Annual Review Debate — In CommitteeText is incorporated into the Bound VolumeAnnual Review Debate — In Committee[Sitting date: 28 April 2015. Volume:704;Page:2918. Text is incorporated into the Bound Volume.]Annual Review DebateIn CommitteeThe CHAIRPERSON (Hon Chester Borrows): This debate is the Committee stage of the Appropriation (2013/14 Confirmation and Validation) Bill. The time allocated for this debate is 9 hours and comprises two distinct elements in accordance with determinations of the Business Committee. The first is the debate on the annual financial statements of the Government as reported on by the Finance and Expenditure Committee. The time allocated by the Business Committee for this debate is 2 hours. The second is the debate on the annual reviews of departments Officers of Parliament Crown entities public organisations and State enterprises as reported on by select committees. The time allocated by the Business Committee for this debate is 7 hours.We turn first to the 2-hour debate on the Government’s 2013-14 financial statements and the report of the Finance and Expenditure Committee. The Business Committee has determined that the first call will go to the chairperson of the Finance and Expenditure Committee and that the total number of calls will be as follows: the New Zealand National Party 12 5-minute calls; the New Zealand Labour Party seven 5-minute calls; the Green Party of Aotearoa New Zealand three 5-minute calls; the New Zealand First Party two 5-minute calls; and the—[Interruption] The Chairman is on his feet. Will the member keep his mouth shut?Rt Hon Winston Peters: No I won’t keep my mouth shut.The CHAIRPERSON (Hon Chester Borrows): The Māori Party—[Interruption]Rt Hon Winston Peters: Point of order.The CHAIRPERSON (Hon Chester Borrows): No I am on my feet.Rt Hon Winston Peters: Well I am raising a point of order.The CHAIRPERSON (Hon Chester Borrows): The member will be seated.Rt Hon Winston Peters: Well I’m raising a point of order.The CHAIRPERSON (Hon Chester Borrows): I am on my feet. The point is for the members who are present that the Business Committee has agreed to a motion—particularly from the Opposition parties—so that this debate will have more meaning than it has deemed it to have had in the past. This is a new process and I am endeavouring to lay it out to the Committee of the whole House as we are now. I would appreciate being able to continue so that members are fully aware and are not ignorant due to their adherence to the ways that have happened in the past. The Māori Party ACT New Zealand and United Future New Zealand may negotiate with the New Zealand National Party for calls during the debate.Rt Hon WINSTON PETERS (Leader—NZ First):I raise a point of order Mr Chairperson. You may say that a committee outside this House has decided this and has decided that but the fact of the matter is that this House is the master of its own destiny and we will not be ruled out because of some arrangement made outside the House with which we do not agree. If you could tell me how 14 members get 15 minutes and 12 members get 10 minutes and that is fair then I would like you to explain it to me mathematically. But it is not. [Interruption] I beg your pardon? Have you got a problem with actually working out the mathematics on that? If 14 members—The CHAIRPERSON (Hon Chester Borrows): The member should make his point of order or complete it.Rt Hon WINSTON PETERS: My point of order is simply that that ratio cannot be fair that 14 members—[Interruption] Sit down. Fourteen members getting 15 minutes would surely mean that 12 members are entitled to more than 10 minutes. It is just axiomatic. So there for a start I do not think it is reasonable—The CHAIRPERSON (Hon Chester Borrows): I do not need any further help from the member on this matter. Sit down. [Interruption] Take your seat. The point is that the protocols for this debate have been determined by the Business Committee. If the member wishes to seek leave to change that he can.Rt Hon WINSTON PETERS (Leader—NZ First):I seek leave for New Zealand First to have for a start a fairer ratio of speaking time than that laid out by you in your little preamble.The CHAIRPERSON (Hon Chester Borrows): Leave is sought for that purpose. Is there any objection? There is objection. The motion is lost.Annual Financial Statements of the Government for the year ended 30 June 2014DAVID BENNETT (Chairperson of the Finance and Expenditure Committee):This is a good time to be a New Zealander. This is a good time to support the New Zealand economy. [Interruption]The CHAIRPERSON (Hon Chester Borrows): Order! Please take your seat. As I indicated earlier the reason the new process was put before the Business Committee was to try to raise the level of debate. Let us see whether members of the Committee can do that.DAVID BENNETT: This is a good time to be a New Zealander. This is a good time to reflect on our economic achievements. Under this Government we have managed to manage the New Zealand economy in a prudent way that has delivered the right economic benefits for New Zealanders going forward. In the most difficult of economic conditions in times when we could have gone into a worldwide depression this country has not. What we have delivered is a strong economic base for this country to go forward. We have low interest rates.Ron Mark: I raise a point of order Mr Chairperson. Sorry to the member for interrupting his speech but you did make a statement there that has got me totally confused. When has there ever been a question about the level of debate in this Committee and who does it involve?The CHAIRPERSON (Hon Chester Borrows): That is not a point of order.Ron Mark: Well you have made a statement and it should be clarified.The CHAIRPERSON (Hon Chester Borrows): Do not challenge the ruling I have already given.DAVID BENNETT: As I was saying before this is a country that has low interest rates—some of the lowest in the developed history of this country. It is also a time when we have a country that has strong economic growth at 3.5 percent. That is higher than most other Western countries. This is a good economic environment. Unemployment rates are reducing. We are going below 6 percent and we will be under 5 percent in a few years’ time. These are good times for New Zealanders and they reflect a country that has been well managed in the most difficult of times. It is not an easy economic environment out there. It is not an environment that is easy for any country especially a commodity-producing country. But we are still delivering that economic base to grow our country going forward and it comes from stable Government that has good economic management. That is the strong growth prospect that we will have going forward.Last week I was in Australia. In Australia they are facing high unemployment. It is facing high Government deficits. It is facing lower growth than us and it has higher unemployment than us. People are coming back to New Zealand because they know that this country has delivered the right things going forward. They know also that they do not want a Labour - Greens - New Zealand First Government. They do not want the Labour Party that delivered a recession before the rest of the world. They do not want a Labour Party that was going to put New Zealand into a lifetime of debt at 60 percent of GDP and not reducing. They know that they want a country that can be economically managed and done in a very good way. They do not want a Green Party that is going to sing “Kumbaya” on the beaches and think that everything is just going to come their way. They do not want a New Zealand First Party that is led by some cult figurehead who requires all male members to wear handkerchiefs in the pockets of their suits. No New Zealand First is not the party for those people there.New Zealand has an economic base that is very strong. We need to celebrate that economic base. We need to understand that we have the economic strength to go forward and deliver the policies that New Zealanders will want. This is not a time when we need radical change. This is a time when we work on the base that has been presented and we do the things that New Zealanders want in a constructive fair and prudent manner. It is a time when we can look forward and make those investments in our communities in our social infrastructure and in our physical infrastructure. We can deliver the things that New Zealanders want.It is not a time for the radical economic change that would come from the Opposition parties. It is not a time when we would throw the baby out with the bathwater where we would throw away the economic potential that we have as a country. We are growing. That is something to celebrate and we should be supportive of that. Those low inflation rates deliver low interest rates for New Zealanders so that they can go out there and buy their first home. We are delivering jobs to New Zealanders so that they can have the work to enable them to do that. These are good economic times. These are the best economic times for a Western country. That is something that all New Zealanders understand and they are proud of it. We in this Parliament should be proud of that and we should be working to make the most of it. We should not be trying to denigrate our country. We should not be trying to bring in silly policies that will take us back to the 1950s to the control-based economies that the Opposition wants. We need an open free country an open economy that delivers that has free-trade agreements that enables our New Zealand businesses to invest that enables the infrastructure that is there for all New Zealand companies to grow and succeed that enables those educational opportunities that are there that rebuilds our second-biggest city and that delivers an economic return going forward. Thank you.GRANT ROBERTSON (Labour—Wellington Central):If ever the National Party wanted to signal to New Zealanders that it was out of touch and out of ideas it would put up David Bennett as the first speaker in a debate. David Bennett stood up in this Chamber and said that it has never been easier for New Zealanders to buy their first home. Well tell that to the people who live in Auckland Mr Bennett. Tell that to the people in Auckland who see a house on the North Shore make more money than most people who go to work each day earn in a year in Auckland because that is what we are seeing in Auckland today. In these financial statements what we see is a Government that is out of touch out of ideas arrogant in its third term breaking promises and lowering the standards that we would expect from a Government.We heard from the Prime Minister this week that he is the most casual Prime Minister in New Zealand’s history. I will tell you what: he is pretty casual about wages and the fact that they are not keeping up. He is pretty casual about the fact that unemployment is still higher than it was when the global financial crisis started. He is pretty casual about the fact that housing affordability is the worst that it has been in 60 years. And he is very casual indeed about the impact of the neglect of this Government on the regions. If this Government wanted a sign of that it came in the Northland by-election. The signal to this Government that the regions of New Zealand are feeling neglected and forgotten goes all the way from roads to broadband to the investment that we would expect in the economy. It is not happening from this Government.Ed Miliband in the UK said something interesting the other day when talking about the Conservative Government there. He said that people tell them there is prosperity but most working people feel that that prosperity is happening to someone else somewhere else. That is what the people of Northland have been telling the New Zealand Government and that is what the people of the regions are telling us as we travel around. It is all very well to celebrate an economy built on the recovery from natural disaster and one commodity price but that is not good enough for the New Zealand economy. It is not good enough after 7 years for Bill English to stand up in this Chamber and make excuse after excuse for why he will break his promise to New Zealanders to deliver a surplus and why he will break his promise to New Zealanders to reduce the level of borrowing. The debt today is $85 billion—$85 billion. Bill English has borrowed more money than Rob Muldoon. Rob Muldoon is John Key’s political hero. I do not think he is Bill English’s political hero but Bill English has borrowed more money than him. We are not in a surplus and we will not be in a surplus despite what we have been told. It is a broken promise from this Government.It was Bill English himself who said that getting into surplus was one of the most important things a Government could do in order to safeguard the economy. He said that—he said that—in this Chamber in fact. And today in Parliament he said he recalled saying that but suddenly he has adopted the Prime Minister’s view that getting a surplus is an artificial target that it is like trying to land a Boeing 747 on the head of a pin. Well I tell you what: Michael Cullen must have been a really good pilot because he managed to land that 747 on it nine times in a row. In this Budget we will have seven deficits for seven Budgets from Bill English. I challenge the Minister to stand up in this Chamber and explain to New Zealanders why while they have gone through the last 7 years tightening their belts doing what has been asked of them being told election after election that the surplus would come that the paying down of debt would happen when that occurred yet again the Government fails. Yet again the Government fails to deliver to hard-working New Zealanders who rightly will be looking ahead to this Budget and saying: after 7 years what do we get? Well what they are going to get from this Government if we look at these financial statements is more debt lack of growth in the economy in terms of diversifying it lack of growth in the housing supply not managing demand in terms of housing and neglecting the regions. That is what they will get and after 7 years that is absolutely appalling.Let us look at the promises that the Government has made. It has made the promise that New Zealanders’ average wages will go up to $62000 by September 2017. That was in an open letter that John Key sent to New Zealanders at election time. Well at the moment Bill English is spending all his time talking down wage increases. He is saying New Zealanders should not expect more than 1.5 percent in terms of wage increases. We are talking here about teachers and nurses and people who serve New Zealanders every day who have sat by knowing that the economy was under strain but then Bill English and John Key declare the global financial crisis is over. Where is the dividend for those people? If we look at the promise to get to $62000 average wage by September 2017 it requires a 3 percent year-on-year wage increase. Bill English is saying only 1.5 percent this year. This is broken promise No. 1.Then the National Government tells us that we are going to see unemployment go down and go down to around where the OECD averages are. Well what we know is that in the last cycle unemployment went up. It went up to 5.7 percent. The only reason it even looks partly good is the Christchurch rebuild. We are not seeing the sustained investment in the New Zealand economy to diversify. If we look at a region like—shall we pick Wanganui? It is a great region of New Zealand neglected by this Government which now sees the highest unemployment rate in the country. It is higher than Northland higher than the East Coast. It is places like Gisborne Wanganui and Northland that are saying: where is this Government? Where is the investment in the economy beyond commodity prices because we are seeing dairy prices slip further and further? That is what this economy has relied on under National—commodity prices; riding the wave of commodity prices. We are now looking at a $7 billion hole in the New Zealand economy because dairy prices have come off so far. That does not affect just the famers who wear that; it affects every rural and provincial community in New Zealand because they will see the impact of the loss of that money. So there is a broken promise around employment fuelled by this Government not being prepared to invest.But then when we look seriously at the regions and look at issues like investment in transport and investment in broadband activity in rural broadband is happening only because communities are doing it ahead of the Government. This is a Government that has forgotten where it has come from. It is interesting to stand up on this side of the Chamber and realise that this Government is now so out of touch with its own voters in the regions that it neglects them in an attempt to try to milk the rest of the Christchurch rebuild in order to show that it has got some kind of vision for the economy. What we now have is a Government that has been reliant for so long on commodity prices that has relied for several years now on the rebuild of Christchurch but still tries to use it as an excuse and that is out of ideas. When Bill English stood up in the election campaign when he was asked what new idea he had to grow the economy he could not come up with one. Now he says there are no new ideas for housing either. The Government is out of touch out of ideas. It is an arrogant Government in its third term.Once upon a time the slogan was “ambitious for New Zealand”. Now it should be “embarrassed for New Zealand” because that is what we are getting from this Government: an embarrassing lack of investment in the economy a Prime Minister who goes around embarrassing the whole country and a Government that does not have any ideas to grow the economy long term and in a sustainable way. These financial statements speak of a Government that has lost touch with where ordinary New Zealanders are. The questions we get asked when we are out in the community are: where are the new jobs coming from where is the investment in new industries in adding value in information and communications technology in high value manufacturing? New Zealanders have the ideas. They have got the interest but they do not have a Government that will back them. They have got a Government that is complacent. It is sitting there waiting for those commodity prices to rise again. The message for this Government is that it is not going to happen. Over the next 5 to 10 years there is a glut in global milk supply. We have got to do something different. Do you know what the Government’s response is? It is to change the targets for exports.When National came into Government it said: 40 percent of GDP for exports. And what does it do now? Well 30 percent was what National had when it came in. It fiddled around a little bit with the way it worked it out but it is below 30 percent. It is dropping. It is 28 percent. We will not thrive as a country if we do not build our export base. This Government is out of ideas. It is out of touch with New Zealanders and it has completely failed to invest in the regions. It has failed in housing in a way that no Government before it has done. It has completely failed to build houses and it has completely failed to manage demand. Now we have the Governor of the Reserve Bank telling the National Government that it has failed on housing. No building no increase in supply and now the Reserve Bank is saying no control of demand. This is a Government with its head in the sand. John Key tells us there is no crisis in housing; there is a crisis.Dr RUSSEL NORMAN (Co-Leader—Green):I rise to speak on behalf of the Green Party on the debate on the Government’s financial statements. National told us to judge its economic performance on whether it achieved a surplus or deficit—repeatedly over and over. Over the last 6 years this is something we have been told. As it approaches a record equalling seven deficits in a row—of course its previous record was set by the Holyoake Government of seven Budget deficits in a row—we can only say to the Government that on its own terms it failed to meet what it said was its objective which was to actually produce a Budget surplus. Surely what that says to the Government is that it is time to reconsider the big tax cuts that it gave to the wealthiest people in the country which drove the Budget further into deficit.It is worth remembering that prior to this Government we had Michael Cullen and nine Budget surpluses in a row. Each time one of those surpluses came around the National Party said to us that we should not pay down debt; we should give the surpluses away in the form of tax cuts to the wealthy. At the time the Labour-led Government with the support of the Greens and others said: “No we should use the surpluses to pay down debt.” Fortunately that is exactly what Cullen did. He paid down debt. So when this Government came in and faced a series of genuine challenges—the global financial crisis the earthquakes—there was a lot of leeway in order to borrow which this Government has done over and over and over. But unfortunately part of the borrowing is to pay for tax cuts for the wealthy and I would say to the finance Minister: surely even you looking back at that must recognise that was a mistake.The thing is that Budget deficits are not really the best measure for whether a Government is performing well. The National Government has told us we should judge it by its Budget deficits but the truth is that actually that is one measure. It is an important measure but actually there are a lot of other indicators we should look at. For example we should look at the current account deficit. The current account deficit is currently rising. It is $7.8 billion in the year to December 2014. Perhaps we should look at the growing net international investment liability which has now gone up to $154 billion. It is certainly true that there were some reductions in both of those numbers around the global financial crisis but what we are seeing again is that the New Zealand economy is running big deficits. The truth is that New Zealand cannot borrow its way to prosperity. That is something that the finance Minister himself acknowledged when he first took the role. But as he has been unable to crack that problem and it is coming back once again—it is only going to get worse according to the Reserve Bank projections—it is a problem that is going to be passed on to the next Government to try to deal with. We simply cannot borrow our way to prosperity.Linked to that is the research and development deficit. New Zealand has one of the lowest levels of investment in research and development in the OECD and this Government is unfortunately cutting investment in research and development—the funding to businesses that want to invest in research and development. Even the most recent announcement that the Government made—which was a small nominal increase—when you look at it in real terms is a decrease in research and development investment once you take into account inflation over the years ahead looking at the Government’s draft investment plan for science. There are in fact great businesses in New Zealand that want to invest in research and development and want to embrace the opportunities of smart Green economics. But it is very difficult when you have a Government that subsidises the primary sector commodities subsidises milk production and subsidises oil exploration but strangles high-tech industries and strangles smart Green innovation. In every other country those industries get a lot of support from their Government on research and development because that is an essential part of the package. Under this Government we have very low levels of investment in research and development.What about the housing deficit? It is simply a fact now that for many Aucklanders their houses earn more in a year than they do. The median house price has gone up by over $250000 in Auckland since this Government came into office. That is terrible economics and it is terrible social policy at the same time. The Reserve Bank is really worried about the Auckland housing bubble and has called for a capital gains tax on investment properties as have the Greens to dampen the housing bubble. National unfortunately opposes that measure to close that loophole and Labour—well I am not quite sure what Labour’s current position is on capital gains tax.We also know that offshore demand for housing is virtually unlimited and so we need some constraints on offshore demand for housing in Auckland as many other countries have. So far we do not have that. We also know that in terms of the supply side increasing high-quality housing density around improved public transport routes is actually the only solution on the supply side that works. Auckland needs to go up not out. That is just a basic reality. This Government unfortunately has been backing sprawl and it has been backing motorways rather than compact urban form and rail. It is going in exactly the wrong direction in terms of dealing with the housing affordability and livability crisis that Aucklanders are facing. Instead of supporting compact urban form and rail which we know is the way to actually reduce house prices in Auckland in terms of the supply side the Government is backing sprawl which makes Auckland more and more unlivable.What about the climate deficit? When the Government first came in it gutted the emissions trading scheme it subsidised road transport and hence fossil fuel use on roads it subsidised dairy expansion and it subsidised oil exploration. Unsurprisingly New Zealand’s net greenhouse gas emissions are surging. The Minister for Climate Change Issues—I use the term advisedly—has tried to hide the massive net deforestation that is under way right now in New Zealand. He put out a press release saying that afforestation is ahead of deforestation in New Zealand except it is not. So Mr Groser had to issue a new press release a correction to his press release where he had to acknowledge that in fact deforestation in New Zealand is currently happening at about twice the rate—so twice the number of hectares—of afforestation according to the Government’s own figures that it released a couple of weeks ago. Of course the impact of that is that New Zealand’s net greenhouse gas emissions are increasing and our intensity—the amount of net greenhouse gas emissions per unit of GDP—continues to increase. So we are going in exactly the wrong direction in terms of climate change.The cost to the taxpayer is enormous. Treasury is trying to estimate what the cost to the taxpayer of this big surge in New Zealand’s net greenhouse gas emissions will be. It estimates it will probably be up to $52 billion in order to buy carbon credits to meet our climate change targets. So the taxpayer—the Crown—will have to buy an enormous quantity of carbon credits on the international market to try to meet our international commitments to marginally reduce our net greenhouse gas emissions. That of course is not free; the taxpayer has to pay for that. Depending on the price for carbon credits internationally that will mean that the taxpayer has to pay up to $52 billion in order to buy those carbon credits internationally according to the New Zealand Treasury. I think this really demonstrates the way that this Government is passing these deficits on to future generations and future Governments. It introduced a whole series of policies that resulted in a big increase in net greenhouse gas emissions—the climate deficit if you like. The impact of that on future Governments is they are going to have to buy carbon credits internationally to try to meet our targets. There will be a huge fiscal burden on the taxpayer as a result of that.We still of course have no official emission reduction targets to present to the World Gas Conference in Paris coming up at the end of the year. I think the tragedy in all of this really from the point of view of “New Zealand Inc.” is that it is really an enormous missed opportunity. New Zealand already has a great reputation—“100% Pure New Zealand” and so forth—and it is a great opportunity for New Zealand to grab the opportunity of smart Green innovation which is just taking off internationally. Unfortunately New Zealand is locked into a 1950s mentality—or the current Government is unfortunately. There are a lot of New Zealand businesses that are trying to break out of that. The Government is locked into the mentality that says: “This climate change stuff doesn’t really matter and all that innovation stuff. We’re going to do milk powder and we’re going to do oil.” But that really is locking us into a very unproductive future and is missing one of the great economic opportunities of the 21st century which is sustainability. Purpose-driven capitalism if you like—capitalism of abundance and sustainability—is going to be the marker of this century and New Zealand is completely missing out on this opportunity because we have a Government that cannot see it and that looks backward as it travels into the future.Finally there is the biodiversity deficit. New Zealand is in the middle of a great biodiversity crisis. We are really losing magical things that are hard to put a number on. This debate is about the financial statements of the Government but as we lose the amazing biodiversity that we inherited from those who came before us it is hard to put a number on the enormous loss of our children not being able to see the amazing plants and animals that once lived in this amazing country—these islands and this kingdom of the birds. As we lose biodiversity because we really—as a Government and as a country—have not put the effort and the financing of the need into the Department of Conservation and elsewhere to protect that biodiversity we are losing something that cannot really have numbers put on it. I think that is perhaps one of the irreparable damages that Governments can leave.Hon BILL ENGLISH (Minister of Finance):It is good to hear a coherent explanation about the economy from the former Greens spokesman on finance Russel Norman. Actually he will be a loss to the Opposition because there is no one to take his place whether they are from the Greens or Labour. I do not agree with his apocalyptic description of either the New Zealand environment or the New Zealand economy but he does focus on the real issues. He does have a different point of view but you can follow it and occasionally be influenced by it which puts him in a vastly different class from Grant Robertson that is for sure. Grant Robertson is the man who is now campaigning for surpluses in between turning up at protest marches outside Government departments protesting against constraint. Out on the street he is against constraint but when he comes in here he is lecturing the National Government about how we have not shown enough constraint—have not shown enough constraint. So I look forward to hearing from the Opposition parties about which programmes they think should be cut to generate a larger surplus number. That is the bit I want to hear. I suspect I might not.But we have heard a couple of versions of what is going on in the economy that amount to the economy that Labour and the Greens wish they were criticising. There are two features of the current growth rates that stand out. One is the breadth of the base of growth. In fact when members talk about commodity prices what they should be referring to is the way in which the New Zealand economy is showing broad and sustainable growth at a time when the dairy prices are low. That is actually the interesting issue. The question people should be asking themselves is if dairy was so dominant why is it that we are looking at growth of 2.5 to 3 percent over the next 3 to 4 years while dairy prices are low? Well the reason is that a lot of other industries are doing well—even export industries. One should just look at the trade-weighted index which is a measure of the sales of our exports in the currencies that are relevant to those sales. What is rather surprising in the light of the drop in dairy prices is that that trade-weighted index has stayed relatively strong. That is in a context where we have a number of features of the economy that indicate the kind of sustainable growth that will deliver moderate but consistent wage increases to our households.New Zealand households have learnt with the experience of the last few years that simple solutions to the challenge of rising living standards probably are not viable. The most simplistic is the one that the Labour Party suggests is the answer to every single problem and that is tax deductibility of research and development. That is the answer to everything. Well it is not the answer to everything. As the Government has set out in its Business Growth Agenda there are about 300 answers to the question of what needs to be done to support investment by businesses that enables them to employ another person and to grow their business because that is what growth is. It is all set out in the Business Growth Agenda.This debate is actually about the fiscal results to 30 June 2014. That year which now seems somewhat distant prior to the election showed a significant advance in the Government’s books where the deficit peaked at about $18 billion and I think that for the year ended 30 June 2014 the deficit was around $2.5 billion. I will simply reiterate what was said earlier during question time. The Government’s approach to fiscal management is pretty straightforward: what works for the community works for the Government’s books. When we solve a problem in our community and in our families we reduce pressure on the Government budget. I know it is an approach that confuses the Opposition parties; to some extent it confuses the media who think that any Government gets fiscal control by cutting everything. Well actually the key to smaller government is better government. When we do a better job—as these accounts indicate we are and certainly the Budget will indicate a further intensive focus by the Government on doing a better job—that is how we get back to surpluses and get debt repaid.Hon ANNETTE KING (Deputy Leader—Labour):As members opposite know this bill is called the Appropriation (2013/14 Confirmation and Validation) Bill. I have to say to the Minister of Finance who has just returned to his seat after trying to do a valiant job of defending the Government’s record by splashing as much animal manure around as possible that the only thing this bill does is to confirm and validate that the National Government is arrogant that it is out of touch and that it has lost its way. It has lost its way by doing one of the most fundamental things that you should not do in politics—that is break its promises the solemn promises National members made to New Zealand about the economy of this country.We have also had the Prime Minister who has said that he was going to set these high standards. Of course with high standards come telling the truth and not breaking your promise. But unfortunately for New Zealand over the last fortnight we have become the laughing stock of the world. We have the international media not commenting on our rock star economy or how great our exports are. No what they are commenting on—Hon Bill English: Like they were doing the other week.Hon ANNETTE KING: —Acting Prime Minister is the Prime Minister’s weird behaviour. If you just go and look at the Guardian it has put up a whole article on the 10 weird behaviours of the Prime Minister. They go from pulling the hair of a young person working as a waitress right through to joking about a paedophile. So rather than it concentrating on the good things that New Zealand is doing we have this problem—a credibility problem—out there in the international community and we are a country that must value its international reputation. It is very very important to this country.You know a small exporting country like ours needs to retain its reputation. We have been seen for many years as the honest broker in the international community. If you think about it we have got ourselves on the United Nations Security Council because we said we would be the honest broker particularly to small communities. But rather than being the honest broker we are the joker of the international community. What does it do to those who are working hard trying to get ahead when the leader of our country is seen to be a joke? Well I think the Government is taking us backwards. It is taking us backwards. I think that John Armstrong got it right when he wrote this week in the New Zealand Herald. He said that our rock star economy is on the rocks and that the Government uses smoke and mirrors to cover up the real position in New Zealand—the creative use of figures. It is very interesting to listen to answers from Ministers. They are in favour of some of the figures when they are in their favour and they are opposed to them when they are not. So you cannot tell whether they support Treasury figures or Statistics New Zealand figures because they change their views depending on what their narrative is. So there is the creative use of figures. We have got the selective use of data. We are given some information but not all information. We have got the downright technological inexactitudes about how New Zealand is faring.Let us take just one measure of our economy which the Minister talked a bit about—our trade us as a trading nation. Let us talk about our trade deficit. I agree with Rod Oram who wrote in the Sunday Star-Times this week that we are suffering from two trade deficits—two trade deficits. One of them is a physical trade deficit and the other is a political trade deficit. He said that the physical trade deficit has widened to $2.2 billion in the year ended February and that our exports have weakened mainly reflecting lower dairy prices while our imports have risen. Our trade deficit has grown and the more it grows the more the Government ramps up its rhetoric. There is a political deficit between trade talk and performance and the Prime Minister who is a very casual chap and who is a very friendly chap has a tendency to over-egg most things that he does. In fact he spoke to the New Zealand Institute of Economic Research in March saying our service exports were one of the most exciting areas of trade growth.But the truth is the opposite. Have a look at the data from 2009 to 2014. Our exports fell from research development architectural engineering technical legal and accounting services. Service exports is the area that the Prime Minister said was the most exciting part of our export growth. Then we had the trade Minister Tim Groser. He spoke at the Primary Industry Summit last year and he said that New Zealand was on track to meet the goal of lifting exports from 30 percent to 40 percent of GDP by 2025. But what does Statistics New Zealand—you know that organisation that is independent of any Government whose job is to collect statistics and report them fairly and honestly—say? What does it say? What does the Treasury forecast say? They say we are falling well short of the between 5.5 and 7.5 percent a year needed to double exports and reach the Government’s targets.But so desperate is the Government to cover up its poor performance in trade it has even decided to change the method of measurement and this is where we get to the smoke and mirrors of this Government. It has changed the method of measurement. How deceitful is that? It was not publicised and in fact nobody knew it had changed its method of reporting until it turned up as a footnote in the Ministry of Foreign Affairs and Trade annual report 2013-14. It is that sort of approach to the economy that means that New Zealanders cannot trust what Government members are saying. As Rod Oram said we can build exports if reality overcomes rhetoric. And what we are faced with from this Government is a daily dose of rhetoric over-egging the situation and not facing up to some of the real difficulties we have in this country.Another example I have to say of rhetoric replacing reality is the promise to return a surplus in this Budget. Mr English I do not care what you say in answers to this House I have sat here long enough and listened to you as the Minister of Finance telling us how important it is to get the Government back into surplus and how it would be achieved—how it would be achieved—by this Budget. This Government said to the country in a solemn promise to New Zealanders that it would return this country to surplus. It is not about what we want to cut Mr English; it is about the solemn promises you took to the country and about you asking New Zealanders to vote for National. You asked them to vote for National because you were the best at balancing and managing the books. Well I remember Mr English what you said in December 2008 even if this member does not remember what he said.Hon Bill English: I raise a point of order Mr Chairperson. The experienced member will know that she should not be referring to you quite as often as she is. She should address the member correctly.The CHAIRPERSON (Hon Trevor Mallard): Well I was listening carefully and she did say: “you Mr English” or “you Bill English” so I think she did make herself pretty clear. And I think a member breaking up a member’s speech like that is not desirable.Hon ANNETTE KING: Thank you Mr Chairman. I can say that this speech is getting to the Minister of Finance because the Minister of Finance knows that he made those promises to New Zealand. He made those promises to get votes before the election. It is not about what Labour wants to cut; it is about being honest to the people of New Zealand. We are not the Government. When we get to the election of 2017 you will know what our Budget will be and we will do what we did when in Government and that is to keep the promises we made before the election. That is something that National has not done. It promised that the Budget surplus would be the centrepiece of this Government’s measure of success. Well I have to say it has failed. It has failed because this mantra about getting a surplus has just turned into a 7-year exercise. It is not going to be achieved. Now watch the Government members as they wriggle and squirm. They are full of blatherskite and animal manure about what is going on.Let us have some honesty from this Government about the real state of the financial situation in this country because we are not getting it. We had the Prime Minister saying: “No no it was just an artificial target. We did not really care about the surplus.” He said it is like landing a Boeing 747 on the head of a pin. Well that was not said before the election. We were told that there was going to be something like a half a billion in surplus by the time we got to this election. I remember the Minister of Finance saying in December 2008 that the previous Labour Government had set aside enough for the rainy day. So when he talks about the Labour Party’s record I remind him of that.CHRIS BISHOP (National):It is a pleasure to take a call on the Government’s 2013-14 financial statements. It is a pleasure to take a call because this is a Government that is moving New Zealand in the right direction. We are actually in a rather unique situation for New Zealand. New Zealand is growing at about 3 percent a year and we have inflation at about zero. That is actually extraordinary within past New Zealand history—to grow at a high rate without incurring inflation. What that means is that jobs are being created and New Zealand is getting ahead. More important New Zealanders are getting ahead because wages are rising faster than inflation. So it is a pleasure to take a call on this.I want to deal with two issues that have been raised by the Opposition in the debate so far. The first is about debt and the surplus. The second is about research and development. So firstly let us talk about Government debt. We heard from members opposite particularly Annette King about how the National Government is a woeful fiscal manager and how Labour was amazing and ran surpluses for 9 years etc. and there is a complaint about the surplus. We heard the same thing from Russel Norman. There are three things to say in response to that. The first is that the premise that the Labour Government was a wonderful fiscal manager is wrong because it was the Labour Party and the Labour Government that left New Zealand with never-ending Budget deficits—never-ending fiscal deficits—in 2008 when the National Government came to office. They often say: “Oh we ran nine surpluses.”—wrong. The 2008-09 Budget forecast a deficit of $3.9 billion. So it is just wrong for Labour to continually assert that it ran 9 years of surpluses.Between 2003 and 2008 Government spending increased 50 percent in 5 years—50 percent in 5 years. Interestingly the Salvation Army in 2008 said that there had been a lamentable lack of social progress despite the increase in Government spending. We have actually got that under control. Net debt was forecast to increase to 60 percent of GDP by the 2020s; we have got that down. The first thing to say is that the premise that the Labour Government was a great fiscal manager is wrong.Secondly over the last 7 years the Labour Party and members opposite have continually opposed every piece of fiscal restraint that this Government has implemented. As the Minister of Finance Mr English rightly pointed out Grant Robertson stands outside buildings protesting about things. Only a year ago Sue Moroney was going on about how it was a shocker that the Government cut Moroccan cooking course subsidies in her neck of the woods. Even Government cuts to Moroccan cooking those sorts of things—which I think all of us can agree should be paid for by people with their own money rather than the Government—they were opposed to.The third thing—listen up Annette listen up—is that the Labour Party actually encouraged more spending over the last 6 and 7 years particularly at the height of the global financial crisis. It was David Cunliffe who was the Opposition spokesperson on finance at that time who was going on about Keynesian deficit spending. We really had to you know throw everything we could at the global financial crisis and really ramp up Government spending! And now Opposition members have the temerity to come down to the Chamber and complain about debt. Well we have got debt under control. Net debt is forecast to peak at half the level it was going to peak at under a Labour Government and we are moving in a strong direction back to surplus.Another thing I want to point out is about research and development because we heard an actually quite considered speech from Russel Norman—an actually quite considered speech to be fair—but he made a wrong assertion. The assertion was that National has cut research and development spending and cut innovation funding. That is not true and I want to put on the record for the Committee that this Government has increased spending on research and development and innovation by a massive 70 percent in the last 7 years.Tim Macindoe: How much?CHRIS BISHOP: 70 percent. It was forecast to hit $1.5 billion by the 2015-16 year. In fact business expenditure on research and development is rising. It rose between 2010 and 2012. Do we want it to go up more? Of course we do. Do we want to see more businesses investing in research and development and innovation? Of course we do but we are definitely heading in the right direction and that is very important.I want to close by talking about our growth prospects because it is only economic growth that will lead to better lives for New Zealanders and particularly it is only economic growth that will help us deal with the most vulnerable in our communities. Treasury the Reserve Bank and other commentators are now saying that the speed limit of the New Zealand economy—the limit at which the economy can grow without incurring inflationary pressures—is actually a lot more than what we thought it was before. That is a testament to the hard work that we have done over the last 7 years.FLETCHER TABUTEAU (NZ First):Thank you very much Mr Chair for this opportunity to speak to the Committee today. I would like to commend the Minister for speaking up earlier to defend the National Government’s opening speech. It was unfortunately a reflection of this Government’s inadequate thinking and arrogance as to the economy. The opening speech was an attack and a focus back on the past that was inaccurate and inappropriate for this debate. I want to address a couple of statements from the Minister himself if I could. The Minister spoke of the breadth of the base of growth in New Zealand and he justified that by saying: “Well actually we are still growing despite the fall in milk-solid prices in New Zealand.” But the Minister will be the first to admit that those falls in milk-solid prices actually have not transferred to the farm gates yet. The farmers themselves are not getting those lower payouts yet. The auction prices are not yet reflected in our farmers’ pockets. To say otherwise is deceptive and in only 6 months’ to a year’s time we will see the fallout of those decreases in international market prices. This Government is in denial already and obviously has no plan to move forward.The Minister spoke about this wonderful trade-weighted index average. What a wonderful statistic that is to highlight how wonderful the New Zealand economy is! Our unrealistically high exchange rate has come about because of our unrealistically high interest rates which the New Zealand banks are having to run at the behest of this New Zealand Government. We are talking about interest rates compared with the rest of the world that actually you cannot compare with the rest of the world because in some of the European economies for example they are literally paying a negative interest rate to borrow money. Yes that literally means they will borrow $100 and be paid back $110 in the future. That is what our New Zealand businesses are having to compete against. The fact that the Minister is claiming our trade-weighted index as a wonderful measure of how this economy is performing is either deceptive or naive. It is wrong. It is our exchange rate and it is our interest rates that are doing that.What it is also doing actually is punishing New Zealanders. It is actually punishing New Zealand exporters. That high exchange rate is making it incredibly hard for our exporters to compete in the international market. Picture a large multinational in China or in the US where money is so cheap and they are borrowing that money. Back here in New Zealand our businesses are borrowing at 6 7 8 or 9 percent. There is no competition there. We will be dominated and the fact that we are opening up our markets through Government procurement for example to these kinds of businesses with access to this kind of money is an unfortunate state of affairs that will see most New Zealand businesses not able to even compete or provide core services for the New Zealand Government or local council.The Minister also spoke about Governments from the past. Can I suggest that the Government stop using Governments of the past as an excuse for things not happening now. He talked about cutting everything. Actually what this National Government is doing is exactly that. The Government is now looking from the reports we have received to cut back expenditure to contain it within 30 percent of GDP—almost as much as 5 percent lower than it has been in the past. It is a blatant attempt to cut back expenditure. On the other hand it says it wants to decrease the tax take. It just does not make any sense at the moment. I think that most members of this House including those on the other side would agree that trickle-down economics does not work and that we need a smarter and more focused plan.I had the privilege of travelling to Ireland and Poland over the break. What we saw there were those two respective Governments investing literally billions of euros into their agricultural markets.JAMI-LEE ROSS (National—Botany):I am pleased to speak after Fletcher Tabuteau. He is actually a very good member of the Foreign Affairs Defence and Trade Committee—very constructive. But then he walks into the House having listened to what Winston has told him to say and it all turns to custard.The CHAIRPERSON (Hon Trevor Mallard): Order! The member will refer to the right honourable gentleman in the proper terms.JAMI-LEE ROSS: I apologise to the right honourable gentleman.I am pleased to speak on the financial report that has come from the Finance and Expenditure Committee. I am pleased to report on it because we have in this economy in this country a finance Minister who is envied around the world by other finance Ministers because of the decisions that this Government has taken which have helped this economy to get to the position it is now in. We are living in a country with one of the fastest-growing economies in the world. We are living in a country where 80000 people have gained a job in the last year. We are living in a country where we have high growth rates and relatively low inflation rates which is leading to our country improving year after year. We are proud on this side of the House to speak about the growing economy and about the success of Bill English and this whole House should be celebrating that.One of the measures of whether the New Zealand public and those investing in this country feel confident about the direction the country is heading in is whether or not they are willing to commit their cold hard cash and front up and invest in the economy. Last week the Hon Bill English was in my electorate to visit several important developments. I want to mention those today because they are evidence that New Zealanders are feeling happier. They are feeling as though the economy is going in the right direction. They feel as though this country is worth backing.The construction launch of the Ormiston town centre which the Hon Bill English launched last year is a half-a-billion-dollar investment by Todd Corporation. It has got 700 houses in it and 30000 square metres of retail. Forty thousand people will be serviced by that retail development. This is evidence that in my own electorate New Zealanders are happier to invest because of the economic settings that we have put in place. After visiting the Ormiston town centre construction Mr English then visited the Highbrook development which has got 500000 square metres of commercial space. Fifteen thousand people will be employed in that development and there are 107 hectares of development. That again is evidence that the economic settings put in place by this Government are leading to more investment in our economy. Investment in our economy flows only if you have the right economic settings. The fact that we are cleaning up the mess left by the Labour Government which would have seen net debt as a percentage of GDP reach 60 percent—the fact that we are cleaning that up turning it round and getting ourselves back into a position where New Zealanders are happy to invest in this country—is a positive thing.The fact also that New Zealanders are voting with their feet and are coming home and are no longer leaving our country to go offshore is another positive indicator that we should be proud of. When we came into office about 30000 New Zealanders a year were leaving this country to go offshore. We are now seeing New Zealanders choosing to come home and live in New Zealand. It does not happen overnight. It does not happen by pure chance. It happens because the Government puts in place settings that lead to greater investment that lead to greater job growth that lead to higher wages and that lead to New Zealand becoming a more desirable place for people to live. When we talk in this House about what the Labour Party likes to call doom and gloom—and we talk about the fact that it is actually improving—and when we talk in this House about the economic settings the very important indicator we must always watch is whether New Zealanders are voting with their feet. They vote with their feet they vote with their pockets and they vote at the ballot box as well. The New Zealand public have endorsed once again the economic progress this country is making.I wish to challenge the member opposite who was talking just a few minutes ago about interest rates because that is a very interesting question that we often debate in this House. Let us not forget that in 2008 when the Labour - New Zealand First coalition left office interest rates were about double what they are now. Mr Tabuteau please do not come into this Chamber and lecture about interest rates when the very party he is a member of was part of a Government that had an economy with interest rates double what they are today. [Bell rung] Mr Chair—The CHAIRPERSON (Hon Trevor Mallard): Jami-Lee Ross.JAMI-LEE ROSS: No sorry.STUART NASH (Labour—Napier):You know that a Government member is in real trouble when he gets a call to speak for another 5 minutes and he sits down because he has just got nothing to say. There is nothing to say. He has run out steam like the Government over there. He was in full flight and then suddenly “Pffft!” and he is down. Well Jami-Lee Ross that is what the people of New Zealand are seeing at the moment. Let me just correct you on a couple of points Mr Ross.First and foremost the member talked about debt. Let me just inform you that the last Labour Government got gross debt down from 40 percent of GDP to 18 percent of GDP. I am sure the member knows how much the net debt was when the last Labour Government left office. Let me inform him. It was down to zero. Net debt at the moment is $56 billion and gross debt is $80 billion. That is 40 percent of GDP. When banks go out and talk to households about economic wealth and when you read books about how to grow rich and all that sort of stuff they say: “Get your debt down.” What this Government has done is blow debt out and what it is going to take yet again is another Labour Government coming in and managing the economy in a way that gets the debt down—yet again like we did last time. It is always the way.The one thing I would like to say is that the major difference I see between the National Government and a Labour Government is that National believes that if you leave it to the market it will have the solutions—that the Government has no role to play; leave it to the market. The Government has left it to the market and what have we seen? We have seen that since 2007 according to the Reserve Bank Auckland house prices have increased by 60 percent—by 60 percent. In fact the growth in GDP per capita is below the national average. So if that member believes that this economy—this country—is doing well because house prices have just got out of control in one city and wages have been kept down then his definition of success is completely different from our definition of success. And it is completely different I think from the vast majority of New Zealanders’ definition of success.We cannot have an economy that relies on booming house prices. In fact when the Governor of the Reserve Bank spoke to us at the Finance and Expenditure Committee he actually said that this is a two-speed economy. It is a two-speed economy. You have got Auckland and you have got the rest of New Zealand and that is simply not healthy for the rest of the country. As a provincial MP I see it. And when I hear a member stand up and talk about our rock-star economy I say that the people of Hawke’s Bay for example—the people of Napier who bought tickets to this—are not feeling the love. Auckland is doing well; the rest of New Zealand is not doing well. I am sure the members on that side know this by what happened in Northland. Winston Peter’s message was to send the Government a message and it did.The thing that surprises me—the thing that really surprises me—is that the Government was sent a message. I was quite interested to see how it was going to react to that message and whether it was going to say: “Well goodness me we have neglected the regions. Let’s change the rhetoric and let’s get out there and let’s start empowering those in the provinces.” But the Government has not changed. It just has not changed. The Government believes it has got it right—let the market control the variables and everything will be OK. Well Labour does not believe that. Labour believes that the Government has a role to play in driving economic growth. That is why the people of New Zealand are going to see some very innovative policies come out for the 2017 election which are going to make sure that every single New Zealander shares in the economic success of our country because you cannot have an economy that is based simply on Auckland house prices.The previous member Jami-Lee Ross also spoke about interest rates. He talked about it as good news. The problem we have got—and I think it is acknowledged by a lot of people—is that we are not that productive in this country. Part of the problem we have got is that the cost of capital in New Zealand is significantly higher than it is for a lot of our global competitors. So in order for our companies to invest in plant machinery that is going to improve productivity and allow them to take their products to the world they have got to borrow at 6 or 8 or 9 percent whereas our global competitors can borrow at 1 or 2 percent. That is putting us at an immediate disadvantage. We have got to do something about this if we really want to take on the world in a global way and be competitive.Hon Paul Goldsmith: What do you suggest?STUART NASH: Just employing a whole lot more people might have good short-term labour market outcomes but it does not have great long-term productivity outcomes. We have got to get the cost of money down and the easiest way to do it—the Minister sitting beside the chair says: “What do you suggest?”.Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs):I am pleased to take a call on behalf of the Government because I am proud of this Government’s economic management—proud that as a result of the effort ingenuity and skill of New Zealanders helped along by the confidence given to them by a strong and stable economy this economy grew at a rate of 3.5 percent in 2014. That is one of the fastest growth rates in the developed world and it is expected to continue to average around 3 percent over the next few years.We heard from Annette King I think it was—that face of the modern Labour Party elected in 1984—who told us that this was a Government that has poor performance. I find it hard to understand how you would regard 3.5 percent economic growth over the last year as poor performance. Average wages have increased by 15 percent over the past 5 years—faster than the cost of living. How can you regard that as poor performance?What about the jobs boom that we have had in this country over the last year—80000 more people employed in New Zealand than last year and 217000 more people employed than over the 5 years before? That is a jobs boom in this country. I would like to hear whether the people the young men and women who have got jobs—who have been able to go out early in the morning work hard all day and come back with some money some earnings to support their families—think that that is a result of poor performance. Eighty thousand new jobs in this economy in the past year is a great performance and one that I am proud of.Cost of living increases are low in New Zealand. Inflation is virtually zero well below the average weekly wage increase of 2.5 percent. The balance of payments deficit which has dogged this country over many decades is running at 3.3 percent of GDP which is a lot lower than it has been in previous years. We have overseen a very significant turn-round in the books—we are approaching a surplus.Another thing is that we have seen more Kiwis voting with their feet and staying in New Zealand. When I first stood for Parliament in 2005 I remember everybody being very deeply concerned about Kiwis leaving for Australia. We were losing 30000 or 40000 a week. That figure was being compared to a full Wellington rugby stadium going out of the country every year and it is very gratifying to see that number now reduced to virtually zero. It is a measure of the success of this economy—it is holding families together and giving people an opportunity to see that their hopes and dreams can be realised in this country.We do have considerable challenges in New Zealand and they are mainly challenges of growth. There are challenges around housing in Auckland. I am certainly keenly aware of the issues in Epsom where I am based. There are challenges around transport infrastructure particularly in fast-growing Auckland and there are challenges around the skills shortage as so many people are looking to employ new people and bring them into the workforce. They are good challenges to have and ones that I believe this Government is absolutely well-equipped to deal with. We will continue to work constructively with the Auckland Council for example on the housing situation.In the areas that I am responsible for in commerce I think we are making very good progress when we move our question to how we get growth in this economy. One of the most important areas of course is to have access to capital. Businesses need capital to grow. So the whole point of the Financial Markets Conduct Act which was the biggest change in financial markets regulations last year is to try to build New Zealanders’ confidence in the financial markets so that they do not feel that investing in real estate is the only option and so that they know actually that you can invest in the financial markets. That is what the whole point of that very sweeping piece of legislation was about. We will be working very hard this year to make sure that that very large change in legislation is bedding in well. We are also going to be looking at a review of the financial advisers legislation to make sure that New Zealanders have access to good financial advice and can have confidence in the governance of financial advisers in financial products and in the advice that they are getting.I am also responsible for competition policy. When we talk about rising living standards in New Zealand growing the economy is important but making sure that the domestic economy is competitive is also an important way that we keep control of cost and make sure that every dollar that New Zealanders earn goes further. So we have got a lot of work in the competition area. The Commerce (Cartels and Other Matters) Amendment Bill is progressing through the House and we are also looking at a review of section 36 of the Commerce Act which is the section about the misuse of market power. We are looking forward over the next few months to asking whether we have got that right in New Zealand. I am convinced that New Zealand is in very good shape.JULIE ANNE GENTER (Green):Tēnā koe Mr Chair. Tēnā koutou e te Whare. I rise to speak about the Government’s financial statements for the previous year. Budgets are all about priorities. We have a choice about what we spend our money on and where we spend our money speaks volumes about what is really important to us. This National Government I think it is clear is quite out of touch with what is really important to New Zealanders. The Government Ministers and members have been speaking about the economic growth rate being slightly over 3 percent. Economic growth is not an end in and of itself. The economy is there to serve us. It is there to ensure that people are able to live better lives and the entire economy of course takes place within the confines of the natural environment.National’s economic growth unfortunately is not all based on us being better off. A significant portion of the economic growth that we are seeing this year and that is forecast for the next few years is entirely related to the Christchurch rebuild. We are not better off because we had an earthquake and a lot of buildings had to be rebuilt but that is what it looks like for the next few years. It looks like there is high economic growth. We are not better off because there is an out-of-control situation in Auckland with house prices. Yet it does look that way on the surface. I think many New Zealanders will realise that we are not better off; we are in an economy that is becoming more and more divided between those who have and those who have not.National’s economic strategy is based on increasing pollution and increasing inequality. It is a woefully 20th century approach. We know more and more from the research that is coming out around the world that there are opportunities to have a far more sustainable economy. The great economic opportunity of the 21st century is responding to climate change and to global inequality. By responding to those we could have a sustainable economy that actually left New Zealanders better off. New Zealanders love their natural environment and they want to live in a country where we all have a fair go and where not just a smaller and smaller portion of people increasingly hold the majority of the wealth.Of course National started with tax cuts for the wealthy which continues to cost us about a billion dollars a year. That was a choice that this National Government made to prioritise tax cuts for those who already had a lot of money rather than using that money on programmes that would actually address the problem of growing poverty amongst children in this country. So rather than spending the money on the quarter of a million children in New Zealand who do not have enough to eat who go to school hungry and who are not able to learn it chose to prioritise tax cuts for the wealthy. Then it claimed that despite having a billion dollars a year to spend on tax cuts for the wealthy we did not have enough money so we had to sell our State-owned energy companies which were turning a nice profit for the taxpayer. So in order to raise about the same amount of money that we lost through tax cuts for the wealthy in the first 4 to 5 years of this National Government we sold our profitable State-owned energy companies. Of course the privatisation of those shares went to just a small portion of New Zealanders just several thousand New Zealanders—those who had enough money in their pockets and a few thousand spare dollars in cash to pick up those shares and who are now benefiting from that investment. National said that it would spend the proceeds of these asset sales wisely on productive infrastructure. That was the term used by the Minister of Finance who was also the Minister for Infrastructure.But in fact what we have seen the money spent on is a bunch of election bribes. So rather than prioritising infrastructure projects on the basis of a rational assessment of what is going to be best for the New Zealand economy we have seen bridges and roads randomly chosen from around the country where Steven Joyce the campaign manager for the National Party thinks they are going to yield the most votes for the National Party and will be the best way to win electorate seats. They are also poor investments not just because they have been cherry-picked from what National thinks is the greatest priority but because they do nothing to reduce our reliance on carbon pollution and imported oil. One would think given it is 2015—it is the 21st century—that we would be investing in infrastructure that actually reduces pollution and responds to climate change.This National Government is so arrogant that it refuses to take the advice of the OECD the IMF the UN and the thousands of scientists working for the UN who have told us that we need to take urgent action to respond to climate change. We need to reduce climate pollution and all new investments in infrastructure should take us in that direction of reducing rather than increasing pollution.MARAMA FOX (Co-Leader—Māori Party):Kia ora Mr Chair. I am not an economist. When you become a member of a party of two you learn quickly that you have to talk on all sorts of things. So today I am going to talk about what I know and what I know is that the minimum wage in this country is forcing people into poverty. In fact the minimum wage is set at the level of poverty. We are paying people to be impoverished. We need to ensure that there is a greater distribution of wealth in this country that we reduce the profit margins that are paid out to the wealthiest and that we ensure that the people who work very hard to create those profit margins are paid what they are due and are paid a living wage.Often I come into this Chamber and we talk about determining what poverty is and about how we can do that. People argue about whether it should be 60 percent of the median wage 65 percent of the median wage or 50 percent of the median wage. Well we will continue to have that debate for as long as we are unwilling to address it. What we need to be addressing are the hardship factors that impact on our people across this country. In fact if we do not act now to address poverty then it will be out of our reach to reverse. In this country we have the ability right now to address poverty and to reverse the factors that put our people into hardship—hardship factors such as whether a person has had a portion of protein with their dinner. Do they have a winter jacket? Do they have to go without a major meal once a day? Do they stay home from school because they do not have food with which to provide themselves lunch? Do they sleep in their car on the beach under a bridge or in a shack beside the river?In executing my duties I drive around this country quite a bit and I pick up hitchhikers because I think that I might as well get some benefit out of having a car that is paid for by the Government. So I pick up hitchhikers and I take them wherever they need to go. I picked up an elderly man who was clean and did not smell—a wonderful guy. He was hitchhiking to a rest stop because 50 metres from that rest stop down by the river there was a shack that he had found in which he could sleep and he has been there for the last 4 years.The CHAIRPERSON (Hon Trevor Mallard): Order!MARAMA FOX: Yes I am coming around to the economy.The CHAIRPERSON (Hon Trevor Mallard): I think the member will take a seat when I stand up. Thank you. I am pleased that she has indicated that she is going to come to the economy and especially the decisions that the Government made in the year that ended on 30 June last year. If she would just make even a passing reference to that that would make her within the rules.MARAMA FOX: Thank you. Hopefully that will not detract from the time that I have been given but thank you for the instruction.The CHAIRPERSON (Hon Trevor Mallard): No it does not. We are trying to make up time actually.MARAMA FOX: Yes. The decision was that we increase our minimum wage by a paltry 50c on 1 January every year. That has brought our minimum wage to $14.75. Again if I can make the point that is actually paying our people to be impoverished. It is about 65 percent of the median wage of this country and that means that if you add accommodation and hardship factors on top of that we are paying people to be impoverished and to live in hardship.So what do we do? I think there has been some grace given in the speeches I have heard so far about what we might be able to do in the coming year to address that. What we need to do is raise the minimum wage and support the people who are suffering in hardship in this country so that we do not have to pay for food in their schools because they can afford to buy it themselves and so that we do not have to have charities that provide jackets and shoes for children because they can afford to buy them themselves. What we need to do is halt the march of poverty. We need to address it immediately and that way we can support the people of this country in an economy that is thriving so that not just the very rich are able to benefit from that thriving economy but there is a greater distribution of wealth across all sectors of our society. We must halt the march of poverty before it is out of our reach to do so. The system intervention that requires us to do that actually just requires a little bit of willingness and that willingness is about improving the minimum wage to a living wage. That is what I have decided to speak about because—The CHAIRPERSON (Hon Trevor Mallard): Order! I did invite the member to give a passing reference in order to bring herself within the rules and she has declined to do that.BARBARA KURIGER (National—Taranaki - King Country):I am pleased to take a call this afternoon in this conversation because I am really proud to be part of a Government that has produced 3.5 percent growth in the economy in the last year. We are growing and we have one of the best results in the current Western World globally. I just want to bring a little bit of reality to the Committee this afternoon because we do hear a lot about falling dairy prices and where they are taking us economically as a country. Well let me tell you that I have been involved in dairy for a very long time and we do live in a volatile world. Prices do go up and they do go down but we are in a country where we have a strong focus on dairy and it does take us through. It got us through the global financial crisis a few years ago. At the moment it is just having a down period. It is in the process of producing the finest protein in the world and prices will go up again. So it is just in a bit of a glitch at the moment.Let me tell you as someone who has just spent the 3-week adjournment out in my electorate of Taranaki - King Country that things are happening in the regions. Taranaki is at one end of my electorate. At the southern end of the electorate oil and gas permits are still being reissued. Let me tell you that that has done a huge favour to the people of Taranaki and New Zealand not only in the last 12 months—The CHAIRPERSON (Hon Trevor Mallard): Order! I invite the member to sit down for a second. I have just terminated the member’s speech because she did not make any reference to the required debate. All the member has to do is refer to some decisions of the Government in the year ended 30 June last year or to the report of the committee that we are talking about. It is not too hard and it only has to be a passing reference but the member has to do it.BARBARA KURIGER: Thank you Mr Chair. One of the things I did refer to was oil and gas permits having been issued to help the economy build. I also want to note that money has been spent on infrastructure. There are roads that happen to be going on in my electorate. There is a fantastic roundabout going on in Waitomo at the moment which is actually allowing the traffic—Stuart Nash: Mr Chair she has no idea what the Government did last year.BARBARA KURIGER: Yes I do.Stuart Nash: Tell us about it then. A roundabout in your electorate? Tell us what you’re doing for the regions.BARBARA KURIGER: I am telling you that there is actually—Stuart Nash: Tell us how you’re growing the economy.BARBARA KURIGER: We are talking about some of the 350 initiatives that are in the Business Growth Agenda and one of those is infrastructure. OK infrastructure—roading. We have currently got a whole lot of roading things going on on State Highway 3 that are a result of Government decisions. It is a road that is actually important to the infrastructure and the economy of this country because we have got products and services that are going to the ports and they have to go up and down that road. The Government has also been negotiating trade and export agreements that actually help us to take our product to the world—free trade. And I tell you what—it is currently still negotiating.I will tell you something else that the Government has actually done and the news is out today. This is something that is going to be really really pleasing to the people on the other side of the Chamber. There has just been an announcement today that some of the Government research and development funding over recent years has led to a breakthrough in methane production. And so this just goes to show me that this is about the economy this is about finance and this is about investing in research and development which in the long term will actually help us to get that economic sustainable New Zealand that we have desired for so long.Stuart Nash: Yeah but what are they telling you in your electorate about milk prices?BARBARA KURIGER: What are they telling me about milk prices in my electorate? People in my electorate know that milk prices come and go. So you know to me there are some wonderful innovations that have happened through Government research and development and the funding that has gone into research and development in our financial accounts.I just recently—a few months ago—opened a mānuka health factory. That mānuka health factory is not only about the economy of picking up honey; it is about the economy of taking the unique mānuka factor honey and putting it into bandages and health products that are actually going to hospitals and health services around the world. So I see all of those things happening and we are on the right track. We are actually making progress.We have got a lot of things happening out in our regions. Broadband is another one that the Government has invested in and put money into in the last Budget. I can actually see that the infrastructure of broadband is spreading all the way through our towns and we are getting people more connected so that we have got some wonderful technology businesses out in our region.Stuart Nash: Like what?BARBARA KURIGER: Like what? We have got people actually in Raglan in our electorate who are making drones.FLETCHER TABUTEAU (NZ First):Listening to the debate in this House this afternoon has kind of consolidated a lot of my thoughts on this particular Government and I hope I have coined a phrase here: this Government strikes me as being “the media masters of circumstance”. Ms Kuriger Mr Goldsmith and Mr English tell us these wonderful stories. Mr Bishop for example claims that somehow what is essentially zero percent inflation is the Government’s doing and that this highlights excellent Government management. This is either naive or deliberately misleading and Mr Bishop is not naive. Falling international—The CHAIRPERSON (Hon Trevor Mallard): Order! The member might have attempted to use a device but he did breach the Standing Orders then. He will withdraw the comment. Just stand up and say: “I withdraw.”FLETCHER TABUTEAU: Certainly Mr Chair. I do withdraw that comment and I apologise. Falling international commodity prices—including and especially falling oil prices—is the reason for inflation being so low in this country. This is thanks to for example structural changes in China which means that it is not spending as much as it once did on large infrastructure. The war in Russia and the Ukraine and the political uncertainty there is certainly something I would suggest that this Government not claim as being beneficial to New Zealand.The Minister himself described the poor and unfortunate circumstances in Australia and several members have claimed that New Zealanders coming home—people voting with their feet—is an indication of the excellent management of the New Zealand economy. I would suggest to you that the unfortunate circumstances in the Australian economy mean that New Zealanders are simply returning home because that once-golden light—the once-golden economy that existed in Australia—is not there anymore and it is an opportunity to return home. But the Government is claiming that this is again somehow National’s doing. New Zealanders—Northlanders in particular—were certainly not voting for this Government in the Northland by-election and I would have thought that would have painted a very clear picture for this Government to stand up and listen. National continues to sell stories that are edited. In fact take the dairy industry. The Government is relying on hard-working dairy farmers who have had such a wonderful run of it and who are hard-working and innovative and are competing in an international framework. This Government claims their success as its own and implies that it is the Government’s doing.This Government needs to take account of the true economic position that it has taken this country into. We have got a $7.4 billion current account trade deficit. Interestingly we have 2645 entities which generated $89.4 billion in revenue. But then they spent $92.2 billion leaving in return a large gap of $2.9 billion. Not only is this over 40 percent of gross domestic product but it is a sight of a lot more than what the Government is beating its chest over. It was quoted that the strategy for returning to surplus is based on expenditure restraint—something that another Government was criticised for earlier—and this means that spending will fall below 30 percent of GDP during the coming 4 years down from a peak of essentially 35 percent. Only in March did the Minister of Finance say that. But any homeowner or business owner can tell you what this means in the long term which is that it is actually a recipe for disaster. You cannot simply cut expenditure and hope that it will solve all your problems. Balancing a Budget which this Government has not actually been able to do in its time here and creating a surplus by cutting expenditure is not a solution to New Zealand’s problems.Although the Government may have $256.1 billion worth of assets for example it has $175.3 billion worth of liabilities. And just as an aside New Zealanders still wonder why some of those highest-earning assets in terms of profits generated were sold off. It just makes no sense. If we view the Crown as a company that kind of gearing ratio of more than 50 percent would be considered high. This Government in the widest sense sits at 61 percent and I am worried—as every New Zealand should be—because that raises a big question over the financial management that this Government claims to be expert at.JONATHAN YOUNG (National—New Plymouth):Thank you very much for the opportunity to speak in this debate. It is good to see that one of the decisions the Government made in the last financial year was to establish WorkSafe and also to bring some real attention to this whole area of health and safety reform. We know that the royal commission into the Pike River tragedy came up with a number of recommendations which the Government has instituted by a number of different means—some of them through legislation particularly around the Crown minerals permitting bill and that sort of work. One of the decisions that the Government made was to set up an independent task force that would go through the industries in our country look at our record and look for where improvements can be made.One of the goals that the Government has decided is that we want to see a 25 percent reduction in fatalities and serious injuries in the workplace. It is very important here in this country—in what we say is a very developed and advanced economy—that men and women who go to work get home safe and sound at night and are able to earn a good wage or income as they do that. So the independent task force went through our country. There was a very intensive number of visits and submissions and it was open to hear the views of New Zealanders. It came up with a set of recommendations that became the basis of the Health and Safety Reform Bill which is currently before the Transport and Industrial Relations Committee. It is due to report back to the House later next month. Out of those decisions this bill will include some of the most significant changes in this whole area of health and safety that we will have seen in the last two decades. That bodes well for New Zealand and for the workplace being a safe place where people can as I said before not only go to work but also come home safe at night.Some of the concerns out there in the community and potentially in workplaces are about what it is going to take and whether we are going to be able to do this. No doubt as this bill comes back to the House and gets debated in this House we will see the outcome of some of those decisions and discussions and it will hopefully alleviate the concerns. All of this is because we want not only to have a safe workplace but also to have a productive workplace. We know that the cost to the economy of workplace injuries and death is huge. It is in the billions of dollars. If we can make the workplace safe—not only for individuals but also for families—it bodes well for our economy as well. We know that the New Zealand economy is doing better than most economies around the world. That is good to see. It is good to see that that is generating confidence for capital investment to come into our economy and 80000 jobs were added to the economy just last year. That has got to bring real confidence to our country particularly to those who are going through the education system whether they are at secondary or tertiary level or at university preparing themselves for the workforce.It is incredibly important as you will know that New Zealand remains competitive and effective in the workplace in order for us to compete internationally. Out there in the international arena there are always demands upon I guess the quality of goods and the cost of goods. Although we want to have quality goods that earn a premium we are always competing against other nations around the world. We live so far far away from the markets that we sell to that we have to add in huge freight costs and therefore we must be more efficient. Part of the efficiency is of course making sure that our workplaces are safe and that people can contribute work hard be productive and also have the confidence that they are going to get home safely. So we are pleased that this Health and Safety Reform Bill has come through a process of Government decisions not just last year but over the years before as well and is going to come back to the House this current financial year and be in place in due course.There have been 80000 jobs created in the past year. That is the accumulation of decisions made not just in the last financial year but over a number of years. The Business Growth Agenda is a piece of work under the Ministry of Business Innovation and Employment that has—Hon DAVID PARKER (Labour):I have to start by responding to one of the comments made by the speaker before last—the speaker from the National Party the member for Taranaki - King Country—who said as part of her contribution that the economic development of the country was made better by the manufacture of drones out of Taranaki - King Country. A crueller member than me would say they elect them except I would have the gender wrong so I will not say that.This third-term Government resorts to spin when it is trouble. The Finance and Expenditure Committee reported back to Parliament that during the term of this Government net debt has gone from zero to $60 billion. I did not hear that referred to by any members of the National Party who sat on the Finance and Expenditure Committee. That same Finance and Expenditure Committee reported back accounts that showed that exports as a percentage of GDP are decreasing not increasing—that the Government is failing in its own target. This has become such a problem in New Zealand that we see symptoms of it erupting everywhere.We have just come from a briefing from the Reserve Bank which has no doubt been given to members of other parties in this House and also to the Finance and Expenditure Committee. The Reserve Bank gave us a presentation that included the startling fact that despite this enormous rise in Auckland house prices per capita GDP—that is the output in Auckland per person—is increasing at a substantially lower rate than the rest of the country.You would think that if the Government thought it should be encouraging through its economic signals this ridiculous outcome in terms of Auckland house prices we would at least be getting better off as a country. But the truth of it is that we are not and why did the National Party lose Northland? Because the people in the provinces know it. They know that under the current settings of the current Government the vortex that is Auckland sucks all of this money sucks all of the immigration into Auckland and makes the economic problems in Auckland worse as evidenced by the fact that the average house price has gone up by $300000 since National was elected.What is the other side of that effect? What is the other effect of that misallocation of investment of money? It is that not enough money is being invested in our productive export sector. The Finance and Expenditure Committee reported that back to this House as well. Indeed it is so clear that we are getting commentators in the likes of the Sunday Star-Times lamenting the fact that in the—[Interruption] Sorry what was that?Chris Bishop: Rod Oram.Hon DAVID PARKER: Yes Rod Oram can count. He can count. He reports quite accurately that exports which the Government said it was going to increase from 30 percent to 40 percent of GDP have now—on the figures Rod Oram reports but the member opposite seems to deny despite the fact that they are also in the Finance and Expenditure Committee report back to this House—dropped as a percentage of GDP to under 30 percent of GDP.What was that man’s former boss’s response to it? Change the way you measure the target. So Mr Joyce came along and he fiddled the measure and he fiddled the measure and initially that benefited him because it appeared as though there was an increase in exports from 30 percent to 33 percent of GDP. But then actually on the volumetric basis that he swizzled it to it turned against him and sent it backwards even under that measure. The truth of it is that the measure was intended to measure the value of New Zealand’s exports as a percentage of our economy. That was going to go according to National from 30 percent to 40 percent of GDP. It has gone backwards. It is now under 30 percent of GDP. Our trade with the rest of the world in goods and services is dropping as a proportion of the economy.The target which the Government still says is now just an aspirational target of 40 percent is never going to be met by this Government—never as long as this Government is in because it has got the economic signals wrong which is why house prices in Auckland are going crazy and there is under-investment in the provinces. What is happening in terms of those subsets of exports? Well we all know that the dairy price has gone down. Everyone concedes that. That is one of the reasons that the nominal value of exports has dropped recently. But of greater concern is that more elaborately transformed exports have been dropping as well.MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti):Tēnā koe Mr Chair. Tēnā tātou katoa. I am pleased to take part in this debate on the Government’s economic performance for the 2013-14 year. As I listened to the debates in the Committee today I was thinking there were going to be some sparkles or some great trumpets playing from that side of the Chamber to celebrate what a rock star economy this is. But alas I heard nothing. In fact I wonder whether members on that side of the Chamber are actually doing our job for us by underselling their own economic performance.For two elections now National has promised a surplus in its financial year. National has made it a centrepiece of its bid for re-election and it is set to break that promise yet again. It is not good enough for the Prime Minister John Key to claim that a surplus is an artificial target. Today in this Chamber I heard the Hon Bill English in response to a question from our finance spokesperson create a new way of saying that we cannot predict and that figures are just artificial targets and are not something that we should actually achieve. It is interesting to note that the Government was predicting a half-billion dollar surplus which is now a half-billion dollar deficit. The current projections for 2015-16 are also for a half-billion dollar surplus. The question I pose is whether we can believe that that will actually be reached.The numbers around National’s debt are extraordinary. It has borrowed a million dollars an hour in gross terms since coming into office. The debt has grown so much that this year the Government is spending over $10 million a day on interest payments. Remember that when we tried to pass the “Feed the Kids Bill” the Government’s response was that it was unaffordable. This Government has run up more gross debt as a percentage of the economy than any other New Zealand Government since the Forbes Government in the 1930s.Much of the debt that National took on was unavoidable. We do not begrudge it having to pay for the recession and the Canterbury earthquakes but the Government has wasted billions—it has wasted billions. The tax cuts to the top 10 percent have cost about $5 billion. The asset sales cost which increases with every dividend is nearing $1 billion. The corporate bailouts and handouts to South Canterbury Finance AMI Rio Tinto Skycity Oracle etc. run into billions of dollars. But what has National achieved with all this borrowing? There has been 1 year of decent growth—we will give it that—which is quickly coming off the boil. Unemployment is still hovering near 6 percent. Wages are stagnant. Regions are going backwards and I will touch on that shortly. Families are in poverty and there is a shortage of decent housing for families in need. There are not enough houses for families to buy at a price that ordinary people can afford. National has borrowed more than any Government in 80 years. It has imposed a huge interest burden on future Governments and has nothing to show for it except a trail of broken promises.National’s economic plan is quite a basic plan. It is to make more milk it is to export logs and it is to find oil. That plan is seriously under threat.The Government is not delivering the economic benefits out to the regions. I come from a region of the East Coast. I travelled around the East Coast like many do during the adjournment. I had some colleagues of mine in Gisborne and we met with the Gisborne District Council. One of the biggest issues for it is roading. There is a huge gap in investment from this Government into roading in the regions. The council for instance is having to bridge that gap. If the economy is doing as well as we hear it is from that side of the Chamber then why are we not investing in infrastructure.Hon NIKKI KAYE (Minister for ACC):I am very pleased to speak in this debate. I want to do three things. The first is to give just a little bit of context because we cannot be talking in this debate if we do not actually understand what has been happening in the last couple of years from a fiscal perspective. We were left with never-ending deficits. We were left with a situation where we were looking at significant debt—I think the figure was 60 percent—and we have halved that. For anyone listening to this debate you need to stand here and understand that with both the Canterbury earthquakes and the projections that were given to us as a Government we have halved those projections.What we also need to do in this debate is talk about some of the decisions that the Government has made that have meant that the economy is heading in the right direction. We have just heard from the previous speaker Meka Whaitiri that it is all about milk and it is all about mineral exploration. We know that is what Labour members do. They go around the country saying that. What about the $326 million spent on National Science Challenges much of which was in train in the last financial year? That is about investing in the future of our nation. I have got a Bachelor of Science in genetics and I can say that that is going to do more for the future of this country and more for the future of businesses in New Zealand than anything. That is one of the key decisions that the Government has made that is about future growth and innovation.Secondly I want to talk about my portfolio—ACC. We were handed a $4.8 billion hole by the last Labour Government and we have to talk about some of the decisions that have been made in the last couple of years around that up until 30 June. We get lectures from that side of the Chamber about ACC levies when actually we have delivered—and these decisions were in train to 30 June—$1.5 billion of levy reductions after we had a $4.8 billion hole. Some of that is around the work account but it is also around the motor vehicle account. What that means is small businesses are better off under National. We had a horrific situation under the last Government but now there are significant levy reductions.The other thing that I want to comment on in terms of good fiscal management is ACC generally. If you look at the investments team of ACC what we know is that there have been some very very significant results. We know that for 19 consecutive years it has outperformed benchmarks. It has done that again over the last couple of years. We need to acknowledge that team of people.We also need to understand that this is a Government that has invested significantly in infrastructure over the last couple of years and that is really really important if we want to support those regions and support those small businesses. In fact the figure I have in front of me is that there has been over $16 billion of infrastructure investment. Some of that includes significant transport projects. I know that in Auckland alone obviously via the Minister of Transport—and some of the Budget figures will show this—we have seen projects that have been in train including projects like the Victoria Park Tunnel and the Waterview Connection. All of these projects are incredibly important for a city like Auckland and they are important for growth.This is a very busy Government that has done the almost impossible and has taken a country that was staring down the barrel of a decade of deficits and has halved what the projections were around debt. We are one of the fastest-growing economies in the developed world at 3.5 percent. So when we hear the doom and gloom from the other side of the Chamber we need to put it in perspective and we need to understand that this is a Government that has invested in science and innovation. This is a Government that has invested in infrastructure. This is a Government that is reducing levies. This is a Government that is focused on employment law reform. This is a Government that has actually raised the minimum wage while we have been doing all of those things.We are heading in the right direction. I hope that all of those people who are watching the House today can see that there are a number of initiatives that have happened in the last year that are absolutely focused on building a stronger nation and a stronger economy. Small businesses and the many workers of New Zealand will be far better off as a result.ANDREW BAYLY (National—Hunua):At the recent briefing by the Reserve Bank Governor at the Finance and Expenditure Committee I asked him how often he got the opportunity to stand and talk about what a wonderful set of economic parameters that he had to talk to us about. So I find it funny that some of the Opposition members are talking about all these figures it makes me realise that maybe they did not understand what he was actually saying.If you sit and actually listen to him GDP is at 3.3 percent. We are one of the strongest-growing economies in the OECD and that rate is actually the highest since 2007. Our net debt is at 27 percent of GDP and is forecast to go to 20 percent by 2021. Our unemployment rate is at 5.7 percent. Again it is decreasing and projected to decrease over time. We have got a current account deficit at just over 3 percent—again that is very reasonable when you consider us and compare us with other international economies.This is an economy that is recognised as one of the fastest growing in the developed world and the success of this has been borne out in the exchange rate for the New Zealand dollar. We are now seeing the dollar touching parity with the Australian dollar. This is the first time we have got to that point in nearly 40 years. Although having that high dollar is hard for our exporters it is quite simply a mark of success.Our policies are also leading to fewer New Zealanders leaving our shores and to a lot of our expats returning to New Zealand bringing valuable experience and expertise. Net outflow 2 years ago was 36700 people. Just in the year to March this year it had dropped to 2300 people. Do you remember when the Prime Minister made that bold statement about turning it round and all the naysayers were saying it would not happen many of them across on the other side of the Chamber? Well actually he has achieved a lot of what he has said. And we are seeing consumer confidence rising up 9 percent between March and April this year. Twelve percent of people feel better than they were feeling 12 months ago and 31 percent expect to be in a better position in 1 year’s time. New Zealanders are optimistic about the future.This Government is showing financial restraint and that is keeping interest rates lower which is good for mortgage holders and also for businesses that want to borrow money to invest in their businesses. We have all seen the impact of this in employment. As I said before we have a low unemployment rate of 5.7 percent compared with 10 percent when we came into Government all those years ago. There are 217000 more people employed than 5 years ago. This is a Government working to put people back into paid employment. This is why we have also increased the adult minimum wage as we have done every year. So again we put the rate up by 50 cents to $14.75. That injected $60 million into this economy over this year and will favourably help 115000 New Zealanders currently in employment. We are seeing our average wage rate improve with an inflation rate of 0.3 percent and we are seeing average wage rates going up 1 percent. That means a net increase and there has been a net increase of 15 percent over the last few years.Recently I was maligned in the National Business Review for asking the Minister of Finance about what this Government is doing for New Zealand families. Mr Hooton thought it was strange that someone with my financial background should be asking the Minister such a question. He thought I should be skulking around the back and not trying to ask that question. He is wrong. Looking after our families is not only fair and just but also good business. As a society we need to have an equitable society and having strong families with people in meaningful jobs is a crucial part of that equation. I am proud of the recent policy announcements that this Government has made.Hon TODD McCLAY (Minister of Revenue):It is a pleasure to take a call in this very important debate. Can I say to the previous speaker in this debate Andrew Bayly that I particularly enjoyed his speech. I have not had an opportunity to hear him for a little while. In particular the parts that I think were most relevant were those statistics because it is hard to argue with the cold hard facts. Our economy grew by 3.5 percent in the calendar year 2014—the best performance in the economy since September 2007—and we expect average growth rates of about 3 percent over the next 5 years. When one compares that with many other countries of the world that we have close relationships with and with countries that we trade with—indeed countries that New Zealanders were going to in significant numbers in 2007 and 2008 but we now find that they are returning home—we are doing extremely well. So better growth rates are projected than in the euro area the US the UK Japan Canada and of course Australia.Annual core Government spending has increased by just 14 percent now compared with when we came into office 6 years ago. Indeed over the 9 years of the previous Labour Government the increase in spending was around 50 percent. So that means hard-working New Zealanders were getting out of bed every day going out to work going to their jobs paying their taxes and not spending anywhere near as much on their own households on their families on their children on the things that we want them to do and the Labour Government was ramping up expenditure—a 50 percent increase. Well the Prime Minister and Bill English have very very clearly focused on this and a 14 percent increase in Government spending—Stuart Nash: What was the net debt?Hon TODD McCLAY: —I am coming to that in a moment—under extremely difficult financial circumstances when one considers the global financial crisis and the many other challenges that not only the world’s economy faces but New Zealand’s economy faces is I think a testament to their focus.We are approaching a surplus with net core debt to peak at 27 percent of GDP. A member opposite asked earlier what the debt was back then. Well it is actually about the state that the books were left in when we came to Government and the great challenge that went on around the world. Treasury came out and said to us that if we kept on the reckless spending direction of the previous Labour Government—something that the members opposite sound very proud of; you know ramp up spending let the economy get carried away with itself do not worry too much about many of the macroeconomic indicators—by 2020 debt would be at 60 percent of GDP. It would be a whopping 60 percent of GDP.Through the focus and hard work of the Government over the last 6 years on making sure that we are spending money only where we are able to and by focusing on public services and a better delivery of public services not only have we been able to get back on the track to a surplus and restrict our debt to GDP to only 27 percent but also at the same time we have been able to spend more money in the areas that are important for all New Zealanders. These are in health and in education and certainly by way of a very big investment in the social sector particularly around social development—helping New Zealanders to help themselves much more than was the case previously and would be the case today if there had been a change of Government at the last election.Very interesting and important is the fact that 80000 jobs were created last year—217000 more people are employed than was the case 5 years ago even though we have gone through very challenging and difficult circumstances. The unemployment rate today is 5.7 percent—5.7 percent. It is still too high but when one compares that with what is happening in other countries and with our very close neighbours—and our economies are fairly closely interlinked—well Australia is moving in the other direction at 6.1 percent unemployment. The most interesting thing here is that the labour force participation rate has gone up to a record of 69.4 percent. When we came to Government 6 short years ago—Sue Moroney: Six long years.Hon TODD McCLAY: —New Zealanders were voting with their feet. Ms Moroney knows this because she stood in the seat of Hamilton and most of her supporters deserted and went all the way off to Australia. Do you remember the photographs of football fields stadiums full of New Zealanders going to Australia? Well they are coming back in great numbers. Net migration is up now and those New Zealanders are coming back to work because unemployment is holding its own in going down and the participation rate in employment is on its way up.Hon MICHAEL WOODHOUSE (Minister of Immigration):As we round off this debate on the Finance and Expenditure Committee’s report—it has been 2 hours of “My statistic’s bigger than your statistic.”—I just want to follow up on a couple of the statistics that Mr Parker raised because they were indeed quite right. He did say that when this Government came to office net debt was zero. Well that is not quite right. It was $10 billion but it would be churlish of me in the context of that to say that that was a significant error. It was 5 percent of GDP. It was certainly much lower than when the Labour Government first assumed office although the point around gross debt is misunderstood. Gross sovereign debt actually went up under the previous Labour Government not down.Stuart Nash: No it did not.Hon MICHAEL WOODHOUSE: Yes it did. It went from $34.4 billion to $34.7 billion. Net debt certainly went down. Here is something Mr Parker also said: he said that that debt has now ballooned out to $60 billion. Mr Parker is right. What he did not say was that had this Government continued the trajectory left by the previous Labour Government that debt would have been much more than $60 billion as Mr McClay pointed out. Net debt was going to go to 60 percent of GDP unless—The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the honourable member. The time for this debate has expired.Report noted.The CHAIRPERSON (Lindsay Tisch): We now turn to the second part of the debate. This is a debate on the annual reviews of departments Officers of Parliament Crown entities public organisations and State enterprises as reported on by select committees. The time allocated by the Business Committee for this debate is 7 hours. I remind members that this debate now includes the reviews of performance of Crown entities as well as departments. The Business Committee has determined that this part of the debate be structured as seven themed debates. A list of the entities covered by each theme is available on the Table. Each debate will be led by a call from the chairperson of the select committee nominated by the Government as the major committee reporting on the theme. The Labour Party will have two calls. The Green Party will have one call. New Zealand First will have one call. The Minister in the chair will have three calls in response. All calls are 5 minutes in length.In addition there are 28 five-minute supplementary calls which may be taken by parties as they see fit during the seven themed debates. At the end of the each debate the question will be put that the committee reports relevant to the theme be noted. The time taken on each question is in the hands of members depending on parties’ use of their allocation of supplementary calls. However this part of the debate expires after 7 hours.At the conclusion of the debate a single question is put on the provisions of the bill. There is no amendment or debate on this question. When the chairperson reports the bill to the House it is set down for third reading forthwith. There is no debate on the third reading.BusinessThe CHAIRPERSON (Lindsay Tisch): The question is that the reports of committees relevant to services for business—accident compensation commerce and consumer affairs customs economic development foreign affairs and trade immigration labour science and innovation and tourism—be noted.DAVID BENNETT (Chairperson of the Finance and Expenditure Committee):I would just like to congratulate everybody on the way that they are going to engage in these debates. I think that they will actually give an opportunity for a bit of wide-ranging debate rather than the traditional way that we have approached these issues.When we look at this debate here there are seven issues—or a number of issues anyway—that are quite broad and that cover a range of issues. First of all as the chair of the Finance and Expenditure Committee I just want to cap off that previous debate. When we look at economic development and some of those issues that are listed here in the services for business debate it is very important that you have that economic environment in place. That is what this Government has been doing through working towards Budget surplus through getting unemployment down through keeping interest rates low through keeping inflation low and through seeing strong economic growth. All those things are important for business because the environment that we as a Government deliver for business is the most important thing that we can do. It is much more important than any one-off decisions that we may make about what we prefer as the business of the day that we should be supporting or about the nature of any changes to the way that those businesses direct their affairs.There is one issue in there that is quite an interesting one in our list which is immigration. It is not necessarily something that the Finance and Expenditure Committee deals with. I dealt with it previously on the Transport and Industrial Relations Committee and I notice the chair here is Mr Jonathan Young—and a very good chair he is as well. I just wanted possibly to have a little bit of a talk about immigration. I think that in this House we have a very restrictive approach to immigration in New Zealand and we should be looking at a broader way that we as a country could develop and take more migrants in to enable this country to develop. The changing face of New Zealand that would be the result of that would be something that I think would add value and diversity to our country going forward. We are providing an economic environment that people will want to be part of. The human pool of capital that is out there—that talent of young people around the world who are looking for an opportunity and a future—will see New Zealand as a place to come to. They see us as somewhere that is free and open that has a strong economic environment that will allow them the ability to prosper and that will allow their families to grow up with the opportunities that they might not have had in their home country. And yet we deny so many people that opportunity and as a country we deny ourselves the ability to have the strength that they would bring to this economy and this country going forward.Over time that will change. In 50 years’ time we will not have these kinds of debates. As you have seen a globalised world evolve you will see a globalised capital world of talent evolve. There will be no limits between countries around human capital; it will be something that will travel freely between countries as they all strive to get the best people to come to their country. For New Zealand it is also important that we actually take part in that process. Imagine the city of Auckland at 4 million to 5 million people being competitive with Sydney and Melbourne. Imagine the cities of Hamilton and Tauranga at 500000 or 600000 people. Imagine if we built a city between Hamilton and Auckland. Imagine those kinds of changes which would arise if we had a greater immigration policy. That is the future of building economic growth in this country through having a more modern and progressive approach to our Government to our planning and to the development of our people.Those people will come with energy passion and desire. They will come with the ability to work hard. They will come with a desire for education. They will come with a desire to make their children have the best opportunities. That is the future of New Zealand. That is an opportunity where we can leapfrog our neighbours as well. Many countries will fail to take advantage of that opportunity. They will have situations where they are very restrictive in their approach to their country’s population growth and that will limit their ability to grow as an economic base. It would be sad if any party in this House were to take that approach because that would be to deny New Zealand our future and it would be contrary to any good economic judgment and that party will not be here in 50 years’ time. So that is why we will not have to worry about that.Dr DAVID CLARK (Labour—Dunedin North):This is the Government of gerrymandering “John-mandering” and “Joyce-mandering”. It is a Government that is failing to achieve its own export goals as it meddles in the economy looks after its mates and fails to produce a vision for New Zealand’s future that can take the country forward. We have seen Rod Oram’s column on the weekend drawing attention to the Government’s failure to achieve its own target of having 40 percent of our GDP being exports. The Government started at 30 percent and it is going backwards rapidly. It wanted to achieve 40 percent by 2025. Now having admitted failure on its path to that target it is talking about revising the target downward. That is how desperate this Government gets. When it fails to achieve targets it starts wanting to revise them downwards.This is a Government that is out of touch and out of ideas. The dairy price drop has hit it hard and it will hit the dairy industry hard but this Government has got to stop blaming the dairy farmers every time the economy gets tough. That is what they do over there on the Government benches. The members blame the dairy farmers every time the going gets tough for them. Well it is not the dairy farmers’ fault. The dairy farmers take on the risk every day and they do it because they have got skin in the game and because they believe in their businesses. But this Government has failed to diversify the economy so we lurch from one commodity price boom to the next.The dairy price has dropped an astonishing 51 percent since February last year and that leaves our economy vulnerable because this Government has failed to diversify. It is shifting our product mix from value to volume. By its own admission it has changed the statistics that it uses to measure our export success away from the value of the products we are selling to the sheer volume. Probably it was doing that in an attempt to make itself look good but it has got egg on its face now.Of course the challenge for this Government is that it is not going to achieve that target and now that it is trying to dress it up and the public knows that it is trying to dress it up it has got to try to introduce another spin-doctoring effort. Of course it has the ministry for it. The Ministry for Business Innovation and Employment is struggling to battle “Team Joyce” in the office of the Minister who so often meddles with its business and its best advice. The ministry has 50 spin doctors sitting there across the road; there is $5 million worth of salaries sitting with the spin doctors across the road. And it probably needs it to be honest because this Government has meddled so much in its affairs that it is very difficult for the ministry to achieve the targets the Government has set—that 40 percent of GDP.Asked whether it was achievable the chief executive said it was an aspirational and ambitious target that is useful to aim for. But he could not say that the ministry has full confidence it can be achieved as so many factors are beyond the Government’s control. This is a Government that has cheapened the word “aspiration”. In this Government’s eyes it now means unachievable and that shows a Government that is out of ideas. It is thick on spin and low on solutions. In fact Steven Joyce used to be considered the “Minister for Everything” and now we see that he has the reverse Midas touch. He used to be the man with the pitch. He used to be the pinch-hitter—the man with the pitch. Now everything he touches turns to a shemozzle. That is a man who has got no ideas and sees our economy going down the gurgler.The CHAIRPERSON (Lindsay Tisch): Order! Come back.Dr DAVID CLARK: I come back to many of the examples of this behaviour in respect of the Ministry for Business Innovation and Employment and in respect of economic development with Skycity being the most infamous of them all. It is where the Minister met behind closed doors with one of the bidders for the convention centre—The CHAIRPERSON (Lindsay Tisch): Order!Dr DAVID CLARK: Mr Chair this was covered in the annual review. As you will understand questions were certainly raised about the probity of that and in the words of the Auditor-General the deal being neither transparent nor even-handed. It was certainly something that came up in the annual review and that particular dirty deal—the Skycity deal for the convention centre—is an indictment on the National Government. That deal was supposed to produce by an independent report 18 net jobs for the economy. That was when it was still an international convention centre. Of course it has been scaled back. It may no longer produce 18 net jobs for the economy. The Government needs to front up and tell us how that has changed with time.Of course this is the Government that brought us Oravida. It is the Government of disgraced MPs teapot tapes and the Government Communications Security Bureau. It is a Government that is failing to meet the promise it set itself of higher standards.Hon NIKKI KAYE (Minister for ACC):I am very pleased to take a call in this new debate around services for business because what we know on this side of the Chamber is that in order to have decent services for businesses and for many Government departments to be delivering initiatives that create wealth in New Zealand we need a good business environment. That means Resource Management Act reform that means labour reform and that means projects like the International Convention Centre all of which members on the Opposition side of the Chamber opposed. So for them to stand up and lecture us on services for business when they have opposed Resource Management Act reform argued for massive increases in the minimum wage opposed the International Convention Centre opposed major infrastructure projects and advocated for increasing a whole lot of taxes is actually not fair.We know on this side of the Chamber that we have got a range of initiatives—which have been set out in a number of these reports by these ministries—that we are doing. They include as I have already mentioned $326 million around National Science Challenges. They include major infrastructure investment. But the one that I want to deal with was just dealt with by the previous speaker David Clark—that is exports. So again we are getting a lecture from the Opposition around trade and exports. Well let us actually look at the facts. If we look at the facts in terms of increasing exports our exports have increased by 16.73 percent since 2008. Also we have engaged in several major initiatives. We have got the Chinese Taipei agreement which came into force on 1 December 2013. That has seen New Zealand exports grow by 17.9 percent.Then we had a lecture around diversification of exports. Well actually—and I know that Mr Joyce has been saying this in the House a number of times—although primary products have been a major factor in this increase we have seen growth in other sectors. For instance in the IT sector we saw 9.4 percent growth in the 10 years to reach $723 million. That is significant growth in that area and part of that is actually a range of initiatives that we have been involved in. We have been involved in investing a whole lot of money around the skills and training in some of these sectors. That has been not only in our tertiary sector and the investment we have seen there; we have also seen other initiatives in New Zealand around things like the Wynyard Quarter Innovation Precinct. All of that is about supporting that information and communications technology sector to ensure that we have that diversification.We also need free trade deals and no one has a better record than this Government. Whether it is Chinese Taipei or whether it is Korea those are things that have been initiated by our Government but we have also seen coming into force the Chinese free-trade agreement. And just to give you some figures on that under our Government merchandise exports to China have almost quadrupled from $2.5 billion in 2008 to $9.9 billion in 2014. Again I was with the Prime Minister in China. He has been incredibly active in that relationship and part of trade is actually about building those relationships. So you have on that side the party that says no to everything. It says no to Resource Management Act reform it says no to the International Convention Centre it says yes to more taxes and it says yes to more regulation. We are the party of getting things done like the International Convention Centre like pushing investment in innovation and science funding and like more free-trade deals. We are the party that is sending the country in the right direction. That is the party that advocates for the opposite.Dr KENNEDY GRAHAM (Green):The Foreign Affairs Defence and Trade Committee’s annual review of the Ministry of Foreign Affairs and Trade’s performance and operations for the year ending March 2014 is before us today. The role of the ministry as stated in the committee’s report is it “promotes and protects New Zealand’s interests overseas. It provides advice on international relations works to advance and protect New Zealand’s security and trade interests administers New Zealand’s overseas aid programme”—so says the report but this leaves much unexplored. It does not make clear the extent to which New Zealand in the 21st century regards the promotion and protection of our interests as dependent on global competition or global cooperation—“punching above our weight” to quote various Cabinet Ministers triumphantly returning home. It implies that the Government regards the international community as a potentially threatening environment.The report addressed five major areas: the security situation in Iraq our work on the Security Council Syrian refugees trade negotiations and diplomatic immunity. These are all important issues but the annual review is selective and therefore significant for what is omitted. If this is the legislature’s annual review of the executive’s conduct of our international relations we have a long way to go before we have a comprehensive world view. Where for example is the acknowledgment that the world is now in a global ecological crisis? Where is the recognition that the global population will have increased sevenfold in two centuries after 100 centuries of stable numbers? Where is the recognition of the pressure this is placing on the planetary resources—the scientific work on the planetary boundaries beyond which we cannot proceed if we are to pass on a sustainable world to the next generation having breached four of the nine such boundaries already? Where is the recognition of the latest finding by scientists that there is now a 10 percent chance of the global temperature increase exceeding 6 degrees Celsius which would simply make the planet uninhabitable for human and most forms of advanced life—a 10 percent chance?If these issues seem too huge and too abstract for the Foreign Affairs Defence and Trade Committee of the New Zealand Parliament to address then the question has to be asked: who will address them? Who in New Zealand will address the future of the planet and the fate of New Zealand as a result? Who is responsible for New Zealand’s role in the collective task of global policy-making? If it is not our foreign affairs parliamentary committee who is it?I have just returned from Europe as part of the Speaker’s tour: France Ireland Northern Ireland Poland and Germany. It was a useful visit and the delegation learnt a great deal. One of the main lessons was the sophistication with which European parliaments address foreign policy. They deal with global and regional issues with serious intent: climate change Security Council reform Ukraine the Islamic State of Iraq and the Levant Iran and refugee migration. They are all dealt with in each Parliament’s committees in greater depth than we do it here. And how is the global climate change dealt with here in New Zealand? In the Local Government and Environment Committee.A related issue is the debating style of the parliaments over there. The very physical nature of their debating chambers facilitates consensus through their hemispherical nature and the central podium in the front from which MPs address all colleagues including their own. This compares favourably with our own adversarial structure with two main front benches directly facing each other in trench-warfare style which gives rise to some fairly puerile behaviour from time to time and dysfunctional decision-making. Democracy would I suggest be enhanced by the simple expedient of a bit of carpentry here in the House. Just as we jettisoned the British electoral system in favour of the German model so we should change the British carpentry for the European model.So I suggest three improvements for our democracy: change the physical nature of our debating chamber into a hemispherical shape hold an open debate on foreign affairs once every quarter and ensure that the Foreign Affairs Defence and Trade Committee is responsible for specified global issues including the global commons such as climate change planetary boundaries weapons of mass destruction and others.DAVID SHEARER (Labour—Mt Albert):Keeping on with the topic of foreign affairs the Government has lost its way in this particular area. I look at the comments that were made by John Key just a few weeks ago about a deployment to Iraq. He mentioned human rights and I was surprised because I had never heard him mention human rights before. So I went to the Parliamentary Library and I asked: “How often has John Key mentioned human rights in the course of his time in Parliament?”. The answer was once—once other than in questions. It was just the once when he moved against Zimbabwe back in 2007. It was a big call—a very big call—but not really keeping up with what he was claiming and accusing about going into Iraq. And yet here we are with him about to go to Saudi Arabia where human rights are called discrepancies—discrepancies.I am in favour of a free-trade agreement with Saudi Arabia and the Gulf States but it is our duty and our obligation under the treaties and the various agreements that we have signed up to under international law to make sure that we mention and take that to the table as well. The people of New Zealand are certainly not convinced that we are going into Iraq because of human rights. Fifty percent of them believe we are going there simply because our mates have asked us to and John Key cannot say no like a lot of other things that he does not feel obliged to say no to either.Mr McCully was asked yesterday about Indonesia and the executions and whether we support executions. No of course we do not here in New Zealand. But here is what he had to say about executions. He said that “It is a very concerning situation and we will have something formal to say about it.” When will he say that? When the two people accused are dead? When they have been executed? Probably. Of Nepal with regard to our urban search and rescuers going off to help he said that New Zealand stands ready. That is great except that everybody else left and went there and we were still standing ready. Unfortunately for the good people with the experience that they hold from dealing with Christchurch they did not get to go to Nepal. I believe that as a result of that we were not able to share our expertise and why? It is because we have sat here and dithered.In Vanuatu Cyclone Pam hit on 13 March. On 23 March 10 days later we sent our ship. Australia had already sent a ship. Australia had got its flights into Vanuatu before us. We know that every year cyclones and earthquakes are things that are likely to occur somewhere throughout the world and yet we do not have the ability to operate as quickly as other countries in the world. It is not about a race; it is about getting our act together so that we are able to be down there on the ground doing the job that we know we are good at and as a result the people who are in harm’s way will be able to benefit. We need to pre-position. We need to act. We need to stop dithering. We need to take a firm stance on the issues that this Government is not taking a firm stance on. Human rights is one of those issues. John Key needs to mention human rights more than just when he is about to send troops off to Iraq on an unpopular deployment because he is trying to please his mates.When it comes to the Trans-Pacific Partnership we have the prince of arrogance himself Mr Tim Groser swanning around saying: “I do not need to talk to the country. I do not need to discuss this with anybody else because I know everything there is to know about trade and I can make that decision on everybody’s behalf.” Wrong Mr Groser—you do have an obligation. You do have an obligation to talk to the rest of the country. You do have an obligation to sit down with civil society and actually explain what it is that we are getting ourselves into. New Zealand used to stand for something and now it stands for arrogance and dithering.Hon TODD McCLAY (Associate Minister of Foreign Affairs):It gives me pleasure to take a call in this part of the debate and to talk about foreign affairs and trade which are two issues that are very important to New Zealand and indeed this House.I will just thank the last speaker for his support of Murray McCully and his sterling work almost single-handedly—although Mr McCully is very modest; he would share the credit with others—to get so many countries of the world to recognise the importance of New Zealand and what a fair-minded country we are how we do go out and at an appropriate time in the best way possible speak up for others who are less fortunate than ourselves and to get all of those votes so that we could become a member of the United Nations Security Council for the next 2-year period. That is where many of these discussions will take place and need to take place as well.We got so many more votes than the other countries in that first ballot because of how New Zealand is thought of. It is because the country as a whole is not like some parties in this Parliament. It is not about lecturing other people about just the rights and the wrongs or telling them that they are always wrong and that we as a country are always right. That may be the case in this Parliament sometimes I guess when you feel you must oppose absolutely everything. But I would say to Mr Kennedy Graham—and I do have a lot of respect for him on many of these issues—that I do not think changing the woodwork in this place is actually going to deliver the level of utopia that he hopes for the world and New Zealand’s place in it unfortunately. This is a place for robust debate; it does not matter which direction you are focused on. I advise him to be as critical of his colleagues as he is of the Government because that does not happen very often yet he suggests that in parliaments in Europe that is the case.The Government will do a very good job on behalf of New Zealand in representing all of New Zealand on the Security Council. I do note that Mr Shearer travelled with Mr McCully to the United Nations in New York where the final vote took place. The votes were hardly counted before he put out a press release saying how wonderful it was to be there and claiming a bit of the credit. But we do not mind sharing it and as I said Mr McCully too would share the credit where it is deserved. That press release told us who the Labour Party thought deserved it.When it comes to trade we are a trading nation. We will not raise incomes; we will not have more for the Government to be able to provide to New Zealanders by way of services—the things New Zealanders demand and deserve—by merely trading with ourselves. Indeed if we look at many of the products that we produce in New Zealand we produce too many of them to be able to consume ourselves. Just take dairy for a moment. I know that the Green Party is not a big fan of the dairy industry but if we had to consume all of the dairy produced in New Zealand we would be bigger people. We will increase and promote a better standard of living and quality of life in New Zealand only by trading with others.We are extremely fortunate to sit on the rim of what I think at least will in my lifetime be one of the largest growths of disposable income in the world and that is in the wider continent of Asia. There are a billion people in China and a billion people in India whose incomes every day are rising. We face some choices as with everything but we are a trading nation and we need high-quality agreements to make sure we have good access to these markets so that our producers in New Zealand—and more than that the people who work for these companies in New Zealand—can benefit from preferential access in many cases to a very large group of people who want to consume as their incomes increase the things we are so very good at producing. The only way we get that is with high-quality trade agreements and there have been a number of them.In fact I would recognise the work of the previous Labour Government when it came to starting moving through and concluding a negotiation with China. In fact it was Mr Goff as the trade Minister who did most of that work at that time. I actually feel for Mr Goff at this moment because he knows the importance of trade to New Zealand. He supports good high-quality trade agreements. He knows that you cannot talk about all of the issues around a negotiation at every point in time but he also knows that there is a process for this Parliament to follow when an agreement is negotiated and concluded. The reason I feel for him so much and actually have a lot of respect for him and his lifetime of work around trade is that he now finds that he is in a party that is turning its back on those New Zealand companies and turning its back on the importance of trade negotiation. The Government has been—Sue Moroney: Oh what rubbish.Hon TODD McCLAY: The member says: “Rubbish.” but actually go and look at what your leader says and stand up behind him. So largely the Government—IAIN LEES-GALLOWAY (Labour—Palmerston North):Today is Workers’ Memorial Day. It is the day when working people and business leaders and others come together across the country to mourn and commemorate those who have been lost at work those people who went to work and never came back home again as well as those who have been injured at work. It is also a day to re-energise and re-invigorate the fight to ensure that the living get to work in safer workplaces. Last year 47 people were killed at work. So far this year 10 people have been killed whilst at work.Although I acknowledge that this Government has taken health and safety more seriously in the wake of the Pike River disaster and there is health and safety reform legislation going through the House right now we have to maintain a laser-like focus on accountability for health and safety and on encouraging workers to participate in health and safety and to have their voices heard in the workplace. It is also incumbent on all of us not just to rely on legislation but to carry out safe working practices and to encourage better health and safety practices so that we will see fewer people killed and injured in our workplaces.We have a workforce in New Zealand of around 2375000 people. The Ministry of Business Innovation and Employment is responsible now for the labour inspectorate which is responsible for ensuring that that workforce gets access to the minimum standards and requirements that it is entitled to under legislation. The International Labour Organization has a guideline for how many labour inspectors we should have. As a developed industrialised nation the International Labour Organization recommends that we have one labour inspector for every 10000 workers. With our current workforce that would amount to 237 labour inspectors. At the time of the period that this review considers we had just 35 labour inspectors. I acknowledge that it has now increased to 41. That is less than one-fifth—less than 20 percent—of the number of labour inspectors that the International Labour Organization recommends that we have.Even the Council of Trade Unions in New Zealand has not recommended that we seek to hit that mark of one to 10000. It recommended 2 years ago that we double the number at the time of 35 to 70 and that we double it again so that by now the number of labour inspectors we would have would be around 140. That would be one labour inspector for every 1600 workers. This Government has not made any effort at all to get anywhere near that number.So what we see every day in our workplaces across New Zealand are minimum standards rules around the minimum wage the expectation that workers have a written employment agreement rules around the fact that you are not supposed to dock a worker’s pay if theft occurs such as where people drive away from petrol stations—those sorts of things happen every day because we do not have a ministry or a labour inspectorate that is sufficiently resourced to enforce the legislation that is in place.So I am happy that the Ministry of Business Innovation and Employment is working on issues to do with zero-hour contracts and that the Minister has indicated that he plans to change the law to somehow deal with the issue of people having their pay docked when theft occurs—although it is illegal now; I do not know why the law needs to be changed. All those law changes are welcome as are greater penalties for employers who breach those minimum standards. But my question to the Government is how it actually plans to enforce those law changes when it cannot even enforce the laws that are in place today because it refuses to resource our labour inspectorate and the ministry responsible for it to a sufficient extent so that workers can get the minimum rights they are entitled to. I was talking to a worker just the other day who has no written employment agreement and gets paid for probably 4 days out of the 5 days a week they work. Yet they are scared to take that to the labour inspectorate because they are fearful that they will lose their job and they cannot have that happen in this job market.CHRIS BISHOP (National):I want to focus my remarks on two particular aspects of the debate so far—that is firstly on science and innovation and secondly on internationalisation. It relates to the foreign affairs component of the debate we are having today and the Government’s financial statements. The story of the New Zealand economy and of successive New Zealand Governments really over the last 30 years is of the internationalisation of the New Zealand economy which is an increasing recognition firstly—to be fair to Labour—by the fourth Labour Government and then by Governments from that point that New Zealand cannot sit down at the bottom of the world and insulate itself from global economic trends and from a market economy and cannot put up barriers behind which the New Zealand economy should stand. The future of the New Zealand economy is one that is globally competitive and that is based on price competition where we try to produce goods and services that the rest of the world wants and where we try to be open and accessible to the rest of the world not only in terms of people moving to New Zealand but also in terms of capital that they bring with them.This Government has been very focused on continuing along that path that successive New Zealand Governments have gone on because the future for New Zealand is one where we are increasingly internationalised. That is why this Government is so focused on things like free-trade agreements. We have signed a closer economic partnership with Taiwan. It is why we are so focused—including in the Budget statements that we are talking about and no doubt in the Budget coming up—on concluding the Trans-Pacific Partnership deal. It is a real shame in some ways that really the only party that has a wholehearted and fully fledged commitment to free trade in this Parliament these days is the National Party and the National-led Government. A Trans-Pacific Partnership deal where we can sell more of our goods and services to some of those countries on the Pacific Rim with us like the United States and like some of the countries in Asia would absolutely be in our national interest and I believe that we need to continue down that path. We need to continue to open up markets overseas like where the Prime Minister is at the moment with the Gulf Cooperation Council.Another important thing that the Budget in 2013-14 gave effect to was an increased drive by this Government for international education so we are bringing more international students to New Zealand but also having New Zealand universities do more offshore to earn revenue for New Zealand. For me it is not so much about the revenue that international education brings into our universities although no doubt that is important and we do have a drive as a Government to get that revenue up and to double it by 2025. Actually it is more important than that. It is about the people-to-people links that New Zealand students create when they go offshore. It is about sending New Zealand students into China into Viet Nam and into those ASEAN countries to learn more about those countries and it is about bringing those students from Saudi Arabia and from Vietnam and from—Sitting suspended from 6 p.m. to 7.30 p.m.The CHAIRPERSON (Lindsay Tisch): Members the House is in Committee on the Appropriations (2013/14 Confirmation and Validation) Bill and the question before us is that the reports of the Committee relevant to services for business—accident compensation commerce and consumer affairs customs economic development foreign affairs and trade immigration labour science and innovation and tourism—be noted. Before the dinner break Chris Bishop was speaking and he has 1 minute and 53 seconds remaining.CHRIS BISHOP: I am delighted to take this 1 minute and 53 seconds. When I was speaking before the dinner break I was talking about the importance to New Zealand of international education and making the point that it is not just about the revenue that New Zealand universities and the New Zealand economy gets from international students coming to New Zealand but it is about the building of those people-to-people links that New Zealand gets. Ultimately I think in the longer term that will be the best effect of this Government’s very focused drive to increase international education. It is a good thing that we have Indian students coming to New Zealand it is a good thing that we have Chinese students coming and it is a good thing that we have students from Chile—which Minister Joyce just announced the other day—coming to study in New Zealand secondary schools and universities because ultimately New Zealand’s future is one that is internationally connected in a globally connected economy.I also flagged at the start that I wanted to talk about science and innovation. That is something that I as a resident of the Hutt Valley and a list MP based in that area feel very strongly about because the Hutt Valley is really making a name for itself as a place and a destination built on science innovation maths engineering and manufacturing. In fact in just a couple of months we have the very first inaugural Hutt Valley STEMM Festival—science technology engineering maths and manufacturing. I am really looking forward to that and the first inaugural Technology Valley Awards. This Government has placed a real emphasis on science and innovation. We have Callaghan Innovation based right in the Hutt Valley.We have also placed an emphasis on things like information and communications graduate schools. We heard talk earlier from a Green Party member about how the Government is not investing in things like information and communications technology in fast-growing sectors of the New Zealand economy. Nothing could be further from the truth. The Government’s $28.6 million investment in Budget 2013 and Budget 2014 in information and communications technology graduate schools is a testament to that commitment that we have to growing the high-tech sector of the New Zealand economy. I could go on. I could talk about things like our proposal to allow start-up firms to cash out their tax losses.The CHAIRPERSON (Lindsay Tisch): I am going to call Sue Moroney.SUE MORONEY (Labour):An excellent choice it is too because I want to speak about ACC in this debate on the annual reviews. I want to start off by saying something that I never thought I would say in this Chamber and that is that I agree with John Key because John Key has claimed that the surplus is now an artificial target. Well boy oh boy is it ever artificial. It is so artificial that those members are using smoke and mirrors to try to obtain a surplus and they are still probably going to miss it. The smoke and mirrors that they are mainly using is the overcharging of ACC levies to every worker and every company in New Zealand and the Government knows it.The Government by its own admission—by its own admission—ignored the recommendation made by ACC itself to drop the ACC levies. It ignored that recommendation because it wanted in Judith Collins’ words to “get to surplus”. So let us just investigate what that means because that is what the select committee did when the ACC board came before it for its annual review. We asked the ACC board what the impact was of the Government’s overcharging of levies and this is what it had to say. I am actually quoting from the Financial Condition Report 2014 of ACC. It said: “The higher than recommended Work and Earners’ Account levies mean that these Accounts will all other things being equal accumulate further funds in excess of the Board’s funding target.” What that means is that the Government is putting its sticky fingers into the pockets of workers and companies to the tune of $350 million a year—Dr David Clark: How much?SUE MORONEY: —$350 million—that it does not need to cover accidents and injuries because it is using this technique to try to make it look as though the Crown’s books are in surplus. So I agree with John Key; it is completely artificial because of course as we all know the money that is sitting there—the riches that are embarrassing the ACC board which are sitting in these funds untouched—cannot be used on anything else. They cannot be used on anything else in the Crown accounts. They are simply fat sitting in the ACC’s accounts against its wishes by the way. The ACC board recommended substantial cuts to ACC levies but that Government ignored it because it has failed—it has failed—to get to surplus by growing the economy. That would be the traditional way to get the Government’s books into surplus. That is what every New Zealander would want in terms of getting to surplus.New Zealanders want to get to surplus because they want to see a growing economy that delivers that. They do not want to see businesses and workers ripped off to the extent of the $350 million that they are being overcharged in ACC levies in order to try to get to surplus yet it looks as though the Government is still going to fail to get to surplus even though it is using this false method to get there so badly has its fiscal credibility plummeted. A lot of credibility has plummeted over the course of the last few weeks. John Key’s credibility I think lies in tatters but so does the National Government’s financial credibility. There is no doubt about that.In those burgeoning accounts in the work account—that is the account that all businesses pay into—there is 140 percent of what is needed to pay for accidents and injuries sitting in there. In the earners account—the one that workers pay into—130 percent of what is needed is in there. After the gradual process injuries are taken into account there is still more than is needed sitting in those accounts.Who is out of pocket? Well it is the companies and the workers. Here is the bizarre thing about it: if those companies and those workers had their money back in their pockets rather than being overcharged in ACC levies that would drive economic growth because they would be out spending that money. Companies have said—they have told me—that they would be using that money for research and development for giving their workers a wage increase and for employing more workers. An independent report said that they would be using it for up to 700 more workers in the economy. That is the bizarre thing about what the Government is doing.Then there are the motor vehicle levies.JAMES SHAW (Green):Tēnā koe. The 2013-14 annual review of the Ministry of Business Innovation and Employment outlines activities that the ministry has undertaken in support of the Government’s economic development strategy of increasing deep-sea oil exploration fracking for gas and coal extraction. This particular plank of the Government’s economic strategy has a number of consequences. First of all it increases our dependence on oil imports which is currently costing the country about $5.3 billion a year and is contributing to our balance of payments deficit. Secondly it decreases our resilience to global shocks such as fluctuations in the price of oil and the risk of stranded assets. Thirdly and most important it adds to New Zealand’s contribution to greenhouse gas emissions globally which are of course in turn increasing climate change.Climate change is a significant drag on the New Zealand economy. New Zealand’s worst storm in 60 years in 2013 left 30000 Wellington homes without power—some for up to a week—and set the city back $4 million in direct clean-up costs. Around the country it resulted in over $31 million in insurance claims. But that pales in comparison with the hit that we took as a result of our worst drought in 70 years. Scientists from the National Institute of Water and Atmospheric Research Ltd and Victoria University of Wellington found in a peer-reviewed study that the severity of the drought was due to climate change. This drought cost the New Zealand economy over $1.5 billion. Jobs are being lost in the tourism sector as glacier melt does not just melt the glaciers but also eradicates the businesses that are guiding tourists up to them. An industry that is close to my heart personally—the snow sports industry—is under threat as snow cover retreats up the mountains and the seasons get shorter and this will worsen over the coming two decades. I note that the Minister of Tourism is completely silent about these job losses in his sector and about the challenge facing this important part of New Zealand’s tourism sector.We are already paying the price of climate change. Farmers are already paying the price of climate change. Our tourism operators are already paying the price of climate change. Top Kiwi scientists are telling us that we will be experiencing these worst ever - type of events every single year—longer deeper droughts; extreme rain and floods; incredibly powerful winds. The thing is while we are investing in sunset industries that expose New Zealand to ever-increasing risk we are missing the economic opportunity of a lifetime—an economic opportunity that is taking the rest of the world by storm so to speak. The global renewable energy market is estimated to be worth about $20 billion by 2020. Why is exporting our already extreme competence in this area not a core part of the Government’s economic development strategy? The global industry for converting waste into value is estimated to be worth about $200 billion and New Zealand is nowhere to be seen. Upgrading every New Zealand home to be thermally efficient would save us around $800 million a year in unnecessary energy costs and would increase our resilience to extreme weather events. Investing in distributed energy via a world-class smart grid would save us about $3.6 billion by 2030 and would turn people who currently consume and spend into people who produce and earn.This is just a sample of the opportunities that we could be taking up and participating in. If we did we would be more resilient and more self-sufficient and would have a better balance of payments. But most important when it comes to climate change we would be part of the solution and not part of the problem.Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs):Thank you for the opportunity to speak. Over the dinner break I have been catching up on the National Business Review and I came across an interesting article in relation to the latest IMF World Economic Outlook which estimates that advanced economies are expected to average 1.5 percent annual GDP growth over the next 5 years from 2015 to 2020—1.5 percent. New Zealand a developed country is expecting to grow on average 3 percent over the next 3 years so at double the rate at which the IMF is expecting the rest of the OECD countries to be growing. That to me exemplifies why I am so proud to be part of this Government—its economic record is second to none and it is doing very well.The question is why growth is so weak in so many countries around the world. The answer is that investment is sluggish and that is because businesses particularly around Europe and in many other parts of the world at the moment lack the confidence to invest. That is a puzzle because when you look around you see almost negative interest rates in some parts of the world. Money is cheap and yet businesses are still not investing significantly to grow their economy. The puzzle is why that is and it is because there is a lack of confidence. To me the best thing that a Government can do anywhere around the world is provide stable predictable government. That leads to confidence and that is why you get businesses growing and investing and it is investing that leads to jobs. When we look back over the last year a year in which 80000 jobs were created in New Zealand we see that we are in the middle of a jobs boom in this country and every family around—Dr David Clark: Why is unemployment higher than it was during the recession?Hon PAUL GOLDSMITH: Well 80000 jobs were developed in the last year and 217000 jobs were created in this economy in the last 5 years and it is those jobs that are enabling young men and women in this country to be able to get up in the morning and go to work and come back with some money in contrast with so many other young people around the world at the moment who are facing high levels of unemployment. That is something that I am proud of.I want to focus on the services to business area which we are supposed to be focusing on in this period and the areas that I am responsible for—particularly in the financial markets where we are working hard particularly with the significant changes in the Financial Markets Conduct Act in the last year which we are bedding in this year. The most important thing that businesses need is access to capital so that they can grow. We are hoping to build confidence in capital markets in New Zealand by improving the quality of disclosure in respect of investments and creating a regime that can build confidence in investment by strengthening the governance of financial products—and we have done that in many detailed ways—and thirdly by enabling more innovative and flexible methods of capital raising.We have seen some real progress being made in the crowdfunding area over the last few months which is opening up a new avenue for smaller fast-growing countries to access capital to grow. We are expecting the next market to develop in the stock exchange which will provide a new opportunity for middle-sized businesses and so on and the programme develops so that those businesses have more access to capital and can grow. We want financial markets to be supported by clear predictable rules that enable investors to make confident judgments about risks and returns.Related to that is the review of financial advisers that we have got under way at the moment. We have had the terms of reference out for the last few months and I expect to be bringing some suggestions over the next few months in the area of financial advisers which again is a very important area. New Zealanders have been in the habit of investing most of their money in residential property. That is a good thing for many households but we want to enable New Zealanders to feel more confident to invest in financial products and the financial advisers’ regime is an important element in that.I do just want to touch again briefly on competition law because if we are trying to raise living standards in this country we can grow the economy but we can also make each dollar that people have go further by having a competitive domestic market in all sorts of industries across the economy. That requires good competition law which roots out cartel behaviour and deals effectively with the misuse of market power and that is why we are at the moment bringing through our cartels legislation. We are also going to be reviewing section 36 of the Commerce Act.Dr DAVID CLARK (Labour—Dunedin North):Well we have heard another speech from a tired arrogant out-of-touch Government. The Government has the rhetoric but it does not have the ideas any more. We hear about capital markets reform and we are seeing that it is not happening the way it should be. This Government is a Government that reads the National Business Review in the dinner break rather than talking to ordinary New Zealanders who know that this country is struggling to get ahead and that the ordinary people who are working hard are being left behind. When we do see some signs of economic growth—some tentative shoots—it is the people in the middle who are missing out. It is a tired out-of-touch and arrogant Government that is failing to achieve its own targets.I talked in my earlier contribution about the failure to achieve growth in exports as a proportion of GDP. That was discussed extensively in the annual review that I was a part of. This Government set itself the goal of shifting from 30 percent of exports to 40 percent of exports as a proportion of GDP and that number is something that it is now in fact trying to retreat from because it cannot achieve its own targets. It has also talked about achieving surplus for a couple of elections now. It is about to have its seventh Budget and will fail to reach surplus yet again. It is failing to achieve its own targets yet again. New Zealanders are losing trust in the promises of a Government that always promises jam tomorrow and has failed to deliver.I want to talk about regional development which was another thing that came up in the “MBIE” annual review. The OECD says of course that there is—Sue Moroney: “Mobie”.Dr DAVID CLARK: “Mobie”—my colleague corrects me. The Ministry of Business Innovation and Employment the great white whale. We know that regional development should be a focus for this country and yet people in the regions are feeling neglected and they are being neglected. We see a tale of a two-speed economy emerging as the Government neglects growth in the regions and we cannot afford it. Everyone in Auckland agrees as well that we cannot afford the regions to be left behind. The OECD says that the way to build economic growth in developed nations is to lift the skills of the lowest-skilled workers in the regions. It is the most cost-effective way of achieving economic growth. We have seen a Government without a plan happy to let a two-speed economy emerge as it takes its hands off the wheel of the economy.I want to talk a little bit about the way in which those statistics play out. In Northland recently we had an election and the Minister for Economic Development said there was a unique set of circumstances there that caused the thumping defeat of the National Party in Northland which had previously held a huge surplus of votes. The people in the regions are saying: “We are not happy with what’s happening.” They have voted out the National Party in Northland. But it is not a unique set of circumstances—and this is the point I want to make—because in Northland people are struggling and it is tough there as unemployment is around 8 percent. But in the Manawatū and Whanganui regions it used to be around 3 percent and it is now 9 percent—higher than in Northland. That is hardly a unique set of circumstances. In the Waikato they used to have a 10 percent premium in real median weekly wages over Northland. They used to get paid more in the Waikato than they do in Northland in real weekly wage terms. They do not any more—they do not any more. Northland has caught up. It is getting worse in the Waikato because the commodity price bubble is hurting. We also see that in the Hawke’s Bay and Gisborne it is actually worse again. They used to have a higher real median weekly wage in Hawke’s Bay and Gisborne than in Northland and now they have a lower real median weekly wage than they do in Northland. Again it is hardly a unique set of circumstances. Talking about the West Coast and Tasman unemployment and weekly wages are hurting there too.The people in the middle are struggling in New Zealand and this Government has no answers. It is out of touch and it is leaving them behind. It is happy to get on with its meddling and its tutu-ing around—adjusting the settings here and there but sailing on while Rome burns. We have seen this with of course the gerrymandering the “John-mandering” and the “Joyce-mandering” that I have talked of earlier. The Skycity deal and what we see going on there is what the Auditor-General has described as neither transparent nor even-handed. It is a deal done behind closed doors that the Treasury was suspicious of and that looks set to introduce very little if any economic growth for New Zealand. That is the Government’s big flagship economic growth project. This is a Government that is out of ideas. It talks about unique sets of circumstances. It has every excuse in the book but actually it is out of touch and New Zealanders are losing faith in this Government.It is about photo opportunities. We have heard the pre-announcement for the Budget of $20 million a year in extra research and development spending. That is a drop in the bucket in research and development terms. It will buy the Minister a few more photo opportunities with his hand-picked favourite companies but it will not boost research and development in this country which is well below the OECD average.DENISE ROCHE (Green):I rise to take a call in this debate on services for business and I am going to direct my remarks to WorkSafe New Zealand. Today is Workers’ Memorial Day so it is a good time to reflect and assess whether our industrial relations framework and the mechanisms that the Government has to support healthy and safe workplaces are fit for purpose.Over the last 5 years 287 workers went to work and did not come home. Last year in New Zealand 47 people died at work and that was down from 2013 when 57 people were killed. It is a terrible reminder of what can happen when people go to work and they do not come back. In the last year we have already had 10 workplace fatalities. These figures are provided by WorkSafe New Zealand. It says that the actual death toll could be higher because workers who are killed on the road in aviation accidents or on the sea are investigated by Maritime New Zealand the Civil Aviation Authority and the police. Each death is a personal tragedy.Today I went to Canterbury for the commemoration of Workers’ Memorial Day there which was a very heartfelt and sad occasion. It was today that we remembered the death of Lyttelton Port worker Brad Fletcher and the deaths of the two Work and Income workers Peggy Noble and Susan Cleveland. These are the people behind the statistics. The grief that their families and friends feel is raw and it is real.As well as the social costs there is the economic cost. WorkSafe New Zealand suggests that the cost of the death rate is a conservative $3.5 billion each year. Over the last 5 years there were nearly 28000 serious harm incidents reported—that is people who have been hurt seriously at work—and it estimates that that is about just under 6000 people per year. On top of that it says that there are between 600 and 900 people who die every year from diseases that were caused by long-term exposure to harmful influences.Our health and safety record is nothing to be proud of. A New Zealand worker is twice as likely to be killed on the job as an Australian worker and four times as likely to be killed on the job as a worker from the UK. This is not because the work is different. The work is the same. It is just that the culture is different the laws are different and I have to say the industrial relations framework is also different.I acknowledge that there is legislation in front of the House at the moment that reforms the health and safety laws and I am hopeful that that law will introduce more emphasis on employers on corporate bodies and on owners to take responsibility for safety on the job. However I remain convinced that little will change unless workers themselves are empowered to be safe at work and to be able to speak up about potential risks and hazards.Workers who work in a place with higher workplace democracy have better health and safety records because they are not afraid to speak up about the hazards or the risks that are present on the job. But sadly this Government undermines health and safety practice that is good by creating an industrial relations environment that pits worker against worker and creates a workplace climate of fear. It has done that through the introduction of youth rates the 90-day fire-at-will legislation and the changes to the Employment Relations Act that make it harder for workers to join a union or to negotiate collectively. A poor health and safety culture thrives when workers are insecure about their jobs and when precarious work and zero-hour contracts mean that they are not going to kick up a fuss about what is going on in the job in case they do not get rostered back on again.We know and we have seen it time and time again that workplaces with high union membership and good workplace democracy are safer workplaces and we just have to compare the Huntly mine with the Pike River mine and what happened there. I do want to acknowledge the sterling job that WorkSafe New Zealand is doing. Thank you.MARK MITCHELL (National—Rodney):I would just like to open by saying that I would challenge the Labour Party and the members opposite—the next caller—to get up and instead of what we continue to hear tonight which is negativity and attack actually articulate what the plan is.Hon Ruth Dyson: What are you hearing? Tired old Government—out of touch and arrogant?MARK MITCHELL: The Hon Ruth Dyson just played right into the point that I wanted to make which is the fact that when we come to this Chamber we should come here with aspiration. We should be talking with aspiration and we should have aspiration for our country and for our nation. This is the type of language that I hear throughout the night from the Labour Party from the Opposition benches: “tired” “left behind” “arrogant” and “failure”. I hear it time and time again. That is not the language of aspiration. That is not the type of language actually that this country needs.I want to come back to something that my colleague the Hon Paul Goldsmith said the point that he made earlier tonight and that is the fact that he said that when we went into the global financial crisis and we went into it in a world recession what we really needed was strong leadership. We needed leadership that knew what had to be done to get us through that and to protect and help those who were most vulnerable. I am very proud of this Government and what it has achieved.But to achieve stability it actually helps if you have one leader and I am very proud of the fact that we have had one of the best world leaders that any country could have asked for through a global financial crisis and through a world recession—that is the Rt Hon John Key. If we look across at Labour if we look across at the Opposition benches look at the leadership that they have provided over the last 6 years. Let us look at the churn rate. We have had the Hon Phil Goff—gone. We then had David Shearer come in. David Shearer whom I have worked with on the Foreign Affairs Defence and Trade Committee is a quality man who has got a very good track record and a proud record. What happened to him? What did you do to him? Gone.The CHAIRPERSON (Lindsay Tisch): Order! Come back on to the debate.MARK MITCHELL: Cunliffe and Little that is right a constant churn—but you are right Mr Chairperson. I will come back to the bill.I want to speak about the Ministry of Foreign Affairs and Trade. I want to acknowledge all the staff and all our people who are employed around the world and working in New Zealand’s interests. I especially want to comment and thank and acknowledge the Ministry of Foreign Affairs and Trade staff who have been dealing with the recent tragedy and earthquake in Nepal. I spoke with a father who has a 19-year-old son over there at the moment and he said that they have been nothing but fantastic. The communication has been very good. They have located him. They have reassured him that he is OK and that he is safe. That seems to be a constant theme in terms of what they are doing and how they are performing. I want to acknowledge them.I want to acknowledge Minister McCully again and the team at the Ministry of Foreign Affairs and Trade and the likes of David Shearer who work very hard for a huge achievement for us in terms of credibility and presence on the world stage and for being successful with achieving a seat on the United Nations Security Council.I want to acknowledge the people who work in the trade sector along with our Minister and the free-trade agreements that have been very very successfully negotiated over the term of this Government. We are a small country. We are a small trading nation down the bottom of the world. The future of our country relies heavily on how well we continue to trade with the rest of the world. That is why these free-trade agreements are so critically important to us. I do want to acknowledge Phil Goff and the Labour Party for the work that they did on the free-trade agreement with China and the way that we picked that up when we came into Government. It has been very successful and it continues to be very successful for the GDP growth of our country.I want to just quickly refer back to something that the Deputy Prime Minister and Minister of Finance highlighted. I think it is something really worth noting. That is the fact that even though the milk powder price has dropped off—and unfortunately that is something that we cannot control—our GDP is still very strong and continues to grow. What that would show is that there actually is a lot more diversity in our economy than we realise. I just wanted to acknowledge that point also.I just wanted to very quickly touch on the deployment to Iraq. I know that that is close to all our hearts as our servicemen and servicewomen from the Defence Force arrive in Iraq.Hon ANNETTE KING (Deputy Leader—Labour):The member who has just resumed his seat Mark Mitchell was disappointed that we have not spoken in the language of aspiration—that members on this side of the Chamber have been pointing out that we believe that the Government has become arrogant and out of touch that it has lost its way and that it has been breaking promises. We do not resile from that Mr Mitchell. That is our job—to point out the failures of this Government. It gets plenty of sycophantic endorsements from its own members of Parliament who can find absolutely nothing wrong in what it does. I just have to remind Mr Mitchell when he asked what we have had in leadership over here—well let me just say: Jim Bolger Jenny Shipley Bill English Don Brash John Key. I can say that there were five leaders of the National Party before you got this Prime Minister. So when you quote history you need to just look a little bit further back because you will find it might come to bite you in the bottom.I would say to the member thank you for recognising some of the work that a Labour Government did including free-trade deals but I would have also appreciated it if the Government opposite could one day acknowledge the work that Labour did in terms of the management of this economy through Michael Cullen the very man you have made chair of the New Zealand Post Group because he was so terrible as Minister of Finance you wanted him to run New Zealand Post. Of course we know the reason he was made the chair of New Zealand Post is that he was such a good manager of the economy.I want to point out to the members opposite where I think there is a real problem in this annual review and that is in the area of health. I am very concerned about what is happening in health. I have sat through the annual reviews—The CHAIRPERSON (Lindsay Tisch): Order! That is the next debate. Health does not come under this one.Hon ANNETTE KING: This is the general debate on—The CHAIRPERSON (Lindsay Tisch): No no—health comes next in theme No. 2.Hon ANNETTE KING: I thought we could do any theme under the one heading.The CHAIRPERSON (Lindsay Tisch): No I have already indicated to the Committee what is included in this debate—health does not come under this one. It is in the next one.Hon ANNETTE KING: In that case Mr Chairperson—Hon Member: The party that was in touch with the people would do a better job.Hon ANNETTE KING: I beg your pardon? Sorry Mr Chairman I never heard your ruling. The understanding we had was that under the themes that we are doing—The CHAIRPERSON (Lindsay Tisch): No no—[Interruption] Order! When we started this debate at 20 past 5 I indicated clearly the seven themes. There are going to be seven themes. We are on theme No. 1. When we started after dinner at 7.30 I actually read out once again what those themes were. We are debating the relevant services for business: accident compensation commerce and consumer affairs customs economic development foreign affairs and trade immigration labour science and innovation and tourism. Those are the themes that we are on. Health comes into the next debate.Hon ANNETTE KING: Thank you Mr Chairman. Unfortunately not everybody sits listening to every word that is said in the Chamber at 5.20 and at 7.30—some of us actually were at other functions. So I apologise to the Committee for not speaking on the right area.I would like to speak about labour and that is under this area I am told. We know that when we left Government we had one of the lowest unemployment rates in the world. We did that through sheer hard work and good management of the economy. We acknowledge the Government went through a global financial crisis but we are now talking about our seventh year on. This Government cannot continue to blame the global financial crisis for everything that is wrong in New Zealand. Whenever it goes wrong it says: “Oh but there was a global financial crisis.” Remember the Prime Minister told us 5 years ago that the global financial crisis was over—that it was finished. But John Key has not delivered on his promise for jobs in this country. He has not delivered.What worries us is that when you look at those unemployment figures and you look in the regions of New Zealand you have to be concerned about those who are not getting jobs particularly our young people. You need only to see some of the figures—the number of young people who are missing out because this Government will not focus on the fact that the concentration should be on getting our young people into work. The Government talks about what it has done but I have to say that it has been abysmal particularly for Māori and Pasifika youth in this country. We ought to worry about that. That is a generation that is going to miss out unless there is a greater focus put on it.We also know that under the labour portfolio this Government has been very miserly when it comes to the minimum wage. When we promoted a minimum wage that was close to the living wage this Government had plenty of excuses why people should not be paid enough to live on. I would tell those members to go and spend a day with home-care workers in this country who are paid the minimum wage looking after our old folk doing work that is difficult—Reports noted.CitizensThe CHAIRPERSON (Lindsay Tisch): The question is that the reports of committees relevant to services for citizens—education health housing senior citizens and social development—be noted. We need a—[Interruption] We cannot move if we do not have a Minister in the chair. All right.ALFRED NGARO (Chairperson of the Social Services Committee):I rise to take a call on the services for citizens. The focus of the appropriation debate for this year has been to try to sort of ensure that we increase our ability to have debate that focuses on the issues that are very important. I just want to make mention of the comments by the Hon Annette King that talked about Māori and Pasifika in particular—a generation that she has commented on and that she feels that we are locking out. I want to hold the previous Government to account for those very words because when you talk about that—let us talk about Māori for instance. When it came to Treaty claims—members opposite do not like this because it came after a whole lot of issues around the foreshore and seabed. So they are all silent. They are very quiet because they will know that when they talked about issues for Māori they did not deliver. Issues that were delivered on health education and welfare—you do not want to go there because you know that is a fact. The truth is this. The truth is this—[Interruption] The rest of New Zealand will hear this mike not those voices over there so I will just keep talking because that is the truth of what is happening here.The second thing I want to point out—let us talk about issues for Māori. Let us talk about Treaty claims. How many Treaty claims were resolved by the Labour Government and would have benefitted health education and welfare which are focuses for this debate?Hon Annette King: I raise a point of order Mr Chairperson. Are Treaty claims part of this debate?The CHAIRPERSON (Lindsay Tisch): I am just dealing with this. I am just asking the Clerk specifically whether it comes in here because Māori affairs are covered later on. I have asked specifically whether Treaty claims come under this. I am just seeking some advice. [Interruption] Let me just answer. Before I answer the question about Treaty claims the Business Committee has changed the format for this debate. It has come up with a format as to how we are going to debate the seven themes. The seven themes are identified and the total debate is 7 hours. That is what we are doing. In answer to the point of order about whether Treaty claims are part of this they are not unless you can relate Māori aspirations or Māori involvement back to the headings that I mentioned before—education health housing and social development. If you do that that is fine. You cannot specifically talk about the Treaty claims settlement process.ALFRED NGARO: As I was alluding to in my speech I talked about the impact of those claims—not particularly the claims themselves but the impact that they have on Māori education health and welfare. Again I see under this Government what we have done. That is right: there have been over 42 Treaty claims that benefit health education and welfare. That is what this Government has done. So I hold to account the words that have been spoken over there.Let us talk about Pasifika because I love it when those members want to stand up and speak about this about Pasifika. Let us talk about the whole aspect of education and the achievements. What have been the achievement rates for education in particular? I will tell you what. They are education rates that the Labour Government would be ashamed of. Under a National Government we have increased early childhood education participation. We have increased the retention rates and the completion rates at university. That is what we have done. [Interruption] Again I remind Opposition members that the only mike that is heard by the public is this one not their one. So this is what we are doing as a Government. These are the things absolutely. This is what we are achieving. The reality is that it is the facts that speak the loudest—it is the facts that speak the loudest to this.These are the things that we have done that are important to welfare for our communities and that are truly making a difference. Vulnerable children services are absolutely critical. Under Budget 2014 $16.4 million went around child protection services and the Social Workers in Schools programme is now available to 142000 children. Child abuse statistics—and this has got to be critically important: the abuse statistics for children who are in our community who are vulnerable. We know that in June 2014 those statistics fell by 12 percent. Let us give that a number—2306. Why? Because those are the statistics. That is what is proving different.I want to announce to the public who may be listening to this that this appropriation debate is about what this Government has done previously in the Budget to make a difference. These are the facts that we are talking about. Let us talk about welfare reform because this really hits at the heart. The old adage that keeps coming out of the previous Labour Government is the same old thing which is paying out: they tax and they spend. Under the current Government 1600 people are moving off welfare and into work each week—1600 out of welfare and into work each week. That has got to make a difference. Why? Because the fact is that we are creating more opportunities. Let us talk about the facts again. March 2015 recorded the lowest benefit numbers of any quarter in 6 years. [Interruption] That is right. You can yell and you can shout. But here are the facts just to remind you: a 3.7 percent—or let us give it a number 11060—decrease from March 2014. That is making a difference.Welfare reforms have reduced the expected future time on main benefits by an average of 1.2 years for sole parents and 2.8 years for youth beneficiaries. I just want to be able to clearly say that what this Government is actually about is showing that it cares. Through its welfare reforms it is giving opportunities to get out of dependency and into the work opportunities that are out there. Over the past 3 years the number of young people on the youth payment at age 17 expected to still be on a benefit at age 19 has dropped by 19 percent. These are the things that are really important out there—19 percent.So you can talk and you can bandy it all around but here is the thing that really hurts you the most. For all the condemnation for all that 2 weeks ago what did the polls say? They said that 49.1 percent of New Zealanders still have confidence in this Government. That has got to really hurt the Opposition. For all that it has tried and all the effort and all the fighting and all the banter 49.1 percent still say that they have confidence in this Government to deliver whether it be on welfare education or health.PHIL TWYFORD (Labour—Te Atatū):You know the National Party used to talk a lot about being ambitious for New Zealand. But you do not really hear that very much these days. It used to be so ambitious for New Zealand and nothing illustrates better a tired run-down Government that is out of ideas than Bill English’s comments only a few days ago when he said that there was nothing left undone by the Government in relation to the Auckland housing crisis—there was nothing left undone; there was nothing more to do. But I guess Bill English was kind of right if you ignore cracking down on speculators. Oh and he probably forgot about banning offshore speculators from buying New Zealand houses. Oh and he forgot about building new houses that people could actually live in. He did not mention reforming the planning rules to build more houses and more affordable houses. Oh and he must have forgotten to mention the fact that loan-to-value ratios should be changed so they do not needlessly punish the regions and first-home buyers. But that is only six policies. Other than that I guess Bill English was right and there is nothing more to be done about the Auckland housing crisis.You see this Government on housing is looking increasingly isolated and beleaguered. You saw it in question time today on Bill English’s face. He was tired and worn down and beaten and embarrassed that this party that once claimed to be so ambitious for New Zealand is so patently completely out of ideas and flailing around. You know in the last couple of weeks the Deputy Governor of the Reserve Bank called on the Government to take action to address imbalances in the housing market. The Reserve Bank called on the Government to crack down on speculators. Who would have believed it—that this Government would be so isolated and so embarrassed on housing policy that the Deputy Governor of the Reserve Bank is advocating a crackdown on speculators. According to Quotable Value 40 percent of all property transactions involve those speculators.To rub salt into the wounds of tens of thousands of young Kiwi first-home buyers who are shut out of the market by this National Government which has presided over the worst rates of homeownership in 60 years what did we hear last week but a New Zealand company running ads on the radio in Singapore and Malaysia saying: “Come and invest in New Zealand property because New Zealanders will give you half their weekly earnings.” They said New Zealanders will give you half their weekly earnings and there is no stamp duty there is no capital gains tax and there are no restrictions on foreign speculators bidding up the price of New Zealand houses. So this Government instead of being ambitious for New Zealand is out there on the world stage prostituting our real estate market for all comers. It is saying: “Come on the property speculators of the world. Come to New Zealand and you can buy and sell New Zealand houses for capital gain and these New Zealanders will give you half their weekly earnings.” That is what has happened under this National Government which used to be so ambitious for New Zealand.What did John Key say when he was asked about the comments of the Deputy Governor of the Reserve Bank? He said that Auckland house prices which have increased by $300000 under this Government are not overvalued although there has not been a market correction in 45 years. John Key said: “That’s just the market working. That’s how markets work.” You see this is the currency trader trying to get his head around a failed housing market that has destroyed the dreams of a generation of young New Zealanders and Government members do not care about it because they all own multiple properties themselves.John Key who says there is no housing crisis is completely oblivious to the fact that homeownership rates are the lowest in 60 years; that in Auckland it now takes 50 years to pay off the average house—50 years under this National Government. And that is something that Jami-Lee Ross is proud of: that people are living in garages and cars and caravans and that foreign speculators are making a killing off New Zealand homes. Government members are out of touch they are arrogant and they do not care that the next generation after Generation X and Generation Y under this National Government is “Generation Rent”.The Government’s biggest housing policy has been to blame everybody else. Last week the Prime Minister announced that the Government was going to send letters to property developers complaining that they were not building houses on their so-called special housing areas. So developers are now the problem! The Government has spent the last year blaming the councils because apparently it is all the councils’ fault. It has also said that first-home buyers are the problem. Nick Smith said last week that “people need to be realistic … [it’s] your first home … [it’s] not going to be … in the leafy suburbs of Remuera close to the central city.” So now we have got that developers are the problem councils are the problem unrealistic first-home buyers are the problem—and of course the Resource Management Act is the problem in spite of the fact that under Labour we built 40 percent more houses when we were in Government than this Government is currently building under the very same Resource Management Act.The National Party has been talking a big game on Resource Management Act reform since it was in Opposition. Back in 2006 Bill English and Nick Smith were blaming the Resource Management Act for unaffordable houses. What have they done in 7 years in Government? Nothing. The Government has done nothing about reforming the planning rules to make housing more affordable. It has done nothing about urban growth boundaries that drive up the price of land. It has done nothing about the rules that stop developers building affordable flats and apartments in the leafy suburbs of Auckland. It has done nothing about it. Government members keep on talking about it. It is a joke. They should put up or shut up.The other great fiasco of National’s housing policy is the State house sell-off. John Key announced in January that he wanted to sell 8000 houses in this 3-year term. Bill English thinks it is a lazy use of capital for the Government to own houses even though there are people all over this country desperately in need. There are people living in garages and caravans and paying exorbitant rents for cold damp and unhealthy homes in the private rental market. But this Government thinks that the solution is to sell off State houses to property developers. For the best part of 6 months after the last election it tried to dress up that policy and deceive New Zealanders by saying it was going to sell these houses to the Salvation Army. Well our most respected social agency did due diligence on that policy. It told the public that that policy would not improve the lives of the tenants of social housing and that the Salvation Army would not have a bar of it and the fig leaf of respectability was stripped away from that policy. And now the Government has been forced to admit that if it wants to sell those houses they are going to have to be sold off to property developers and private landlords. What an absolute disgrace.Too often people think that the housing crisis is simply an Auckland problem. Well it is not. It is an Auckland problem when houses go up by $300000 in 1 year. That is a problem and it is a problem for the generation of hard-working young families who only want what their parents and their grandparents had in this country and that was the opportunity to buy and own their own home. That is a broken dream under this National Government. But it is also a problem in other parts of the country. Because of this Government’s complete and utter failure to do anything meaningful about the Auckland housing crisis the rest of the country—the two-thirds of the people in this country who do not live in Auckland—are having to pay 20 percent minimum deposits because the Reserve Bank was backed into a corner by this Government’s failure to do anything about the Auckland housing crisis. Loan-to-value ratios have whacked first-home buyers driven them out of the market and damaged the lives and the economic prospects of regional New Zealanders but this Government does not care about regional New Zealand. That is far from its concern.MOJO MATHERS (Green):I wish to address my comments to the Ministry of Social Development. So apparently supporting vulnerable children is one of this Government’s priority areas. Who could disagree with that? But I find it difficult to reconcile the aim of caring for vulnerable children with the fact that over the last 5 years more than 11000 disabled children have lost access to the child disability allowance—11000 children. I want to ask how slashing access to this vital supplementary benefit helps disabled children. The answer is that it does not. It is penny-pinching on the meanest level.The child disability allowance recognises that there is significant time care and effort involved in raising a child with a disability. It is well established that for many disabled children significant parental time and energy are needed in their earliest years to help amongst other things to develop speech language motor coordination and all these other skills and that as well as the extra time there are numerous associated extra costs relating to caring for a disabled child such as the extra costs of transport to doctors specialists therapy and child care. We also know that more disabled children than those in the general population live in poverty and in part this is because parenting a disabled child often means that a parent cannot obtain full-time work. So for these families the child disability allowance is doubly important. Yet despite all of these facts about the need and the benefits of ensuring that these children are adequately supported the Government is so obsessed with pinching pennies that it is scrimping in supporting our most vulnerable children and families.I have just this week heard from a parent whose disabled preschool child has been declined the child disability allowance despite the fact that expert medical opinion clearly states that the child needs access to significant therapy and early intervention before entering school all of which will involve significant time and effort by the family. It is just one example of many that have come through my office. It is wrong that parents and families are going through so much stress just to access a simple benefit for disabled children. It is clear that the bar has been shifted for accessing the child disability allowance and that that bar has now been set too high and that children with very profound disabilities are no longer able to access this benefit. The Government needs to recognise that it has gone too far and that it needs to fully reinstate the child disability allowance to return it back to how it was so that families with disabled children are not put under more pressure than they already are.The other area where I believe the Government is really getting it wrong is with the welfare reforms. The needs of disabled children need to prevail ahead of parent job seeking and work preparation obligations especially in sole parent households. The obsession with the welfare reform programme is ignoring some inconvenient truths around the care for disabled children. Many early childhood education centres are simply not set up to provide for the needs of disabled children leaving many parents in an impossible situation where either they cannot get their child into an early childhood education centre or their child will have substandard care or they risk losing the sole parent benefit. That is an impossible situation that far too many families are finding themselves in.Hon HEKIA PARATA (Minister of Education):Tēnā koe Mr Chair. Otirā tēnā tātou katoa i roto i te Whare i tēnei pō. I am delighted to stand and make a contribution in this annual review debate under the theme of services to citizens and in so doing assure the anxious Opposition that we remain both ambitious and accountable. We have a set of 10 Better Public Services targets that are well known to the public that hold us accountable every 6 months to what this Government is doing across a range of public services and that are all about the quality of citizenship that New Zealanders can enjoy under this Government.Predictably and appropriately I am going to speak in particular about education and the very significant contribution that all of us know it makes to the quality of life we lead as individuals and that therefore our families communities and ultimately our country—this great nation of Aotearoa New Zealand—can lead. The story in education is a very good one. Kids are starting earlier staying longer and leaving better qualified. That is in every ethnicity. I will be very pleased to talk about the particular achievements by and occurring in both the Pasifika and Māori communities as well as of course among Pākehā Asians and all of those who make New Zealand their home and participate in our education system.That is as much because our Government has invested the most ever into education demonstrating that we put money where our mouths are; in this case in education. In the past year over $10 billion has gone into both early childhood and secondary schooling. When we came into Government—just to remind us of the stark contrast between Labour when it left Government and where we are now—$800 million was what the Labour Government was—[Interruption]Sue Moroney: You should be choking on it too.Hon HEKIA PARATA: How ungracious the member of Parliament Sue Moroney is. I am not choking on it. I am not choking on it. What was happening under her Government was that early childhood education investment was $800 million. Under ours it is forecast to be just under $1.6 billion nearly doubling that investment as well as attending to quality. Let me just tell the member if she is of a mind to actually listen that of the 1500 reviews undertaken by the Education Review Office into the quality of early childhood education provision between 2013 and this year only 12 providers were found to be failing—less than 1 percent. So jumping on this ridiculous bandwagon and saying that we have sacrificed quality for participation is not supported by the evidence but I accept that the Opposition is not in a very close relationship with evidence.We have also increased spending on special education. Again when we came into Government in 2007-08 the spending was $414 million. It is now $530 million and that is supporting 80000 to 100000 young New Zealanders who have special education needs.Kids are starting earlier and that is because we are really focused on how young people get the best start in education. We know that if they start behind too often they stay behind so we have been focused on their starting earlier throughout the system. There is a great story to tell in early education and it is a pity that the Opposition does not have the grace to celebrate that strong start for our youngest learners.Kids are staying longer and leaving better qualified. Here is a statistic for the Opposition. When we came into Government in 2008 Māori students were leaving with the minimum qualification of the National Certificate of Educational Achievement (NCEA) level 2 at a rate of 44 percent. That is what the Opposition hangs its hat on as being the quality of commitment it made to education. Less than half of all Māori students were leaving with our minimum qualification. Pasifika students were doing slightly better at 51 percent. The Opposition can sit there and say it has a proud record in education; that is again disputed by the facts. Under this Government we have had on average a 20 percent lift in both those populations. That is a great credit to those students; to their families whānau and aiga; to the New Zealand education system; and to the relentlessness of this Government which understands that a quality education gives young people more choices than they would otherwise have.We now have Māori achievement at over 63 percent. That is much better but not good enough and we are focused on lifting it even further. That is ambition. Pasifika students have responded extremely well to the initiatives we have embraced together with churches with community groups and with sports clubs. It is now up at 72 percent and climbing under this Government.The Opposition does need to take note that this is occurring throughout the system. It means that more young people are able to get into trades through the vocational education pathways that we have made available through working with industries through working with industry training organisations and through working with businesses and employers to understand what skills they want from kids and then delivering those through the education system.Again we are seeing significant uptake by Māori Pasifika and all New Zealand kids and that is why we are seeing the lift in NCEA level 2 qualifications. We are seeing them staying at school longer. In fact 82 percent of our 17-year-olds stayed at school in 2014. That is great because we know from the evidence that the longer kids stay at school the more likely it is that they are able to leave with a great education.We have got higher confidence in education than we have ever had. UMR Research in its Mood of the Nation report as one indicator said that since it began this series education has been at the highest it has ever been. That is because we are a transparent Government and we are reporting to it at primary schools through national standards every 6 months. We have developed a public achievement framework that lets parents know exactly what is happening with their children every year in every school. The more informed parents are the more they can demand of us. The more they demand of us the more we lift our performance. That is the kind of Government we are.In Rotorua on Wednesday I was pleased to announce as I indicated in the Chamber this afternoon that we now have a further 18 communities of schools bringing that to a total of 29 which is 85000 students now involved in these communities which is where we are investing to lift the quality of teaching and of leadership. We passed legislation this year to establish the Education Council of Aotearoa New Zealand a professional body that will be focused on meeting the needs of the profession and again on joining us in this crusade to raise the quality of teaching and leadership. That will in turn raise the prospects of a great education for each and every one of our young people.We have invested in a teacher-led innovation fund of $10 million which was significantly well subscribed because we understand that by working together teachers know best what will make a difference. Again we put our money where our mouths are and supported that.We are building a nimble responsive and modern 21st-century education system. Not only are we investing in better property but we are as I have indicated investing in better initiatives that support learning. We are in danger of seeing an even greater outbreak of achievement. Is that not great for New Zealand—for our country—for families and for our participation on the global stage?I want to take the opportunity to acknowledge at this time not having done so not only the schools their governors their boards the parents and the kids themselves—who are absolutely at the core of our education system and we completely understand that—but also how well the agencies within the Government are working together. The Ministry of Education the Education Review Office the New Zealand Qualifications Authority the Tertiary Education Commission—all of them understand that there is a pathway from age zero through to university and postgraduate studies where in every year a difference has to be made in order for our young people to attain the kinds of qualifications they are looking for so they can contribute to a more meaningful life for themselves and for their families. Those agencies understand they are here to serve the education sector. They are here to ensure that the Better Public Services targets that our Government has committed to can be delivered. It is all about the quality of citizenship.We have just spent the weekend in Anzac commemorative services. Anzac Day is a significant symbolic event commemorating the contribution and sacrifice that citizens have made on behalf of our country. There is no bigger sacrifice than the sacrifice of one’s life. Our defence forces have fought in wars and managed peace and conflict all around the world and they have done so from a small nation here in the heart of the Pacific. They have done so because they have understood what quality of citizenship means at one end of the spectrum. Education is at the other end as well as housing social development health and other issues that will be covered in tonight’s debate.DARROCH BALL (NZ First):It is a pleasure to rise on behalf of New Zealand First to take this 5-minute call on the service to citizens theme. I think that the title services for citizens is quite apt and let us not forget who the most vulnerable citizens in our society are who need the most help and the most service in their lives and that is our vulnerable children.So I would like to talk about the social development area if I may but before I do I think timing is everything and just today the Productivity Commission released a draft report on the social services. There is an article on the TV3 news website and the title is “Govt social services lacking …”. What the article says is that changes are needed to improve the way the Government provides social services to the most in need New Zealanders. The chairman Murray Sherwin says: “[The] current system isn’t designed to deal with the complex problems facing many vulnerable New Zealanders. Services are designed and commissioned in administrative silos without the full picture of what an individual might need”.What that is saying is that the Government—the way that it deals with social services and the whole process—is out of touch. Government members are making their laws and creating policy and legislation in this Chamber and in their caucus but what is not happening is the interaction with the people and the most vulnerable and how it affects the most vulnerable in our society. That is what the Productivity Commissioner is saying.The commission drafts recommendations and one of the recommendations is to make better use of the data. What we just heard the Minister of Education talking about was Better Public Services targets. Well I would put the question to the Minister: when was the last time those Better Public Services targets were reviewed? When were they independently audited? I can give you the answer. The answer is never. They have never been audited or independently reviewed so how can the public of New Zealand have any faith or confidence in this Government or its social services when the very targets that the Government creates for its ministries and its services to accomplish are never independently audited? What the Minister also said was that that Government is putting the money where its mouth is in regard to accountability. Well I challenge the Minister and I challenge the Government to get all of their Better Public Services standards independently audited and give the public of New Zealand the confidence in their statistics.I would like to focus on the social development area like I said and in particular the Office of the Children’s Commissioner and its report as well as the Social Workers Registration Board report. There are a couple of questions that fall out in regard to the commitment this Government has towards our most vulnerable children. The first one is: what is its priority? What priority does it give to the vulnerable children and what priority does it give to the Office of the Children’s Commissioner so it is able to do its job adequately and properly? The second is: does this Government value the role of the Children’s Commissioner?There are a few things that you can do just off the top of your head to answer that question quite aptly. We have had a few members’ bills that have come through that have not been passed because of that Government. The first was the food in schools bill and that directly affects our vulnerable children. The second is the paid parental leave bill which directly affects our vulnerable children. Instead we have got millions of dollars being spent on a flag referendum. Where are the priorities that this Government is setting for our most vulnerable in our society?New Zealand First of course values our Children’s Commissioner but at the moment the office has got limited resources it has got limited staff and it has got limited funding. This is all coming out of the annual report from the Office of the Children’s Commissioner. But the question is what the expectation is to fulfil one of the most important roles in our society. We have got on the one hand this great expectation from the Government to the Children’s Commissioner to fulfil one of the most important roles in our society but it does not give the resources the funding or the staff to be able to do so. All of the available savings that the commissioner can make have been implemented. There is a pattern of deficit and overspending under significant financial restraints and then you start talking about the cut backs that the Office of the Children’s Commissioner has had to make. What is its current role? What is the current role of the Office of the Children’s Commissioner? It is to provide a social security blanket.CHRIS HIPKINS (Labour—Rimutaka):There was a time when the National Government promised New Zealanders that it was ambitious for New Zealand. Not only have Government members not delivered on their ambition for New Zealand; they have made every other New Zealander embarrassed for New Zealand in recent times—embarrassed for New Zealand. There was a time when John Key promised to raise the standards of Government and raise the standards of ministerial behaviour. How can he promise that for other Ministers when he cannot even deliver on that himself? There was of course a time when National promised to get the books back in order. In fact it declared victory at the last election when it said the books were back in surplus and yet here we are the seventh Budget in a row and the seventh deficit in a row—another broken promise for this National Government. Not only has it failed to deliver one single surplus; in fact it has clocked up the largest Government debt in New Zealand’s history. Let me repeat that. This Government has clocked up the largest Government debt in New Zealand’s history.So what does that have to do with social services? It massively constrains what the Government can do in the social service area when it is making such a shambles of its management of the overall economy. Let us look at some of the promises that Government members have made in the social services area. They promised free doctors’ visits for the under-13s. Have they delivered that? No they have not. They promised better teacher-child ratios in early childhood education for the under-twos. Have they delivered that? No they have not delivered on that. They promised New Zealanders higher wages at the last election. Have they delivered on that? No they have not. No they have not delivered on that promise.In fact you do not have to look very closely at the National Party manifesto from the 2008 election the 2011 election or the 2014 election to find a broken promise. They have literally littered the country with them like confetti because this is a party that says that whatever it thinks it needs to say to get elected with no intention whatsoever of delivering on those promises after the election. This Government has become so arrogant that it simply believes that it is born to rule—that it is the natural party of Government and it does not have to earn the trust of New Zealanders. Well actually it does need to earn the trust of New Zealanders and it is certainly not doing a very good job of that at the moment. New Zealanders have had enough of being embarrassed around the world by this Government they have had enough of having broken promises shoved down their throats and they have had enough of a Government that tells them what they want to hear and then fails to deliver on those things. The Steven Joyce school of politics: ask the voters what they want; give them what they want or maybe not; and tell them you have given them what they want even if you have not actually given them what they want. He misses out the middle bit. He basically asks them what they want and then tries to tell them that they have already got it.Actually New Zealanders deserve better from their Government. New Zealanders are willing to work hard to get ahead. They want a Government that is going to back them and they do not have that in the current National Government. New Zealand parents want a better future for their kids they are willing to work for that and they are willing to do their part to make sure their kids get the best start in life. They want a Government that is going to do the same.I listened very carefully to Hekia Parata’s contribution on this debate when she was talking about education and I recalled the fact that Hekia Parata’s one big idea—her first big idea her one big idea the boldest most audacious idea that Hekia Parata had to improve educational outcomes for Kiwi kids—was bigger class sizes. That was her first major promise to New Zealand parents and New Zealand kids: more kids in every class in front of every teacher. That was Hekia Parata’s first major promise and she had to back down because there was such an outcry from parents. Her second major commitment to the educational community was that she was not necessarily going to pay teachers because she implemented the Novopay payroll system which meant that some teachers waited for weeks and months to simply get paid what they had earned. Forget about pay rises and raising wages; the teachers around the country for months and months just wanted to be paid—because of Hekia Parata’s absolute incompetence. And what was Hekia Parata’s promise to the people of Christchurch? That the Government would stand with them during the tough times. Hekia Parata and John Key’s National Government stood with the people of Christchurch by closing down a big chunk of their schools at a time when the people of Christchurch had already been clobbered by the Christchurch earthquakes. That is how this Government views education.Of course when it comes to education we know that the most significant thing a Government can do is back the teaching profession. All of the words of Hekia Parata in this House mean nothing—mean nothing—if she is not out there backing teachers. It is not all Hekia Parata’s own work in lifting student achievement; it all comes down to teachers and parents. And what have we seen from this Government? An absolute war on teachers around the country a Government that tells parents they cannot trust teachers and a Government that tells the public they cannot trust teachers so much so that they take complete control of the body that regulates the teaching profession. It would not do that to lawyers. It would not do that to doctors. It would not do that to any other major profession. In fact the National Party filibustered in Parliament when the Labour Government tried to regulate the real estate profession more heavily saying that the Government should not do that. It is willing to do that for all those other professions but when it comes to teachers—oh no no Hekia Parata knows best. She is going to hand-pick the people who are going to regulate the teaching profession without any democratic input from the profession itself and that says everything about this Government’s attitude when it comes to education.On the one hand although it says it wants to raise the standard of teaching of course we know how hollow that is because when it comes to charter schools they do not even have to have registered teachers at all. So much for raising the standards of teaching in New Zealand as charter schools do not even need to employ registered teachers at all. Of course the Government is willing to pump millions of dollars more into a handful of charter schools than it would put into any public school in New Zealand so desperate is it to make its charter school experiment work when actually any State school in the country could do amazing things with that money if it was given the opportunity to do so. I want to acknowledge the hard work and dedication of the many many people who make up our education system: the teachers the support staff the principals the boards of trustees and the parents. They are working hard to achieve great things for kids and they are doing it in spite of a Government that does not back them in doing so.Hekia Parata talked about increases in Māori and Pasifika achievement. So here is a simple question for Hekia Parata: if things are getting so much better for Māori and Pasifika young people why is it that they are still the most likely to be represented in unemployment statistics? Why is it that in record levels they are leaving the education system with whatever level of qualification they have and going on to do nothing? No job no further training—they are leaving and doing nothing. Why is that? If the Government’s education platform has been so successful why have record levels of people been leaving the school system to do absolutely nothing? Because if we are going to judge the success of the Government’s education policy then surely the outcome that matters is what happens to the kids when they leave. Is that not the point of the education system—to prepare people for the world that they will enter? And yet we have got record levels of kids leaving and going on to do absolutely nothing because we have got a Government that has failed to create the right environment for jobs and that has absolutely failed to make sure that there is opportunity for those kids when they leave school.We have had 7 years of National in Government and there is still no light at the end of the tunnel when it comes to those big important issues like what kids are doing when they leave school. Because this Government is simply beset by scandal—beset by scandal. It has completely lost track of the things that matter. On the other hand I tell you what I said that there was no light at the end of the tunnel but there is because there is an election in 2017 and the Labour Party will be ready. It will be a very clear contest. It will be a very clear contest between a leader in Andrew Little—whose work can be trusted; who New Zealanders know if he says he is going to do something about early childhood education like John Key did will actually deliver on it; who if he promises better and better outcomes in education will deliver on it—and a leader over there who tells New Zealanders whatever they want with absolutely no intention of delivering on it who embarrasses New Zealand regularly on the world stage and who has got more publicity for New Zealand by embarrassing us than he ever got in his role as Minister of Tourism. New Zealanders will know in 2017 that when it comes to making the choice between a Government on this side that will deliver and a Government on that side that is full of promises with no real delivery—they know exactly what side they will be better off under.Education is so important to New Zealand’s future. Early childhood education and increasing participation is a great thing. That is very good. But increases in quality participation are important. So why is the Government lowering the standard at the same time as participation is increasing?Hon Peseta SAM LOTU-IIGA (Associate Minister of Health):Thank you Mr Chairperson and thank you for the opportunity to take a call in this annual review debate. Tonight I am just going to touch on the health portfolio for which I am the Associate Minister of Health. In the 2013-14 year this Government spent $14.9 billion on health. That is more than at any other time in our history—more than when David Cunliffe was the Minister of Health and more than when Annette King was the Minister of Health. But it is not just about spending money—it is not about spending money. That side of the House thinks that it is just about spending more and more of taxpayers’ money on Government services. No this is about results for patients. It is about quality spending. It is about the well-being of New Zealanders in order to have a better quality of life.Clare Curran: Where? Where?Hon Peseta SAM LOTU-IIGA: I am going to get to that Ms Curran. I will get to it. And it is about some of the promises that we made when we became the Government in 2008. What did we say?Hon Simon Bridges: Tell us.Hon Peseta SAM LOTU-IIGA: What did we say Mr Bridges? Do you remember? We said: “More front-line police.” We said: “More nurses on the front line.” We said: “More doctors.” We said: “More front-line services.” And that is what we did. So we know that in health in 2014 there were 1000 fewer managers than when we took over the Treasury benches. We know that there were over 1000 more doctors. And we also know that there were 3000 extra nurses when we took over. You see it is also about meeting health targets. It is about outcomes. It is not about activity; it is about outcomes. And in terms of immunisation in the 2014 financial year the target for 8-month-old children was 90 percent—90 percent for immunisation. And what did we achieve during that financial year? 92 percent. We met the targets. On the promises that we made to the people of New Zealand: we achieved those targets.The Hon Tony Ryall also set a target for an increase in elective surgeries of 4000 patients per annum—4000 patients per annum. And what did we achieve in 2014?Alfred Ngaro: Tell us.Hon Peseta SAM LOTU-IIGA: I will tell you Mr Ngaro. It was 7300 in terms of extra elective surgeries in 2014.What else is it about? It is about bringing our services closer to home—services closer to home. When I was at the Counties Manukau District Health Board last week—and I encourage members across the aisle to go and visit the clinics to go and visit the health boards—it had a Quit Bus. The Quit Bus is about taking services on smoking cessation out to our communities—where they live where they congregate and where they work. That is what this Government stands for: services closer to home. It is also about strengthening our health workforce. As the Minister for Pacific Peoples I am proud of the fact that we have implemented a scholarship scheme the Aniva Scholarships—over $1 million—in order to promote the participation of Pacific people in the health workforce so that they can contribute meaningfully to health services in this country. I am proud of that and I know that the National Party is proud of that.Ms King is here and she asked about what we were doing for Pacific and Māori health. In terms of rheumatic fever we know that rheumatic fever has been a problem over the years and that it largely affects Māori and Pacific people. We have invested $65 million over 6 years to combat rheumatic fever. Guess how much money Ms King as the health Minister put in on this particular issue. Guess how much. A big fat doughnut—a big fat doughnut. She made no spending in this area. Guess what happened. Here are the outcomes. Here are the results. Here are the results. In 2013 there were 194 cases of rheumatic fever. One year later after applying resources there were 153 cases that were reported. So that is a drop of 25 percent. That is what a Government that is committed to quality health services can achieve. It is also about the work of cross-agencies. Mr Twyford was there talking about housing. Guess what. This Government has insulated 300000 houses and has spent $2 billion on accommodation support. That is what makes a difference.So I say to those Labour members: “Stand up and stand on your record. Stand on your record.” This Government has done more for Pasifika and more for people in the health services than any other Government in history.KEVIN HAGUE (Green):It is a shame that the new style of this debate on the Appropriation (2013/14 Confirmation and Validation) Bill does not permit me to go across multiple portfolios because I would love to talk about the comments that the Minister in the chair the Minister for Pacific Peoples has just made about health. Instead tonight I am going to talk about housing and pick up the comment made by the Hon Hekia Parata that this debate is about the quality of citizenship New Zealanders can expect under this Government. There is a human right to good housing—a human right. It is a basic human need and yet across the broad spectrum of housing issues this Government is failing again and again. Let us see what some of those issues are. Affordability of housing is certainly one of those particularly in Auckland and Christchurch but not isolated to those communities; rental affordability and also security; and the quality of housing that we have in this country—those are three big issues and I will touch on all three of those.First of all on affordability last week we had the Reserve Bank Deputy Governor Grant Spencer talking in quite extraordinary language about the need for central government to step up to the plate saying that the Reserve Bank simply did not have the tools to do the job itself and that only central government could do the necessary things to solve the affordability crisis particularly in Auckland. He recommended a comprehensive range of measures with the centrepiece in fact being addressing the unequal tax treatment of income that we earn from our jobs compared with the income derived from capital gains. He was advocating a capital gains tax amongst a suite of other measures. What we saw from the Government in response to this extraordinary demand side picture painted by the Reserve Bank was a silver bullet solution that was about supply and how it is going to change the Resource Management Act to make supply a bit easier. That is what the Government had to respond to the Reserve Bank with.The median house price in Auckland is now $720000—$720000. The median household income for New Zealanders in Auckland under the age of 35 is under $50000. Housing for that generation in Auckland will never be affordable with all of the consequences that that has for retirement savings. It is a fundamental failure of Government policy to ensure housing supply for those New Zealanders. When we come to rentals I pick up on some of the comments that lead out the Social Services Committee’s report on Housing New Zealand’s annual review: “Housing New Zealand Corporation aims for New Zealanders in high need to have access to a Housing New Zealand property for as long as that need continues.” Well in fact that is a fundamental shift of policy. The point of State housing in the first place was to ensure that everybody was housed not just those in high need. That was what Housing New Zealand set out to do. Housing New Zealand did not use to say “When that need is finished then we no longer provide service to you.” The reality is that Housing New Zealand and the Government used to understand that settling someone’s housing situation might well provide the platform that enabled them to actually take further steps up the ladder further steps in reducing the chaos in their lives. What happens now is that as soon as that person finds a job a tenancy review comes in and out you go. They are plunged back into the chaos of homelessness. It is an incoherent policy that maybe has short-term gains for Housing New Zealand but long-term costs to this country.I just want to mention too the shameful use which is not picked up in the select committee’s review of 90-day notices by Housing New Zealand. Housing New Zealand decides that it wants to get rid of some tenants. It takes them to the tribunal and loses and then it responds by—Hon Anne Tolley: Mr Chair—The CHAIRPERSON (Hon Chester Borrows): I am sorry; the Ministers’ calls have been used in respect of this. [Interruption] I am sorry. I stand corrected.Hon ANNE TOLLEY (Minister for Social Development):Before I go on to talk about social development I just want to make the point that I think that although we all agree that there are huge issues in the Auckland housing market actually the average house price in Kawerau is $53000. And the—Kevin Hague: How many jobs?Hon ANNE TOLLEY: Well there we are you see. I encourage young people to come and move to the Eastern Bay of Plenty or to the East Coast because housing is great the weather is great and life is pretty good. And there are jobs particularly at this time of the year—seasonal harvest jobs and of course the pack-houses of the Eastern Bay of Plenty are going full tilt with our very valuable kiwifruit crop.I am very proud to stand here tonight as a Minister in a National Government that has focused on supporting vulnerable New Zealanders through some of the toughest times that this country has ever seen. This Government has made no apologies for the fact that we have not brought in any austerity measures. We have supported vulnerable New Zealanders vulnerable families and in particular vulnerable children throughout those very difficult times.Even in the last year the Budget year that we are talking about this Government has made significant moves to make sure that some of the most vulnerable children in our community are supported such as the passing of the Vulnerable Children Act and the Children’s Action Plan which listed a whole raft of initiatives to be completed by both Government and the NGO sector and focused on making sure that children have the right—and we are talking about human rights—to grow in a home safe from abuse and that is warm and well insulated. This Government has a good record on that. As I say I am very proud to be part of that Government.In addition to that we are very focused on breaking that cycle of welfare. We are working extremely hard both with sole parents as a group and with people who are able to and ready to go back into the workforce to make sure that we support them into work in order to break that cycle of dependency. The statistics are really good: about 1600 people a week are going off welfare and into work. That is a tremendous outcome not only for the Government and the taxpayers of New Zealand but for those families who are able then to stand on their own two feet and be independent. We know that work is important. It is important to people’s health both physical and mental. It is important to the social fabric of our communities that we have those people working. It is always sad when the Opposition does not support us in the efforts that this Government has made to get families back into work.I think one of the areas that we are most proud of is our work with youth. Over the last 12 months in this Budget year the youth service has seen that four out of five young people who have been enrolled in that youth service—that is those youth who are living away from their families and also the ones whom we talk about as “neets” who are not in education and training and whom the youth service picks up—have been able to be re-engaged in some form of education training or in-work training. I think that is an outstanding result for young New Zealanders. In fact in this financial year we are discussing here that resulted in an 8 percent drop in the number of those 15-year-olds and 16-year-olds enrolled in youth services on a youth benefit who went on to a full benefit at age 18. If we can stop them going on to a benefit at age 18 we have a very good chance of helping them to live full successful and independent lives raising their families and becoming full and participating members of our communities.The reason that that is so important is because we have good data now good data that tells us that a child born into a family that is reliant on a benefit—that cycle of dependency that we talk about—has a 25 percent chance of receiving a Child Youth and Family notification and a 24 percent chance of substantiated abuse. This is against the rest of the population who do not rely on a benefit who have a 2 percent chance of receiving a notification to Child Youth and Family. That will keep our children safe.CARMEL SEPULONI (Labour—Kelston):The theme of this part of the debate is services to citizens but I think when looking at social development we really need to rename it as “Disservice to New Zealand citizens” because that is what this National Government has been doing. I want to start by saying that we agree fundamentally on some things with the National Government. Yes where possible we think it is good to get people off benefits and into work. What we have seen from the National Government is this perceived drop-off in benefit numbers but so many of our social services out there are saying: “This is not a drop-off; this is a cut-off.” What is happening is that people are being denied support at Work and Income and other Government agencies and then they are getting referred by those Government agencies on to our church-based organisations and our NGOs. Those same church-based organisations and NGOs have not had any increase in funding under that National Government for over 6 years. They are under-resourced and the demand on their services because that National Government is not helping the most vulnerable people has skyrocketed through the roof.I just want to say that that Government is responsible for running some of our most charitable people into the ground taking advantage of some of the goodwill that these people have—the goodwill of these very good organisations that the Government is responsible for taking advantage of. They are working off the smell of an oily rag. They are talking about the fact that they have people coming to them who are being denied Government support and who are on the verge of suicide. I am not making that up. They are telling us because we have been all around the country that they have people going to them with high mental health needs who are being denied financial support by the Government and the last port of call for these people are these church-based organisations and NGOs which do not have the funding to support them but what they do have is the goodwill to do the best that they can. So I think that this theme of this part of the debate should be called “National’s disservice to New Zealand citizens” as opposed to “Service to citizens” because that Government is doing nothing.What I am really concerned about are the long-term repercussions of the decisions that that Government is making. It is saying that it is all about getting people out into work. Getting people out into work—no one will deny that that is very important but what are we risking here? We have got mothers who are being pushed out into work way earlier than they would like to be with kids who actually need their support and the mothers would like to be able to stay at home with them. But that Government says: “Nah. You had that baby. You get out and work. We don’t care who looks after it. We don’t care about the quality of early childhood education that they are going to be exposed to. We don’t care about the childcare arrangement. We don’t care about the danger that that child might be in. You go out you work that minimum-wage job you work your butt off and let’s not worry about the safety of you and your family or the long-term well-being of you and your family.”That is the real concern that we have on this side of the Chamber. We are concerned that it is just all a numbers game to the National Government—it thinks that by reducing the number of people accessing welfare it is winning. But that does not necessarily equate to more people going into work and it does not necessarily equate to a healthier society. And we are not seeing a healthier society. If you live in Auckland or even any of the other major cities around New Zealand you only need to walk out to your nearest shopping centre to see that the levels of homelessness the number of people begging on our streets have increased dramatically under that Government. That is a sign. That is a sign and the Government shuts its eyes to those things because it refuses to admit that it is responsible for the increasing social problems that we are facing as a country.As I said this whole debate should be themed “The National Government’s disservice to New Zealand citizens”. What infuriates me even more is that that Government through social development is dealing with the most cash-strapped New Zealanders who exist and yet we saw when we went through the annual review that in particular areas funding had increased significantly. Yet when asked the ministry could not say where that money had gone to and instead said that it was a drop in the bucket. That Minister Anne Tolley said that that is a minute amount of money. Well the $6.9 million that I pointed out which I was asking questions about and I was concerned about in terms of an increase in funding and spending was almost equivalent to the $7.2 million that that Government had to shave off and defer in terms of funding programmes that would have been really important to our people.BARBARA STEWART (NZ First):I would like to take a brief call on the health vote. New Zealand First has always said that health is a really critical investment and if we ignore it we ignore it at our peril. We really know that some of the problems that we have got are becoming totally overwhelming and unmanageable. What we are seeing from the Government is an attempt to manage the Budget around the areas that are easy with little regard for some of those areas.We are really concerned at the number of people who are now becoming obese in New Zealand. When we went through the annual reviews not many district health boards had thought about nor was there any money from the Government for programmes to address obesity. Ignoring the problem is not going to assist it; it is just going to make it bigger and bigger. At this point in time we have got 1.2 million New Zealanders who are classified as obese and that is a significant number. The cost to our health system is increasing—$686 million per year every year. Really if we are going to spend that amount of money we would have to believe that it was a health crisis.We know that the Government has decided to adopt an Australian programme to try to tackle the problem of obesity and invest $1 million per year in 10 communities around the country. It is ironic that this Government chose to look overseas for programmes to address obesity when we have got some really good programmes here in New Zealand that have addressed the problem. I must talk about Project Energise which is in the Waikato. What did it do? It got children out and about exercising reducing weight and improved health was a result.Why on earth would we choose to go with a programme that the evidence says—and I will quote from Professor Boyd Swinburn from the University of Auckland—“… seems to show that it will be effective in European kids. But … it needs to work for Māori and Pacific kids …”. Well guess what? New Zealand is a multiracial society and obesity is an issue that affects everybody not just Europeans and not just the residents of the 10 lucky areas that have actually been chosen. If nothing is done this will only continue to increase the problem and the demand for services. We need to look at action and prevention right now and take some really practical steps to ensure that New Zealand families can address the problem themselves.Another absolutely disgraceful case of cost cutting demonstrated by the Government is the under-spend of over $20 million on family-funded care schemes last year. The scheme was originally set up so that family members of disabled people could be compensated for the time and the effort that they put into caring for their loved ones. I can assure you that this is not a little job; it is a very difficult job and there is little appreciation of it. Basically that scheme was meant to ease the financial burden that families were facing. They already face a huge financial burden and they really are in need of support.When the scheme was first rolled out we were told here in this Chamber that it would benefit 1600 New Zealand families that $23 million would be spent and that the disabled and care communities had actually been consulted to produce the scheme. When we look at the reality out of the projected 1600 families only 187 families have been allowed or are able to take up the opportunity and just over $2 million has been spent. We have here a disabled and carers’ community who believe that the scheme is the most flawed. A review is absolutely essential. The money has been put aside; we need to ensure that it gets to the most vulnerable and these people are.My last area—another area that has been totally overlooked—is that of asthma and respiratory disease. We know that there are over half a million Kiwis suffering from asthma and the costs are estimated to be in the vicinity of $800 million a year.ADRIAN RURAWHE (Labour—Te Tai Hauāuru):Tēnā koe e te W’are o te rā. Tēnā koutou katoa. I get really worried when I hear the Minister for Social Development talking about the house prices in Kawerau even at $53000 and seasonal workers. I get worried because since when can a seasonal worker go to Kawerau and earn enough money to get a deposit on a house even at $53000? It does not happen. There is a reason why the houses are $53000 and it is because no one is buying. That is the reason why. That is an example of arrogance. I am hearing in my mind: “Let them eat cake.” That is what I heard when the Minister said that—let them eat cake. That is like saying that you can attain something that is really unattainable. So it is rather annoying that that kind of arrogance is blatantly displayed in this Committee.I will give you another example. Last year in June we were told that the Māori housing fund announced by the Government would be given to Te Pou Matakana because it was working at the grassroots and it is the kind of organisation that can deliver on the Government’s housing policy. So why was it that in December of last year after the election and after the Māori Party and the Government went to the electorate and told it that this was how the Government was going to deliver its Māori housing policy to Māori it all changed? Why? What happened? What happened in December? Well I will tell you what happened. All those statements around Māori housing were made by the Hon—now Dame—Tariana Turia. If you do not believe me go and read her statements to the whole world from December last year. She was annoyed with her own party. She told her party that it had got it wrong.I am standing up here to say that that is an example of how the Government can change its policy—say one thing in June of last year and then in December of last year completely change it. Why is that? Well I think No. 1 you no longer have a Minister such as Minister Turia fighting for that policy. But I can tell you also that that policy to me is in danger of not being delivered. How many houses have actually been built since then? What has happened since June of last year until now around Māori housing? What has changed? To me what I can see is that nothing has changed. I look forward to seeing some changes. We need changes. We are talking about the most vulnerable whanau in our community. For the Minister to be standing here saying: “Well you could get a job in Kawerau and that might solve your housing problem.”—well sorry but you have lost your way.The Government has lost its way. Not only has the Government lost its way but its support parties have lost their way as well. Last year at the general election I think the Māori electorates saw that the Māori Party had lost its way. That is why Te Tai Tokerau Tāmaki-Makaurau Hauraki-Waikato Te Tai Hauāuru Ikaroa-Rāwhiti and Te Tai Tonga got it right. Waiariki sort of got it right in a way too because if you have a look at the numbers that voted against the incumbent you will see that they understood that as well. I stand here before you in this Committee to say that we need in 2017 a new Government. We need a good Minister of Housing who we would have with Phil Twyford. I think that is really important.I want to talk also about this artificial target with regard to housing and all the other policy areas. If you look it up in the dictionary I will tell you what the synonyms for “artificial” are: manufactured fabricated insincere false exaggerated and overdone.SIMON O’CONNOR (National—Tāmaki):What an excellent word the member opposite finished on—“overdone”. I think that fully expresses what we have heard from the Opposition tonight. I want to primarily talk about health but one thing I want to note following an earlier tirade against Work and Income and as someone who worked in the Ministry of Social Development and for many years prior in the community is that I want to say thank you to those people particularly within the Ministry of Social Development who day after day tirelessly go out and serve their people and community. I heard that from the Minister Anne Tolley but I just wanted to add my own voice to that. So thank you for all that you do to serve other Kiwis in this country.I want to turn to health though. I think we have some very good news stories there. Although it is not news coming out of the Government I noticed as I was coming down to the Chamber that there was a breakthrough by the Malaghan Institute which I think is symbolic of the great work that our Kiwi health providers and scientists are doing. They have actually worked out a way to deal with something like hookworm. I know it is not the most exciting topic but it is something that affects a billion of the poorest people. Here in New Zealand based out of Wellington the Malaghan Institute has worked out a way to create an immune response to hookworm. Again it is a small thing in and of itself but this has been led by Kiwi scientists and Kiwi medical people and I think it just provides a good context of how New Zealand leads the way not only in immunological research but also in health.We heard from Minister Lotu-Iiga earlier some very good statistics that have come out of the Ministry of Health in general and I think that is pretty fantastic. You know a health budget of $15.6 billion—huge. We now know that 94 percent of 8-month-olds are fully immunised. We are going to reach the target of 95 percent by the end of this year. Just a comparison: when we took over Government in 2007 shamefully only 67 percent of young people were immunised. But if I can just step away from the broad big numbers I just want to reflect on some of the good news stories we heard out of the district health boards in particular that came before our select committee. Obviously there are too many district health boards to review every year so we take a sample but the Health Committee has been very hard at work and some of the themes within health that came to me were first and foremost around financial improvement. No one shies away from the fact that times are always tough and every group wants more money from the Government but we saw in the district health boards financial improvement. A quick and good example is the likes of the Nelson Marlborough District Health Board which has actually moved from a deficit of about $2.9 million 2 years ago to now a surplus of $4.4 million—I think a really good example.We had the Northland District Health Board come before us and I think that its good news story amongst others was just how it is investing in new infrastructure. And although I am proudly the MP for Tāmaki I am originally a Whangarei boy; I know the hospital well. The investment it is making there particularly in maternity wards and services is really impressive.Turning back to Auckland although it is not my district health board—I am going to talk about the Waitematā District Health Board—we are hearing about life expectancy. A number of district health boards touched on this and it came up in the reviews—it is increasing for New Zealanders. In Waitematā as one example the average life expectancy is now 85.1 years. So it is 3 years higher than in most of the rest of the country. In fact it is even higher for Māori in Waitematā in terms of their growth as well—they are 4 years above the national average. Again good news.We heard a lot about mental health services. That was a question that was raised quite often. I turn therefore to the Capital and Coast District Health Board. We heard from it and from the Hutt Valley District Health Board and the Wairarapa District Health Board all three together. And I note that my colleague here Alastair Scott from that electorate would know this but the district health boards there have launched a new integrated mental health system. Its message is “New service no boundaries” and it is I think a marvellous example of how three district health boards work together.Other things came through around oral health—and I think it is particularly actually through Barbara Stewart from New Zealand First to give her credit. District health boards one after the other know the importance of fluoride. I occasionally get in my electorate people who ignore the science but the science is clear and the district health boards are clear: fluoride in water makes a difference. It is the same around immunisation: immunise your children. That is a simple key message; there are no excuses or YouTube videos that can impress upon me any difference. And therefore to move on to that look at the Southern District Health Board whose immunisation rates exceed the national target and I think that is a wonderful result for the Southern District Health Board.Reports noted.InfrastructureThe CHAIRPERSON (Hon Chester Borrows): Members the question now is that the reports of the committees relevant to infrastructure—Canterbury earthquake recovery communications energy and transport—be noted.JONATHAN YOUNG (Chairperson of the Transport and Industrial Relations Committee):I am very pleased to stand and talk upon such an important series of subjects to the life and the economy of New Zealand as infrastructure. Infrastructure is like the skeletal system. It is like the nervous system. It is like all of these things that enable our country to function and succeed.I want to just talk about ultra-fast broadband to start off with and talk about just how important that is and certainly how well I think that we have seen progress take place in this area. The OECD said that New Zealand is No. 1—No. 1. Figures for fibre growth connections—Hon Damien O’Connor: Come down our way and have a look. Open your eyes.JONATHAN YOUNG: You need a better MP over in your area. That is the problem over there. Figures for fibre growth connections in the OECD released earlier this year show that New Zealand is No. 1 with a connection growth rate of 272 percent and the average of the 34 developed OECD countries is just 12.4 percent. So the momentum is growing and the fibre is being rolled out and we are seeing this affect the way that New Zealanders do education do health and do communications. It is incredibly important. We have provided fibre-ready service to over 2200 schools including almost 1000 rural schools and to 36 hospitals and integrated health services around the country. We have rolled out ultra-fast broadband to more than 570000 locations nationwide. We have ensured that over 231000 households and businesses now have access to faster broadband under the Government’s Rural Broadband Initiative—the RVI. All of these things are important.We are in the middle of a technological revolution not just here but around the world. Ultra-fast broadband is absolutely essential for this nation to be able to go forward. You know we have seen revolutions happen around the world—the agrarian one the Industrial Revolution and we have seen the digital revolution over these last number of decades—change the way that people do business. Every single one of these revolutions of business and of function has this effect of actually taking people out of the rural areas into city areas and all of that creates I guess better mechanisation better manufacturing and clearer more detailed more high-quality manufacturing. All of these things also come with the social challenges that all of that provides.So it is important for us alongside rolling out these infrastructures to ensure that we as an economy and as people who go through our educational system can engage with these sorts of technological advancements. We are making sure that 97.7 percent—that is a high figure—of schools can connect to broadband which means that nearly 100 percent of students can connect to broadband. So they can learn in a modern environment they can access information they can access tuition they can access all sorts of ways in which they can learn about this world in their homes schools and towns.We are providing fibre access to rural public hospitals and integrated family health centres by June next year. We also announced last year that we are investing $100 million to expand the rural broadband programme and added to that $50 million to improve mobile coverage in black spot areas along main highways and popular tourist destinations. That is going to work well when it comes to State Highway 3. I know that you Mr Chair and other members who come from the central North Island understand that State Highway 3 has a real necessity for coverage in this challenging area of roading where there are many black spots and where there have been a number of accidents.So all of this is not only just creating better communication but it creates the flow of information and makes travelling our roads safer and enables us to be able to ensure that tourists who come this way can have the adequate communication that they need as well.More towns have been fibred: Whangarei Te Awamutu Cambridge Tokoroa and Hāwera in South Taranaki are fully fibred. In the South Island we have Ōamaru Blenheim and Ashburton—thanks to the Government’s ultra-fast broadband network they are fully fibred as well. It is important to understand that this is more than just downloading a movie so people can enjoy that sort of entertainment.Hon RUTH DYSON (Labour—Port Hills):I am sorry that I interrupted the member Jonathan Young in his flow. It was quite an interesting speech but the bell had rung so if I wanted to get a call I had to stand up and take it.I am pleased to be contributing in the debate related to the Canterbury earthquake recovery. I just want to note that a number of my colleagues have been talking about the “third-term-itis” of this Government and about how arrogant it has become how out of touch it is and how it is ignoring the big issues for New Zealand. I do not think anybody personifies that more than the Minister for Canterbury Earthquake Recovery. It is a bit of a steep competition in Cabinet I know but Minister Brownlee has generated so much spin in Canterbury about the pace of the recovery and the vision for the future that actually people are dizzy. Nobody can see anything happening that is his responsibility—it has all been good private sector investment and risk but he takes the credit for it.Somebody said the other day that John Key comes down to open an envelope and somebody else said: “But he closes the post office on the way out.” which is exactly how it feels to us. You cannot of course ignore the fact that we had a series of horrific earthquakes and they caused massive amounts of damage but insurance money and taxpayers’ and ratepayers’ investment into the rebuild does not make an economic recovery. And that is what John Key and the National Party promised the people of New Zealand. They promised an economic recovery. They promised a Budget surplus—not just in passing but throughout the entire 2011 election campaign and then again throughout the entire 2014 election campaign—and they promised that this year 2015 would be the year of the Budget surplus. That is called another broken promise. Add it to the big long list actually—a big long list of broken promises.Now the Prime Minister says: “Oh that’s just an artificial target.” Well actually during the 2011 campaign and the 2014 campaign when some members opposite stood on platforms promising to deliver this he said it was going to be a Budget surplus not an artificial target. This time last year this surplus was going to be half a billion dollars—this year’s surplus in the Budget next month. Now it is going to be a half-billion-dollar deficit. Where do those members stand? Where is their integrity their personal credibility and their basic honesty with their constituents? How are they going to front up to those people whom they said one thing to and now are delivering another? I guess there will be another round of spin and excuses but people will see through it. They are not as stupid as John Key and the National Party want to make out.National has borrowed a million dollars an hour since it became the Government—a million an hour. It is spending $10 million a day in interest payments on its borrowing. How is this good financial management? We have more gross debt as a percentage of the economy than any New Zealand Government since the 1930s. “Bill the borrower” is exactly the hashtag that he deserves. Yes we have had a recession; yes we have had a global financial crisis; and yes we have had a series of earthquakes but we have also had some disgraceful wastes of taxpayers’ money. It is not Government money. It is not the Government’s generosity that allows it to spend on things that it determines. It is taxpayers’ money. It is our money that we contribute for the public good.The Government gave $5 billion worth of tax cuts to the wealthiest 10 percent of New Zealanders—sorry not the wealthiest but the highest income earners who declared that for the purposes of paying tax because that is different from the wealthiest. The top 10 percent of income earners in New Zealand got $5 billion worth of tax cuts in the same Budget that Bill English cut home support for older New Zealanders. What are the priorities of this Government? Through its asset sales programme we have lost nearly a billion dollars already in lost dividends and that loss is rising every day. We have had corporate bailouts and handouts: Rio Tinto with no guarantee that it will stay going and most recently Skycity. Those corporate bailouts and handouts run into billions of dollars. They have borrowed more than any other Government.STUART NASH (Labour—Napier):I must admit it was very rude of me to interrupt the Hon Ruth Dyson because she has a lot to say on this—on a very very important issue that affects all New Zealanders. But as she did not seek a further call I decided I had better stand up and make one.I would not mind talking for 5 minutes about the electricity sector. We had Transpower come and talk to the Finance and Expenditure Committee. They talked about how its revenue grew by over 9 percent to a billion dollars but its profits declined by 18 percent. So it delivered a dividend to the Government of about $151 million. As the Hon Ruth Dyson outlined just as an aside it is quite interesting to note that due to the sale of State assets over half a billion dollars in dividends that would have come in to the Government have actually gone out to the private sector. It would have been nice to have that at a time of fiscal restraint. But anyway that is where we are at.The other thing that is worth noting is that the North Island grid upgrade project actually exceeded the maximum allowable cost approved by the Electricity Commission by over $70 million. Again that seems like a bit of a theme. If it is not a database or if it is not a system then it is an upgrade. There is just so much under-budgeting and cost overruns going on here that it is of great concern. But having said that I am sure it is of great concern as well to the Minister of Finance. One of the things I would like to talk about which I know is dear to the Minister’s heart is that the World Energy Council does something called the Energy Trilemma Index and New Zealand came in at 10th. It sounds pretty good—10th in the world out of over 100 countries. But if you dig a little deeper into these figures what we will see is that the energy equity in our country dropped from 18th to 28th. Energy equity relates to the accessibility and the affordability of the energy supplied for the total population and this feeds into what is a growing problem in this country and that is fuel poverty. The definition of fuel poverty is the inability to afford to heat your home in the middle of winter. It is a real issue affecting New Zealand at the moment as poverty rates grow.As Mr Twyford well knows as our housing spokesperson and as he has told everyone who will listen—and those who will not listen as well; he has still told them—the state of our housing stock at the moment is deplorable. We need to do something about this and we really need to address this issue of fuel poverty. Mr Twyford and I as the housing and energy spokespeople have been working very closely to come up with solutions to this. But the thing that concerns me Mr Bridges is that you do not seem to care about this. You think it is all OK we are 10th in the world and who cares about the general population—you know if we have slipped to 26th in terms of energy equity it does not really matter. Well in fact it really does matter. This cuts to the heart of what we expect of a country. We do not like to think of citizens sitting in cold houses wrapping themselves up in blankets because they cannot afford power. There is a high degree of fuel poverty in this country.The other thing that happened in that World Energy Council’s Energy Trilemma Index is that our environmental sustainability dropped from 36th to 42nd position. This is of equal concern because we go out to the global market with a brand that is clean green and 100 percent pure. But the real concern I have is we are not living this brand. I do not think we have got very long to rectify the situation until that brand is eroded to such an extent that we become just another small economy selling commodities to an overcrowded global market. If we lose that clean green 100 percent brand we are in real trouble. An organisation tried to quantify this about 10 years ago. They reckoned it was worth about $30 billion a year to our global economy and it is being eroded. Megan Woods and I along with others on our environmental team are working on solutions that will actually allow us to live this brand. If we do not live it if we do not walk the walk then we are in real trouble as a country. The erosion of our global brand I think is a major major issue and something that this Government is just absolutely ignoring. We cannot continue to do that Mr Bridges. Even you Mr Bridges must admit that environmental sustainability from 36th down to 42nd is a real concern.The electricity generation sector has a pretty good story to tell. We are at around about 80 percent renewables at the moment and we are looking to go towards 90 percent. We both agree on that target. It is a very good target. But what we have also got to do is make sure that good hard-working Kiwis can afford to heat their homes and that we are living the “clean green” brand. Thank you very much.Hon NICKY WAGNER (Associate Minister for Canterbury Recovery):I am delighted to take this opportunity to have a call on infrastructure because it is efficient and effective infrastructure that underpins both economic development and the quality of life for all New Zealanders. The Canterbury earthquakes have taught us just how miserable life can be if you have got broken roads you do not have a reliable power service the water system is patchy and you do not have a functioning toilet. The National Government has invested heavily into infrastructure into the roads of national significance the roll-out of ultra-fast broadband new social housing fabulous new schools and health facilities and in Christchurch we have got all this and more. In fact our city is getting the biggest infrastructure investment New Zealand has ever seen.I want to talk in terms of “horizontal infrastructure”—as if we knew that term before the earthquake! The Stronger Christchurch Infrastructure Rebuild Team is delivering its rebuild on time on budget and to specification. The Christchurch roading and the three water systems the three waters network—that is waste water storm water and potable water—when complete will be far more resilient and much more cost effective than ever before. Right now at 31 March 2015 across Christchurch 66 percent of the roading and the three waters network is complete 91 percent of all the work in the central city is complete and overall 70 percent of the whole Stronger Christchurch Infrastructure Rebuild Team’s repair and rebuild is done. Every Cantabrian will be thrilled when we get that finished although I think we will feel a bit bereft when we lose all those road cones.The public transport infrastructure will get a boost when the new bus interchange is completed next month. Although the bus network has been running pretty successfully the new interchange will be more than just a building because it signals a new start to the way that we deliver public transport in our city. It is intricately connected with the An Accessible City plan and that is providing a safer more concise central roading system and better public transport. This is infrastructure for all. The needs of pedestrians the needs of cyclists the needs of the fully abled as well as those who are not are all accounted for in this plan.The justice and the emergency services precinct in Christchurch is growing by the day and when it is complete it will have 19 courts accommodation for police and corrections and an emergency services hub. That hub is a new way of delivering emergency services. It will include the fire brigade St John Ambulance and a combined emergency call centre. It will be state of the art. It is infrastructure that will support not only Christchurch but also Canterbury and the rest of the South Island during emergency conditions.Christchurch is already benefiting from its hospital rebuild. Both Burwood and Christchurch hospitals are being rebuilt and that is over $600 million worth of work. It is well under way and it is the biggest hospital project in our country’s history. I went to the opening of the new Child Haematology Oncology Centre which is fondly known as “CHOC”. It is an absolutely magnificent facility which will provide a really good homely environment and real support for young people and their families and it truly will make a difference during these difficult times in their lives. While I am talking about that I would like to acknowledge the work of the Canterbury District Health Board and everyone who works in those hospitals. The logistics of running a hospital during a rebuild are enormously challenging and they affect everyone who works on the site. I know life is difficult for them but they are getting through it because they are looking forward to the real benefits of a new modern hospital.Finally in terms of the central city 65000 square metres of new office space has been completed in the central business district and every day new businesses are moving into the centre city. The retail sector is also booming with retail sales 30 percent higher than pre-earthquake and the infrastructure for nightlife—the bars the restaurants and the cafes—is back. They are back to about 95 percent of pre-earthquake levels. The National Government understands that resilient and modern infrastructure—The CHAIRPERSON (Hon Chester Borrows): I am sorry members but the time has come for me to report progress to the House.Debate interrupted.Progress reported.Report adopted.