Estimates Debate — In CommitteeText is incorporated into the Bound VolumeEstimates Debate — In Committee[Sitting date: 28 July 2015. Volume:707;Page:5364. Text is incorporated into the Bound Volume.]Estimates DebateIn CommitteeDebate resumed from 21 July on the Appropriation (2015/16 Estimates) Bill.Environment Sector (continued)The CHAIRPERSON (Lindsay Tisch): Members when we were last progressing the estimates debate we were debating the votes in the environment sector—volume B.5 volume 3. They are Vote Conservation Vote Environment and Vote Parliamentary Commissioner for the Environment. Scott Simpson had the call and he has 2 minutes and 20 seconds remaining if he so wishes. Before giving the call to Mr Simpson I would like to remind the select committee chairs who are allocated calls who lead the sector debates of the requirement of the Business Committee to set out the major findings of their committees in relation to the estimates. Mr Simpson has set an excellent example in this matter.SCOTT SIMPSON (Chairperson of the Local Government and Environment Committee): Mr Chairman I appreciate the acknowledgment and also the opportunity to conclude with a couple of minutes’ rounding out what for me is a very important part of this Appropriation (2015/16 Estimates) Bill discussion and debate. It relates exactly to the environmental sector where two very competent Ministers preside over the most important environmental decisions and the stewardship of our precious environment. Looking forward to the future they are putting in place excellent protections excellent stewardship and excellent advances that have not previously been considered by other Governments.In the field of conservation the Minister of Conservation Maggie Barry is doing an exceptional job. She is a person who has devoted her entire working life—not just in this Parliament but her entire working life—to ensuring the advancement of conservation matters and of our environment. In terms of the Ministerfor the Environment Nick Smith he too has made a greater contribution—dare I say it—than any other member in this House in terms of protecting and ensuring the enhancement of our natural environment.I want to highlight one or two matters that came before the Local Government and Environment Committee during the estimates hearings. I was particularly impressed with the work that the Department of Conservation is doing in partnership agreements with independent bodies and commercial organisations to leverage the funding and access of resources for the further advancement and protection of our environment. I particularly want to commenton with appreciation and note the work that Fonterra is doing in terms of its Living Water programme. One of those projects has relevance in my electorate on the Seabird Coast at Miranda and Kaiaua where excellent work is being done to protect the wetlands there. That is just one area where partnerships are proving absolutely that they can add value to our conservation message and to our conservation objectives.Another one is the rat eradication on Great Mercury Island also within the boundaries of the very beautiful and lovely Coromandel electorate. There Sir Michael Fay and David Richwhite have entered into a programme with the Department of Conservation to eradicate rats on that very precious and important island. There are some who object to that but I think that is a wonderful move and it is certainly something that is going to enhance that island and also the greater area.Dr MEGAN WOODS (Labour—Wigram): It is my pleasure to take a call in this section of the estimates debate and to listen to the words of the member who just sat down Scott Simpson—and very fine words they were. You would believe that everything was hunky-dory with the environment. You would not actually realise that this is a Government that is failing in some key issues of the environment or that we have a Government that is not being straight with New Zealanders on a range of issues from the housing crisis right through to a number of issues. We certainly have a Government that is not being straight with New Zealanders about the state of our environment.I just want to pick up from where Mr Simpson was concluding—he was talking about the wonderful work in terms of our waterways. We have just received a report from the Parliamentary Commissioner for the Environment that gives us the facts about what the state of New Zealand water is the impacts of dairying on our waterways throughout the country and what they are.To stand in the House and say that everything is fine is just a symbol of how this Government is governing. Government members are closing their eyes to the reality and they are closing their ears to what is happening around them. They are certainly not being straight. In this area our environment is being left behind.In my address today I want to deal primarily with two key issues that we covered off at the hearings and my colleague Ruth Dyson will pick up on further areas. One is Resource Management Act reform. You might remember Resource Management Act reform. It is something that this Government has been talking about for a very long time. It is also something that this Government has been spending quite a lot of money on. So when we have a look at the appropriation that this Government is putting in under Resource Management Act reform we see $3 million there for contractors. One has to assume—Hon Ruth Dyson: What?Dr MEGAN WOODS: $3 million—that is right. There is $3 million for contractors because this is a Government that is failing to get its reforms across the line.It is also a Government that is failing to take the offer from Labour to work with it on the sensible bits of Resource Management Act reform. We will—we have put that offer in. Nicky Wagner is looking confused. She might like to look at the papers—it is in there. Labour has put the offer on the table. We have said that we will work with National on a national policy statement around housing and sensible reform—things that can be achieved. But that has been reacted to with blankness.There is no intention to work together for sustainable enduring solutions for such a linchpin piece of legislation as the Resource Management Act. Instead we have got $3 million in this appropriation for spin doctors and contractors to play catch-up because the Minister for the Environment has dropped the ball on Resource Management Act reform. He has mucked it up from go to whoa and not only in terms of what National was intending to do around gutting the fundamental provisions of the Resource Management Act. He has also mucked up relations with the coalition partners and he cannot get it across the line. The taxpayer is left holding the $3 million bill for Nick Smith’s ineptitude in this particular area. The taxpayer is of course footing the bill for Nick Smith’s ineptitude in a range of areas but in the area of Resource Management Act reform let us just call it $3 million.I want to turn my attention to the issue of climate change. This accounts for 48 percent of the Vote Environment budget. It is a substantial part of the environmental budget and even more actually if you factor in the money that is set aside for the emissions trading scheme. So after hearing speakers in the previous debate say that Labour is the conservative fuddy-duddy party that does not want to see progress I have two words for Mr Bishop—11 percent. That is the paltry sum that this Government is thinking it is going to take to the Paris talks. It thinks that is a credible position for New Zealand to take to the Paris talks about what our emissions reduction target should be but it is not.This is a Government that is being criticised all over the world for its negligence in this area—it is certainly not enough. This is a Government that has absolutely let the emissions trading scheme fail to do what it needs to do through letting the price of carbon collapse. It is a Government that is not incentivising the things we need to be doing around planting forests and it is a Government that will not take the hard decisions it needs to take around what we need to do around carbon dioxide emissions reduction. It is a Government that will not have the sensible and needed conversation about how we account for methane in our emissions target profile and about when we bring this in. This is a Government that is content to be a laggard in the world and to be criticised by other nations for not doing its bit. Thank you.Hon MAGGIE BARRY (Minister of Conservation): Kia ora Minister members. Mr Chair ngā mihi nui ki Te Wiki o Te Reo Māori tēnā koe.[Thank you Minister and members. Much accolades to Māori Language Week and to you Mr Chair.]It gives me great pleasure to stand before this Committee this afternoon and take a call on the appropriations. From the point of view of being the Minister of Conservation it is very important to me that we understand the nature of the struggle that we are involved in. It is important that we have enough money to do what we need to do and in order to make taxpayers’ money go even further we need to work in collaboration. So in my call today I am going to outline some of the more successful collaborations including collaboration with the Australians.Two weeks ago I was a keynote speaker at the inaugural Threatened Species Summit in Melbourne where I discovered that the Australians have vastly more money than we do to spend on many things. However what they envy us is the level of collaboration that we have been able to knit together with partners philanthropists and businesses so that we can work as a whole team to overcome our obstacles. As New Zealand has experienced and so too has Australia our vulnerable species are prone to being predated upon by mostly eco-invaders. Ironically here in New Zealand one of the worst offenders for us is a treasured protected species of possum in Australia. I did offer to ship over a couple of million to solve both our problems but Australia refused that kind offer.However where we were able to collaborate was around the need to have a strategy and to have what we are about to announce which is a threatened species ambassador. This is an individual who will help us to develop a strategy and a series of guidelines for acting with partners so that we will be able to do the good fight together.I will give a couple of examples that are working successfully at the moment. One of them is Air New Zealand. Air New Zealand is going to part-fund this threatened species ambassador’s role for the first couple of years. That is building on a successful long-term partnership that has been worth $7 million over the past 3 years with Air New Zealand and it gives significant gains for conservation our New Zealand economy and also Air New Zealand. It is a classic win-win which is why it has not only sustained but it is also being built on. Air New Zealand through its in-flight entertainment and advertising has contributed to the success of the Department of Conservation’s Great Walks. As we know tourism is now our biggest earner in New Zealand. It has overtaken dairying. By teaming up with Air New Zealand and promoting our walker numbers for example those have gone up by more than 30 percent since the partnership began. So in round figures that is up from 79000 overnight stays to now more than over 100000.The Department of Conservation has also been working a lot with Genesis Energy. That was a partnership that began 4 years ago. Over the past 5 years $2.5 million has been specifically aimed at supporting and protecting the blue duck our whio or whio whio as it is called in the middle part of the North Island. So what that partnership has meant is that we have been able to double the amount of conservation work. We now have eight secure sites to maintain a viable population of ducks that breed and we take out the baby ducklings—the whio whio—to actually get what we call a boot camp for ducklings which is where they get training in having to swim upstream on some very rapid bits of water so that when they are released to the wild they are then made fit for purpose in the wild. It is a fantastic thing. So welcoming partnerships with philanthropists is also something that the Department of Conservation has encouraged in the past couple of years.NEXT Foundation for example is running $100 million of strategic philanthropy over the next 10 years in partnership with the Department of Conservation and other entities. NEXT Foundation commits something like $5 million and up to $15 million a year and it ring-fences three major projects including Zero Invasive Predators or ZIP as it is known. Along with NEXT Foundation Fonterra the dairy industry the Department of Conservation and the philanthropists we are all working together. The target is a big one. To the members of this Committee who understand these things to be able to be predator-free and to have that as a measurable target and goal by 2050 is indeed a very ambitious target. It is only by involving philanthropists and an army of volunteers to help us that we will be able to get there. Zero Invasive Predators is focused as we are as a Government and as a department on excluding pests from all the parts of the mainland where they have been eradicated.The Department of Conservation is extremely good and effective—and is known to be so nationwide and internationally—at looking after pest-free islands. Our ambitious goal now is to transfer those skills to the mainland. There are many excellent projects that this department and this Government are involved in. I am very proud of them and we will continue to do our best.EUGENIE SAGE (Green): Tēnā koe  Mr Chair. Thank you. Tuarua ki ngā mema o tō tātou Whare tēnā koutou katoa.[Secondly greetings to you all the members of our House.]Appointing one threatened species ambassador is not going to solve our biodiversity crisis. The Government has done very little in this Budget to tackle that. The Department of Conservation is not being adequately funded to tackle the conservation challenges that it faces and the dump of Budget documents was very revealing. It showed that Treasury as explained to it obviously by the Minister of Finance does not believe that increasing the funding for the department to assist kiwi is consistent with the Government’s overall priorities. The Cabinet may have overruled that but it is clear that the Government has not got a priority of protecting our biodiversity.Since Aotearoa New Zealand was settled 800 years ago 53 bird species have gone extinct 15 of those since 1850. Currently we rank the worst in the United Nations for the protection of threatened species. We have more species threatened with extinction than any other country. Yet what did we have in this Budget? No increase for the Department of Conservation; in fact there was a reduction of $7 million in the funding that the department puts towards the management of natural heritage. This Government despite the Biodiversity Strategy having a clear objective that all Government agencies agreed to in 2000 of maintaining our biodiversity of halting the decline is failing to invest adequately in the protection of our native plant species and wildlife. So the Department of Conservation has been left to manage a third of New Zealand’s land area and over 40000 square kilometres of marine reserves on a pitiful budget.Last year for example the department was supposed to be managing 159 threatened species actively. What happened? The department was so distracted by the restructuring and the loss of staff with technical expertise that it was able to actively manage only 104 threatened species. What is the target for this financial year? Managing 104 threatened species actively. The department is winding back its goals because the Government and this Minister is not investing adequately in baseline conservation funding. National is completely out of touch with what makes New Zealand special and out of touch with how our wild landscapes and our native plants and wildlife contribute to our identity as New Zealanders and how much Kiwis value them.We had the Department of Conservation recognised recently as the eighth most influential brand in New Zealand up there with Facebook and Google and surpassed only by TradeMe and Air New Zealand as other New Zealand entities. The 1000 respondents in that Ipsos survey were asked to score 100 national and international brands on five factors: leading edge trustworthiness engagement citizenship and presence. The fact that the Department of Conservation scored so highly shows how much Kiwis value conservation yet National has looked the other way when it comes to investing in the public sector in conservation.What it is also failing to do is use the Resource Management Act. A lot of our threatened species are on private land so the decisions that Māori landowners and private landowners make about what happens there have a major impact on whether species like grasshoppers like whio and like a lot of our native fish have got better prospects or not for their future. Yet we have seen this Government proposing to spend Nick Smith nearly $21 million which is allocated in this Budget for improving resource management for providing more advice and more tools. Yet this will not be going to strengthen the Resource Management Act in relation to indigenous biodiversity.Given the National Government’s past plans to gut the Resource Management Act we are likely to see it further weakened and see the powers of private landholders to make whatever decisions they like increased. In fact some of the past plans that the Minister had to change the Resource Management Act have included providing for councils to compensate private landowners if the council includes rules in the plan that affect the ability of private landowners to use their land. That will hinder the prospects of threatened species. It will hinder our biodiversity not support it.Under National private property rights reign supreme. We have had major evidence of that in a recent report that Environment Canterbury has put out. It showed how agricultural intensification is destroying areas of riparian wetland and shrubland habitat along the margins of internationally important braided rivers in Canterbury—rivers like the Waiau River the Rangitata the Hakatere River or the Ashburton River. Alongside those rivers those areas of wetlands and shrublands are some of the only areas on the Canterbury Plains where indigenous species can survive. They are habitat for kowhai for cabbage tree for our native brooms for some of the divaricating mat plants like the Raoulia. They have not been cultivated so they remain as habitat. Yet between 1990 and 2012 over 11000 hectares of those areas were destroyed and converted to pasture. That is an average of 530 hectares each year.The Resource Management Act is supposed to provide some protection for significant indigenous habitats and significant indigenous vegetation. It is supposed to control the environmental effects of land use. Yet this grasp for more pasture to increase the milk supply is leading to the decimation of remaining wild nature and indigenous habitats on the plains. National has done absolutely nothing about that. The Department of Conservation and Land Information New Zealand have failed to enforce the Resource Management Act even though 40 percent of that 11000 hectares was actually Crown land or conservation land or Environment Canterbury reserve. The Resource Management Act needs strengthening to ensure that it protects our biodiversity not further weakening as National is proposing in its reforms.One of the other areas where this Government is failing our biodiversity also under the Resource Management Act is the recently released National Environmental Standard for Plantation Forestry. Although it is desirable to have some consistency in the rules that apply to forestry across the country we are not going to get it under this national environmental standard. That is because it has got very weak provisions to protect indigenous biodiversity. It has got quite clear rules around the shading of plantations on roads to prevent icing yet it allows exotic plantations to be established in indigenous grasslands and in shrublands and it provides the requirement for resource consent only if these areas have been identified as significant in district and regional plans. Most councils have got a very limited list of significant natural areas. They cover only a tiny proportion of the indigenous habitats in the district. So this National Environmental Standard for Plantation Forestry is going to provide a means for private landowners to destroy more areas without getting a resource consent.Again with the biodiversity crisis the Government could have picked up the National Policy Statement on Indigenous Biodiversity and made sure we had some consistency in rules around the country in terms of vegetation clearance control. It has failed to do that. In 2011 it could have progressed it but it dropped it like the proverbial hot potato because who opposed it? Landholders and business interests. So National has failed to implement the national policy statement under the Resource Management Act on indigenous biodiversity. There have been two goes at that yet this Minister and her colleague Nick Smith have totally dropped the ball. That allows a permissive approach to the destruction of habitat on private land to continue.This Government is out of touch. It does not recognise that Kiwis really value our indigenous plants and wildlife and our wild landscapes. It does not recognise that we need to protect these areas as the basis of a healthy economy. It allows private property rights to prevail. It thinks that appointing a threatened species ambassador is going to address the major challenges that we face with the highest number of threatened species in the world. It fails to invest in the Department of Conservation by increasing its funding. Instead it cuts its funding. It is all just about optics as my colleague Russel Norman talked about in an earlier speech—the optics of a threatened species ambassador but not the substance of investing in conservation and ensuring that our law actually protects our wild places and our indigenous habitats on private land.DENIS O’ROURKE (NZ First): I want to speak on the Environment sector in the Committee stage of the Appropriation (2015/16 Estimates) Bill and specifically on climate change policy ready for Paris 2015. This Government has a half-hearted approach to climate change policy and I think it has actually lost sight of the real objective. The need to greatly reduce the planet’s greenhouse gases arising from human activity is the most serious issue of the age. The effects of climate change will be as serious for New Zealand as for the rest of the world and maybe they will be even more serious given New Zealand’s reliance on agriculture. New Zealand in fact is in a better position than most other nations to make a positive and exemplar commitment to its targets and contrary to Government claims there is no need for any risk to the New Zealand economy by doing so. In fact as President Clinton used to say what is good for the environment is good for business. Indeed there are bound to be significant benefits for the New Zealand economy our physical environment our social systems job growth and of course our international reputation from a genuine commitment to a climate change target. Most of all we could make the greatest contribution possible to future generations of Kiwis by committing to a genuine and significant target for 2030.The Government’s recently announced target of an 11 percent reduction in greenhouse gas emissions below 1990 levels by 2030 has been called feeble unambitious and embarrassing. I would have to agree. I think it is pathetic. We in New Zealand First do not aspire to make New Zealand First a leader in cutting greenhouse gas emissions but we do think there needs to be a genuine target for that and in particular we think we need as a nation to take effective measures to ensure we actually achieve our target. New Zealand so far has failed. Instead of doing more this Government has decided to take longer and to do less. There is far too much reliance on carbon credits from plantation forests established many many years ago. As a result our actual greenhouse gas emissions will be 33 percent higher than in 1990 and we will be worse on a per capita basis than the United States. Our targets are now so low that we may not have to do anything at all to reach them and that applies to both the 2020 and 2030 targets. That is an utterly inadequate response when there is no satisfactory reason for not at least doubling the 2030 target that the Government has announced if not more.The Infometrics study for the Ministry for the Environment has calculated that at worst it would cost New Zealand as little as $500 per household—not per capita but per household—per year until 2020 for an additional and much more ambitious and effective target for New Zealand. In fact a rise to a 40 percent target instead of an 11 percent one is achievable at this reasonable and affordable cost. If you think about the amount of $500 per household per year that is less than $10 per week or to put it another way it is the cost of about two cappuccinos for two people per week. It is a very low cost indeed. That in fact is the real cost of an effective climate change target which is not what we have got under this Government. We can afford it. We can afford a much better and much more ambitious target as part of our national budget. But what we cannot afford are the risks of climate change by doing too little.We in New Zealand need to show the rest of the world that we are going to genuinely play our part not just to make a statement to the rest of the world but for our own New Zealand benefit especially for those of future generations. For those reasons I believe that we must upgrade our target for Paris in December—not just to make such a statement but to achieve a better economy a better social system and a better environment for New Zealand. I want to take this opportunity to call on the Government to revise the target it has announced and to adopt a much more ambitious one.Hon Dr NICK SMITH (Minister for the Environment): In these estimates I want to emphasise that our National Party Government does not proclaim to be the greenest party in this Parliament. What we do proclaim is that we are the party that is able to marry together good economic stewardship with responsible management of New Zealand’s treasured environment.I firstly want to respond to the challenge from Eugenie Sage around biodiversity. My colleague Maggie Barry the new Minister of Conservation—against the advice of Treasury—secured $11.5 million in this vote for ensuring that the ongoing decline in the kiwi population does not continue and if there is a portion of our biodiversity that every member of this Committee should treasure it is the survival of our iconic kiwi bird.I want to respond to the contribution by New Zealand First in respect of New Zealand’s climate change target and the work that Tim Groser is doing internationally. I want to put on the record of the House as a member who has taken an interest in climate change for all of my 25 years here that I have not known a climate change Minister to be as influential in the international negotiations as Tim Groser and every member of this Parliament should be proud of the contribution that he is making. Mr Denis O’Rourke challenges us on the target of a 30 percent reduction of emissions by 2030. I have a simple challenge for New Zealand First: we could have been much more ambitious in those targets if it were not for the fact that emissions went up by 25 percent in the term of the previous Labour Government which New Zealand First was part of. So it is rich for New Zealand First to come to this Parliament and claim that the target is not ambitious enough when during its watch when its members were in the Cabinet room emissions went up by more than in any other term.Look back at the projection—the actual record of emissions between 1990 when we entered the framework convention on climate change and today—and the very worst period was in the period from 2005 to 2008. At the same time that the previous Labour Government was talking about carbon neutrality—the very period when New Zealand First had ministerial warrants—New Zealand’s emissions went through the roof. I ask those members to contrast the fact that the actual record of this Government in constraining the growth of emissions has been more successful than any Government in the records since 1990.What these estimates provide for is a real focus on the environmental issues that are important to New Zealand. The biggest increase in my vote is in terms of the work around fresh water. I think every member of this Committee would want that to be a priority for the Government. Let me give the numbers for a matter of record. These estimates enable us to lift the overall contribution during our period in Government—our commitment to freshwater clean-up projects—to $350 million over the 9 years that we have been in Government. Let me compare that with times when there was a lot more cash for the Government when the previous Labour Government spent just $50 million. That is one-seventh of the amount that we have committed and that is why I say to members of this Committee that this Government has a record of real commitments in fresh water.But it is not enough just to commit the money; we need to get the proper rules and management in place to manage fresh water. That is why in 2010 we introduced the first National Policy Statement for Freshwater Management and why in 2013 we introduced national standards known as the National Objectives Framework and why in this next year we will be taking the next steps around the invertebrates index around the issues of exceptions to the policy and around the very tricky challenging issue around Māori rights and interests. With these estimates we will be able to take those next key steps around fresh water.I also want to say that these estimates provide the resources for the Government to take the next steps in ocean management. An important step that we will be taking later this year is for the Environmental Protection Authority to take responsibility for the pollution regulations in that part of the exclusive economic zone that makes up more than 20 percent of the area that we are responsible for in terms of jurisdiction. That is why a very important part of our next steps for our Bluegreen team is around reform of New Zealand’s legislation in respect of marine-protected areas.This is a complex piece of work. It involves a large number of Government agencies—foreign affairs and defence have an interest and both my ministry the Ministry for the Environment and the Department of Conservation. There is a big interest of course from the Ministry for Primary Industries and Nathan Guy is taking an intense interest in it. This year we will be putting out a substantive discussion document on how we can improve the legislative framework and that is something we are going to do in the next year and we would welcome Labour’s support for a piece of work that has been promised for—Hon Ruth Dyson: Got a time frame yet?Hon Dr NICK SMITH: I will just remind the Labour member that it was in Labour’s policy in 1999. You had 9 years in Government and made no progress. Look forward to the progress that we will be making in the next year around that important piece of work around marine-protected areas which was mentioned in the Speech from the Throne at the beginning of this year.The other specific area that I want to mention is the importance of resource management reform. In that area we are going in the direction of a greater degree of national consistency. If we are to get good environmental outcomes but bring the compliance costs down for sectors what we need to have is a greater use of the national instruments under the Resource Management Act. That is why right now with the support of these estimates which provide a substantive increase in funding we are looking at a national environment standard on telecommunications. Why? Because my colleague Amy Adams the Minister for Communications is going for broke to make sure that New Zealand is a world leader in the extension of ultra-fast broadband and cellphone technologies.But it is no good doing that if we cannot actually get those new networks consented. Having every single one of our councils across New Zealand having a different set of rules around where you can put Wi-Fi ultra-fast broadband and cellphones does not make sense. That is why these estimates provide for our concluding this year a national environment standard around those communications. I really do challenge the Green Party which has come out publicly and opposed that national environment standard and I say that it is holding back New Zealand’s connectedness and New Zealand’s competitive advantage in not wanting us to have a greater degree of consistency in that area.I will also mention one of New Zealand’s really important export industries the forestry sector. You know members give lip-service to the issue of regional development. What are the regions of New Zealand where forestry is a critical industry? It is Northland. It is the central North Island. It is areas like Nelson Marlborough and Southland. If you talk to the forestry industry one of the real concerns that that sector has is differentiation of rules under the Resource Management Act which drives up their costs and undermines their international competitiveness. That new national environment standard which we are consulting on right now is going to provide for good environmental outcomes. In some areas it will mean tougher environmental rules—that is true—but it will result in better environmental outcomes and a huge reduction in the amount of bureaucracy and consents that are required for New Zealand’s fourth-biggest export earner.Alongside that piece of work is important work around the Resource Management Act which is also critical in respect of the key challenge New Zealand has around housing. A key part of these estimates provides support for the development of the Auckland Unitary Plan. Why does that matter? Well Auckland is actually one-third of the country. This Government is providing support to Auckland to be able to finalise a plan for that city in the next year which is so critical to its economic growth and housing as well as ensuring that we have good environmental management in that year.So this programme in the conservation climate change and environmental areas shows a very active blue-green agenda by this Government. It does the things that will make sure we better manage our environment our water our marine space our biodiversity our air quality—those things—while also supporting a strong economy.Undermining all that work then is a revolutionary step in the way in which we actually measure how we are doing.Hon Ruth Dyson: Did you say “undermining” or “underlining”?Hon Dr NICK SMITH: Underlining—absolutely underlining it. Let me tell the member who has interjected why. It is this: if you ask me what is one of the two most important pieces of legislation that a National Government has passed that has made New Zealand do better I would highlight the Fiscal Responsibility Act 1994 because we as a country should be ashamed of our record preceding that Act in the management of our public finances. And in the 20 years hence we have done so much better.Hon RUTH DYSON (Labour—Port Hills): Rau rakatira mā tēnei te mihi ki a koutou i runga i te kaupapa o te rā tēnā koutou tēnā koutou tēnā tātou katoa.[To the esteemed ones of a hundredfold I acknowledge you collectively in regard to the matter of the day; salutations greetings and accolades to you and to us all.]It is a really important debate that we are having and I want to acknowledge everyone who has contributed to it. It is the one opportunity in the year that select committees get a chance to hold the Ministers of various portfolios to account and I want to acknowledge the Ministers who did front up to the committees and generally answered questions to the best of their ability—not always as well as we had hoped but certainly to the best of their ability.There are few comments that I want to make in relation to the conservation portfolio specifically. This is the seventh year in a row that we have seen a reduction in the overall budget for the Department of Conservation and frankly it is getting to the point where every time the department has a bit of crisis on its hands—for example a stoat on Kāpiti—it puts out the begging bowl and has to ask whether there is anybody who would like to donate so that it can perform its core statutory responsibilities. I think that that is an embarrassment to New Zealand and New Zealanders and I think the Ministers misrepresent the position that the department has been put in by the lack of support from their Cabinet colleagues.There are other points of concern that were raised during the debate in the Local Government and Environment Committeethat I want to mention. The first is the lack of reclassification of stewardship land and the implication that that might have particularly in two areas that are of current concern. One is Ruataniwha and the other is the Hurunui where conservation land is being proposed as part of a land swap for the creation of a dam. Because those areas in the most part are currently stewardship land there has been a tendency to reduce the public concern by dismissing them as land of little value and we know from the work that the Parliamentary Commissioner for the Environment has done on the need for the proper classification of stewardship land that that land is often not of low value at all. I would really urge the Minister for the Environment and the Minister of Conservation to take the report of the Parliamentary Commissioner for the Environment and do something with it.The second concern that I want to put on the record is the fact that the Minister for the Environment is now responsible for leading our marine reserves legislation and change and I want to say that that is not because of the personality of the Minister for the Environment. Few National members are more passionate than he is about marine protection and I acknowledge the work that he has done over recent years in particular. That is not the concern that I have. The concern I have is that as Minister for the Environment he operates under different criteria.The current marine protection legislation led by the Minister of Conservation has preservation and protection as the basis of that legislation whereas the exclusive economic zone legislation which is where the Minister for the Environment is likely to lead has a sustainable management ethos. They are quite different foundations and that causes a considerable concern in the transfer. So it is not about the personality of the Hon Dr Nick Smith. I am quite comfortable with him amongst all of the National Government Ministers—in fact he is the only one amongst all of the National Government Ministers who I think gives a toss in this area. It is about what the basis of our future marine legislationis going to be. So I wish him every success in ensuring that conservation and preservation are the basis of future legislation.The next point I want to mention is the inability of the Minister of Conservation to answer on time some of the questions and her refusal to answer questions about unsuccessful Budget bids. She is the only Minister I have seen before a select committee who has refused to acknowledge that in some areas her bids were unsuccessful. She should have been up front and honest with not just the committee and Parliament but the public of New Zealand. I have seen other Ministers front up to those questions; she refused. I have subsequently asked the Prime Minister; he has refused to have anything to do with that as well.The last point I want to make is in regard to conservation partnerships. Of course these are a good thing—working with philanthropic organisations with business with individuals and with community organisations together to progress a shared goal—but it goes over the line of partnership when the department is dependent on donations in order to fulfil its core functions. It has got that way in the area of pest management and control it has got that way in areas of planting and it has got that way in the area of education. Those are core statutory functions that the department is unable to perform on its own.DENISE ROCHE (Green): E Te Whare tēnā koe; tuarua ki ngā mema o tō tātou Whare tēnā koutou katoa; tuatoru mihi atu ki Te Wiki o Te Reo Māori tēnā koutou tēnā tātou katoa.[I greet you the House; secondly salutations to you all the members of our House; and thirdly I acknowledge Māori Language Week. Greetings to you and to us all.]I am addressing my comments to the Vote Environment budget. The revenue line shows that the waste disposal levy is expected to remain the same for the 2015-16 year as it did for the 2014-15 year. Currently that budget is $32 million.This revenue is the result of charging $10 on every tonne of waste that goes to landfill and I would just note that that is in the Waste Minimisation Act 2008 which was a member’s bill initiated by the Green Party that got cross-party support. That levy of $32 million is shared between local government and central government to fund waste minimisation activities and initiatives. Basically that is what it is used for.The Government’s Budget line shows that waste minimisation is not working—certainly not if it is going to keep the revenue level at the same amount as this year and last year—and I guess that is not really a surprise when you consider some of the schemes that the Government is funding. The classic example is the one that the Minister announced on the Saturday before last which was a voluntary product stewardship scheme from the packaging industry where it would set up collection points at supermarkets as a 3-year trial to collect single-use plastics and soft plastics including single-use plastic bags.The Government has allocated $1.2 million to do this for the 3-year trial but it is an example of “greenwashing” and nobody is fooled. One just has to look at the New Zealand Herald editorial on Saturday which basically explained why it is “greenwashing”. Again today in the Dominion Post we have the headline here “Plastic bag scheme won’t work” over an opinion piece from Massey University’s Dr Trisia Farrelly. It will not work because the scheme is an ambulance at the bottom of the cliff and it does not deal with the problem of single-use plastic bags in the environment. We use 1.6 billion of these single-use plastic bags every year. That generates about 6 to 11 tonnes of carbon per year and if we got rid of them it would be the same as taking about 3600 cars off the road permanently.Plastic bags are designed to be disposed of. Yes they do not make up a huge amount in the landfill but that is because they are incredibly lightweight and this is where they have a devastating impact on the environment. They can be ingested by marine animals—up to 2000 different marine species including whales and turtles are known to ingest plastic bags and die from them—and they break down into micro-plastic which is eaten by fish and then it enters the human food chain.This Government scheme does not work to change consumer behaviour so it does not minimise the amount of soft single-use plastic and it targets the same environmentally aware consumers who already take their reusable shopping bags to the supermarket in the first place. This is the ambulance at the bottom of the cliff once we have failed to avoid refuse and reduce and then we have got into recycling but this is not going to fix it.Prevention is the way to go and for single-use plastic bags that would be done by introducing a disincentive to use them. We could join hundreds of countries and States across the world and phase them out entirely or we could introduce a point-of-sale levy. International evidence shows that having a levy reduces single-use plastic bag use by between 70 percent and 95 percent depending on how much is charged. Local government bodies really really support doing this. They voted on the Sunday before last to call on the Government to introduce a levy on single-use plastics because they are the ones that are cleaning up the waterways and cleaning up the drains that are getting blocked by this pest and this terrible product which is having a huge impact on our environment.TODD MULLER (National—Bay of Plenty): E Te Heamana e mihi atu ana ki a koe.[I acknowledge you Mr Chairman.]I would like to spend just a few moments talking about the conservation partnerships but if I can just acknowledge the Minister in the chair Nick Smith. He spoke to the key messages that he actually spoke to at the select committee. He spoke about our reform agenda over the last few years and how effective that has been. We have the National Policy Statement for Freshwater the National Objectives Framework the Environmental Protection Authority—there is a huge list of reforms and of course there are funding initiatives to support that. But in particular I would like to spend a few moments just reflecting on the conservation partnerships that we now have in place have had in place for a number of years and intend to continue to invest heavily in over the next 2 or 3 years.When these conservation partnerships were introduced a few years ago under Nick Smith and under Al Morrison’s leadership as the chief executive there was a typical reaction from the Labour Party and the Green Party in particular. They were very anti them—a typically ideological reaction from those who think that conservation and business cannot work together and are in fact in their view very incompatible bedfellows. But these partnerships have proven that wrong. The philosophy that we were privatising the Department of Conservation that private-public partnerships are evil and that conservation is simply the preserve of the Government reflects a tired and captured ideology that in my view is holding them back.These conservation partnerships which Minister Barry and Lou Sanson stepped us through in the Local Government and Environment Committee are successful and are working. The reason they are successful and working is that they are partnering with people who are on the ground. They have the expertise of the Department of Conservation which is in the particular region understands the ecosystem pressures and can identify what the appropriate interventions are to give the best outcome. You have local communities be they iwi or be they local non-government partnerships that are energised and are passionate for their particular area and they can be partnered with business in a way that delivers real benefit. It is not a failed ideology of privatisation which gets barked at us from the other side. It is yet again an example of a pragmatic framework that is working and is delivering and I am very pleased to able to be part of a Government that supports that and to hear from Minister Barry in terms of the various partnerships and how they are progressing.Some of this is pretty personal to me because of the Fonterra Living Waters programme which was launched 2 years ago in partnership with the Department of Conservation. I was part of that; I saw it being introduced. Five areas across the country that are under pressure are having an immediate turn-round with the community Fonterra and the Department of Conservation working together to get a better ecosystem outcome. It is the same with Air New Zealand. There is a list of them and it is worth just reflecting on these conservation partnerships and how they are impacting across the country from Air New Zealand’s conservation partnership—which was initially focused on supporting the kiwi and has now been broadened tosupporting Great Walks marine reserves and other coastal gems—to Dulux New Zealand. Obviously I have touched on Fonterra’s partnership. There is Genesis Energy and its support in terms of the Whio Forever Project. Minister Barry of course at the select committee spoke on the Kiwis for Kiwi programme and the significant investment that we are putting in for that programme and the Mitre 10 Takahē Rescue programme is also an example of that.What is coming to be very clear to those who are involved in these partnerships is that once you actually get around the table likeminded people—people who are concerned about ensuring a better ecosystem outcome—and businesses that are prepared to put their money and support and energy behind that over time as they work together on that particular programme other opportunities come from that. As the relationships become deeper and as the community the Department of Conservation and the business have an established track record of being able to work together for effect the community is presented with more opportunities to take up.I want to reinforce that that is an example of a public policy that is working. It is working today and it deserves ongoing support and credit not the blind opposition based on ideology that we are hearing from the other side.Earlier on we had Eugenie Sage talking about the fact there was no new money in this Budget for conservation. That is wrong. There is $11.2 million of extra funding.NUK KORAKO (National):Tēnā koe e te Kaiwhakahaere. Ā koutou rā te Pāti Rōpū Reipa Ngā Kākāriki Aotearoa Tuatahi me ngā Kahurangi he mihi tēnei ki a koutou katoa.[Thank you Mr Chair. To you the Labour Party the Greens New Zealand First and the Blues I acknowledge you all.]I would like to take a short call in the estimates debate around the environment sector. From listening to the different views from both sides of the House indeed the glass on this side of the House is half full or over half full and on the other side unfortunately it is empty or half empty.I just want to also acknowledge the last speaker my colleague Todd Muller who talked particularly about the relationships that have been developed and fostered particularly over the last three terms of this Government. I particularly want to acknowledge Lou Sanson as well because when we look at the work that he has done particularly with iwi mana whenua and tangata whenua there has not been a time ever during the history of the Department of Conservation when iwi relationships have been so high. That is a true reflection of the way that the Department of Conservation acknowledges Te Ao Māori the world of the Māori and particularly because the other part of it is a whakataukī or an interesting proverb that goes “Whatungarongaro he tangata toitū he whenua”. What that means is that people move on but the land remains. That is really the basis around true partnership and relationships when we talk about the environment.There is one part of the estimates vote that I would just like concentrate on and it particularly concerns the Minister of Conservation but that is not to forget the other two Ministers Minister Groser particularly with climate change and Minister Smith as well for the environment. The Minister of Conservation appeared before the Local Government and Environment Committee to update us around the programmes to tackle kauri die-back. I want to just really concentrate on this because some years ago I spent some time working in tourism up in Northland—particularly up in Waipoua working with the iwi of Te Uri o Hau which is an iwi that operates right inside the Waipoua Forest—and also working with Footprints Waipoua which does tours particularly to Tāne Māhuta and really tells this incredible story around the spirituality of Waipoua.While I was there I really did gain an appreciation for how much of a taoka or treasure kauri are to tangata whenua of the Tai Tokerau but also to all New Zealanders. In the area sometimes referred to as the Kauri Coast kauri contributes to a growing tourist industry as well. I had the opportunity when I was up there in Northland at the beginning of the year to visit the Kauri Museum at Matakohe. That also demonstrated the really important part that kauri plays in the local economy.I just want to say that it is fascinating when you look at those people who work on this kauri die-back programme because it really reflects the partnership that the Department of Conservation has developed with them. You do have these individuals you have conservationists you have iwi and then you have the Department of Conservation working together. So when we look at this—when the Minister came to the committee she expressed the frustration that I think we all feel that we do not know enough about the invisible killer of the kauri. What we do know is that the pathogen is carried through the soil and that it is easily spread from place to place on our shoes and by visitors.A party vote was called for on the question That Vote Conservation Vote Environment and Vote Parliamentary Commissioner for the Environment be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Votes agreed to.External SectorThe CHAIRPERSON (Lindsay Tisch): Members we now come to the votes for the external sector—volume B.5 volume 4. The question is that Vote Customs Vote Defence Vote Defence Force Vote Foreign Affairs and Trade and Vote Official Development Assistance stand part of the schedules. I ask the chair of the committee to set out the major findings of your committee in relation to the estimates.MARK MITCHELL (Chairperson of the Foreign Affairs Defence and Trade Committee): I have a lot to say in such a short time but I will give it my best shot. I wanted to speak about Vote Foreign Affairs first and then cover off very quickly what we discussed in our appropriation hearing in the committee. The first thing is of course the sheep farm in Saudi Arabia. I just want to say that from my own observations from my own time up in the Middle East I was very interested to watch a big stock-handling facility that was built in Boosaaso. It was sponsored by the Qatari Government. It was built so that the state of Puntland which is a part of Somalia on the Horn of Africa could start trading livestock with Saudi Arabia because of the size of the market and the demand there. It helped drive up its GDP. It was a very good project.I also want to state that mutton and lamb is a big part of the diet in the Middle East. That is not something new. It is not like we are just taking sheep into the Middle East for the first time—they are there. The markets in Basra in southern Iraq used to feed a good part of the Middle East prior to the second war and people would travel from all over the Middle East to go to the markets and the stockyards in Basra to buy mutton.We were told that no additional funds had been provided to New Zealand Trade and Enterprise to actually fund the agribusiness hub there and there are about 30 New Zealand businesses connected to the agribusiness hub that are providing goods and services. This is a big business. This has a lot of potential for New Zealand. We own a lot of the intellectual property the knowledge and the know how in order to actually create a real vibrant business in the Middle East.We spoke about the Trans-Pacific Partnership agreement. We asked for an update on that. The agreement is an important one for New Zealand. It involves 40 percent of New Zealand’s trade in goods and services and it involves five of New Zealand’s top 10 trading partners. We know that once the agreement is signed by all parties it will go through New Zealand’s domestic approval processes in the course of which the agreement and its associated national interest analysis will come before the Foreign Affairs Defence and Trade Committee. If changes are required to New Zealand’s domestic legislation Parliament will need to pass them before ratification of the treaty.We spoke about the ASEAN relationship. The year 2015 is the 40th anniversary of New Zealand’s diplomatic relations with ASEAN countries and New Zealand will host 31 celebratory events across 10 ASEAN capitals.We talked about Niue. The Minister of Foreign Affairs spoke about Niue. He highlighted that since 2010 New Zealand has focused its support to Niue on the development of its tourism industry at the request of the country’s Premier and Government. We heard that Niue’s visitor numbers have increased considerably and that this has been a very very successful initiative which has been supported by New Zealand.We asked the Minister about our seat on the United Nations Security Council of which I am personally very proud to see him now sitting in the president’s seat. I want to acknowledge him all of our ambassadors—for example Sir Jim McLay whom we spoke to on the weekend—and the Ministry of Foreign Affairs and Trade for being so successful in securing us a seat on the Security Council.We have begun our month-long presidency. In that time we are going to host an open debate in the council on 30 July in which countries from outside the council can participate. This is important. This is significant because this is one of the points that we lobbied on in trying to gain support to actually win that seat on the Security Council. They are going to be talking about the security challenges facing developing small Island States. Although such States make up about one quarter of the membership of the United Nations only three of them have ever served on the Security Council. New Zealand wants to provide an opportunity for the wider group to be heard on the council. We also plan to have an informal closed dialogue on reform of the Security Council to make it more accountable and more transparent and there is going to be a fair bit of focus around the use of the veto.The Minister spoke briefly about the Middle East peace process. He highlighted the fact that having a seat on the United Nations Security Council will affect our involvement in the Middle East peace process and that there is general consensus that after the Israeli elections and the formation of its Government the Security Council talks on Iran also need to be concluded before the Middle East peace process can be addressed. There may be an opportunity in August or September to consider the peace process and New Zealand will be alert to playing an active role in the process on which the international community agrees urgent action is needed. So you can see that the Minister and the ministry are going to be very active on the Security Council.Hon PHIL GOFF (Labour—Mt Roskill): I want to speak to the New Zealand Defence Force estimates and to begin by saying that at the estimates hearing having the Minister of Defence before the committee is a real test of whether the Minister has any knowledge or understanding of his portfolio. I regret to report to the Committee that 8 months into his portfolio Gerry Brownlee does not understand defence. He has not got a clue about it.It was interesting. We started with a fairly light issue. “Light issue” is a play on words I guess because it was about obesity problems in the Defence Force. That week there had been a major article in the paper saying that 20 percent of the Defence Force personnel were obese and 10 percent were significantly obese and the Minister said that he did not know anything about it. To give credit to Mark Mitchell he said: “But surely Minister if you banned fizzy drinks and deep-fried food from the armed services’ canteen there must be a problem?”. And Gerry Brownlee said: “Oh we were just following what Labour did in the schools 4 years earlier.” I want to know how come it is that “nanny State Gerry Brownlee” will stop adults in employment from drinking fizzy drinks but the Government removed the requirement not to put those things on the shelves of school cafes in order to look after the kids. That was curious.Then there was a question about Vanuatu. Vanuatu—we were a bit late getting there. We have a great ship the Canterbury to do the job in Vanuatu and the Minister said: “Well we can’t send our people up there till we know what they want.” We know what they want from day one. When there is a cyclone they need building materials they need water purifiers they need food and they need equipment to move the debris. But we took 2 weeks to get there and we did not put the NH90s in there as the Australians did. What did Gerry Brownlee say? I have got it here. He said the NH90s were “a dreadful purchase”. Well I want to read to the Committee the answers to two questions that I asked the Minister in the written questions for estimates: “Does the Minister stand by the assessment of the NH90 aircraft by his predecessors the Hon Wayne Mapp and the Hon Jonathan Coleman as being ‘very capable’ and ‘a quantum leap forward for New Zealand’?”. The response from Gerry Brownlee was “Yes”—yes! He said it was “a dreadful purchase” but it was a quantum leap forward according to his predecessors and he agreed.Then I asked “Has the RNZAF ever advised the Minister that the NH90s are not and will not be fit for purpose?” and the answer was no. I want to tell the Minister how angry the people are in the Royal New Zealand Air Force about his disparaging of the best rotary wing aircraft they have ever had.But the real questions came on the deployment to Iraq. I sat down and read the New York Times when I was at an international airport about the same time as the inquiry was going on. What did the New York Times report? It reported that the United States military in Iraq had more than three times the capacity for training Iraqi soldiers than was being used. They had 2000 soldiers being trained. They had capacity for 6700. So I have got to ask the question: why are we spending $65 million and putting our capable troops at risk to have 16 trainers go to Iraq when there is already a surplus of trainers in that country? The article went on to say that the other problem is that there are 22000 Iraqi troops who have deserted and 50000 ghost soldiers where the money is being ripped off and put into the private pockets of those running the military leadership.Sitting suspended from 6 p.m. to 7.30 p.m.Hon DAVID PARKER (Labour): I rise to take a call in respect of the trade estimates. There are two issues that I want to address. The first issue is in respect of the sheep saga which was traversed a little at the Foreign Affairs Defence and Trade Committee and as members who were there will know the National Government members did their best to stop us inquiring into that. They gave the Minister the Hon Murray McCully the opportunity to explain things from his perspective and to try to cover his tracks and then they stopped us from inquiring into itproperly. This is part of the orchestrated cover up that we have had from the Government in respect of the Saudi sheep saga. Even now we and just about every media organisation in New Zealand have outstanding Official Information Act requests that have been routinely ignored in breach of the Act by all of the ministries—by New Zealand Trade and Enterprise by the Ministry of Foreign Affairs and Trade by the Ministry for Primary Industries by the Ministry of Business Innovation and Employment and by Treasury. They have all gone to the end of the statutory period and have then all claimed that they need more time. Then Treasury had the audacity to say that it was going to have a proactive release some time in the distant future.At the heart of this is the fact that the Government has been caught acting unscrupulously. It has wasted more than $6 million on a farm in the desert where most of the lambs died. The Minister for Primary Industries Nathan Guy said he thought that it might have been because of a sand storm which is rather ironic given that the farm advisers say it was more likely to have been a rain event which is itself ironic given that the sheep are under shelter. That waste of $6 million is less unprincipled than the $4 million facilitation payment that the Government paid unnecessarily in order to settle what it says was some threatened legal claim which we now know was never threatened. There has never been any legal advice that we have been able to see that says there was any legal risk to be settled. It was a facilitation payment paid to the Al-Khalaf Group—a $4 million upfront payment that was hidden for a number of years and that has still not been properly explained by Mr McCully.As if that was not bad enough we have also had the South Korea free-trade agreement which makes some important advances in terms of tariff reductions for New Zealand and therefore is good for our traders. But again we had to drag out from the Government and from officials the truth that the South Korea free-trade agreement contains a limitation on a future New Zealand Government extending the sorts of categories of investment that are screened for—i.e. you can screen for existing categories of investment like farms but you cannot add a new category of screening like banning the purchase of houses. It is almost unbelievable that the Government could be so inept as to get this wrong in respect of the South Korea free-trade agreement because the recent South Korea free-trade agreement with Australia permits just that: the banning of the sale of houses to South Koreans. So why this Government was so negligent as to trade the sovereignty of a future Government being able to do that I do not know.As if that was not bad enough we have then had denial after denial in this House where the Minister of Trade has refused to answer questions as to whether the same mistake is being made in the Trans-Pacific Partnership. They have insulted the intelligence of this House by refusing to answer questions when exactly the same questions were answered by Minister Groser on The Nation and on Q+A at the weekend and then by the Prime Minister on Q+A on Sunday. It is a disgraceful thing. Lots of my forebears came to New Zealand to escape absentee landlords and yet that is what this Government is allowing to happen in New Zealand. The richest 1 percent in the world from overseas countries who want to put their money beyond the reach of their authorities or to spread their investments or who think that New Zealand is a safe place to put their money can outbid New Zealanders can push up house prices and can exclude New Zealanders from owning one house in their own country.We have seen a documentary in Australia of the problems that it is having in respect of farmland purchases at the moment; another area where this Government allows overly permissive rules. This Government pretended after the Shanghai Pengxin transaction that it was tightening the rules and then it sent a side letter to the Overseas Investment Office telling it to look felicitously or to approve applications for up to 10 times the size of the average farm unit.Hon NICKY WAGNER (Minister of Customs): E te Tiamana tēnā koe. As Minister of Customs Te Mana Arai o Aotearoa it is my pleasure to update the House on the excellent work of the New Zealand Customs Service and our Budget initiatives. It is an enormous privilege to be the Minister of Customs because it is the oldest New Zealand service. It is celebrating its 175th anniversary this year because the first customs house was established in Russell weeks before the Treaty of Waitangi in 1840. I like to say that customs is 175 years young because even though it is a traditional organisation and it has loyalty and commitment it is innovative and forward-thinking and it delivers cutting-edge services and technology. So it is great to see that you can teach an old dog new tricks.Customs has four major roles. The first is protecting the border the second is managing travellers as they cross that border the third is managing imports and exports and the fourth is collecting revenue. Over that 175 years the demands at the borders have changed but they are always challenging because customs’ job is to keep New Zealand and New Zealanders safe. We do that by managing risk and making border access as quick as easy and as cost-effective as possible for legitimate travellers and goods but as complicated as difficult as time-consuming and as expensive as possible for illegal or dangerous people or goods. The New Zealand Customs Service does this very well. The World Economic Forum rates New Zealand as fourth in the world for facilitating trade across the border and sixth in the world for its actual border processing. That is pretty amazing considering the emphasis we have on biosecurity and the fact that other countries do not do that at all.Last year 10.4 million travellers crossed our border and those numbers are increasing every year. They are increasing in number and in diversity. We have more non-English speaking travellers and we have different cultures and that increases the complexity at the border. SmartGate allows us to manage that risk. Just this week I announced 29 new SmartGates. These are SmartGates on steroids. These are SmartGates that are brand new technology with a one-step process. No more ticketing booths. No more two queues. It has faster processing and better-quality biometrics. That is a fantastic upgrade for New Zealand.We are also delivering for importers and exporters of goods. The Joint Border Management System and the Trade Single Window are world-leading technologies. They are transforming border processes and streamlining systems. Recently I visited the US and talking to customs officials and business people there they were absolutely impressed that New Zealand had this technology—and jealous because they do not have it yet. Customs manages about 11 million import and export transactions and 99 percent of those are managed within 30 minutes. We are also actively supporting exporters. Whenever the Government negotiates any trade agreements customs is involved in order to manage the border processes. In Budget 2015 $6.2 million has been allocated over 4 years to support small businesses so that they can access international markets and reduce the risk of trade disruption.We are constantly challenged at the border by people who want to bring illegal or dangerous things into New Zealand by smuggling drugs offensive weapons and child pornography. So we need to be vigilant and we need to be one step ahead and we do that by working in partnership with the New Zealand Police and with international agencies. In the last 6 months we have stopped half a tonne of methamphetamine at our border. That is a street value of $246 million. We know that we are holding our own against the drug rings and organised crime because the price of methamphetamine has remained the same since 2011 so we have control.We also collect revenue for the Crown. We collect about $12 billion every year.CATHERINE DELAHUNTY (Green): Tēnā koe Mr Chair. Te mihi nui ki Te Wiki o Te Reo Te Reo rangatira Te Reo tino ātaahua Te Reo tūturu Te Reo kotahi o Aotearoa.[I salute Māori Language Week the noble language the beautiful language the original language and the sole language of New Zealand.]Before I speak about overseas assistance and aid I would like to talk just a little bit about foreign affairs as that is part of the appropriation. How is the war going? How is that going—$65 million worth of it? How is the Trans-Pacific Partnership agreement going—that thing that was never going to take away our medicines but we have found out just today that it is going to take away our cheap medicines? It is going really well if you do not think about the real value of the way we use our money in this country. The way we make trade deals the way we actually approach peace and defence is a bit of a disaster and so foreign affairs at the moment defence—a number of these portfolios that are covered by this appropriation—are actually a real mess.We have actually done really well in helping to polarise things further in the Middle East and at the same time in another appropriation we are refusing to take any more refugees except the bare minimum. So on the one hand $65 million is going to promote the wars that create more polarisation; on the other hand we are not going to help people whose lives are destroyed by war. So that is a really great start for foreign affairs.I would like to talk however about overseas development and assistance because it is our privilege to be in Te Moana-nui-a-Kiwa the Pacific the wonderful Pacific where we have relationships with a number of Pacific nations. Some of those relationships ought to include a healthy and honest relationship around aid because we are the privileged the wealthy and the exploiter in some cases of the cheap labour of the Pacific—we have been in the past—and so we need to have a robust and ethical overseas development and assistance aid programme.Under the current Government it has become very economics-focused and to our shame there is no more of it. In fact in 2014 our appropriation was 0.27 percent of gross national income (GNI) compared with 0.39 percent for most OECD members. So other countries of a similar size are doing a whole lot better but unfortunately the Government is a bit mean a little bit selfish and is not prepared to go for the real goal for official development assistance which would be 0.7 percent of GNI. We can be the better country because we rely on the relationships we have in the Pacific. Just because we are bigger and more powerful does not mean we should change our aid policies or freeze our aid policies to what they were way back in the old days. If the defence budget can be increased why cannot the official development assistance budget be increased? We are going to make more peace in this world through those aid and development healthy relationships than we are ever going to make by sending people over to kill people who already think that killing people is the solution.So I think it is quite important to look closely at official development assistance and look at what it should be addressing. We are on the Security Council. We are in a position to talk about security and aid and all of those things should be focused on addressing climate change engendering more local participation and gender equity—dare I say it as if anyone saw the New Zealand Herald story today they will know that the Government is not really not very big on gender equity at the moment; its statistics are shameful—but particularly overseas looking at the economic and social rights of recipient countries.So official development assistance needs to be strengthened and it needs to be increased and there needs to be support for the right kind of development. I said this in this Parliament—was it 2 years ago; I cannot quite recall maybe less—when we had a wonderful conference here which the Government did host and fund for Pacific nations to come and talk about the important issues of the Pacific. It was a great conference. The greatest thing about it was its rejection of the Government’s free-trade agenda and the Pacific nations’ rejection of opening their economies—Hon Simon Bridges: I don’t remember that.CATHERINE DELAHUNTY: Mr—I cannot remember his title—the Hon Mr Bridges forgets that in the last discussion at that wonderful conference when there was a statement put forward about the Pacific Pacific nations said: “We do not want your idea of development.” Country after country got up and said about this important relationship around overseas development and around assistance and around trade: “We reject your model. We want to protect our resources.” Vanuatu was the first speaker. I can quote you the speech. And they were the first people to say it but country after country got up and said: “We know that the natural resources of our world need to be protected. We know that they are vulnerable. We know that our relationship with Australasia and Aotearoa is important. But we want overseas development and assistance that actually allows us to protect our resources.” They do not want the Trans-Pacific Partnership agreement any more than many of us in this country do.DAVID SHEARER (Labour—Mt Albert): I just want to touch on the speech from Nicky Wagner from before. What she failed to talk about in her speech was the JBMS—the Joint Border Management System—that her Customs Service has been overseeing. It has run off-budget—$30 million off-budget. It has not delivered what she said it was going to deliver and now we have the old system and the new system—the CusMod system and the Joint Border Management System—running side by side duplicating each other’s work. What a shemozzle. And if that was not the only thing wrong with the Customs Service here is another thing: there is the highest number of churn through that department than any other Government department and there is the lowest morale in the Customs Service. There are serious things wrong with the Customs Service. It is the staff who are not happy and the information systems that have failed and that is what this Minister of Customs is not getting on to.But anyway I want to move on to foreign affairs. We came on to the United Nations Security Council this year. It is good that New Zealand is represented there. We were all very proud of that and we are currently right now this month in the presidency—there is a rotating presidency and New Zealand holds the presidency in the United Nations Security Council. Murray McCully said that there were three things he wanted to do: he wanted to solve the Middle East peace process he wanted to solve the issue of the veto in the United Nations Security Council and he wanted to do some work on bringing up the issues and the interests of small developing States. Well we have not heard anything about small developing States; we have heard a bit about solving the Middle East peace process and at the moment we have got 3 days left in July and we still have not quite got on top of it; and we still have not knocked off the veto in the United Nations Security Council. This may play well to a New Zealand audience but to an international audience it sounds woefully out of touch and incredibly naive. We can obviously do some work to progress these issues but coming out and saying somehow New Zealand is going to turn those things round is—well look I wish him all the best but in anybody’s reckoning it is wishful thinking.Meanwhile the Government has done this—and I want to just run through this little story. There are 900 sheep in the South Island 300 owned by Mr Al Ali Khalaf. The Government and Murray McCully really without very much consultation with any of his colleagues decided to buy 300 sheep for Mr Al Ali Khalaf fly them courtesy of Singapore Airlines to Saudi Arabia to Mr Al Ali Khalaf’s farm and give them to Mr Al Ali Khalaf. Can you believe that? This is a true story. This is a true story. You could write about this and nobody would believe you. And then those 900 sheep that sit there in Saudi Arabia are all pregnant ewes and 700 of their lambs die. This is supposed to be a model farm that New Zealand is going to be advertising its wares from. Incredible—what an incredible fiasco and debacle.The reason we did that according to the Government is because the Labour Government said that we were banning the export of live sheep and it had upset Mr Al Ali Khalaf. Well actually this Government extended the ban on live sheep exports in 2010 but somehow that was the problem. Mr Al Ali Khalaf was supposed to be suing New Zealand because we had taken away some of his rights. The only thing is that the Government will not release the papers that show what Mr Al Ali Khalaf was likely to do. Mr McCully says: “Oh we actually had a legal opinion on this.” Well he will not release the legal opinion and they certainly will not release any information about whether they sought a second legal opinion perhaps from the Crown Law Office—absolute debacle.But then there is another reason. There is another reason and that reason is that somehow this is going to block a free-trade agreement that New Zealand is going to have with Saudi Arabia and other Gulf States. I want you to reflect on this: if a company had said that they were going to be paying a Saudi businessman this sort of money what would we call it? We would call it a bribe. That is what we would call it and that is exactly what it is and yet Mr McCully has entered the New Zealand Government into a bribe.Hon TODD McCLAY (Associate Minister of Foreign Affairs): It is a pleasure to take a call in this part of the debate on Vote Foreign Affairs and Trade. Particularly I would like to commend I suppose all of the members of the Foreign Affairs Defence and Trade Committee for the useful report that they have put together. Of course we have heard from other speakers about the great accomplishments in the area of the foreign affairs of New Zealand and therefore the Government and the Minister of Foreign Affairs Murray McCully over the last year. Of course that is about our accession—our moving up and being elected—to the UN Security Council.Over the 3 or 4 or 5 years that Mr McCully and Sir Jim McLay and others were campaigning on behalf of New Zealand for this seat on the Security Council there were members of this House who said that it would never happen. They said that New Zealand would not get the recognition that Minister McCully was seeking and some said that it was a waste of effort a waste of time and—dare I say it—a waste of taxpayers’ money. I think that it is a significant accomplishment on the part of New Zealand to be elected to the Security Council not only on the first vote but also with so many votes to spare. The reason why the support that New Zealand received was so significant is that we are seen to be a fair-minded country that will stand up for the rights of people all round the world. We set out an agenda and said that we would go and talk about those issues and we received that significant support.I know that every member of this House bar a few supports Mr McCully in his work and is certainly very proud that New Zealand has been recognised and has received the votes of so many countries of the world. I know that inside this Chamber is a political place but listening to some of the speeches during this part of the debate it would lead one to believe that not all of the support that should be backing New Zealand is as obvious and apparent as it might or should be from members of the Opposition. I put that down to the politics of the situation. I know that David Shearer is a very big supporter of New Zealand’s place on the United Nations and he is a man for whom I have a lot of respect—a lot of respect for Mr Shearer. Indeed he spoke about customs and his concern about the very high churn of officials in the Customs Service. I was of a mind not to believe him but then I realised actually that he has a lot of experience in this area. Nowhere else across the Government or within this Parliament has there been more churn than with Mr Shearer and all of those other Labour Party leaders who have rotated through that seat over the past 6 years.Mr Shearer said that he was supportive of Mr McCully but then he offered some words of wisdom about what he should actually be doing over there. This is the same Mr Shearer who jumped on a plane to go and support Mr McCully just after I think the election last year and who was the very first person to put out a press release following the vote congratulating Mr McCully—not congratulating New Zealand or the Government but saying that he had been able to do some important work in the day that he had been there that had helped to deliver this victory for New Zealand. That was Mr Shearer. Putting that aside actually I know that his heart is in the right place and that he is one of the few members on that side of the Chamber who are actually willing to put what is important for New Zealand first even when it comes to—and this is my second intervention when I want to talk more about trade—being supportive of high-quality trade agreements. I know that when many of his colleagues vote against the Trans-Pacific Partnership he will be conflicted. I would not mind betting that we will see him on this side of the House.We have taken on the UN Security Council presidency at the moment and Mr McCully with our representatives there is representing New Zealand extremely well. There are two other parts that I want to speak about in this report. The first is our relationship with the ASEAN countries. In 2015 there will be the 40th anniversary of New Zealand’s diplomatic relations with ASEAN and that is quite some achievement. In fact we have very important relationships with all of those countries. Indeed New Zealand will host 31 celebratory events across 10 Asian capitals with representatives from these countries to celebrate that relationship and the important trading relationships that we have with them. But it goes so much further than that—many of those ASEAN countries supported us towards the UN.A final bit here is about Niue and our relationship with it—the smallest country in the world and a very special relationship for New Zealand. Mr McCully has championed our relationship and has ensured that we give the right type of support to Niue and in particular since 2010 a lot of effort between the Governments has gone into the promotion of tourism.RON MARK (Deputy Leader—NZ First): I rise on behalf of New Zealand First to make a brief call in defence of Defence Force personnel during the debate on the external sector in the Committee stage of the Appropriation (2015/16 Estimates) Bill. I have to say I subbed briefly on to the Foreign Affairs Defence and Trade Committee to take the opportunity to hear the Minister of Defence who made a presentation along with the Chief of Defence Force Tim Keating so that I could get a bit of clarification around why I could not find in the appropriations a clear indication or any detail of a pay increase for Defence Force personnel. I think it is only appropriate at this time to remind the Committee that it was not so long ago when we had a certain gentleman standing on that side of the Chamber yelling at the House—in fact I actually believe it was outside the Standing Orders myself but the Speaker never responded—The CHAIRPERSON (Hon Chester Borrows): Do not relitigate that please. Carry on.RON MARK: He did not respond Mr Chair. The question was put to this side of the House that we should gain some intestinal fortitude; in fact that we should “get some guts”. The question put across the House was about how the Opposition needed to get some guts and support the deployment of these troops. Often in my time in the Defence Force—15 years in the New Zealand Army and 5 years operating internationally—I heard many many speakers from this House talking about how they valued Defence Force people. In fact if I summed up the number of minutes of speeches at Anzac Day services by Government MPs and Ministers from both sides of the House—Labour or National; both the same to me—talking about how they valued Defence Force contributions I mean if I had a dollar for every second I would not be here today; I would be retired.What we now know from the appropriations is that despite the calls to get some guts and despite the accolades poured upon the Defence Force it did not seem to be enough to move this Government to give personnel a pay rise. There is nothing in this Budget for a pay rise for Defence Force personnel. In fact when I look a little bit deeper what do we in New Zealand First find? We find that this Government actually has the legislative tools and the mechanisms to do one thing for our Defence Force personnel—those deployed to Iraq who have got the guts to go—and that is to give them a tax-free wage. Australia has done it the United States has done it but not the New Zealand Government. When I asked the Minister of Defence that very question in the select committee his answer was no they didn’t consider that. New Zealand First’s question is why not. If these Defence Force personnel are so vital to the foreign policy of this nation and so vital to foreign policy in the view of this Government then why can this Government not see fit to pay them a tax-free wage as the legislation Minister Bennett allows your Cabinet to do. She is mouthing at me across the Chamber—take a call answer my question. As opposed to just chipping at me and mouthing across the Chamber Minister Bennett tell the people of New Zealand and the people at Linton Military Camp and Burnham Military Camp why this Government chose not to.If I look at the Cabinet committee that is meant to advocate on behalf of these Defence Force people—the people whom the Government values so much the people that it wants to pour so many accolades on but is too cheapskate to actually pay them what they are worth—who do I find on this committee? Oh the ministerial committee that makes this determination includes the Prime Minister John Key—well he clearly did not think that they deserved a pay rise. He clearly did not think that they deserved a tax-free wage for being in Iraq. There is the Minister of Defence—well who is going to expect a hell of a lot of support from that gentleman—and there is the Minister of Finance. I am surprised about Bill English. I had almost picked that Bill English was on his own. Section CW23(3) of the Income Tax Act states that the ministerial committee which also includes the Minister of Foreign Affairs “may for the purposes of subsection (2)(b) decide that an amount of income derived by a member for being in an operational area is exempt income.” But this Government no matter what it says out there on the hustings no matter what it says in the media and no matter what it says in the House cannot find it within itself to pay our troops in Iraq today a tax-free salary.What would that do? Well let me tell you as someone who has deployed unlike the person who is yelling out across the House—he would not know what deployment meant—Alastair Scott: Can you spell it?RON MARK: What I can tell you is about when the husbands the wives those service personnel are offshore—listen up Alastair Scott. When they are offshore it is left down to the spouse remaining to look after the kids to pay the power bill to pay the rent—now that they are subject to market rents because the houses have been taken away from them by this Government—pay all off those bills and deal with the coughs the colds the trauma that normally comes up in raising a family. It is hard to do as a couple. It is even harder to do when one is on one’s own. It is even harder to do if one’s spouse is deployed in Iraq and cannot get back. When all those things come to a head it is left down to the spouse back here at home and it is left down to this Government to have some heart and recognise that.DAVID BENNETT (National—Hamilton East): Thank you for the opportunity to speak in this debate. I just want to contrast that last speaker Ron Mark. The members of the public out there will know him as probably one of the most angry members of this House and a most detestable member of this House as well. But that member was actually part of a Government that sent troops overseas and did not give them tax-free salaries. Why did that Government not give them a tax-free salary? Why did the Government that that member was part of not give them a tax-free salary? When that member was in Government troops were sent overseas without tax-free status.And then today in this Chamber he comes here and says: “Look at me. I am the person standing up for those troops. I am the person who is the only one who cares. I am the only one who is doing this.” And when he had a chance he delivered nothing for those troops. All he did was pay for his big fat salary so that he could walk behind his leader and leave this Chamber whenever his leader instructs him to do something. Never has that member delivered anything for this country in this Parliament. Never has that member actually delivered anything that an individual member of Parliament would do. All that member has done in his whole lifetime is sit behind somebody else and be on their gravy train. That is all that member knows.Ron Mark: I raise a point of order Mr Chairperson. I need to assist as a point of correction. I was in a National - New Zealand First coalition Government that delivered lots of good things for the people of New Zealand.The CHAIRPERSON (Hon Chester Borrows): That is not a point of order; it is a matter of debate. The member will be seated.DAVID BENNETT: Thank you. When we come to the foreign affairs and defence areas of this country—Hon Clayton Cosgrove: Which you’d know very little about.DAVID BENNETT: Mr Cosgrove is over there. Mr Cosgrove is another member who knows all about sitting on the fat of the country is he not? We would like to see him win a seat back in that area again but that is not going to happen is it Mr Cosgrove? Coming in here spouting as well—Ron Mark: Go back to San Francisco.DAVID BENNETT: I would be quiet Mr Mark because the public has seen your true colours tonight. The public has seen somebody that is not black and white. He is not New Zealand First. He is not even Green. Ha ha! He is another colour and the reason that he is that colour is that he does not stand up for the people of New Zealand when he has a chance and that is the reality of it. And the Labour Party—The CHAIRPERSON (Hon Chester Borrows): Back to the bill—back to the bill.DAVID BENNETT: OK but it is not really a bill. It is the estimates but I will get back to it.When we talk in this debate about foreign affairs it is important to look at New Zealand as an open free country a country that is confident to take its place on the world stage a country that New Zealanders can be proud of and proud of what it stands for and a country that is open to people coming here and making their lives in this country. New Zealand is a country that sees a future in the Asia-Pacific region. It is a country that does not want to discriminate against people on the basis of their surnames. It is a country that does not want to discriminate—The CHAIRPERSON (Hon Chester Borrows): The member is debating the estimates; it would be good if he got back to them.DAVID BENNETT: OK Mr Chair. I know Mr Mark wants to clap but that is what he does when he is that member of the party and I would love for Tracey Martin to be here at this stage as well. The estimates are an important part of what we look at when we look at what this country is achieving on the world stage especially in the defence area and in the foreign affairs area. When we look at the speeches made in the past they have talked about things like New Zealand’s role on the Security Council they have talked about free-trade agreements with Korea and they have talked about free-trade agreements that are soon to come which the Green Party will be voting against and which the Labour Party for the first time in its history will be voting against. It will be voting against free trade and against something that will deliver for New Zealanders and that is a shame on the Labour Party.You just have to go across the Ditch to see that it did not work out when people took that attitude towards the ability of a country to trade and become more successful. New Zealanders need those trade arrangements. They need those trade agreements and it is a shame on the Labour Party that its leadership will be ideologically driven to oppose free trade—just as they are opposed to immigration just as they are opposed to people making New Zealand their home and just as they are opposed to this country taking its rightful place in foreign affairs and taking its rightful place in the Asia-Pacific region. We can be a leader in that region. We can be a country that is seen as free independent and confident and one that delivers for its people. We do not have to be seen as a country that is insular against trade against immigration and against people making a future for themselves in this country as the Opposition parties have shown themselves to be tonight in their speeches and in their failure to act when given the chance to many years ago.Hon TODD McCLAY (Associate Minister of Trade): I almost did not want to interrupt the member David Bennett. That was one of the most insightful and thought-provoking speeches I have heard in this Chamber for some time. I congratulate him on that. As he is the chair of our most significant committee in this Parliament we are in very good hands.I want to talk now about trade and the importance of trade. Not everybody in this Parliament understands the importance of trade to New Zealand. We do not become richer from selling to ourselves. Of all the things we produce so well be it from dairy wood and wood processing—all of these areas—we produce more than we can consume in New Zealand. We are a trading nation. To be able to make sure that our producers can trade successfully to make sure that New Zealanders can retain their jobs we need high-quality broad trade agreements that at the very least give us the same advantage that some of our competitors have into some of the most competitive markets in the world. But in many cases a free-trade agreement gives us an advantage a preference.Over the last year New Zealand has achieved a significant amount in trade negotiations but also when it comes to trade. Last year New Zealand exported $55 billion worth of goods and services a significant increase on the previous year. That is the first thing. The second thing is that when one looks at the top 10 countries of importance that we trade with—Australia being No. 1 China being No. 2 the United States being No. 3 and Japan being No. 4—we see that we have a free-trade agreement with them or we have launched a free-trade agreement with them or we have a negotiation under way to launch a free-trade agreement.When I look at that list at the next 10 most important countries that we trade with I can see that we have a free-trade agreement with every single one or we are negotiating or we are having discussions with them about the launch of a free-trade agreement. I repeat: we do not become richer as a nation by selling only to ourselves.Tim Groser at the moment is overseas negotiating a high-quality agreement of exceptional importance to New Zealand.Hon Clayton Cosgrove: Are they coping?Hon TODD McCLAY: I know that Mr Cosgrove although he may well have been muzzled—and good luck to those on his side who try to muzzle him—understands trade and is supportive of trade. I know that he has described himself as a rabid free-trader. I accept what that means. That means he is extremely supportive of free trade. He knows the benefits it delivers. Mr Nash is another one. He is a little less rabid when it comes to free trade but he is a free-trader none the less.I think there are starting to be great divisions within the Labour Party when it comes to the trade issue. So are they going to support a high-quality agreement—the Trans-Pacific Partnership—or are they not? I would suggest that a number of the members on the opposite side of the Chamber—the members who know about trade and the importance of trade to New Zealand and are actually in touch with the electorate and know what mums and dads workers and businesses want when it comes to trade agreements—want to support this.But their leader is not so sure you see. I do not know but if you are angry about lots of things why not just get angry about a trade agreement? Why not put aside the collegiality that has often been in this House between the two largest parties when it comes to trade agreements? We will not agree on all aspects of them but actually there has been a bipartisan approach to trade and free trade. We can have the debates about how much further you would go but it is extremely worrying when it comes to New Zealand’s place in the world and the view that the world will have of New Zealand with the second-largest party signalling that it may well vote against an important agreement that would deliver for New Zealanders.So the question is: do we want a free-trade agreement with Japan? Do we want one with America? Do we want to back our businesses to do well in trade with them? Well of course we do—a high-quality agreement. I know that there are members on that side of the House who when they were in Government advocated for and argued in favour of a negotiation with those two countries and others. I know that deep down that they support this.So why is this important? Well think about the New Zealand - Korea Free Trade Agreement that has been delivered and is about to go through this House. I will give you an example from the Bay of Plenty of how exceptionally important this is to individuals and mums and dads. We export a lot of kiwifruit. We are the best kiwifruit producers in the world and the best exporters of kiwifruit. But others produce good kiwifruit as well and others are competitive and others have lower costs of production. So when Chilean kiwifruit go into Korea they have a lower tariff rate than we do.Dr SHANE RETI (National—Whangarei): It is a pleasure to speak about the estimates and appropriations hearing. The estimates hearing was on 25 June. With the knowledge that New Zealand would be taking the United Nations Security Council chair on 1 July the Foreign Affairs Defence and Trade Committee asked the Minister of Foreign Affairs about New Zealand’s role in the Middle East peace process. We heard several things. We heard that the last time the Middle East peace process had been considered was 6 months previously in December. We heard that the process was waiting for the outcome of the Israeli elections. We also heard that there needed to be some conclusion on the P5+1 nuclear talks.Several weeks later we can look at what actually happened. The Israelis decided their electoral process—a Netanyahu Government. I would also note the successful conclusion several weeks after the Minister presented this of the P5+1 nuclear talks. Indeed Mr McCully talks to this. We have to imagine that this is a very important activity around the world. Nearly everyone was very pleased to have those talks concluded in a satisfactory way and New Zealand was the chair when that happened. Mr McCully talked to it at that time. Here is what he said: “Over the last eighteen months negotiators have been working to secure an agreement that will increase international confidence in the nature of Iran’s nuclear programme … This agreement is a positive development for regional stability in the Middle East and will allow for further progress to be made in the relationship between New Zealand and Iran. New Zealand commends all parties to the negotiations for staying the course and concluding this important deal. As the current President of the United Nations Security Council New Zealand will do what it can to expedite any necessary Security Council action and we call for the agreement to be implemented as soon as possible”.So there was a clear answer to us. We asked what role New Zealand was playing on the Security Council. There was a clear answer and within a few weeks we had already stepped up to the plate and been a part of those talks. Furthermore on taking the chair of the council on 1 July New Zealand has more than kept to its word on the whole matter of the Middle East peace process. At the recent Middle East open debate at the United Nations Mr McCully demonstrated that leadership and commitment that we bring because that is what got us the seat in the first place. The small nations said: “Yes we believe in you. We believe you will lead us that you will speak for us that you will guide us and help us.” and within the first few weeks that is exactly what we did tackling some of the hard questions—and the Middle East peace process is a hard question.Here is the statement that demonstrates to those who supported us that we do indeed respect their vote and that we are doing stuff. This is from Mr McCully. Speaking to the United Nations Security Council at the Middle East open debate in New York where New Zealand is currently president Mr McCully said: “[T]he situation in Syria has remained deadlocked for far too long. The region cannot afford for the conflict to continue. Nor can the Council – its credibility is at stake.” These are fighting words. This is tough talk for New Zealand. Although the United Nations Security Council celebrated a historic agreement earlier this week when it signed off a nuclear deal with Iran Mr McCully stressed that the council could not rest on its laurels. That is good stuff. It is a real demonstration that we carry a strong voice at the council.We also heard from the Minister of Customs. We asked customs about what our drug detection capabilities at the border are. We were advised of many refined and very sophisticated tools that we have at our disposal. These included intelligence machinery—that is advanced passenger processing that gives us the ability before people actually hit our borders to have a higher index of suspicion and to do something about it. We were also able to share the Ministry for Primary Industries’ X-ray equipment and it was relayed to us that purchasing approval had been had for cutting-edge detection technology that can detect drug suspended in solutions. This is a good thing. We were also told that we have trace-detection technology that works at a molecular level and of course drug dogs which are very successful for mass screening.So we were told what mechanisms we have to detect and we clearly know what we see and find but an interesting question is: what do we not detect? What could be getting past us? Do we have any sense as to what that looks like? So we actually asked that question and what we were told was that yes there are actually several ways to determine on the street how we are doing and what might be getting past us. Those two ways were first of all a survey that Massey University does regularly. That gets some assessment as to what is on the street what got past us. The second way is measuring commodity prices and simple supply and demand. What they are noticing is that prices for refined methamphetamine especially are stabilising and may even be rising and that would suggest that supply is falling. So I think that in some sense that is an independent measure that our drug detection capabilities at the border are actually successful.At the estimates hearing we heard very strong support for the New Zealand Defence Force. It was quite akin to what the member Ron Mark from New Zealand First was telling us. I do not think a Minister could have given a stronger statement and indeed it raised some contention amongst the committee members at that time. So I want to totally disagree with what Ron Mark was saying. What we did ask the Defence Force about was the other side of the work. So there was a lot of discussion around our forces in Taji and the excellent work they are doing. We asked them about their capabilities and their work around disaster relief more specifically in Vanuatu in the wake of Cyclone—Vote Customs Vote Defence Vote Defence Force Vote Foreign Affairs and Trade and Vote Official Development Assistance agreed to.Finance and Government Administration SectorThe CHAIRPERSON (Hon Chester Borrows): Members we come now to the votes in the finance and Government administration sector—volume B.5 volume 5 and the question is that Vote Audit Vote Communications Security and Intelligence Vote Finance Vote Office of the Clerk Vote Ombudsmen Vote Parliamentary Service Vote Prime Minister and Cabinet Vote Revenue Vote Security Intelligence and Vote State Services stand part of the schedules.GRANT ROBERTSON (Labour—Wellington Central): It is interesting that on the weekend the National Party held its conference here in Wellington. I read about Paula Bennett who was like the host of some kind of demented version of TheGeneration Game pulling on Jonathan Coleman’s hair to work out whether it was a toupee or not. This was the level of debate and rigour and vision for New Zealand that was emanating from the National Party conference at the weekend. Paula Bennett was taking text messages from the crowd about which member of the Cabinet’s hair she could pull.Between that and the canapés and drinking the Kool-Aid Bill English stood up and told the National Party conference that it was all OK with the New Zealand economy slowing down with consumer confidence collapsing with business confidence collapsing and with employment confidence collapsing. That was all OK because it came at the right time in the electoral cycle. That is now the extent of the vision for the economy from the National Party. It is governing not in the national interest but in the interest of the National Party. That is the extent of the once-ambitious National Party for New Zealand.Once upon a time when there was a massive slow-down in rural New Zealand with $13 billion disappearing from regional and rural New Zealand communities over a 2-year period National Party members would have stood up and said: “This is a serious problem.” It was only a few years ago that John Key said: “When the dairy industry gets a sniffle New Zealand gets a cold.” But not now—not now. It is fine. It is a great thing. It is happening now and by 2017 along will come the National Party just as it did in 2010 with a wee package of tax cuts—unaffordable as they were in 2010. The National Party will come along in 2017 and try to bribe the electorate again.Meanwhile people are doing it tough right now in New Zealand and apparently that is a good thing for Bill English. Apparently it is a good thing that people are doing it tough that there are 146000 New Zealanders out of work and that we have the highest number of people who have not had a wage increase in 5 years. That is a good thing Bill English told the National Party at its conference. Well that is a disgrace. It is a disgraceful coming from the Minister of Finance who stands up and says that a slow-down in the New Zealand economy is good because it is happening now in the electoral cycle.I thought Bill English was better than that. I thought Bill English was a better person than that. But he stood up at that National Party conference and revealed that it is just about the politics. That is all that matters. A slow-down in the New Zealand economy people losing their jobs and communities losing out is a good thing according to Bill English. That is what he told that National Party conference. That in my view is an absolute disgrace. There is nothing in these estimates to say to New Zealanders: “Here’s the plan to get us out of this economic slow-down.” After 6½ years of lazy economic management from this Government there is no plan in here to say how we will get ourselves as a country out of this situation. Instead what we have in here is a lack of vision.What we have in this Budget—and let us not mistake this for one moment—is $60 billion more debt than this Government had when it came into office. We have $60 billion more debt. The Government will not pay down under this Budget a cent of that until 2019—until 2019. There is nothing in this Budget nothing in these estimates to give New Zealanders that sense of hope that there might be some new ideas that there might be some ideas for adding value to our industries and that there might actually be a plan to support diversification. Instead all there is is a continuation of trying to ride the wave of commodity prices. Well guess what? The wave has broken and there is no plan B on that side of the House. The wave has broken—$13 billion dollars has gone out of the economy—and there is no plan B.What these estimates show is a complete lack of vision for the kind of economy New Zealand could have—an economy that supports a good life for New Zealanders in the regions and a good life for New Zealanders in Auckland and an economy that says we are going to be ambitious about lifting exports. The Government set a great big target for increasing exports: up to 40 percent of GDP. What has happened under this Government? It has gone down and this Budget sees it tracking down even further.Let us be absolutely certain. Since this Budget was put on the table it is the downside scenario that is coming through. It is not the great upside scenario of growth of around 3 to 3.5 percent. It is heading downwards—it is heading downwards. There is no sign in this Budget no sign in these estimates that the Government has any plan about what happens when its precious precious plan of sitting there and riding the commodity wave falls apart. I would have thought Bill English with his seventh Budget would be able to come to this House with a plan that says: “I recognise confidence is disappearing from this economy. I recognise we’ve got to do things differently. Let’s actually plan.” There is nothing here like that.The CHAIRPERSON (Hon Chester Borrows): Members I will call the member David Bennett shortly. I need to concede that I should have called him first. I encourage him when seeking the call to use the same voice that he uses for interjections. Bearing his last intervention in this debatein mind I would remind him of the Business Committee’s determination that the role of the select committee chair in speaking in the estimates debate is to set out the major findings of their committee in relation to the estimates. I welcome the call from the member.DAVID BENNETT (Chairperson of the Finance and Expenditure Committee): It is my pleasure to do that following the previous speech which did not set out any of the findings of the select committee’s hearing. It was a speech by somebody who has no contact with the real world. He thought that the National Party conference was in Wellington not in Auckland. He thinks that the beltway that he represents is what it is all about.I tell you this: in the 5-minute speech by the Opposition spokesperson on financeI found only one number. You would expect a speech on economics and finance to be full of numbers to talk about Budget surpluses to talk about economic growth and to talk about the things that we talked about in the estimates hearings. There was only one number used in that whole speech and that was when that member described the Minister as having made his seventh Budget. That was the only number that was actually remembered by the member opposite.Never was there any talk of the things that we talked about in the estimates hearings—revenue tax gains what has been largely looked at in the tax field trying to look at getting more tax revenue for New Zealand and appropriate tax revenue—nor was there any talk of the numbers used in Vote Canterbury Earthquake Recovery. Was there any mention of the numbers used in Vote Finance the Fiscal Strategy Report or the Budget Economic and Fiscal Update? This is where we talk about things like the Budget surplus and where we talk about things like economic growth. None of those things were mentioned by that member—none of them.That shows that that member is totally out of touch with his portfolio. He has no understanding of economics. He is purely a Wellington beltway official who is now in the political realm. That is a disgrace. He talked about things like bribing the electorate. This is from Labour which gave free student loans and 20 free hours’ early childhood education. Labour is the bribing party if ever there was one.Hon Annette King: Did you get rid of them?DAVID BENNETT: Annette King is here. She is the top briber. She is the greatest briber you will ever see.Hon Clayton Cosgrove: I raise a point of order Mr Chairperson. Two points—the first point is that I do not think it is appropriate for anybody to be accused as an individual of bribery. I think you will find that that is out of order. Secondly I fail to see what the last 1½ minutes have had to do with anything in the estimates.The CHAIRPERSON (Hon Chester Borrows): The points are well made. It is over to the individual member to take offence if that is the point that is believed to have been made. Having said that the point was underlined to the speaker at the beginning of his speech when he was called that the Business Committee has allocated special calls to committee chairpersons for the purpose of setting out the committee’s major findings on the estimates. I challenge the member to live up to the expectations of the Business Committee.DAVID BENNETT: I was merely responding to a previous speech that had started this debate and I could not let it go without referring to it.If we look at Vote Finance what does it say in Vote Finance? Under the economic and fiscal outlook it says that there is an average growth rate of 2.8 percent in New Zealand—Brett Hudson: How much?DAVID BENNETT: —2.8 percent over the next 4 years—2.8 percent. That is one of the highest growth rates that you will find in the Western World. That is in New Zealand and it represents good economic management. When we talked about Treasury’s Budget and the Economic and Fiscal Update that was one of the key things that came out of it—that is the strong growth rates in New Zealand going forward. Unemployment is expected to drop below 5 percent in the next 2 years. Unemployment dropping and higher growth rates—that is good for New Zealand going forward.When we look at the Budget we actually look at what was considered as the Budget surplus or deficit. It is always a bit of a moving feast at this stage because when you look at the numbers they are quite small in comparison with the overall spend and the total tax take. But when you look at a Budget surplus or deficit—in this case we are looking at losses of about $684 million in 2014-15 followed by a surplus of $176 million in 2015-16 and increasing surpluses after that—it shows that New Zealand is on the right track. It shows that the economic management of this Government is on the right track. I bet that we will actually be in surplus this year a bit earlier than anyone expected and that shows even better economic performance by the New Zealand—Hon Clayton Cosgrove: The economists are hanging on every word.DAVID BENNETT: Is that something Mr Cosgrove is saying is it? Mr Cosgrove was a member of that Finance and Expenditure Committee but apart from his abusing the officials nobody actually remembers what he said. But he was there.Achieving a Budget surplus was a key part of the finance estimates and many members from the Opposition asked questions about that. Of course they were interested to see New Zealand achieving a surplus which is something they do not want for New Zealand and were quite keen to make that point in the estimates hearings when the Minister was quite clear that that is his focus. So it was disappointing for those Opposition members to find that—Hon CLAYTON COSGROVE (Labour): That member David Bennett reminds me of the Edmonds cookbook where you used to have to buy a desiccated coconut and what you would get with a desiccated coconut is that they would break the coconut open and hollow it out. That is what that member reminds me of.That member asked for numbers. Well if he cared to have a look at Vote Revenue it is on page 138. We will go through a few numbers. I know that Todd McClay who inherited the revenue portfolio—poor soul that he is—from Mr Dunne cannot take absolute responsibility for the massive overspends in this portfolio. The member wanted some numbers. Well let us give him some numbers. In the Finance and Expenditure Committee report it talks about the child support reforms. They were originally estimated to cost $30 million but because of delays the budget was revised to $210 million and then after Mr McClay came in like the nightwatchman to clean up after Mr Dunne he bodgied a few figures and revised it down to a blowout of $163 million. So there for the desiccated coconut in the corner over there who has just spoken are some numbers.We will also turn to a couple of other numbers shall we? Look at the Business Transformation project on page 139 in the Estimates—$100 million has been spent to date and what have we got to show for it? Do we have a computer program? We have got some reports and we have got a few piles of paper but do we have one keystroke banged on a computer keyboard? No. And the first $100 million has been spent—Brett Hudson: The difference—that’s because we plan to succeed not plan to fail.Hon CLAYTON COSGROVE: No no you keep quiet over there. The first $100 million has been spent—[Interruption] The old tumbleweed in the corner over there—you keep quiet.Mr DEPUTY SPEAKER: Order! I will just remind the member on his feet that his nicknames for various members of the House have got him in the brown stuff before. I would suggest that he refrain from using those nicknames and tend to refer to members by their proper names.Hon CLAYTON COSGROVE: I take the point Mr Deputy Speaker. I do not understand the first technical point but I am sure we can have a chat about it afterwards.If we can look at some numbers on the Business Transformation project as I have said there was $100 million spent. The latest estimate for this amorphous beast is $1.3 billion to $1.9 billion.Brett Hudson: It’s called planning Mr Cosgrove—planning and design.Hon CLAYTON COSGROVE: For the new member at the back Mr Hudson—I do not know where Mr Halls is but Mr Hudson although he was not a member here may remember that we had a thing called INCIS. There are a number of members who are here in this Chamber—it was the police project remember? That was put down to what they called spec creep at the time. That project rolled out at a couple of hundred million dollars—I think the final bill for it was well over $1 billion from memory. Like that member I was not in the House. I was working in Parliament but I well remember that one. So I wonder whether Mr Bennett will come back and maybe take another call andwhether as he is fond of addressing numbers and those sorts of things he will address some of those.The final point I want to deal with is what was foreshadowed in the Budget which is the infamous land register for overseas interests—if I have time. This is an absolute doozy. This is a cracker. This is a Bill English special. After Bill English along with Dr Nick Smith said that a register of foreign ownership in residential land or any type of database one would be a complete waste of time; two would be totally unworkable; and three—to quote Dr Smith—would cost millions of dollars what did they do when their feet were put to the fire and they needed to look as if they were doing something about the foreign ownership issue? Well they came up with a land register. Then we found out that it will not be universal. It will not cover the main home. You will not have to provide an IRD number for your main home. Why? Because it would be a financial and compliance burden to you for somebody to ring up and ask: “Where’s your IRD number? Can we get it?” Also we find out that it may well be possible—I do not know whether Mr McClay knows this—to have two main homes. So this register—Hon Members: You can’t have two main homes.Hon CLAYTON COSGROVE: Oh yes. Oh yes according to the Inland Revenue Department officials at the select committee.Ernst and Young could not find a reason why people should not universally provide their IRD number regardless of whether it is their main home or a second residence or whether they are a domestic or foreign purchaser. In fact Ernst and Young got up and said: “There is no compliance cost. There is no financial burden or other burden to people doing that. But what it would do if you made the register universal is it would give you high-quality statistics and a real register if you really as a Government wanted to know what is going on.” So I look forward to the debate over that and I bet the Minister whatever he likes that we will be back here inside 12 months amending and patching up that piece of legislation.It is designed as a piece of political propaganda so that the Government can appear to be worried about foreign ownership inresidential property but it is putting together a regime that you could drive a bus through. Even Mr Bennett in his own limited and weird way may be able to find a way around that—I think he might. Even Mr Bishop nods in agreement.JAMES SHAW (Co-Leader—Green): I would like to take a call in relation to Vote Finance appropriations initially. I just wanted to agree with some of the comments that were made by Grant Robertson earlier in the evening when he said that his sense was that looking at the appropriations it demonstrates really a lack of vision on behalf of the Government in relation to how to create a sustainable long-term economy. When this Government was campaigning for office in the mid to late 2000s it talked about trying to create an economy that was built on savings and investment rather than on debt consumption and spending. What has happened over the course of this Government is that the economy has actually become more about speculation than about investment despite a number of things that the Government has been spending money on to try to nudge it in a different direction.One example of that is the research and development grants which have kind of shuffled money around in terms of how we try to encourage innovation. We did some research recently that showed that despite everything the Government has been doing in that area New Zealand’s spending—not the Government’s but New Zealand’s—on research and development and innovation is about the same now as it was in 2008. In other words we have been trying to do some different things and yet we are getting nowhere which in my view looks very similar to the Government’s approach on a number of fronts which is to be seen to be doing something without actually doing anything at all.There has been a real failure to diversify the economy and this has left us of course very exposed. I will also reference the 13 percent fall in the global dairy trade option prices recently which has left the economy very exposed. I just want to call out Steven Joyce on this issue who when we recently questioned him in the House on the risk to the New Zealand economy from the fall in dairy option prices said: “Oh well don’t worry about it—dairy is only 5 percent of our overall economy. It doesn’t really matter.” Of course it might be 5 percent of the overall economy but it is about 40 percent of our exports. I completely agree with Todd McClay who said earlier that we do not get wealthy by trading with ourselves. So the fact that dairy is such a massive portion of our export market is really important. When you try to minimise the fall in dairy prices on the basis of the overall economy rather than the trading economy that is being completely disingenuous. When dairy struggles so does the rest of New Zealand because so much of the domestic economy is actually built around providing products and services to the dairy industry.The other thing that that comment really shows is a sort of callous approach actually to a core National Party constituency which is the rural and farming community. The sheer numbers of farmers who are leveraged up to and past the hilt is now at the point where huge numbers of them are actually at risk having gone through the process of making those conversions so that the price that they are getting at the gate means that they are barely covering the cost of production let alone servicing their debt. I know that the Government says that the price will recover fairly quickly but actually there have been some big shifts in the global market. The Americans for example have changed the way that they subsidise their own farmers which is encouraging huge amounts of production in the American market causing a glut. So I think there is actually some risk that prices are going to stay low and as low as they are if not even lower for quite some time. So this does present a real risk to our economy.Successive Governments—not just the current Government but previous Governments—have failed to address property speculation which has got worse and worse to the point that since 2009 Auckland property prices have gone up 79 percent which is pretty staggering. I accept the Government’s argument that there is a supply side problem. Obviously people do not speculate when there is a glut; they speculate on the basis that there is not that much supply. But it is also a demand side problem. There is both a supply side problem and a demand side problem. Because of this Government and—Hon BILL ENGLISH (Minister of Finance): It is good to hear the Greens bring to the Opposition part of this debate a little bit of logic. I do not agree with everything the co-leader of the Greens said but he made a lot more sense than Grant Robertson did. I could follow his argument. It was starting from some wrong premises but nevertheless you could see where it was going. You know that even if you disagree with their critique of Government policy the Greens have an alternative view of the world and in its own way on its own planet it has got some coherence. You cannot say that about the Labour Party—you cannot.Just before I come to that I just want to correct one or two of the things that the member James Shaw said. He has the benefit of being a new leader. Therefore he is not responsible I suppose for the positions previously taken by the Greens but I have to say that the Greens’ crocodile tears for the dairy industry would be slightly insincere from anyone else in their caucus with their having spent the last 10 years kicking the dairy industry as the destroyer of the planet. It creates the only type of pollution that is almost as bad as people in the Greens’ world. So that is one thing he does not have to take too much responsibility for but I accept that the Greens now have a much more balanced view about the role of the dairy industry in the New Zealand economy which is that it produces jobs exports incomes increments in wealth and the opportunity for the Government to take some of that in tax and pay for other things. So I hope the Greens are going to stick to that position. At least it is more coherent than the Labour Party one.The other area where he was a bit more coherent was around the issue of consumption and expenditure versus exports and investment. That certainly is a challenge for the New Zealand economy. The Labour Party ought to listen because the co-leader of the Greens—and he is not even the finance spokesperson—seems to be able to articulate that kind of logic without sounding like he is a student politician trying to impress a bunch of first-year students in a lecture hall in their lunch break to see whether he can get them out on a protest about student loans which is what the Labour Party still sounds like. It still sounds like that.Mind you it must be difficult being a spokesman for the Labour Party. I mean at least the Greens are against free trade. They like fair trade—I am not exactly clear why but they do—and they are against free trade. Well it must be hard to represent the Labour Party’s position because it is for it and against it and interestingly that does not seem to create much tension for Grant Robertson. It does not seem to matter that those members are totally contradictory just like they are for and against migration. I have finally figured out the Labour Party formula: those members are all for having migrants from China as long as they stay homeless. That is fine. As long as they are homeless migrants they are most welcome as Labour members stand up in front of the Chinese New Year celebrations to acknowledge the role that this ethnic community is playing in the economy of New Zealand.I mean the fundamental problem with the contribution from the spokesman from the Labour Party—and we have pointed it out before in the House and I have yet to hear Labour address it—was this: dairy prices being high was bad for the New Zealand economy. We put up with that for years. Those members said that dairy prices being high meant we were not diversifying it meant that there was too much pollution and it meant that there were rich farmers on the pig’s back getting their carbon credits subsidised. So I thought: “Would it not be great if dairy prices dropped? That would solve all those problems.” Oh no. Now that dairy prices are down that is bad as well even if it achieves all the things that the Labour Opposition said should happen.That is the fundamental contradiction at the heart of Labour’s approach. The Greens are at least consistent. Labour does not believe in prices. Those members think that politicians should decide just to have a bigger part of the economy here and a smaller part over there. Well I look forward to the finance spokesperson for the Greens turning up again—Ms Genter—because I do not think it will take her very long at all to establish her credibility as the leading Opposition spokesperson on finance in the House.CHRIS BISHOP (National): What an interesting contribution we had from Mr Robertson earlier. It was a revealing insight into Mr Robertson’s state of mind. What did he say at one point? He said that the National Party will take to the 2017 election a plan to bribe the electorate with tax cuts. Well I personally hope we do take a tax cut package to the next election but what a revealing insight into what Mr Robertson thinks about New Zealanders with their own money. He said that giving them tax cuts is a bribe. I think that that is regrettable.What else did Grant Robertson say? Well he accused the Government of lazy economic management. Oh the irony—the irony—of Mr Robertson accusing this Government of being lazy. The guy who is spending 2 years on the future of work—2 years gallivanting up and down the country and offshore no doubt to the United Kingdom and Canada to talk to all of his left-wing mates—is accusing us of laziness. Well that is just deeply ironic.You see the Labour Party is really at sixes and sevens at the moment because its Chinese demonisation campaign I think it is fair to say has been an utter disaster. So—Hon Annette King: What do the polls say Chris?CHRIS BISHOP: The polls have not moved for Labour but not only that all of the Labour Party’s best activists are flooding Twitter and Facebook and resigning. So the very people whom the Labour Party relies upon—Sue Moroney: How many Chris?CHRIS BISHOP: The people whom Sue Moroney relies on in her continual and perennially failed Hamilton West and Hamilton East and Piako and Port Waikato campaigns to put up her hoardings which were frequently reused in the last campaign—all those activists are resigning from the Labour Party. Why? Because the Labour Party has been revealed not as the progressive force for enlightenment and tolerance and for welcoming migrants and foreigners to the country but as a party that is prepared to play the race card for base political purposes. And not only that; it failed. So it is really at sixes and sevens.It is really at sixes and sevens about the issue of free trade as well. Actually—and this is really sad—only one party in this Parliament now stands up for an open and tolerant—[Interruption]The CHAIRPERSON (Lindsay Tisch): Order! Actually I would like to hear what is being said. [Interruption] I am on my feet; the member will be silent. That was not necessary. I ask the member to come back to the substance of the estimates debate please on this one.CHRIS BISHOP: Thank you very much Mr Chair. I do want to talk about the estimates but I want to respond to the point that Grant Robertson made about the dairy price and to the point that Mr Shaw made as well. What these estimates contain particularly with finance and Government administration—Vote Finance—is the diversification that is occurring in the New Zealand economy and it is actually quite regrettable that the Labour Party thinks that this is not occurring. What this Government has set out to do over the last 7 years is grow the innovative parts of our economy through things like Callaghan Innovation through things like new rules for research and development and through things like information and communications technology graduate schools. We have sought to do that and actually that is increasing.I just want to pick up on the point that James Shaw made before. He said that the amount of research and development that is going on in the economy is not increasing. Well I think you could probably argue about the numbers but it is true to say that as a percentage of GDP the amount of research and development that is going on in the economy has not increased at the rate that we would like. I think that it is also fair to say that the development of things like Callaghan Innovation and some of the new tax rules that we are introducing have not flowed through into some of those statistics yet. The numbers that he was talking about were for 2014. Some of those developments came in only in 2013 or 2014 so these things take a while to turn round.But what is true is that the number of firms in New Zealand that are engaging in research and development is increasing and the amount of money that is being spent is increasing in real terms. As a percentage of GDP I think it is true to say that those numbers are flat but why is that? Why is that? Because our GDP has been growing and our GDP has been growing at one of the fastest rates in the developed world.So Mr Shaw made a good point but I think it is true to say that these estimates contain a range of measures that are going to increase the amount of innovation occurring in the New Zealand economy. It was a sage speech by Mr Shaw. It is unfortunate that we cannot say the same about Mr Robertson’s contribution.Hon TODD McCLAY (Minister of Revenue): I want to speak in the debate at the moment around revenue. I do want to say that when the Hon Clayton Cosgrove was speaking I did particularly enjoy his interventions. The challenge was that very little—in fact nothing—he said there was correct. It was very unusual because he is a wise man. He does get very excited when it comes to speaking particularly when David Bennett interjects. I would say it reminded me of when I saw him earlier today down at the gym beside the cycle. His little legs were going as fast as they could there was sweat on his brow and there was a very very serious look on his face. Then I suddenly realised he was just trying to get up on the seat. It was very much like his speech here in the House because he was very excited but there was not very much relevance in it.The Government has under way a very large and ambitious project for the Inland Revenue Department to transform and modernise and to modernise and simplify tax administration in New Zealand. It is as straightforward and simple as this: our desire is to find ways to make it easier for New Zealanders to comply with their tax obligations to reduce the administrative burden upon them when it comes to paying tax and to modernise the tax system so it works for them and certainly so it works for the Government and it works for the Inland Revenue Department.This will be broken down into a number of chunks. We have just had two green papers that we have put out where we had more than a thousand interactions with the public. Very significant when it comes to taxation was members of the public and businesses telling us what they thought we may do to improve tax administration. A very important part of this was around provisional tax—making provisional tax simpler and making it easier.We put out a green paper and we said to the public: “We want to hear from you. Put in a submission.” and after the submission date closed all of a sudden the Leader of the Opposition came out with a policy around provisional tax. He said: “PAYE for businesses.” The problem with that was it was less a policy and more of a late submission on our green paper because actually that was what was in the green paper. In the green paper it said: “What about PAYE for businesses to reduce the burden upon them?”. It is good to see that the Leader of the Opposition Mr Little put in a late submission supporting the Government’s proposal. We thank him for that. I have another green paper on tax coming out soon. If he just waits he could actually put in a submission on that as well. If he only asks we can extend the deadline if he cannot get the work done.But do you know why I think Mr Little did that on that Friday? It was because earlier in the week Mr Twyford had made a great error of judgment. He had got some dodgy numbers he had put a few names together and he had decided to beat up on a very important constituent group in New Zealand the Chinese community. But actually he did not beat up on the Chinese community; just on a whole lot of people with Chinese-sounding names. At the end of that week I think that this announcement that the Leader of the Opposition made around provisional tax which I had already released some months earlier was to divert attention away from the horrible horrible things that Mr Twyford had said about Chinese New Zealanders—well actually New Zealanders with Chinese-sounding names.The other part of business transformation that we are going to look at during the course of this year is secondary tax because the system does burden hard-working New Zealanders. You will see some changes around the PAYE system and GST announced this year that will make it easier for people to comply with GST and actually our focus will be around small to medium sized enterprises as well as others. We want to reduce the economic burden upon them. Business transformation as I said to the Finance and Expenditure Committee will go across a number of parliaments—it has been here for two already—and I have extended an invitation to the committee to make Inland Revenue Department officials available to it to work through some of the detail so that actually Parliament as a whole can focus on what is best for our business community and taxpayers. Maybe that will help Mr Cosgrove with those fast little legs going to get it right when it comes to business transformation and the work that we are doing.The other important thing that has just happened is around property tax compliance. We heard from Mr Cosgrove about all the problems in the current consultation. Again actually unfortunately he is wrong. As a Government we have given the Inland Revenue Department a lot of extra money in successive Budgets to focus on property tax compliance and that move brought in hundreds of millions of dollars of additional tax from people who should have been paying it based upon the properties that they bought and sold.Well indeed we announced a brightline test to focus more clearly on this to make it easier for people to understand their obligations. That is out for consultation as well. Mr Little should send his policy in now rather than make a late submission afterwards but we are working in the right direction.FLETCHER TABUTEAU (NZ First): Thank you for the privilege of speaking tonight and tēnā koutou to the Committee this evening. Can I just take this opportunity to reply to some of the words from the Minister of Revenue tonight. I actually say good luck with what you are trying to achieve with the tax system and good luck with the outcomes you hope to achieve because if what you are hoping for actually works then New Zealand First will probably agree that actually that will be great for small New Zealand businesses because we are talking about the lowering of the cost of compliance. But what the Minister and what this Government in particular probably will not concede is that although on the one hand they seek to lower compliance costs in terms of tax conformity or performance on the other hand we are about to debate a piece of legislation in regards to health and safety reform where the cost of compliance to New Zealand’s small businesses will be horrendous.Already the discussion is taking place where small businesses are coming to us and saying: “How can we cope with these costs of these safety regulations?”. The irony of that is that actually if this Government had left the legislation alone but had simply funded adequately the oversight of the safety legislation as it stood previously we would have had an adequate health and safety system. Instead we are changing the law in a large and extreme manner actually and then we are funding oversight—$8 million a year for the next 3 years—to actually ensure that we are complying with health and safety. It seems a bit backwards. So although I commend the Minister for what he seeks to achieve on the one hand this Government giveth and on the other it taketh away.The Minister ofFinance spoke in quite some detail about trade. He spoke about the benefits of trade. New Zealand First as a party needs to repeat as often as possible that we are a party that supports trade. We believe in the benefits of trade and we understand why trade is important. Those members over there deliberately claim ignorance. I am not calling them ignorant; I am saying they deliberately claim ignorance. They deliberately claim it because it makes their conversation or their debate easier. The reality is trade is good but in those same trade agreements we have the likes of certification. More important I presented a member’s bill to this Parliament to try to remove the investor-State dispute settlement provisions from our trade agreements. That is not anti-trade; that is pro - New Zealand.So what this Government says to us is that in order to have trade we must remove our sovereignty. We must disempower this very Government that members sit there representing tonight. The investor-State dispute settlement provisions allow large international corporates to sue this Government not in New Zealand law and not in international law but in secret tribunals. This is what this Government is advocating. It just makes no sense. Those tribunals are not transparent they have no right of appeal and they make decisions that we cannot investigate and we cannot understand how they came to those decisions because they are made in secret. So New Zealand First stood up in this Chamber just last week and said: “We cannot accept that in our trade agreements. Let’s use a transparent legal system. Let’s have judges. Let’s have transparency. Let’s have an appellate system where we can actually appeal the decisions and conversely for once the Governments could actually hold the international corporates to account.”On Budget day I said to this Government that it was wearing rose-coloured lenses. The assumptions that this Government made when it wrote this Budget were bordering on the ridiculous—bordering on the ridiculous. The appropriations were made given a set of rose-tinted assumptions and the Government said: “This scenario is very unlikely. Everything will be rosy and our Budget will be accurate if only a few things come to pass.” Well nothing that this Government used to create the appropriations was actually accounted for in that Budget.JAMES SHAW (Co-Leader—Green): I would like to take another call in relation to the finance and Government administration sector appropriations this time in relation to the appropriation for Vote Ombudsmen and turn attention to the Office of the Ombudsmen to its revenues and to this Government’s attitude towards transparency and openness. I am delighted to see the Attorney-General is in the Chamber to have a discussion on this.I note that the Vote Ombudsmen appropriation for the year 2014-15 was $12.278 million and in 2015-16 it has increased to $12.387 million. So there has been an increase of $110000 approximately to cover the increased costs of investigation and the resolution of complaints. A hundred and ten thousand dollars will buy you perhaps one more staff person and their associated costs. What we know is that the Ombudsmen’s office is completely inundated with thousands of requests for assistance—thousands of complaints every year—because this Government is suppressing information and abusing the process to an extent that is unparalleled since the Official Information Act was created.I am not saying that it is the behaviour of this present Governmentonly. It has been sliding towards this over the course of the last couple of decades but things have got to the point now where essentially the system is now broken and the Government is using the underfunding of the Office of the Ombudsmen to supress the effectiveness of the Official Information Act. In the Finance and Expenditure Committee report we note that there was an extremely high staff turnover in the Office of the Ombudsmen. They are amazing people they are good lawyers and they are extremely good public servants but the burnout due to the sheer weight of the complaints that each of them has to handle the fact that they are not as well paid as they would be in the general market or even in other parts of the Public Service and the repetitive nature of the work of dealing with this enormous volume of complaints means that it is extremely hard for the Office of the Ombudsmen to hold on to its staff. This of course also means that the office is losing institutional knowledge as that turnover occurs—$110000 is not going to cut it in terms of solving those kinds of problems.We note and the select committee report also referred to this that when documents are released now under the Official Information Act some as late as a year as opposed to the 20 days that are specified under the Act often they are so full of redactions that they are basically completely meaningless. So there is a huge problem here.The problem is not to do with the Act itself. The Act is in extremely good condition. It is not to do with the Office of the Ombudsmen. They are working extremely hard under very trying circumstances.But this Government has turned the art of obfuscation into a really fine art an absolutely high art as demonstrated some time ago by the fact that the Ministry for Business Innovation and Employment has got more PR people than it has health and safety inspectors which gives you some idea of where its priorities are. The priorities are on spin and public relations and not on actually getting the job done. When the cracks show in not getting the job done the Government relies on the spin to get it through and when the Opposition tries to do its job of holding the Government to account and speaking truth to power that obfuscation and abuse of the Official Information Act are the order of the day.This Government is using the constant underfunding of the Office of the Ombudsmen as a way of ensuring that it can stay unaccountable so that the Office of the Ombudsmen is unable to deal with the volume of complaints to do with the complaints that are coming through about that. So there are a couple of ways to fix this. We can increase funding to the Office of the Ombudsmen and I accept the Government’s position that it is operating within an extremely tight fiscal envelope at the moment but this is to do with the nature of our democracy. The other thing is to start acting in accordance with the Act because that will obviously put less pressure on the Ombudsmen—to actually live in accordance with the Official Information Act and to live within its spirit.BRETT HUDSON (National): E te Tiamana tēnā koe. We have been treated tonight to some speeches from the Opposition—treated mistreated choose your language. Opposition members seem to be confusing their own opinions with the facts whereas the facts are quite simple. The economy has been growing at around 2.6 percent. Over the last 4 years 192000 jobs were created; a further 150000 are forecast over the next 4 years. Over the same time period unemployment is forecast to reduce to under 5 percent. The economy is doing very well. Interest rates are low. Inflation over the last quarter was just 0.3 percent. New Zealand businesses and New Zealand families are being treated to a lower cost of living and lower costs of debt helping to provide incentives to businesses to grow and helping Kiwis to feel more secure in the paying of their home mortgages.But what instead have we heard? In the face of those facts what have we heard? Well firstly we had from Mr Robertson wild assertion after wild assertion and as my colleague David Bennett pointed out none of them were underpinned by numbers. His was a very special speech. It is known as a Burger King speech—just one whopper after another. And he got confused in the process on taxation and what he referred to as bribery. As my learned colleague Christopher Bishop pointed out he does not seem to understand what taxation is. I would like to take just a moment to help to put him straight. Some years ago a New York newspaper—I think it was the New York Times—ran a competition where if you could change a single consonant or vowel in a word and create a new one there would be a prize. Some chap came up with the word “intaxication”. Intaxication is defined as the mild sense of euphoria you feel upon receiving a tax refund before realising it was your money to begin with. Mr Robertson thinks giving your money back is somehow a bribe.We went from wild assertions and complete misunderstanding of the taxation system to the Green Party and James Shaw who obviously does not know about Daniel Patrick Moynihan because that member most certainly was thinking that he could have not only his own opinions but his own set of facts. Mr Shaw tried to tell us that dairy makes up 40 percent of our exports while acknowledging that it makes up 5 percent of the overall economy. Well that is a very interesting assertion on its own because tourism is now worth 7 percent of our economy. So based on his maths that would mean that tourism is in the order of 60 percent of our exports on its own. That would leave no room for the $2.85 billion of international student education which is itself an export and equates to around 1.3 percent of the economy which the maths tells us is roughly 10 percent of exports. So we have got to 110 percent of exports already. Nor would it leave room for the wine industry which contributes $1.37 billion worth of exports—up 8.2 percent over the past year. Nor would it provide room for the exports in the information and communications technology sector which contributed about $930 million and which overall as a sector both domestically and in exports is around 1.7 percent of our economy. But Mr Shaw would have us believe that dairy is a far greater proportion of exports than it truly is.What those numbers tell us and what those facts tell us is that we do have a diverse economy because although I mentioned wine I mentioned information and communications technology and I mentioned international students I did not mention meat. I did not mention forestry. I did not mention fisheries or oil and gas or minerals or kiwifruit or any of those other products that Kiwi businesses export around the world which I guess must take us up to—I do not know—130 percent of exports. Using James’ numbers who can be sure? What it does show us is that we have a very strong and vibrant economy and a very strong diverse set of export industries across New Zealand. Although dairy might not be performing at its traditional or recent highs the other parts of our export economy are performing very solidly indeed. They are contributing to those continued good strong growth numbers that match up with any country in the OECD that are continuing to provide jobs for Kiwis and that are continuing to provide confidence to New Zealand businesses and New Zealand families in their future. The country is headed in the right direction.MARK MITCHELL (National—Rodney): I am happy to take a call on this debate. Although I am not on the Finance and Expenditure Committee it is a great opportunity to be able to take a call. I have to say that in an appropriations debate I was shocked to see the Labour economics spokesperson Grant Robertson get up and spend the first half of his speech talking about the Hon Jonathan Coleman’s hair and the Hon Paula Bennett’s texting habits. If he is going to talk about the Hon Paula Bennett talk about doing the reverse bungy—she is very good at that.Iain Lees-Galloway: He’s in team Bennett.MARK MITCHELL: That is right. I can testify I assure you.The third thing is that he was obsessed with the National Party conference—he should have just bought a ticket and come along—and the Hon Bill English’s speech. I think the reason why he spoke about the Hon Bill English’s speech so much is that that is where he gets all his information. That is where he actually learns what is going on.Because it is an economic debate I would like to take it back to my own electorate Rodney because we have been talking about how much diversification we do have in the New Zealand economy today—and we do. We do have other industries that are doing very very well. We have a dollar that has weakened and of course in any economy there is always an upside and a downside to that. But one of the upsides that we experience of course is for our exporters. Being a trading nation and a nation that relies heavily on exports that is actually a very good thing for our economy.I want to recognise and speak about Southern Paprika. It is a business up in the north of my electorate just outside of Warkworth. The owner of the company is Hamish Alexander a business leader in our electorate. Southern Paprika is diversifying. It is using technology. It is forming partnerships around the world. It has formed a very strong partnership with a Dutch company where now it is starting to grow product and get into the European market and it is starting to be a real force to be reckoned with over there. It creates jobs. It is creating more jobs. Yes it went through a bit of a tough time when our dollar was as strong as it was but it adapted and it found a way to keep trading and to keep growing. Now that the dollar has come back a bit that growth is accelerating; it is getting faster. Southern Paprika is diversifying into new products. It is investing in avocado. It is buying more land. It is creating more jobs. It is an exciting business and it is another very strong piece of our economy.I would like to talk about the Honey Merchant out of Matakana. I hope that Minister Coleman visits our markets up there and gets to experience some of the honey from the Honey Merchant.Chris Bishop: Good honey.MARK MITCHELL: It is outstanding honey. The reality of it is that this business is growing. We were very lucky last year to have a visit from a delegation from China that signed a contract with it.Chris Bishop: Where?MARK MITCHELL: China—a very good delegation from China that is forward-looking and sees the opportunities that New Zealand also presents in terms of business partnerships joint ventures and being able to grow another very strong part of our economy. This is a part of our economy where we are leading around the science where we are developing new strains of honey bees that are placid and that are very hard-working and that is making a massive contribution to another very strong sector in New Zealand. These industries are creating jobs. They are creating jobs.This is actually something that I think is pretty good: a lot of young people in my electorate are taking an interest in the honey industry. They want to get an entry into the honey industry and so we have got an industry in Rodney that is leading in science is leading in technology and is now starting to train and bring young people into the industry. They need to learn the science. There is a lot of science associated with it. They are in the process of buying and identifying more land. There is even mānuka starting to be replanted around areas in my electorate. It is an industry that is growing.The reason why I wanted to talk about these two examples is that the reality of it is that we do have a diversified economy. We do have some great little industries and some great New Zealand products that are growing and that are being traded and exported around the world. Thank you very much.A party vote was called for on the question That Vote Audit Vote Communications Security and Intelligence Vote Finance Vote Office of the Clerk Vote Ombudsmen Vote Parliamentary Service Vote Prime Minister and Cabinet Vote Revenue Vote Security and Intelligence and Vote State Services be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 56New Zealand Labour 32; Green Party 12; New Zealand First 12.Votes agreed to.Health SectorThe CHAIRPERSON (Lindsay Tisch): Members we now come to the vote in the health sector—volume B.5 volume 6. The question is that Vote Health stand part of the schedules. The chairman of the Health Committee speaks first. I call Simon O’Connor. Mr O’Connor your task is to set out the major findings of your committee in relation to the estimates.SIMON O’CONNOR (Chairperson of the Health Committee): You can rest assured Mr Chair that we will happily be speaking to the main findings of the estimates for Vote Health from the Health Committee. I always say it when I stand up but it is an excellent cooperative committee. It is one of those committees where generally we are in agreement with what we have to do for the betterment of the country. By and large and I see my colleague Barbara Stewart nodding we get that right. Obviously there are a few tensions. You can indicate and see those in the report.As context for what came through the estimates report we are in a fine space for health. We know that the under-13-year-olds are now getting free GP visits and prescriptions—a really positive step there. One thing that I thought was really neat which I had not been aware of until I was reminded was that 94 percent of those under 8 months of ageare now fully immunised. It is a huge step forward. If I may make a plug—Chris Bishop: How much?SIMON O’CONNOR: 94 percent. May I make a plug to those people out there to please vaccinate. It does not matter if it is your children your teenagers or older. It is very positive—there have been 44000 more elective surgeries compared with 2007-08. So this is the context in which the estimates began and were heard. There is a 62-day target for patients to get their first cancer treatment. I will not go into the context of the past but that is an incredibly good period of time and something that I think the select committee—Brett Hudson: We’re up against the world.SIMON O’CONNOR: I think it is world-leading actually Mr Hudson. But this is the context in which the committee began its discussions. We are putting in it was acknowledged further funding to allow 4000 more elective surgeries a year. So again bear in mind that we have increased by about 44000 surgeries a year and we intend to push that higher towards 48000—I would hope eventually 50000. Hopefully none of us will have to avail ourselves of this particular target but 95 percent of those going into the emergency department are seen within 6 hours.Vote Health is the second-largest vote in Budget 2015. It accounts for about 17.8 percent of the total appropriation so be in no doubt—as this Committee will know—that health is a serious issue. We noted in our report that the vote increased by approximately 4.9 percent so we are now spending about $15.868 billion—in fact that is not approximate as that is what we are spending; let us be precise about that.In fact one of the things that we noted in our report is that $55 million of non-departmental capital has been moved and provided to help district health boards around deficit support. I mention that because I do not think we are under any illusion as a select committee and hopefully as a House that it can be tight for some district health boards. That was acknowledged also in the estimates with the Minister of Health. It goes without saying that the Minister is the Hon Dr Jonathan Coleman and when I was reading out those positive lines at the start I think it is incredibly important to note to the Committee that they are not purely the musings thoughts insights or feedback of the chair of the committee; that was in fact the feedback of the select committee itself to the Minister.I quote: “We congratulated Dr Coleman on his appointment last year as Minister of Health and expressed our satisfaction with the working relationship he has established with us.” Those were the words put forward at the questioning but also written up in the report and I would like to thank all the members who contributed to that and the continuing positive relationship we have with the Minister of Health.We noted that there has been a change in sector leadership. Those who follow the health sector will be aware that we have had an acting director-general for a while Mr Chai Chuah. Very shortly before we moved into this estimates hearing he was made the director-general. We were curious about how that was beginning and amongst other things we noted that surveys done recently have shown improving staff engagement and we are looking forward to seeing more of that as it goes along.Other areas we looked at were the demographics particularly around chronic disease. It is something that crops up in our informal conversations from time to time and it certainly has been in front of the Health Committee. When we are talking about chronic disease we are talking about things like “COPD”—that is an acronym for chronic obstructive pulmonary disease—and we also have got the likes of diabetes. Diabetes is very much at front and centre of debates at the moment and in fact over the weekend we had quite a constructive conversation in that space about how we engage with diabetes particularly around healthy decisions around food and sport.When we are looking at these chronic diseases the Minister noted—quite rightly I thought and I hope I am not stealing his thoughts for later on—that new models of care are needed. Although we have always been around “sooner faster more convenient” we I think as a Government understand the need for people to be able to obtain their health needs closer to home from particularly GPs medical practitioners they trust—sorry health practitioners; I should be clear on that particularly as we have a new bill before the House—and how we might work with them.I have spoken to the House before about how we better work the scope of practices. I use again the examples of nurses doing endoscopy GPs doing skin work and so forth. This is part of how we can better engage and we can do it in these chronic areas. One thing that has been announced—and we touch on it later in our report—is around the development of pain teams. Strictly speaking orthopaedic issues are not chronic—I do not think they are; I will have to take some medical advice on that. But the pain teams are pulling together—Hon Annette King: They can be chronically awful.SIMON O’CONNOR: The honourable member notes they are very painful and what we are trying to do is to have a lead provider in the community to help drive the care. So again you might have a GP a specialist a nurse or an occupational therapist who is going to take the lead in that support.I thought that the other thing that was really useful that came out was the whole notion of promoting healthy lifestyles. In fact if I recall the session correctly I asked the Minister of Health—who is not only the Minister of Health but also the Minister for Sport and Recreation—whether that was a coincidence of those two portfolios coming together which of course it was not. It was a good insight of the Prime Minister to see how that was going to work together.The Minister noted of course the Healthy Families New Zealand pilot which has been launched and I think well lauded in the health community. There is also work that has been undertaken to see how we might get that crossover particularly for our young people in schools around sport and healthy eating—two things I am quite passionate about when I visit my primary schools. Some will be in the most effectively wealthy suburbs in the country and then I go to other areas that are amongst the poorest if not the poorest. You look at the lunches and the choices that are being made there—I think we can make improvements not only through working with the principals but obviously through working with the families.The other aspect is activity. In fact I think it was on Prime news tonight or TV3 about how much time is spent in front of digital devices and so forth—so how do we get our young people active? The other thing I would note and we noted in the report from the Minister is encouraging activity. There is the notion of cycleways—I just have to put in a plug for that. The Government put out some money recently and the good people of Tāmaki are most pleased to have got the biggest chunk of that as we put in a cycleway from Glen Innes through to Tāmaki Drive. I am very much looking forward to stopping my running one weekend and actually jumping on a bike.Smoke-free targets—there is some really good work going on there. Speaking personally—and it is noted in the report—I think many of us still have concerns particularly with young Māori women who have an almost 50 percent smoking rate. I think there is stuff that we need to do and must do there. I think that is an important signal to the community as well.We have indicated that about another $12.4 million has been allocated to extend the bowel screening programme which is being done in the Waitematā so that has been extended again. A little bit like prostate work as well—you do this as a pilot you see what is possible and you take those learnings and then see whether it is feasible to roll it out across the country.I am conscious that we are probably coming close to time and I have got quite a number of pages to go. The one I did want to finish if I can is around the flu vaccine. It is coming out of time now but the committee was interested as to why there was an apparent delay. The long and the short of it was that as the flu vaccine was coming into the country the officials were made aware that some strains could be introduced to the vaccine. In other words there were new strains of flu out there and it seemed from the reports that we heard that it was actually better to get the new vaccines in so that those New Zealanders choosing the latter vaccinations could be fully protected from those new strains. There was a small blip at the start but I think we have got every confidence that that will continue and work well next year. I just wanted to mention that. I do not think we want any impression certainly from the Health Committee that somehow there was bad planning or a lack of vaccines available. It was a prudent health choice to look at the best medical and scientific information out there and to say: “Hey new strains.”—I am sorry but I cannot quote what they are—“Let’s get them into the vaccine and make sure New Zealanders are good to go.”An area I am always keen on is palliative care—$76 million - plus has been invested in that. That is going to work in a number of areas. It plays back into that original discussion I was having about “sooner faster more convenient”. A lot of it is for hospice care which importantly is done from home.Hon ANNETTE KING (Deputy Leader—Labour): I am going to pick up on the bits that the chair of the Health Committee Simon O’Connor left out of our report. I have to say however in starting my contribution that we have a very fair chair of the Health Committee and it is a committee that I very much enjoy working with. And to show what generous people we are the Minister of Health will know that we congratulated him on becoming the Minister and on the constructive way he had worked with the select committee. I know of course that he would rather be the Minister of Foreign Affairs but that is another matter.I did raise with him at the very beginning of my contribution my disappointment in the slowness of responding to Official Information Act requests and answering written questions and I said that the Tony Ryall school of thought had continued under the new Minister. I was very disappointed because I was expecting much more. The Minister said he wanted the best possible result but I have to tell you Minister it is slower than it was when you were before the select committee. So can I ask you to go back and speak to Mr Hundleby and others who hold up these Official Information Act requests and say “Pull finger.” because we deserve to have the information that we ask for.We then raised with the Minister the reports that I had had and an anonymous letter that I had received about bullying in the health sector. I have to say that since that issue was raised and it was raised in the media and picked up by many in the media I have been inundated with letters and comments about bullying in the health sector and it has come right from the top. I am not blaming this Minister because he is quite new but he does follow on from a former Minister who was very controlling indeed who put his fingers into every part of the health system and used threats and phone calls on a regular basis. The Minister of Health said he too would be very worried about bullying in the health sector but unfortunately he went away and absolutely nothing happened. That is why we continue to get reports about bullying particularly in the Ministry of Health in the very highest echelons up with the director-general and his office.We then raised the issue of cost pressures in the district health boards. We are constantly told by the Government that there is more money in health than there has ever been before. Well Minister if you put one dollar more in than you did last year there would be more money than there had ever been in health before. The question is: is there sufficient money going into health? Of course we have never been able to get this answer; we are just told how lucky we are to have the amount of money that we do.We had some work done on this by Infometrics. It is independent. These are not our figures—Infometrics did the work. It looked at these six Budgets that the National Government had provided in health. Four of those six Budgets including this one have effectively cut the health funding. We have an accumulative shortfall of $1.7 billion from 2010 to 2015-16. They are not my figures. They are not Labour’s figures. They are Infometrics’ figures. Using the Treasury figures it looked at how the change in core Crown health expenditure aligns with the growth in inflation and demographic characteristics. We now know that there is a shortfall. If the Minister wants to dispute the figures that Infometrics has provided he should put on the table—using the same data that Treasury uses—what the real figures are if the Minister does not agree. I suspect he will not because it is a terrible embarrassment—$1.7 billion has been removed from the health budget over the last 6 years. We now know that 11 of our 20 district health boards are showing a deficit.I then questioned the Ministry of Health on the cuts to its budget. It got $74 million not $79 million as it actually says in our report from the select committee. From Official Information Act requests and papers released by Treasury we know that the ministry asked for $170 million in early funding signalled in November last year. It wanted that to deal with the pressures of Vote Health. It then revised that down to $150 million according to the figures that we received. The Minister received advice in February that $74.9 million was necessary to maintain core services in the Ministry of Health.I want to quote what the Ministry of Health said to the Minister in February with regard to the provision of national services by the ministry. He probably went in to argue for more for the ministry but he was a loser in this respect because this is what the ministry said: “Easy wins had been exhausted and major service cuts and reconfiguration will be necessary to achieve further major savings.”So in fact the Ministry of Health had been asked to reprioritise $32.1 million in savings. It told the select committee the reason that it could now live on $74 million—not the $170 million it started with or the $150 million it then asked for and ended up with $74 million—was that it had revised its figures because Treasury’s inflation forecast was lower than what it had predicted. So what did it do? It adjusted the budget down by 50 percent. Did you know that inflation was running at 50 percent? Because that is the cut that came in the Ministry of Health’s budget. Based on wanting $150 million and getting close to $75 million because of the adjustment in inflation which was lower than it expected—we were expected to believe that claptrap; it is just a nonsense.The Minister if he was fronting up to this issue would say that his ministry is under huge pressure to be able to provide the core services that it has to provide let alone the manifesto commitments that have been made to that ministry. Of course what we got was flannel from his officials as they tried to make sure they looked all right in front of the Minister. We did not get the ungarnished truth about what is happening within the Ministry of Health.We then asked about pharmaceuticals and the money that goes into the Pharmac budget. We are told that Pharmac has got $800 million out of the $15.6 billion budget. It has virtually not moved in 4 years. The same amount of funding has been going into Pharmac and it is expected each year to make the savings for the Government. In fact the Government now relies on Pharmac to help it to pay for the health budget. At the select committee we raised how long that could go on. How long can we expect Pharmac to take the load for the cuts in the health budget? It deserves a reasonable amount of money to provide pharmaceuticals to New Zealanders in a timely and appropriate way in a First World way. We now know there are many drugs in this country that Pharmac cannot and will not provide because it cannot afford it. Minister we have real concerns that you are not in fact providing sufficient money in the Pharmac budget. It cannot be a cash cow for this Government continuously as it has been.There were a number of other issues raised in our examination of these estimates. For example we also raised the issue of social bonds. The Minister has been questioned on social bonds on a number of occasions. He has been unable to tell this House in question time whether the $28.8 million that has been allocated to social bonds will be paid on results as he said at the beginning or whether it will be payment along the way to the banks that are doing the funding. We have not had that answer from the Minister. Perhaps he would like to take the opportunity in this debate to tell the House whether the $28.8 million of funding will be paid once those social bond projects give the results back to the Government or are they going to have sweeteners along the way out of the $28 million to make them look better or even to say that they have worked? Was the Minister telling it straight when he said it is paid out on results—on outcomes? Well you cannot be paying out on outcomes after a few days or a few weeks if you are going to really measure whether mental health patients got a real job and stayed in that job.There are many things in the select committee that we raised. I am glad that the chair was able to be very positive about everything.Hon Dr JONATHAN COLEMAN (Minister of Health): Look it is great to take a call in this estimates debate as the Minister of Health. This has been a great Budget for health in New Zealand. There is $400 million of new money out of a total allocation across the Government of a billion dollars. I mean that is a record result of $15.9 billion in the vote and $1.7 billion across the next 4 years. But of course it is not as Labour would have it just all about the money. You would have noticed in Mrs King’s speech there that her main theme was that there will never be enough money. Well I can tell you that in health it never feels as if there is enough but the fact is that we are a Government that has focused on results in health. That is the key thing and if you look at the results you just cannot dispute them.We have been very targeted on the areas that we think make a real difference for New Zealanders. So there is an extra 50000 first specialist assessments per year an extra 45000 elective operations each year and an extra 5000 doctors and nurses in the system. You know these are real results. And if you look at the health target levels in terms of emergency departments people are getting in and out of our emergency departments within 6 hours. That is 95 percent of people. We are immunising—nearly 94 percent of children are fully immunised at 8 months. Just a couple of years ago that figure was 70-odd percent. We are doing very well on the advice for stopping smoking on heart and diabetes checks.And cancer—that has been a major success. So when Labour was in power 760 people a year went to Australia for cancer treatment.Hon Member: How many?Hon Dr JONATHAN COLEMAN: It was 760. Under us no one now goes to Australia. We have set very tight targets around that and we are delivering in terms of cancer treatment for New Zealanders. We achieved our first target which was around people being able to get their treatment started within 4 weeks of having all their lab tests and being ready. We achieved that. We are now aiming for the gold standard target of 62 days across the whole cancer pathway.So Annette King will tell you about some report that the Labour Party has had commissioned. She talks about cuts in health. That is completely untrue. There is more money than ever; there is more money going in each year. What we have done which Labour did not do is actually look at where the money needs to be spent. So we have new models of care. We need people being treated in primary care with an emphasis on prevention and early intervention. So that is where the money has to go. What happened when Labour was in power? It doubled the health budget but 2000 fewer people each year got an operation. It had those people going to Australia for cancer care. During Annette King’s time it actually delivered fewer first specialist assessments than ever.I do need to also take issue with some of the points that she made there. She was talking about responses to Official Information Act requests. Well actually the more people that Labour has working on those the more it generates and the more it sends to district health boards the more people we are having to employ to answer the requests and the longer they are going to take. But the real point is that it does make Mrs King sound a bit of a hypocrite because if you look back to 2007—The CHAIRPERSON (Lindsay Tisch): Order!Hon Dr JONATHAN COLEMAN: —or it could make her sound a little bit like one.The CHAIRPERSON (Lindsay Tisch): No.Hon Dr JONATHAN COLEMAN: In 2007 it took her when she was replying to an Official Information Act request on the Electoral Finance Act 18 months to reply.Hon Member: What?Hon Dr JONATHAN COLEMAN: 18 months. I mean that is not just unethical and it is not just not playing by the rules; it must be illegal. So for Annette King to come here and argue that sort of thing just does not stack up. So there is a range of things she raised there. She was talking about bullying in the health sector and all these letters she claims she gets. Well what she should be worried about is bullying in the Labour Party because we know plenty of that is going on. Mr Chai Chuah is a very fine Director-General of Health. One thing I can tell you is that he may be many things but he is not a bully. He is doing a very good job of getting the health system into shape.You hear these outrageous claims from Mrs King on the radio each morning. I must say she is a popular figure around the Parliament but when you hear her on the radio—you know yesterday morning she was saying that I must be making stuff up—and you contrast that with this lovely woman here it is a bit like seeing your favourite aunt in court on burglary charges. It is hard to believe that someone like this has something like that in her. It is really quite outrageous. But today tabling that Infometrics—well she did not table the Infometrics—Hon Annette King: You’re telling porkies.Hon Dr JONATHAN COLEMAN: Mrs King talks about porkies. What I can tell you is she spends half her time trying to corrupt her officials and the other half making statisticsup. There you have it.BARBARA STEWART (NZ First): I am very pleased to take a call in the estimates debate. We continue to be astonished in New Zealand First at the lack of preventative programmes rolling out across the country. The Government does not appear to have a plan for serving the needs of the current population let alone future generations and it is a worry. This is an issue that is seriously affecting the health of New Zealanders. Non-communicable diseases are on the increase and we need a fence at the top of the cliff rather an ambulance at the bottom. We know that that ambulance at the bottom is slowly breaking down. We want the Government to be forward-looking and it was quite interesting when we met the Minister of Health to catch up with the lack of programmes that have a preventative focus. We know that the need for health care is going to increase dramatically over the next few years so we need that preventative focus—absolutely essential. Our nation’s health is at critically poor levels with ever-increasing numbers of people suffering chronic illnesses and non-communicable diseases and that is a shame.There is an urgent need for more research into cancer prevention and treatment. We are falling drastically behind Australia in our treatment of cancer. For all cancers New Zealanders’ survival rate at 5 years after diagnosis is 4 percent lower than that of Australia. The Government states that reducing the burden of cancer is one of its top priority areas yet this is an area that remains drastically underfunded. We were very pleased to hear the Minister say that there was going to be a new roll-out of a cancer strategy. We would like to see the bowel cancer strategy increasing and the roll-out of the screening programmes increasing. We cannot afford to wait until 2017 when the Waitematā trial finishes when we have 1200 Kiwis dying every year from bowel cancer. Of course that has a drastic effect on families and the hospital system. Skin cancer—we have the highest death rate of skin cancer in the world and this does need to be urgently addressed.Obesity—our obesity rate is continuing. We are now third in the world rapidly closing in on Mexico and the USA. We are an outdoors country. It is really shameful for us to have this rate of obesity. Critical health services—the ambulance service needs to have more funding. We know for a fact that people are complaining about the length of time they are having to wait for ambulances. The ambulances provide a very critical role and we need them there when we need them most. We expect them to come. So extra funding is actually required in this area.When we look at elective surgery the need for elective surgery is increasing. We get more and more people coming to our door saying that they are on the waiting list. They are waiting and they are waiting and they do not want to wait any longer. It is a shame. We know that despite the increase of $98 million for elective surgeries that is not going to cope with even the current needs. There are far too many people who go to the hospital wait to have an appointment and then are told to go home. They are even called in for scans do not get those scans go home and have to come back the next day or the next week when they can get an appointment.We all know that we have got an ageing population and of course this is going to mean a really sharp increase in all the diseases associated with ageing: Alzheimer’s osteoporosis macular degeneration and type 2 diabetes. We know that the population is set to double. Why are we not doing something about the planning and investment in this area to try to meet the needs that we know are actually coming?Today I had a visitor who is very interested in rural health. Rural health is an area that has been sadly underfunded by the Government. The Healthy Bastards group came to see me. They focus on men’s health. They cannot even get an appointment with the Minister to discuss the work they are doing.JAN LOGIE (Green): I would like to focus tonight on one small aspect of the health estimates rather than do the large overview. I would like this Committee to consider—what if there was a way of providing an essential medical service that was safer more accessible cheaper and less traumatic for patients and that also saved millions of precious health budget dollars? Well there is but we need to change our abortion laws to make it possible.Our abortion law in New Zealand was introduced in 1977 without even one woman’s vote in support of it. It maintains abortion is a crime unless two certifying consultants sign off that a pregnant person meets the legal criteria for an abortion—that is that there is a serious danger to the life or physical and mental—The CHAIRPERSON (Lindsay Tisch): Order! We are debating on the appropriations estimates. The member must come back to what has been reported back. That is what this debate is about. It is not a general debate on health matters. So the member should concentrate on what is actually in the Estimates.JAN LOGIE: Point of clarification—I am just trying to understand this process. The Budget where there are budget lines around sexual and reproductive health within the Budget—that is not enough—The CHAIRPERSON (Lindsay Tisch): I do not have a copy in front of me. [Interruption] There is a copy here—JAN LOGIE: So it is the Budget not the committee report?The CHAIRPERSON (Lindsay Tisch): So this is the Estimates. I would just ask the member—what you are saying if you could tie it back to what is actually in the Estimates. That is what it is about.JAN LOGIE: So it can be broader than the select committee discussion which does introduce sexual and reproductive health?The CHAIRPERSON (Lindsay Tisch): You just carry on but I want you to tie it back into the appropriations.JAN LOGIE: Sure and the budgetthat is in the estimates around funding for sexual and reproductive healthdoes relate to the service and the fact that every year $3.5 million is spent on consulting physicians which is required by our very outdated law. The law requires that a child would be severely handicapped physically or mentally that pregnancy is a result of either incest or unlawful sex with their guardian or severe mental subnormality of the mother. Clearly this law entrenches deeply discriminatory beliefs that harm people with disabilities and also represents a profound mistrust of women. You will note that in that list rape is not grounds for abortion in this country because when it was debated by the men in this House at that time they said that if it were then all women would just say they had been raped to get an abortion. Women were not and it seems they are still not able to be trusted in our laws.This system costs $3.5 million a year—Simon O’Connor: I raise a point of order Mr Chairperson. Although I appreciate that the member is raising what is an important issue to her this really has nothing to do with the estimates or what the committee discussed in any way shape or form.Metiria Turei: Point of order.The CHAIRPERSON (Lindsay Tisch): No I am going to deal with the point of order. The member is talking about the law and how the law—that is what I am taking out of what you are saying whereas this debate is about the appropriations rather than the law in general and those points of interest to you. So let us try again.JAN LOGIE: That was the framing for it Mr Chair. Thank you very much.This entire system costs far more than the $3.5 million that is required as a result of our laws for the consulting physicians because in this country in the way it is happening at the moment and is organised pregnant people will be required to see up to five doctors just to be allowed an abortion. The doctors may be in different places requiring separate appointments and trips. The West Coast and Whanganui still do not offer abortion services which requires more money and more time to be found for travel—all paid for through our health budget. Plus all but two district health boards that offer abortion services require mandatory ultrasounds and in several districts you have to go to another service to get this ultrasound. This is all an unnecessary expense and stress and is against the World Health Organization guidelines.Critically too each of these steps delays access to abortion. Prior to 9 weeks early medical abortion is carried out which is more like a natural miscarriage. After 9 weeks it is a later medical abortion which is more like inducing labour. The Abortion Supervisory Committee advises that it is best practice to carry out abortions before 9 weeks but sadly because of our system women are required to jump through so many hoops that most abortions happen in later term. Only a third of abortions were carried out in this country before 9 weeks because the women were required to jump through so many unnecessary and medically unjustifiable hoops.We have a law and a system in place that is expensive and prevents best medical practice. These processes required or enabled by this system that shows up in our Budget are also a breach of the Code of Health and Disability Consumers’ Rights which guarantees every consumer the right to be provided with services that take into account the needs values and beliefs of different cultural religious social and ethnic groups and guarantees that every consumer be presumed competent to make an informed choice and give informed consent unless there are reasonable grounds for believing they are not competent. Our current law and Budget remove women’s competency.Abortion is a health service. I get that some people are morally opposed to it; that is OK. If you do not want one do not have one. But we recognised that abortion was a health service back in the 1970s. We need to ensure that our current health system is based on best practice and the needs of patients rather than on the morals of a minority. Our wider health budget could do with the resources.Progress reported.Report adopted.