The CHAIRPERSON (H V Ross Robertson): The House is in Committee on the Appropriation (2003/04 Financial Review) Bill. The Standing Orders provide for the financial review debate to be the Committee stage of an Appropriation (Financial Review) Bill. The debate is organised in three distinct parts. It commences with a debate on the Crown’s financial statements as reported on by the Finance and Expenditure Committee. Once that debate is disposed of, the Committee debates the individual financial reviews of departments and Offices of Parliament as reported on by select committees. There is a list of financial reviews available for debate, on the Table. The debate on the Crown’s financial position may be fairly wide ranging, but the debates on the individual financial reviews of departments and Offices of Parliament should be relevant to their performance in the 2003-04 financial year and their current operations.

A member may have no more than two calls on each financial review. Four hours is allowed for these two segments of the financial review debate. At the conclusion of the 4 hours, a single question is to be put on the provisions of the bill. There is to be no amendment or debate on that question. The Chairperson will report the bill to the House, and it will be set down for third reading forthwith. There is no debate on the third reading. With regard to the schedule of proposed questions, I invite members to turn to page 445 of the compendium volume of select committee reports on the 2003-04 financial reviews of departments and Offices of Parliament. The question now is that the report of the Finance and Expenditure Committee on the annual financial statements of the Crown for the year ended 30 June 2004 be noted.

JOHN KEY (National—Helensville) : On behalf of the Opposition, I look forward to engaging in what I think will be a robust debate about a Government that just simply likes to spend money and that is driving up interest rates for New Zealanders with its wasteful spending. It is a wasted opportunity that this Government has failed to deliver on for the people of New Zealand, and I think the Government will be harshly treated for that in the months ahead.

This Government inherited some economic conditions that it had very little to do with. Indeed, it inherited some wonderful reforms that took place in the 1980s and 1990s, which really unlocked a country that had a closed economy—an economy that did not trade with the outside world in any great form, in a country that had all the wrong economic settings in place. Those were the policies that this Prime Minister likes to refer to as the “failed policies of the 1990s”. But those “failed policies of the 1990s” have delivered record surpluses to this Government—record surpluses that this Government has wasted. This Government inherited an exchange rate that was at an all-time low in the early part of its first term, and it had fortunate conditions in inheriting very high commodity prices from a very strong Chinese economy. All those conditions led to the Government having a very large and burgeoning tax take—in the order of $35 billion to $40 billion of additional taxes in the last 5 years. The way that it has chosen to spend that money is one of the key elements of this debate.

Before we go too much further we should look at the record of spending undertaken by this Government, because when the Minister of Finance took office in 1999 he set a self-imposed spending cap of $6 billion. For any Labour Government, we know that sticking within a spending cap can be difficult, and Dr Cullen has proved to be no different from any other Labour finance Minister who has gone before him. He broke his self-imposed spending cap in his first term, even if it was just by a fraction—at $6.1 billion. Having got the taste of that increased spending, having got the taste of blood in his mouth, he went on to undertake $12.7 billion worth of new spending in his second term, and if this Government—and we hope it does not—gets a third term, I project that spending will rise to somewhere in the order of $14 billion to $15 billion, if not more.

The finance Minister knows that that is a major problem for the country, because he told the Dominion Post, as reported on24 March, that there was a bit of a hiccup with the numbers. There is, I might add for the benefit of anyone who may be listening to this debate, a lot more than meets the eye with regard to that comment. We will come back to it in due course. Dr Cullen said, and I quote from the of 24 March: “I can’t confirm any numbers, but I can confirm the initial run of the Budget numbers didn’t play out to a sufficiently credible long-term debt track. Steps are being taken to address that.” That is Treasury-speak for a major bust-up with Treasury and with the numbers it was crunching in an out-of-control spending ministry that was just spending money left, right, and centre. But members should not take my word for that. It may be worth referring to another article that appeared in the in the weekend by Gareth Morgan, who stated in the last paragraph of his column: “Meanwhile, the Government is spending like mad just adding to the inflationary pressures and in so doing increasing pressure on the Reserve Bank to tighten further, and substantially.” The message from economic commentators around the country is that you have a Government that is spending so much money—

The CHAIRPERSON (H V Ross Robertson): No, no—not me.

JOHN KEY: Oh, OK. The Government is spending so much money that it is putting pressure on interest rates, and New Zealanders are paying for that with higher mortgage rates.

This Government was faced with a couple of opportunities. One was to set in place a platform of future economic growth for New Zealand. This Government could have chosen to build capacity in our economy and to invest in infrastructure and quality education. It could have chosen to invest in things that would make New Zealand sustain higher levels of long-term growth. But it failed in that, and it failed rather miserably.

Hon Dr MICHAEL CULLEN (Minister of Finance) : After 2½ years in Parliament, Mr Key has finally become a true member of the National Party. In other words, he cannot remember what he said 2 weeks ago in terms of what he is saying today. And that is the National Party all over. Its members have spent the 2½ years since the last election saying that “Uncle Scrooge Cullen” is running huge surpluses—massive surpluses—and is dragging resources out of the economy. Mr Key is nodding again; he remembers saying that. He was saying only a couple of weeks ago that we were dragging economic resources out of the economy unnecessarily, and that there was plenty of room for big tax cuts and for all the spending promises on law and order and everything else that his colleagues keep making, all over the place. They have a big doozy one coming up on Friday of this week, of half a billion dollars - plus a year. That will come out from the National Party as its next promise. We are just a bit shocked about that—the National caucus leaks so badly that we know when announcements are coming out on key matters.

But suddenly this week Mr Key has understood what I have been trying to say for the last 2 or 3 months: that, in fact, we do not have a large amount of fiscal headroom, at all. There is no room for large tax cuts, unless—and this was the hidden message of Mr Key’s speech—there is a major slashing of Government expenditure. Unless we cut back—

Hon Member: Which one?

Hon Dr MICHAEL CULLEN: Oh, it has to be the biggies! There is no point in fiddling around with the Ministry of Women’s Affairs; that will not address the need for tax cuts. The cuts have to be in health, education, superannuation, law and order, or defence—all the big items of Government. But what have National Party spokespeople said in terms of all those areas? The Government should have agreed to anything that nurses asked for in pay increases, according to the National Party’s health spokesperson at the time. National says we should increase the number of police all over the show. In fact, there should be more police than non-police in our society, if one listened to the National Party on occasions. National also says we should double the amount of money we spend on defence, and buy everything we possibly can for it. We should increase our overseas aid, of course. We should spend more on this, that, and everything else—

Darren Hughes: And cut taxes, too.

Hon Dr MICHAEL CULLEN:—and have big cuts in taxes, at the same time. But Mr Key now says this Government is feeding too much demand into the economy. Well, we just cannot have it both ways. That is exactly what putting a Budget together is all about. It is not a series of exercises in wishful thinking. It is not a matter of going around all one’s caucus colleagues and asking them to say exactly what they would like, of doubling it, and of then seeing whether it adds up.

I will issue this challenge to the National Party time after time over the next few months: when that party produces an alternative Budget, based upon the Government’s own tax model and based upon the same economic assumptions—as Labour did when in Opposition—

Clayton Cosgrove: Costed properly.

Hon Dr MICHAEL CULLEN:—and when it is all costed properly and it all adds up, then we may believe a word the National members say. But in 2002 National flunked that basic test; it refused to issue an alternative Budget. I ask Mr Key whether, after this year’s Budget when he has all the economic data, he will put up an alternative Budget. Oh, yes, he nods. Right—we have that on record. We will need to see then where the cuts will be made in order to pay for his programme, in terms of tax cuts and the diversion of expenditure out of excise duty, and to pay for all the other things the National Party will promise over the next few months.

Of course, 25 new camping grounds on Department of Conservation land may pay for all of that—I do not know. Who knows what National may have in train for that department when it comes to those sorts of proposals? That just will not do as a programme for an alternative Government. But it tells us that the National Party is not an alternative Government. National is just a party that hopes to claw back some ground in this election so that it may win a position by 2008, in order to look like an alternative Government. The danger, of course, is that it may just fluke it if it does that—just as Muldoon did in 1975, when he was lumbered with the superannuation promise that was part of why we had to do the things in the 1980s that we did, in terms of restructuring.

So I say that this debate needs to be about the true realities. I can tell the Committee that on the present projections around net debt and gross debt for the out-years, we are looking at a relatively flat percentage of GDP. There will not be a big decline, at all, in net debt or gross debt as a percentage of GDP. There will not be room in this year’s Budget for the big-spending promises that nearly every other party in this Parliament wants to engage in, on both the revenue side and the expenditure side. There will have to be some doses of cold realism amongst all kinds of other parties, in order for them to make any sense, at all.

ROD DONALD (Co-Leader—Green) : I am sure that the Government would like to be congratulated on its healthy financial statements, but I have to point out that while it is sitting on record surpluses, hard-working Kiwi families, farmers, and business owners are paying a high price for Labour’s mismanagement of this country’s economy. That is because every family with a mortgage, every business owner with a bank overdraft, and every farmer with a loan is paying 1 to 2 percent more in interest because Dr Cullen refuses to take action on New Zealand’s record current account deficit and overvalued dollar. The Minister is shaking his head, but the Governor of the Reserve Bank confirmed, when he appeared before the Finance and Expenditure Committee, that because of our high and growing international debt, New Zealanders pay—

Hon Dr Michael Cullen: And private debt.

ROD DONALD: Private debt; it does not matter—the fact is that Kiwis are paying a risk premium because of that debt.

I would like to know what the Labour Government is doing about that. I would maintain that it is doing less than nothing, because despite net foreign debt now exceeding $120 billion, the Government wants it to be even easier for foreign investors to buy up our land, our farms, our forests, our buildings, and our businesses. Despite the trade deficit being at record levels—$4.1 billion for the year to February, it was announced today—and imports climbing by 9.7 percent in the last year, Labour wants to fuel even more imports by removing New Zealand’s last remaining tariffs. Despite Dr Cullen claiming during the 2002-03 financial review that he had tools available to get the dollar down to realistic levels he refuses to relieve the pressure on our exporters and domestic manufacturers. I believe that that is because the Minister of Finance has a conflict of interest. He would rather sacrifice some businesses than face public outrage as the result of the inevitable rising cost of imports if the exchange rate of the New Zealand dollar was restored to realistic levels.

In particular, I believe that the Minister is rightly concerned about the impact that the rapidly rising price of oil will have on the New Zealand economy when the dollar rediscovers gravity. Despite the high exchange rate of the New Zealand dollar insulating New Zealand from the full force of escalating oil prices, the cost of oil imports rose by 29.9 percent in the year to February, according to today’s statistics report. The impact of oil prices will only get worse if the Government does not take action to reduce our dependence on imported fuel. The Finance and Expenditure Committee report on the financial review highlights that the Government has been caught napping on the oil issue. It was, and still is, totally unprepared for one of the greatest threats to the New Zealand economy and to our way of life.

We have only to look at page 4 of the report to see that it states: “Treasury conceded that previous projections”—that is, oil price projections—“were based largely on historical prices. This has proved a reasonable basis for predictions in the past, as the real price of petrol has stayed relatively constant for the past 30 years.” However, Treasury concedes “historical prices may no longer offer an accurate reflection of future prices”. Well, tell us about it! But Treasury went on to state that it believed that: “current high prices will be temporary”—this was in October last year—“and, in about 7 years, oil prices will fall to around US$35 per barrel.” Well, clearly the futures trader who put in a bid for oil costing $100 a barrel this June had not read what the New Zealand Treasury had to say about oil prices, and the New Zealand Treasury claims that it now relies on futures traders to tell it what the price should be. I think it is time that Treasury revised its $35 per barrel figure upwards, because oil at the moment is trading at more than $50 a barrel, even though the price has settled slightly, and that is almost three times what Dr Cullen stated it would cost in last year’s Budget. He said that oil would reduce to an equilibrium of $19 a barrel.

Hon Dr Michael Cullen: I didn’t; Treasury did.

ROD DONALD: I am sorry to slight Dr Cullen. Dr Cullen’s advisers in Treasury said that.

We have a small window of opportunity to tackle that problem. At the very least, and to begin with, the Government needs to recognise that the problem is real and urgent, and that change is inevitable. It needs to bring in vehicle fuel-efficiency standards right now. It needs to invest more in public transport, in rail for freight and passengers, and on walking and cycling. It needs to encourage more local production and to become less dependent on long-term trade. I acknowledge that the Government has taken some small steps towards that in cooperation with the Greens, but those steps simply are not enough. We need to rapidly transform our economy; otherwise, we will not cope.

CLAYTON COSGROVE (Labour—Waimakariri) : I think Dr Cullen made some very interesting points. We need to get a bit of reality about the National Party back into this debate. Here is the reality and here are the facts, which I think set a wonderful framework and platform for an argument and a debate at the next election. For 6 years we have had the highest growth rate in the OECD. For 5 years we have been ahead of Australia. For those in the National Party who always see Australia as the panacea, I point to those figures. We have the lowest rate of unemployment in 20 years—3.6 percent. Since December it has tightened to 3.1 percent in my own province, in Canterbury. They are facts. They are credible facts; they are verified by overseas agencies.

After the 2004 Budget, when Bill English was the leader of the National Party, I recall getting up and being astounded at the fact that, for the first time, the Labour Government was being attacked for being too tight. I recall that, throughout our history, the National Party and the conservatives have always taken pot shots at the Labour Party as being the tax-and-spend party; but here was a leader of the National Party—for the first time in my short living memory—who had got up, broken the mould, and accused the Minister of Finance and the Labour Government of being too tight.

Of course when that did not work, and it has been proved that we are being fiscally responsible, we now have Dr Brash on the one hand saying that we are still too tight, and on the other is the softer face of National’s economic and finance policies, John Key, saying that we are leaving people out in the cold because we are not spending as much as we should. Then there is the Green member and others who are also saying that. Dr Brash is complaining about high interest rates and is then promoting policies, like spending millions of dollars on law and order—hundreds of millions of dollars, probably; we wait for the dollar signs to come out—and massive tax cuts, which would promote inflation. They would be inflationary and would provide again another pointer for Dr Bollard to raise interest rates on Kiwis.

Of course, as Dr Cullen has said, we cannot really have it both ways. In the last couple of weeks we have seen the softening of the National Party on every particular point at issue that the people have rejected the National Party on in the last couple of elections. With regard to superannuation, there was a very interesting pamphlet—a bit of National Party propaganda—that said National would keep the age of entitlement right, and it would not alter or tinker with the mechanics. But it left out a little bit in terms of the rate: whether the rate would actually stay the same under a National Government. That is the little piece of information that is probably the most sought after by our elderly folk—the rate of superannuation. It was just left out in the ether somewhere and was fudged. There was no mention of it.

National members have had a turn around on asset sales. They say they will not sell assets, except maybe for one or two, such as some of our best-performing State-owned enterprises, like Landcorp Farming.

Hon Dr Michael Cullen: Three or four.

CLAYTON COSGROVE: Or three or four, Dr Cullen says. Then there would be massive spending on health; massive spending that will outdo us—they say—on law and order, but not one dollar figure has been put beside the promises.

I look forward to the next election, because I will stand up on the stump and say: “This is what I said I would do. This is what the Labour Government said it would do. Don’t trust us by our words, trust us by our actions.” I will lay that side by side against the only legacy that the National Party has on financial matters, health matters, social security matters, and social welfare matters. The only legacy those members have was 6 years ago.

Unlike some members opposite who pray that voters are stupid and have short memories, I believe that voters will come home because they can remember the triple cut in superannuation. They can remember the selling out of State-owned enterprises. They can remember all the hospitals being underfunded. They will remember that, and it will become an issue of credibility.

I want to also address for a moment the issue of tax cuts and the argument that we are not doing enough. Well, there is an argument—tax cuts versus Working for Families. That is a spending package I am proud of, because of what Working for Families will do for a family of mum, dad, and four kids on $55,000, which was not a bad income 10 years ago. That family is looking at an increase of $150 a week extra in the hand. Maybe we should not use the term, but we could call it a targeted tax cut, because it is taking money—the wealth of our economy—and redistributing it to the working families, at the bottom of the heap, who need it the most. To get anywhere near that amount, the same family would require a 9.5 percent tax rate, which National would not even deliver, and that is where the credibility starts and finishes.

PETER BROWN (Deputy Leader—NZ First) : Well, we have heard the Minister of Finance, and the chairman of the Finance and Expenditure Committee, who is also a Government member, and we have heard very, very little about what the Government stands for and what it intends to do. We have heard everything about what the National Party is doing wrong or is supposedly doing wrong, but we have heard very, very little about what the Government will do. I will give the member a little credit. He spoke about Working for Families and he recognised that it was a targeted tax cut, which it is. But there was not one mention—not one single mention—about the current account deficit. If I am correct, it stands currently at $9.3 billion. That is up $4 billion from last year. There was not one mention of that. That was all fudged over.

Put simply, we are living too much on credit in this country. There is too much profit being made by overseas organisations based here that is being shipped back to wherever those organisations came from, and there are too few savings being made by the average New Zealander. The average New Zealander likes imports, and buys imports that maximise the value-added content; whilst going in the reverse direction, our exports contain little value-added content. The average New Zealander is hurting.

John Tamihere: Yes, listening to you! Ha, ha!

PETER BROWN: The members laugh. Their own colleague has just said that a family on $55,000 a year needs to have financial assistance. If people are hurting at that level, how are they hurting when they get down to $18,000, $19,000, or $20,000 a year? They are hurting. And what is the Government doing? Come April Fool’s Day, it will put another 5c a litre on petrol. We have heard the Greens talk about the price of oil. When people talk about the price of oil, they basically think of petrol prices. What will the good Minister of Finance do? He will make the price over $1.30 a litre for 91 petrol, come April Fool’s Day. I say to the Minister that it is appropriate that he is doing it on April Fool’s Day, because he is making fools of all New Zealanders.

Hon Dr Michael Cullen: Have you seen the price in Britain?

PETER BROWN: I think the Minister said to look at the price in Britain—but we should also look at the wages in Britain. We should look at the price in the USA and in Australia, and look at what the Government here is taking in terms of tax on a litre of petrol.

Hon Harry Duynhoven: Five cents a litre in Venezuela.

PETER BROWN: I do not believe that the Minister who is shouting out really believes what he is shouting out. I believe he shares my view that it is outrageous that in this day and age we are taking 18.5c per litre and putting it in the Government’s coffers at the expense of roading.

Let us look at what is happening in the electricity industry. Let me read to the Committee a quote from Genesis Energy’s annual report: “Genesis Energy has been concerned at the lack of available information regarding New Zealand energy demand and implications for the industry.” That is a very telling statement. In other words, Genesis Energy does not believe that anybody has a clue what is going on—so much so that it further states: “Genesis Energy commissioned a research report prepared by the Centre for Advanced Engineering to obtain accurate supply and demand information for future planning.” [Interruption] I am telling the member that he should go to his own electorate, particularly in the winter, and ask his constituents whether they are happy with power prices, and whether they are happy that prices will go up and up.

He should ask his constituents whether they are happy that their wages are keeping pace with their electricity bill. I can tell members that I have had more photocopies of electricity bills sent to me in the last few weeks than I have ever seen in my life. [Interruption] Those are the members who think Labour people will look after them. I can tell members that the average New Zealander is exceedingly concerned about the price of electricity. I am referring to the low paid and to people on fixed incomes, and I have a great deal of personal sympathy for them, but I am also talking about business people, who are finding that the price of energy in this country is going through the roof. If this country wants and needs to be competitive—and New Zealand First supports all that—then we must stabilise the price of electricity at a reasonable level. Equally, we must target roading in this country, and use the money the Government takes from petrol motorists for roading.

Clayton Cosgrove: That’s what we do.

PETER BROWN: The member is full of talk. If he took only 1 hour to read the Allen report, he would be much more educated on the importance of roading in this country.

• Reports noted.

Hon RICHARD PREBBLE (ACT) : I rise on behalf of the ACT party to discuss the financial review of the Auditor-General. I realise it is a report that Parliament does not often comment on, because the Auditor-General is a sort of independent officer, and one would like to think the office is not party political. But we as parliamentarians also have to ask who guards the guardian, and ask whether the Auditor-General is serving us well. The Government may decide that this review is in some way a defence of its position. But if we look at one piece of financial expenditure, for the wānanga, which has managed to spend a quarter of a billion dollars this year—that is more than any other university—we have to ask how that came about and whether the Auditor-General drew it to the attention of Ministers. As far as I can tell, the Auditor-General did not do that, but if we are to accept, and, of course, we must, the words of Ministers, we can see that they drew it to the attention of the Auditor-General some time ago—at least last year, and possibly earlier.

I am concerned because I have been told by the Hon Ken Shirley, who has been following this matter very seriously, that when he took documents to the Auditor-General he got the impression from that office that it was not very interested. We now find that the office is doing a report, and that it is not due until next year. The wānanga has received $232 million, and the Auditor-General thinks it is satisfactory to give a report next year.

In fairness to Ministers, they are waiting for the Auditor-General. A huge amount of money will be spent before we know whether that is good or bad. Further than that, the Auditor-General has set out some terms of reference. One matter that I understand he is not prepared to look at is whether enrolments are genuine. To give the Committee a simple example, I was told by Ken Shirley, who is now associated with the matter, that he was at the Easter show on the weekend, and that people—not one person, but a number of people—came up to him and said they thought that what he was raising about the wānanga was very interesting, and that they had received in the mail a certificate from the wānanga for a course they never attended.

The Auditor-General has told Mr Shirley that he will not look at that. If more than one person at just one show came up to Mr Shirley, that indicates that there have been a large number of bogus enrolments.

I then read in the Sunday newspaper that that organisation, even though it is supposed to be under investigation, is now starting an English language course. People might think that perhaps that is a good thing, but, after one has done it, it will be discovered that the course is not certified and that no Government authority states that the course meets any standards at all. When we examine it further, we discover that those students will somehow learn to speak English without having contact time with a person who can speak English. I would love to see how that can be done. But we will never know that, because, apparently, nobody is auditing the course. The Government’s education certifiers are not certifying it, and, again, the Auditor-General is, apparently, not looking into the matter. That is not satisfactory. I would like to know from the Speaker whether she will take the matter up with the Auditor-General.

Let us imagine the situation if it were a private company that one had a problem with. The Office of the Auditor-General has said that it will not look at the question of fraud, even though it is obvious that there have been hundreds of fraudulent enrolments. It is not going to look at the fact that there is now a course that is apparently valueless but is still costing millions of dollars to the taxpayer. And, by the way, we will not have a result until after the election. Perhaps, and this may be a bit unfair of me, the Government may think that that is rather good, because between now and when the Auditor-General’s report comes out, there will be an election.

I think it would be extremely unfortunate if we now had an Auditor-General who took that sort of matter on board. That would be a very serious criticism, and I am not prepared to make that, but I am prepared to say that this situation is not satisfactory. The funding for the wānanga has gone from $4 million to $230 million in 4 years. The Auditor-General has asked for, and been given, the power to look at these sorts of matters, and we would like to know what progress he is making.

• Report noted.

Dr MURIEL NEWMAN (Deputy Leader—ACT) : I would like to raise a very serious matter concerning the Office of the Ombudsmen: the failure of that office to ensure the effective scrutiny of the Government through the Official Information Act. That Act is policed by the Ombudsman. It is a very important Act for members of Opposition parties and for others in the community who want to hold the Government to account.

Hon Richard Prebble: And the news media.

Dr MURIEL NEWMAN: Yes, and for the news media as well. Holding the Government to account is becoming more and more difficult, not only because Labour has expanded the public service by some 20,000 additional workers since being in power, which means that government is even bigger and more intrusive, but also because Ministers are becoming more obstructive, are misleading more often, and, in fact, are just becoming slippery. The Office of the Ombudsmen is failing in its duty to hold those Ministers to account to Opposition members who are asking for information.

More and more often, Ministers and their departments simply refuse to provide information under the Official Information Act—not just to members of Parliament but also, in particular, to the media. The challenges to those decisions are taking many, many months. The Ombudsman used to be our advocate in asking for such information. The Ombudsman used to work for the little guy—because we are actually working for ordinary New Zealanders so that they can find out what their Government is up to. But I understand that 60 percent of some of the Ombudsman’s responsibility is now taken up with complaints from prisoners, which is absolutely ridiculous. The Ombudsman is also becoming an apologist for the Government, protecting obstructive Ministers who want to keep matters of government—the real facts—secret from the public.

Through the Official Information Act we have exposed scandals. The hip-hop tour is one that springs to mind. It was funded by the Community Employment Group in the Department of Labour, with the Minister, Steve Maharey. It was a huge scandal—thousands of dollars wasted—and a huge embarrassment to the Government. Under the Official Information Act I have put in requests for information from the Community Employment Group. Not long ago I received a letter from the Minister, Steve Maharey, stating that my request would cost me $15,197.50. He is trying to charge me, a member of Parliament, $15,000 to get the information I have requested.

That information must include some pretty big secrets that the Minister is trying to hide, because there is no way an Opposition member or a member of the media can afford to spend $15,000 on getting such information. When we go to the Ombudsman to ask for help, what happens? The Office of the Ombudsmen ends up upholding the Minister’s complaints against us, upholding costs, and members of the Opposition cannot get the information they requested.

The Official Information Act states that Ministers can charge for the supply of information but that the charge must be reasonable. I see that Mr Maharey is sitting in the House. I ask Mr Maharey how he would have felt when he was a member of the Opposition if a Minister had said: “OK, I’ll give you the information, but it’s going to cost you $15,000.” I can tell the House that he would have been absolutely up in arms. Now here he is, colluding with his department to prevent information that is clearly scandalous getting out into the public arena.

The Office of the Ombudsmen needs to have a serious look at the way it deals with issues like this. It needs to reassess where its time is going, in particular, the growing amount of time spent on prisoners’ demands. It needs to be spending 60, 70, or 80 percent on New Zealanders who want to hold the Government to account. That is what the office was set up for. I suggest that the Ombudsman needs to reflect on that and needs to come down extremely heavily on Ministers who are trying to avoid giving out proper information to the public by charging exorbitant fees.

• Report noted.

PAUL ADAMS (United Future) : I rise to take a call on this particular report because I believe that the Government has been letting down the small-business community and has also been restricting this country’s ability even to reduce our current account deficit by using the abilities of the small-business sector. It is interesting to note that the 2004 Ministry of Economic Development report states that only 27.4 percent of small to medium sized enterprises make it to the seventh year of operation, while a little more than half move into the third year. I believe that this Government has basically run a policy of taking from the small-business community and loading it up with unrealistic rules and regulations that it cannot handle.

Let me put one thing forward in this debate, taking our forestry industry as an example. At the moment the forestry industry is exporting logs. What if the Government brought in a plan to give tax-free status to any business that, instead of exporting logs, exported them in a—

Dr Muriel Newman: Tax-free?

PAUL ADAMS: Yes, tax-free; that is correct. Businesses would get tax-free company status if they were processing those logs into an item for export—if that company, instead of solely exporting logs, were making them within New Zealand into products for export. What would that do? That would provide a fantastic incentive to develop an export company in this country. Such a company would pay GST on everything it bought and sold, PAYE tax on its executives and other staff, wages and salaries, and everything else. But instead of having a “take” mentality we would be adopting a “give” mentality on something that would benefit the country as a whole.

United Future would like to see this country start to appreciate the abilities of small businesses in relation to economic growth, rather than being restrictive. Small and medium sized companies are made to battle with red tape, which is wasting time and energy, rather than encouraged and given focus by incentives to achieve what we want as a nation.

Eighty-five percent of our businesses employ five people or fewer, yet they are being slowly strangled by increasing red tape, new compliance costs, and a threat of more intervention by central government. I believe that this country and the Government have a fantastic opportunity to look at this area of economic development and begin to refocus. Instead of being takers from these businesses or loading them up with obligations, we should start to work out a plan whereby we can encourage them to move in a direction that will be good for them and good for the country.

The Government needs to look at risk management for many small to medium sized enterprises as they start up, because—as shown by the statistics I opened with, on the danger of them closing—they really need help in the risk management area. The Government needs to provide more advice to small to medium sized enterprises on risk management. Often without easy access to skilled lawyers and accountants, and lacking human resources departments, small businesses can find the cost of complying with Government rules and regulations significantly harder than their larger cousins.

New Zealand is a country that has many entrepreneurs and many people who have a tremendous ability to be risk takers and to design innovative products to export. But I believe that our current rules and regulations are stifling this, rather than being an incentive to achieve. If we were bold enough to do something radical—like saying that New Zealand companies that took a local component such as forestry and turned it into a product that we could export could have a tax-free status—I can guarantee that we would receive more tax and a greater reduction in overseas debt.

• Report noted.

JUDITH COLLINS (National—Clevedon) : The financial review of the Ministry of Social Development takes some reading, because most of it is pretty depressing. In particular, a large amount of the review is taken up by the sickness and invalids benefits and the so-called strategy surrounding them. What we know is that under this Government, sickness and invalids beneficiary numbers have gone through the roof. We know that at the end of January this year, 120,000 people were in receipt of the sickness or invalids benefits. For a country of this size, that is an awful lot of people to be sick. It indicates a 38 percent increase in numbers since 1999. We know from that that the Labour Government under Helen Clark clearly makes people sick, despite the huge amount of extra taxpayer dollars that goes into the health budget every year. Clearly that strategy is not working. When we have asked the ministry why those numbers have gone up so much, its response has been that it does not know why that has occurred but that apparently it is halfway towards finding that out. How does the ministry know it is halfway towards finding that out, if it does not know what the answer is? The ministry has gone on to say that it thinks that a recent cause of the rise has to do with the reclassification of beneficiaries. In other words, the ministry is taking people off the unemployment benefit and putting them on the sickness benefit. That is acknowledged by the ministry. The Minister never acknowledges it, but the ministry staff have.

We know that there are 547 unemployed beneficiaries who have been unemployed for over 10 years. That is 10 years of those people’s lives wasted on the unemployment benefit, and 10 years of taxpayer dollars wasted on keeping them and their families, when they should be doing that themselves. That is 10 years of wasted life. We know that some people who are currently receiving benefits should not be receiving them, because they are not available for work. They are working in their family dairies or on little schemes that they have arranged with local collective organisations. People have those sorts of rorts going on, and we know that is happening because the people at the coalface of the Work and Income offices tell us so. They have a Minister who does not care enough to go in to bat for them and help them to do their job better. Their job is to be the gatekeepers of taxpayer dollars, not to dole out money time and time again and ask no questions.

The Minister has talked about a universal benefit, and that is referred to in the financial review. The universal benefit, as we found out today in the House, will have a multitude of add-ons. So far there are four that the Minister can remember, but we know there are more to come. The universal benefit will not do a scrap of good. This comes from the same Minister who took away the work test for people on the domestic purposes benefit whose children had gone to school. It is the same Minister, yet here he is talking about the universal benefit. It is supposed to fix the problem, but it will not do so.

We know that there is a huge amount of benefit fraud in this country. Again, we know that from the Work and Income staff who tell us that they are seeing it. We know it from the doctors who tell us that they are being approached with demands for sickness benefit forms. If they do not comply with those demands, the people will simply up and go to another doctor who will. The doctors know that if patients do that, they will lose the income from those patients’ families. The doctors know that their own kids can get attacked at school, and also that they themselves can be blacklisted. We have seen it happen. We have heard on the Social Services Committee about what happens to doctors who stand up and do the right thing.

Recently, I trotted around the country and visited various doctors, listening to them and asking them what they were finding. What I heard came as a shock. I heard of one particular town that had 19 doctors. Eighteen said no to one particular sickness benefit applicant, and the nineteenth said yes. The signal that sends out to those doctors is that they should not bother to try to do the right thing because someone else will not, and the doctor who tries to do the right thing is the poor mug who will not get paid and who will have to wear it next time.

Hon Steve Maharey: Tell us who it is, then.

JUDITH COLLINS: It is all very well for Government members to ask who the doctor is. We know what happened last year when doctors came out and said that was happening. It was on the front page of the New Zealand Herald. The first thing that the Minister said was that those doctors were complicit in fraud. That is just not good enough, because doctors are not actually trained to be the gatekeepers of taxpayer dollars; they are trained to be patients’ advocates and medical doctors.

The Minister said that he would fix the problem. But the first thing that he did when he came in was to get rid of the designated doctor scheme, which did fix it. Under the previous National Government sickness and invalids beneficiary numbers were going down, but under this Government they have skyrocketed. We have found that that is not because suddenly everyone has become old, which is what the Minister has told us. It is not because suddenly everyone has a bad back. We have looked at the numbers and seen that we are talking about people in their 30s and 40s who are suddenly sick. We in this party do not believe for a moment that suddenly 38 percent more people than 5 years ago are so sick that they cannot work. We do not believe that for a moment. We taxpayers are being told to believe that this country is suddenly sick. As I have said before, it clearly must be either the Government or the conditions that it has brought in that has caused that situation.

We have also been hearing about the amount of staff fraud that goes on. With regard to that issue, I say that the culture comes from the top. When we have a Government that goes around spending other people’s money willy-nilly with absolutely no understanding of accountability, we can expect that sort of culture to come on down. The culture is not set by the person in the lowest-paid job in an organisation; it is set at the top. The top happens to be the Prime Minister and the Minister. Their every word causes one to wonder what it is that they are saying, because one is never quite sure whether they are telling one exactly what they are supposed to.

There is also the issue of seasonal work, which has to be one of the biggest jokes around. The Department of Labour has told us that it will sort out the issue of seasonal work by bringing Thai fruit pickers into the Northland area, so that they can pick the fruit that all the unemployed people who are on the dole in Northland cannot pick. The department told us that Thai fruit pickers would come in and do the job, and that it would be a great thing. It is a great thing if one happens to be an orchard owner, with whom many people in the Opposition sympathise. But when I ask orchard owners whether the Thai workers can speak and read English so that they can comply with the occupational safety and health requirements, the answer I receive is that they cannot but that they are supervised.

• Sitting suspended from 6 p.m. to 7.30 p.m.

JUDITH COLLINS: I would like to come back to the issue of seasonal work and the difficulty that orchardists and market gardeners have found in getting anyone to pick fruit and asparagus over the last year. The ministry’s view is that the problem does not happen in Nelson or Hawke’s Bay. That will be news to orchardists who happen to be located in Nelson or Hawke’s Bay! The ministry says that it does happen and is a problem in Northland. Before the dinner break I was advising the Committee that the ministry felt that what it was able to do was to bring in Thai fruit pickers to work in Northland. But when I look again at the reasons given by the ministry as to why it is a problem in Northland, I see the reason is not that people have no encouragement to get off their bottoms and go to work, nor is it that people cannot be bothered. It is not for any of those sorts of reasons, which most of us would probably think were the reasons. The reason is that fruit pickers do not have good pay and employment conditions, such as—members should listen to this—the provision of toilets, which may cause difficulties. Apparently that is not a difficulty for the Thai workers. We are also told that transport is a difficulty. Well, it is obviously not a difficulty for the Thai workers, who come all the way from Thailand to pick fruit in Northland. It is obviously not, in fact, a difficulty that those workers do not speak or write English very well. Of course, the occupational safety and health requirements clearly cannot be met if people cannot speak or read the language. But we were then told in the select committee that that is not an issue because the Thai workers are supervised.

What that means, of course, is that we are supposed to expect that New Zealanders who have spent all their lives in this country, and who have spent huge amounts of their time on benefits, are not to be supervised, but that the Thai workers are. We say that that is not one law for all; it depends on where one comes from.

Jill Pettis: They work in sweatshops.

JUDITH COLLINS: Is the Labour member who was interjecting about sweatshops saying that it is OK to have sweatshops in New Zealand? We are not talking about that, at all. What we are saying is that people can come all the way from Thailand to work here under New Zealand conditions, yet we cannot find anyone in New Zealand to do the job.

BILL GUDGEON (NZ First) : We are witnessing the commodification of our seniors within the elder-care sector, due to a stand-off between the Minister and those providing services in the sector. Many of those currently working in the sector are exiting, particularly the religious providers; namely, Presbyterian Support, the Salvation Army, and the Methodist Mission. These are charitable service providers, but they cannot sustain large losses. They are being replaced by large overseas corporates that are in this business only to make profits. They are not interested in the quality of life of our seniors, but only in the profits their overseas shareholders can make.

If this Government would simply pay those already in the sector more per patient than the current $88 a day, then these committed groups would stay. They would also be able to pay their elder-care nurses more—these same nurses who are watching their pay fall way behind that of other nurses. Our seniors are missing out in our hospitals. As well, waiting lists get longer and longer, and the time before receiving treatment grows along with them.

Prior to Christmas 2004, the Government offered a 3 percent increase in funding. This was welcomed by the sector; however, it should be noted that additional funding is still urgently required to maintain services for the elderly, to provide staff with a realistic wage, and to attend to such necessities as maintenance, which has, for many operators, been deferred for some time. Power prices, fuel, and rates all go up faster than inflation, but superannuation stays stagnant with a meagre inflation adjustment. Our seniors are forced to stay in bed because they cannot afford heating. This is not dignity. This is survival, which this Government has forced on them.

When we look at how much it has cost the Government to get four people into work—in excess of $400,000—could that not have been put to a more worthy cause like taking care of our elderly, who have contributed enormously to the tax take of this country and deserve better?

Aged-care facilities throughout the country are watching anxiously as rest homes have been forced to close because of inadequate funding over the past 10 years. The Government promised a 3 percent increase unconditionally, but the funding has not been passed on to providers. If too many providers exited the sector, then the choice would become limited. Although we fully support a person’s right to be cared for at home if he or she so chooses, we believe that there will always be a place for residential care services for those no longer willing, or able, to remain at home.

In Auckland, those who have withdrawn, or who have publicly stated that they are pulling out, are Presbyterian Support, the Salvation Army, the Methodist Mission, and the Northern Masonic Association Trust Board. These organisations are charitable service providers that are focused on quality without commercial interest. However, they cannot sustain large and continuing losses. Funding has reached the point where these services are being lost.

I hearken back to the 1999 general election, when I said in Hastings: “We are breeding a nation of people who have lost the work ethic.” Five years later, in 2005, this has been confirmed by a report from officials who reported to the select committee that it was difficult to get the unemployed into seasonal work, and that immigrant workers were being employed instead, who have little, if any, grasp of the English language. This quote, surely, is applicable to our situation: “Give a person a fish; he or she will eat for a day. Teach people how to fish and they will eat for the rest of their lives.”

Daniel Webster on 1 June 1837 said: “I apprehend no danger to our country from a foreign foe. … Our destruction, should it come at all, will be from another quarter. From the inattention of the people to the concerns of their government, from their carelessness and negligence, I must confess that I do apprehend some danger. I fear that they may place too implicit a confidence in their public servants, and fail properly to scrutinize their conduct; that in this way they may be made dupes of designing men, and become the instruments of their own undoing.”

Hon STEVE MAHAREY (Minister for Social Development and Employment) : I rise at this point because most of the notified speeches in relation to this particular financial review have been given, so it is a good time, perhaps, to provide a few words from the Government’s point of view. I thank Mr Gudgeon for what I thought was a careful and reasoned speech around the issues he was raising; certainly, they are concerns that the Government wants to explore.

I return to the address given by Mrs Judith Collins, who is the National Party spokesperson on social welfare issues. I always thought that one of the responsibilities a member has when coming into this Chamber in order to spend at least 5 minutes of taxpayers’ time talking about an issue he or she is supposed to be an expert on—Mrs Collins is the expert on this issue from the National Party’s point of view—is at least to be informed. That is what scrutiny is for. That is why we have these financial reviews. That is why we have people sitting in the chair. That is why people are listening on the radio—I imagine that not a lot were listening after Mrs Collins’ intervention, but perhaps there were more after Mr Gudgeon’s.

I just want to come back to what, I guess, is the job. I point members to an example of what I think was simply a waste of time, if that is what happens in a financial review debate. Mrs Collins raised the issue of seasonal workers. As far as I can tell, Mrs Collins knows nothing about seasonal workers. For example, she said that there was no issue in the Hawke’s Bay. I tell Mrs Collins that my associate Rick Barker comes from the Hawke’s Bay, and that he has campaigned for many a year to try to ensure—as the number of people who are unemployed has decreased to almost nothing in the Hawke’s Bay, and as growers have found that they no longer have a pool of labour that, come harvesting time, they can turn to—that people work together within the industry in order to do a lot better at getting labour prepared, trained, and available to clear crops.

I was in the Hawke’s Bay last week talking with people from the industry. They sat in a room together and talked about how they appreciated the work that people such as Rick Barker had done and that the Government had done. They were keen to address issues such as toilets, accommodation, transport, and wages, and to not have people in the industry who simply hoped that labour would turn up at the door when they were trying to pick their Braeburn apples in the very near future.

That has been going on for many years, and it is a direct result of a shift in the environment of people involved in seasonal cropping. They relied a lot on the persistently high number of people who were unemployed. They would turn, at cropping time and harvesting time, to organisations such as Work and Income to ask whether they could have some people. There were thousands of people unemployed in the Hawke’s Bay. There are around 900 in the industry now; in the whole of the Hawke’s Bay region there are about 1,600 unemployed people now. Clearly, they are not all suited to work on orchards, so the number of people available is quite small.

Therefore, there is only one way forward for the seasonal industry. Rick Barker has worked with the seasonal industry on that, and the industry agrees with him: it must prepare itself, like any industry does, to try to make sure that it has its share of the labour market. The industry is moving to such exciting ideas as trying to create a harvest trail. So instead of, perhaps, people picking Braeburn apples and having a few months’ work—or even a few weeks’ work—at most, they move from one crop to another crop; they move around the region and maybe find themselves 12 months’ work.

All that work is going on. It has been going on for years. People, whether they are in Northland, Otago, the Hawke’s Bay, or wherever they might be, compliment Work and Income because it is working with the industry and doing an outstanding job. Yes, the situation will, to some degree, be augmented by bringing people into the country to help do that kind of work. Of course, the work is very difficult to predict—if we get a different kind of climate one year then the Braeburn will come on during a different week from the week they came on last year. It is all a little bit in the lap of the gods to that extent, so one has to have some flexibility. That is also what we have been working on—to ensure that we have access to immigrant labour. Immigrants can come in, do that work, and go back home again. It is good for them and good for this country. The working holiday programme is also part of the whole process of trying to have Italians, Germans, Swedes, and so on who can easily access the work when they come here.

If a financial review speech from the National Opposition spokesperson on this issue is going to have as its dominant theme an exposé—as she likes, I imagine, to think about it—of what is happening in seasonal work, then what is the point of having this kind of debate? The Government would welcome—in fact, we want to have—a debate about how to improve the way we get those crops in each year. But I sat here and waited for one single glimmer of a policy idea. All I got was some debate about whether Thai people need to go to the toilet versus whether New Zealand people need to go to the toilet. That seems to be the sum of the insight offered by Judith Collins on behalf of the National Party.

I know that, perhaps, when members come to the Chamber at half past seven at night, they are reliant on the fact that no one is listening to the radio. Maybe that is what they are doing. They may feel that if they pop down and say some drivel into the radio—

Rodney Hide: They are not listening now!

Hon STEVE MAHAREY: That is no wonder, after Mrs Collins’ speech. As I said before, that has probably killed the listeners off. Listeners are not getting a debate. Mr Gudgeon gave a carefully prepared speech about the issues of concern to New Zealand First, and the Government takes those on board. But, really, I just ask members in the Chamber tonight whether they learnt a single thing from the National Party about what it said was essentially its biggest issue—seasonal workers—in the debate on this particular financial review. Not one single policy was put forward. There was no glimmer of insight into the issues faced by the seasonal worker industry. Yet people from this industry listening at home know that they produce a huge amount of apples, kiwifruit, or whatever it might be, across this country. They produce an enormous amount of wealth for this country. They have a serious problem in a low-unemployment environment—we have a 3.6 percent unemployment rate, and potentially it will go down further—because they have to be able to pick those crops. I would have thought it was the job of a person given the task of being the National Party spokesperson on these issues at least to sit with some people from the seasonal industries in this country, and at least to find out what the issues are, and not to come here and waste people’s time in a financial review of this nature with the kind of speech we just heard.

So I just want to reassure the Committee that, although National Party members have nothing to say of any value at all about people who do seasonal work and who pick all those crops around the country, Government members do. We have been working on that issue for 5 years. I began doing work on it when I first became the Minister for Social Development and Employment. Rick Barker now has that portfolio as a delegation. He travels all over this country and talks to people about those issues. He has done a fantastic job. I say to Mrs Collins that when I asked people in the industry in the Hawke’s Bay the other day what they thought of the work Mr Barker was doing, the answer was that it was fantastic. They said that he understands their issues, talks to them face to face, is out there on the farms, knows what they are up against, and is coming up with policies that help.

The last thing I will say as an indication of that—Mrs Collins might like to know—is that one of the major changes Mr Barker has fought for, for a long time, has been to get people who are in seasonal work, such as in the meat industry, support when they are out of season so that they can sustain their households and come back into the industry later on. It is a great issue that we will address in the near future, because Mr Barker has fought for that. I imagine that people in the seasonal work industries will, therefore, see his work as good, concrete, helpful work by a member who understands exactly what they are on about.

I thank the New Zealand First folk for their serious work this evening. They have taken this review properly. But I do despair at what I hear all the time from National Party members now. I guess we know that they have written off the next election and are merely going through the motions as they wait for the inevitable defeat later on this year. As a result, they do not feel that they need to do any work. Well, I say that they do. They still get a wage. They still get paid. They are still expected to come down and do the job in this Chamber. I am here because I want to be scrutinised, and my department wants to be scrutinised. We want to hear about the ideas people have, and if they have a good idea, it will be in action tomorrow. That is how we work. We do not care where the ideas come from; they just have to be good ideas, and we will carry them out. I will now sit down and hope that Mrs Collins will take a further call and give one single good idea that we can use to go forward and spend taxpayers’ money on in order to make a real difference to this country.

GEORGINA BEYER (Labour—Wairarapa) : It is a privilege to follow on from the Minister for Social Development and Employment as we consider this financial review of the Ministry of Social Development. I have to echo the disappointment from National Party member Judith Collins. In answer to the Minister’s question, I guess that perhaps the best idea that could be put forward to the National Party is to “bring back Katherine Rich.” At least, that woman had some vision—we might not have liked quite what the vision was, but she did have a policy to put out. But what happened? The policy was slapped into the corner, and she was packed off to the back bench for having vision in that party.

I take the point the Minister made previously—that we did not hear any policy from National Party members. What utterances we have heard in recent weeks have been calls to cut the domestic purposes benefit, to get rid of this and that, and generally to take us back to the era of the 1990s when, of course, there were terrible benefit cuts. Perhaps National Party members have forgotten what a social service is in this nation, and how many people have benefited from such a service and have therefore become great contributors to our country in helping, at least, to provide taxes through working.

We have the lowest unemployment rate in recent history at the moment. This Government has delivered on its promises. This Minister and his ministry have worked extraordinarily hard, not only over the last year that we are reviewing but certainly in the time since this Government came in during 1999.

The Working for Families package, which will be rolled out extremely shortly, will be fantastic news for New Zealanders. There are New Zealanders who will get somewhere in the region of up to $100 extra a week in their pay packets—in their hot little hands—to help build and strengthen families so they can continue to make their valuable contributions to this country. Those people will be beneficiaries. Those who are in need in this country will benefit from that particular policy package, which of course comes to light on 1 April. That will be very good news for New Zealand and for many hundreds of thousands of New Zealanders.

But we are not only introducing that; we have worked on strengthening families. That has been a tremendous help to many New Zealanders around the country. I have to mention that within my own electorate some of the strengthening family initiatives have gone on there, in order to combat our not-too-proud history of domestic violent crime, child abuse, etc., that has occurred in recent history in the Wairarapa. We have not heard many of those stories coming out of the Wairarapa in the last year or so. That is because community members, along with local government and certainly with a major contribution and effort from central government—namely, the Ministry of Social Development, Child, Youth and Family Services, and numerous other services—are working extraordinarily well together now, to try to get on top of those problems we experienced.

The problems are not only in our own area, of course, but also in other areas of the country. As we run out pilots in order to battle some of those issues, we are seeing ever-increasing, positive results around the country. We are trying to turn round those negative trends, but that relies on our supporting families, strengthening families, and providing expertise where the problems are.

There is a need for getting in together and working much more closely with non-government organisations—those that at times are often able to pick up the challenges facing communities and, with the assistance given by Government agencies, to roll out their particular plans and pilots for addressing specific needs. One size does not always fit all, around the country, in dealing with those particular matters. Generally, we are able to tailor services, advice, and actual help at the coalface to suit those communities and their particular vision of how they would like to develop. They have to have that buy-in, and we have to have them on board, in that sense.

This Government, with this Minister Maharey, with his Ministry of Social Development, and with all the other agencies attached to that, has done an extraordinary job.

MOANA MACKEY (Labour) : I am happy to speak on the financial review of the Ministry of Social Development. I am glad the Minister mentioned the inordinate time that Judith Collins spent talking about seasonal work, although it mirrors the inordinate time she spent talking about seasonal work during the select committee’s financial review of this ministry. Mrs Collins seems to think that putting people into seasonal work is one way of solving unemployment. But anyone who has done seasonal work—for example, anyone who was a university student in the 1990s and found that seasonal work was all there was and had to take it—knows that it is extremely difficult work, and not everybody will be capable of doing it. Now, at a time of low unemployment many able-bodied workers are working, so seasonal work might not be the solution that it once was in a time of high unemployment.

But the real low point in the select committee arose when we were discussing Thai workers, and Mrs Collins took to calling anyone who did not speak English, illiterate. She asked whether it was true that illiterate people who came to our country could not speak English and therefore follow instructions. It had to be pointed out to her that not only do people from other countries often speak English but they are not illiterate just because they do not speak the same language as we do.

The most striking aspect about this report from the Social Services Committee is what is missing from it. In reading through it one cannot find any reference to, or section on, the domestic purposes benefit. That omission really needs to be pointed out, because, after all, the domestic purposes benefit has been targeted by the National Party as one to be attacked during this election. National says that we need to get people off the domestic purposes benefit, but there is no mention of that benefit in this review of the Ministry of Social Development. In fact, in the select committee not one question was asked by an Opposition member during the entire financial review. It came down to a Government member to talk about the sterling efforts of the ministry and the changes it had made in getting women—and men too, because men are on the domestic purposes benefit—back into work when it suited them, and, more important, when it was appropriate for their families.

The policy of getting those people back into work has to be one of the most important ever implemented by that Minister and his ministry. With the casework approach these people are not treated as though they are a burden on society. There is an appreciation that raising children is difficult and carries with it financial costs, but that it is even more difficult for a sole parent. There is acknowledgment that the State has a role to ensure that every child, including a child from a sole-parent family, has financial support to ensure that he or she has the same opportunities as children who are fortunate enough to have two parents supporting them.

Although National members seem quite happy to talk to the media about the domestic purposes benefit and what National would do, when they had an opportunity at the select committee to ask questions of the people who deal with these issues every day, they had nothing to say. They know that the number of people on the domestic purposes benefit is going down.

I take this opportunity to recognise the excellent work done by Mr Peter Hughes and all his staff at the Ministry of Social Development. He is an extremely capable chief executive in charge of a very capable ministry. There needs to be recognition by the House of their hard work over the last few years.

Another policy that will make a big difference is the Sickness and Invalids Benefit Strategy, whereby the focus is on what people can do rather than on what they cannot do. We want to ensure that people are on the correct benefit. If they need to be on a sickness benefit or an invalids benefit, they will be put on that benefit, and not on the unemployment benefit. If they are on a sickness benefit or invalids benefit they can get the tailored help they need. Too often in the past the focus was on what the person could not do. If a person’s job involved a lot of physical activity and the person suffered an injury and could not continue in that job, he or she might go on to a sickness benefit or invalids benefit. But we should have thought of what else the person could do, and maybe not in that area of work.

It might be interesting to know how many of those on a sickness benefit or invalids benefit today are in this position because during the 1990s they did not go to a doctor when they should have, or did not seek medical help, because they could not afford it, or because it was not accessible, and then reached the point of no return. That is why primary health is so important.

• Report noted.

KEITH LOCKE (Green) : The Government has been under a lot of pressure in the last couple of months over the pitiful level of overseas aid. The report of the Foreign Affairs, Defence and Trade Committee on the Ministry of Foreign Affairs and Trade stated that New Zealand’s ratio of official development assistance to gross national income is currently 0.24 percent, compared with the target of 0.7 percent set by the United Nations Millennium Development Goals. The 0.24 percent level has been present throughout the 5 years of the Labour Government.

Last March, aid organisations in New Zealand were so upset that they joined with the Council for International Development in what they called a Point Seven campaign. They want to invest in a better world by getting our level of aid up to 0.7 percent of gross national income (GNI) by the year 2015.

This month the Government has had two further embarrassments. Firstly, the Norwegian Prime Minister, Kjell Bondevik, visited New Zealand. As he spoke around the country he said that Norway had a level of 0.96 percent of GNI, which is exactly four times our 0.24 percent, and that the level would shortly go up to 1.0 percent of GNI.

The Government had a further embarrassment about a week ago when Kofi Annan, the UN Secretary-General, made a big speech on the Millennium Development Goals. He said that nations had to get up to that 0.7 level very quickly if those development goals were to be met—goals such as halving the number of people in the world who live on less than US$1 a day. There are 1.2 billion such people in the world today. It is a disgraceful figure.

We have to do something towards getting to 0.7 percent. Kofi Annan said that every country must have a timetable to get to that level by 2015. New Zealand does not have a timetable. A year ago the Government talked about getting to an interim target of 0.35 percent of GNI by 2006-07, but nothing was done on that. There is no timetable.

I would like the Minister to explain why there is no timetable—because there is no reason. New Zealanders support overseas aid. We saw that in the money given to the tsunami victims. Virtually 100 percent of the New Zealand population said it was great when the Government came out with a special package of $52 million, plus $16 mission over the next four years. All the Government needs to do in order to get to that 0.7 target by 2015 is to give about that same amount extra each year—roughly $60 million a year—up to 2015. The Government should have the courage to do that. People would buy into it.

One-third of the aid that Norway gives goes through non-government organisations. It has a huge number of people on the ground in overseas countries, and when those people return they help build a consensus in the country for a high level of overseas development assistance. The Norwegian Prime Minister said—and he is a Christian Democrat, conservative Prime Minister: “There is a national consensus. We’re giving a high level of overseas aid, and we need to give it.”

Those Millennium Development Goals are very laudable. For instance, beyond reducing the number of people who live on US$1 a day or less, the goals aim to halve the proportion of people in the world who do not have access to safe drinking water, and there are 1 billion of those people. Another goal is to halve the number of people who do not have basic sanitation, and there are 2.4 billion of such people. A further goal is to get universal primary education for all boys and girls in the world. There are 900 million people in the world today who are illiterate—two thirds of them are women. We need decent conditions for the 1 million slum dwellers in the world. We need to reduce child mortality by two-thirds; 10 million children a year die because of preventable disease.

So we need to put the effort in, to do our part in the world, but we are not doing that. New Zealand is way down the bottom of the OECD table at the moment. It is a disgrace.

Hon MARIAN HOBBS (Acting Minister of Foreign Affairs and Trade): I take great pleasure in responding to that particular speech. From 1999 to 2002—the first term of this Government—most work in the aid area related to the restructuring of NZAID. I will talk more about that in a minute. That was a very important thing to do—to set up a semi-autonomous agency that had a very clear goal of poverty elimination and that focused on the Pacific. In some countries—and I could name them—aid is something that is used in order to promote one’s foreign affairs ideas and to win friends and influence. New Zealand is very pure about aid. Aid is about poverty elimination and the Pacific. That was quite a change, and quite a lot of work had to go into growing a New Zealand aid agency.

Since 2002, at the beginning of the Government’s second term when I was given the particular role of Associate Minister of Foreign Affairs and Trade with responsibility for NZAID, we have increased aid money by $30 million, plus the $58 million—as was mentioned by my colleague Keith Locke—that went this year toward the tsunami. That is a substantial increase. The difficulty is that had we allocated that money and not had a growing economy, I imagine that aid would constitute 0.3 percent of gross national income (GNI). The difficulty is that we have a growing economy, and although we are giving more as a country, we are sort of paddling to stay up at the same percentage of GNI. That is a problem we have.

The previous speaker made a comment about the Norwegian Prime Minister coming here. There is an extraordinary difference between the Norwegian economy and ours. As a member of Cabinet, I could only salivate when he spoke about, I think, $35 billion in cash reserves—not a surplus done by accrual accounting, but real money. I think he said there was $35 billion in real money stowed away. Heavens above! I would be able to give some away, too! It is a very different situation from that in New Zealand.

For all that, in the 2003 survey announced at the OECD meeting—and because we were seated in alphabetical order, I was sitting beside the Minister responsible for aid in Norway—New Zealand scored higher than Norway. Why did we score higher? Because the survey was about trade equity. It was about refugees taken into a country as a percentage of the population. It was about the peacekeeping work we did, as well as the money we spent on aid. That survey saw us in holistic terms in terms of aid—aid not necessarily being cash. The Norwegian aid agency actually came to New Zealand following the tsunami and asked how it is that we do it so well. We may be small in terms of the amount of money, but I have utter pride in terms of how we deliver out there. I will stand by that and fight that corner for many a long time.

An aid budget of 0.7 percent of today’s GNI in today’s currency would require an extra $600 million. So if the previous speaker is really saying that that is what he wants to spend, then he has to play the game of priorities. Where would he take that $600 million from? The member cannot be in a party that is calling for universal support for students—at a cost of $400 million—then ask for an extra $600 million for aid. This is a game of priorities—well, it is not a game, but it is a serious decision about taking us forward.

I think that New Zealanders really want to be involved in a good aid agency. So good are we as an aid agency that we should think about whether we are working to meet the millennium development goals. One of the millennium development goals relates to core education. For a long time in the Pacific—and also back to the Colombo Plan—we spent something like 80 percent of the aid education budget on scholarships to bring students to New Zealand. That is now down to 50 percent. In the Solomon Islands, people who operate in a non-cash economy still have to find SI$600 per term to get a child into primary school. Our aid commitment is, I think, between NZ$12 million and NZ$14 million per year, which means that within 3 years we can ensure that in the Solomon Islands we meet the millennium development goal of having every child—male and female—able to receive core education. That relates not only to the classroom, the teachers, or the books, but also to water.

That sounds funny. It relates to sanitation, because girls do not go to school unless there are decent lavatories that provide them with privacy. That may sound strange, but there are no lavatories in many of the schools I saw in the Solomons; the bush is used. That means that young girls do not go to school at certain times of the month.

We are extending that effort into Tonga, where a huge amount of work has been done. I think of Vince Catherwood, a marvellous leader in our own Ministry of Education for several years, who has retired from there and taken on a wonderful role in Tonga working to redesign and, again, to ensure that we meet core educational objectives. We are moving on to Vanuatu in the same area; again, there is the same great need as in the Solomons. I have huge pride for what we are doing in NZAID.

I will tell just one story from the tsunami. The tsunami happened just as I started a trip down the Whanganui River. I said that we could spend whatever money was needed, because we have an emergency fund. I thought there would not be very many dead. When I finished the trip, 2½ days later, I found that there were a lot. I arrived at the office, and what did I see but a magnificent whiteboard. All this consular work was going on in order to care for New Zealanders. On the whiteboard was a note stating that a man involved in the water and waste-water industry had rung up and said that he was a water engineer and that he would like to go over and help. His name was put up on the board. The next thing, in rang one of the agencies—Oxfam—which said it needed some water and sanitation engineers. Gotcha! NZAID lined them up. The board was full of brokerage deals done by NZAID, because it was trusted by the agencies and by people, and it delivered.

New Zealanders have such a fabulous reputation overseas. Right now, an earthquake has hit again in that same area. We have a New Zealand doctor over there. He was chasing the perfect wave 5 years ago and decided to stay there. He said that it is so easy to clean up malaria but that no one does it very well. He is in there again today, because we are supporting him in his continuing work, not just to do with the tsunami but to do with the wiping out of malaria. He made contact with us immediately. He said that he had the doctors but he needed money for a helicopter. Done! The helicopter was out there, instantly, within hours, so that we could check on the health of people in outlying villages. That is concrete work. That is work that achieves a goodness.

Yes, I would love—I dream of—aid spending of 0.7 percent of GNI, but I am aware of what my colleague the Minister of Health has to do to get meningococcal vaccines. I know what she has to do when members of Opposition parties say that we need vaccines for this and vaccines for that. Members will remember the whole bird flu thing and everything else that went through. I know the costs of that, and I know that I have to juggle and move us forward. I acknowledge that we will move forward in absolute definition—that we will move forward to meet those millennium development goals in our own backyard and do it in such a way that we partner people and respect them. We will not be there to use people and to plaster a kiwi over everything to show that New Zealand did it. No, it is about facilitating and strengthening the people who are there.

That is not the only area that I am particularly proud of in terms of foreign affairs. I am here today because the Hon Phil Goff is in the Pacific, and because I am very proud of the leadership that New Zealand has taken inside the Pacific Islands Forum and with the Pacific plan. Again, it is our manner of working. I am also extremely proud of the trade work done by the other member of the triumvirate, the Hon Jim Sutton. Members should think of the trade work that New Zealand has been involved in in foreign affairs since Labour has been in Government, and of the relationships that we have developed. Members should just think of how many overseas visitors in the last 3 weeks have wanted to come to this country and talk with us. We are no longer an island at the bottom of the world, just north of the Antarctic. We are somebody that people want to engage with. I am proud of New Zealand’s work in foreign affairs.

Finally, I am well aware that in 3 weeks’ time I leave for New York and for our work on nuclear non-proliferation and disarmament.

• Report noted.

Hon ANNETTE KING (Minister of Health) : As a report card, the financial review of the Ministry of Health from the Health Committee is very positive. One would not think so if one listened only to the previous speaker. He made a highly political speech but failed to tell the listening public a single thing that a National Government would change. I will tell the listening public why that is so. Don Brash has already told New Zealanders that National will not change the “highly complicated, bureaucratic system” that this Government has set up. He said there are no votes in it. Mr Don Brash said that the public have no appetite to change the health system. Why does he believe that? He believes that because New Zealand saw a decade of “health reforms” under the previous National Government. They want to talk about bureaucracy! We had CHEs, four RHAs, and one THA. Then we had an HFA, 23 HHSs, and a plethora of organisations—business units, etc.

The changes that have been made by this Government have been overwhelmingly supported by the health sector of New Zealand. Its representatives tell me—and they tell Dr Hutchison—that they do not want another round of changes. They do not want to throw out 21 district health boards. They do not want to change what we are doing. They want to consolidate what we have in New Zealand; they want to get on with the job.

So Dr Hutchison owes it to the Committee tonight to tell New Zealanders what National would change. Will it get rid of the 21 district health boards? He talked about bureaucracy, but do members see that he forgets that there were 23 hospital and health service providers—not 21 district health boards but 23 hospital and health service providers—not to mention the huge bureaucracy that was in the Health Funding Authority. Let us remember that the chief executive of that authority earned $27,000 a month as his pay and worked three days a week. We can talk about the waste and bureaucracy we had in the past; New Zealanders are not keen to see such changes. So I say to Dr Hutchison that he can wail all he likes and make the political points, but then he should tell the people of New Zealand what a National Government would do.

Let us talk about the Health Committee. I have heard a report from the select committee that is totally different from the one Dr Hutchison heard. I am sure my colleague the chair of that committee will talk about it in a moment. I know that boards appeared before the select committee to speak to their financial reviews, and they told Dr Hutchison—although he may not have wanted to hear it—of the very, very good things they were doing in primary health care. They are reaching out to those people who have diabetes or cardiac conditions. However, that member, who was a health professional, asks where the health outcomes are. Anybody who understands health knows that if people want to track health outcomes they track them through morbidity and mortality. Dr Hutchison will see the improvement—even in the short time we have been in Government—in morbidity and mortality. Now, that is interesting because that is how it is measured—not by asking the question: “How many people do you think you have saved today?”. I do not know what questions Dr Hutchison asked, but he was told of the projects and programmes that have been put in place. We measure health in the same way that other countries do—that is, around morbidity and mortality.

It is interesting that we have seen for the first time an improvement in the health—mortality and morbidity—of Māori. That is one area where we have had a huge discrepancy in New Zealand. We know that Māori people in New Zealand do not live as long as other New Zealanders. We know that the difference in life expectancy can be as much as 10 years compared with other New Zealanders. We know they get sicker than other New Zealanders, but we have started to see improvement. Is that not good? Is that not what we should be measuring in the way we run our health systems? That improvement certainly did not come out of the policies of the 1990s.

Dr PAUL HUTCHISON (National—Port Waikato) : I do note any absence of rebuttal of the facts contained in the Health and Independence Report 2003, which showed that 160,000 operations were carried out in 1999 and 157,000 in 2003.

Hon Brian Donnelly: How many people are healthier, then?

Dr PAUL HUTCHISON: Very few. But we have just heard the Minister talking about how we measure health outcomes, and she talked about morbidity and mortality. Well, if the Minister really wants to know, I can tell her that morbidity and mortality have been decreasing in New Zealand over the last 120 years—and so they should be. What we have not seen in the last 5 years is a sudden measurable decrease, under the Labour Government. Any improvements are probably the lag from the benefits of the last 10 years under National, in actual fact. There is always a lag with morbidity and mortality, and the Minister certainly has a very large lacuna when it comes to knowing that.

I turn now to the question of Ms Clark, and the point she made in saying she knew all the arguments about getting better value for money in health spending. After all, she indeed was the Minister of Health in 1989, when the Auckland Area Health Board was so dysfunctional that she had to fire her own husband as well as the entire board.

Steve Chadwick: Stop raving on.

Dr PAUL HUTCHISON: They say I am raving on, but I see almost a déjà vu situation. We have an Auckland District Health Board with a deficit of $44 million this year, and next year the board is due to have a deficit of $84 million. So let us have a look at what Ms Clark said in 1997: “The deficit funding of the public sector has to stop. A Labour Government will be looking to negotiate with our public health sector what we need to provide and the cost of providing it. We should fund a balanced budget for our public health services, not a deficit budget.” Well, I ask the Minister how it is that the Auckland District Health Board this year has a deficit of $44 million, and is projected next year to have one of $84 million. The Minister should be embarrassed about it, and I hope she will do something about it in this Budget, because the legacy that she has left in the Auckland District Health Board over the last 4 years is a disgrace. It is very much like the disaster we all know about that was left by Helen Clark in 1989. We have a health board crippled by problems that have occurred during the time of this Government.

But let us get back to the scandal of waiting lists under Labour. That party’s members ranted and raved during the 1990s about waiting lists, yet under Labour we saw one of the biggest deceptions in the history of health when it said it would fix the waiting list but took 25,000 people off that list and sent them back to their general practitioners. As a constituency MP, I know that the most frequent visitors I have in my electorate office are people who say they cannot even be seen in order to be put on the waiting list.

Under this Government, if one happens to have common things like varicose veins, hernias, haemorrhoids, or gallstones, one cannot be seen unless the condition is very severe. Again, I have asked every district health board I have seen at the Health Committee whether they will do those common operations. They say no, unless the condition is very severe. That means that those patients come into hospital, the operations are complicated, the recovery is complicated, and those individuals often take a long time off work, because they just cannot get to work because of those common difficulties. It is a disgrace that under this Labour Government, which has put so much into primary health care and is planning to put in another $1.7 billion in total, although one might be able to get to the doctor, nothing can be done about it when one actually gets there in terms of some of the common problems.

BARBARA STEWART (NZ First) : This review definitely makes interesting reading, and one of the issues discussed is the urgent need to address aged-care funding for our senior citizens. One of the true measures of success for any Government is the care that is provided for the most vulnerable in our society.

We had the Prime Minister telling Parliament that Labour would look into funding pressures in the aged-care sector, and I know that it has done so. But the bottom line is that one cannot build a reputation on what one intends to do. That sector is still waiting to receive the increase in funding it was promised. The Government promised a 3 percent increase unconditionally, but the funding has not yet been passed on to rest home providers. Most of those who enter rest homes do so because they can no longer live at home and they need to be looked after. But these rest homes are not hospitals, even though the majority of funding for them comes from the Government’s health budget. We must ask when that additional funding will be passed on and how much longer those rest homes will have to wait.

The fact is that there is simply not enough money going into elder care. There has been no increase in fees for many years, and that issue needs to be addressed. Many rest homes are operating at a loss, and no one can afford to sustain a loss for a long period. Then, what do we see? We see that providers are literally forced out of the sector and the resultant care they had provided vanishes with them. Chronic underfunding has already forced the closure or sale of dozens of rest homes and private hospitals right through the country, and we regularly hear of more instances of that happening.

There are between 850 and 900 residential care facilities and geriatric hospitals throughout the country, and they cater for a minimum of 42,000 people. We know that the number is far greater than 42,000, as that is the number on the Ministry of Health database is for subsidised residents. We need to be very aware that we have an ageing population, and that we will require the services of those residential care facilities.

I heard the very same pleas for funding when I attended the launch of HealthCare Providers New Zealand, a new organisation formed to represent the rest home industry. Aged-care facilities are watching very anxiously as rest homes are being forced to close. To date, more than 2,000 rest home beds operated by religious and welfare organisations have been lost or are up for sale. If too many providers exit from this sector, the choices will become extremely limited.

We also have a second crisis within the aged-care industry: those who work within the sector are seeing their wages turn into dust. The pay for those who provide the service must be addressed. We cannot continue to rely on the goodwill of those working within the aged-care sector to accept substandard pay, because rest home carers are among the lowest paid in New Zealand. In today’s Dominion Post we also read that: “The Government has been accused of forcing care providers to employ staff as ‘slave labour’, and of crippling services for those in need with chronic underfunding.” So the Government needs to be very aware that if more is not done in this particular industry, the fall-out will be totally devastating.

It is a sad fact that growing older is becoming very difficult in this country. For many elderly New Zealanders, the future looks bleak. At the end of a productive life, it is not too much to expect to receive care when it is needed. Although we acknowledge that some responsibility for that care does initially lie with the family, we must also acknowledge that sometimes it is just not possible to cope with a needy parent, and that is where the Government can help. This is an area that needs urgent attention. Funding must be sufficient to ensure quality care in the aged sector, and we definitely owe our elderly that. It is an area that we do not want to see fall over. We have seen the demise of many rest homes, such as those run by the Salvation Army, the Methodist Mission, and some of the smaller private rest-home providers. Last December the Salvation Army announced that it would close rest homes.

STEVE CHADWICK (Labour—Rotorua) : I am pleased to take a turn in the debate on the financial review of the Ministry of Health, especially following the Minister of Health, to address some inaccuracies from the Opposition spokesperson on health. I want to remind him that in 1995, 85,000 people were on the elective waiting list—and it was a waiting list, not a booking system—and 50,000 people were taken off it. We do not forget that.

It was very interesting to find the Opposition spokesperson on health talking from a slash-and-burn perspective. Of course, the member is a surgeon and can look at health only from a surgical perspective, whereas this Government and this financial review of the Ministry of Health started to turn the tide to look at addressing the decade of disparities that we saw throughout the 1990s. We heard about the availability and the roll-out ahead of time of the primary health organisations, which are starting to look at some very, very exciting health disparities, and that report affirms those disparities. The primary health organisation roll-out is ahead of schedule. It has already targeted the under-18s and the over-65s. We are now targeting the 18 to 24-year-olds. This year one of the interesting perspectives we heard from the Ministry of Health was about looking at some complex patterns of care, Care Plus, that are emerging from primary health organisations now that those organisations are getting on with doing the business.

This financial review of the Ministry of Health was a very positive one. I have been at four such reviews previously, and this is the first time the ministry has had an absolutely clear understanding of where it is coming from and where it is going to. That was absolutely clear in its presentation to the Health Committee, because we actually got on to some rather small and insignificant points that were of interest to individual members, without even worrying about or spending a lot of time on the big issues. We heard about aged care being devolved out to the district health board sector. The funding has been devolved; the issue is not about how it is being devolved. When we have gone to the district health boards, they have said: “Good job. We’re glad it has come to us.” This is the last bit of the puzzle that they want to get right, and why do they want to do it? It is because they have democratically elected boards. They know their communities. They go out and consult with our communities through some of the committees they have set up.

I point out that the perception that there are burgeoning costs in the health sector in administration and management is simply turning out to be not true. In my own district health board, Lakes District Health Board, management costs in 2000 under the old Crown health enterprises were at 11 percent, but now those management and administrative costs have dropped to 6 percent. I hope that the member opposite is listening. The drop in management and administrative costs in the district health board sector has been absolutely astonishing. Mark my word, those facts are real. Management and administrative costs in the Lakes District Health Board went from 11 percent to 6 percent. It is a mean machine that is focused on keeping people well and not on obsessing on waiting times for surgery.

In fact, we heard from the Ministry of Health that it had started to look at the wonderful roll-out of orthopaedic surgery. Over the next 3 years, $130 million will meet the demands we face in the electorate. No one at all has come into my electorate office concerned about the orthopaedic waiting time, and I have a very busy electorate office. There is some degree of satisfaction, too, to see that after measuring transparent waiting times for surgery, the Ministry of Health, along with the Minister, has agreed that the next chunk of work will focus on cataracts. That is something I am sure all of us will be very pleased to see. We want to keep people well and to reduce the disparities in health—the decade of disparities we inherited.

I want to talk about the widening gap between health wellness and disease management, and about the disparities in health under the previous administration, which brought about bottom-line financial fatigue in Crown health enterprises. Now that district health boards are not focused on debt management alone—by being accountable as companies and by attempting to make a profit in the health sector, which was what we faced for a decade—they are starting to say that they are getting out there with their annual district plans, working with their communities, and targeting the reduction of inequalities and disparities in health. We heard about targeted programmes for diabetes and cardiac disease. That was incredibly exciting. Morbidity and mortality are our indicators of effectiveness.

JUDY TURNER (Deputy Leader—United Future) : I rise on behalf of United Future to speak to the financial review of the Ministry of Health. It is great to be involved with a party that commits itself to positive politics. I thank the Minister of Health, Annette King, for having a very wide open door towards our party, whereby we can approach her with solutions and suggestions and receive a welcome from her. She listens to what we say and she considers it seriously. We are very proud, for instance, that in the last Budget we had a hand in securing the extra $250 million over the next 4 years to ensure that the Government can follow through on its commitment to the Mental Health Commission’s blueprint. However, I would be remiss, as a member of a party separate from the Minister’s, if I did not express to the Minister some concerns that we want her and the ministry to consider as a way forward in this area.

We signal that we have some concerns about the underspending of blueprint money in some regions. We understand that the Minister’s priorities for spending in the primary health services have been to layer into primary health organisations, firstly, inexpensive or free GP visits for the under-18s, and secondly, funding for GP visits for the over-65s. We expect that the Minister’s third priority will be the funding of a community level of primary mental health service. We welcome the opportunity for that to be funded through primary health organisations. However, the concern remains that if we are under-delivering now on current levels of funding for mental health services, we need some assurances that the services offered in terms of desperately needed primary interventions for those suffering from ill health will reflect the money allocated. United Future is keen to see clear provisions for psychological therapies to be funded with as much enthusiasm as pharmaceutical treatments currently receive.

The real crisis facing our health system is threefold: workforce, workforce, workforce. Shortages plague us in both high-level tertiary specialist services and the vital aged-care sector, with caregivers who deal with New Zealand’s most vulnerable citizens—who are in the most vulnerable season of their life, and where dignity is absolutely essential—being paid the most appalling wages and working under the most appalling conditions. That problem will not go away; it will only get bigger, and some long-term planning in that area is absolutely essential.

Another concern we have relates to core child health services. We believe that there is a huge need to overhaul and review what we are presently offering. The eight Well Child health checks need to be monitored more closely. We need the ministry to provide us with the data to assure us that the coverage of those Well Child checks is as complete as possible. We are hugely concerned, for instance, about child dental services. I say to the Minister that we face an extremely Third World condition in the Hutt at present, in that the Sisters of Compassion are funding a dental service on a Saturday morning to make up for the shortfall in that area. I think that the problem is more widespread. Bay of Plenty schools have reported that they have children who have not been seen by a dental therapist for 2 years. We really think that child health is a huge area.

The Vision Hearing Screening Programme is particularly dear to United Future’s heart. We are deeply concerned that that is a flawed screening programme that is giving false information to parents and teachers, and that large numbers of children are slipping through the cracks, going undetected, and failing in our education system, purely because they cannot see the work in front of them or have a hearing impairment that has gone undetected. We urge the ministry to do a serious review of that screening programme.

We are also concerned about child mental health services. We agree that, again, workforce development will be needed. We are concerned, as others are, about the overprescription to children of Ritalin. We encourage the ministry to make sure that it monitors that, and we encourage the Minister to keep an eye on that core child health service.

Hon ANNETTE KING (Minister of Health) : I thank members for their contributions to and comments on the financial review, which, as I said in my opening remarks, was a very positive one for the Ministry of Health. In fact, the ministry received a very good report card from the Audit Office. Those who take the time to read the review will know that there are very many good things outlined in that report. I thank the members of the Health Committee for the report they have given to the Committee of the Whole House.

I will deal with some of the issues raised by Judy Turner. In the first instance, she raised the issue of child health. I share her concerns about child health, particularly in the area of dental health, and about our ability to provide a network of dental health services to children and adolescents in New Zealand. Members will be aware that two major reviews of the way we will provide it have been done. In the next 3 months I will announce the total repackaging of the way in which we provide those services, including the capital investment that is needed. One of the great tragedies, however, is in our ability to provide that service, because we have such a shortage of dental therapists.

Darren Hughes: And why is that?

Hon ANNETTE KING: My colleague may well ask why we are unable to provide that service. For over 80 years, Governments provided training for school dental nurses, followed latterly by dental therapists. They were trained in three places in New Zealand: Christchurch, Wellington, and Auckland. In my day, about 80 people were trained in each of those schools per year. In the 1990s, every school was closed—no school was left open by the end of the 1990s. How did we think we would train a workforce to do dental and oral health in New Zealand if we did not have a workforce to do it? I have no idea what went behind that thinking.

The first new training course was opened in 2001 in Dunedin. It is a degree course for dental therapy. The second course opened in 2002 at the Auckland University of Technology, and it also is a 3-year degree course in dental therapy. It takes 3 years to train people. We got our first graduates from Otago last year. We got our first graduates from Auckland 2 weeks ago. We need 40 graduates per year just to replace what we have now.

When I hear National Opposition members making comments about the Government’s inability to provide dental health services to children, it makes me sick, because we cannot provide the service without the workforce. We will have 40 graduates per year by next year. It has taken determination by this Government to put that in place. Otherwise we would not have had that workforce and we would continue to be unable to provide it. I know the concerns of both Barbara Stewart and Judy Turner. They have raised them many times, and I know they are genuine in their concerns. This is a good opportunity for me to set out once again why we have the problem. That is not an excuse; it is the problem. We will overcome it, and I believe that we will overcome it by next year, when we will see children once again being recalled after no more than a year.

Over the last 5 years we have seen a huge investment in mental health. We undertook to implement the Mental Health Commission’s blueprint for services, and we have seen almost a doubling of funding in that area. Judy Turner raised the issue of a drop in access. I need to inform her—I do not know whether the select committee was told this—of one of the problems. From July 2004 we required service providers to provide us with data on diagnosis but, in fact, we did not collect all the data. The data is incomplete, which is one of the reasons why we do not have full data on access. Organisations are required to provide the data by March this year, so we will see the genuine level of access then. One of the problems is that we do not record what services are provided by non-governmental organisations and, as members will know, non-governmental organisations are increasingly becoming the providers of services outside the acute care services provided within hospitals. So being able to capture the data as to what is being provided by those organisations is really important.

I am pleased—and I know that Judy Turner will be—to see the huge improvements that have been made in child mental health. It is not good enough, but I invite members to look at what we started from. If members go back and look at the figures provided on page 7 of the report, they will see that in June 1998 we were funding 24 inpatient beds for children. Now we are funding 56. We had 322 fulltime-equivalent clinical staff. We now have 739. In 1998 we had no day residential or respite care packages for children. We now have 113. So there has been improvement. We still need more.

Barbara Stewart raised the issue of aged care. The Government shares many of the concerns she raised. I am pleased to tell her that my Associate Minister Pete Hodgson is involved with a working group on long-term sustainability for aged care, because it is an issue we will face into the future. Most of us here are baby boomers. We are going to live a long time and want a lot of services, particularly services for older New Zealanders. Ensuring that we have that long-term sustainability is really important. That work will, I think, be very significant. Also, the member asked when the 3 percent will be passed on to aged-care providers. It will be passed on as soon as they sign their contract. The Government has approved the money. It is there for the providers. They have to sign the contract. I hope that that happens soon.

Finally, the National member Paul Hutchison took a second call and raised a number of issues, including the issue of deficits. It is interesting that we rarely hear about deficits today. That is because we no longer run what is called the “second chequebook”, which was a hallmark of the 1990s. Boards were able to run up deficits, and then the Minister of Health, with the Minister of Finance, would sign off a cheque to cover the deficit. Now there is only one funding stream. Boards are required to live within the funding they receive. When we look at the deficits across this $10 billion sector—most of which goes to the district health boards—we see that the deficit for the last financial year was around $80 million. I remember that around 1997-98 it was over $200 million on much less money. Paul Hutchison said that the sector was worth around $6 billion. It was probably worth about $5.5 billion at that stage, and the deficit was over $200 million.

He also asked about Auckland. Most of his speech went back to the 1980s. He did not talk about what a National Government would do, but he went back to Helen Clark and the 1980s. He talked about the Auckland District Health Board and its deficit. I would like the member to reflect on why it has a deficit. If he had asked the chairman of the board, I am sure he would have been told that the major reason why Auckland has a deficit is the shoddy decision made prior to the 1999 election to build the Auckland Hospital. The deficit almost reflects the underfunding of that project, because there was no business case. The project was signed off in Jenny Shipley’s office just before the election.

Steve Chadwick: They were told that.

Hon ANNETTE KING: I am told that the select committee was told that. There was no business case, there were no real costings, and when the building was done the project was well over the proposed cost. [Interruption] That is the absolute truth. I say to Bill English, who is very ashamed of this, that he should speak to the chair and the members of the Auckland District Health Board, who will tell him never again to build a hospital with that shoddy approach. National did the same thing in Wellington. It promised a new hospital for Wellington, a few minutes before the election, at $150 million. There were no real costings, it was never able to be built for that sum, and once again we have had to fix up the health mistakes of the past. We are prepared to do it whether or not it is the workforce or buildings. Those are just a few of National’s mistakes. It failed then and it would fail if it ever got another chance.

• Report noted.

IAN EWEN-STREET (Green) : We can see from the financial review that, by and large, agriculture is doing pretty well in this country, despite the high dollar. In this environment it is easy to be complacent, but I think we have to be aware that there are some worrying signs on the horizon. It is clear that milk solids are still very competitive internationally, but that is virtually the only commodity that is so. It also will face some serious crises in the future, and we need to be thinking about them now.

Let us look at our niche markets in agriculture that are doing exceptionally well. Let us look at wine. Internationally there is a wine glut. In many places one can get only about $2 a litre for wine. Has that had the remotest impact on New Zealand wine? The answer is no. New Zealand wine is doing very well. The reason for that is quality. We produce the best wine in the world. Let us look at kiwifruit. Zespri has marketed itself extremely well. It has gone for low chemical inputs and high-quality products. It is doing very well. Let us look at Saxon wool. The bottom has fallen out of the merino market. Saxon is at the top end of the range. It is doing exceptionally well. We do quality well.

We need also to be aware that consumers are becoming very aware of things other than appearance and taste in food. They are concerned about pollution, animal welfare, chemical residues, and “food miles”, which is a major problem for us as a little island in the South Pacific. Clean, green food products are what New Zealand does well. We have been doing them for many years, and that is the way we have marketed ourselves for many years.

I urge members to look at the report of the Parliamentary Commissioner for the Environment entitled Growing for Good, because it has highlighted a number of difficulties that New Zealand farmers will face in the future. We can see those problems as barriers to growth and development, or we can see them as opportunities. I think we need to look at them as opportunities. For dairy farmers, effluent runoff and fertiliser runoff have become significant social and environmental negatives. But we can turn to balancing fertiliser inputs. We can fence off riparian margins and plant them with trees. Those may be expensive things in the short term, but they are a great medium-term investment.

We also need to look at natural events. The storms in the Manawatū and Whanganui last year caused enormous slips in the high country at the headwaters of streams. There were huge sediment dumps in the lower reaches of many of the rivers. We need to identify those marginal lands—and almost all of them have been identified—and retire them from grazing, because grass simply cannot hold the soil together. The areas need to be replanted. If those areas, along with riparian margins, are reforested, it will slow down the amount and velocity of runoff.

But fundamental to farming in this country is economics. That is what it is all about. As a country we earn 65 percent of our export income from primary production. As farmers we have to be aware that the focus is moving away from productivity and on to quality. No longer do we have to say that every blade of grass counts. We need to farm smarter. The people who are doing very well are the people who emphasise quality. Again, we should look at what is happening with producers of wine, kiwifruit, and Saxon wool. They are smart operators who are striving for quality. They leave no stone unturned, and they are doing exceptionally well.

Dairying cannot be complacent. Farmers are doing well at the moment, but there are big problems ahead. Consumers are increasingly concerned about pollution, runoff, effluent, and the way farmers treat their animals. As a farmer, I am aware that it is often not popular to consider doing things differently. There is a lot of peer pressure in farming to continue doing the things we have always done. But we have to think about the pressure that consumers can bring to bear on us. Let us look at what happened to the Australian meat industry when it was discovered by consumers overseas that farmers were mulesing their sheep. I will not go into what mulesing is all about, but it became a huge issue in terms of the pressure on Australian farmers.

Hon DAMIEN O'CONNOR (Associate Minister of Agriculture) : I take the opportunity to speak on the review of the Ministry of Agriculture and Forestry. The report back from the Primary Production Committee is testament to the lack of issues the select committee exposed when going through the review. I compliment all the staff at the ministry on the brilliant work they are doing. Those main industries, agriculture and forestry, are, of course, the core of export generation in this country. As a Government we acknowledge that, and I think it is important for us to acknowledge it as a Parliament at this particular point.

I will run through a few of the operational issues that the ministry has been confronted with. Biosecurity, which was raised very briefly by the Green member Ian Ewen-Street, is a very important issue on which the ministry focuses. The ministry has been party to Exercise Taurus, which the Green member, as a member of the select committee, has observed. It is very important that we have structures in place so that the ministry can react to any breach of biosecurity in this country. I think that it has done a lot of excellent work; that is supported by the fact that the select committee did not identify any problems in that regard.

The issue of genetic modification was not raised by the Green member—I was quite surprised. He was very focused on the “clean and green” issue. The ministry and this Government is very focused on clean, green food production. We are cautiously approaching the issue of genetic modification. Officials are working through all those issues, and, in spite of the Green member’s cynicism, we will not have widespread production of genetically modified organisms. We will look at that science and investigate it very carefully, as officials are doing, before we move ahead in that area—we must do.

The officials are involved heavily with trade negotiations. They are providing advice to the Minister, Jim Sutton. It is very important that we break down the barriers to trading our clean, green food products in the world markets. It is a very big part of the focus of the ministry, and it will continue in that area.

The Sustainable Farming Fund has to be one of the highlights of the Government’s initiative in terms of agriculture and forestry. It has committed another $10 million on an annual basis to that fund, which is assisting hundreds of projects up and down the country to look at better ways of utilising land, labour, and technology in order to give us sustainable production into the future. Those are projects that would not otherwise get under way. They needed seed funding and the support of officials from the ministry, and we have seen some brilliant outcomes from those projects. Again, I compliment ministry staff, the Minister, Jim Sutton, on his initiative in initially putting that programme in place when Labour came into Government, and the Government on continuing to fund it.

Ian Ewen-Street: Why didn’t the Nats speak on this?

Hon DAMIEN O'CONNOR: I would just like to highlight those things for the member. He quite rightly pointed out some of the positive things that are happening, and I thought I would follow on from his good initiative.

Ian Ewen-Street: Why didn’t the Nats speak on this?

Hon DAMIEN O'CONNOR: I am not sure why the National Party is not speaking about this. It has traditionally seen itself as the so-called champion of the agricultural sector. I know, and farmers know, that we as a Government have done more to focus on sustainable production into the future than the National Party has. We have not been bogged down by ideology about producer board reform. We have worked with every industry to put in place better law to assist development into the future. There are some challenges ahead of us for a number of those sectors—particularly the apple industry and horticulture—but industries are getting on with it in the knowledge that this Government will assist them. It will not tie them down, or tie them back, to an ideology as the National Government did.

The issue of water, its allocation, its utilisation, and the protection of its values is very, very important. It is one of the big areas that the ministry has focused on. The ministry is doing a lot of work on that. It is in the early stages of working through consultation. As part of the Water Programme of Action it has undertaken consultation with communities in 27 centres in New Zealand. That programme of action is vital for all New Zealand—for the production of our exports and the protection of our waterways and our way of life. The ministry is also focusing on the area of access in order to assist in attaining the appropriate balance between access to waterways and the protection of farmers’ rights.

I have every confidence that the good work the ministry did in the previous year will continue on into the future under this Government. I take the opportunity to thank each and every member of the ministry staff for the good work they have done, and the select committee for being astute enough to realise that the ministry has done that good work. We look forward to working with the ministry for many years to come.

• Report noted.

Hon BILL ENGLISH (National—Clutha-Southland) : Like the health portfolio, the education portfolio is littered with lost opportunity in a fiscal fool’s paradise. I just want to take members over some of the numbers so they can understand what has actually happened to education under the stewardship of, apparently, the most competent Minister in the Government, Mr Trevor Mallard.

Darren Hughes: The Hon Trevor Mallard.

Hon BILL ENGLISH: The Hon Trevor Mallard, and then there is the other education Minister, who has taken up his job recently and cannot stay awake in the House. When I get letters from parents about the fact that their children with special needs cannot get teacher-aides, and that they are getting semi-abusive letters back from the Minister, then I know there is a problem.

I will tell members where the money has gone, because it has not gone to the people who need it. Sneering arrogance from the Government will not change that one bit—not one bit. The member from Otaki can listen to these numbers: in tertiary education, Government spending has gone up between 2002 and 2005 by $1 billion—from $2 billion to $3 billion—and over the next couple of years it is forecast to go up another $500 million, so the rate of increase is picking up. This is when the Government has said that it recognises there is a problem with the Te Wānanga O Aotearoa, and it is going to do something. Well, it is actually not doing something at all—it is doing nothing.

Tertiary spending has got completely out of control, with homeopathy for pets, the “art of health”, which includes learning about the effect of colour on the human soul, and $20 million phantom computer courses that no student ever did. The member for Otaki is going to sit there and giggle at the parents of special needs children who cannot walk, cannot talk, and cannot change their own nappies at school, and who cannot get a teacher’s aide. That is the reality. That is the cost of the fiscal fool’s paradise that this Government has overseen.

A bunch of half-successful lecturers and middle management out of universities have got hold of the Government’s honeypot and spent it all on their mates—in the polytechs, mainly—not on the students. The proportion spent on students has dropped by 20 percent, so we have had a multi-billion dollar blowout in tertiary education, which has not gone on the students. They have not got their fair share. Let us compare the increase in—[Interruption] Well, that member’s local polytech campus is in real trouble, because when Trevor Mallard comes with his cuts—which are inevitable—it will be the first to go. Members heard it here; that member will regret ever raising the topic of the Wanganui campus of the Universal College of Learning, because it will cost her the seat of Whanganui. She just has to wait.

Expenditure on tertiary education, in the two terms of this Government, has gone up 50 percent. That is before the coming salary negotiations, which are going to certainly boost that expenditure, because university staff are looking for a collective contract with big increases.

In schools, Government expenditure has gone up 16 percent over that time but, of course, parents’ expenditure has gone up much faster. Parents now contribute almost $500 million per year to the operating costs of schools. That has gone up 34 percent in just 3 years, from 2000 to 2003. So what will the member for Otaki tell parents in Levin about that—that in 2003, parent donations and fees for Labour’s free State education were $199,863,111?

Hon BRIAN DONNELLY (NZ First) : As they say, a week is a long time in politics. I will read a statement from the financial review of the Ministry of Education, which was tabled on 3 February 2005, which includes a statement on the National Certificate of Educational Achievement (NCEA): “According to the ministry, the recent NCEA examinations went relatively well. Scholarship examinations were introduced this year, and feedback from schools indicates that students found them challenging.” Well, I think that the results from the scholarship exams were more challenging to the Ministers than they were to the students. But that is not the issue that I want to talk about this evening.

The issue I want to talk about is one I first ran across in January when I met a deputy principal of a relatively large secondary school. We got chatting about a variety of different things, and I happened to ask about how they were coping with the non-contact policy issue. He said that they had no problem at all—they just sent the kids home. I asked what he was doing, and he said that once a term his school sends the kids home and they have a teacher-only day, and that is when the teachers can do their preparation and planning. I made some muttering noises about compliance with the law, and he just grinned at me and said that it was the only way they could do it, and that the staff were happy.

During the adjournment week it was reported in the Northern Advocate that two secondary schools in Whangarei are doing this in order to comply with the conditions of the secondary collective contract. Students are being asked to stay at home. Why is this of concern? There are two reasons. Firstly, educationists know that one of the most critical factors in determining learning is what is known as engaged academic learning time, which is the amount of time the learner is actually actively engaged in activities related to his or her learning. One can certainly guarantee that if secondary students are back at home, they will not be engaged academically in learning as they would be if they were at school. But there is a second little problem, and that is that schools are required by law to be open for instruction for 380 half-days per annum. When schools are asking students to stay at home, how can they possibly be open for instruction?

New Zealand already has a very low number of days that students are required to attend, relative to our international counterparts. I also tell the Associate Minister of Education, David Benson-Pope, that there was a report in 1997 by the Education Review Office that showed that there was already considerable slippage within our secondary system of the days open for instruction, or of the interpretation of the days open for instruction. What is actually happening as a result of the terms of the collective contract, plus the lack of provision of additional teaching resources to the schools, is that students are being robbed of academic learning time. It is the only way in which schools are able to meet the commitments that the Government has entered into with the Post Primary Teachers Association (PPTA).

How did this situation come about? It came about in 2002, when the Minister of Education, the Hon Trevor Mallard, got himself into a bit of a problem with the PPTA. There was a looming election, so his way out of it was to give it to an independent body. The independent body came up with a solution that in fact neither New Zealand First nor the Minister agreed with. New Zealand First said: “Yes, we do need additional staff, and we have lobbied the Government for 2 years to put in more staffing, particularly with NCEA coming up. Put them into the secondary schools. It has to be done, otherwise you will have a real problem on your hands.” The Minister said no. The reason why we did not go along with the guaranteed non-contact time on a weekly basis was that it took away all the flexibility that secondary schools need to be able to determine how to best use the staff resource they have. The Minister agreed with that—but when it came to the crunch he bowed to the pressure and gave in. But he did not come up with the resources.

I have been hearing for a number of years now that we do not have the resources to provide the non-contact time that we have to provide under the collective contract. So how is it being done? There are only two ways that it can be done. The first is to reduce the number of subjects, and the second is to increase class sizes in order to get the commitment there. Schools, quite naturally, are not planning to do that. Instead, they have taken away learning time from the students. Who will suffer from students being asked to stay at home for another 3 or 4 days of the year? Of course, the schools are still supposed to be open for instruction, so there is a breach of the law there, and I will be asking the Associate Minister what he is planning to do with the schools in this particular regard.

JILL PETTIS (Labour—Whanganui) : I feel I have to rise to speak after listening to that outrageous contribution from Bill English. I thank Brian Donnelly for his contribution, which was, as always, well researched and well considered. But Bill English’s speech was just an absolute rave. He is losing the plot. The ranting speech he has just given was not in his usual style, so I do not know what pressure he is under at the moment.

I want to remind the member of some recent history. When Labour came into power in 1999, one of the first things it had to do was to put $40 million into Special Education, just to help that sector keep its head above water. That money has been well invested. We know that more is required. We know that Special Education is an area that requires serious funding. In no way at all do we think that that is all we have to do. We know that more needs to be done.

One of our first expenditure items was to put $40 million into Special Education. We are now spending $40 million a year on numeracy and literacy initiatives. That is money well spent. It is investing in the future of young people in this country. We also spent $40 million on rescuing the polytechnic sector in Wanganui, Palmerston North, Ōtaki, and Wairarapa. In fact, more than that was spent, but I know that $40 million went into ensuring that Wanganui had provision for tertiary education. It was amazing, because there was not one peep from our closest geographical member of Parliament from the National Party. The reason was that Maurice Williamson wisely took him aside, and said: “Don’t open your mouth. You can’t win on this one. Let them get on and do it.”, and we did. Mr Power can confirm that he did not once open his mouth when we were rescuing the polytechnic sector in and around the Wanganui district and surrounding districts.

I want to say that although our polytechnic will face some difficulties with student numbers—I tell Mr English that that is what happens in regional polytechnics—there is nothing new about that, at all. This Government recognises the value of the provision of tertiary education and training in provincial New Zealand. We will continue to recognise that, and we will continue to support it with funding.

This Government has increased education funding substantially since it has been in office, and the member knows that only too well. Since we have been the Government, we have increased school operational funding by over 15 percent in real terms, and we have delivered 2,700 extra teachers over and above roll growth. We acknowledge that we have had to rationalise some schools in the smaller rural areas, but National closed 360 schools when it was in Government—even though my unfortunate National opponent said on the wireless the other day that the schools closed themselves. I recommend that National keeps that man hidden. We have funded schools at a level at which they have never been funded before.

One area where I am particularly pleased with the additional funding—and it is huge—is in the tertiary sector. We are continuing to work to make education more and more affordable for young people in New Zealand. I have had the experience of being a parent of two children, both of whom went to university—one under a Labour Government and the other under a National Government. There was a vast difference in their debt levels at the end of their tertiary education. The reason was that tertiary education was more affordable for our oldest child who did the greater part of his tertiary education under a Labour Government, as opposed to our daughter who did hers under a Tory Government. This Government is increasing the spending in tertiary education, because it knows how important it is to make tertiary education more affordable.

BERNIE OGILVY (United Future) : I want to talk about the student loan scheme, referred to on pages 5 and 6 of the report, and make some suggestions. It is very clear that in the year under review nearly 10 percent of the population had taken out a student loan. But more startling, in 8 years’ time that figure will have increased from nearly 10 percent to just over 25 percent. In the year under review it appears the total amount of student loan debt was just over $5.3 billion. By 2010 it will explode; it will double to $10.6 billion. That is a huge increase. It is like a steam engine rolling down the line towards us.

I would like to make some suggestions on behalf of United Future. We have to keep that end in mind, and find a way to solve this ever-explosive situation. We urge the Government to press ahead with the hard work in designing a loan scheme that will amount to a tertiary savings programme. In the long term we will have whittled down this debt load and eventually there will be no need for any student to borrow, because savings would have been built up over time.

An article on the front page of the New Zealand Herald stated the Government had ditched the savings plan, but I understand that is not the case. United Future says it is unacceptable that young men and women have so much student debt they will never contribute fully to the workforce, and will delay the purchase of their first home and starting a family. That is not the basis on which to build a society, and we do not want to see that carry on.

We need an education policy that encourages parents to save voluntarily for their children’s tertiary education—from birth. For example, they could save contributions from relatives and from the children themselves as they grow up, from charitable organisations and other donations, iwi trusts, and all sorts of things, as well as some incentives from the Government to help along the way. The Government is aware of this need. It sought responses to a letter it sent out to the nation last year about a savings programme, asking what people thought was the most important thing the Government could do. The most popular suggestion from 59 percent of submitters was for some sort of pre-education savings scheme. That is a huge endorsement of a concept that can be developed and worked through.

We have the examples of Canada, Sweden, and Britain where Governments put in a lump sum, on the birth of a child, varying according to parental income, thus the child receives some sort of minimum endowment. That money can be carried forward for the rest of the child’s years, and built up with contributions from the parents, and so on.

United Future thinks that maybe parents could be given the option of diverting part of their family assistance payment into such a savings scheme. It would incentivise people towards a savings culture. The Government has flagged that as one of its prime issues, and we give that support. If we change the culture and New Zealanders learn how to save, that will produce assets for our nation.

Hon BILL ENGLISH (National—Clutha-Southland) : I have a series of questions the Minister in the chair, the Hon David Benson-Pope, might like to answer. One picks up on the issue raised by my colleague who has just sat down. Is the Government doing a savings scheme for tertiary education, or not? I suspect that yesterday it was not, but since the New Zealand Herald ran it on its front page today that something the Prime Minister said would happen could not happen, today the policy is back. So the Minister can tell us about that. I also want the Minister to answer some questions about the exploding bureaucracy that he is overseeing.

Can the Minister tell the Committee why the amount of money spent by the Ministry of Education on policy advice has doubled under his Government? Are they the people who gave advice about how to waste hundreds of millions of dollars on tertiary education? Are they the people who advise the Government to ignore the needs of children with special education needs? Why has spending on policy advice doubled from $25 million to $47 million? Why has the amount of money spent on ownership advice doubled? Twenty million dollars a year is now spent in the Ministry of Education on ownership advice. That figure is twice what it was 5 years ago. Why has the amount of money spent on administration of regulation trebled on the Minister’s watch? Why has that amount trebled? Can the Minister tell us?

Spending on policy advice has increased by 200 percent, spending on ownership advice has increased by 200 percent, and spending on the administration of regulation has increased by 300 percent, but the operations grant increase for schools in 2005 is just 2 percent. That shows us the Minister’s sense of priority. Why has the bureaucracy, the number of civil servants employed in the Ministry of Education—putting aside the intake of special education needs into the ministry—gone up by 24 percent? Why does he need 24 percent more bureaucrats to give bad advice on how to run the education system? Can he tell us that?

Another thing I want to ask the Minister is this. Why is the Government so wrong in its forecast about tertiary education expenditure? I have looked back at the forecasts for the 2005-06 year. That is the next one coming up. To go back to 2002, it forecast $2.8 billion. The latest forecast is $3.26 billion. Why is the Government’s forecast half a billion dollars out? Why has that forecast changed by half a billion dollars? How many special-needs kids’ nappies would that change? That shows that Government expenditure on tertiary education is completely out of control. Suddenly $500 million has appeared in the forecast, which means that parents are selling raffle tickets to pay for teachers and doing sausage sizzles outside the The Warehouse to buy some decent computers. They are using the leftover money from the computers to pay for the teacher-aide to change the nappies of the child who cannot walk or talk, but suddenly the Government can find $500 million extra for tertiary education. It just appears in its forecast. Where does that $500 million come from? It would have been more, except that the Government doubled the amount of money spent on policy advice.

Why does the Government not cut back the spending on policy advice and spend some of that on special education? Why not cut back the ownership advice funding—$20 million? All that does is pay officials to go around polytechs telling them how to break the rules so that they can get enough money to be financially viable without fixing their basic financial problems. [Interruption] That is what they tell me. The officials from the Ministry of Education turned up and said: “Why don’t you run one of these phantom computer courses? That’ll fix up your financial problems.” Is that not great! The Government is paying one official millions to tell the other officials how to blow out the Government’s budget by hundreds of millions. That is some kind of perpetual motion machine that just keeps spewing money out week after week and year after year. Would the Minister please give us the answers.

Hon DAVID BENSON-POPE (Associate Minister of Education) : I am delighted to take a call, and I begin by thanking Mr Donnelly, who spoke a little earlier, for the rational contribution he made to this debate, and, equally, Mr Ogilvy. Unfortunately, the previous speaker, in his second contribution, went into the extraordinary hyperbole we have become accustomed to in this House, most of it without any connection with reality. I guess that one of the two things Mr English has to face up to is the fact that members of this House, and the general public, have completely lost faith in the extraordinary statements he makes, mostly without foundation. The second thing he has to face up to is the short period he will have in his job when Mr Peachey arrives in this place, because, as Mr English knows, Mr Peachey is a friend of Dr Brash, and Dr Brash will make sure that Mr Peachey sits in Mr English’s place, quick smart.

We have heard the most extraordinary diatribe from the Opposition, which has been criticising the Government for huge increases in education spending. I shall detail those. We have had the extraordinary position of Mr English criticising the Government for a 50 percent increase in tertiary funding, and for—although he never mentioned this figure—a 30 percent increase in Special Education funding. I tell Mr English that that will never be reversed, because when National was in Government it did not fund education—in fact, it gutted our educational institutions—and that is not lost on members of this community. It is certainly not lost on members of this House. In many years’ time, when those on the Government benches sit in Opposition, there will be absolutely no chance that they will be criticising that person in Government, or any of his successors—Mr Peachey, no doubt—for the sort of commitment to education this Government has made.

It is no surprise that the Labour Party and a Labour-Progressive coalition Government would be focused on health and education. Those areas have always been our traditional focus, and they will remain so. That is why I am pleased to tell the House that, although we are talking of increases in education expenditure, the increases in my particular area of responsibility for schools since 1999 have been a massive $1 billion. In the area of schools, expenditure has been lifted from $3.5 billion in 1999 to $4.5 billion in 2005. What an extraordinary contribution and commitment that is to the future of the young people in this country.

I shall also talk briefly about the comments Mr English made about the shortage of teacher-aides. We are aware of the pressure on teacher-aides. We are aware of the invaluable work they do alongside their trained teacher colleagues. One of the reasons we have such problems with providing enough teacher-aides in the community is the employment situation. It is a problem, and we acknowledge that—but what a fantastic problem to have. It is a result of unemployment being at record lows—3.8 percent unemployment. Is it any surprise that people who are not sufficiently remunerated and who need to renegotiate their collective contract—as they are doing this year—are difficult to staff because of better remunerated positions in so many parts of the economy? How different is that from what we inherited in 1999, when the failed National Government, with its failed policies of the past, had done nothing to provide any workplace continuity?

My predecessor, who spoke earlier about Vote Health, alluded to this in terms of the health workforce supply. It is no different in education. One of the greatest challenges for us, and one of the reasons for redeveloping and rebuilding the ministry that had been so gutted by our predecessors, is that we have to provide the continuity of workforce supply. That has never been done by the Opposition.

I refer to the operations grant. If one looks at what I think is a quite rational review by the Education and Science Committee—and again I compliment the chair of that committee, Mr Donnelly, and its membership—one can see that one of the first issues talked about is operational funding. Let me say to members of the Opposition, particularly Mr English, that since 1999 operational funding has increased by 13 percent—that is if we do not include the $111 million that this Government has spent on software licences, on software programmes, and on all sorts of things that were never provided for schools previously. Including that expenditure, since 1999 the operations grant for schools has increased, in current inflation-adjusted dollars, by 18 percent. So members of the Opposition should not tell me that we have not kept up with inflation, because the consumer price index certainly has not moved in that degree.

• Report noted.

MIKE WARD (Green) : Although the Finance and Expenditure Committee carried out a pro forma investigation of the Ministry of Transport, a number of issues need to be debated. The Greens enjoy a close relationship with the Government on the transport portfolio. It is also a portfolio that has probably the greatest environmental impact of any portfolio. The Ministry of Transport is also the ministry that has the greatest energy footprint of any ministry. Transport is also the portfolio that has the greatest impact on New Zealanders’ lifestyle and health. I am pleased to note that the Secretary for Transport mentions the whole-of-Government approach in his report. There is certainly no area where we require a whole-of-Government approach more than in transport. It is an area rich with opportunities for savings and for making a substantial contribution to New Zealand’s Kyoto commitments, while at the same time we prepare ourselves for a future where energy prices are likely to escalate dramatically.

I want to focus on a couple of issues from the overview by the Secretary for Transport. The Secretary for Transport states that he wishes to reduce transport-related deaths and injuries—300 fatalities is the target, and 4,500 hospitalisations, by 2010. Those are admirable targets. He also wants to enforce tougher enforcement measures for targeting speeding drivers—again, that is admirable. But I suggest that probably the simplest thing that the Minister and ministry could do would be to reduce the number of vehicles on our roads. It is interesting that in spite of the call for more roads and more infrastructure, there is probably more spare capacity on our roads and more spare capacity in this ministry than in any other sector. I did the sums the other day when Joel Cayford announced that $3.7 billion was to be spent on public transport, and well in excess of $10 billion in total on transport infrastructure in Auckland over the next 10 years or so. I did the sums, and I worked out that there were 700,000 cars on the roads in Auckland, with an average occupancy rate of 1.1 people per car. The roads in Auckland are currently cluttered with something like 2.5 million empty seats. If one has that kind of money to spend, then it ought to be possible to get a few bums on a few more of those seats—700,000 cars, 1.1 people per car.

Peter Brown: Pass a law!

MIKE WARD: I do not think we need to pass a law. With that sort of money we ought to be able to give a few incentives. I remember the word Bernie Ogilvy used before was “incentivise”. We could do some incentivising, and encourage and persuade people to hop into somebody else’s car, maybe to travel to work with the wife or the husband occasionally, maybe to catch the bus, or maybe to move into town.

Since the Secretary for Transport’s report was published, peak oil and climate change have gone from being issues that the Greens were scoffed at for raising, to become headline issues in most newspapers in New Zealand. Last week there was a full-page article on climate change on the front page of the Dominion Post. It is no longer a laughing matter; it is already happening. We are seeing the consequences here in New Zealand, it is happening all over the world, and it will get worse. If something like 16 of the hottest years on record since records began to be kept have happened since 1980, and if that is the result of an increase of just 90 parts per million in carbon dioxide levels, what will happen when we have a doubling of carbon dioxide levels this century? If that does not worry members, it ought to. With the kind of money we are targeting at transport, I believe there are measures we can take to change behaviour. I am pleased the Government is taking measures to change the culture. It is evident from the report that there are good intentions there. We hope that those good intentions can be turned into measures that will actually clean up vehicle emissions, not just investigate methods of cleaning up vehicle emissions, that will increase vehicle occupancy rates, not just talk about it, that will reduce vehicle volumes, and that will implement comprehensive land-use reforms.

So far, successive Governments have spent a great deal of time on perpetuating certain bizarre transport behaviour. It is the kind of behaviour that the planet cannot handle, and we deserve better than that. Why would people move into a house, knowing that it is located much too far from all the places they need to be at, spend half their life paying it off, much of the rest of their life actually going to and fro, and a fair bit of their life earning the money to do that? There are better things to do with one’s time than to sit in traffic jams and put up with road rage. I think the measures set out in the report may just achieve something.

Hon MAURICE WILLIAMSON (National—Pakuranga) : If ever there was a reason for the public to be very afraid, it was that speech from the Greens, because the member’s opening line was all about their wonderful working relationship with the Government, in the field of transport. But that is where the problem lies. That is why there has been so little progress on solving transport problems. The Greens had so much control over Labour policy that we ended up with a Land Transport Management Act that it was claimed would deliver all sorts of things, but it has not. No, I am wrong. It has delivered some things. It has delivered major delays to major projects, to the point that Transfund could not even spend its money last year—the year under review. Transfund ended up with nearly $230 million of unspent money.

Ask any New Zealander whether he or she thinks there were a range of roading projects that were not ready to go but could have been started. The answer is they were not ready to go because the Land Transport Management Act—the greatest sop this Government has ever given to the Greens, way over what it should have given—required all these projects to be reviewed. So we end up with a set of motorway arteries in Auckland. I say to members that if the arteries in their body did not join up at either end, they would not be of any use to them.

When one arrives at Māngere Airport and crosses the Māngere Bridge on State Highway 20, suddenly, bang, one hits Hillsborough Road. From then on it becomes a nightmare, an absolute dog’s breakfast, trying to navigate into the city centre. That is not true of Sydney and Melbourne. They used to have a problem as bad as ours, but decided to fix their connectedness issue. Those cities rolled out massive infrastructure, to the point where traffic congestion and delays are now lower than what we are experiencing in Auckland. They brought in major investment from the private sector, because they recognised that the Government could not do it.

When I first proposed private sector funding I certainly got some reaction. I have some wonderful quotes that I will be using come the election campaign. I am really going to enjoy that. I have some from the Rt Hon Helen Clark, who said that allowing the private sector to build roads in this country was selling our soul; it was actually selling our roads to foreign investors. But then the Labour Government had a change of heart, and when the Land Transport Management Act came along there was a part in there that would allow for private sector participation. I thought that was interesting. It was totally against Labour’s philosophy, totally against its core beliefs, because it thinks the private sector is evil and should not be involved. But it was interesting. So the Ministry of Transport must have had some impact on the Minister and his thinking to have achieved that legislation. The transport bill went through and, in this very Chamber tonight, I want members to tell me how many private sector - funded roading projects there are in New Zealand today. Mr Hide knows the answer; he just shook his head and went numb. He is right.

Rod Donald: I hope none.

Hon MAURICE WILLIAMSON: Mr Donald has played into my hands by saying that he hopes it is none. The Green Party is the absolutely right coalition partner for a Government that said it understood the private sector and would enter into public-private partnerships, because it understood those. Yet here is Mr Donald happily saying in this Parliament that he hopes there are none.

I ask members in this Chamber to think of any comparable jurisdiction they can name, and tell me whether they have any private-sector participation in the building of roads. No, I mean in the funding of roads, because the Minister will get up and give some smart alec answer and say that the private sector is already involved in their building—well, that is the contractors laying asphalt and tar. But there is not any private-sector funding of roads in this country. There is in New South Wales, there is in Victoria, and there is in Queensland. The Millau bridge in France was built in 3 years across a huge valley by the private sector—fully funded and tolled.

How many have we here? None! How many are we likely to see with a Government that has the Greens for a coalition partner, dragging it back? None! That is how many private-sector projects we will see. But in the State sector element, what did we see? Did we not see Transfund knocking at the Minister’s door and saying it was sorry but it had spent all the money it had? And there are just so many projects back-logged for a couple of decades. I admit that it is a long-term backlog—I openly admit it—

Hon Mark Gosche: Why is that?

Hon MAURICE WILLIAMSON: No, no—I admit it goes way back. If Mr Gosche wants to get smart, let me tell members where the big drop occurred. Up until 1985, historically this country spent around 1.3 percent of its GDP on roading. That figure today is still the OECD average. But in 1985, and members can guess which party was in Government—

Hon MARK GOSCHE (Labour—Maungakiekie) : That was an amazing speech—absolutely amazing! That speech was from the National Party spokesperson on transport, who from memory was the Minister of Transport two or three times during the 1990s, but who could not find a motorway in Auckland that he opened in his time as Minister. Could any member find a plaque anywhere in Auckland with Maurice Williamson’s name on it—or Jenny Shipley’s name on it? They were only in Government for 9 years, so we should give them a break! There is not one piece of motorway in Auckland with Maurice Williamson’s name, unless he might have scribbled his name with chalk under a motorway bridge—not a thing.

And did that party support the Government’s legislation that allowed the private sector to build roads? Did that party over there support the Government legislation that allowed tolling? Let us go and look at the Hansard to see who voted for that legislation. I think the Greens did. I think the Labour Party did. But I know damn well that the National Party opposed it. What a bizarre speech! It opposed it. He is now lamenting the fact that he opposed it. He was over there somewhere at the time. He was out of the party, in some sort of netherworld. He has now come back to be No. 27, or something. That is how highly rated the National Party spokesperson is. But in poor old Maurice Williamson’s time in the Minister’s chair, not one bit of motorway was built in the Auckland region.

Hon Maurice Williamson: Not true.

Hon MARK GOSCHE: There was a bit—there was half a bit. But I opened that. Poor old Maurice Williamson! It slumped in the middle when they were building it because it took so long to build. And it was to get people out of Auckland, not around Auckland. It took a Labour Minister to get it fixed and opened. That party is just absolutely without ideas and without policies.

On the TV tonight I saw motorway construction all through Auckland. Public transport infrastructure is going flat out, as fast as it can, to catch up on years of neglect. There were more people riding on public transport in 1955, when I was born, than there are right now, thanks to Maurice Williamson’s party. It absolutely wrecked public transport; we are having to put it back together again. We are working with the private sector and the public sector to make sure that we have a balanced approach to transport in Auckland.

• Progress reported.
• Report adopted.