Edmonds Barbara; Willis Nicola; Pugh MaureenHon BARBARA EDMONDS (Labour—Mana): Thank you Madam Chair. I thank the chairman of the Finance and Expenditure Committee for his opening comments. It's quite interesting that he talked about how the previous Government left the economy in a mess when actually it was just Fitch Ratings last week that confirmed the same credit rating as the previous Government for this Government—so it's no better it's no worse it's exactly the same.So going into what the Minister has spoken about—front-line services—we've heard right throughout debates questions in select committee and the media the Minister has confirmed to the public of New Zealand that there will be no front-line service cuts to pay for the tax cuts because ultimately that is what I understand the fiscal savings programme was set out to achieve. However it's been almost three months since the Budget and we are having daily examples throughout the community of front-line service cuts that have been done. For example in Porirua which has one of the lowest socioeconomic areas in this country we have seen cuts to the Salvation Army cuts to the Taeaomanino Trust we've seen cuts to the Porirua women's centre. We have seen so many cuts across the board at a time when the cost of living is so high. Some of these cuts are to financial budgeting services. And this is not just isolated in Porirua alone; this is right throughout the country.So there are ramifications for these public service cuts and I don't think it was wasteful spending for the previous Government to support these numbers of service providers. And I'm sure members on this side of the House will actually come forward with other examples of where there have been front-line service cuts.The other area that has been quite clear there's been front-line service cuts is in Te Whatu Ora. So there is a savings programme I understand under way where they need to find $1.4 billion which is part of the savings as part of the merger of the different DHBs and yet there is a hiring freeze. How do we know this? It's because the nurses have come out saying that: We can't get jobs." And for those members of the public who don't understand through the memorandum of understanding with the Nursing Council these graduate nurses are promised a job within the health system if they do not go to the private areas.So one of the key areas that the Government did have to respond to really quickly after the Budget was released was in relation to cancer drugs. We've received a number of Official Information Act (OIA) requests since that particular period so I do want to ask the Minister in relation to some of the process that she undertook—which was in particular the OIAs showed that the costings for those 13 cancer drugs were done after the Budget was released—why had she not prioritised her election promise and another party's election promise around those cancer drugs? What was it that she thought wasn't as important to prioritise? Because we've seen in the Budget an allocation of $2.9 billion for landlords. We've also seen that there's been an excise tax contingency of $216 million for heated tobacco products. And I do acknowledge that the cancer drugs were eventually funded and that was because of the community because the community was up in arms because they wanted those promises to be met.However given that her operational allowances have been reduced as a result of this Budget how will she meet the cost pressures for health when only $103 million in particular has been set aside for infrastructure cost pressures? And we've seen some of our senior doctors' unions who have done some analysis of the Budget since it was released saying that once adjusted for inflation there's only a 0.4 percent increase in Vote Health.The other question I want to ask to the Minister is how will she commit to delivering more efficient health services alongside the $600 million for Pharmac all while reducing the operating allowance to $2.4 billion in Budget 2025? We know that population growth is increasing we know that people are getting older we know the issues that are within the health system about the reduction of nurses or the hiring freeze that is currently happening the savings target that Te Whatu Ora has to go through as well as the fact that the operating allowance—about three-quarters has already been spent. I want to hear from the Minister how she was going to deal with these health cost pressures in the future.Hon NICOLA WILLIS (Minister of Finance): The member makes a few assertions which I wish to address. The first is an assertion that in order to maintain the level of front-line service delivery to New Zealanders somehow the Government must pledge to never ever alter a contract with a private or community provider—that we must under no circumstances review those. I think that would be a foolish stance for the Government to take and we reserve the right to look at the contracts we commission on behalf of taxpayers to assure ourselves that they are delivering on the intentions that were there when they were initially funded. Our pledge is to deliver improving quality of services not to do things in exactly the same way as they have always been done. In fact if we were to do that we would continue to get the completely suboptimal results that characterised the past six years. We've set better public service targets. We are very focused on delivery and outcomes and that includes actually being quite innovative and bold in doing things differently—for example our work on charter schools comes to mind as I look out at Hon David Seymour.The next set of questions related to health funding. Now in this Budget which is what this debate relates to we made a couple of important decisions. The first was we decided to allocate funding for the pressures in health at a level which was exactly the same level as the National Party campaigned on and interestingly the same number as the Labour Party campaigned on. And that was because we judged that number was sufficient to meet the pressures. In addition to that number we then funded individual initiatives including some that have been very warmly received by New Zealanders if opposed by the Labour Party including things like funding Gumboot Friday mental health services for New Zealanders. So we stand by that approach.We then took another decision—and I want to acknowledge in this House that it was a decision we did need to think hard on—which was should we pre-allocate additional funding to the health system from future budgets now or should we reserve judgment and come to those decisions later? Ultimately we were persuaded by the case that Health New Zealand and others working in the health system put to us which is: if you commit upfront out of future operating allowances to put additional funding in that will provide us certainty of our funding path the ability to plan and to budget to find efficiencies and to engage in longer-term contracts.On that basis we've then pre-allocated additional operating funding from future budgets totalling $.16 billion in total. And what that means is that the health system can be assured by this Budget that it is literally the first cab off the rank when it comes to additional budget funding. It doesn't need to line up to bid for funding in next year's Budget; we've already allocated it and we've already allocated it from the next Budget as well—such is our commitment to the health system.Then the member asks a series of questions about how we ensure that the health system can deliver and deliver effectively. I would put to that member if only we hadn't had a Government that was so focused on rewriting the org chart at Health New Zealand and merging different DHBs and creating new layers of management then our task now might be easier. But that is not the case. We inherited a botched merger. We are now working through that. The way we are doing that is according to some principles and one of those principles is that we think that those working on the front line are often best placed to make the best decisions for patients. We do not think that multiple layers of bureaucracy are the way. We're working with the commissioner to get good results but we are also thinking about the policies needed to ensure our health system can be productive efficient and service-oriented into the future.Finally the member asked about cancer medications. Well I am proud to be a member of a party that campaigned on funding additional medicines—a campaign that that member has never made—and that actually delivered on that not only for those in need of those cancer treatments but delivered on that for multiple other patients by using the Pharmac model. That is a front-line delivery and it is commitment and it's one that I'm pleased that this Budget represents.CHAIRPERSON (Maureen Pugh): I call Chlöe Shwarbrick thank you."