Financial Review Debate — In Committee 
Financial Review Debate — In Committee 
[Volume:661;Page:9460] 
Financial Review Debate 
In Committee 
The CHAIRPERSON (Lindsay Tisch) 
: The House is in Committee on the Appropriation (2008/09 Financial Review) Bill. The financial review debate is the Committee stage of the Appropriation (2008/09 Financial Review) Bill. The time allocated for this debate is 4 hours and comprises two distinct elements. The first is the debate on the annual financial statements of the Government as reported on by the Finance and Expenditure Committee. Once this has concluded the Committee debates individual financial reviews of departments Offices of Parliament and non-departmental appropriations as reported on by select committees. The debate on the Government’s financial position may be a fairly wide-ranging one but the debates on the individual financial reviews of departments Offices of Parliament and non-departmental appropriations should be relevant to their performance in the 2008-09 financial year and their current operations. 
The compendium of financial reviews and non-departmental appropriations available for debate are on the Table. A member may have no more than two calls on each financial review. At the conclusion of the debate a single question is put on the provisions of the bill. There is no amendment to or debate on this question. The Chairperson then reports the bill to the House and it is set down for third reading forthwith. There is no debate on the third reading. 
Treasury 
Financial Statements of the Government of New Zealand for the year ended 30 June 2009 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Thank you for that introduction and in keeping with past practice the Opposition would like to begin by commenting on the general state of the Crown accounts reflecting on several of the important macro-aggregates and then proceeding to look at individual departments. 
New Zealanders are asking themselves three key questions in respect of the Crown accounts and the Government’s economic performance. Why is there no coherent plan for growth and jobs? Why is the Government talking down the recovery rather than boosting confidence in it? Why is the Government raising GST after the election when National certainly did not tell New Zealanders that was its plan before the election? 
Let me talk first about the Crown accounts themselves. There is no doubt that these accounts show that the impact of the recession on New Zealand’s books was serious. But as economic conditions start to improve the Minister of Finance and the Prime Minister need to ensure that all New Zealanders will benefit from the recovery. It is time that the Minister of Finance was frank with New Zealanders that the books are improving to ensure that he does not talk down the recovery as cover for delivering a tough Budget that New Zealanders will not want to hear. 
The recent Crown accounts show that New Zealand is doing much better than forecast. Gross debt was $2.9 billion lower than forecast and continues Labour’s legacy of trajectory towards lower debt with gross Crown debt the third-lowest in the entire OECD. The operating deficit was $1.4 billion lower than forecast and is now only $630 million negative and that closes the operating gap by around 70 percent. Net worth is $1.3 billion higher than forecast. The Labour Opposition does not pretend New Zealand’s economy is out of the woods yet. To do so would be irresponsible. But when the gap between the forecast deficit and the actual deficit has been closed by approximately three-quarters we believe it is time the Government was frank with New Zealanders about the progress that is being made. New Zealand does not need to face a decade of deficits or anything like it. New Zealand does not need to forget about pre-funding superannuation thereby risking the future of the scheme. New Zealand does not need to starve much-needed social services in health and education of the necessary funding to offset cost growth. 
It is very notable that some of the most successful of the Crown’s investments were in the New Zealand Superannuation Fund and the Accident Compensation Corporation both of which tracked above forecast. With those improved forecasts Labour challenges the Government to resume payments into the New Zealand Superannuation Fund noting that the Crown accounts would now be much better if they had not been suspended. New Zealanders have gone without during the recession. The Minister of Finance was kind enough to draw attention to some of the activities of the Labour Party’s tax tour of the country during the parliamentary adjournment. I can reassure the Minister that in the small towns up and down New Zealand people are very clear about the tax package. They did not vote for an increase in GST because National did not tell them it was going to do it. It told them the opposite. They are feeling shafted I think is the word in the mining communities by this Government. What they really cannot get their heads around is that even if they could believe the rhetoric from the Minister of Finance that they would be “no worse off after compensation”—leaving aside inflation of course which he would not discuss today—they cannot understand why it is OK for the middle class to stand still at best while the wealthiest New Zealanders get a major windfall gain from a tax reduction from 38c to 33c in the dollar or perhaps as low as 30c in the dollar. That is a one-way street towards redistribution from the middle of our society and the bottom towards the top. It is Robin Hood in reverse. It makes no sense in terms of social equity and even less in terms of good economics. 
As we were going around during the adjournment New Zealanders up and down the country were also asking what the game plan is for growth. What is the Government’s strategy for recovery from this recession? In advance of the May Budget which the Minister of Finance knows well will compress new Government spending to the lowest levels in many years he is trying to convince New Zealanders that the crisis is still as bad as it looked 18 months ago and it patently is not because the gap has been closed by three-quarters of those original forecasts as revealed in these Crown accounts. The risk in trying to keep New Zealanders gloomy so they will accept his harsh medicine is that he is not telling them the full story and he will talk down the prospects of recovery. It is no surprise that commentators and journalists—even those at perhaps the more conservative end of the media spectrum people like Fran O’Sullivan—are increasingly saying they are frustrated with this Government that seems incapable of making decisions and incapable of laying out a plan for New Zealanders that business can understand and investment can get behind. 
We have a duality. Business says it wants to see a game plan and ordinary New Zealanders say that the game plan the Government is showing them so far looks absolutely rotten to them. That is why this Government is stuck in a cold hard place between the focus groups that the Prime Minister cannot take his eyes off and the reality of the Crown accounts which is that the books are improving. They are improving because we are moving out of a cyclical recession. It is a recession we went into with some of the lowest debt and lowest unemployment in the OECD thanks to the previous Government. 
Just this morning Statistics New Zealand released productivity data that shows that for the years 2000 to 2008 labour productivity grew by a little over 1.5 percent per annum but it declined when the recession hit in 2008 through 2009 and it has not shown the slightest hint of improving according to the Government’s programme. I ask members what the Government has done. It has a cycleway to nowhere and a 9-day fortnight scheme that was good as far as it went but did not go far which the Government has now cancelled removing the sporran from the Scotsman—the fig leaf of activism—that it never had. New Zealanders are left wondering whether the Government has been doing any thinking at all about how to take the country forward or any thinking about how to get growth back in the economy. Businesses are asking why the Government will not get behind their efforts rather than staying on the sideline or worse talking the recovery down. Why is the Minister ignoring the fact that in these Crown accounts the operating deficit gap has been closed by three-quarters yet still using the rhetoric of the dark early days of the global financial crisis? 
I challenge the Minister to take a call and explain to New Zealanders exactly why it is that when the operating deficit forecasts have reduced by three-quarters he has not changed his song at all and he is talking New Zealand into a funk. New Zealanders are still waiting for the answers to their three key questions: how will we get growth and protect jobs; why is the Minister talking down recovery; and why is this Government raising GST on ordinary people just to fund a massive tax cut for the few? Thank you. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 The Green Party’s vision for Aotearoa New Zealand is one of prosperity without growth in resource use or waste. In fact it is a vision of prosperity with declining resource use and waste and declining inequality. We believe the Government should approach the raising and the spending of money with this aim in mind. On the revenue side taxes should be structured to not only raise the money the Government needs but also move our economy in a green direction by taxing resources and waste. The Government’s books would be in a much healthier position by potentially billions of dollars if there were a levy on the commercial use of water and a levy on the production of greenhouse gases. At the same time by increasing the price of water and carbon the market would direct our economy to use water and carbon more efficiently. A country that uses water wisely will prosper in the 21st century as water becomes scarce globally—likewise for carbon. Sadly the Government is doing neither of those things. There is no price on water for irrigation which is the biggest user and there is a scant price on carbon as the emissions trading scheme is too weak. We miss out on the revenue that resource rentals could raise and we lock in our economy to investments that use water and carbon inefficiently. 
The one bright spot on the revenue side in the Government’s accounts is catching the banks’ attempt to steal $2.2 billion from the taxpayer. The banks got caught but suffered no penalties. I ask members to think about that. It is possibly the biggest theft of public money in New Zealand history. The banks got caught and had to pay it back which helped the revenue side of the Government’s accounts but there were no penalties. No one was sent to jail. In fact some of the people who advised the banks were appointed to the Tax Working Group. 
On the spending side our accounts are weighed down by the ghosts of years past. The dramatic increase in inequality in the 1980s and 1990s has left our budget with huge legacy spending due to high crime and violence a high prison population high spending on social services and preventable illness and an education system that is struggling to teach kids who are dragged back by poverty. Inequality is really really expensive on the public purse and we are living with that legacy and paying taxes through the nose to pay for the downstream effects of the Rogernomics experiment. 
Also on the spending side we are throwing vast amounts of treasure at new motorways—literally tens of billions of dollars. It makes the spending on buses trains cycling and walking look like peanuts. It is Joyce’s think big project with the inevitable production of white elephants. Clearly Labour and National do not read the reports from the International Energy Agency that warns Governments that the era of cheap oil is over. I suggest that one way for the Government to save money is to stop paying for the International Energy Agency reports because clearly no one in the Government is reading them. 
Then there is the small question of our accounting framework for those accounts. When we consume natural capital by mining minerals to buy consumer goods are we really richer? Our national accounts certainly say so as GDP increases but if we start selling off parts of our house in order to buy flat-screen TVs are we actually richer? Of course not; we are simply consuming our capital. That is exactly what we are doing with our minerals. We are simply consuming the natural capital today that we will never have again. I ask members how much better our books would be today if we had invested a good proportion of the returns of the Maui gas field in a gas fund whose dividends would now be helping our chronic current account deficit and the Budget deficit. Norway turned a good chunk of its North Sea oil—its natural capital—into financial capital in the form of the giant half-trillion-dollar Norway Pension Fund while New Zealand and the United Kingdom simply consumed their mineral resources and now we have nothing to show for it except a few mothballed Think Big plants. Thinking long term to ensure prosperity is the Green way and we encourage all parties in this House to steal our ideas instead of stealing the next generation’s inheritance. 
Hon BILL ENGLISH (Minister of Finance) 
: 
 I am not sure who it was but someone famous said that he or she changed his or her mind when the facts changed— 
Craig Foss 
: Maharey? 
Hon BILL ENGLISH 
: No Steve Maharey changed his mind regardless of the facts; it was not him—and I suppose that is my response to the Hon David Cunliffe. When the Government is in a much stronger fiscal position the Government will change how it describes New Zealand’s fiscal position but that has not happened. This idea that somehow most of the pressures on the Government’s books have evaporated because of small improvements in economic forecasts tells us more abut Labour’s attitude to the hard-won PAYE income that comes in every week from hundreds of thousands of New Zealanders who could use that money for different purposes themselves than it does about any kind of analysis of the Government’s books. 
The Government has followed a pretty straightforward plan in a year when the economy was contracting fairly strongly. It maintained what were previously high levels of spending under the previous administration. Now that the economy is recovering the Government has outlined a plan to lower the growth of Government spending starting from 1 July this year. The new discretionary spending will be about $1.1 billion on average when over the last 3 or 4 years it has been somewhere around $2.8 billion. The new spending has funded a lot more new activity than the current Government will be able to. 
Small improvements have not changed that picture. At the moment these books that Parliament is looking at today show that if we take the forecasts ahead it will take another 6 years before the Government is back in surplus. Even then it will have accumulated a very significant increase in public debt. That matters because as those who have been around the House for a while will understand public debt cycles are quite long. New Zealand’s public debt started lifting in the early 1970s and it was about 35 years before it had gone through the full cycle of rising strongly into the mid-1980s and then successive Governments brought that debt back down as a proportion of GDP through to about 2006—roughly 35 years. That was a somewhat difficult political time. In that period from the mid-1980s through to the mid-1990s at various times New Zealand faced threats of downgrades and a lot of difficult politics around containing Government expenditure and changing the mind-sets that go with the view that money grows on trees and it does not matter where it comes from. We do not want to do all that again. It would amount to a betrayal of many ordinary New Zealanders to allow our public debt to get out of control. That would be as the co-leader of the Greens Russel Norman used the term “stealing from the next generation”. He applies that analysis to any use of natural resources. I am applying it to monetary resources. 
If the current generation believes that we have a right to leave a burden on people who have not left school yet and to make them pay for things that we believe we want now even if we do not really need them then the Government disagrees with them. So that is why despite the member’s optimism about the improvements in the Government’s books I would describe them as marginal. I hope we keep making marginal improvements; that would be good. I would like to see us getting to surpluses sooner because then we have a few more choices. We would not have all the choices that he would like us to believe we would have but we would have a few more. Even when we get to surpluses we will then have this large stock of public debt and even when it stops rising we then have to start getting that stock of public debt down because we incurred it. We incurred it trying to maintain our standard of living through these times. We have an obligation to the next generation not to leave them with the burden of paying for what we wanted to have. 
So the Government is working through a fairly measured process. We have said that over the next 3 to 5 years the Public Service should get used to having no new money. It needs to rethink how it delivers services and learn to do more with less. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am pleased to speak following the Minister of Finance as we debate the Crown accounts this afternoon. I will pick up on some of the comments from my colleague the Hon David Cunliffe about GST. I address to the Minister some questions about the Government’s proposals for GST and ask exactly what increasing the GST rate will do to advance the rate of increase in jobs in New Zealand. What would an increase in the GST rate do to improve economic growth the economic recovery or indeed the Crown’s financial balance? The indications thus far from the Government are strongly that for every extra dollar it takes in from the GST increase it will compensate New Zealanders. If one believes that difficult though it may be it begs the question of why the Government would bother to introduce a tax increase that was certainly not judged by our GST bus tour as being by any means popular—absolutely the contrary of that. 
I think the answer to that question is simply this: it is payback time for the Government in terms of cutting the top tax rate again. We saw that in the rushed legislation prior to Christmas of 2008 where the tax changes were such that about 3 percent of taxpayers received a third of the gains from them. One suspects from the newspaper projections of a cut in the current top tax rate from 38c in the dollar to 33c in the dollar that we know which end of town that cut will fall in. On behalf of my electorate of Christchurch Central which although it has its leafy suburbs is certainly not a wealthy electorate I have to say I know where the impact will fall. The figures for my electorate show that 76 percent of people earn less than $40000 a year. They spend every dollar they receive on the basics of life. They do not have discretionary income. They do not have overseas holidays and they do not have much capacity to save. So they will be whammied by an increase in GST effectively of 20 percent. That is why people are concerned about that and that is why they were turning out in large numbers in support of the bus tour that Labour recently took around the country. They know what that tax increase will mean for them and their families. 
I say to the Minister that OECD statistics show that in terms of consumption taxes already New Zealand has the fifth-highest rate of consumption tax with GST. We do not have the highest rate itself at the current 12.5 percent but we have virtually no exemptions. So currently we have the fifth-highest rate of consumption tax in the whole of the Western World. Where does the Minister want to take us to? Do we want to go to second or third in terms of the consumption tax? What benefit will that bring to ordinary people? 
I will touch upon the financial review of Radio New Zealand. During the course of the Commerce Committee hearing into Radio New Zealand’s financial year we were given a letter from the Minister of Broadcasting Jonathan Coleman to the Radio New Zealand board in which he said the board needed to change its mind-set— 
The CHAIRPERSON (Lindsay Tisch) 
: We are concentrating on the Finance and Expenditure Committee’s report not on Radio New Zealand. The member will have an opportunity to debate that later if he wishes. 
BRENDON BURNS 
: I think what has happened across the whole spectrum of the Cabinet spend is the Minister of Finance has remonstrated with some of his Ministers and the positions they have taken in the past are now contrary to where they are at today. In the case of that particular entity it had a charter introduced to the Parliament only last year which said it would not go into the commercial sponsorship of programmes. But that is now specifically what the Minister is proposing to that entity. I think we are seeing that happen not just in Radio New Zealand but across the spectrum of Government departments. We also see in the broadcasting portfolio that the broadcasting Minister suggested to Television New Zealand that it now needs to look at funding— 
The CHAIRPERSON (Lindsay Tisch) 
: I have said to the member this is a debate on the Finance and Expenditure Committee’s report not on Radio New Zealand. He will have the opportunity to debate that matter later on so I ask the member to come back to the debate. He has 30 seconds remaining. 
BRENDON BURNS 
: I pick up on comments today from the Prime Minister in relation to the funding of literacy as funded through the Crown accounts and as reflected on in the financial statements of the Government. The suggestion today was that the funding of literacy has been improving. I know again in my electorate that the YMCA has lost its funding for programmes for literacy for the worst-off young people—for those youths who are at the bottom end. 
Dr KENNEDY GRAHAM (Green) 
: 
 I rise in support of the comments by my colleague Dr Russel Norman. The purpose of the Appropriation (2008/09 Financial Review) Bill before us today is to confirm expenses incurred for the 2008-09 financial year that are in excess but within the scope of an existing appropriation in accordance with the Public Finance Act. 
I begin by recognising the Minister of Finance for his cautious custodianship of the country’s public purse for the period in review. I am aware that he is responsible for only 7 of the 12 months involved and that his Government would claim that was an insufficient time to make the mark it intended in battling the economic recession that it had inherited. But we have already had an additional 8 months since the end of the period under review. So our judgments are inevitably coloured by the passage of time since then in which his Government has had sole responsibility for macroeconomic policy and financial management of this country. 
This is no simple responsibility. I count as constituting the Government reporting entity in Part 3 of the Public Finance Act for which he and his colleagues are responsible some 41 departments 19 State-owned enterprises 70 Crown entities and 23 other organisations including the New Zealand Superannuation Fund and the Reserve Bank of New Zealand. We are talking of some $55 billion of revenue and $64 billion of expenses a net operating deficit of $11 billion a gross debt of $43 billion and a net Crown worth of $100 billion. It is a major challenge to ensure that the economy is prudently managed and the financial statements are well prepared. As the Minister said in his covering statement: “By taking the shock on its balance sheet the Government has helped to cushion New Zealanders from the worst of the recession”. 
Given all this why then does the Green Party oppose adoption of the appropriation review? Why will we be voting against the Government on this bill which is essentially a serious annual exercise? It is because of the philosophical divide that separates this House. There is a numerical divide and there is a philosophical divide in this House. Numerically the House is divided between the two largest parties between National and Labour; 69 votes square off though not always against 53. But philosophically the House is divided 113 to nine. 
What is the nature of this divide? It has to do with the fundamentals of economic and financial management which go to the heart of government and on which this financial debate rests. All other parties embrace the concept of unlimited economic growth. We heard that from the Minister of Finance from Mr Cunliffe and from Mr Burns just recently. In contrast the Green Party alone repudiates this concept. The Green Party embraces the concept of a steady-state economy: economic development yes; economic growth no. There can be no more fundamental party divide in a political democracy than over underlying macroeconomic belief. This House and in a more general sense this country is divided between those who believe that human technology has freed us from the primitive grasp of nature and those who believe that indefinite economic growth on a finite planet is a logical impossibility even allowing for technological growth. 
It is important therefore that we explain even in a technical debate of this kind the theoretical tenets on which the Green philosophy rests and which prompt us to vote against the Government while acknowledging to some degree its financial stewardship. This has to do with the relationship between the biosphere and the economy. The Earth’s biosphere continues as a whole in an approximately steady state. Contrary to what the opponents of steady-state theory say this does not mean that the Earth is static. Much qualitative development can happen inside a steady state. This has happened on Earth and it can happen inside today’s modern global economy. But after millennia of relatively harmonious living on the planet human society has changed within just the last 200 years with the enormous growth of the economy relative to the encompassing ecosystem. It is as if the aggressive child is killing off its nurturing parent. 
The distinction has to be made between growth and development. Growth is simply more of the same stuff. Development is the same amount of better stuff. The natural world is no longer able to provide the sources and sinks for the metabolic throughput necessary to sustain the oversized and overheated global economy. Yet with the global population growing from 6.7 billion to 9.2 billion and every country determined to increase its per capita GDP the economic managers of our times call none the less for the mindless pursuit of more growth. We are locked in an economic asylum of circular logic that is incapable of accounting for the externalities beyond the perimeter’s limits. Those externalities in the 21st century will prove to be lethal to most if not all societies. Economic growth has in fact become uneconomic in the sense that it cannot be sustained indefinitely which is of course its primary objective. We in the Greens advanced this critique of orthodox neo-liberal economic policy in our address in reply to the Prime Minister’s statement in February. We reiterate that critique today and we will continue to do so up to and into the next election. 
The financial statements contain the audited results for the 2008-09 year in comparison with two sets of forecasts. The first is the original Budget as published in the 2008 Budget Economic and Fiscal Update and the second is the estimated actual forecast as published in the 2009 Budget Economic and Fiscal Update. There is an obvious intimate relationship between the budgetary planning of the Government and the final financial forecasts. It is therefore consistent with Green Party philosophy that governmental approaches to macroeconomic planning and evaluation adopt a broader set of indices than the purely economic and financial ones that we currently use which are before us today. The Green Party has been prescribing this for at least a decade now and it is finally becoming mainstream. 
Last year President Sarkozy of France established the eminent commission led by Joseph Stiglitz and Amartya Sen. The commission was asked by the President what was the best way to measure economic health. It concluded that GDP was inadequate as the principal measure. Perhaps concluded the commission: “Had there been more awareness of the limitations of standard metrics like GDP there would have been less euphoria over economic performance in the years prior to the crisis; metrics which incorporated assessments of sustainability … would have provided a more cautious view of economic performance but many countries lack a timely and complete set of wealth accounts the true natural balance sheets of the economy that could give a comprehensive picture of assets debts and liabilities of the main actors of the economy.” President Sarkozy has embraced the commission’s findings. He said with his usual candour: “The world over citizens think we are lying to them that the figures are wrong that they are manipulated. And they have reason to think like that.” Behind the cult of figures behind all the statistical and accounting structures there is also the cult of the market—that it is always right. 
We have reached a stage where we must incorporate environmental and social indicators into our macroeconomic management and our national financial accounts. To that end I have been working with colleagues recently to develop a member’s bill that could amend the Public Finance Act to ensure that our budgetary planning and our financial reviews take these indicators into account. It is my hope that I can submit this bill into the ballot within a month or two and that we can engage in a constructive dialogue on the best way to improve matters. 
RAYMOND HUO (Labour) 
: 
 Debates like this are primarily about the Crown accounts. When we are talking about accounts the most effective way is to show the actual numbers or to show them by way of graphics. In that vein I would like to offer my contribution by showing two cartoons from the Auckland Chinese media to illustrate the point. The point that the artist and the ethnic media are trying to make is that although Prime Minister John Key has maintained his beaming smile since taking office his standing within the Kiwi Asian community has changed dramatically. Coincidentally these cartoons accurately illustrate the points I want to make in relation to this debate. 
This is cartoon No. 1 which was published shortly after the 2008 general election as members can tell from the scoreboard which shows National 1 Labour nil. This cartoon shows the approachable energetic and triumphant Mr John Key becoming New Zealand’s Prime Minister with an array of the promises that he will fulfil. Prime Minister John Key laps up the rounds of applause from the majority of the Kiwis—good on them! 
The second cartoon was published early in 2010. This cartoon shows the same approachable energetic and triumphant Prime Minister John Key. However the weight of his promises are becoming unbalanced. Tax cuts for the top income earners outweigh the gains made by lower-income earners. The rounds of applause now echo out only from the privileged few—as the cartoon shows—who can afford giant diamond rings. The title the artist gave to the cartoon was “Step forward for the super rich; or tiptoe for the low to middle income earners”. 
That explains why Labour’s “Axe the Tax” campaign has struck a chord with the general public. I was at the campaign’s launch in Auckland and also in Christchurch last week engaging with ordinary Kiwis. One cannot help but ask what on earth this National-led Government has been doing to help ordinary New Zealanders. More GST means higher prices and no one voted for an increase in GST. Increasing GST to 15 percent means 20 percent more tax on the basics. The cost of living is already an issue and having a higher rate of GST will just make it worse. 
The Governor of the Reserve Bank Dr Alan Bollard indicated to Parliament’s Finance and Expenditure Committee recently that he agreed that an increase in GST to 15 percent would add 2 percent to inflation and living costs. Based on the Reserve Bank’s own forecasts in the recent Monetary Policy Statement this means that with the introduction of an increase in GST inflation is likely to outstrip wage growth while the labour cost index currently looks to just remain steady without any additional inflationary pressures such as a rise in GST. It is not just the impact of GST and National’s money-go-round: most people get a rise in GST and small change while the big cuts go to a few at the top. This will certainly raise a huge issue of equity. 
The second issue I picked up while campaigning is the uncertainty in relation to the possible change to other aspects of the tax system. National has indicated that it may remove depreciation from buildings. This reduction in income to landlords will flow roughly as an increase in rent possibly as high as $45 a week. That is on top of GST increases inflation minimal wage growth job insecurity and rising power prices. 
With regard to another issue of how to catch up with Australia as I argued in the House before focusing on the bottom 50 percent not on the top 5 percent is more sensible. I borrowed the idea from my friend Keith Ng whose research shows that New Zealand’s tax system is less progressive than Australia’s. That is high-income earners in Australia pay more tax both proportionally and in absolute terms. 
CRAIG FOSS (National—Tukituki) 
: 
 This session is certainly off to a scintillating start. I look forward to seeing a translation of whatever the speaker from the Green Party was talking about earlier because with respect to that member I had absolutely no idea what he meant. I would like to thank the members and officials who helped and assisted us to prepare the various financial reviews that we have in the report before us today. I think it goes for all members that we thank the people who produced these reports. I also join with the spokesperson on finance from the Opposition David Cunliffe in congratulating Mr English the Minister of Finance on the improvement in the accounts and in the forecasts which the Opposition spokesperson alluded to earlier. It is true that there is no longer a forecast of a decade of deficits; in fact it is 6.5 to 7 years at the moment. I will come back to that matter later. 
The accounts clearly demonstrate the need for accountability responsibility and transparency and to have a line-by-line expenditure review because if the accounts had continued to straight-line in the way that they had been doing in the previous 5 years or so this country would be in dire dire straits. I again congratulate the Minister for at least putting the brakes on some of the negative impacts of the accounts such as a potential blowout of the debt to GDP ratio. Budget 2009 began that clean-up process and Budget 2010 will start to bring some fairness and equity back into the economic system of New Zealand particularly with regard to the taxation field. If I have time I will touch base on that matter because some of the comments of previous speakers with perhaps just one eye open were totally and patently wrong. 
These accounts show a deficit of $10.5 billion from a positive $2.5 billion balance in the year before. Much of that deterioration comes from the recession and the global financial crisis to be fair but also much of it was locked in stepped up expenditure booked up by the previous administration. For example many Public Service salaries had been locked into 5 percent annual increases over 5 years which is 25 percent. That is before compounding the increases so they are obviously higher than 25 percent. So much of the problem with the accounts comes from having straight-lined expenditure increases yet variable or decreasing revenue as members have alluded to to be fair. 
If we run a deficit it means having debt. It means we have to borrow funds. It means we have to fund that borrowing. That money is quite simply not available for other services within the economy. It is not available to pay for health or education. It really surprises me that the Opposition goes on about more and more spending increases—I think of up to about $7 billion which would actually mean $7 billion worth of more borrowing. Well as other members have said that is a theft from or a tax on future generations which is simply not fair. To listen to earlier speakers one would think the problem was all over. It is not as bad as it had looked to be; that bit is dead right. But the issue is all about confidence and eliminating the deficits; it is not about pretending they are all over with a bit of a snapshot. 
One point to note is that the commentary says the previous administration did not pay off 1c of debt. The ratio of debt to GDP improved somewhat but that Government did not actually pay off 1c of debt. I invite members to look at the numbers. 
I would like to point members to page 13 of the transcript because the Opposition spokesperson on finance had a bit of difficulty with some of the issues there. He questioned the Minister about the percentage changes. If we want to show a percentage change between year 1 to year 2 we need to have two columns. We compare the two and we get one percentage change over 1 year. The Opposition spokesperson kept questioning the Minister of Finance who had produced a press release. It had six columns in it that produced percentage changes over 5 years. The media that were present were flabbergasted. Everyone around the table was flabbergasted because the most important issue for that member at the time during the review was how many columns the Minister of Finance had produced in a press release and even then the Opposition spokesperson got it round the wrong way. As I said if we want to show the difference between 1 and 2 years we need two columns of data. Again that may to be seem trivial but that is what the Opposition spokesperson on finance said; it is on page 13 of the report. 
One further thing I will say is in respect of superannuation. Basically the Opposition spokesperson on finance was essentially saying the more one borrows the more one makes. Supposedly we should have borrowed more funds in order to put more money into the New Zealand Superannuation Fund. I think we put in $250 million not the $2 billion that we would have needed to borrow in order to put into that fund. Members should look at the returns. They will see the returns are still not above the water. But the more one borrows the more one makes according to the Opposition member. Thank you. 
Report noted. 
Ministry of Economic Development 
JOHN BOSCAWEN (ACT) 
: 
 I will refer to the collapse of financial markets and the importance of restoring confidence in financial markets and particularly to page 107 of the Commerce Committee’s report on financial markets. The committee outlined the progress that the Government has been making to restore confidence in financial markets. But this afternoon I want to talk about one specific finance company Strategic Finance. Sadly it was placed in receivership last Friday with no doubt the loss of many hundreds of millions of dollars. I believe that if the Government wants to restore confidence to the financial markets it needs to put Strategic Finance into statutory management. I wrote to the Minister of Justice Simon Power on 14 December outlining the reasons why I believe he should do just that. I believe that some of the investors who voted in the moratorium in late 2008 did so without knowing the full situation surrounding Strategic Finance’s financial affairs. 
In setting out those reasons I will come back to a speech I gave on the last sitting day of last year. In particular I referred to the fact that in the June 2008 accounts Strategic Finance showed $300 million worth of second mortgages. Twelve months later in the June 2009 accounts rather than showing $300 million worth of second mortgages it showed $232 million of second mortgages— 
The CHAIRPERSON (Eric Roy) 
: If I can pause the member for a minute this is a financial review of the Ministry of Economic Development. Although the member has some interesting material it should have some connection to that matter. 
JOHN BOSCAWEN 
: I am making those points because the theme that comes through from the Commerce Committee is a need to restore confidence. We have had a situation arise where accounts have been presented that in substance are showing mortgages that although classified as second mortgages are in effect third mortgages. The people who have invested in those second mortgages bondholders in Strategic Finance are told more than 12 months after the end of the financial year that the second mortgages they think they hold—some $68 million worth—are second mortgages with subordinated position. A second mortgage with subordinated position is a mortgage where Strategic Finance has participated with other lenders and investors where the company’s position is subordinated to those people. 
In my letter to the Minister of Justice on 14 December I gave an example of the Hilton Fiji project where some $80 million $90 million or $100 million was advanced on second mortgage but of that mortgage approximately $30 million was a preferred position. So when it comes to paying back that second mortgage those preferred investors those at the top half of that second mortgage get paid in advance. I believe that the people who voted in the Strategic moratorium did not have the full facts at their disposal; I believe that they may not have voted for that moratorium and in terms of restoring confidence— 
The CHAIRPERSON (Eric Roy) 
: There are two issues here that trouble me a little bit. The first which I have raised earlier is that this is the financial review of the Ministry of Economic Development. The second is that I believe that this matter is before the courts so under the Standing Orders some elements of what the member is talking about are matters that are sub judice and cannot be referred to in the Chamber. I tell the member he should move on from the material and refer to matters on the Ministry of Economic Development financial reviews. 
JOHN BOSCAWEN 
: I have only a couple of minutes left. I guess the Commerce Committee was concerned about restoring confidence to financial markets and we have had a receiver appointed to a company that can hardly be called an independent receiver; PricewaterhouseCoopers wrote an expert opinion that appeared in the moratorium. And no this matter is not before the courts I believe but it should be before the courts. If the Government is serious about restoring confidence to financial markets it can pass all the laws that it wants but it may as well start by enforcing the laws it already has. To restore confidence in the financial markets I believe we need an independent statutory manager appointed to this company. I do not believe it is appropriate to have PricewaterhouseCoopers appointed as a receiver when it was that party’s expert opinion that may well have led the company going into the moratorium in the first place and when the losses the bondholders will incur—and they will be substantial—will be even greater than they may have been had the company been put into receivership in December 2008. Thank you. 
Report noted. 
Ministry of Justice 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 Members of the Maori Party were fascinated by the five pages that formed the substance of the report of the Justice and Electoral Committee on the Ministry of Justice. There has been a series of damning reports into the situation for Maori across the justice sector so it was our expectation that the financial review would make at least a cursory mention in passing of these reports and the ministry’s response. 
First off there was the report of March 2009—a 60-month follow-up analysis of the reconviction patterns of released prisoners. That report highlighted that the relatively high rates of re-imprisonment for Maori and for young offenders are particularly concerning. The re-imprisonment rate over 60 months for Maori offenders at 58 percent is over 10 percentage points higher than for European offenders and nearly 20 percentage points higher than for Pacific Island offenders. Yet the only mention of reconviction in the report was the reference to the decision to limit parole for the worst repeat offenders. 
The second report we thought would be entirely relevant for this report was the  
Offender Volumes Report 
 of 2009. The data in this report is depressingly familiar: the graphs reveal as at 30 June 2009 the preponderance of Maori males in the prison population especially in the younger age groups. As an example approximately twice as many Maori 25-year-old males are in prison as European males of the same age. Data upon data demonstrate that Maori offender volumes have increased at given snapshot dates. A quick glance at the evidence and advice received however tells us that such vital information about offender volumes was somehow not considered relevant. 
I turn to what we thought would have been a critical report for this ministry in terms of the emphasis on youth justice. We looked at the report presented by the Ministry of Social Development titled  
Effectiveness of Youth Court Supervision Orders: Measures of Re-offending 
. A key statement stands out in this report: “Currently in New Zealand there is no research on the effectiveness of Youth Court supervision orders in reducing the frequency and seriousness of re-offending.” There is reference in the financial review to the Youth Court and there is also reference to the involvement of the Ministry of Social Development. But this is where more questions are raised than resolved. Instead of drawing on this very significant finding the financial review suggests that the primary focus for the Ministry of Social Development was to ensure that the policy information was accurate “as distinct from advising on the appropriateness of expanding the jurisdiction of the Youth Court in this way.” I am sorry but this just does not add up. The Ministry of Social Development’s own research tells us that there is no research on the effectiveness of Youth Court supervision orders yet that information appears to have been ignored by the ministry in coming before the select committee. 
Some other major findings in that research have failed to make it to the financial review. One is the fact that Maori are overrepresented in the profile of youth offenders at 55 percent—a disproportionate figure relative to their proportion in the New Zealand population of 14 to 16-year-olds at 22 percent. Another is the extremely high recidivism rate: four out of five of the 1800 young people in the cohort committed at least one other offence within the follow-up period consistent across the three supervision orders. One would have thought an 80 percent reoffending rate would be worthy of comment. 
Finally I turn to another major report undertaken in the justice sector during the period of review. I suggest every member of Parliament look at this report; its title is  
Identifying and Responding to Bias in the Criminal Justice System: A Review of International and New Zealand Research 
. What is so useful about this report is not that it finally points out the well-known fact that certain groups are disproportionately represented in adverse criminal justice outcomes at successive stages of the criminal justice system; its key value is that it reports on the factors likely to bring about success in addressing ethnic disparities. It recommends that indigenous peoples should have a central role in programme design implementation and governance; that there should be a holistic approach to addressing structural inequalities more broadly; and that it should be appropriately monitored. 
I have bothered to go through these four different reports because it is our view that current New Zealand analysis and research on the key issues confronting the justice system should form a specific context to any financial review of the sector. These reports have told us that the current evidence depicts high and unchanging recidivism rates and continued overrepresentation of Maori at every level of the criminal justice system from apprehension through to recidivism. 
Yet what do we find when we look at the 2008-09 financial review? On the first page we find a whole paragraph dedicated to the large number of departmental officials who attended the hearing as if too many people at a hearing or meeting is one of the critical issues cutting through the sector. We fully appreciate the extra load that has landed on the Ministry of Justice in responding to not only the demands of electoral work following the general election in November 2008 but also the heavy focus on justice and law issues in the 100-day legislative programme of the new Government. But it is not as if the information is not on hand; these reports are all generated by various arms of Government: the Ministry of Justice the Ministry of Social Development and the Department of Corrections. The facts and figures are there for all to see—all except for the members of the Justice and Electoral Committee it seems. 
In one case even when the facts are explicit the review manages to slide past them in a way that downplays the reality. The youth justice sector of the report describes a question from the select committee as to whether the youth justice system continues to aim to take a diversionary approach to young offenders. The Ministry of Justice confirmed that this is still the intention yet the statistics tell us that prosecutions of youth offenders have increased while there has been an associated decrease in the numbers of alternative actions available. Indeed the report into child and youth offending describes youth prosecutions as trending upwards with the proportion of apprehensions resolved in this way increasing from 13.2 percent in 1995 to 28.1 percent in 2007. 
I have no pleasure at all in bringing to the Committee this up-to-date information about the performance of the justice sector. I do so reluctantly with two clear aims. The first is to enable a far more solid context in which to understand performance issues than is provided in the financial review and the second is to ensure that we have all information on hand in order that we do what is needed to create the solutions we so urgently desire. 
I believe the section on drivers of crime offers the one glimmer of hope we need in order to move forward. The financial review reports that the Minister of Maori Affairs and the Minister of Justice co-hosted a ministerial meeting on the drivers of crime in April 2009. That meeting was distinctive in its ambit as it sought to address the underlying causes of crime rather than just the criminal justice sector’s response to it. These causal factors included early childhood trauma disconnection from society and deterioration of family community and cultural support structures. So it is heartening to read in the report that addressing the drivers of crime would be established as a whole-of-Government priority. We certainly feel confident that with the work that Dr Sharples is leading in the drivers of crime policy and the work that Tariana Turia is leading in Whanau Ora we are embarking on pathways that can help to address these disproportionate and persistent statistics by drawing on the strength of whanau as our greatest resource. Thank you. 
JOHN BOSCAWEN (ACT) 
: 
 I seek leave to lodge with the Committee a copy of my letter to the Minister of Justice dated 14 December 2009 requesting that Strategic Finance be put into statutory management. 
The CHAIRPERSON (Eric Roy) 
: Leave is sought for that purpose. Is anyone opposed to that course of action? It appears not. Leave is granted. 
Document by leave laid on the Table of the House. 
JOHN BOSCAWEN 
: I seek leave to lodge with the Committee a copy of the Minister of Justice’s reply to my letter dated 21 January 2010. 
The CHAIRPERSON (Eric Roy) 
: Leave is sought for that purpose. Is anyone opposed to that course of action? It appears not. Leave is granted. 
Document by leave laid on the Table of the House. 
CHESTER BORROWS (National—Whanganui) 
: 
 It is good to be able to take the opportunity to review the year in this financial review of the Ministry of Justice and to review the work of the Justice and Electoral Committee and the officials from the justice ministry who have appeared before the committee. The previous speaker commented on the work of the committee and on the proportion of justice legislation that formed part of the Government’s 100-day plan and has been transacted through the select committee and the House over the past 12 months. I take this opportunity to thank those justice officials who have worked with the select committee and to thank the members of the committee who have worked very collegially over the last 12 months to transact that legislation. Although there have been some significant points of difference largely there has been a great deal of consensus within the committee which is the way that things should be with regard to legislation that we would like to think was relatively apolitical and was certainly needed. 
I take issue with a number of comments made by the previous speaker as to the work of the select committee and those things that appear to have slid past the committee. It seems a little difficult for a member of a party that is not represented on the committee to be able to make those sorts of comments not having been within the room. The point is that the issues raised in terms of youth offending are covered across a number of committees. They have been traversed within the Justice and Electoral Committee and the Social Services Committee and it is important to point out a couple of points. One point is in respect of the number of prosecutions of youth appearing before the Youth Court. Actually the proportion of youth who appear before the Youth Court as a proportion of all youth who come to the attention of the police is staying about the same as it was previously. About 20 percent of those who come to the notice of the police are dealt with by way of a family group conference along the Youth Court track and only about 20 percent of that group actually appear before the Youth Court. The reason that more young people have been appearing before the Youth Court is due to the scale and severity of the crimes they have committed particularly crimes against the person. The ability to deal with those crimes through ways other than prosecution is very very limited. 
It is important though to point to the work that the committee and the justice ministry have done over the last 12 months in respect of the legislation that has come before the House. They have worked on legislation that has clamped down on criminal gangs and their ability to work within the P trade. They have been tackling the problems of violent youth crime which is what we were talking about a moment ago. Not long after the National Government came in after the 2008 election one of the first pieces of legislation it introduced strengthened the bail laws in order to make it harder for violent criminals to get bail rescinding a move by the previous Government. Then the National Government removed the right of the worst repeat violent offenders to be released on parole. We introduced legislation to enable the police to take DNA from all people who are arrested for an offence punishable by imprisonment and that is probably the single piece of legislation with the ability to protect more people than any other single piece of legislation that this House is likely to look at enacting. We need to bear in mind that securing a DNA profile from somebody who is arrested for a relatively minor offence is likely to prevent an increase in the number of victims because identifying such offenders means that if they ever escalate their offending they can be identified. That is especially so in respect of crimes against the person where bodily secretions or hair is left at the scene of a crime. Those offenders will be able to be identified and will not be able to go on to commit the level of offending that has been seen as abhorrent in our community. 
The justice ministry gave advice on the setting up of the victims’ compensation scheme. That scheme involved the introduction of a $50 offender levy for any person who is convicted of an offence before the court. That money is put into a victims’ fund to assist in the education of victims as to their rights and the resources available to them to be able to attend for instance parole hearings or to obtain childcare while they are giving evidence in court. It will enable them to attend trials involving family members or trials at which they are to give evidence. The Legal Services Agency helps victims of crime and the families of victims of crime to attend parole hearings and coronial inquests at no expense but we had had instances in respect of that that we needed to address. We were pleased to receive support across the House in respect of that measure. Thank you. 
SIMON BRIDGES (National—Tauranga) 
: 
 The financial review of the Ministry of Justice proceeded without great moment this year. That really has been the measure of the Justice and Electoral Committee throughout this year: it has been an uncontentious committee. There have not been a lot of headlines about it and—as the chairman Chester Borrows has said—members have on the whole worked collegially and cooperatively. I think that probably has something to do with the fact that we are seeing a Government that is implementing its election promises in the areas of law and order and justice. Alongside our pledges to make a difference in the economy those were the single biggest things upon which the National Party and John Key were elected. 
The review process has been good and uncontentious. Together with the Law and Order Committee this select committee has put through a large volume of legislation. My recollection off the top of my head is that it has considered about 11 substantial bills in the last year. That is not to say that it has been some sort of supermarket conveyor belt just pushing bills through. In fact—as again Chester Borrows has said—a lot of thought has been put in by the committee. There has been a huge amount of deliberation and of course a large amount of work by the Ministry of Justice officials who have done an excellent job particularly—as I think Rahui Katene said—in that 100-day period at the start of this Parliament. They had a huge amount to do and did it with aplomb. 
I do not want to go through all the legislation that has had impact in this area but I want to single out one bill. My view as a former criminal lawyer is that this bill along with one that was before the Law and Order Committee—the legislation on the proceeds of crime—will have the single most important impact and a large effect for the good of victims ultimately creating less victims in our society. The bill I am talking about is one that Chester Borrows talked about: the Criminal Investigations (Bodily Samples) Amendment Act 2009. 
Hon Ruth Dyson 
: Fewer. 
SIMON BRIDGES 
: What did I say? Was it bad English? 
Hon Ruth Dyson 
: You said “less”; it should have been “fewer”. 
SIMON BRIDGES 
: Thank you. Less victims— 
Hon Members 
: Fewer. 
SIMON BRIDGES 
: Fewer victims—that is a product of the school I went to. Chris Carter was my English teacher. That may have had something to do with it; I do not know. 
The legislation will create fewer victims—let us get that right—in a couple of ways. Firstly more criminals will be convicted because there will be more DNA on that database. Also important is the fact that if we take for example the David Dougherty case which I think everybody will remember—I think a DNA trace on his underpants saw him vindicated and cleared of a rape despite having been in prison for some time—we will see that not only are the guilty convicted but also the innocent are acquitted and as in his case the innocent going free after spending some time wrongfully behind bars. I think this is powerful legislation that will make a large difference along with the Criminal Proceeds (Recovery) Act which has already seen in only a 2-month period many millions of dollars in ill-gotten gains taken from criminals—actually from just a small number of wealthy thugs. 
The Ministry of Justice officials are doing a great job for the Justice and Electoral Committee and for justice. If there is a golden thread that runs through everything we and the Law and Order Committee have done it is about victims. It is about getting a better deal for victims so that they see justice in the process but also so that there are ultimately less victims of crime. 
Report noted. 
Ministry of Health 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 I am delighted to be able to speak in the debate on the Appropriation (2008/09 Financial Review) Bill on the financial review of the Ministry of Health. I will mention in this debate the new language that has come to the fore when we consider what is happening in the health system. When we look at the services that people are currently receiving that are being cut when we look at the impact of the budget restraints that the Minister of Health is personally imposing on district health boards and when we look at the lack of support that the Minister is giving to the key sector leaders throughout the health system we see there really is a big change. 
The new language of health which the Associate Minister Jonathon Coleman repeated today is extraordinary. We do not have cuts in health services; we just have “changes” in health services. Well he should tell that to the older people in Otago and Southland who are currently receiving 1 or 2 hours’ home support a week which enables them to have quality of life and to be able to stay safely in their own homes in Dunedin or Southland. I say the Associate Minister should tell them that the letter they have just received which says they will no longer receive that home support is not about a cut in health service but is just about a change. A big change for them is that if they want to have that home support any more if they want to have help with their laundry meal preparation or house cleaning they will have to pay for it themselves. That is the change for them but from their point of view they know what the Minister and the Associate Minister have really been saying which is that this is not a change but a cut. 
In the same way the nurses at Nelson Hospital know that the cuts in staff numbers in Nelson’s public hospital are not a change but a cut. The chief executive has been directed personally by the Minister of Health to stop filling any vacancies in nursing positions. What did the Minister promise New Zealand before the 2008 election? He promised that there would be no cuts to front-line services. We cannot get someone who is more front-line than a nurse in a public hospital. The nurses are now speaking out publicly saying patient safety is being put at risk. Patient safety is being put at risk in Nelson Hospital because the Minister of Health has told the chief executive to leave vacancies unfilled. So we have fewer staff but the same number of patients is in the hospital. Nurses are now calling on overworked doctors to help them out and this is all about cutting costs and services which puts patients’ safety at risk. 
The good people of Horowhenua will be very interested to hear Jonathon Coleman the Associate Minister say the cut of 24 patient beds at the Horowhenua Health Centre is not a cut in health services. The centre has only 24 patient beds and 24 beds are being cut. Taking away 24 patient beds is being called just a change. 
This is the new language of health that Tony Ryall and Jonathon Coleman are trying to ram down the throats of the public of New Zealand but they are not having a bar of it. We know particularly as we look through the details in this financial review that those are not changes in health. They are cuts to front-line services and are hurting hard-working New Zealanders. Frankly the most upsetting are the cuts to the services for older people. They have given their lives in the service of our country either in paid employment or in raising their families often serving our country overseas and literally putting their lives on the line for the good of the country. When older people need just 1 or 2 hours a week of home support to keep them safe and living with that little bit of support in their own homes they are told that they will just have to pay for it themselves. That is not good enough and it is certainly not what the older people of New Zealand deserve. Just to cap it off though the older people who live in Southland which is the Minister of Finance’s own electorate have been told that not only is their home support being cut but also there will be a 6-month waiting list for their rest home. That is not good enough for older New Zealanders. 
Hon Dr JONATHAN COLEMAN (Associate Minister of Health) 
: 
 It is quite clear that one of the reasons the last Government was thrown out of office was that the public no longer trusted it to manage the health service. That is absolutely true. That is what happened. Over 9 years the previous Government failed to deliver elective surgery and failed to make a difference overall to service provision for New Zealanders and it was found out. 
You know it is very interesting; that member just got up and talked about the new language of the health sector. Well I have a document here published under the previous Labour Government that talks about programmes being reprioritised during the Vote Health October 2008 reprioritisation. Of course that was not a cut; it was a reprioritisation! So when that Government took $10 million from the interim funding pool for people with disabling chronic medical conditions oh no that was not a cut; that was a reprioritisation! I think that it is very very difficult for that member there Ruth Dyson to speak with any credibility in this Chamber on matters of health when she is so badly— 
Hon Ruth Dyson 
: We didn’t cut services. 
Hon Dr JONATHAN COLEMAN 
: She says they did not cut services. They took— 
Hon Steve Chadwick 
: And that Minister brought in changes in immigration policy— 
Hon Dr JONATHAN COLEMAN 
: And now this member wants to talk about immigration and not health; it has got too hot for them. Quite frankly I tell members there is no credibility. Ruth Dyson brought up the matter of the old people of Invercargill. We inherited a massive problem left behind by that previous Government but we have put a lot of new money into Otago and Southland—$28 million. The fact is that because of that previous Government’s mismanagement we are in the situation where we have to make some real changes. This is not a new problem because I can tell members that when Minister Hodgson was faced with this very issue back in 2006 I note that he took pretty similar action. He wrote at that time to Chester Borrows when faced with making changes to the household management services for 304 elderly people under Whanganui District Health Board and said “DHBs are expected to provide services within the limits of their budgets. Whanganui DHB as well as other DHBs must prioritise which services to fund. As a consequence 304 people assessed as low-need will no longer receive household management services funded by Whanganui DHB.” So that is exactly what the previous Government did. Apparently it was absolutely— 
Hon Ruth Dyson 
: Every one of them had an assessment. Tell the truth for a change—tell the truth. 
Hon Dr JONATHAN COLEMAN 
: You see she is saying now that I am not telling the truth. We cannot get any more truthful than this letter from Pete Hodgson. That member there Ruth Dyson is having to resort to unparliamentary language because she has been completely caught out. She has had to get personal on this stuff; she has no credibility on health. Labour members had 9 years to handle it and they failed. So if all they can do is come in here at question time or in debate and say “Oh you guys are doing exactly what we did but now it is a cut and when we did it it was a reprioritisation.” it is no wonder they lost the last election. I think personally that they need new people here. They need a new spokesperson on health— 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. It is a relatively simple point of order. This is I understand a narrow debate unless there has been a reinterpretation of it to talk about things that are general political issues and not related. I think I have been in the Chamber for probably 3 minutes but have not heard reference to a particular item under review. It seems to me that the debate seems to be certainly outside what used to be allowed in it. If we are allowed to have something very general the Opposition would support that. But if that were the new ruling from here on in I am not entirely sure that the Minister of Education would support it. 
The CHAIRPERSON (Eric Roy) 
: In response to that I tell members that it is a somewhat difficult issue for me to contain everybody exactly inside the rails. But I think that by and large the debate has been pretty much on track. Although the Minister did not often refer to the financial reviews regarding health he did spend some time responding to some comments made by the Hon Ruth Dyson. But I think the reminder is timely. I wish we could keep this debate tightly constrained but both sides have erred somewhat—well it is more than sides; the whole spectrum of the Committee has been involved. But it is a timely reminder. 
Hon Dr JONATHAN COLEMAN 
: Of course it is an old technique that if one is losing the debate one tries to break it up. But we are used to that sort of thing. That member Trevor Mallard is one who should be leaving as well. If members would like to discuss the financial review aspects— 
Hon Trevor Mallard 
: Put a cigar in your hand. 
Hon Dr JONATHAN COLEMAN 
: You see he is getting personal. They are losing; these guys are losing: they are losing with the public they are losing in the Chamber. Mr Mallard is another who definitely should be going. But we are quite happy to have him here because the more he talks the better it gets for us. 
I tell members that $536 million of new money is going into health. There is more money going into health than ever before. There is more elective surgery being done— 
Hon Members 
: Oh rubbish. 
Hon Dr JONATHAN COLEMAN 
: There is; those members cannot deny it. We have put more money into health than any other Government in the past and we are delivering services: 12 months’ treatment with Herceptin and more elective surgery than ever before. Quite frankly I tell members the public wanted a focus on the services they needed and they are getting that. The public are happy. The big reasons for which this Government was elected were to manage the economy to make people feel safer at home to get the health service right and of course to deliver on national standards in education. We have made some promises; we are firmly delivering on them. When we look at what else has happened we can see that we have firmly tackled the workforce crisis which is probably the biggest single aspect of the health care system that needs fixing. We are making more places available. We have introduced a voluntary bonding scheme. We are focusing on getting the money directed to the services that the public need and that will be our overwhelming emphasis. 
Hon LUAMANUVAO WINNIE LABAN (Labour—Mana) 
: 
 Kia ora talofa lava and warm Pacific greetings. I stand to speak on the Appropriation (2008/09 Financial Review) Bill with a heavy heart and with sadness as I reflect on this National Government which continually uses rhetoric and nonsense over logic and common sense and which labels cuts as changes. 
Let me prepare a snapshot of some of the changes; we are talking about the impacts on our families our communities and our elders out there in the community. In March 2009 the Taranaki District Health Board publicly signalled that its hospital was preparing for cut-backs. In April 2009 the Southland District Health Board and the Otago District Health Board confirmed they were cutting home-based services in order to reduce costs. The boards were looking to make savings of up to $10 million by reducing home-based support for the elderly. In May 2009 their anti-obesity oral health and mental health targets were cut. National took $2.3 million out of cancer controls in Budget 2009. It has slashed the “Get Checked” Diabetes Aotearoa budget by $4.8 million each year. It has cut $3 million from the cardiovascular disease budget and mental health services have also had their funding cut. 
In June 2009 the Whanganui District Health Board said that it would be closing hospital wards at weekends to save money on nursing overtime. The Fruit in Schools programme which currently provides 100000 children with fresh fruit each day is under threat. In July 2009 the South Canterbury District Health Board said that it would be reducing the number of patients seen in its emergency department by up to 5000 people a year. In August 2009 there were cuts to elderly care in South Canterbury. Rest home care limits have annoyed general practitioners and Dunstan Hospital has reduced community physiotherapy and disability home support. In September 2009 $2 million was cut from mental health services in Nelson’s mental health funding. In October 2009 there were home support cuts for the elderly in Canterbury. I quote from the Christchurch  
Press 
: “Man 83 offers to clean shower with foot”. 
In November 2009 a total of 12.5 nursing positions were chopped across Palmerston North Hospital’s main surgical medical and child health wards. In December 2009 a survey showed that spending was down on general practitioner visits and on surgery. Research commissioned by Southern Cross Healthcare found that the number of people who visited their general practitioner when they felt unwell fell from 64 percent in 2008 to 56 percent in the following year and senior doctors voted overwhelmingly to focus on achieving a pathway to try to better conditions. In January this year Mary Bourke a district health board member was candid about the accident compensation squeeze. She said “So effectively madam chair what we are talking about here is that ACC is trying to cut down on its costs by shoving its responsibilities on to someone else?”. More than 1200 Canterbury elderly have had their home help hours cut or reduced since the new assessment service and we have numerous stories in part of my electorate the Mana electorate where home-based support cuts are being assessed via the telephone. We have heard these stories all over the country. What is really disturbing is the anxiety and stress that is caused. For example in my electorate of Mana 24 percent of Kapiti are over 65 years old and people are worried. If we look in terms of the elder example we see that we are actually talking about over 28000 people in rest home care and over 60000 people who receive home-based care. It is cheaper and much more cost-effective to continue to give that little bit of support to enable our elders to continue to live independently and in their own homes. 
At the end of the day this particular group is very important to our society because they hit us at a personal and intimate level. They are our parents they are our grandparents and they have contributed to and built society. Is that the sort of reciprocity we want? At the end of the day it is sad to see a lot of programmes that Labour embedded and which needed more time to continually produce the achievement levels they were already showing— 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 Thank you for the opportunity to speak on this very important financial review. I must say that I am very proud to be able to speak of National’s record in health. 
Hon Steve Chadwick 
: Really? 
Dr PAUL HUTCHISON 
: We see the Labour Opposition and we look at its record. Labour members were the very ones who when in Government culled tens of thousands of patients off the waiting lists—tens of thousands of patients. That was a bad record and that record is very well evidenced. In sharp contrast in this financial year over 129000 elective operations have been carried out. That is 11800 more than in the previous year. 
Hon Member 
: How many? 
Dr PAUL HUTCHISON 
: It was 11800 more than in the previous year and many thousands more than in any of the previous 8 years under the previous Labour Government. One of the things that distinguished the Labour Government was the dismal productivity in the health sector. That was borne out very clearly by a series of papers written by Treasury. After all Labour injected money into it but there was no evidence of an increase of output clearly shown in the area of elective surgery and clearly shown when Labour culled—not reprioritised; it culled—tens of thousands of patients off the waiting list. So when we have this Labour Opposition talking about cuts it just has to look back at its record which was a particularly dismal one when it came to health. 
One of the things I think is important to emphasise is that the health system that Labour had put in place was totally inappropriate in terms of the duplication and the poor local regional and national planning and performance right around the country. That is one of the great achievements that occurred with the formation of the new National Health Board. It is indeed providing the leadership required to manage that $9.7 billion that funds the 21 district health boards. It is indeed extraordinarily timely. 
It is important also to comment on the significant report called “In Good Hands” to guide district health boards in introducing greater clinical leadership into the public health system. Clinicians doctors and nurses throughout the country have absolutely unanimously considered that this is the very sort of thing that should happen after 9 years of being shunted out of front line services in the New Zealand health service. 
One of the other very interesting things that happened recently was the publication of a simplified health target system. Under Labour we had target after target we had strategy on strategy and Labour members just did not know where they were going. I note in the  
Dominion Post  
just this morning that the editorial “Public comparisons boost performance” said “One thing is for sure in the wake of the publication of Health Ministry statistics comparing the performance of 80 primary health organisations. Total Healthcare Otara the PHO with the poorest record of immunising two-year-olds will be taking immediate steps to improve its performance. Public ignominy is a powerful motivating tool. So it should be. The release of the data highlights yet again the benefits of comparing the performance of organisations doing essentially the same job whether they operate in the health sector the education sector or any other area.” 
That was one of the problems of the previous Labour Government. It was not transparent it created huge bureaucracy and it failed to bring evidence out into the public. Here we are seeing before us one of our major papers saying that this is good. In education they have baulked at it but the health fraternity is saying: “Yes this is great.” The district health boards have lauded it and so have the primary health organisations. 
Report noted. 
State Services Commission 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 What the financial review of the State Services Commission tells us is that the Government actually does not have a coherent plan for how to establish public services that are relevant and proper for the 21st century. It has made a series of moves that are nothing more than smoke and mirrors. 
At the Government Administration Committee we looked into the question of what front-line staff are. One of the big centrepieces of the National Government’s public-sector policy is moving more people to the front line—out of the back room on to the front line—delivering services to New Zealand. We discovered in the financial review process that there was no definition of front-line staff. There is no definition whatsoever of what front-line staff in the public service are or what they do. In fact as we look across the financial reviews we can see that there are a variety of definitions of front-line staff. 
Archives New Zealand is a Government agency that I think does an excellent job. It is a very very good and efficient outfit. It told the select committee that it had 80 percent of its staff on the front line. Not even I as a great supporter of Archives New Zealand believe that it can really be saying that 80 percent of its staff is front-line. But the reality is that there is no definition of front-line and it is the centrepiece of the National Government’s policy. We asked a number of other agencies; some of them told us that the State Services Commission was developing a definition and some told us that it had given them a definition. There was absolutely no clarity about one of the most central points in this Government’s policy the idea that there will be more people on the front line. 
Perhaps it is not too surprising that National wants to mask some of that. One thing became clear when the Ministry of Education told us that the percentage of people working as front-line staff in 2008 was 57 percent and in 2009 it had gone down to 53 percent. So the number of front-line staff in the Ministry of Education actually declined in this National Government’s first year in office. So much for a policy to move staff to the front-line and give the New Zealand public the services it deserves! We can actually see in these financial reviews that the percentage of staff working in the Ministry of Education on the front line went down. 
It is all smoke and mirrors when it comes to the public sector; there is no coherent plan. That became very evident on radio last week when the Minister of Education Anne Tolley was asked about the $25 million dollar cut to the Ministry of Education. She was asked what programmes and what activities would be cut. She told Radio New Zealand that she did not know. We know it will be $25 million but we do not know what the programmes and the services are. That is completely the wrong approach to take towards State services. New Zealanders deserve a Government that looks to see what outcomes we want from the public sector and what kinds of services New Zealanders need and deserve and then builds the ministries to deliver on those outcomes. But instead we hear from Anne Tolley that she does not know. It is $25 million; it is just a dollar figure. That is the problem with the National Government’s approach to the State sector. It is penny-pinching and it is not prepared to invest. The Government is not prepared to ask questions about the outcomes. It just wants to cut into it. 
There is a complete farce in this policy. The National started at the beginning of this term with a cap on the public sector—no cuts; just a cap. We know that is wrong; more than 1500 jobs have gone out of the public sector. It is the front-line services that are going that matter such as Child Youth and Family staff and at the border biosecurity staff. What could be more important as a public service provided to New Zealanders than protecting our borders? The National Government has made indiscriminate cuts. It is not about what the best services could be for New Zealanders; it is about putting in place ideological funding cuts right across the board. That will not deliver us the public sector that New Zealanders want. 
When we look overall at the performance of the State Services Commission there have to be questions asked about its future. The work of e-government is being done by the Department of Internal Affairs the work on Government procurement is being done by the Ministry of Economic Development and the work on productivity in the State sector is being done by Treasury. There is very little left for the State Services Commission to be doing. Its future must be in question. But once again what we are seeing coming out from the State Services Commission is seemingly random restructuring. It wants to bring Archives New Zealand back inside the Department of Internal Affairs. It went out in the 1990s because we realised that it was time to give Archives New Zealand its own mandate and the ability to get other Public Service departments to deposit their records. That is why it was done yet it has now been put back in the Department of Internal Affairs. 
There is no coherent plan. Why is the National Government not going back and looking at the State Sector Act for instance and asking how we can organise public services to be delivered in a coordinated manner? That is what New Zealanders want and it is not coming from this Government. 
KANWALJIT SINGH BAKSHI (National) 
: 
 The financial review of the State Services Commission was undertaken by the Government Administration Committee. One of the main aims of the National-led Government is to provide services to the public. In February 2009 the Government released its  
Expectations for Pay and Employment Conditions in the State Sector 
. These new expectations reflect the Government’s priority in economic and fiscal situations. 
The key points were that any changes to pay must not lead to private sector movements and must take into account the total cost and value of employment conditions. State sector agencies that were required to consult the State Services Commission regarding changes to the conditions of employment are expected to demonstrate that the outcomes are fiscally sustainable within the baseline responsible and demonstrate value for money. This was not a wage freeze. It was about moderating wage expectations in the public sector which has continued through the financial year. 
The National-led Government is not about growing the Public Service but about growing services to the public. This means more front-line service delivery and more efficient back-office services. 
The National-led Government has halted the growth in Public Service bureaucracy. The human resource capability strategy of 2009 shows that the Public Service is heeding the Government’s call for wages restraint and small core Government administration. The summary reports a decline in the number of public servants since December 2008 and labour force index data show that growth in Public Service wages has slowed. It is not the numbers; it is the service that this Government has committed to the public and we are providing that. Thank you. 
Report noted. 
Ministry for the Environment 
CATHERINE DELAHUNTY (Green) 
: 
 I welcome this opportunity to speak to the Appropriation (2008/09 Financial Review) Bill on the financial review of the Ministry for the Environment. I was not a member of the Local Government and Environment Committee. That committee is incredibly important to the Green Party and my colleague Sue Kedgley was a member of it. 
Hon Member 
: And still is. 
CATHERINE DELAHUNTY 
: She still is a member. As I said there was an issue discussed that I want to describe today. Instead of having a broad-brush approach to a range of issues I will talk about the serious nature of cutting funding for what may seem to be an obscure issue. Last year the Ministry for the Environment suffered a number of cuts because we were in a recession and because the Government did not seem to have the same commitment to the Ministry for the Environment that we would like to have seen. One of the cuts that was discussed at that select committee that has had a serious effect was the cut to the Contaminated Sites Remediation Fund. The Contaminated Sites Remediation Fund is administered by the Ministry for the Environment to assist regional councils to investigate plan and remediate contaminated sites in their regions. It is an incredibly important fund because it seeks to assist communities and councils to clean up the mess concerning contaminated sites that has not been addressed for many many years. The Ministry for the Environment fund was cut from its 2008 level of $5 million to $1.78 million in 2009. That might seem like very small beer but in reality we need a lot more than $5 million to deal with the legacy of toxic sites across this country. 
Only this week the Mapua community had a very serious report into the ongoing health effects of the failure of the Ministry for the Environment to properly clean up a site at Mapua. It was very unfortunate that the Government decided to cut the fund from $5 million which barely covers several major contaminated site clean-ups—if indeed it would cover those—to $1.78 million for 2009 and 2010. The Green Party is very concerned about that for a number of reasons. One of the reasons is that it is in the context of councils having just been forced to create registers of contaminated sites thanks to a proactive journalist who went to the Ombudsman. We are hearing that it is not a matter of each region having just a few sites. Many regions have hundreds of sites that need the assistance of the Ministry for the Environment to help clean them up. We could argue that the polluters should pay and in fact I will be arguing that point through a liability bill. But right now it is the responsibility of the Ministry for the Environment to make sure that there is sufficient funding to assist communities to clean up contaminated sites. So we see it as a very retrograde step that in the last financial year that funding was cut. 
Another reason why it is a bad time to cut that funding is that the Government has not yet even finalised the soil standards for toxic sites. Those standards have not been set and they will set the real cost of clean-up. Until we know what the standards are we do not know what those costs will be. We can guarantee that the clean-up of toxic sites is not getting cheaper. 
What is the history of this issue in terms of the Ministry for the Environment? It is important to recognise why I am concerned about that cut in 2009 and why I am talking about it during a financial review. It is because the Ministry for the Environment has serious responsibilities for a number of toxic sites around the country. There are hundreds of them. We have some information about the real cost of cleaning up contaminated sites. For example the Waipa sawmill at Rotorua was contaminated by pentachlorophenol and $28 million will still be spent over the next 35 years to try to treat the water that comes out of the sawmill. The water goes through the Puarenga Stream into Whakarewarewa—where children dived for money—and into Lake Rotorua. That is an ongoing cost of $28 million over 35 years. So clearly that is the kind of money we are talking about for one contaminated site. Another example is the Kopeopeo Canal in Whakatane. It is estimated by the local people who have been very active in looking at a positive way of dealing with the issue that $3 million to $6 million will be needed to clean up that one canal. That is only one of 28 orphan sites around Whakatane that will need a clean-up even if the trialling of the bio-remediation model which is being worked on at the moment is successful. 
The last one I want to refer to is of course Mapua. The Ministry for the Environment estimated that it would cost $7 million to clean it up. The costs have since doubled and it is still a mess. Some clean-up took place but the off-site impact of the experimental mechanism used to clean up Mapua has created more risks and thus more costs. The people of Mapua found out yesterday that there were many chemicals that they were exposed to at that site that were not monitored for such as polychlorinated biphenyls and dioxin etc. 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
: 
 It is my pleasure to speak in the financial review debate and to refer to the report of the Local Government and Environment Committee on the 2008-09 financial review of the Ministry for the Environment. As the chair of that committee I must say that I am very pleased with what has been delivered. The committee itself is a hard-working and diligent committee with a high level of commitment to quality outcomes a little like the example given by the National-led Government. 
In the 2008-09 financial year we have seen a new Government with new priorities significant changes to the ministry’s structure and governance systems and a reduction in baseline funding. The new priorities included the reform of the Resource Management Act and developing new policy on the roles and functions of agencies operating in the environmental sector including establishing an Environmental Protection Authority under the Resource Management Act. The amended Resource Management Act reduces the time for processing consents and reduces the paperwork required without forfeiting obligations to New Zealand’s unique environmental heritage. As part of the commitment to environment management an Environmental Protection Authority has been established and it will become effective on 1 October. It has been a pleasure to be involved with the first phase of the Resource Management Act reforms and certainly those reforms clean up an awful lot of rubbish. It was mentioned on the other side of the House and that is where the rubbish emanated from. I look forward to the critical phase of two reforms later this year. Two call-ins have been completed—Te Mihi geothermal and Te Waka wind farm—and two new proposals have been called in. 
The way we handle resources is very very important. The Ministry for the Environment produced some excellent work in preparation for changes to the Resource Management Act. Indeed it is possibly worth mentioning that it made an exceptional commitment at a staff level to making those changes and bringing recommendations forward. We could not have asked for more assistance than we got. It was exemplary. 
I note the comments of the Green Party member who has just spoken and I certainly would not lessen the gravity of the toxic waste clean-ups. They have occurred but I am not quite sure I agree with the member about the success or otherwise of the Mapua one. We had a report just yesterday that indicated that the situation is hopefully not as serious as could have been imagined initially. That work is being done and the report is out there for 6 weeks during which time members of the public particularly those with any concerns are encouraged to make contact with the Ministry of Health. I encourage them to do so and indeed people in Mapua where I was on Friday are encouraged to get in touch with me if they think I can be of assistance with their inquiries. I would be happy to do so. It has been a long journey for them. It is not over yet but again the way the Ministry for the Environment has worked through this has been an exemplary indication of commitment to getting things right even though they were wrong. I congratulate the ministry on the way it has done that work. 
The emissions trading scheme has been an important priority during the reporting period. We have seen the Climate Change Response (Emissions Trading) Amendment Bill implemented. This was drafted to tight time frames and was introduced in September 2009. The Emissions Trading Scheme Review Committee reported back to the House on 31 August 2009 with recommendations and the Act was passed on 25 November 2009. Features of the amended Act include: revised entry dates of 1 July 2010 for transport energy and industrial sectors and 1 January 2015 for agriculture; a transitional phase until 1 January 2013 with a 50 percent obligation and a $25 fixed option for the transport energy and industrial sectors and incentives for afforestation created by a domestic and international market for carbon credits. 
Another important step that has been made is the investment of $36 million in a bio-diesel grants programme. This will promote bio-diesel production to kick-start the biofuels industry. Thank you. 
Report noted. 
New Zealand Police 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 In the brief time we have available I want to make a couple of remarks concerning the funding of the New Zealand Police. I am pleased that the Minister of Police is in the chair because it was and still is that Minister who makes a great play of talking tough and saying she will back the police. [ 
Interruption 
] However those members do not like this debate because unlike a select committee they cannot shut this debate down which the chair of the Law and Order Committee sitting over there has tried to do in that committee. 
There is a worrying trend within the New Zealand Police and it is not about the police officers themselves. The trend is that this Minister after talking tough making a large amount of promises grinning like a Cheshire cat and having a wee giggle as she does has embarked on a series of cuts that are evidenced in the documentation that is before us—[ 
Interruption 
]—and they do not like it. It was this Minister who said she would put 600 new police on the streets by the end of 2011 when we know that although that sounds good in theory in practice approximately 380 of those 600 officers were already promised. Before she says that one has to follow promises with funding I say that those officers were already funded and being trained under the previous Labour Government. 
We know the obsession the Minister has with her own patch of Counties-Manukau and she and her Prime Minister celebrated the 200th graduate police officer to go into Counties-Manukau. OK that is fair enough because we know that Counties-Manukau has some unique crime and violence problems but here is the rub: we found out courtesy of an Official Information Act request and one district commander Mike Bush that the Minister has according to her own departmental papers provided only 25—she now says it is 43—police cars for the so-called 300 police she is putting into Counties-Manukau. District commander Bush made a very interesting point. He said that that is one vehicle for every 12 officers. The Minister says it is now 43 but let us not quibble. Even if it is 43 it is far less than the normal ratio. Of course district commander Mike Bush comments in the Official Information Act memo this ratio of 1:12 is “considerably lower” than the current ratio which ranges from 1:4 to 1:6. This is not a bureaucrat; this is a senior police officer who is probably the first at district commander level to question the rationale for this policy. 
Chris Auchinvole 
: We get our policemen out on the job. 
Hon CLAYTON COSGROVE 
: Those members interject and fluff about over there but the member for West Coast - Tasman who has lost cars in his patch will not stand up and protest that in this Chamber. That member will not stand up for his local police force on the West Coast; he hides away. 
I also say to the Minister that she is a Minister who—according to district commander Cliff in Canterbury who has verified it publicly in documentation that has been tabled—along with this Government required a $21 million cut in police resources. Firstly it manifested in 340 cars or 10 percent of the vehicle fleet going. The Minister said: “It won’t be front-line vehicles. It’ll be things like vans.” Even in my patch the community cop now has to drive the police prison van around because the van did not go but his squad car has gone. The youth aid officer in Kaiapoi has to get a pool car when she can get it to chase down young offenders. 
So what we have— 
Sandra Goudie 
: Oh rubbish! 
Hon CLAYTON COSGROVE 
: The member says it is rubbish. I invite that member who chairs the Law and Order Committee to go to the West Coast to go to the Kaiapoi Police Station to go to the Rangiora Police Station and to go up and talk to district commander Mike Bush in Counties-Manukau and ask him why he said what he said. I do not think district commander Bush is a liar. I think he is a man of his word I think he is an honourable person and unlike the Minister of Police and the politicians in this Chamber he is a front-line trained professional crime-fighting police officer. If anybody knows about the resources that police need it would be that district commander. The Minister laughs and looks likes the political version of a Cheshire cat; she is good at that. She stands up to say “Oh Mr Chairman” but she does not match her rhetoric with resources. The question I have for this Minister is why if the police had all these resources did they not come to us and ask us— 
Hon JUDITH COLLINS (Minister of Police) 
: 
 It is really great to be the Minister of Police and to remind members that in the last Budget the police were huge winners getting almost $300 million extra. But there was not a word from the Opposition on that point. I say to the member who just resumed his seat Clayton Cosgrove that one thing our front-line police officers do not like is having their names used in this Chamber and brought into political debate. I ask him to kindly respect the fact that those officers are embarrassed by his using their names and they would rather he did not do that. And quite frankly they also dispute many of the things he says about them. 
One of the points we can note is that the New Zealand Police is the best police force in the world. There was not a word from the Opposition about the fact that a UMR Research poll shows that for the first time 78 percent of people polled thought that the police were fantastic and that they do a good job. That is the highest rating ever; a 7-point increase in 1 year. The Government had something to do with it in terms of funding leadership and direction and backing for the New Zealand police. But the majority of the credit should go to our police officers who everyday put their lives on the line for us. I would like to give them that credit and I want to tell members about some of the very good stories from the New Zealand police during the last financial year. 
Chris Auchinvole 
: Tell us! 
Hon JUDITH COLLINS 
: I thank Mr Auchinvole; I certainly will. 
For a start we recognise that there is a problem with organised crime. Police have achieved the best results in 10 years for the National Cannabis and Crime Operation. Over 800 searches led to 1175 offenders being identified and over 140000 plants being destroyed and New Zealanders were protected from some $379 million worth of socio-economic harm. 
Three major operations—Operation Viper Operation Vito and Operation Web—smashed serious drug operations. In September 2008 Operation Viper led to more than 70 people being arrested for serious drug-dealing offending. Operation Vito led to 10 arrests in relation to the manufacture and supply of methamphetamine and three clandestine laboratories were dismantled. 
The whole-of-Government approach is the only way to fight organised crime and it was very satisfying to see the Organised and Financial Crime Agency New Zealand or OFCANZ carry out its first operation last year. This signalled that New Zealand has become a more hostile environment for organised crime groups. This Government was very pleased to be able to get through the House and put in place legislation such as the Criminal Proceeds (Recovery) Act and the Anti-Money Laundering and Countering Financing of Terrorism Act which empower police to hit crime bosses where it hurts. 
Police have continued to invest in staff and equipment that reflects international best practice. New digital radios in the Wellington region were the culmination of 4 years’ work and the safety of officers has been greatly improved. [ 
Interruption 
] The Opposition may think that is nothing to get excited about but this Government does. Auckland and Canterbury are on track to have digital radio this year. 
The national Taser roll-out is under way thank goodness following the Government’s decision to back the police and give them an extra $10 million in the last Budget. Early data shows that in 90 percent of violent instances the situations are resolved when Tasers are presented without any physical force or even the use of the Taser. 
Chris Auchinvole 
: Really? 
Hon JUDITH COLLINS 
: Yes—amazingly! This Government is serious about giving the police the right tools to do their job safely. 
In late 2008 police started training staff in world-leading investigative interviewing techniques. More than 3700 staff have now been trained. The electronic crime laboratory has led internationally ground-breaking work on the remote examination of electronic devices. This allows police anywhere in the country to examine seized computers without those computers being forensically compromised. 
We look forward to the effects of the innovative approaches to crime and crime reporting such as the Crimestoppers service which was launched in October last year. Results have already shown that in the first 4 months the service took nearly 2200 calls and police have advised me that around 40 percent of those calls led to the detection of a crime. 
There was also success with road policing in the first part of 2009. Operation Tahi targeted driver behaviour in the South Island on State Highway 1 for 5 months. High levels of cooperation between the various districts led to an estimated 38 fewer fatal-injury crashes. This is a good-news story for New Zealand police but there has not been a word from the Opposition. Unfortunately it is left to the Government to say that we are very pleased about the wonderful work of the New Zealand police. 
DAVID GARRETT (ACT) 
: 
 I will take a fairly short call in the debate on the financial review of the New Zealand Police. When the Commissioner of Police appeared before the Law and Order Committee it was very gratifying to hear him acknowledge that using sworn police personnel to run speed cameras was a waste of resources. The commissioner came close to suggesting that traffic enforcement should be separated back out from what I would refer to as true policing. But he later issued a statement making it clear that that was not his intent. However the commissioner agreed at that hearing that having six police running a checkpoint at 9 a.m. looking for warrants and registrations in the village near where I live was not a good use of resources. The commissioner noted that they must have been doing something other than that. Well only they would know but I doubt it. 
I note that the speed camera van that is regularly parked in the village outside the school—and no one disagrees that it should be there—is manned by a man who looks like a retired policeman but who in fact told me he is an active sworn policeman. Surely he could be better deployed somewhere other than sitting in a van outside the Kaukapakapa School making sure that no one smashes the camera. I encourage the Commissioner of Police to look further at deploying resources better to fight crime rather than to look after speed cameras. 
Policing in rural areas is a major problem. There must be a balance between the low population density and therefore relatively lower crime rate and the shortage of resources. Obviously the police must be concentrated where most of the crime takes place. However there is an old saying: “Build it and they will come.” In my view that works the opposite way and I will alter that truism slightly and say: “If they know they are not there they will come also.” In the 4 years or so that I have lived in the country I have noted a marked increase in wheel skids all over the road every morning in and around our area. That is because the hoons know that the nearest manned police station at night is in Orewa which is 15 kilometres away. So because the police are not there they come and make mayhem. 
I have spoken in this Chamber before of our local general store and liquor store owner Willie and his family who are hard-working New Zealand Chinese. The shop opens at 7 a.m. this time of year and does not close until 7.30 p.m. One would think Willie and his family deserve their rest but he has to be out on the street at 2 a.m. most nights especially on weekends to deter the hoons who are doing doughnuts all over the road. The hoons do that because they know there is no policeman within 15 kilometres. What would happen if the little swine were to confront him? If Willie and his family were beaten up it would take half an hour or more for an ambulance to reach him. In my view the very successful community constable experiment should be extended more into rural areas. If money needs to be found then we say it should be taken from the highway patrol car that is regularly to be found sitting at the Silverdale on-ramp looking for the dangerous speedster doing 120 kilometres an hour up a brand new motorway which has presumably been built to the highest standards; from the highway policeman whom I used to encounter lying in wait at 5 a.m. on the straights north of Ngatea for some unsuspecting motorist doing 120 kilometres an hour on a deserted straight section of highway; or from the two policemen who once apprehended me on the southern motorway in Manakau City at 4 a.m. It is simply not credible that the best use of police time at 4 a.m. in Manukau City is for the police to sit on the side of the motorway hoping to catch someone driving an old Jag at 120 kilometres an hour. 
The Commissioner of Police has said that the public are in favour by a large margin of having the traffic function remain with the police. Well I would be interested in the evidence for that. “Rebalancing” is the current buzzword. In rural areas at least the residents believe that there should be a rebalancing away from handing out traffic tickets on country roads and towards establishing a police presence in rural areas. 
Report noted. 
Ministry of Education 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 This is a case of our being more in sadness than in anger as far as the Opposition is concerned. I think that we have gone through the point with this Minister of Education where we were angry with the Prime Minister for her appointment when her inadequacies were shown. I think it is important to know that as Heatley has gone and as Worth has gone it is our expectation that this Minister will at some stage join that group of former Ministers. I think that the Prime Minister has to make up his mind relatively soon as to when he will hand out the Not Achieved to this Minister. 
As we focus on the different parts of this vote we would have expected this Minister to be in charge of both parts of this vote as Minister of Education. But we note that effectively half her workload has been stripped from her because of the inadequacies that have been shown and that half of the workload has been given to Mr Steven Joyce. It is sad that a Prime Minister has had to take half the workload from a front-bench Minister in the way that the Prime Minister has had to do by taking away from this Minister her responsibility for reporting on a very significant part of this vote. 
We saw the Minister at the Education and Science Committee answering on this particular topic and I think it is fair to say that there has been a previous Minister who had a worse performance at the select committee: Nick Smith I can remember. I can remember Wyatt Creech and Dr Smith appearing before the select committee and both of those people knew their subject. They did their homework; they understood. They knew what a vice-chancellor was they knew what a vote was and they knew how the system was put together. They knew what group special education was because they were responsible for it and they did their homework in the way that this Minister just does not. 
They would never have put $62 million into national standards in a way that strips money out from making actual change in education. They would never have cut the money from professional development in the way that this Minister has. She has taken $45.6 million out of professional development. 
Hon Member 
: Let’s list literacy and numeracy. 
Hon TREVOR MALLARD 
: No she has not transferred it to literacy and numeracy; she has taken it out of the total money available for professional development for teachers—$45.6 million over 4 years. 
Katrina Shanks 
: 9 years and you couldn’t do it. 
Hon TREVOR MALLARD 
: No—9 long years of money going up but under this Minister the money for professional development has gone down. That is because we have such a lightweight on the front bench. Again she is someone who is clearly not coping with her job. She is clearly not coping with her job in the way that people should cope. 
I am sure that my colleague will talk about adult and community education but I am going to schools now that used to have adult and community education. I have been to two schools in the last 2 weeks and I have talked to three schools if we count a meeting with a principal who came to see me. They all say that adult and community education used to make a real difference to their schools. It was something that bonded them with their community. It got adults into their schools at night and that meant that vandals did not turn up. But what has this Minister done? She has cut the funding and said to schools that there is no more money for anti-vandalism there is no more money to fix up the schools and there is no more money for the overheads that have been lost as a result of doing that—and by the way she is taking $62 million out of the Education vote for her national standards. 
Hon Anne Tolley 
: That’s just not true. 
Hon TREVOR MALLARD 
: Well I do not know; when I went to school 36 and 26 were 62. I know there is a new approach to numeracy on the part of Anne Tolley but that is still $62 million that could have been helping kids learn and she has stolen it. 
LOUISE UPSTON (National—Taupo) 
: 
 It is an absolute delight to speak about the financial review of the Ministry of Education. This is a once-in-a-lifetime opportunity to deliver a brighter future to every New Zealand child and I am proud to be working with a Minister of Education who has the courage to take the steps needed to do that. Before the election National promised to deliver national standards. In December 2008 just before Christmas we passed legislation that would see national standards in every school and legislation to make sure that more of our young students attend school. 
I will focus on the issues. They are the important things that are being delivered in education by the Ministry of Education. This Government is determined to do better for the one in five children who currently leave school after 10 years unable to read write and do maths. That is a disgrace and members on that side of the Chamber are unwilling to own that failure—one in five. Those members do not like it and they will not listen. We recognise that a strong foundation in literacy and numeracy is vital. That is the one priority and that is what the Ministry of Education has been delivering. It is fantastic news. 
Hon Trevor Mallard 
: I think she believes it. 
LOUISE UPSTON 
: We need our children to be able to read write and do maths but unfortunately Mr Mallard does not believe that which is a great disappointment to members on this side of the Chamber. 
Our priority is national standards. They are simply signposts. They describe what children in years 1 to 8 should be able to achieve and by when. Teachers will assess—[ 
Interruption 
] 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry to interrupt the member. I am having difficulty hearing. Interjections are fine but running commentaries are not. I cannot hear the member so I ask members to tone it down. I am happy with interjections but not with running commentaries. 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. I wish you had done that during the previous speech. 
The CHAIRPERSON (Lindsay Tisch) 
: The member was speaking then and I know that there were interjections but the member was able to be heard and I could hear what the member was saying. I do— 
Hon Trevor Mallard 
: They were constant. 
The CHAIRPERSON (Lindsay Tisch) 
: I hear where the member is coming from. I am having difficulty hearing this member. I ask members to please be quiet. I am having difficulty hearing this member and I am asking to be able to hear her so that I know what is being said. 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. Are you saying that there are two standards in this House: one for members who have strong voices and one for weak members? 
The CHAIRPERSON (Lindsay Tisch) 
: I have made my ruling. I am asking members to tone it down. Interjections are fine but not running commentaries. It is such that I cannot hear the member. 
LOUISE UPSTON 
: Just to reiterate the national standards are quite simple; they are signposts for years 1 to 8. I have three children in years 1 to 8 so this is really important to me as a parent. It is important as a parent to be able to know and receive information back from the school on exactly how children are doing and that is what the parents I talk to at school every week are telling me. We are investing $26 million to train and support teachers as they implement national standards. Another $36 million is being invested to help students who are identified as needing additional assistance. 
National does not believe that excellent schools are created by the Ministry of Education; they are created by excellent teachers and excellent principals. I want to give members an example of an excellent local school in my electorate. It is a decile 1—[ 
Interruption 
] Members should listen. If they cannot stand the truth they should listen up. The school is a decile 1 Maori immersion school. It does not have to have national standards but it recognises how fantastic national standards are and it will implement its own this year. It knows the values that national standards will deliver to the students in the school. It is fantastic news and I am really proud of that school for taking leadership and ensuring that its pupils learn how to read write and do maths. 
The other thing we have to crack down on—unfortunately in 9 years the previous Government it did not tackle this at all—is truancy. We know that we need to have students at school in order to teach them. It is not rocket science. Unfortunately for 9 years Labour did not tackle it or address it. Look at the report  
Attendance Absence and Truancy in New Zealand Schools in 2006 
: Labour failed miserably at keeping kids at school. Well we are not going to say that that is acceptable. We are taking action on truancy and we will put in an extra $4 million a year. I have visited schools recently to look at the data that each school is able to use with their electronic systems. It is fantastic. Teachers get to see exactly where the problem is they get to see where students are struggling and they can support those students to make sure that they are at school. 
National standards is about the future of every New Zealand child. It does not matter what race students are or what their family circumstances are. This Government aspires for those kids to do well. 
Hon MARYAN STREET (Labour) 
: 
 I differ from my colleague Trevor Mallard in one respect: I rise to speak to the financial review of the Ministry of Education both in sadness and in anger. When I look at tertiary education I see that the characterisation of this Government’s work in tertiary education has been cuts cuts and more cuts. Yes I am sad about it but also I am angry. It is an ignorant approach to education to continually and routinely under-invest and cut just at the moment when other countries around the world are increasing their investment in tertiary education because they know that the way to sustained economic recovery is through investment in tertiary education and not through cutting it. 
Worse than that level of ignorance which is almost unfathomable is the deliberate policy that this Government is demonstrating in tertiary education of narrowing access to tertiary education opportunities. The Government is not broadening the access but narrowing it. We are talking about the period of appropriation when the Hon Anne Tolley was in charge of the tertiary education portfolio. We saw from the outset a Government beginning the way it meant to go on. It cut adult and community education funding by some 80 percent taking out $13 million from a $16 million budget and leaving $3 million behind. It reduced the number of high schools around New Zealand that ran adult and community education classes from 212 to 24 with a few others added on as clusters of schools led by one lead school out of those 24. 
That was the first effort at narrowing the basis of access to post - compulsory education opportunities for New Zealanders. It is one area where New Zealanders have been able to step back into education in an accessible non-threatening low-cost environment that allows them to revisit what may have been a previously unsuccessful educational career and to begin to build the foundations that they need in order to excel. 
Last year I went to about 17 or 18 public meetings. Sometimes there were 60 people at those public meetings protesting against the cuts to adult and community education; sometimes there were 500 people. Time and again I saw at each of those meetings the level of anger and the level of loss that people felt for not only those things that the Minister does not count as necessary such as social cohesion and strong communities but also a loss of opportunity to learn which those cuts represented. It was felt very acutely by people right across every community even communities that one would imagine that the National Government would be keen to protect such as rural communities where post - compulsory education opportunities are few and far between. The National Government took no notice because the hallmark of the previous Minister’s tenure in the tertiary education portfolio was obstinacy ignorance and just plain stubbornness. 
That was the first of the cuts but let us see what else happened under that Minister’s tenure. I have to say that the new Minister for Tertiary Education Steven Joyce is not proving to be any better in that his approach to tertiary education is evidencing even more cuts. We will come to that shortly. In the year under consideration the Government cut $98 million from tertiary scholarships with the bonded merit scholarship scheme the Step Up Scholarships and the Top Achiever Doctoral Scholarship ceasing from June 2009. So the efforts that the previous Labour Government put in place during its 9 years in office to allow people to access advanced tertiary education have been cut by this Government; $98 million was taken out. 
Let us look at the CPI adjustments from 2009. For industry training Modern Apprenticeships and adult and community education elsewhere the CPI adjustments were cut. That is another $172 million shortfall in funding to those programmes over the next 4 years. Cuts cuts and more cuts. 
Hon ANNE TOLLEY (Minister of Education) 
: 
 It is a bit rich is it not? It is easy for the previous speaker Maryan Street to come to the Chamber and talk about cuts but she was a Minister in the previous Government and was responsible for leaving half a billion dollars’ worth—half a billion dollars—of promises that were made during an election campaign with no funding in place to deliver on them. Someone else had to come in and clean up the mess. It is all very well for her to get holier than thou but someone else had to come in and clean up the mess. 
I want to talk in this Chamber about student engagement because that is what this Government has been focused on and the previous Government ignored it. In fact one could almost say that it was Labour’s dirty little secret. Let us talk about truancy. In 2006 a survey was done on truants and it found that almost 30000 kids were absent from school at any one time. 
Chris Auchinvole 
: How many? 
Hon ANNE TOLLEY 
: Almost 30000. Do members know what Labour members said? They said that it could not be accurate. They said that the report could not be true. There was a big tangi in the week when the survey was done so they said that it could not be true. What did Labour do next? The survey was due to happen again in 2008 and what did the Minister of Education do? He cancelled it because if one does not— 
Hon Parekura Horomia 
: I raise a point of order Mr Chairperson. I struggle to understand why the Minister brings up connotations of tangi as being relevant to her delivery. I think it is obnoxious and appalling. 
The CHAIRPERSON (Lindsay Tisch) 
: I thank the member. These are debating points. But I refer all speakers as we did right at the beginning to the fact that we are debating the appropriations. It would be good if we could focus on the appropriations. 
Hon ANNE TOLLEY 
: What has this Government done? The first thing I did as Minister was to say that we needed to define the problem and to have a report. In 2009 we carried out a truancy report and guess what? We found that 30000 kids were missing school on any one day. The problem was there; the previous Government just hid it and hoped that it would go away. What has our Government done? We have doubled the funding. Over the next 4 years we will put in an extra $4 million a year to address truancy. 
Hon Member 
: Oh that’ll make a huge difference! 
Hon ANNE TOLLEY 
: It will make a hang of a lot more difference than was made under the previous Government. It could make twice as much difference because there is twice the amount. 
We have reviewed the district truancy services. We will pay more to the district truancy services. There is that wonderful electronic system with automatic texts to parents which has been so effective and we are putting in the incentives for schools. I give credit to the previous Government for setting up that system but it never did anything more. We are saying to schools that we will help them to get that. 
In addition to that though this is not just about attacking truancy. The other thing we have done is to develop our Youth Guarantee. Let us compare that with what the previous Government did. Do members know what the previous Government’s answer was to students leaving school without qualifications? It was to change the law to keep students at school until they were 18 so that they could not leave. It was called Schools Plus. When we came into Government we asked where the money was in the appropriations for Schools Plus. That money did not exist. It did not exist. Where was the policy work around the big announcement that the previous Prime Minister made? Where was it? It did not exist; it was just another flimflam from the previous Government. 
What have we done? At the beginning of this year with the money that used to go to support people learning Moroccan cooking Spanish and concrete mosaics 2000 young people got fees-free places at polytech—2000 people. Those 2000 young people had left school without qualifications and could have been on an unemployment benefit and there will be another 2000 next year. 
Chris Auchinvole 
: Another 2000. 
Hon ANNE TOLLEY 
: Another 2000 next year. That is what has happened to that money. 
Hon Maryan Street 
: She’s not managing. She needs more support. Come on guys you can do it. 
Hon ANNE TOLLEY 
: It is like a screaming skull over there is it not? The Manukau Institute of Technology opened New Zealand’s first tertiary high school. We put a couple of million dollars into New Zealand’s first tertiary high school because that is an innovative way of keeping young people engaged at school. 
Then of course there are our trades academies. We asked for expressions of interest. We got 112 from around the country—112 people put forward propositions. They were delighted that a Government had asked them how they could help keep young people at school. We have taken 11 propositions from that and from the beginning of next year within 2 years of becoming Government we will have six or maybe seven or eight trades academies opening to provide good pathways. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I was not going to take another call—I have spoken with the Labour whips and I may be in a little bit of trouble—but I think that that speech by the Hon Anne Tolley cannot go unanswered. The first thing we should focus on is the comments the member made about standards and her suggestion which has been made here and around the country that every single student will when standards are properly implemented leave with a National Certificate of Educational Achievement (NCEA) level 2. I have never heard so much nonsense in my life. There are hundreds if not thousands of students in every cohort in New Zealand who are not capable of getting NCEA level 2 unless the standards are dropped enormously. It is inappropriate for a Minister of Education to be so out of touch that she is going around the country promising parents—promising parents—that their children will achieve at that level when she if she has a modicum of intelligence will know that that is absolutely impossible. She has a system that she is putting $62 million into— 
H V Ross Robertson 
: What? 
Hon TREVOR MALLARD 
: She is putting $62 million which was stripped out of professional development and a number of other areas into an objective that is absolutely and utterly impossible. 
Next I will make a comment about the academies to which she referred. I tell her that as I move around the country in the areas with academies I am discovering absolute chaos. No one has bothered to tell the schools which of their kids are at the academies. The schools have pastoral care responsibilities for those students; they are meant to be on school rolls—[ 
Interruption 
] Well truant officers will not be looking for them because they are not on school rolls but no one has told the schools. At the start of the year apparently there were thousands of kids all around the country at the academies but no one had told the schools which kids had gone to the academies. What a shambles in implementation! 
What about qualifications? What shambles is this Minister putting into secondary qualifications now? She is taking out a number of unit standards—quite a large number of unit standards—and what is the result of that? The result of that is that if people want to run a sports academy for example at a school they now have to have moderation from one two or three different industry training organisations. Instead of the New Zealand Qualifications Authority doing the moderation if a school is running a series of academies under the implementation of the policy started by this Minister in the financial year under review that school has to have one two or three different industry training organisations doing that work. If a school is running six seven or eight different types of non-traditional programmes it might have up to 20 different organisations coming in— 
Hon Member 
: Get on the planet member—get on the planet. Don’t insult us with such stupidity. 
Hon TREVOR MALLARD 
: —no no; absolutely—to that school to moderate because of the abolition of unit standards under the direction of that Minister. Some people do not understand how our system works; some of us have been working with it now for about 20 years and we know that we make haste slowly. That Minister is someone who with her changes is making an enormous difference but it is negative. 
There is a very easy way of doing what she should have done. I agree with her basic thesis that differentiating an equation for calculus and making a cappuccino should not have equality for university entrance. For people going to university they are not the same thing. There was an easy way of fixing it which was to say that unit standards did not count for university entrance but that Minister was too slow to pick that up. 
Report noted. 
The CHAIRPERSON (Lindsay Tisch) 
: I understand that the next financial review that members wish to debate is the financial review of the Ministry of Agriculture and Forestry. Will members please turn to the Primary Production Committee’s report— 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. Rather than starting with half a minute to go might we take leave to take the dinner adjournment now? I have seen 5.59 p.m. on the clock for about half a minute now. 
The CHAIRPERSON (Lindsay Tisch) 
: The time has come for me to leave the Chair. I shall resume the Chair at 7.30 p.m. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Ministry of Agriculture and Forestry 
Hon JIM ANDERTON (Leader—Progressive) 
: 
 The question for the Government to answer is this: where in this appropriation has it made decisions that will achieve a step change in this country’s economic performance? The answer is: nowhere. There are two hugely contrasting approaches to the New Zealand economy in this House. Both sides know that our economy has to do much better. Over on that side of the House the Government’s entire programme for transforming New Zealand is to increase GST drop the top tax rate for the most affluent New Zealanders and—oh yes—build a cycleway. That is it—that is the Government’s one shot. On this side of the House we have a long list of ideas to foster innovation create jobs and increase incomes: research and development investment in science and skills and partnerships with the sectors the businesses the institutions and the people who can bring great New Zealand ideas to market. National says it supports them but this appropriation tells a different story. 
Where is the research and development investment here? The Government cut $700 million from the New Zealand Fast Forward Fund. That is a total cut of $2 billion in New Zealand innovation made up of $700 million from the Government matched dollar for dollar by industry and interest earned over 10 years—$2 billion. The Government abolished that and replaced it with a primary partnership which has so far completely failed. Eighteen months have been wasted. Not a single project has been funded and not one cent has been invested. Those are months we will never get back. 
I thought that when the Government axed the Fast Forward Fund it was coasting in neutral but it is much worse than that. It is actually going backwards. It is overseeing the axing of 40 jobs in AgResearch. Fifty jobs have already been lost in biosecurity. How will that help innovation and science in the most productive and innovative part of our economy? It will reduce growth further. Our future prosperity and jobs depend on science and innovation and the sector where innovation and science make the most difference in New Zealand is the primary industry sector. It makes no sense to hack off the jobs of 40 scientists. What does the Prime Minister say about that? He says that the Government is “not inclined to step in to save the jobs.” He is relaxed about it. The Prime Minister calls it “a necessary adjustment to deal with the structure of AgResearch as it currently finds itself” because it has “too much capacity in certain areas”. That is nothing less than double-speak. In the 1980s we heard quotes like: “We have rising unemployment around a falling trend.” or when we closed post offices and post banks it became not closure but “transferring their resources” and we are getting the same kind of double-speak now. 
I will tell members why AgResearch has too much capacity. It was meant to be working in partnership on research projects that would have been funded by the New Zealand Fast Forward Fund. The Government has chopped science funding and now of course we are losing scientists. The farmers themselves are not inclined to stump up for research in areas like wool because they know the Government has sawn them off. They are not going out there alone when the rug is being pulled out from under them. 
So the Prime Minister says AgResearch has “too much capacity”. That can only be possible if the Government thinks that too much science is already being done in New Zealand. What has this Government got against science anyway? It seems to be on a crusade to smash every limb of science research and innovation in New Zealand. The very first policy that the Government brought to this House after the last election was to impose the largest increase in company tax in New Zealand’s history. It targeted very carefully our most innovative companies. By removing research and development tax credits $700 million was gone over just 3 years for that purpose. Is it any wonder then that we are lagging behind in ways that we never envisaged? What was supposed to happen was that we were to come out of this recession—which of course has been worldwide—with our wheels running really fast. 
I look through this appropriation to try to find the pro-science policies that have replaced the research and development tax credits. Where are they? Tragically they do not exist. John Key still says we will catch up with Australia. Yeah right! We will catch up with them all right. I am waiting for the next speaker to make my day. This is a disaster. 
Hon DAVID CARTER (Minister of Agriculture) 
: 
 One often wonders where Mr Anderton has been over the last 18 months when he suggests that there has not been a substantial step change in the way that agriculture is now recognised in this country. We had a decade of absolute ignorance by the previous Government of the importance of agriculture to this economy. The farmers were treated like dirt by Mr Anderton. He completely ignored them but now they have a Government that cares about the farming industry and responds to its needs and it is time that Mr Anderton woke up to that. 
Let me deal with research and development. Every time that Mr Anderton gets on his feet he talks about the Fast Forward fund. Let us analyse the Fast Forward fund. The previous Labour Government borrowed $700 million put it into a fund and said industry would support it with dollar for dollar. Not one industry player put a dollar into Fast Forward. Those players knew it was ridiculous from day one. I say to Mr Anderton that we campaigned on research and development. National campaigned to the farmers of New Zealand on the Primary Growth Partnership and who won? The Primary Growth Partnership now has $175 million worth of bids before it. 
Last week I was down in Otago in the Ben Nevis range a beautiful part of the country. There were 500 high country farmers there and they are delighted with the performance of this Government. [ 
Interruption 
] I say to Mr Parker that this Government respects the fact that farmers have a property right and this Government will not trample on their property rights. This Government will give them a reason to farm the high country and a reason to farm it sustainably and carefully. We are not talking about a 600 percent or a 6000 percent increase in rents in an attempt to force farmers off their land. We actually respect the job that those high country farmers do. 
The other thing we did immediately upon becoming the Government was to modify the emissions trading scheme. The previous Labour Government had put in place an emissions trading scheme that would have completed gazumped the agricultural sector. 
Hon Jim Anderton 
: Oh yeah. 
Hon DAVID CARTER 
: Mr Anderton laughs. He thinks that is funny. That shows how out of touch he was with the sector. 
Hon Nathan Guy 
: Tell them about Jim’s chainsaw. 
Hon DAVID CARTER 
: Well I do not think that Mr Anderton would have ever operated a chainsaw. He certainly never owned a pair of gumboots; we know that. 
Mr Anderton suggests that the Government has cut the AgResearch budget. That is wrong again I say to Mr Anderton. We have not cut the budget of AgResearch. The farmers voted not to support their own wool levy. That has meant less funding going into AgResearch and AgResearch has responded to that. But it is absolutely incorrect for the former Minister of Agriculture to stand here and suggest that this Government has cut expenditure to AgResearch because we have not. In actual fact this Government has put an absolute emphasis on science. As we face the challenges of climate change science will provide the solutions. 
Mr Anderton spent 10 years talking about agriculture but he never delivered anything to it. This Government will not make that mistake. We are well and truly on board with our farmers and all around the country farmers are saying there has been a step change in the way that this National-led Government relates to this important constituency. This constituency is the backbone of the New Zealand economy and Mr Anderton should have realised that when he spent so many years as the Minister of Agriculture. He was a disgrace and farmers are pleased to be rid of him. 
Report noted. 
Ministry of Research Science and Technology 
Report noted. 
Ministry of Transport 
DARIEN FENTON (Labour) 
: 
 One of the promises National made before the last election was to continue to fund the SuperGold card. This comes within the responsibility of the Ministry of Transport in the appropriation period and indeed of the Minister of Transport Steven Joyce. In fact a year ago John Key went further when he said he supported the scheme and would be funding any increase if it became more popular than was budgeted for. Unfortunately someone forgot to tell the Minister of Transport—and it is good to see the Minister here—and the ministry and a week ago there was a big “Oops!” when the Minister announced a review of the SuperGold card. 
The ministry’s discussion document is still on its website. It was released on the website and by the media and it states: “After the first 12 months of operation it has become clear that in its present form the scheme will not be financially sustainable with the funding available.” So the scheme is not financially sustainable with the funding available. What did we see in the next 24 hours? We saw a huge U-turn a huge flip-flop from the Minister. The  
Dominion Post 
 got it right on Monday 15 March when it stated that Minister of Transport Steven Joyce had been acting strangely before he did “a screaming U-turn” and reversed his decision to review the SuperGold scheme for the over 65s. 
Now we have to wonder why this happened. It was pretty strange of Mr Joyce to alarm more than 500000 SuperGold card holders by even suggesting he wanted a review. As the public knows and is increasingly learning a review by this National Government really means a cut. We need only ask all the public servants this Government has sent down the road. They thought they were having a review but it turned into a cut. I have to ask the Minister why he would make such a mistake. Could it be that for just one moment he let his true colours show? 
Everyone knows that National does not agree with the SuperGold card policy. Secondly we know that it can never say that publicly because that would be so unpopular. But if we unpack what National believes we find that it thinks everyone over 65 should have been so successful with their investments that no special arrangements such as a SuperGold card should even be necessary. National also believes that because the scheme is not means-tested plenty of over-65s who could afford the price of a bus fare are riding the bus for free. 
Then we had the spectacle of the discussion about older New Zealanders in Auckland where I and some National MPs live who have the cheek to get on the train and then get on the ferry to go to Waiheke Island. That has meant a lot to those people. It has meant that they get out of their homes and have an outing and why should they not? As I have said that is the whole point and that is why Labour and New Zealand First worked together to establish the SuperGold card. We believed that the SuperGold card should be available to everyone who was 65 and older irrespective of income. 
The policy was about respecting the older generation and the contribution they have made to the standard of living we all enjoy today. It honours the contribution older New Zealanders have made and continue to make to New Zealand. It is an acknowledgement of the respect they deserve. It is a physical reminder—and maybe this is the reason why the Minister does not like it—of Labour’s commitment to seniors and veterans and it improves their standard of living through the discounts it provides. 
But the Minister of Transport slipped up. He showed older New Zealanders his real agenda. It was obvious that the Prime Minister got involved—probably when he remembered that in March 2009 he described the SuperGold card as a successful programme and said that the Government would provide any necessary increase in funding. What we saw after that was the bizarre behaviour of Minister Joyce at the opening of the Bell Block Bypass in New Plymouth. He was seen hiding behind a bush and texting and then getting on a truck and texting there as well. Now we know what really happened. John Key remembered that he had said he would fund any extra costs for the SuperGold card and he was on the phone texting the Minister and embarrassing him. 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 It is a tremendous yarn that the member opposite has been running. It is an interesting one because there are a range of things in transport that she could talk about. There are some very big issues. Road safety is an important issue. The Government is making major investments in roading which we know members of the Opposition sometimes do not like. There is also the big job in turning round KiwiRail for which way way too much money was paid by the previous Government. There are other issues that we have to clean up including the shortfalls the previous Government left in the driver-licensing and driver-testing accounts which we are now trying to settle and solve. But of course none of those things are all that important to members of the Opposition. They are focusing on one particular issue. I think it would be wise to have a look at that issue because it points to something about Labour. I think it is a physical reminder of Labour’s lack of fiscal concern for anything. 
What we decided last week to do which we are now doing is to test whether the providers of transport services to SuperGold Card recipients are being paid the right amount for the services they provide. That is the purpose of the review. The people who run the ferry out to Waiheke Island are paid around $2 million a year to carry those with SuperGold Cards free of charge. Nobody is arguing about whether they should be going out there. As we have said all the way through we have accepted the policy but the question we have to ask in testing everything from a fiscal point of view is whether that is value for money in terms of what is being paid to the operator. It is not about the people who are using the cards; it is about what is being paid to the operator. 
I think that Labour members are telling us that we should never test those things; that once we have voted money for something we should never look at it again. Of course we have stacks of examples of that. We have examples in my own portfolios of transport and communications where they have said write the cheque and whatever we do later do not look. In fact we should never test whether the money is being spent well because we do not really care. Money just comes from the taxpayers—just bring some more money in and it will be fine. Fortunately we now have a fiscally responsible Government that does care and that is prepared to test the assumptions and to maintain the services but to constantly test whether we are getting value for money from the people who are providing the services. That is what this Government does and this issue is another example of that. That was what this thing was about last week. It showed once again the Government’s concern for the money that belongs to taxpayers of this country. 
I would have thought that Labour members would be very interested to find out what is happening with KiwiRail. After all the Labour Government spent about a billion bucks on it but Labour members do not seem to have any concern about where that money went. They have not raised it tonight. They have no concern about where the money for KiwiRail has gone or whether the business is in good shape. They could have taken calls and popped up to say that it is a big issue that this was $1 billion that they threw away in the dying months of their administration. I thought they might have a little bit of an interest as to whether that money is going well but there was no interest whatsoever. 
There was also no interest in the rest of the rather large transport portfolio in terms of expenditure as to what is going on with it. That is fine. That is their approach and I am sure they will criticise everything we as a Government do to check whether expenditure is at the appropriate level for the service that is being provided. We are happy for them to do that because I can tell members that taxpayers and in fact Grey Power want us to do that. Grey Power endorsed our approach on Friday— 
Hon Annette King 
: Ha! 
Hon STEVEN JOYCE 
: They did. They endorsed our approach and said that they supported the Minister in his attempts to ensure value for money from the passenger transport operators so that the scheme could be kept sustainable and continued into the future. That is what they said on Friday. So the Grey Power people are in favour and every other taxpayer is in favour and all members opposite can say is that they like to write the cheques and that once the cheque is gone they do not care any more. Well I do not think that will be an approach for this Government as long as it occupies these benches. Thank you. 
AARON GILMORE (National) 
: 
 I will touch on a few things. This review is looking at the Ministry of Transport and we have just heard from the Minister of Transport some of the wonderful things he has done in the last 12 months. 
I will touch on one thing in particular. We heard from Darien Fenton who talked about what I would call the cents but we are interested in the dollars and in particular the $1 billion that has been put into funding for new State highways over the next few years. I will talk about one special project: the new Christchurch Southern Motorway. It is a $730 million project—$730 million. It is the single biggest roading project that has been built in the South Island since anyone can remember. It is a wonderful project. I had the absolute pleasure of sitting there on the first sod-turning day with the Minister of Transport and with a large number of the community who were ecstatic that they would have the ability to get to their homes businesses and schools just that little bit faster because of the roads of national significance. The Christchurch Southern Motorway is one of the lynchpin projects of the roads of national significance. 
On that opening day with that first sod-turning ceremony a large group of people were there. There were National MPs and a few National Ministers but I ask members how many Labour MPs were there to celebrate the most significant roading project in the South Island’s history. 
Colin King 
: I don’t know. You tell me. 
AARON GILMORE 
: Zero. There were zero Labour MPs were there to celebrate. That just shows us what little they see of the importance of roading to unclog the clogged arteries we have in New Zealand. 
You see we have a problem in Christchurch. People think that the only roading projects to solve a problem are in Auckland but I can tell them that if they drive down either of the major current entries into Christchurch from the north or from the south they will wonder what they have run into in terms of congestion. We have that in Christchurch. This is not just about the Christchurch Southern Motorway; it is the first project in a collection of roading projects. We will have an upgrade of the western bypass which will go around the outskirts of the city to the west. In time we will have the new northern motorway which will come through to my community in northern Christchurch. Our people are screaming out for those projects and they will be possible only with the extra billion dollars that we have put into the State highway network for the next 3 years. What a wonderful thing that is. The important thing is getting mums and dads and people to work and school faster. 
We should not be worrying about some small issues around a $10 million SuperGold card; this is a billion dollars that the Minister has here. I tell members to put it into context. I have touched on my favourite pet project the Christchurch Southern Motorway but I know that my colleagues have others like the Waikato Expressway and the Caversham Bypass. There is a collection of projects up and down the country. People want the arteries unclogged and to have the ability to get to home work and school much faster. These are wonderful projects but what do Labour members want to talk about? They do not want to talk about those. They could talk about public transport but they do not want to talk about that either. They want to talk about the SuperGold Card and that is remarkable. 
We can talk for hours on this whole issue of the roads of national significance and the importance of it for the Christchurch community the Dunedin community and the Hamilton and wider Waikato community. But what do we hear from Opposition members? This is the typical thing about Opposition members. They do not care about the big dollars they do not care about the big picture and they do not care about the economy. 
Michael Woodhouse 
: They can’t count that high basically. 
AARON GILMORE 
: That may be the case but I would not possibly want to comment. I could not possibly stand up here and not talk about the other major project in our roads of national significance. It is the great big project that has occurred of bringing forward the Victoria Park roading project by 1 year—that is a year sooner for people in Auckland to have the ability to access that roading and be able to get to where they want to go better faster and sooner. 
Hon Member 
: More conveniently. 
AARON GILMORE 
: More conveniently. 
But the jewel in the crown is the announcement for the long-suffering people in Wellington of the $2.2 billion strategic upgrade of State Highway 1 into Wellington Airport including Transmission Gully. When I was a long-suffering public servant this project was on the books 15 years ago. However this Minister has brought forward the Transmission Gully project. He has taken it from the ether in the distance and brought it on to the paperwork of progress. What a wonderful thing that is. There is $2.2 billion so that people from Wellington can get to Porirua and others can come into Wellington in a much faster way. What a wonderful thing that is. Thank you. 
Report noted. 
Ministry of Social Development 
Hon ANNETTE KING (Deputy Leader—Labour) 
: 
 I begin this evening by congratulating the Minister for Social Development and Employment the Hon Paula Bennett on her selection for an Eisenhower Fellowship and I tell the Minister that I genuinely mean that. It is a great honour to have been chosen to go and have 6 weeks’ study in the United States. Many years ago I had the opportunity to go for 3 weeks and I studied assistance for dependent families in the United States. One of the things I learnt—and I suspect that the Minister will learn it—was that it is a very different country from New Zealand with very different values particularly in terms of the way it treats families. So I will be interested in what the Minister comes back with after her study there. 
I will raise one particular issue with the Minister tonight and I am seeking answers around the whole area of Whanau Ora. I think it is time that we had some answers. Whanau Ora is a flagship policy of this Government we are being told over and over again. But every time we have questioned on this issue we have not been able to find out first of all what it means. Members of the Social Services Committee who were there on the same day that I was were astounded when we had Government departments tell us that they did not know what Whanau Ora was and could not give us a definition of what it was. I think that the Minister in terms of blocking any information on this and refusing all information requests—and not only this Minister but also all other Ministers with portfolios related to it—is not doing a service to New Zealand. Now we have commentators writing about Whanau Ora and defining it as they would like to define it. 
I will put on record that Labour is not opposed to the concept of Whanau Ora. After all Tariana Turia was my Associate Minister of Health back when we were in Government and I very much understand where she comes from and what she wants to achieve. Tariana Turia has not changed what she believes Whanau Ora is but we have been getting conflicting and confusing messages from this Government depending on which audience its members are talking to. Tariana was very upfront and forward about this policy. She said that this policy was for Maori by Maori. But after a period of time and obviously some polling Mr Key then decided that he needed to say: “No no. It is for all New Zealanders.” After several weeks of that Tariana Turia said that if all New Zealanders wanted to access it they could. That was said on one medium but when Mr Key was interviewed on Maori media—and perhaps he thought that no one was listening—he said: “No no. It really is for Maori and it will run in the same way as kohanga reo. If other New Zealanders want to access it through Maori then that is how we will do it.” But that is two messages; people do not know who will be able to access it. 
Tonight I tell the Minister for Social Development and Employment that I would really like her to answer a number of questions for this Committee. Where will the funding come from? Will it come from the Pathways to Partnership money—the over $100 million that was parked in the Minister of Finance’s contingency fund? How will the service to providers be decided? How will taxpayers’ funding for Whanau Ora be monitored? How will the outcomes from Whanau Ora be measured? Can the Minister also tell us whether there will be a “Minister of Whanau Ora”? Will Te Puni Kokiri be the lead agency for this programme? Will there be regional Whanau Ora committees? Will there be a separate appropriation for Whanau Ora? 
All those recommendations were in the task force report given to the Government which it has refused to release even though it has now had the report for weeks. The Government has had the report for weeks. It just so happened that a departmental report with the recommendations in it made its way to other members of this House. I say to the Minister that I think it is time that those questions were answered. We already have funding being allocated under the label of Whanau Ora funding—$415000 has been allocated to five women’s refuges. I do not have any problem with that but I ask where the money is coming from for the Government to be able to provide it to those five refuges. 
I tell the Minister for Social Development and Employment that I think it is time there was a clear description of Whanau Ora. When I asked the Minister in the House for a description and actually gave her a description and asked whether it was Whanau Ora the Minister said yes. But that was the same description as for Strengthening Families a programme that already exists. I ask the Minister to take this opportunity to put on the record what this programme is all about because people are seeking answers. 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 I am grateful for the opportunity to stand up and talk a bit in the financial review debate about what the Ministry of Social Development has been doing and how it goes about that. The Ministry has departmental appropriations of $1.1 billion a year of which $950 million is in running costs. The Ministry has met $168 million in cost increases up to June 2009 through efficiency gains and cost-reduction activities. It has plans for a further $272 million in gains over the next 3 years. Its value-for-money programme looks at the potential for those sorts of efficiency gains through measures such as self-service online tools and options that reduce the level of administration. 
It has been quite a focus for us that we get back to people. We are back to how we work with people how we are actually managing them in their lives and helping them by working alongside them. If one asked me in all honesty how we were going to make the biggest difference for those who are dependent on welfare both short-term and long-term I would say that it comes down to the relationship they have with their case managers how they work together how we give them the right sort of incentives with the right sort of obligations and how we are able to back that up with that people contact. 
A big part of this past year and a big part of the financial review has been about cutting down on some of the administration side so that we free up people to spend money on the stuff that really matters. Goodness knows there is a lot of efficiency to be made in there and I wanted to share some of it with the Committee because I think that that is the way forward particularly for Work and Income and for the Ministry of Social Development. 
Let me give members a couple of real examples because at the end of the day that is what matters. Study Link made 400000 transactions online via MyStudyLink—that is 400000 transactions were made online via MyStudyLink. Ninety-seven percent of student loan and student allowance applications were made online. A mail online service was implemented on 1 November 2009 and since then 168919 letters have been viewed online. So something as simple as saying to young people that they can view their mail online instead of having it posted to them has meant that the cost savings and the efficiency gains have been substantial. It means that there are people actually working with people which I think is what will make a difference. 
Let me talk about the payment card. In 2009 food grants made up half of hardship assistance payments. There were 501000 payments totalling $52 million—501000 payments totalling $52 million. That is big big bucks. Introduced in November again was a payment card for food special need grants. Between November 2009 and January 2010 the time saved by the use of payment cards was approximately 7 minutes per application. That does not sound very interesting—7 minutes. What is that? How is that going to go? But that translates to approximately 11700 case management hours. So once we add up the volume we are dealing with and cut that time down to 7 minutes 11700 case management hours on pure administration have been taken away. It means that those people can be spending that time with people and on stuff that really does matter. 
Approximately $350000 was saved as well due to the unspent amounts on those cards. What happened was that when people had the amount on letters it stayed on the letters; it stayed with whomever they spent the money with—with the supermarket. Now that that money is not being withdrawn from the Government’s bank account it means that it is being saved and that we can invest it back into people. It is that stuff that will make the ultimate difference. 
What we have also done which we have been really fast-tracking over the last few months is bring in high-trust contracts. In the past under Labour we heard a lot about integrated contracts and what they were—and this one really gets me! With integrated contracts Labour would have an organisation that had 7 contracts. It would have those seven add another one on top and call it an integrated contract. But none of those seven would be changed; none of those seven would be taken away. Instead Labour would just add another one and say that that was integrated. What we have done instead is bring in a high-trust contract. That means that all of those seven are taken away. They are replaced by a 3-page document that says “We actually work together in this. We are focused on the people that we want to help.” instead of it being about who has the power and what the relationship looks like and the constant partnership stuff that we used to hear about under the previous Government. We say that instead of actually focusing on each other and what that relationship looks like how about we focus outwardly and on to people—the people we all agree we want to work with. The results have been outstanding. 
KATRINA SHANKS (National) 
: 
 It is my pleasure to take a call tonight as the chair of the Social Services Committee. We have a very good ministry in the Ministry of Social Development. Peter Hughes and Ray Smith make a wonderful contribution. I believe the Ministry of Social Development is most probably one of the strongest ministries we have in New Zealand with the strongest leadership we have as well. Not only that but it does many many things that pre-empt what is happening. In fact when we heard a recession was coming—after the first quarter we knew a recession was coming; Labour was in Government then—it already started putting things in place to face those changes. It is very proactive. It knew that when times were getting tough when the economy was going to shrink and more people would be unemployed it would have to focus on getting those people into jobs. It looked at changing the way it was set up and helping people in their Work and Income New Zealand offices. It knew that it would have a lot of people in transition who were not going to end up getting a benefit because they would transition quickly into another job. It had to treat those people a little bit differently from the normal client base that it treats. It had to treat them so that they would not be scared to come in to say they were looking for a job and could be moved on quickly. 
I want to acknowledge the ministry in how it moved quickly in the environment that we faced. It did not wait for it to build up and get out of control; it moved quickly. It moved its resources. The ministry is a very very big ship. It is very hard to change direction but it did it quickly and swiftly and without fuss. So I acknowledge the hard work that it has put in to ensure that our vulnerable those down on their luck and those who are just unlucky to lose their jobs in a recession have been looked after as well as they possibly can be in these hard times. 
I also acknowledge the hard work that the Minister for Social Development and Employment has done. This is a Minister who has no fear this is a Minister who addresses the issues and this is a Minister who says exactly how it is. She has done many things—many things indeed—to help the people of New Zealand in this recession. She came in as a Minister when there was a recession. That was not in the good times when unemployment was low when we had high employment. It was not the good times; it was the tough times when this Minister came in. She comes into this House day after day and gives straight honest answers to questions. I acknowledge the hard work that she has put into this ministry as well into the people of New Zealand and into our most vulnerable. 
So what has she done? Well where do we start? She has done a Student Job Search summer jobs campaign which is the most relevant thing she has done just immediately because university students have just gone back. So it is important that we identified that they needed a little bit of assistance over the summer break. That was put in place. Never Ever Shake a Baby—what a fantastic campaign that is. How powerful that is. The Minister recognised that the message has not been out there for a very long time. We have had some terrible horrific cases of child abuse in New Zealand so she took that issue head on. Never Ever Shake a Baby—what a powerful message that has sent to New Zealanders. 
Then there is the Break Away package for school holidays. Thirty-thousand young people did activities during the school holidays. There are 500 places in respite camps and 100 places in the Prime Minister’s Youth Programme. How relevant is that to our youth in New Zealand? It is totally relevant and so effective. 
Fresh Start for young offenders has 3000 places and programmes designed to address the causes of young offenders’ behaviour. How relevant is that coming off a review that has just been done on youth and youth offending and the new bill that was introduced into the House at the beginning of this year to address that problem? There is $152 million for the Youth Opportunities package and there are 17000 places for people aged between 16 and 24. This Government is committed and focused and so is the Minister. 
I will end by addressing a question that Annette King asked during her speech in this debate. She asked where the money is coming from. I can say that the money will be there because we are watching the money; we are very focused on the economy unlike Labour which seems to be able to waste money. Imagine if Labour had not spent the money on the tax bus. Imagine if Labour had not spent the money on the national standards bus. How much did that cost? Imagine how many children could be helped with that amount of money. 
Report noted. 
Department of Conservation 
Hon DAVID PARKER (Labour) 
: 
 I think most people will be surprised when they reflect on the year under review ask which was the most significant thing that the Department of Conservation did this year and find out that it was not anything to help with conservation but was actually the antithesis of conservation. It was mining in inappropriate areas. The Government through the Department of Conservation and the Ministry of Economic Development last year and this year has been investigating opening up more of the conservation estate to mining. I am not someone who says mining is always wrong. I wear a gold ring and I drive a metal car. There is a place for mining; it would be hypocritical for us to say there is not. Indeed there can be times when it is appropriate to mine parts of the land that is in the conservation estate. It happens not infrequently already. But just as it can be appropriate to mine in some parts of the conservation estate it is completely inappropriate to mine in some other parts of it. 
The most notable of the areas that ought not to be mined are of course the national parks. It is many many years since anyone in New Zealand thought it was sensible to mine in national parks. That is until the previous Minister of Conservation Tim Groser got into the portfolio. What was his first act as Minister of Conservation? His first act within days of the election was to amend the boundaries of the Oteake Conservation Park that was being created to exclude an area where there is a lignite resource. We are not talking about gold we are not talking about copper and we are not talking about diamonds. We are talking about brown coal. The Minister altered the boundaries of a conservation park so as to exclude that area from it. Then the next things that the Government did were to start the so-called stocktake of mineral resources in the conservation estate and to look at how it could free up the mining of other parts of the conservation estate. 
There are some parts of the conservation estate which are listed in schedule 4 of the Crown Minerals Act where mining is prohibited. They are largely national parks. Other than the national parks mining is not prohibited in most conservation areas. But there are some notable exceptions to that. I think the most notable exception to most people is the Coromandel. The Coromandel is close to Auckland. Auckland has a third of the population of New Zealand and it does not have its fair share of national parks. The conservation areas close to Auckland like those in the Coromandel area really do need to have protection. That is why some years ago this Parliament decided that an area north of what is called the green line in the Coromandel should not be opened for mining. This Government is reconsidering that decision. But having done that it found itself in a bit of a muddle so it has tried to obfuscate and say it is doing nothing different from what the previous Labour Government did. 
National says people should look at what happened in Paparoa National Park. The Government says mining by Pike River Coal adjacent to the park is an instance of mining on the national park. Of course when we look at the detail of that mining we see the Government is wrong. The only things in the national park are four emergency exits for the miners each of which has a diameter of 1.5 metres. Mr Key’s saying that that was a precedent for mining in national parks is not correct. It is a precedent for mining in non - national park conservation areas and that can be appropriate if they are not schedule 4 - listed lands. But the Government has been caught misrepresenting that. 
What else is the Government up to? Of course the Minister has already overseen the taking away of ministerial responsibility in respect of decisions on developments in the marine space. There were problems with the timing within which that discretion could be exercised. I think members on both sides of the House would have been very happy to tidy up the timing of it so that people had not spent their money on their resource management applications before the Minister’s decision was made. But that was the law as it stood. That could have been tidied up but instead the Government has removed any political accountability in respect of decisions that there ought to be ministerial accountability for. The Minister is the guardian of public spaces on behalf of the public and the Minister ought to be willing to be judged on the basis of his or her decisions. Instead we see that the Government is trying to avoid political responsibility by taking lands out of schedule 4 and making it easier to develop those areas and others. I think that is wrong. I think it is consistent with what the Government is doing in terms of taking the assets of Auckland City away from the direct control of elected councillors. That is wrong. 
NICKY WAGNER (National) 
: 
 David Parker might like to talk about mining and focus on mining but I am much more interested in conservation and the work that the Department of Conservation does in that area. The Department of Conservation has huge responsibilities. It manages and oversees the conservation of New Zealand’s natural and heritage assets on land and sea and it actively encourages all New Zealanders to enjoy them. It directly manages almost one-third of our land mass and our marine reserves and it facilitates agreements to protect public land. The department is also responsible for managing protected wildlife and marine mammals. It is a huge job but the department seems to do it very well. It seems to have a presence in every nook and cranny across the country and it works actively with hundreds of volunteers to do this job and to do it well. 
We are all aware that New Zealand is a country of unique animals birds and insects. Over 25 percent of our birds and 90 percent of our insects are indigenous. But New Zealand’s native wildlife faces a continuous battle for survival. Landcare Research scientists estimate that over 25 million native birds are killed every year. That is 25 million birds killed every year by imported predators such as stoats rats cats and possums so one of the Department of Conservation’s most important responsibilities is pest control. 
Today I would like to talk a little about 1080 poison and why it is critical to use toxins like 1080 to protect our native forests and fauna. The department told us at its review that it feels there is a lot of misinformation about 1080. We know that there is much controversy about its use. But the active ingredient in 1080 is a naturally occurring substance that is found in plants and interestingly enough in plants like tea and puha. The 1080 poison is biodegradable. It dilutes and breaks down in water and plants and animals naturally excrete non-lethal quantities of 1080. The Department of Conservation has monitored over 200 kiwi through 1080 operations and no birds have ever been lost. On the other hand without its protection nine out of 10 North Island brown kiwi born in the wild were killed in their first year. But after an aerial 1080 operation that targeted stoats and rats in Tongariro forest seven out of 10 kiwi chicks made it past their first birthday. 
The Environmental Risk Management Authority the independent environmental watchdog put 1080 under intensive expert examination 2 years ago. It concluded that the continued use of 1080 has significant benefits for New Zealand’s environment. The Department of Conservation uses 1080 according to guidelines imposed by the Environmental Risk Management Authority and health authorities and there have been more than 2000 tests of water supplies. None of the results have identified any risk to public health. Safety standards for reticulated water have never been breached. 
There has been a refinement in the use of 1080 over the last decade and the amount of toxin per hectare has been cut down by about 90 percent. This means that there is only a teaspoon of toxin on each hectare. The Department of Conservation does about 560000 hectares of pest control annually most of which is ground based. One hundred and fifty thousand hectares are aerially sprayed with 1080 and that method is used in country that is challenging and when other options are not available. The Department of Conservation’s aerial 1080 operations cover less than 2 percent of public conservation land. The department also spends hundreds of thousands of dollars a year on alternative pest control methods. Alternatives have to be cost-effective have comprehensive coverage be humane and pose little risk to human health. At least 30 research projects are under way to find improvements in the use of 1080 or alternatives to its use. Other methods such as innovative self-setting stoat and rat traps have recently been developed by the department in conjunction with private enterprise. A possum trap is due shortly. These innovations should boost the cost-effectiveness of ground control. 
JACINDA ARDERN (Labour) 
: 
 I am delighted that in her contribution Nicky Wagner said she wanted to talk about conservation. That is absolutely what we on this side of the Chamber wish to talk about and that is why we are being forced to discuss mining. The most controversial issue that the Department of Conservation and this country are currently facing in this subject area is the fact that the National Government wishes to open up our national parks and other areas of strategic and sacred importance to this country for mining. Members on the Government side of the Chamber may shake their heads at me and claim that I am acting as a scaremonger but let me take those members through the rational reasons why we would not need to touch schedule 4 of the Crown Minerals Act unless we wished to mine the lands listed in it. There is absolutely no alternative reason why we would remove land from schedule 4. 
Before we begin I think it is probably useful to look at the true role of the Department of Conservation which is helpfully raised in the financial review. It states: “The Department of Conservation manages and oversees the conservation of New Zealand’s natural and heritage assets … for the benefit and enjoyment of all New Zealanders. The department directly manages public protected lands”. We have already spoken about the fact that roughly 30 percent of New Zealand’s land area is locked into the conservation estate. But there are two categories of conservation land and I think it is important that we draw out the distinctions between the two. When we talk about schedule 4 we are not talking about everything. We are talking about those areas that a National Government in the first instance decided after much discussion and debate were important enough to be given a special place in our legislation. That is the schedule that is now being questioned by that very same Government. 
We see in the financial review that some members rightfully put to the department the question of whether it felt that its role was being compromised by the fact that it was involved in this review of schedule 4 in the first place. I understand that the Director-General of Conservation said the department was advising on the conservation values of the areas under review and he did not regard its involvement as contrary to the objectives of the legislation. Well I question whether he was allowed to speak out against the department’s role in this particular review. I think that it compromises the role of the department as an advocate on behalf of the conservation estate. 
Before we go any further let us look at why this issue has been muddied. I personally blame the National Government if there is any lack of clarity about what is going on in this debate. I have some previous history in this area. Some years ago I was a private secretary for an Associate Minister of Energy who had responsibility for mining. I worked directly on schedule 4 and variations when mining companies wished to make applications for mining on conservation land. I understand the distinction between the two situations. If the National Government wishes to remove land from schedule 4 that is a very different thing from whether someone is granted a variation to mine on the conservation estate. Those are two different things. 
Probably the best reasons we can find as to why schedule 4 was created in the first place are given in the  
Hansard 
 of the third reading debate on the Crown Minerals Amendment Bill (No. 3) on 20 November 1997 by Nick Smith himself. He was the Minister who ushered in this important schedule at the time. If we go back to some of the rationale that he provided at that time we see that he said: “This Bill at long last puts some pegs in the sand in some very significant areas of New Zealand and says to the mining industries of New Zealand: ‘These are no-go areas.’” The irony is the reference to “pegs in the sand” given that half of the Coromandel is back up in question as well. Nick Smith continued: “This legislation says to the mining industries that those areas set aside as national parks are not appropriate areas for mining.” Ten years on I would like to ask the Minister whether perhaps at some point he would like to share with us what has changed. Does he think that those national parks are any less significant to New Zealand now than he did then? As far as I am concerned everything that is listed on schedule 4 has remained the same in terms of its conservation value. 
Nick Smith went on to say “This is landmark legislation for the conservation movement in New Zealand.” Those who were involved—the Royal Forest and Bird Protection Society in particular—were heralded by him for their role in developing such important legislation but now that they speak up against it being reviewed they are being labelled as scaremongers by this Government even though they were the ones who helped to usher it in in partnership with that National Government at the time. Nick Smith conclude his speech by saying: “I welcome the Bill’s progress and as Minister of Conservation look forward to not having to consider mining applications in those areas where nature should be able to rule the roost.” 
Dr CAM CALDER (National) 
: 
 “Why a stocktake?” I hear the call from members on the other side of the Chamber. I tell those members that it is pertinent to consider the prescience and thoughtfulness of those people who 30 40 or 50 years ago did a stocktake of the resources that lay in the north and south Taranaki bights and also on the land area of north and south Taranaki. Last year $2.8 billion worth of oil and gas was exported by this country. It was our third-biggest export earner. As we have heard the Department of Conservation manages and oversees the conservation of New Zealand’s natural heritage assets the length and breadth of New Zealand covering about a third of New Zealand’s land area our marine reserves and our wonderful freshwater resources. 
The Department of Conservation administers a conservation estate in which flourish the towering tawa the stately kauri the glossy green-leaved karaka the ravishing rhododendron and the tree that cause our foreshores to blaze with crimson fire every summer and captures the spirit of a New Zealand Christmas. I am referring of course to the beautiful pohutukawa. The Department of Conservation has a role in fostering recreation in areas under its management. It is thanks to the Department of Conservation that we can all go up the Panekiri Bluff on those sturdy aluminium ladders to gasp our way into the hut and get a refreshing draft from the tank that exists up there at the top of the Panekiri Bluff in the Ureweras which embrace the jewel of Lake Waikaremoana. 
It is thanks to the Department of Conservation that a weary tramper has a superb hut right alongside the Welcome Flat hot springs. It is a perfect spot to rest after making the journey up the Copland River or a traverse across the Southern Alps east to west through the Copland Pass. We owe a great debt to the Department of Conservation’s programme of vermin eradication that a marked track runs down the true left of the Joes River in Fiordland. It is a huge advantage as I found to my cost a little bit over the Christmas holidays that the true right is virtually impossible owing to the density of the undergrowth in this seldom-visited area of Fiordland. We have a lot to thank the Department of Conservation for. 
The department is funded mainly through Vote Conservation and in 2008-09 it was in the order of $312 million. It spent all but $2 million of that. However one of the interesting things is that the department worked closely with various agencies—not just Government departments but community trusts commercial operators and volunteer organisations. In the department’s 2009-12 statement of intent the Minister of Conservation adopted the term “conservation economy” and I think it is an important concept to understand in order to highlight the importance of conservation to New Zealand’s economy. 
The central premise is that conservation is an economic investment not simply a social good. This premise builds on the already well-accepted social values of conservation that are reflected in the Conservation Act 1987 and in particular the intrinsic worth of natural and historic heritage. It takes this further by showing the interdependence between nature’s systems social systems and the economy. In its totality conservation plays a critical role in validating the “clean green” brand that is the market advantage on which our producers rely. 
The benefits of conservation include carbon sequestration and storage mitigation of flood risk better freshwater quality and flows soil retention pollination and bioprospecting opportunities. In 2008-09 the department began to develop a commercial framework and to review its processing of concessions. It is also developing relationships with the tourism industry and the Ministry of Tourism and collaborates on projects such as the cycle track which we heard about earlier today in the Chamber. The department also acknowledges that public conservation land affords opportunities for economic development such as electricity generation and transmission. I am particularly interested in the opportunities that private people can have from land adjoining conservation estates through which a river flows so that they may undertake for themselves the micro-generation of power from renewables. Thank you. 
Report noted. 
Department of Labour 
CAROL BEAUMONT (Labour) 
: 
 I will focus particularly on a couple of key issues in the financial review of the Department of Labour. I will look at the whole area of productive employment relations and I will look at the area of skills. I hope that during the course of this debate perhaps the Minister of Labour Kate Wilkinson will comment on these matters—I certainly hope so. 
One of the stated objectives of this Government is to reduce the gap between people’s incomes in Australia and New Zealand by 2025. One of the much talked about ways that we are to do this is by improving productivity. In my view productive employment relations are absolutely fundamental to doing that. What do we mean by productive employment relations? In my book it is about getting standards across industries. It is about having economic development that involves the workforce. It is about a recognition of the need to lift the quality of our workplaces. That includes the wage rates the work conditions and the quality of interaction within our workplaces—that is what I call productive employment relations. Unfortunately I believe that this Government sees workers and their rights as costs that need to be reduced. I say that with some sadness really but when I think about the Prime Minister’s statement I remember that he talked about the need for better regulation and then went on to talk about labour laws imposing excessive costs on this country and holding us back in taking advantage of opportunities to create jobs. 
When we look at what has been going on in the labour portfolio and look at the time line of the erosion of worker’s rights we can see a pattern. One of the first things that this Government did was to bring in the 90-day “no rights at work” provision so workers could not challenge unfair practices by their employers for the first 3 months. That was followed closely by the minimum wage increase in 2009 of 50c an hour although I do recall that the Minister of Labour was opposed to that. She was much keener on having a zero percent increase but I think she succumbed to what was understood to be the view of the population of New Zealand which was that perhaps that would not be very fair. I think we are starting to see an increasing clamour for a real lift to the minimum wage. There is a strong move now to see the minimum wage lifted to something more like $15 an hour. I think that would be a good step towards moving to close the income gap between Australia and New Zealand. But certainly lifting the minimum wage by 50c an hour in 2009 was not quite there. 
Then we saw the pay and employment equity unit disestablished and a number of pay equity reviews cancelled. That was done ignoring the fact that those were important mechanisms to lift the wages of predominantly women in industries where their very important work is undervalued. So that was another step in the erosion of worker’s rights. It was followed by the introduction in October 2009 of the Employment Relations (Rest Breaks and Meal Breaks) Amendment Bill. This bill will be one that members on the Labour side of the Chamber will be voting against. It will deny vulnerable workers basic rights to minimum breaks during their working day and is yet another backward step. So much for productive employment relations! Then there will be the changes to the Holidays Act which will get rid of people automatically having 4 weeks’ annual leave. Again that is another step in the wrong direction. This year we have seen the announcement of the very significant 25c an hour lift in the minimum wage which takes it to the grand sum of $12.75 per hour. Of course there are some members in this Chamber who would like to see that reduced—members like Roger Douglas from the ACT Party. The previous National Party leader Don Brash felt that was part of his productivity prescription to ensure that we closed the gap between Australia and New Zealand. I think those people have it all wrong. 
I will go on to look at the issue of skills. But just before I go off the topic of Don Brash’s task force I note that in the financial review of the Department of Labour we did talk about that. It was fair to say that it was acknowledged by the departmental officials that they were not once consulted on this matter. 
DAVID BENNETT (National—Hamilton East) 
: 
 I want to follow on from the speech made by Carol Beaumont who is an effective member of the Transport and Industrial Relations Committee. I am disappointed that the Labour Party gave her the job of trying to say nothing for 5 minutes. The Labour Party is a party that has been based on labour relations. That is its core support—the unions are its support base. There was nothing in that previous speech and National has done nothing to compromise workers’ rights in New Zealand over the last year and a half. In fact National has stood up for workers and delivered for them when Labour did not. 
Tim Macindoe 
: 75c. 
DAVID BENNETT 
: As Mr Macindoe that great member from Hamilton West said 75c was added by the National Government during a recession to the minimum wage. Labour was nowhere to be seen in terms of looking after workers during the 9 years it was in Government. That is sad. It is sad when the Labour Party goes for its core constituency and cannot even make any arguments that would be of consequence to the punters and the voters out there. 
The Labour Party knows that the Government has delivered as much as can be given in these economic times. The Labour Party says that according to National workers are costs that need to be reduced—that is its perception of National’s view but it is simply not the case. New Zealanders and the National Government value the work that all New Zealanders do. We want to see a stronger country where workers across the board get a fair return for their day’s work and we will deliver that to them through measures like tax cuts through measures in relation to the working environment and by keeping their jobs. We will not have a situation where we will compromise workers’ employment for political expediency. 
National wants to see New Zealanders keep their jobs and we want to see New Zealand develop so that we can pay workers what they deserve and give them the opportunities they seek in life. It is a shame that Labour members cannot find anything to argue in terms of labour relations from their point of view. They know that we have delivered for the workers better than the previous Labour Government did in 9 years. 
Report noted. 
The CHAIRPERSON (Hon Rick Barker) 
: Members we are getting close to the end of the time for this debate. The situation as I understand it is that the Labour Party has exhausted its calls. My advice from the Government whip is that members now wish to debate the report on the Ministry of Maori Development. 
Ministry of Maori Development (Te Puni Kokiri) 
Hon Dr PITA SHARPLES (Minister of Maori Affairs) 
: 
 I would like to— 
Te Ururoa Flavell 
: I raise a point of order Mr Chairperson. Tena koe Mr Chairperson. Can I just confirm that the Labour Party has no further calls? I thought I heard you say that but I ask whether you could confirm it. 
The CHAIRPERSON (Hon Rick Barker) 
: The member is correct. I will just make the point to the member that if in the event that no other party takes a call and there is time available members can take a call. 
Hon Dr PITA SHARPLES 
: I am happy to take a call on the financial review of Te Puni Kokiri for the last financial year. I acknowledge the work of the Hon Tau Henare and the Maori Affairs Committee in its examination of the performance of Te Puni Kokiri. It is pleasing to read that in its judgment the ministry has increased its focus on working with other agencies in the State sector to benefit Maori. The committee’s report particularly acknowledges the complexity of the environment that Te Puni Kokiri provides its advice in and the work of the ministry to improve its performance across a range of areas. 
Since I became the Minister of Maori Affairs in 2008 Te Puni Kokiri has supported me well in delivering on this Government’s priorities. Three things stand out for me in the 2008-09 year. Firstly the Maori economic summit that I convened on 28 January 2009 stands out. This summit brought together Maori leaders and thinkers to devise responses from Maori to the recession. On 18 March I announced the appointment of the Maori Economic Taskforce to progress responses to the economic downturn. That task force is nearing a year in existence and we will have a full report on those activities next time. That task force has had a busy year and it has commenced a number of initiatives that will enhance the Maori economy. 
Secondly I was able to announce my whanau social assistance programmes during the year. We now have Kaitoko Whanau a network of whanau advocates in communities to liaise with whanau and community groups working with our families experiencing hardship in order to empower those families out there. This is a forerunner of course to Whanau Ora. Following on from that is our Maara Kai programme our gardens programme; $1 million has gone out for our gardens all over New Zealand—to marae and to Maori organisations. And there is the Oranga Whanau programme—our elders working among the community. 
Thirdly 2008-2009 was a milestone year for the Maori Trustee. It was the last year that that office was part of the core Public Service. From 1 July 2010 the Maori Trustee will be a fully independent sustainable entity with ongoing funding for enhanced services for Maori beneficial owners. [ 
Interruption 
] I agree with the member Te Ururoa Flavell that it has been a really good year for Te Puni Kokiri. Once again I thank the Hon Tau Henare and the select committee for their performance review. All in all it is not too bad for 7 months in office and this year is even busier. Thank you. 
Hon TAU HENARE (National) 
: 
 I congratulate the Minister of Maori Affairs on a job well done but it is a job that is only half complete. I think it is wonderful news that we have seen an increase in community assistance whereby the Government or the Crown—call it what you will—is telling the community: “Here is some money you know the problem you know the issues and you should go and sort it out.” without the interference of every policy maker who is employed by the Government. 
I congratulate the Minister I congratulate the Prime Minister and I also congratulate the Maori Party and National on being able to see through the last 9 years of what has been nothing short of a Fabian conspiracy. It is time to stop treating the indigenous people of this land as some sort of basket case and to realise that they can do things for themselves. With a bit of leadership from our Minister of Maori Affairs our Prime Minister and the two parties involved in the coalition agreement that is what we can achieve. 
I will take just a couple more minutes to concentrate on national standards. I believe that this policy underpins the next 20 to 30 years of this nation’s development. It is undoubtedly—undoubtedly—the most important policy that we have been able to achieve in our short short time on the Treasury benches. I congratulate Anne Tolley on her kaha her strength in the midst of some old-style left-wing union politics. 
I will finish by saying—well not “finish”; I think I will go for my full 5 minutes—that driving around in a red bus with “Axe the Tax” on it which has been paid for mind you by the New Zealand public and not by the Labour Party is embarrassing. It is embarrassing to take all that money which could have gone into national standards or into Whanau Ora but did not and have only six or seven people turn up to hear those Labour members speak. I just thought that I would get that off my chest. 
I think that these are important times for Maori. I tell members that we have seen much over the last few years in terms of Maori development. I must take off my hat to the previous Minister of Maori Affairs Parekura Horomia. At least he tried. At least he gave it a bash. He was in the job for 8 years. There were some significant movements and I take off my hat to the previous Minister. But as a people we cannot wait any longer. The clarion call that has gone out to our Minister of Maori Affairs is that he should get on with the job. He should not worry about what the Opposition says; he should get on with the job. 
Without our development the country does not go anywhere. Without our input the country does not go anywhere. We can take any department we like be tourism or education and we see that Maori input is essential for the growth of this nation. Once we realise that then we will be a better nation for it. The leadership is already out there in our communities. The Maori community has done it before and we will do it again. This is not something new. I wish the Minister well in his next 12 months and for however long he is in the job. 
Clauses 1 to 11 and schedules 1 to 4 
A party vote was called for on the question  
That clauses 1 to 11 and schedules 1 to 4 be agreed to. 
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Clauses 1 to 11 and schedules 1 to 4 agreed to. 
Bill reported without amendment. 
Report adopted.