Debate on Crown Entities Public Organisations and State Enterprises — In Committee Speaker Recalled In Committee 
Debate on Crown Entities Public Organisations and State Enterprises — In Committee Speaker Recalled In Committee 
[Volume:617;Page:13234] 
Debate on Crown Entities Public Organisations and State Enterprises 
In Committee 
The CHAIRPERSON (Ann Hartley) 
: The new Standing Orders provide for the debate on the performance of Crown entities public organisations and State enterprises to be a series of debates on individual financial reviews of Crown entities public organisations and State enterprises as reported by select committees. The debate on the individual financial reviews should be relevant to their performance in the 2002-03 financial year and their current operations. A member may have no more than two calls for each financial review. Three hours is allowed for the debate. At the conclusion of the 3 hours the Chairperson will report to the House. 
There is a list of the financial reviews available for debate on the Table. Only those financial reviews reported by select committees are available for debate. Two reviews are not yet reported. They are the financial reviews of Industry New Zealand and the New Zealand Teachers Council. I understand it is the wish of members to debate groups of financial reviews and that the first entity they wish to debate is Guardians of New Zealand Superannuation. 
JOHN CARTER (Senior Whip—National) 
: 
 I raise a point of order Madam Chairperson. Could you just clarify for me please the two areas not yet reported back. You said Industry New Zealand and— 
The CHAIRPERSON (Ann Hartley) 
: The New Zealand Teachers Council. 
JOHN CARTER 
: It is just that they were on the schedule we had been given so we had speakers ready to speak on them and had advised the whips of that. Will there be further debate on those in due course or how do members go about debating those reports that are not prepared as there is only a 3-hour debate set down? 
The CHAIRPERSON (Ann Hartley) 
: There is not now an opportunity for that debate. 
JOHN CARTER 
: Obviously I will have to take this up with the Speaker in due course. I will not call the Speaker back now but perhaps we could discuss it at the Business Committee. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I did not realise that we had this situation. I wonder whether we could recall the Speaker now because I am advised we need to seek leave in the House for those reports to be debated. I am quite happy for leave to be taken but we cannot take leave in the Committee. So we need to go back into the House if that is possible. 
John Carter 
: If the Speaker could be recalled now. 
The CHAIRPERSON (Ann Hartley) 
: We will recall Mr Speaker. 
House resumed. 
Speaker Recalled 
The CHAIRPERSON (Ann Hartley) 
: The Committee of the whole House is seeking leave to debate two further reports—the financial reviews of Industry New Zealand and the New Zealand Teachers Council—at a future date. These reports have not yet been reported to the House by the select committees. 
Mr SPEAKER 
: Perhaps the Leader of the House could ask for leave. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I seek leave that the Committee debate the New Zealand Teachers Council and Industry New Zealand institutions as part of this State-owned enterprises debate even though reports have not yet been received by the House. 
Mr SPEAKER 
: Is there any objection to that course being followed? Leave is granted. 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 I raise a point of order Mr Speaker. I am afraid that that is not good enough. We may have been granted leave for the opportunity to debate the reports before they are reported back but in my 14 years in the House this is without precedent. 
We have come to this particular debate with select committees having not completed their work. If it were now to be a matter of course that we grant leave to debate reports that have not been reported back then why would select committees bother to meet any kind of deadline? The Opposition cooperates with the Government in order to get to the deadline. If it is now to be the case that the deadline does not matter then I for one as a member of the Education and Science Committee would like a great deal more time to do proper financial reviews of the entities that come before our committee. 
I think that in the first place the House deserves an explanation and it has to come from the Government. This is Government business. The Government ought to advise the House as to why it is managing its own business in a way that is unprecedented in the House. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 The Government is not in charge of select committees—select committees are. It is up to them. If select committees fail to report their matters then that can be used as a device to avoid any debate on the performance of State-owned enterprises and Crown entities in the future. The member should always remember the rule of unintended consequences in these matters. I have seen Governments use precisely these kinds of rulings in the past to avoid debate. This Government is in fact making sure that there will be debate. 
Mr SPEAKER 
: This matter is not entirely without precedent but I agree with the member that it is unusual and I thank him for his point of order. There is no delay in the reporting back. Select committees have 6 months to report back and that deadline has not expired. All I can say is that leave was sought no one objected and leave has been granted. We cannot go back from there. 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 That then raises an issue that is Government business which is why has it scheduled this debate before the select committees have completed their work if the 6-months’ deadline has not expired? 
Mr SPEAKER 
: That is a matter for the Government. It is not a matter for me to adjudicate. The Government put it on the Order Paper and it is entitled to do so. Leave was sought and leave was granted. We cannot go back on that. 
JOHN CARTER (Senior Whip—National) 
: 
 Mr English has made some very good points and I suspect that we may have further discussion on this in the Business Committee. But further to that it now leaves us with one other issue. We have now decided by leave that we can debate Industry New Zealand. I will breach the Standing Orders by saying that I do not see that the Minister is available here at the moment for us to debate that legislation with him. I am aware that other Ministers can fill in but I thought the Minister might have been available to discuss his vote given that we gave notice that we intended to debate it. We have now been given leave and it would be unfortunate if he were not present to debate it. 
Mr SPEAKER 
: The leave has been granted and I cannot go back on that. It is up to the Government as to which Ministers are present. The member knows that; it has been the case ever since I have been in the House. 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 I raise a point of order Mr Speaker. I am not questioning any of your rulings but I am looking for a full explanation of the circumstances the House finds itself in. I presume as a member of the House that the Business Committee had some discussion about the scheduling of this debate. 
John Carter 
: Not to any large extent. 
Hon BILL ENGLISH 
: Did it or did it not? Not to any large extent. Someone somewhere decided to schedule this debate at a time that required the leave of the House to debate two reports that have not been completed. Mr Speaker had I been aware of that when you put the leave I would have refused it because I believe that the House ought to stick to the process of debating reports when they are completed. 
I would like an explanation as to why this debate was commenced before the select committees have finished their job. Mr Speaker you have made it clear that it is not because of a deadline. The deadline of 6 months has not expired so there must be some other reason. I would also like an explanation from you as to whether this will be regarded as a precedent—the precedent being that the Government or the Business Committee can choose a time to have this debate regardless of whether select committees have finished their job. This puts the Opposition in particular in the position whereby it is reliant on the leave of the House to do a job that is absolutely at the heart of the function of Parliament. We should not be required to get the leave of the House to debate financial reports on Crown entities. There is no other job more important to this Parliament than that one. We need this process cleared up. We need to be sure that there will not be precedents set that limit the opportunity for the House to do the job that an Opposition in particular is meant to do. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 To be blunt I do not feel any great need to respond because we are now nearly at the end of the 2003-04 financial year and this debate is about performance during 2002-03. I have always felt that this debate is already somewhat of a mockery because it takes place far too long after the events to which it refers. It seems to me that it is quite important to get on with the debate rather than waiting the 6 months that have been mentioned as that would really make the debate completely useless. 
Mr SPEAKER 
: I will make two comments. Firstly under Standing Order 334(1) the Government can select any day for this debate. Secondly there will always be some reports outstanding whenever this debate is scheduled because reporting is a continuous process. 
JOHN CARTER (Senior Whip—National) 
: 
 I raise a point of order Mr Speaker. This is just a machinery matter. Are we starting the 3 hours again when we go back into Committee? 
Mr SPEAKER 
: The debate has already started but the time spent back in the House does not count. 
Debate resumed. 
In Committee 
The CHAIRPERSON (Ann Hartley) 
: I understand it is the wish of the members to debate groups of financial reviews. 
The Guardians of New Zealand Superannuation 
Government Superannuation Fund Authority 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I was rather hoping one member of the Opposition would want to debate this extraordinarily large element of the New Zealand Government’s expenditure and programme. As I outlined this afternoon in the House the two largest long-term fiscal pressures facing any Western Government are provision for superannuation and provision for health care partly because of the ageing of the population. But the Opposition is far more interested in debating the New Zealand Teachers Council than it is the New Zealand Superannuation Fund. 
During 2002-03 the New Zealand Superannuation Fund had not gone to market. It was still being managed within the Debt Management Office in Treasury. Subsequently arising out of that year the fund has gone to market. Despite the claims made—for example in the  
Listener 
 
in what I regard as National’s weekly column on politics—that the New Zealand Superannuation Fund has lost lots of money on the market it has done absolutely no such thing. Since it went to market in October last year it has outperformed its own targets. It has outperformed targets such as the rate of return on New Zealand Government bonds. That can be compared for example with the Government Superannuation Fund which when the equity markets were bad was losing money. Even so since it went to market it has averaged a post-tax return of 4.7 percent which is above the bond rate return in terms of a post-tax rate of return. So it has done better than it would have done had it not gone to market in that period. 
We have heard a great deal about the supposed losses that were made all of which were unrealised losses on paper but suddenly now that the funds are doing well we hear a total silence from members opposite—except on the question that we want answered. We know about the National Party’s “by lunchtime” promise. It will reform the Resource Management Act within 3 months—so it says—and of course it promises that it will have nuclear ships back by lunchtime given the opportunity. We want to know whether National if it became the Government would have the New Zealand Superannuation Fund gone by lunchtime. If the New Zealand Superannuation Fund is to go by lunchtime what will replace it in terms of security for pensions for the baby-boom generation? There are tens of hundreds of thousands of people in that generation born between 1946 and 1961 or so who want to know where their pension is to come from. There is only one answer: a Labour-led Government. There is very little hope it will come from a National-led Government because National says that the New Zealand Superannuation Fund is not important to the future of New Zealand's superannuation. Well the latest figures show that at peak 36 percent of the funding of New Zealand superannuation will come from the Superannuation Fund. That is equivalent to $138 a week of the current married rate for superannuation. We should go out there now and ask superannuitants—those who are married couples—whether they would notice a cut in their superannuation of $138 a week. No doubt to people like Mr Key that is peanuts but to the great majority of superannuitants it is a great deal of money indeed. 
I raise the point further because what the Budget documentation will show is that the only real room available for tax cuts to the rich—so beloved of the National Party and the ACT party—will come about only if the Superannuation Fund is abolished. The only real big headroom for major fiscal initiatives over the next few years will occur only if the New Zealand Superannuation Fund is abolished by any future National Government. So the National Party will face some very hard choices and some very hard questions come Thursday afternoon in the House and subsequently. It will face them particularly from people who are part of the baby-boom generation. Lynda Scott is one of those people although she does not look as if she is booming very much at the present time because she is well looked after in other respects. Mr Carter claims to be a baby-boomer although I think he may be flattering himself slightly in that regard. He is more a sort of pre-boomer like I am. 
We want to know whether superannuation like all the other State-owned enterprises and State assets will be gone by lunchtime if the people make a mistake and vote for a National Government. Or will the New Zealand Superannuation Fund remain in the long term as an important part of how to fund New Zealand superannuation so that ordinary New Zealanders can enjoy a decent pension in retirement? That is the question we need an answer to today. It is one of the many questions the Opposition National Party will have to face over the next 15 or 16 months as we run into the election and it will get a surprise when it understands it has no answers. 
CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I want to follow on from where Dr Cullen left off. Is it not ironic that as Dr Cullen said not one speaker from the other side of the Chamber wants to talk about the Superannuation Fund? All the members on that side cowering behind their desks like the pack of so-and-sos they are—and I do not think the term “so-and-sos” is unparliamentary—know exactly what they did to national superannuation when they were in office. What we know is that when we got into Government we put some certainty back into the lives of pensioners. We said we would reverse the cuts that members opposite made. We said we would make the pension no less than 65 percent of the average wage and we did. We inflation-indexed it and we set up the Superannuation Fund—a fund that Dr Brash and every party of the National Party has run around— 
Rt Hon Winston Peters 
: Where is he? 
CLAYTON COSGROVE 
: I cannot respond to that because as the member knows I would be breaching the Standing Orders. Those members do not want to debate the matter because as Dr Cullen said they want to abolish it. I look forward to going to Mr Heatley’s and Mr Carter’s electorates and to every electorate around this country to tell Grey Power and the pensioners what they would get under a National Government. Let us add it up. If a party says it will make tax cuts then that means less revenue. If a party—the National Party—says it will abolish the Superannuation Fund then as Dr Cullen pointed out how will it guarantee as the National Party now says it will the current levels and the current age of eligibility—although on this it now says “maybe”? One of the ways to do that would be to sell public assets and we know that that is about as popular as some members on that side in their obscurity. We know that Landcorp Kiwibank and all the very profitable good going concerns and State-owned enterprises such as New Zealand Post and others that people iconify and that this country wants to see maintained and held by the Crown would under that crew over there be gone. They would be history—on the block. 
If I were a pensioner or even maybe as Dr Brash has pointed out a person now in my 50s I would be shaking in my boots because under Dr Brash there would be no superannuation fund although there would be a tax cut that would mean less revenue. But then the numbers and the mathematical rationale stop. No one knows how under a National Government the pension at the current levels and age of eligibility would be maintained as we have promised it will be. What we do now know of course is that that will not happen under a National Government. 
Dr Brash said this about people now aged 50: “I suspect that eventually—if not in five years then almost certainly in 10 or 15 years—we will have to have a look at the age of eligibility again”. He said that in the  
New Zealand Herald 
 on 4 March 2004. Prior to making that statement he said—in places all around this country except in this Chamber—that the age of eligibility would have to be raised to age 70. Even Mr Woolerton in a couple of years would have to wait. It speaks volumes that no member of the Opposition after wanting to put the review of The Guardians of New Zealand Superannuation on the list will get up to speak on it—just as no member on that side will get up to debate the economy because it is growing; unemployment because it is decreasing; or employment because it is increasing. Opposition members cannot handle all that good news but they go around the country and scratch every little itch that certain members of the community want scratched. 
I say again that if National has an alternative to the Superannuation Fund that will guarantee the age of eligibility and inflation-proof levels at not less than 65 percent of the average wage then one of those geniuses on that side should get up and tell us. They have 18 months before the elections. Maybe Mr Heatley might get up or Mr Carter to explain to his constituents in the far north what National’s policy is on guaranteeing the age of eligibility and the levels of entitlement. Every pensioner including Mr Carter’s dear old mum whom he talks about so often in this place—and I am sure she is a dear old lady who is proud of her son—is now asking how her son and the National Party will guarantee her pension and the age of eligibility. National does not have a policy on superannuation and every New Zealander knows that. 
Reports noted. 
Industry New Zealand 
PHIL HEATLEY (National—Whangarei) 
: 
 I rise on behalf of the National Party to voice its displeasure in respect of Industry New Zealand. Members of Parliament will know that Industry New Zealand is the Government agency that businesses said they did not want and did not need but that Jim Anderton’s photographers said they must have. The Committee will know that for some years now Jim Anderton has been touring the country with his little elves like Clayton Cosgrove throwing around $100 here a $1000 there and $10000 elsewhere. We as taxpayers know that it would have been cheaper to take out an advertisement to show Jim Anderton’s smiley face but no Industry New Zealand Jim Anderton’s promotional group has done that work for him in the last few years. 
I found it interesting when members of the Commerce Committee asked for the historical background—review if one likes—on some of the cash Jim Anderton has been throwing around the country in the last few years. We asked what the criteria were for the assistance provided. In other words when he threw taxpayer cash at those businesses what criteria did he look for and I have to say that officials struggled to give us that information. We asked what form the assistance took. Apparently it did not take the form just of cash; it also took the form of assisting in the facilitation of relationships with local agencies. I can only assume that that was Jim Anderton taking people out to dinner on the numerous credit cards that the staff of Industry New Zealand have and that he facilitated the relationship with local agencies. That is the form of assistance it took as well as the cheques Jim Anderton willingly wrote out on behalf of the taxpayer. 
We asked the agency what the projected outcomes were. The answer was that it did not have any. The committee asked whether each scheme met the projected outcomes. Of course because Industry New Zealand did not have any projected outcomes in many cases it did not meet them. We asked simple questions. We heard that Industry New Zealand was being touted as “Jim’s jobs machine” so we asked how many jobs were created; also what the projected outcomes were and why they were not achieved. The number of jobs created ranged in many cases between 10 and 100. When we asked at the select committee what those jobs were specifically we were told they were very hard to identify. It was difficult to say whether the jobs created would have been created anyway; whether a company would have shifted to New Zealand anyway; and whether—regardless of whether Jim Anderton and his corporate welfare had given out $10000 cheques—the jobs would have come anyway. 
Industry New Zealand the Government agency that businesses said they did not want but Jim Anderton’s photographers said they must have could not at all justify or calculate the number of jobs it created. We asked what the overall value of those schemes to New Zealand was but we could not get an answer. Were any lessons learnt? The only lesson we got was on The Warehouse fiasco. Members will recall that in May 2002 which falls within this financial review The Warehouse got $70000 from young Jim Anderton and it was grateful for that. The Business Growth Service gave that money on behalf of Jim Anderton and the taxpayer to The Warehouse and some lessons were learnt from that. Members will recall that the Audit Office reported back on the inquiry into why Jim Anderton was giving $75000 to the struggling Warehouse—and it is certainly struggling in Whangarei. It does not have enough room. Although it is the biggest red barn in the country it still cannot fit the people in. 
Hon David Carter 
: The share price is struggling. 
PHIL HEATLEY 
: Yes the share price is struggling. 
Report noted. 
Housing New Zealand Corporation 
Hon DAVID CARTER (National) 
: 
 My questions relate to Housing New Zealand and its recent financial review. I want the Minister to explain the rationale for the 12635 people who are now waiting for a State house. I would like the Minister Mr Maharey to take the opportunity whilst he is in the chair to acknowledge that his policy around income-related rents has been an unmitigated disaster. 
Jill Pettis 
: Under a National Government there wouldn’t be any State houses. 
Hon DAVID CARTER 
: Jill Pettis is interjecting and it is the normal rubbish we get from her about the National Government selling State houses to people who have lived in them for a long long time. I will take the opportunity to ask the Minister another question. Why does he not allow people who are living in a State house who like their State house and in some cases have an income of $140000 to buy their State house? Why does he then not use that money to reinvest in houses that thousands of people are waiting for. 
Little has been done for housing in New Zealand as acknowledged by the only good work that Minister has done and that is the release a fortnight ago of the housing strategy. Anybody who reads the housing strategy will acknowledge that the previous policies put in place by the National Government which Jill Pettis bothers to object to are reinforced by the housing strategy and that is the policy of an accommodation supplement. 
 No Government will ever be in a position to buy the stock of housing required for low-income New Zealanders. There will always be a requirement for the State to provide some houses and for the private sector to provide the majority of them. That will never change. If the Minister wants an equitable housing policy that will work and will not have 12500 people waiting for a State house then he must provide a system that is clear concise and equitable between both the State sector and the private sector. The housing strategy recently released by the Minister states exactly that. 
The housing strategy states that the policy must be delivered via the accommodation supplement. Mr Maharey Graham Kelly formerly a Labour Opposition spokesperson and one Helen Clark now Prime Minister are repeatedly in the media criticising the accommodation supplement throughout the 1990s but now the Minister himself acknowledges that it is the only credible logical way to deliver housing assistance. 
I ask the Minister to explain why he has 12500 people on a waiting list and why nearly half of those people are in absolutely urgent situations. He should explain why he came to the House a fortnight ago and tried to tell members that Housing New Zealand is building 4000 new houses when any Minister who is on top of his or her own portfolio will know that the number of houses being built is in the hundreds not the thousands. The Minister is actually doing long-term rental arrangements with the private sector putting those houses into Housing New Zealand stock and then claiming that he is building up the housing stock. That is not happening. 
The Minister needs to provide housing in areas of high demand such as Auckland. There is no demand in areas like Wanganui. Jill Pettis criticised the previous National Government for selling Housing New Zealand stock in areas like Wanganui. That was probably the best thing that was ever done because that money is now available and has been available to Housing New Zealand to reinvest into housing stock in areas where it is demanded. Unless the Minister is prepared to acknowledge that he uses the accommodation supplement he will not have a solution to the housing needs of New Zealand. The Minister also needs to look at ways of encouraging people who are living in a State house on an income of $140000 a year to stop being dependent on the State. 
Clayton Cosgrove 
: Name one! 
Hon DAVID CARTER 
: I am not allowed to name one because of the privacy laws. However the Minister’s answers confirm that there is one such family on $140000 a year. 
Hon TAITO PHILLIP FIELD (Minister of State) 
: 
 That was an appalling speech. That member had the audacity to get up on his hind legs and talk about a housing shortage when it was the National Government that sold off 12000 houses during its tenure in office. 
Rt Hon Winston Peters 
: How many? 
Hon TAITO PHILLIP FIELD 
: Twelve thousand! It is interesting to note that the shortage of houses for those on the waiting list actually matches the 12000 houses that the National Party sold off. Then that member had the cheek to respond to an interjection that asked how many houses the National Government had sold by saying: “Not enough.” He wants to talk about the housing shortage and the long waiting list and then says that the National Government had not sold off enough houses. 
One of the major contributing factors to poverty in this country is the cost of housing. There is no question about that. I ask members Opposite to do their homework and to look up the facts about poverty in our communities. We also know that overcrowding is a significant factor contributing to infectious diseases. People in communities such as south Auckland contract meningitis and all sorts of infectious diseases because of overcrowding and this Government is doing something about it. We are quite proud of our track record over the last 4 years. We are looking at building an extra 3500 houses and another 3000 to 4000 houses in the following 3 years. That will deal effectively with the giving of stability to low-income families. When families cannot afford to rent they have to move from house to house. That sort of mobility gives instability to children who need to go to from pre-school and kindergarten on to primary school. When they do not have that stability in their family life their education suffers. So it is a question not only of health and education but also of the fundamental right of families and children to be able to access affordable quality housing. That is what this Government is about. 
I am very proud that we have significantly reduced the cost of housing by an average of $1800 for low-income families. The disastrous effect that market rents—brought in by the previous National Government—had on those families is something that those members opposite need to be ashamed of. As we continue to talk about the poverty within our communities we have to remember that a lot of people including many children suffered under the National Government in the last decade not only because of its housing policies but also because of other aspects of its social policy such as benefit cuts of 25 percent. 
Labour has a proud record of rebuilding the stock numbers in State housing. We are looking at meeting the demands in Auckland. I am particularly concerned about the south Auckland area that I represent which has the longest waiting list for State houses. At least we are moving towards ensuring that the stock numbers are built back up to the 72000 that they used to be before the National Government sold off 12000 of them. 
We must also recognise the need to promote homeownership. There is a decline in homeownership and I congratulate the Minister of Housing Steve Maharey on looking at initiatives that can promote low-income families into their own homes. The Kiwibank package has already been released. It helps families into homes without deposits and it is also a way of getting them to understand how to repay their mortgage. That is very important in helping to increase in percentage terms the numbers of families into their own homes. 
What we in this Government have achieved in the housing portfolio is very important. It is something we can be proud of. Housing is fundamental to the health and well-being of our communities particularly for low-income people. This Government has a proud track record of achievement and we look forward to the next phase in its housing policy which is to improve the numbers I referred to and to get the stock level up to where it can meet the demand particularly in areas like Auckland. There is no doubt that Auckland’s growth means that there is a need to plan properly to ensure that communities have the facilities planned around Housing New Zealand’s housing projects. 
I am sure the Minister can expand on what is being looked at for the next 12 months but certainly the emphasis of this Budget will be not only on housing and levels of incomes but also on supporting low and middle income families who need it. 
JILL PETTIS (Labour—Whanganui) 
: 
 I did not intend to take a call in the housing debate but after listening to David Carter the National Party spokesperson on housing talk about housing I felt absolutely compelled to. I have never heard such drivel in my life as I have just heard from Mr Carter. My colleague Phillip Field has just explained some of the very good sensible socially responsible things this Government is doing in housing. I remind Mr David Carter National MP that National members do not mind getting into State houses as long as they are ministerial ones provided by the taxpayer. There is a degree of double standards coming from those members: they do not mind getting into a State house but they do not seem to have any inclination towards letting poor people who need a helping hand up get into a secure house. I say to Mr Carter that that is absolutely speaking out of both sides of one’s mouth at the same time and he should be ashamed of himself. Mr Carter seems to have already forgotten about the huge number of houses that National sold off. That was absolutely despicable because it removed that valuable housing stock from people with the greatest housing need and placed them in far more severe financial situations than they were in previously. 
Fortunately this Labour-Progressive Government has invested millions of dollars in restoring the housing stock and helping people to get into a home that provides a secure roof over their head which brings all sorts of other social advantages with it. I will refer to the food bank statistics. Anybody who bothered to look at those statistics would tell the National members that one of the biggest costs for people who require food bank assistance is housing. Those statistics are very revealing and selling off the State houses shows that National Party MPs did not bother to go and read the statistics and look at the impact that housing costs particularly under National’s iniquitous market rent policy had on people’s incomes and the quality of life they were enjoying—and “enjoying” is not the appropriate word really. I remind the National Party members that housing is important not only for the fact that people need to have a secure roof over their heads but also for the improved health and increased educational opportunities that people are able to access when they have secure safe dry well-provided housing. National members seem to have completely disregarded the impact that safe secure dry housing has on people’s health and their education chances. 
It is very clear that National intends—if God forbid it ever gets back into power again—to sell even more houses or to quit itself completely of responsibility for what we know in New Zealand as State housing. Tony Ryall is on record as saying that National does not have a desire to expand the level of housing in New Zealand. Housing is not an issue that is dear to National’s core constituency so the National MPs have absolutely no interest in it whatsoever. But I remind those members that a large number of people in New Zealand are fundamentally and philosophically in support of the provision of State housing. I meet people who would not necessarily strike one as being core Labour supporters but who still firmly believe in the provision of State houses. Having a roof over one’s head is a fundamental part of the New Zealand way of life. Those National MPs have clearly forgotten the appalling overcrowding situations that occurred in some of our biggest cities particularly in Auckland when as I said earlier the iniquitous market rent housing policy applied. We saw people living in garages. We saw two to three families—and that is no exaggeration—living in the same house and we saw all the health and social problems that accompanied that. 
New Zealanders do not want to return to that situation. New Zealanders want people to be able to have a home of their own and the vast majority of people who get a State house as we commonly refer to it move on. It is a first step towards people getting their own independence and having a home of their own helps them to gain it. 
Report noted. 
Broadcasting Commission (New Zealand on Air) 
Radio New Zealand Limited 
Television New Zealand Limited 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 We have in New Zealand a senseless TVNZ charter which underpins the nonsense that is occurring at TVNZ. The charter of course is just an exercise in political correctness and cultural drivel focused on ethnic programmes that are little more than social apartheid. It is part of this Government’s social engineering agenda and we oppose it. The charter has also confused the commercial imperative outlined in the State-Owned Enterprises Act. The State-owned enterprise is to be either a public service broadcaster or it is to be surely a commercial entity. It needs to be one or the other but it cannot be both. Nothing illustrates that point more than the debacle of Ross Armstrong—theformer National Party vice-president who was of course appointed by the National Party to most jobs but who is also one of Helen Clark’s current followers—who got away with fraud double-dipping and the serious misuse of taxpayers’ money. He got off scot-free and no one was held accountable. I find it very unusual that when Maori people commit fraud Don Brash and National and ACT are down on them like a ton of bricks—but not in the case of Ross Armstrong! They would have given him a knighthood if they still had one. 
I am really concerned that taxpayers’ dollars are being used to fly executives all over the world to stay in the best hotels under the guise of dubious claims that by doing so they will somehow provide a better service. We say that taxpayers’ dollars would be better spent here in New Zealand on promoting our already-proven film industry. What is really of concern of course is that TVNZ is a very very high-priced label and it lives under the dark shadows of the National Party’s no doubt intended policy plank of selling it the moment that National ever gets back into power. Well we all know that is not going to happen but nevertheless it cannot be easy for a television service to operate having a public mandate when it is to be put under the threat of sale. 
But the real issue today is this: why have the TVNZ executives not come along to the Commerce Committee and given us an explanation for the hundreds and hundreds of thousands of dollars of unlimited personal credit card spending on behalf of 11 of the executives and for a half hour being taken at the start of the year in a prime programme called  
Holmes 
 to try to do in somebody’s political career? 
I have news for those gentlemen and it is all bad. We want them to come along and explain each credit carddetail by detail. 
R Doug Woolerton 
: Oh they won’t do that. 
Rt Hon WINSTON PETERS 
: Well they will have to because in a fit of macho behaviour the man at the top promised that. He even asked me whether I wanted details of the make-up allowance account too. I said yes of course if he wanted to give it to me that would be fine. 
I want to know what the clothing allowance of Paul Holmes is. I want to know what Susan Wood’s clothing allowance is. Is it $25000 $35000 or $55000? Let us find that out. Those people made a big job of Tuku’s underpants. Now they have put all the clothes on the other body and I want to know what their clothing account is—or is it just limitless? Do they spend what they like? Is it true that at the end of the year they divvy all the clothes up and have a little auction amongst themselves? [ 
Interruption 
] Not on the market no—a very limited market. 
R Doug Woolerton 
: Who’d want a gift of Holmes’ clothes? 
Rt Hon WINSTON PETERS 
: That is true. Maybe Mark Peck would pop along and get a decent suit. Anyway to cut a long story short we want to know when TVNZ’s executives are going to turn up and we want to be certain as a House that they do not treat Parliament and the Commerce Committee with contempt. In short we want them to show us what has been going on. That must surely be in the interests of TVNZ because we know what a huge believer it is in public accountability. It is the absolute paragon of virtue when it comes to public accountability and we want to give it a chance to demonstrate just how much it means by that. 
R Doug Woolerton 
: Is this a Tui’s ad? 
Rt Hon WINSTON PETERS 
: Yeah right. This is not another Tui’s advertisement. 
Hon Member 
: Don’t be cynical. 
Rt Hon WINSTON PETERS 
: I am not being cynical. I just want to make it very clear to TVNZ that if it thinks it is going to stitch up somebody’s career with a tissue of lies and get people to perjure themselves in not one affidavit but three then there are consequences. 
I want TVNZ to know it has picked on the wrong person here. 
SUE KEDGLEY (Green) 
: 
 I want to pick up on the issue of credit cards but before I do so I would like to touch on two other issues relating to TVNZ’s financial review. The first is that TVNZ assured us that the $10.7 million in taxpayer funding it received to implement the charter in 2002-03 was all spent on programmes that met the criteria spelt out by the charter. But when we actually looked at how it had spent the money when it finally published that information retrospectively in its annual report we discovered that it had spent more than a million dollars on buying in over 1000 hours of BBC World Service programming and other foreign programming. I have no problem with TVNZ buying in BBC World Service programming but I have to ask why it is spending taxpayers’ money—charter funding—on buying in thousands of hours of foreign current affairs programming when for example we have only 24 percent local content on TV2. In fact most of that programming—the 1000 hours—screens between the hours of midnight and 6 a.m. How does that conform with the charter funding criteria and why are we spending millions of dollars on that? The Minister said last week in answer to a question in the House: “No charter funding is spent on any of the network’s major news and current affairs programmes.” Yet we learn from the annual report that more than 1000 hours of charter funding was spent on buying those foreign current affairs programmes. Was the Minister misleading the House in his answer? 
A second issue is this: how has current affairs been improved under the charter? We had a lot of rhetoric about what would happen but what has been delivered? Firstly 92 fewer hours of current affairs have been screened since the charter came in. Secondly TVNZ has dropped the flagship current affairs programme  
Assignment 
 has sacked 14 current affairs staff—allegedly to save $4 million in its news and current affairs budget—and now we learn it is paying twice the market rate to buy in yet more foreign current affairs and news programmes. What on earth is going on there? And what about TV2 the channel that our children and young people watch? TVNZ acknowledged during the review that it did have a legal obligation to deliver the charter on both channels. But then we learnt that TVNZ is screening less than half of the local content on TV2 the programme our young people watch that it is on Television One. In fact it is screening a pitiful 24 percent on TV2. How can it be implementing the charter equally on TV2 when it is showing a mere 24 percent of local programmes on that channel? That is simply not good enough. Where are the performance criteria that we have been waiting for? 
On the question of credit cards which Winston Peters has now raised that was an issue I raised during the financial review. Mr Peters has focused on the 11 executives who have unlimited spending. But in fact when one looks at the report one sees there were far more than that. An extraordinary 462 staff in TVNZ have company credit cards of whom an astonishing 89 staff have unlimited spending on their credit cards and a further 66 have spending limits of up to $15000. Why would we have almost 500 staff with credit cards many of which have unlimited spending in an organisation with a public service culture? We were told that there is no explicit policy relating to the number of credit cards allocated to staff. TVNZ refused to tell us about credit card usage by its senior executives. It did acknowledge that 11 senior staff had spent $316000 last year but basically TVNZ would not tell us about the rest. We have had to ask the TVNZ executives to come back to the Commerce Committee to try to answer those questions. It is almost unheard of that we have had to recall them to the committee yet again in order to try to understand why such an extraordinarily large number of staff have credit cards and how they can be made accountable for that expenditure. 
MARK PECK (Labour—Invercargill) 
: 
 At the commencement of this debate two votes had not been reported back to the Committee one of them being that for Industry New Zealand. The point made by the Hon Bill English was that that is the most important work that has to be done by the Committee. I have taken the opportunity to go back to my room and check my notes from the Commerce Committee meeting on Thursday last week when the committee was to consider and deliberate on the Industry New Zealand report to Parliament. The National Party member requested that we did not deliberate in order that Mr Phil Heatley the person who spoke on those particular estimates had an opportunity— 
The CHAIRPERSON (Ann Hartley) 
: I need to interrupt the member. I believe that that is confidential information. 
MARK PECK 
: Oh no that is not confidential information. That was the proceedings of the committee. 
The CHAIRPERSON (Ann Hartley) 
: I am taking advice from the Clerk. The proceedings in a select committee other than the hearing of evidence are confidential until they have been reported back. So I cannot allow the member to go on with that point of order. 
Hon STEVE MAHAREY (Minister of Broadcasting) 
: 
 It is no surprise that the Opposition has chosen to most spiritedly debate an area like Television New Zealand and not rise to debates on things like the guardianship fund an overseas superannuation fund with a large fund of money which we thought might have attracted the interest of people. But it has chosen to go for Television New Zealand. That has attracted the interest of Mr Peters undoubtedly because a person scorned over dinner is someone that one should always expect to come back for dessert and today he had a wee crack at them again. I am sure they are able to cope with that so I will not dwell on him feeling bad about the dinner. 
I want to say though that in terms of Mr Peters’ comments I am in complete agreement on two points. One is that I agree with his drive for accountability. He spent most of his time talking about Ross Armstrong. I just want to remind Mr Peters that Ross Armstrong no longer is the chairperson of Television New Zealand. He did leave Television New Zealand because we asked him to. He agreed to do that. All of those things have been cleaned up and there has been a long gap in between. But if Mr Peters has forgotten that I thought I would just remind him that those things do matter to us and we do act on them. 
I also want to agree with him on the notion of public asset. He is right. If the National Party were to ever under some kind of extraordinary circumstance return to the Treasury benches it would sell this asset. It would sell Television New Zealand. It would sell Radio New Zealand as well. We know that because National members have said repeatedly that they can see no point in owning it. Now whether one likes or does not like what goes on with the programming Television New Zealand is part of the little left to us by the National Party of our nation’s infrastructure and we will not be selling it. We will be hanging on to it. There is a clear point of difference between the National Party and ourselves. 
Let me just talk quickly about credit cards. Can I tell members who do not seem to have read their notes very well that TVNZ confirms that all its credit cards now carry a credit limit and that the number of credit cards on issue is strictly controlled and has been reduced by 20 since January 2004. The use of credit cards enables low-value transactions to be processed efficiently while contributing to a rebate on expenditure for the credit card provider. So all the comments about limitless spending everybody has one and they have 12 in their back pockets are wrong— they do not and under this Government they will not because we ensure that people get the message that we want prudent spending. 
Television New Zealand of course is now working under the charter towards New Zealand content being at least 50 percent of programmes shown. That will mean an enormous growth for independent producers of programmes. It will mean a real change on screen. The commitment to New Zealand programming is something that the Green Party may not have read either but it is right there. 
There was concern about current affairs on Television New Zealand. Yes Television New Zealand has been reviewing news and current affairs and yes it has taken off some programmes and put others on. If members read their notes once again they will find that more current affairs programmes are on now than there were last year. This year we are planning to increase current affairs and news. There are new kinds of programmes on television because we really like to see debate about the kinds of issues in our country. We are very pleased to see the charter being fulfilled in that way so if members have any concerns about New Zealand content and current affairs they should please go back to the notes. They will find that there are even more. 
Sue Kedgley asked the question about overseas programming being a proper area of expenditure under the charter. Well of course it is. A charter does not just mean that New Zealanders who do happen to live in a global society want to watch programmes made by New Zealanders about New Zealanders entirely. They also need to know what goes on elsewhere and they need other points of view coming in. It is an appropriate thing for a public broadcaster to spend some of the money it gets under the charter on programmes it might not otherwise be able to afford to bring into the country. That is an appropriate use of the money. 
Television New Zealand is going through a large number of changes—there is no doubt about that. But right now it is maintaining audience share as the House would want. It is maintaining a very high level of profitability and it has had a very good year in relation to advertising. At the same time TVNZ is slowly but surely working out what it means to be a chartered organisation that has to return a commercial return to the Government. It is one of only three public broadcasters in the world—the Canadians the Irish and ourselves—where a commercial return is required by the shareholder the Government. It is required to provide a larger return. A larger profit has to be made by TVNZ so this is a big learning curve but I can say right now that we are seeing major changes and we are reasonably happy with the state of TVNZ’s finances. 
MARK PECK (Labour—Invercargill) 
: 
 I congratulate the Minister on his comments in the Chamber today. I join him in reminding those who are listening to the debate today that if National had the opportunity it would sell off TVNZ Radio New Zealand by lunchtime and a heck of a lot more. National members do not believe in public assets. They think that the market delivers best. Indeed Don Brash even when talking about schools said only a couple of years ago that for his part he did not care who owned the schools. He does not care who owns the Accident Compensation Corporation or hospitals. He certainly does not care who owns broadcasting. He does not care whether Television New Zealand is in private ownership. 
I just ask the people of New Zealand to think about that a little bit because not everybody earns the same amount of money as Don Brash used to earn when he was on half a million bucks a year as the Governor of the Reserve Bank and certainly not everybody has the same sort of assets that John Key has. Many people in New Zealand rely totally on the public broadcaster for their television news information and entertainment. 
I just say to members opposite that if they want to sell Television New Zealand bring it on! Let us take that particular debate into the election and have it. Let us put it on the table and have a debate about it because I know that the Kiwi mums and dads around the country like their free-to-air television. I can say about the people whose houses I door knock on that not everybody has Sky because they cannot afford the payments. In some parts of the country not only do they not have Sky they cannot get it unless they really go the whole hog and get the— 
Hon Maurice Williamson 
: You can get Sky anywhere in New Zealand. It comes from a satellite. 
MARK PECK 
: The member should try to get it in some places in Southland and see how he gets on. 
Hon Maurice Williamson 
: Anywhere. 
MARK PECK 
: Anywhere? 
Hon Maurice Williamson 
: Done. There is the technology. 
MARK PECK 
: A done deal. That is very good. 
Darren Hughes 
: He’s got his salary back now. 
MARK PECK 
: He has his salary back and his position back. It is good to see him back in that seat as he has given a bit of punch to the Opposition which they were lacking for some time when he was No. 27. He was a bit like a Telecom advertisement—“Go 27”—but of course he did not go he came back and someone else along the way did go— 
Darren Hughes 
: He’s still going. 
MARK PECK 
: That is true he is still going and we know about that. I congratulate Television New Zealand on the work it does. It does an extremely good job of providing the news service and current affairs programmes. It also provides very good children’s programmes. I remember when I was bringing my children up the importance of children’s programmes on a Saturday morning as people were waking up and getting into their day. These programmes are top notch. 
Darren Hughes 
: Even 40 years ago? 
MARK PECK 
: It is a little bit less than 40 years ago but almost. I am delighted that very soon I will be a grandfather and will be able to enjoy those Saturday morning programmes with my grandson or granddaughter—who knows but it will certainly be one of the two—and I am certainly looking forward to that. 
There were some issues that we discussed with TVNZ and we will have it back for a briefing on some of the matters that have been referred to in this debate but that is as it should be. One of the things about financial reviews is that they give the select committee an opportunity to get behind the numbers and that is an important thing to do. But at the end of the day that is not a reason to give the likes of the Opposition an opportunity to say that they would like to flog it off. 
I can understand that point of view coming from ACT. All that ACT has ever believed is that we should sell everything but I would have thought that if the National Opposition was looking to build a solid social infrastructure in this nation it would have said that broadcasting was part of that but no they remain silent on the other side. It took Winston Peters and Sue Kedgley to raise the issues in this Chamber but National members will not raise them because they know that Television New Zealand is a very good State-owned enterprise. 
As Opposition members consider their proposals for the next few years I tell them this: the State-owned enterprises in this country of which TVNZ is one have on their balance sheets $11 billion worth of assets. If members opposite are talking about getting rid of that it is probably just under 10 percent of New Zealand’s gross domestic product. It is a significant amount to be putting on the market and I think Opposition members should stand up and be accountable for that. I wish one of them would make some comments. 
Reports noted. 
Career Services 
Early Childhood Development Board 
Learning Media Ltd 
New Zealand Qualifications Authority 
Tertiary Education Commission 
New Zealand Teachers Council 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 So much rests on the broad shoulders of Dr Cullen this week because the rest of his front bench is crumbling starting with the Prime Minister who has had no response to the Maori challenge and including Mr Goff with his liberal views on under-age sex and the Minister in the chair Mr Maharey with a failed tertiary policy. 
I found a quote the other day that I thought I might share with members. It is about the work of the Tertiary Education Commission. “The work included the Tertiary Education Advisory Commission’s four reports the industry training review the training opportunities and youth training review the work of the adult education and community learning working-party and most importantly the passing of the Education (Tertiary Reform) Amendment Act the development of the tertiary education strategy 2002-07 and the promulgation of the first statement of the tertiary education priority.” That is all its work in 5 years and what is the result? The result is widespread mismanagement and potentially fraudulent behaviour among our polytechnics which have unexpectedly blown the least strategic part of his Budget out by $80 million over the last couple of years the worst year being 2003. 
I ask the Minister when he will start taking this matter seriously. Let us take the example of Brylton Software and its joint-venture deal with Christchurch Polytechnic. That polytechnic had 96000 enrolments which we are told is only about 20000 or 30000 people and it earned $15 million in revenue from the Government. The head of development for Christchurch Polytechnic was Vicki Buck who was also a director of Brylton Software which provided the course that involved students being given CD-ROMs. So $15 million flowed into Christchurch Polytechnic and I want to know—and the students of the polytechnic want to know—where it went. How much did Brylton Software get with the director of development for Christchurch Polytechnic being a director? 
I can recall much debate in this Parliament about Aotearoa Television and Tuku Morgan and his shopping habits. I remind the Minister that about $100000 in director fees were in question in that case and there was huge debate. I suggest to him that if the Tertiary Education Commission had been a Maori organisation he would have sent in an independent investigation months ago. He would have taken the view that the public would not tolerate Labour being soft on Maoris. Well it is not a Maori organisation but the extent of the mismanagement is enormous. It amounts to $15 million just in Christchurch—before we begin to talk about Tairawhiti Polytechnic the Open Polytechnic and The Tertiary Alliance all of which have not merely dipped their toes in the water but been in it up to their necks. 
Given the obvious potential conflict of interest what did the Minister do? Well he went and asked the people who were conflicted whether they had behaved themselves. They said that yes they had behaved themselves. But the answer to the parliamentary question does not say that. It says that at one stage the two people in the polytechnic who were conflicted advised of their conflict and withdrew from negotiations. So in an answer to this Parliament the Minister has confirmed that Vicki Buck and her offsider were involved in negotiations between Christchurch Polytechnic and Brylton Software—a company of which they were shareholders and she was a director—involving $15 million. 
Then today I outlined to the House allegations from students at Tairawhiti Polytechnic that in enrolling for one course they were asked to enrol for another course in order to “help with funding”. When they enrolled they attracted hundreds of dollars of public money for their enrolment. Every person in Christchurch who enrolled because he or she got an inducement attracted $800 of public taxpayers’ money. When will the Minister set up an independent investigation into these matters? 
DEBORAH CODDINGTON (ACT) 
: 
 Once again we see why the Minister of Education the Hon Trevor Mallard is an absolute disgrace to education in this country. We stand to debate the report on the Teachers Council and because this Minister has repeatedly pushed unnecessary and superfluous legislation through the Education— 
Hon Bill English 
: I raise a point of order Mr Chairperson. I am sorry to interrupt my colleague but I just want to clarify the process. I was asked whether we would agree to take the education reports that are relevant to the Minister in the chair now and was told that Mr Mallard would be here later to debate the reports— 
Darren Hughes 
: No but— 
Hon Bill English 
: If that is the case then we were misled and that is a serious problem. I was advised that Mr Mallard would be in the Chamber later to deal with—[ 
Interruption 
] The whips had better clarify that because that is the agreement I signed up to. If that had not been the case I would not have agreed to it. We will have to change the course of this debate so that we know what is happening and all opportunities are available. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Can I suggest the two whips sort out the order of the debates. As Chairperson I cannot be expected to know that. If they could sort that out I would appreciate it. 
DEBORAH CODDINGTON 
: The Teachers Council is an absolute disgrace. It does not even report to the House—it is only by leave that we can even debate it. The Teachers Council has been in operation for 29 months in some form or another. It was set up as a push from the teacher unions to take over from the Teacher Registration Board because the teacher unions did not have representation. In those 29 months it has managed to breach the Public Finance Act; it has not issued a statement of intent so we cannot even measure how well it has done; and it has managed to issue only a draft code of ethics. We heard in an open session at the Education and Science Committee that the excuse was that it was still having teething problems. It spat out its director Margaret Kouvelis amid great secrecy. Then what did the Minister do? I think it is bizarre that he is not going to take a call to explain why every one of the entities in his portfolio—the Teachers Council Learning Media the New Zealand Qualifications Authority Career Services—is in total disarray and disorder. The New Zealand Qualifications Authority is not doing what it is meant to do. Learning Media is pouring money down the drain. It was once a profitable company but now is spending money hand over and fist. 
So what did the Minister do? On 1 July 2003 he appointed Joanna Beresford as the chair of the Teachers Council. The council was set up to provide a leadership role in the teaching profession and it has done nothing of the sort. How could the Minister of Education appoint as the chair of the council a person who had been working with the teacher unions since the 1980s a person who actually said: “We must actively promote trade unions as at the very core of a democratic and participatory society.”? Well someone tell the band to strike up the “Internationale” because that is nothing to do with promoting leadership in the teaching profession. 
It is a disgrace that we have spent hundreds of thousands of dollars of taxpayers’ money on this Teachers Council but we are in a worse state than we were before. What does the annual report state? Well as I said earlier one of the most important things it states is that the council had not complied with the Public Finance Act. It had breached that Act in that the audited financial statements were not available within 120 days after 30 June 2003. We are now almost into June 2004 and it still has not even brought them back to the House. How are the taxpayers the parents of children at schools around New Zealand expected to have confidence in what their children are being taught how they are being taught and whom they are being taught by when the Teachers Council—much-vaunted by the Hon Trevor Mallard when he was just in Opposition and who in an article I wrote for  
North and South 
 magazine hailed his vision of the new Teachers Council as something that would replace the Teacher Registration Board do away with all the nonsense being taught in colleges of education and make teacher registration compulsory—still does not even know although it is compulsory for teachers to be registered how many teachers are teaching in New Zealand? How can we know how many are not registered if we do not even know how many are teaching? 
What are we paying these people on the Teachers Council? We have four people who are paid over $100000 a year. As I have said it is a disgrace. 
MOANA MACKEY (Labour) 
: 
 I want to talk about the Tertiary Education Commission and I want to congratulate my colleague the Hon Steve Maharey on the good work he has been doing in this area over the last 5 years. The member opposite Bill English asked what Mr Maharey had been doing for the last 5 years. I will tell him what Mr Maharey has been doing for 5 years. He has been reducing the cost of tertiary education for students. He has been making it easier to pay loans back and to reduce loan burdens. He has been reintroducing a Modern Apprenticeships scheme which the National Government scrapped. 
I cannot understand how one could find fault with an apprenticeship scheme that puts young people into work in industries where we absolutely need their skills because otherwise we choke economic growth. The National Government just got rid of that. It did not see the point of it. Well the Minister has been reintroducing it. We now have over 6500 people on these schemes and we are going to increase it to 8000. We now have Modern Apprenticeships available in 28 sectors. We have nearly 1500 Gateway placements from 126 schools. We are targeting 4000 Gateway placements. We now have 126000 people in industry training in this country and that is what the Hon Steve Maharey has been doing for 5 years. I congratulate him. 
 I started university in 1993 which was one year after Lockwood Smith introduced the student loan scheme. 
Government Member 
: The bad old days. 
MOANA MACKEY 
: In the bad old days. I remember in 1990 when I was at high school—we were going through the election and discussing it at school—that the National Party said it would abolish the $1300 tertiary tuition fee that the Labour Government had forced students to pay. Well National did abolish it but replaced it with a $3000 tertiary tuition fee. Perhaps it could be said that that party was being honest I do not know but I think it was being a bit slippery. The fact is that my fees went up 14 percent per year under a National Government— 
Steve Chadwick 
: How much? 
MOANA MACKEY 
: On average it was 14 percent per year. I did not know what I would be paying from year to year in my tertiary fees. When students are trying to get jobs over summer and pay fees for the next year because they do not want to take out loans it certainly helps if they have some vague idea of what their fees will be from year to year. Well students have that now. The fee maxima system means students know that their fees will not increase by any more than 5 percent each year. That might not seem a big deal to people who did not pay for their education in the same way we did but it certainly would have helped when I was a student. It certainly would have helped to know that the difference might be about $200 and not $1500. 
Another thing we have done in tertiary education is to remove the interest on student loans while students are studying. When I went to varsity I took out a student loan but I did not take out the maximum I could have. I tried not to because I knew I would have to pay it back. When I took that loan out I just was not aware of the huge amount of interest that was compiling while I was a student. When I finished my degree and received my final loan statement I was shocked to find out that I was in fact thousands of dollars further in debt than I thought I actually was just because of the interest I had accumulated while studying. That is hard. When people are young they are just trying to get through varsity—because their parents cannot afford to put them through—and they are having to work so it comes as a bit of a shock when they suddenly realise they are many many more thousands of dollars in debt. 
Simon Power 
: Your parents were on $80000 a year. 
MOANA MACKEY 
: My mother was on the domestic purposes benefit when I started university. Mr Power might not have realised that. She supported me as much as she could and I appreciated that help. When I finished varsity and started paying the loan off I had gone to work as a laboratory analyst. Laboratory analysts earn a good wage. I was earning about $35000. I was happy with that but there was no way my student loan repayments were keeping pace with the interest. My loan was getting bigger and bigger I was trying to pay it off but I just could not keep up. That is fairly dispiriting. I started to think: “Well what’s the point?”. 
I remember reading the article by Lockwood Smith in which he gave out the fine words: “Just don’t bother trying to pay it back.” He asked why students were moaning and whingeing about the loans and said they should just forget about them. That is easy to say for someone who does not have a student loan and who does not know that when students try to get a mortgage for a house the loan counts against them that they are paying 10 percent more off their salaries and that they are faced with doing that for the rest of their lives. Well in 1999 changes were made and interest was taken off loans while students were studying. In addition in my case on my salary no more than 50 percent of my loan repayments went to paying the interest. 
BERNIE OGILVY (United Future) 
: 
 I want to take a few minutes to look at certain elements of these reports before us. In particular I would like to start with Learning Media Ltd. This entity as we all know has had a major cloud over it in the last year or so due to nothing more than the expense account of a former chair a Mr Donald Sollitt whose expenses of over $200000 were achieved on the back of credit cards. I believe that that was a very dark cloud that hung over Learning Media Ltd. When we asked in the select committee what had been done to recover that money we found that $9000 of that sum had been invoiced back to him. Yet the expenses he had been living on as a spree were a sort of joke. He must have thought it was a bit of a joke too that he was asked to repay only $9000. I think the reason given to us sort of sideways was simply that this same said gentleman had gone into bankruptcy and therefore the Governmentcould not gather any more money from him. I do not believe that that was a sufficiently good answer on that occasion. 
Even if we put aside the horror part of Learning Media’s history there are still some very worthwhile matters I would like to bring to this House. The literacy and numeracy programmes that Learning Media has started are and have been very well recommended by both students and teachers around the country. I can see that as those develop and unfold theywill advance New Zealand. 
Another thing I noticed too in Learning Media’s report to us for the last year was that its overseas operations had increased some 30 percent. The revenue was mainly from the US but it was also from Canada and I think from Scandinavia and other countries which indicates that as a Crown entity Learning Media was starting to overcome the shadow placed upon it through its former chair. As select committee members when we reviewed and questioned the entity on that aspect we felt that its progress was notable. 
I would also like to take up one aspect of the New Zealand Qualifications Authority in its report to us. The committee along with the public remains somewhat concerned—some even sceptical—about the National Certificate of Educational Achievement (NCEA) and its processes of assessment in New Zealand. The public the parents and the children—the scholars and the students—do find it difficult to compare their assessments with others within their own group and age level and they also find it very difficult to find any useful understandings between schools as to what the system has actually achieved. As a result I have noted that schools have then gone into and are increasingly going into alternative forms of assessments and examination procedures because of the poor information being obtained from the NCEA programmes. More schools and principals this year have told me that they have certainly signalled to their parents the benefits of other examination systems so that parents children and of course employers can get a grip on what is happening. 
The International Baccalaureate with its benefits for instance is one of those programmes that parents are turning to and asking their children to take on more and more in schools. The Cambridge examinations are flourishing around New Zealand on the back of a misunderstanding—or a lack of understanding—of how to interpret the NCEA programme. I think that the New Zealand Qualifications Authority needs to wake up and listen to what parents and employers are really wanting. Standards-based achievements have limited features for parents students’ learning and employers. I also note that the Education Review Office has sent a real hurry-up message to the qualifications authority about the NCEA programme. So United Future as a party believes that the NCEA implementation was frustrated from day one through a lack of resourcing. 
HELEN DUNCAN (Labour) 
: 
 This debate on the financial review of Crown entities public organisations and State enterprises certainly points out the differences there are in this Parliament on these matters. This Labour Government is committed to ensuring that Crown entities and State-owned enterprises are working together with communities for the benefit of all New Zealanders. We are committed as a long-term shareholder to the State-owned enterprise model as opposed to the “hold for sales” stance of the previous Government. Shareholding Ministers seek to maximise the value of their companies for the benefit of all New Zealanders. National in contrast could not wait to fob off the family silverware. Just about everything of value to New Zealanders would have been gone by lunchtime under the National model. 
 This applies even to something as sacred to New Zealanders as our public school system. Our party is committed to a strong public education system that meets the needs of all New Zealanders. We believe that most New Zealanders would expect that this was true of all parties but it is certainly not true. After all when Don Brash was asked about it what did he say? He said: “For my part I don’t care who owns the schools.” Well I have news for Don Brash. Most New Zealanders do care who owns the schools. They believe in a viable public education system—a strong quality public education system paid for by the taxpayers because that is what real choice is about. Real choice is about all New Zealanders being able to send their children to good quality schools. We want every school to be a good quality school and every child to have the opportunity to attend a high-quality public education facility. We are not interested in the market model which has been so disastrous in so many areas of New Zealand life. 
In early childhood education what this Government is about is improving both access and quality. We have provided a lot more places in early childhood education and by ensuring that early childhood educators are better trained and qualified we can ensure that the quality of the education that children get is better. We know that the key to quality education is quality teachers. There is plenty of research to prove that. We want to improve the standard of early childhood education so we must improve the standard of the teachers in that area. 
This has met with some opposition from those who espouse the market model and who think that early childhood education is actually about childcare and babysitting. It is not. It is about ensuring that every child in early childhood education is having quality learning experiences that nurture the child and prepare the child for attending school. We are committed to having early childhood teachers who are better trained and qualified and I know that this will ensure the future of New Zealand education and of our children and that we will be thanked for it in time. 
In the primary service the emphasis has been on literacy and numeracy programmes based on strong research to show what is really good for our schools. There are some excellent research programmes particularly at the education department of Waikato University that show what can be done to improve the one area of the education system where there has been the greatest problem and that is with the “tail” as it is called. Eighty percent of pupils in New Zealand schools are doing really well and our education system is providing a really excellent education for them. But everyone in the education system knows that there is a group of about 20 percent of pupils who are certainly not doing as well as we would wish them to. When one looks at the international comparisons that tail in achievement is there. It is there for every other system in the world but our Government is dedicated to getting rid of it. 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 I invite the Minister to take a call to explain the activities and the purpose of the Tertiary Education Commission. As this House has been made aware in the last couple of months the tertiary education strategy itself has totally failed. We have ended up with by far the biggest growth in expenditure in the least strategic courses and if there is any other way the Minister thinks the commission’s strategy should be measured he can get up and tell members. But it would seem to me that if the lowest priority eats up the most new money then there is something pretty wrong with the strategy and he may have been better off without one. 
That raises the question of what the commission actually does. One thing it does do is get offside with every other Government department. It has just published a document about the different roles that different institutions might take. The document looks like it has been written by probably a second-year policy analyst who no doubt has sat at the Minister’s knee listened to all the jargon and gone off to put it in the word processor. It is full of all sorts of odd expressions but that covers up a fundamental strategic contradiction within that document and also within the commission. 
In practice no one in the tertiary sector takes much notice of the commission. The tertiary sector used to be hopeful that somehow this steering strategy would amount to something but it has now become hopeless because it found the commission is hopeless. The commission talks and talks and talks and when it has finished talking it reports and reports and reports. I think there have been 11 or 12 reports in the last 4 or 5 years. 
I understand that what the commission is trying to do is decide what direction tertiary education should take. Government departments have some interesting comments on it. I want to quote Te PuniKokiri which is not a department that everyone in Parliament takes a lot of notice of but it made this comment: “It seems to us that when students are making decisions about what course of study to undertake it is unlikely that aligning it with the tertiary education strategy will be uppermost in their mind.” 
Well I could not have put it better myself. The Minister is trying to devise a machine that I call “the revenge of the middle-management”. If people who have been in big organisations who then get into Parliament have been middle-management in those organisations they believe that the boss always got it wrong. So they invent some machine that will make all the right decisions and prove that they were right. This is about tens of thousands of young New Zealanders making decisions and they are not making decisions willy-nilly but decisions for which they pay tens of thousands of dollars. 
Why would the Tertiary Education Commission know better? The answer is that it does not. It does not matter how much data the commission collects how detailed the profiles are or how much it signals facilitates and relationship-builds—which I gather is its function; that is what one does when one has no authority and no control—it will never be able to get the right answer. That is because tertiary education these days is so dynamic so changeable and so much driven—as it should be—by generally young people’s choices that by the time the commission catches up with what has happened it is too late because it cannot change it. 
The community funding is exactly the best example of that. By the time the commission caught up the $80 million blowout was out of the bag. It was too late. The fraudulent enrolments had already happened the conflicts of interest had already conflicted and the commission still cannot do much about it. What it does is ring up the culprits to ask whether they have done anything wrong which is like asking burglars whether they have burgled a house and they say they have not. The commission rings up the culprits who say that it is not right and that they did not do any of those nasty things and the Minister goes away reassured. 
So what is the strategy all about? Well it has crumbled. It has lost credibility in the sector. The Minister has lost credibility and I want to know what he will do about that. He has spent hundreds of millions of public dollars on this strategy over 5 years—for nothing. Was it for this document that has come out which was meant to be the  
Landscape 
 document but is something else? It has been roundly criticised by every Government department and we need some answers. 
Hon STEVE MAHAREY (Associate Minister of Education (Tertiary Education)) 
: 
 The debate around education which seems to be coming to an end has largely consisted of Bill English—who would know about crumbling—talking about crumbling and Ms Coddington talking about the Teachers Council. There was a little bit of a discussion about Learning Media and other good things that are going on and now members are back to the Tertiary Education Commission. So I guess I will spend most of my time on the Tertiary Education Commission and take up the invitation of Bill English who was desperately interested in this matter. He was so interested that I guess he will take another call straight after this so he can be part of it. I will invite him to take another call at the end of these 5 minutes to use up the rest of that time in the completion of his so-called demolition of the tertiary education strategy. 
The basic proposition is this: if a nation is to move towards a more strategic approach to tertiary education it has to have someone to do it. This is not Nigeria so therefore we will not run it as a Government department. Therefore there has to be an intermediate body. That is what the Welsh do what the British do and what California does—one could go on and on. Every country that has moved towards this kind of model has had to have an intermediate body that stands one step removed from the Government so it can have the independence from Government policy it needs and one step removed from the sector so it can satisfy the need for the Government to know that there is a body out there that is scrutinising and doing its job properly. 
 I ask National members to get up and tell us whether they will run a strategic approach to tertiary education rather than return to a market-based approach. Will Mr English tell us when he takes his next call whether he will take the Tertiary Education Commission and repeal the legislation that underlies it? 
If we are to have a strategic approach someone has to do it. We cannot go back to the market. I did not hear anything about that—all I heard from the National Party is that it wants to give more direction. It wants to tell universities what to teach. It wants to tell polytechnics what to do. These are autonomous organisations in a democratic society and I will never put this Government in a situation whereby it will dictate what those organisations do. We want them to be autonomous organisations. I ask Mr English when he takes his next call to take up that challenge. 
What has the National Party done over the last little while? The Tertiary Education Commission has been in business for a little over a year. Mr English has not been the leader of the National Party for a little over a year and I do not know whether he has done anything. I have not seen anything. Now and again he pops up in the Chamber. Now and again he does a speech somewhere but I cannot remember him accomplishing one thing. 
Unlike him in a little over a year the Tertiary Education Commission has completed its first round of charters—523 of them are approved. It has completed its interim profiles for last year for tertiary education institutions industry training organisations and the larger private trainers. It has just completed one of the most stunning examples of policy in the last 4 years under this Government—the Performance-based Research Fund. I know that we debate back and forwards now and again—and I am looking at Maurice Williamson. I know that for many years Maurice Williamson thought we had to have a strategic approach to tertiary education research. We now have it. It is a class act. Right across the world I am told by Sir Howard Newby the person who runs the Higher Education Funding Council for England that this is a class piece of work. It is better than the research assessment exercise which is about to go into the last thing again. Who did that? The Tertiary Education Commission did that huge piece of work. 
The Private Training Establishments Strategic Priorities Fund has now been through two rounds of spending. That fund was capped by the work of the Tertiary Education Commission. We have had completed rounds for the Innovation and Development Fund the E-Learning Collaborative Development Fund and the Partnerships for Excellence. We have had the Growth and Innovation Pilot Initiatives round—the second one is underway—the Building Research Capability in the Social Sciences round has been completed and the Pacific peoples strategy and the Maori education strategy have now been put in place. 
The Centres of Research Excellence programme is run by the Tertiary Education Commission and we have had a 9.3 percent increase in industry trainees since it took over that strategy. We have the Modern Apprenticeships programme the Gateway programme—which it administers across the country for us—and it runs the whole industry training strategy. I could go on and on through pages and pages of work. 
The Tertiary Education Commission has been going for a little over a year. Am I happy with it? If its officials worked any harder I am not sure they would go home at all. All organisations as big as this will have teething problems as they work issues through with the sector. An issue like 5.1 worries this Government because we want to make sure we can get all of this under control. 
Reports noted. 
New Zealand Trade Development Board 
Report noted. 
Abortion Supervisory Committee 
MURRAY SMITH (United Future) 
: 
 The Abortion Supervisory Committee has been the subject of scathing criticism for many years—from the last term of Parliament from the Audit Office and from this term of Parliament. If it had been any other committee except this one this Chamber would be in uproar and the members of that committee would have been called upon to resign long ago. 
In the last term of Parliament a unanimous comment of the Justice and Electoral Committee stated: “We are concerned that the annual report of the Abortion Supervisory Committee does not present information that would enable us to form a view of how or how well the Abortion Supervisory Committee’s functions are being discharged. The Abortion Supervisory Committee does not consider strategic planning documents necessary or appropriate to its task though it does continue to review and update those tasks each year. The Audit Office last year told the Justice and Electoral Committee: ‘The Abortion Supervisory Committee annual report does not present information that would enable the committee to form a view on how or how well its functions are being discharged.’ Since it appears that the Abortion Supervisory Committee has determined that it will not collect such information notwithstanding the committee’s expressed views on the matter the committee appears to have little choice other than to question the Abortion Supervisory Committee in detail on what it actually does and to form its own view about whether or not those procedures comply with the Act and constitute good performance.” What a scathing criticism of any committee endorsed by this Parliament! 
In the last review the Justice and Electoral Committee again unanimously concluded that the Abortion Supervisory Committee did not fulfil its statutory functions. The Abortion Supervisory Committee stated that it did not need to keep performance measures to evaluate how well it was carrying out its statutory functions. It claimed it had a Crown Law opinion that said it did not have to do anything other than meet minimum statutory requirements and that that was what it had chosen to do. 
The committee pointed out that the law did not prevent it from doing more than meeting minimum statutory requirements but it appears that fell on deaf ears. The committee said: “It appears that the ASC will continue its practice of not collecting information that would enable us to form a clear view on how—or how well—its functions are being discharged.” Section 14(1)(h) of the Act requires the Abortion Supervisory Committee: “To keep under review the procedure … whereby it is to be determined in any case whether the performance of an abortion could be justified.” 
The Abortion Supervisory Committee said it sent out information to consultants but never sought information in return let alone monitored analysed or collated the results. How can it possibly say that it is fulfilling its statutory functions when it does not even collect any information? Instead of the committee taking up the challenge that the 2001-02 financial review put to it in this year’s review it criticised the fact that the Justice and Electoral Committee had challenged it. It referred back to a 1996 committee report that said that “the Abortion Supervisory Committee and its individual members were constantly criticised for alleged inadequacies in the performance of its functions. In particular it is asserted that in carrying out its functions the Abortion Supervisory Committee fails to have regard to ‘the rights of the unborn child’. This criticism ignores the fact that there is nothing in the Act spelling out what those rights are.” 
The Abortion Supervisory Committee and the committee it appears of the time referred in evidence of that to the case of  
Wall v Livingstone 
 a 1982 Court of Appeal judgment in which taken out of context the court said “it was important not to lose sight of what must have been a deliberate parliamentary decision—the avoidance of any attempt to spell out what were to be regarded as the legal rights of an unborn child with the consequential absence of any statutory means by which rights could be enforced.” 
 Now the implication that the committee took from that which is quite clear in its report was that because the rights of the unborn child were not defined by the Act the requirement in the preamble to the Act that “the authorisation of abortions must have full regard to the rights of the unborn child” was meaningless. 
But when one looks at the Court of Appeal judgment one sees that it states nothing of the kind. It cites with approval the lower court decision by Justice Speight who said in describing the general effect of the legislation: “That Act and the Crimes Act consider not only the rights of the mother and the need to protect her even against herself but also balance them against the ‘rights of the unborn child’ which in the course of nature must mean the right to be born.” The committee is certainly not considering anything of that nature and I think it should be sacked. 
Report noted. 
Auckland District Health Board 
Bay of Plenty District Health Board 
Canterbury District Health Board 
Capital and Coast District Health Board 
Counties Manukau District Health Board 
Hawke's Bay District Health Board 
Hutt District Health Board 
Lakes District Health Board 
MidCentral District Health Board 
Nelson Marlborough District Health Board 
Northland District Health Board 
Otago District Health Board 
South Canterbury District Health Board 
Southland District Health Board 
Tairawhiti District Health Board 
Taranaki District Health Board 
Waikato District Health Board 
Wairarapa District Health Board 
Waitemata District Health Board 
West Coast District Health Board 
Whanganui District Health Board 
Health Research Council of New Zealand 
Health Sponsorship Council 
New Zealand Blood Service 
Pharmaceutical Management Agency 
Residual Health Management Unit 
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 The debate tonight is about the 2002-03 financial reviews and the performance of our district health boards. During that time the district health boards had a large deficit. That deficit has improved but one has to ask what has happened in our district health boards where morale has never been lower than it is today. We see time and time again that our doctors and nurses feel that cuts are being made in all areas by a Government that said there would be no cuts and that said it would reduce the waiting lists. Well it did that! It did it by simply dumping everybody off the waiting lists. The  
Health and Independence Report 2003 
—the Ministry of Health’s own report—showed clearly that we are doing fewer orthopaedic major joint replacements and less cataract surgery than in 1999 when National left Government. 
Steve Chadwick 
: In hospitals. 
Dr LYNDA SCOTT 
: Where else is a hip replacement done if it is not done in a hospital? Quite frankly we will not be setting up corner stalls to do hip replacements I say to Steve Chadwick. We will not have people who are to have cataracts removed lined up on the footpath. Yes we do those operations in hospitals because that is where they need to be done. But maybe that is this Government’s solution. Maybe that is what people will have to come to accept. When I went to the doctor the other day someone bailed me up and asked me whether I knew someone actually had to be crippled and in a wheelchair or so blind he or she could not get across the road before that person could get a hip or cataract operation out of this Government—and that is not far from the truth. 
The wife and the doctor of a 67-year-old farmer contacted me because they were so concerned about his situation. That man who had been a very active man had pain in his right hip. So the doctor had an X-ray taken and decided that the hip needed to be replaced. The man was put on the waiting list. He waited and waited to the point where he was on morphine and his general practitioner was saying that the man was suicidal because he had not slept for months. What he needed was an operation not continual trips to the doctor and to be put on morphine. It is no wonder that in the Budget we will see the Prime Minister dish out a bit of money for orthopaedic surgery because there are people like that all over New Zealand. Not all of them go to their MP. That man suffered in silence until somebody said enough was enough. 
We know that our hospitals’ productivity has reduced. Treasury’s own report showed immense concern that despite the fact that there has been a 6 percent increase in funding the productivity in our hospital sector has reduced. The Government can say that it has put money into primary care but—let us face it—those people who want operations do not want to know that less surgery is being done in our public hospitals than was being done in 1999 when National left Government. The fact is that a whole lot more private surgery was also being done in 1999 when National was in Government. The Capital and Coast District Health Board is a very good example of a board that has taken some bad decisions that have impacted both financially and on patients’ lives. It decided to pull Wakefield Hospital’s contract for cardiac surgery. The board said it could do it all in-house in its own public hospital sector. The only problem was that the intensive care unit could not cope. Acute cases bumped elective cases off the surgery lists and two patients who were twice cancelled for cardiac surgery died last year one of them being the 42-year-old father of two children. If he had got his surgery there is a very very good chance he would be alive today. The Capital and Coast District Health Board saw it as an achievement to have brought all surgery in-house but after careful consideration 3 years down the track it admits that it cannot do it and is finally going to re-contract with a private hospital. 
Our public hospitals do a very good job with regard to acute care but let us hope that when this Government brings the money forward for more orthopaedic surgery—which it should have done 4 years ago—the private hospital sector will be contracted. I say that not because of ideology but because of the fact that acute care does not take place in private hospitals so when elective surgery is booked it can be delivered on the day. People are not continually bumped off the surgery lists because acute cases take the surgeons the theatre space the intensive care space or the bed space. That contracting of private hospitals needs to happen. The productivity of the hospitals has gone down and it is no wonder as to why that has happened. There is nothing in the current system of 21 district health boards— 
STEVE CHADWICK (Labour—Rotorua) 
: 
 I am delighted to follow the National spokesperson on health and to come out fighting by saying that hospitals are all that that member mentioned. We already know that this Government has created a stable and an effective health service something that we did not have in the 9 years Labour was in Opposition. We are putting resources staff funding and infrastructure in place. We are building a public health system that people can trust and that is transparent and has community involvement in the democracy of the district health boards. That health service will be there for people regardless of their ability to pay. We know that that member of the Opposition has already talked about what she would do if she were ever to become the Minister of Health. We should be afraid—be very very afraid—because she says that National would discontinue the forced implementation of primary health organisations. Everything that this Government is focusing on will build a robust and healthy community based on health and wellness which that spokesperson would scrap. She has also gone on to say that the whole primary health organisation system would go and that we are forcing the model on communities. But it is interesting to see how communities are responding to us. That whole speech was about the morale of hospitals productivity cuts in hospitals and operations. This Government is focused on the community and on the primary health organisations. 
But I want to look at the focus on district health boards because—good news—in the first three-quarters of this year they have reduced their deficits quite markedly. The deficits are 20 percent better than the boards had stated they would achieve. We have put 43 percent more funding into the health sector since 1999. We are spending more money on operations. Operations are not measured properly—the member knows that—and we are doing work to look at that. Does the member know about the innovation of the surgical bus? There are new technologies allowing surgery to be done out in the primary health sector. They are not even measured in the productivity of hospitals let alone the outcome measures in terms of health and wellness that we are focusing on now. One of the most profound statements in our financial review of the Auckland district health boards came from the chair of the Waitemata District Health Board who said when the health boards got together: “We’re moving to survival of the patient rather than survival of the organisation.” I was very proud to hear that statement. 
When we did the financial review of the district health boards we looked at innovation. District health boards talked about managing chronic disease outside the hospital setting and they were looking at parish nursing ideas to manage obesity and diabetes in the church community in south Auckland. That type of innovation was never in the health sector before. District health boards are involving the non-governmental sector and they are looking forward to managing devolution of the services for the elderly which they have responsibility for now. Even with the difficulties they say that they want to manage services for the elderly in their own communities. We heard all the Auckland district health boards talk about the population-based funding formula. They said we should not get rid of the formula but that we needed to tidy it up a bit and we should look at quaternary and tertiary services. They said that we needed to look at interdistrict flows and patient movement but they liked the formula and said we should not change it. 
One of the formulas from Dr Brash that we need to be very afraid of is a comment from him that shielding people from the consequences of their actions has costs and sometimes substantial costs. He suggested that a Government under his leadership would not provide free kidney dialysis to those who over many years of overeating had substantially increased their risk of type 2 diabetes. He said he would not provide hospital care for somebody who had a road accident while driving under the influence of alcohol. Those are appalling statements. People should be very very afraid. National would continue to make cuts based on a market model that the Leader of the Opposition feels he knows. He can only look at pricing economic value units in health care while we get on with the innovation. 
We saw some wonderful things happening in the South Island when we looked at the Otago District Health Board. The chair of that district health board said that the boards talked to each other. 
HEATHER ROY (ACT) 
: 
 I shall start where the National Party spokesperson on health left off and talk about productivity which of course is down. When the Health Committee did the financial review of the Capital and Coast District Health Board—[ 
Interruption 
]—perhaps the member would like to take a call instead of shooting insults across the floor of the Chamber. When we did the financial review of the Capital and Coast District Health Board I asked in detail about its mental health services. I was not trying to get at that board because in fact mental health services across the country are a national disgrace. Ward 27 at Wellington Hospital has had its fair share of problems although it does not experience those problems on its own. However in recent times it had a patient who left the ward and climbed into the tigers’ cage at Wellington Zoo. Soon afterwards that incident was followed by the Buckle suicide which resulted in an inquiry. More recently after leaving the ward a patient jumped off the sixth floor building at Wellington Hospital and received serious head injuries. 
Two weeks ago I highlighted the problems with regard to overcrowding at Wellington Hospital’s mental health unit and I am at pains here to say that that is happening not only in Wellington but at many mental health units around the country. Overcrowding is a particular problem in Wellington but the Minister of Health has done nothing about it. In fact she said what a good thing it was that the extra mental health ward at Kenepuru Hospital closed in July 2002 without so much as a murmur leaving the Wellington region to cater for a population of 250000 patients with 30 mental health acute beds. Two weeks ago that ward was so full that it had 35 patients and others queuing up to go in so one patient was put to sleep for the night in the ward’s telephone booth—the room that is assigned for the telephone. The telephone was taken out and the patient was put in. This is a Government that prides itself on reducing the stigma experienced by those with mental illness. In fact it prides itself so much on that that it has spent just over $13 million to date on the Like Minds Like Mine campaign with flash television advertising and various other components to it. I would like to know and I would like the Minister in the chair the Hon Ruth Dyson to tell this House how making a patient sleep in a telephone booth for the night tells that patient that he or she is a first-rate and well-respected New Zealand citizen. It does not. It tells people that mental health is the poor cousin in the New Zealand health system and that they will be treated in that way. 
Let us imagine the public outcry if a child was put to bed on a mattress on the floor of a children’s ward in any hospital in this country or if someone with a broken leg was put in similar circumstances in a telephone booth for the night. There would be a public outcry about that. The relatives of the patient would go straight to the local newspaper. However when that sort of situation happens to a mental health patient there is not a murmur from this Government. The Minister of Health is well aware of those problems. In replying to question for written answer No. 5684 this year in relation to the Capital and Coast District Health Board the Minister stated she had been advised that 35 patients were in the ward that night and two beds were set up in a room usually designated for telephone use—one in the women’s lounge and one in a doctor’s interview room. Are we not treating mental health patients well in this country! 
What has the Minister of Health done about the problem? She has thrown more money at it. That has not resulted in any more treatment. The Hon Ruth Dyson answered an oral question in the House last week by saying that since 1999 an extra $321 million has been allocated to mental health. This year about $800 million will be spent on mental health—almost 10 percent of the health budget. What are the mentally unwell getting for that? Three percent of the population suffers from a serious mental illness requiring treatment. How many are treated? The figure is 1.6 percent of the population and that figure is down from 1.7 percent in the previous year. It is a disgrace that 1.4 percent of the population of this country who suffer from a serious mental illness are not receiving any treatment at all. What is the Government doing about it? It says that it is ring fencing that money. It is a disgrace! 
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 The Labour Party speaker said I had been concentrating only on hospitals. That was because this speech will be about primary care. 
One thing we did hear from the Auckland district health boards that that member was so busy quoting was that they think it would be a really good idea if there were only one district health board for Auckland because the cross-boundary flow issues are huge. Following patients from one side of Auckland to the other moving money and patients around—if the patient moves the money follows—is hugely time consuming and costly for the Auckland district health boards. I have to say that if we have one district health board for 1 million people a quarter of New Zealand’s population—it is probably above that now; there are probably 1.3 million people in the Greater Auckland area—why have a whole lot more 18 others for the rest of the country? When we talked to the Otago District Health Board it also said it thought it would be a really good idea if there were one district health board for Otago and Southland. The district health boards are getting together on a lot of backroom functions. Having 21 boards causes a major increase in bureaucracy. 
But let us talk about primary health organisations. The member opposite was correct: National will not force the implementation of primary health organisations. Their funding is based on race and location and that has caused major implementation problems across New Zealand. I wonder whether Clayton Cosgrove would like to tell people in his electorate who happen to be poor and have high health needs why he backs a scheme that has people in Rotorua and Gisborne regardless of their health need or whether they can afford to go to the doctor paying $15 while his people are still paying $35 or $40. That is an unfair funding formula and we do not agree with it. 
I am absolutely astounded that the Minister of Health said that 3 million people are enrolled. For goodness’ sake! If you do not enrol you get no access to the new money. Does she not understand that financial incentives drive everyone? 
The CHAIRPERSON (H V Ross Robertson) 
: The member is bringing the Chair into the debate. 
Dr LYNDA SCOTT 
: The Minister of Health should wake up and realise that if she puts a financial incentive there of course people will join. Why would doctors not join if joining meant that their patients would get access to the new money? No one disagrees with the new money being put into primary care but it absolutely has to be based— 
Clayton Cosgrove 
: What’s the member’s position on primary health organisations? 
Dr LYNDA SCOTT 
: Instead of shouting and screaming across the House as that member is so wont to do he might like to get up and take a call—but he will not do that. 
The primary health organisations funding is based on race. Those organisations are wasting dollars. They have a bureaucracy. There are 84 of them—another Government structure. When New Zealand was told it would have 21 district health boards that would look after hospital care and primary care we were not told that this Government would set up yet another bureaucracy; that it would set up 84 primary health organisations all with a community governance board—yet another set of committees. This Minister of Health is the “Minister of Committees”. 
We have a major problem with the implementation of the primary health organisations. We have problems that the independent practitioners association system could have solved. If the Government had let the doctors get on with doing what they know and what they are good at doing—that is providing excellence in primary care in this country—if it had backed the doctors to do that it would have had a much better outcome for the money it spent. Actually it probably would not have needed to spend as much because it has set up a whole new bureaucracy. 
We heard about aged-care funding being devolved. Well every district health board that I have spoken to is shivering in its boots about the funding of aged care because those boards know that this Government has not put a penny into it for the 5 years it has been in Government. Why has it not done that? Because it is saving the money to fund its asset-testing promise—the asset-testing promise that it has not actually kept. So there are no new services whatsoever in aged care. We have not seen an expansion of care for Alzheimer’s patients. In fact I have just got a letter on my desk from the Minister saying: “Sorry we don’t have any psychogeriatric facilities in Wanganui.” 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 There is certainly a time in a Government’s term when it can no longer hide its failures. If ever there is an area where its failures are becoming more and more obvious it is the district health boards and the health services they provide. One has only to go back to 1999 when Labour said on its pledge card: “We will deliver.” 
Dr Lynda Scott 
: No surgery! 
Dr PAUL HUTCHISON 
: It is not quite that bad but there is certainly a hanguva lot less surgery. Back in 1999 Labour also said that it would focus on patients not on profit and that waiting times for surgery would be cut. The system that the Government has created over its 4 years the system of district health boards which we are analysing tonight is one of the most complex bureaucratic systems that New Zealand has ever seen and probably one of the most complex bureaucratic and inefficient health systems in the world. 
Back in 1999 when this Government was supposed to deliver on its so-called pledge card who should come into Parliament looking somewhat arrogant but one Hon Dr Michael Cullen who said: “We won. You lost. Eat that!”. In the next 24 months the Government proceeded to deliver this highly complex bureaucracy of 21 district health boards and even the Government is now beginning to admit: “Gee we’d better amalgamate all the district health boards in Auckland.” I remind the Committee once again that back in 1989 the then Minister of Health Helen Clark—now the Prime Minister—fired her own Auckland health board which included her own husband because it had become so dysfunctional. Ten years later she had forgotten the mistakes of the past and set about recreating what had been a dismal failure back then. So we had Michael Cullen saying: “We won. You lost. Eat that!” but if we look in last week’s  
Dominion Post 
 we see: “More money. Less surgery. What’s wrong?”. 
What is wrong is the design of the health system that this failing Labour Government set up. As my colleague pointed out just recently the number of publicly funded surgical inpatient discharges—acute and elective—has fallen significantly in the 4 years of the Labour Government. Back in 2000 there were 160000 of them; this year the figure is down to 157000. When Dr Cullen was asked in this House what was wrong he said: “Look they mustn’t have been counting things. We’ll start counting what is happening in the outpatients clinics in the radiation clinics and various other aspects.” Once this Labour Government starts to count and to try to defend its actions we will find a network of deception—the very same network of deception that it created when it said it would cut waiting lists. What did this Labour Government really do? It set up what is called an active waiting list and literally tens of thousands of ordinary New Zealanders who had expected to get surgery under this Labour Government were simply shifted into the community to wallow to lie in pain to wait for their cataracts or hip surgery to be done. 
I would like to give the Committee an example that I have picked up over the last year during the period for which the Counties Manukau District Health Board is being examined. I received a letter from an 86-year-old man who has failing eyesight. He wrote: “Please note an enclosed report from Dr Singh of Tuakau Surgery detailing the condition of my failing eyes. A peculiar turn is the fact that Dr Singh received a report from Manukau eye clinic stating that Mr McPhail had been put on the list for cataract surgery while at the same time I Mr McPhail received one telling me my name had been removed.” That is the sort of shambles that this totally dysfunctional bureaucratic district health board system that the Labour Party Government created is actually creating in the community. It has caused confusion for that sort of elderly man. The district health board wrote back to me: “We can appreciate that the decision to remove Mr McPhail’s name from the rating list is upsetting and frustrating for him and must seem strange given that he had originally been on the waiting list for surgery. Clinically Mr McPhail would benefit from cataract surgery. Unfortunately we can’t deliver it.” 
That absolutely backs up the Treasury report that we addressed in December 2003 which showed that despite this Labour Government spending more money it was delivering less. That has been backed up absolutely clearly in the areas of both major joint replacements and cataracts over the 4 years of this Labour Government. It is extremely serious to note that in 1999 the number of major joint replacements done was 5250 and that in 2002-03 this Labour Government delivered only 4481 major joint replacements. I refer now to cataracts which affect the elderly of this nation and which my constituent Mr McPhail writes about. He writes about the failings of the district health boards under this Labour Government. What are the actual figures? Back in 1999 7831 cataract operations were carried out and in 2002-03 that figure had gone down by over 400. What is the reply of the Labour Government to that? It is: “Oh we’ll do some more analysis of what we are doing in the outpatient clinics in the radiation clinics and in the oncology clinics. We’ll fix some numbers that will befuddle the general public.” 
It is absolutely clear what has happened under this Labour Government. It has put in more money but the number of cataract operations for the elderly has gone down over 4 years. The Government has said it will deliver—that it will cut waiting times. What has it done? It has created an active waiting-list whereby patients who have real illnesses difficult conditions and are in pain are put off the waiting list to await their fate. That is the effect of this Labour Government’s design of the health system for New Zealand and it is a disgrace. 
I have gone around each district health board asking each of them two questions. One was whether there had been any shifting of resources from the secondary and tertiary areas into the primary area. That was one of the promises; that was one of the things Labour said would happen when it concentrated on primary care. Every one of them has said a resounding “No”. The other question I asked them was whether there had been any tangible improvement in health outcomes out in the community that they could measure. The answer has been a resounding “No”. This Labour Government despite all its rhetoric despite Labour’s pledge card has delivered absolutely no improvement in heath outcomes out in the community. 
The CHAIRPERSON (H V Ross Robertson) 
: Honourable members just before I put the vote can I say that a cellphone was heard during the speech made by Dr Paul Hutchison. I remind members that it is my duty to keep the debate within the Standing Orders. After all they are the rules that have been crafted by well over a century and a half of parliamentary practice in New Zealand and it is my duty to ensure that they are upheld. So if members do have cellphones in the Chamber would they please turn them off. I refer them to Speaker’s ruling 16/2. 
Reports noted. 
Animal Control Products Ltd 
R DOUG WOOLERTON (NZ First) 
: 
 I wish to speak about two State-owned enterprises. One is a shining example in my view and the other needs to learn—I say that advisedly—how democracy works and who it is accountable to. The first is Landcorp. In previous years Landcorp lived under a very very— 
The CHAIRPERSON (H V Ross Robertson) 
: I just say to the member that this debate is about Animal Control Products Ltd. 
R DOUG WOOLERTON 
: Mr Chairman I thought we were taking a basket of things: State-owned enterprises— 
The CHAIRPERSON (H V Ross Robertson) 
: I understand that that has been agreed to. Thank you. 
Jill Pettis 
: It’s a broad-ranging debate. 
R DOUG WOOLERTON 
: I will stick pretty closely to the topic and not go off on to other things but I want to mention these two different entities. 
Under previous administrations Landcorp could not flourish as it should. It could not develop properties that were previously undeveloped under its care. It did not even know whether it could hold on to land that was in its care because of something called the land bank which was set aside for treaty settlements. So I am pleased to say that Land Corporation has certainty now. It has been told by the current administration that it is not for sale and New Zealand First—which is against asset sales especially sale of land to foreigners—can do nothing else but applaud that decision. We are worried that any change of administration may put Landcorp in danger again. 
It is amazing what has happened to that organisation once certainty of ownership or tenure was established. Landcorp has flourished and is a huge success showing the Government returns the likes of which I understand even Telecom could not match in its wildest dreams and it is showing what in fact agriculture can do in this country. Not only is it doing that and returning money to the shareholder the owner—which is the Government and the taxpayer of New Zealand—but it is also providing what I would call a Ruakura-like example of how farming can be in sometimes marginal situations. So to a degree it is acting like a research station. It is showing the way in many areas. Just for the benefit of my Green colleagues on my left I point out that Landcorp is showing the way not only in areas of advancement but also in developing what should be developed and putting aside what should not. That is the key to good farming. Landcorp is a prime example of what a good State-owned enterprise should be doing and is doing for the taxpayer once it is given certainty of tenure. 
The other thing I want to talk about is not so good and that is AgriQuality New Zealand Ltd. We in New Zealand especially in the farming sector need good robust organisations that service the farming sector and through the farming sector the overseas markets we sell to. AgriQuality has a prime part to play in that and I want to read to members—and it cannot be more eloquently put—from the report from the Primary Production Committee of which I am a member. 
I read from the report a couple of statements to show what we are talking about. The select committee stated: “We sought further information on how TB testing technical specifications or requirements have changed and a rationale for the restructuring but were frustrated by the inferior quality of the written responses to our questions. It was only through subsequent questioning that we were able to find out that qualitatively the Animal Health Board specifications have not changed dramatically”. I read now from the end of the report: “The company states ‘While commercial activity may be an issue in some cases these are in practice likely to be rare and such sensitivity would have to be very clearly demonstrated.’ ” That relates to the hedging that these people undertook when they were before the select committee. 
This is an organisation that put out a glossy brochure—I call it a brochure but it is actually technically an annual report—full of pretty pictures of the executives etc. etc. 
Hon DAMIEN O'CONNOR (Associate Minister of Agriculture) 
: 
 I would like to take the opportunity to respond to a couple of matters that Mr Woolerton has raised. I accept the points the Primary Production Committee made in its report on AgriQuality and I am sure it will do its very best to improve its performance next year. 
I would like to raise an issue around Landcorp. It is as the member said an outstanding organisation which is very proudly owned by the Government. But I would like to note on the record that the National Party has indicated it will sell Landcorp along with some other key strategic assets if it ever becomes the Government. I think we can be grateful that it will not get there for a long time but it is important. Landcorp is an outstanding organisation. It has $585 million worth of shareholder assets and the National Party will sell it to pay for its low-tax promises. 
Clayton Cosgrove 
: It will do what it did to kiwifruit! 
Hon DAMIEN O'CONNOR 
: Absolutely. Landcorp as I say has $585 million of value. 
R Doug Woolerton 
: What are they saying about Kiwibank? 
Hon DAMIEN O'CONNOR 
: They will sell Kiwibank. They will sell every asset they can get their greedy hands on. Landcorp is a strategic asset for the rural industry and economy of this country. It is developing marginal land and is doing so very successfully. When this Government came into power 4 years ago Landcorp did not know where it was going because the previous National Government had said it would sell it and Landcorp did not know what to do. We came into power and we told Landcorp: “We will not sell you. Get on with the job of farming.” That is indeed what it has done. It has a 5-year strategic plan. It is 3 years through that plan and has outstanding results. It has returned to the shareholder year-on-year tens of millions of dollars. 
Hon Pete Hodgson 
: With an excellent chief executive. 
Hon DAMIEN O'CONNOR 
: Chris Kelly is outstanding. He has assisted Landcorp to develop the dairy industry side. It has a mixed portfolio of dairy deer and sheep farming operations on marginal land that is now high-quality top producing land. Landcorp is also showing environmental leadership in the agricultural sector. It is setting aside land and protecting it—land that it considers is more valuable kept for biodiversity within its own farms. That is good leadership. In my own electorate of West Coast – Tasman Landcorp is showing farmers the value in setting aside bush—as my own father does and that will surprise some members—and it is showing that one can run a successful economic operation on marginal land and protect the environment. That is worthy of note. 
Hon Pete Hodgson 
: What will Don Brash do with it? 
Hon DAMIEN O'CONNOR 
: Don Brash will sell it. He will sell Landcorp and knowing the National Party he will sell it for less than its $585 million. There are plenty of examples of where National fire-saled strategic assets. 
Craig McNair 
: To his mates! 
Hon DAMIEN O'CONNOR 
: Absolutely—to his mates no doubt. Another key role that Landcorp plays in the agricultural sector is that of career opportunities. It is providing opportunities for young people to get into agriculture work their way through the system and become outstanding managers. That is something worthy of note. As the average age of farmers in this country increases Landcorp provides an opportunity for keen young people to come in and we must praise them. 
Just before I finish I must point out that Landcorp has been farming Molesworth Station the largest farm in this country for many many years and doing so very successfully. There was some discussion and debate when we transferred that station back to the Department of Conservation. What will happen is that Landcorp will continue to manage that farm. It will have a management team—an oversight team—with the Department of Conservation to protect some of the marginal areas the landscape areas of important protection. We had to do this because the risk of a National Party ever coming into Government again meant that it would sell Landcorp and Molesworth Station as well. That is why we had to transfer it into well-protected public ownership through the Department of Conservation—if we had not acted the National Party would sell Landcorp andMolesworth Station. 
Report noted. 
Energy Efficiency and Conservation Authority 
Genesis Power Ltd  
Meridian Energy Ltd 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 The year under review was the second full year of the operations of the Energy Efficiency and Conservation Authority since it was set up on a statutory basis as a result of my Energy Efficiency and Conservation Bill which was passed in 2000. The year under review was also the first full year of the implementation of the National Energy Efficiency and Conservation Strategy. The Local Government and Environment Committee was pleased to learn that to the extent that one can tell with only 1 year’s data the Energy Efficiency and Conservation Authority is on track to meet its target for energy efficiency and renewable energy. 
The authority has been laying the groundwork across an extraordinarily wide range of activities for a more energy-efficient future in all energy-using sectors. There are a bewildering range of activities including minimum energy performance standards for appliances grants for energy audits in industry an electricity demand exchange to cope with dry winters ethanol blends with petrol bio-diesel travel demand plans home energy retrofits and a great deal more. The authority has a mere $8.5 million for this work and it is spread very thinly across a wide range of activities. Therefore progress in all those areas has been quite slow because the authority has tried to work across a range of areas. 
I want to talk about two areas where I believe the authority could go further faster and also where it needs more funding. Both concern domestic energy use which is one-third of our electricity consumption. I believe if we are going to change the culture of our society towards a more energy-efficient culture then we need to pay some attention to households even though they are many and small because households are where people’s attitudes can be changed and where people learn about the kind of society we need to build for the future. 
The first area concerns the use of direct solar energy to replace electricity and also to give us greater security of supply in dry winters as well as build some capacity. It would be like a whole lot of little power stations on people’s roofs all around the country. The Energy Efficiency and Conservation Authority is working towards a target of installing 10000 solar water heaters each year but that is less than half the number of new houses being built every year. So the authority is not even proposing to keep up with the rate of expansion of the housing stock. At present it gives a grantfor about 1 year’s worth of interest to a householder who has to borrow to install a solar water heater. 
Hon Pete Hodgson 
: 2 years. 
JEANETTE FITZSIMONS 
: The Minister says it is 2 years’ interest. Jolly good! But people who would like to put their savings into this technology rather than in the money market because the return is quite good cannot get any help. The grant of 2 years’ worth of interest is not really enough to encourage a lot of people to want to take it up. Yet I get letters all the time from people who would like to adopt this technology but find it too expensive. 
The one big obstacle standing in the way of widespread use of solar water-heating in New Zealand is the small-scale nature of the industry. There is a terrible lack of capacity— 
Sitting suspended from 6 p.m. to 7.30 p.m. 
JEANETTE FITZSIMONS 
: I had been saying that the lack of capacity in the solar water-heating industry and the installing industry was an obstacle preventing this technology from making any really significant contribution to New Zealand’s electricity security and sustainability. That lack of capacity will not be solved by giving out a few quite small grants to individual householders so they can buy a solar water heater. What we need is a bold programme of Government leadership whereby all Government buildings are audited then all buildings where solar water-heating would be cost-effective are put out to tender over 5 years for a programme to solarise all suitable Government buildings. 
Over that 5 years the industry would have a chance to gear up its manufacturing and its installation capacity. It would know it had an assured market. The price would come down through competitive tendering. At the end of that 5 years there would be a lot of operating experience capacity would be built in the industry and the price would be a lot lower for ordinary New Zealanders wanting to solarise their homes. That is what I think the Government ought to be doing in the Budget on Thursday. That is the way to go if we want to get solar water-heating off the ground. I will keep on saying that and I have been saying that for a few years now. 
I want to make a brief mention of household energy retrofits. In the year under review 1500 retrofits were done and there are 700000 to 800000 pre-1978 homes left to do. We need to speed this up. 
GERRARD ECKHOFF (ACT) 
: 
 If I may I will preface my remarks with the observation that after sitting here for several hours I cannot help but note that many members especially Government members but also the odd speaker from this side of the Chamber seem to think that if the Government ran all the services in this country everything would be sweet. The health service is in a mess. The education service is in a mess. The fact that the odd service does work well like Landcorp for example seems to imply that if the Government ran everything everything in the country would be wonderful. However nothing could be further from the truth as is typified by the energy sector in this country. 
The electricity sector despite what some in this Chamber might say is heading for a crisis. We are not in that situation yet as I am sure the Minister would happily point out but the general consensus seems to be that that is exactly where we are heading. The energy sector is absolutely vital in this country and I want to include in my comments the role of Meridian Energy in that sector. 
Essentially all that this Government has generated in the electricity industry and the generation industry is uncertainty. Major upheavals occurred under Max Bradford. This Government has done nothing but add to the problem that was created when private property rights were taken from small generators—like the one I have some experience of Pioneer Generation in Central Otago. It was a marvellous little company owned by the populace of that region until it was forcibly sold. We were very unhappy with that. 
I now want to focus on the role of Meridian Energy especially as an Otago MP. I look forward to hearing a speech from David Parker on the very subject of Meridian Energy. As he is the constituent MP I am sure he will be taking a call on this most vital of industries especially in the south. Meridian Energy is not what the Government seems to paint it to be. I see that the financial review of Meridian Energy states that the company suffered significant losses on hedge contracts as a result of increased spot prices and is also experiencing increasing difficulty financing costs arising out of a $500 million bridging loan used for the acquisition of Southern Hydro—in Australia not in New Zealand. It is as if New Zealand does not have energy problems or a need for energy capacity. Well we all know that that is exactly what is needed in this country. We must have increased generation and we need it rapidly. 
Meridian Energy has stated that opportunities for company growth are limited within New Zealand and it has expanded into Australia. Who in his or her right mind would suggest that opportunities for growth in the energy industry are limited? Gracious me we are heading for a major shortage! We really should identify the impediments to growth in the industry. 
I suppose some might call the exercise that Meridian Energy went through over Project Aqua a futile exercise. However it is an example of what we really should be focusing on and the problems that were faced. Almost $100 million was spent by Meridian Energy on Project Aqua. A large portion of that $100 million is now totally wasted money. About $45 million was spent on the Resource Management Act process which is an outrageously large amount despite the fact that it was a $1.2 to $1.3 billion project. To have to spend $45 million on that process is in my view excessive. Meridian Energy spent the balance of that $100 million on acquiring land. Meridian Energy has now spent $100 million that it has had no particular use from. No private company could have afforded to do anything along those lines. Meridian Energy said: “Well look here we are being supported by the Government it doesn’t really matter.” 
GORDON COPELAND (United Future) 
: 
 Perhaps the decision by Meridian Energy a couple of months ago to pull the plug on its proposed $1.2 billion Project Aqua will be seen as the biggest call made by any State-owned enterprise in 2004. We had foreseen Project Aqua making a huge contribution to the electricity supply shortage facing New Zealand from around 2007 onwards. So Meridian’s decision not to proceed sent all the other State-owned enterprises involved in the sector such as Genesis Mighty River and Solid Energy back to the drawing board for a major rethink of their future plans. Meridian itself of course is in the same situation but in addition it has to grapple with the reality of a significant write-off in relation to the preliminary work undertaken on Project Aqua. Of the $95 million spent on the project $50 million was spent on assets such as land some of which will now be put back on the market. So the write-off will be at least $45 million and I predict it will be somewhat more than that. 
I recommend to the Government tonight that in view of those circumstances we collectively insist that a post-cancellation audit should be undertaken by the company in relation to both the costs arising and the procedures followed in relation to this abortive project. That would be in line with international best practice. 
Unless a post-cancellation audit is undertaken both the company and its shareholders—the taxpayers of New Zealand—are left with a whole range of unanswered questions. For example should Meridian have been able to foresee earlier that the project was doomed having regard to items such as the consents process under the Resource Management Act the difficulties and costs associated with the acquisition of the land the geological and technical issues arising from the design and scale of the project the accuracy or otherwise of the announced $1.2 billion price tag risk evaluations in relation to water consents river flows storage and rates of return on investment etc.? I believe that both prudence and good management dictate the necessity to undertake this work. Are there lessons that the company could learn for the future? Are there lessons that the Government itself on behalf of the people of New Zealand can learn for the future particularly in relation to matters such as water allocation and the Resource Management Act processes? 
The other item that I wish to draw to the attention of members today concerns Genesis Power and the decision of the Environment Court announced yesterday to limit the diversion of Whanganui River water into the company’s Tongariro hydro scheme to only 10 years instead of the 35 years sought by the State-owned enterprise to ensure ongoing security of supply. I urge the Government to consider and consider very carefully the ramifications of this important decision both for Genesis itself and for the wider implications that arise in relation to other existing and potential future hydro schemes within New Zealand. I ask whether this case is some kind of precedent concerning the duration of water consents; if so it is a serious matter. 
It needs to be remembered that vast sums of money are required to build hydro dams and if the cost outlay and an adequate return on investment are to be assured then the owners of the project—in this case again the taxpayers of New Zealand—must be assured of long-term water consents. Clearly a 10-year consent period would in most circumstances be totally inadequate meaning that new dam projects will be rendered uneconomic. This is hugely important given the nation’s looming electricity shortage. 
A decision such as this could quickly scare off potential new investors whether or not State-owned enterprises or privately owned or New Zealand - based or overseas-based. Coupled with the cancellation of Project Aqua which I mentioned earlier on the face of it the Environment Court decision creates further uncertainty at a time when not only electricity generation investors but also the commercial and domestic consumers of electricity seek reassurance concerning both supply and price. In these circumstances I believe that the Government must leave no stone unturned including the possibility of new legislation should it be required. 
Reports noted. 
Foundation for Research Science and Technology 
Crown Research Institutes 
RON MARK (NZ First) 
: 
 I note that the Education and Science Committee has been advised no matters were found that needed to be drawn to the attention of the House in respect of the Institute of Environmental Science and Research Ltd but it is an area that I want to express a couple of concerns about and put some questions to the Minister. My questions are related to law and order. 
The Committee cannot ignore the fact that the work the institute does is extremely important to citizens who are concerned about law and order and safety in their community. Science has moved on and so have the tools the police rely upon and lean on in order to prosecute and gain convictions. But I have to say that when I look back over the past year there are some anomalies in statements that have been made. 
On 21 May 2003 the police in a document provided to the Law and Order Committee  
Vote Police: Supplementary Questions 21 May 2003 
 gave the committee an understanding of the types of problems the police were facing. They specifically pointed to a need to boost DNA capacity and research and the ability to collect and collate data from DNA. They went on to talk about their need to get a greater handle on the methamphetamine industry. Both of these areas had great implications I would have thought for the Institute of Environmental Science and Research. 
In talking about their desire to boost DNA capacity the police went on to state in the last sentence on page 4 that in addition to this requirement—whereby they were seeking to generate a further 3500 additional samples resulting in an additional 500 DNA hits and with the increased capacity they wanted to put in place on the police side—there was “a need to provide some additional resource to fund ESR processing costs related to increased throughput”. 
Going further into the police submission dealing with the clandestine laboratory responses again they asked for a number of things. They did not ask for the three units that the Minister of Police gave them; they actually asked for four. They highlighted the booming methamphetamine industry and the ballooning numbers of clandestine laboratories they were uncovering and they emphasised the need for the police to have increased resources to deal with the clean-up but there was also a direct inference that the ability of the institute needed to be up-gunned and better resourced. 
What was the result? The result was a series of headlines and I can go back to 14 October 2003 for example when already the Institute of Environmental Science and Research was admitting it was having problems. A scientist admitted that she gave the wrong drug-test evidence. There were many reasons; some would suggest that one of the reasons the institute was struggling was the heavy workload. 
The institute came under huge pressure as industry sought to deal with drug use in the workplace. I know that Air New Zealand is one such business that sought to implement drug-testing of employees. Again where did that responsibility fall? It fell on the institute to pick up the tab. Private investigators were reported in the paper as saying there was an increasing need for industry to protect itself and once again the workload would fall on the institute. There were more articles in October and in December concerns were being expressed on the radio as to the institute’s ability to keep up with its workload. Then in January 2004 despite all the assurances about adequate resourcing we again became aware of the issue. The Wellington Regional Chamber of Commerce Chief Executive Philip Lewin said: “Industry is not able to keep tabs and to carry out the drug testing because ESR cannot keep up.” School principals were talking about drug testing students and the need for that; and again there were implications for the institute. I am not talking purely about funding but also staffing which I guess is a funding issue. 
Reports agreed to. 
Civil Aviation Authority 
Land Transport Safety Authority of New Zealand 
Maritime Safety Authority of New Zealand 
Transfund New Zealand 
Transit New Zealand 
Transport Accident Investigation Commission 
MIKE WARD (Green) 
: 
 The vision that drives New Zealand’s transport future is admirable. I rise to examine the preparedness of Transit and Transfund to realise that vision. I want to examine the issue by referring to a real transport issue from my own community. Several weeks back the Environment Court handed down a decision that confirmed an earlier decision made by Nelson Council - appointed commissioners not to approve a third highway the Southern Link into Nelson City. It was a decision the Greens endorsed and the kind of decision we would expect to see more of in future under the Land Transport Management Act. However having said that we have considerable sympathy for local authorities confronted by transport issues where all the advice and the vast bulk of the funding have been devoted to roads. 
 While roading decisions have been arrived at with the help of all the expertise Transit has at its disposal and are likely to be substantially if not totally funded by Transfund there appears to be no equivalent authority to advise on public transport initiatives and their implementation on some of the more innovative and exciting cycling and pedestrian possibilities or on planning mechanisms and land-use tools that might put at the community’s disposal a range of transport options or might persuade individuals and families to live closer to the places they live work shop or go to school and thus avoid the necessity of spending vast amounts of time getting to places they should have lived much closer to in the first place. 
The Transport and Industrial Relations Committee noted that the ministry had adopted a sustainable transport vision focusing on economic social and environmental sustainability in line with the new Act. The committee was interested in how the ministry intended to achieve greater environmental sustainability and encourage people to move towards sustainable modes of transport. For instance the report noted that approximately 30 percent of journeys were 2 kilometres or less. The committee noted that a key component of implementing change involved changing cultural attitudes. The report supported measures taken by the ministry to encourage people to move away from car travel towards alternative modes such as walking cycling and the use of public transport. The culture will not change by itself. It requires commitment. 
The Southern Link was more than an idea. It was a fully developed if flawed concept. Millions of dollars had gone into its planning and millions more into pursuing it. Half a million dollars had been spent on air quality plans so that the catchment through which the road was to run could accommodate the pollution generated by 30000 cars a day. The road and the air quality plan demonstrated commitment. The Nelson City Council had budgeted $15000 for a carpool hotline. Another $15000 has been committed to extending the bus service. Millions of dollars in pursuing a road and half a million dollars for a clean air plan spells commitment but $15000 for a hotline or a bus service equates to lip service. 
Traffic demand management will certainly be much less expensive and I suspect more successful than building roads but traffic management is not free. Just as roads need planning and expertise so do measures to persuade people out of their motorcars—at least for some of their journeys. Traffic demand management will certainly be much less expensive and more successful than building roads as I say but traffic management is not free. Local authorities feel aggrieved when central government imposes its decisions on them without providing the wherewithal to carry them out. In that way the Land Transport Management Act and the new land transport strategy as admirable as they certainly are must come with the necessary levels of expertise and funding that will enable councils to develop sustainable transport measures to meet New Zealand’s transport needs without the downsides of congestion and pollution and the costs to health and quality of life that the roading approach has imposed on all New Zealanders for much too long. 
We are concerned in the Green Party to ensure that councils are equipped to carry out the culture shift that the committee endorses in its report. Unless Transit New Zealand is matched by an equivalent authority to provide the expertise for non-roading transport initiatives or is provided with a mandate and the personnel to help councils develop more imaginative transport solutions then Transit itself may have outlived its usefulness. 
The Greens have been pleased to work with the Government to provide leadership on transport issues. Transport and how we provide for it has implications for health safety air quality and our exercise habits. It has implications for the economy. Auckland’s wish list has grown from $5 billion a year when we started the hearing into the Land Transport Management Act last year to $8 billion at the end of last year and to $10 billion at the beginning of this year. It is almost certainly a quality-of-life issue. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I welcome following a speaker from the Greens because if ever I heard a party talk about transport issues from the bottom up it was that party. I am astounded by some of the things the Greens stand for when it comes to transport matters. 
Transport in this country is in a mess. It is either just getting out of a mess or just coming into a mess—and we can look at every mode of transport. Let us look at our airline industry. A few years ago we sold it because marketeers were going to make it into the best airline in the world. But the Government had to rescue it—and it cost $800 million to rescue it. What about our railways? My leader only the other day apparently put some railway brakes on the table. I was not here; I missed that. The railways are in a mess and there is a Railways Bill going through a select committee right at this moment to sort out the safety issue. Then there is the shipping industry. I know that the Minister has inherited a problem with that. The Government has sat on its hands and done nothing for 3 years although it has had a shipping industry review since December 2000. 
Every time I have an opportunity—and the member over there knows it full well—I ask a question about our shipping industry. I should give the Minister a piece of advice. In my view he has two options: go with cabotage which is what the seafarers want; or go with a favourable tax regime like a tonnage tax which the British have. Cabotage will cost more. Undoubtedly it will cost more for exporters and more for the users of ships. A tonnage tax like the one the British have adopted will encourage the development of shipping and it will cost the users less. That is the way to put our shipping industry on par with international shipping. We owe it to the people of New Zealand an island nation down in the bottom of the South Pacific and miles from anywhere to have a reasonable efficient shipping fleet. I have stood by that view as long as I have been in this Parliament and I am hopeful that this new Minister of Transport will do something in the not too distant future. 
Let us now look at roading. Roading has been so heavily influenced by the Green Party that we will go backwards. If the Greens had their way they would tear up the roads. They are anti-roads and anti-car. 
Reports noted.