have a good institutional memory. People tend to move on but iwi do not forget. So she makes a very good point there and I am determined that this infrastructure is going to be put in place so that the litany if you like of agreements that have been drawn up over the years and the undertakings that have been given by the Crown will indeed be honoured into the future.I want to thank honourable members who have spoken for the nice words they have said about the Office of Treaty Settlements. It is an outstanding group of people. I call them the Jesuits of the Civil Service because they are utterly dedicated and go above and beyond the call of duty in this work. For many it is not a job; it is a vocation. I too salute them. I also want to place on record my support and my respect for people like Paul Swain. Paul was an opponent—he was never an enemy—and since he has left Parliament he has done wonderful work for me as indeed has Rick Barker doing Treaty negotiation work. I guess if there is anything that can be said about that quite apart from the fact that they are excellent blokes who do a great job it is that there is life after Parliament.So I end as I began by a reference to the MP for Rongotai. It is time to move on dear lady. It is time to see those greener pastures. The member has been here a long time and there comes a time when sitting and sniping in question time loses its fun. She too could be out there negotiating if she got off her flea-bitten old nag and was just a little bit more pleasant to people. She could achieve quite a lot. All she needs to do is talk to Rick Barker and Paul Swain and think about her future.Vote agreed to.Vote Social DevelopmentDr RAJEN PRASAD (Labour):I will make just a few comments about social development. I think having now seen the Government operate its social development programme for about 5 years one gets the sense of what this Government is trying to do. It does not make for very good reading. It does not really give any confidence that indeed over time the approach this Government is taking for many of the vulnerable through its social development programme is going to achieve the kinds of things that it could achieve. In fact it will be left to another Government with a very different perspective on social development to make the kinds of changes that will put those children those vulnerable families and those vulnerable communities back on the pathway to growth and development. The reflection on the Government’s social development programme is a sad reflection.My prediction is that in the end although the Government uses the language of the underclass over time it will produce a bigger underclass. It will produce more people who will lead lives of quiet desperation. The language that the Government has used to justify its programme or to anchor its programme is the so-called investment approach. What has happened here is that it has taken those on benefits today worked out through some process the lifelong cost of that and said that that $17 billion is too much so it must now start to cut back. Well the Government came with an agenda of cutting the welfare State right from the beginning not to use the processes of the welfare State toactually make life more productive for our most vulnerable and make our communities stronger.What the Government has produced through that kind of ideology is a punitive approach. It is amazing. Every welfare reform programme that we have seen from this Government over 5 years has led to a lot of sadness on this side of the House. There was a great deal of glee and even high-fiving on the last one—“Here we are. We have destroyed the system that was designed to care for the most vulnerable.” That approach is punitive. Do Government members think about what is going to happen to those families who now cannot have access to those resources that they need but were taken away because somebody has calculated that you were not supposed to have another child when you had one child just over 5 years of age anyway? When that happens the Government is going to apply a whole series of punitive actions to destroy the ability of parents to be parents. There is an alternative approach.John Hayes: Tax and spend.Dr RAJEN PRASAD: The question that Government members ought to be asking and could well ask Mr Hayes is what do we need to do to ensure our citizens are socially included in our society and they are socially included in their communities? What is it that excludes people from participating in meaningful lives? The social inclusion approach I say to members opposite would actually produce a different set of results. It would ask a different set of questions. It would not bank the problems of today in a bank that produces no interest and in fact creates a bigger mortgage so to speak down the track because that is what will happen. The welfare programmes are really moribund of ideas of change and they have not managed to really come up with a set of ideas with a set of principles that could produce the kind of society we could be producing.If we look at Child Youth and Family we know that the outcomes for vulnerable children are horrible. We have had the green paper we have had the white paper and so we have got this thing on a slow burner to somehow in 10 to 15 years achieve change. Six months 1 year 2 years 3 years today is a lifetime for these young children and yet the social development programmes of this Government actually freeze them in that time frame. When their brain development is taking place at a rate of knots the very things that create those synaptic connections in their brains are not being provided. So Child Youth and Family has become this organisation that is so bogged down in its own processes that it is now unable to provide the kinds of services and programmes that are required.There is not much in the social development programme of this Government and the money it is spending that is going towards producing the kinds of results—what it does do is feed into the negative mind-set of those who do not like this area of work. Thank you.Hon PHIL HEATLEY (National—Whangarei):I would just like to reiterate that one of the approaches that the public appreciated the most when we were going through that difficult recession in 2008 which started under the previous Labour Government you will recall was our management of it from a social welfare point of view. Rather than take the knife to welfare during that difficult 2 to 3-year period like some Governments did we maintained payments to welfare recipients and of course superannuation was untouched. We brought about a number of grants that saw some social services retained and maintained where otherwise they were struggling. We said at the time that that was all about taking the sharpest edges off the recession. So on the one hand across the world we had those who were slashing welfare and on the other hand we had other countries that were actually writing cheques and in some cases increasing welfare during that time. I do know that the Labour Party wanted to take thatpath and had it been in Government that is what it said it would have done. Labour would have written cheques from an income that the country simply did not have.That responsible management of the economy during that period where we made sure that we still protected the most vulnerable—that whole concept—remains today although I must say that we are concentrating much more on resolving some important issues. Two examples of that are where on one side of the ledger we are making sure that things are much easier for those on welfare in order to get them back into work and we are also putting up certain standards of responsibility for welfare recipients.Two examples where we are making things work sensibly and better for them include the microfinance support for people on low incomes. That is where we work in partnership with non-governmental organisations to look at alternative finance for those on low incomes. That provides low or no interest to people with unsustainably high debt who cannot access affordable credit. It will of course require them to build financial literacy. This leads to the second approach which is extra funding for budgeting services. The Government has put in an extra $1.5 million to support budgeting services. That is in addition to the $8.9 million to be provided this year and it is intended to relieve pressure on those essential budgeting services that help those on low incomes. But as I say that is one side of the ledger.The other is of course bringing in that whole personal responsibility that New Zealanders for over a decade have been looking for. They are saying: “Look welfare’s great. It’s there for a hand up during difficult times. We’re concerned that under the Labour Government though welfare ran away and that cheques earned by the taxpayer were too easily written out.” That is why we have got to focus now on people having to be work-ready. They cannot be on drugs. They cannot be the sort of Nandor Tanczos of the Green Party reflected in the general public where you can promote drug use support drug use be involved in those sorts of Green Party policies and still expect to get your benefit and where you cannot actually say you are available to work because your veins are so filled with drugs. So there will be no more of the drugs. If you are work-ready you cannot have drugs in your system. If you have got drugs in your system you cannot receive a benefit under those circumstances.Again we decided that if you are running away from the law and on a benefit well that is not on. We are not going to pay you to run. We are not going to pay for the petrol of the stolen car so you can run away from the coppers. We think that is sensible and of course New Zealanders support that. They are not so interested in some of the mad policies that the Labour Party is putting up to sort of out-green the Greens and out-loony the Greens. What we are doing is putting up sensible policies that Kiwis say to us are sensible. They are saying: “Hey someone on a benefit shouldn’t be full of drugs should they?”. We are saying: “Well no I suppose not.” They are saying: “Well they shouldn’t be running away from the coppers and we shouldn’t be funding them either.” We are saying: “Well no that’s quite right.” So we are doing what middle New Zealand expects us to do.There is that quid pro quo going on. But the major point here is that during—JAN LOGIE (Green):Over 200 years ago Adam Smith recognised that the essentials of life are “not only the commodities which are indispensably necessary for the support of life but whatever the custom of the country renders it indecent for creditable people … to be without.” The economic historian R HTawney also stated that a good society is not just one in which people can rise but also one in which “they should be able to lead a life of dignity … whether they rise or not”. I would like the House to reflect on those two quotes in consideration of the welfare reforms that are being implemented at the moment. Under the most recent welfare reforms the potential for a life of dignity for beneficiaries has been further eroded. This Government ismaking it increasingly clear that those who require the assistance of the State are of less value in this society.As was stated again by the Minister for Social Development tonight when she was speaking to the employment estimates—somewhat obliquely but the meaning is still pretty clear to me—you are not going to get out of poverty by sitting on a benefit. Earlier than tonight she has talked about other parties leaving people to rot on the benefit—as if people have no agency of their own as if at times when jobs are available people have not found work and gone into those jobs and as if between 1999 and 2008 the number of people on the unemployment benefit had not dropped from 161000 to only 17000. This Government is treating people who require income support as if they have no drive of their own and that is not true. It is treating people as if they are not fully deserving of the same rights as every other New Zealander.New Zealanders have recognised that beneficiaries are now the most discriminated-against group in this country. We all know the myths—the myths that beneficiaries are job-avoiding lazy pot-smoking criminals who neglect their children. So what have these reforms done to ameliorate those myths to tell New Zealanders: “Actually no that’s not the case. These are people in need.”? We set up the social security system because women need to be able to leave violent relationships. Women or men who have been left by the main income earning - partner need to be able to support their children. People with illness and disability when there are barriers to their employment need to be able to participate in our society.” What has our Government done to uphold those values and enable people to participate in our society? Well actually it has fed those stereotypes which will lead to stigma.Actually it is really important at this point to point out to my National colleague Mike Sabin who is looking so sceptical that stigma—and there has been medical research on this—has a really dramatic and under-recognised effect on the distribution of life changes such as employment opportunities and housing. Stigma which these reforms feed actually creates barriers to people being able to get employment. It makes people sick and it increases costs to the entire society.Mike Sabin: Is smoking drugs a barrier to getting people into employment?The CHAIRPERSON (Lindsay Tisch): Order!JAN LOGIE: It is being yelled at me about drug-smoking beneficiaries these terrible drug-smoking beneficiaries as if beneficiaries are all pot smokers. Challenge those myths. I ask Government members to look at themselves and actually assess where these stereotypes come from and whether they are real. Is it serving us as a population for everybody now getting on a benefit to get a letter telling them they are going to be drug tested? Or for a woman leaving a violent relationship and looking after her children to receive a letter in the mail saying that you are going to be drug tested—is that going to help her look after her children and keep her family safe? No it is not.Le’aufa’amulia ASENATI LOLE-TAYLOR (NZ First):New Zealand First acknowledges that social development is a massive portfolio and it is imperative that this Government closes as many loopholes as possible. The reforms come with an admirable yet somewhat out-of-touch goal of getting more beneficiaries into the workforce through placing restrictive requirements on solo parents couples widows convalescents and the unemployed.Mike Sabin: Out-of-touch goal—getting beneficiaries into work!Le’aufa’amuliaASENATI LOLE-TAYLOR: I hear the member for Northland interjecting quite a lot of the time. That member sounds like somebody who can resist everything except temptation—everything except temptation. The domestic purposes unemployment and sickness benefits have been replaced by three new categories. These categories are known as job seeker support for those actively seeking andavailable for work; sole parent support for single parents with children under the age of 14 years; and supported living payments for people significantly restricted by sickness injury or disability.With over 40 percent of jobs advertised with Work and Income requiring a drug test beneficiaries must now oblige or risk losing their entitlement. We do not see a problem with drug testing; after all we did support that part of the legislation. Parents will face reductions to their benefits if they do not enrol their children in Well Child /Tāmariki Ora checks with a general practitioner and in early childhood education or day care. This has created major concerns for many who see this approach as bullying and dictatorial. Furthermore all people previously categorised as sickness beneficiaries sole parents—The CHAIRPERSON (Lindsay Tisch): Sorry to interrupt the honourable member. The time has come for me to report progress.Progress reported.Report adopted.