The CHAIRPERSON (H V Ross Robertson): Kia ora tātou, nō reira, good afternoon, honourable members. The Standing Orders provide for the financial review debate to be the Committee stage of the Appropriation (2005/06 Financial Review) Bill. The debate is organised into three distinct parts. It commences with a debate on the annual financial statements of the Government as reported on by the Finance and Expenditure Committee. Once this debate is disposed of, the Committee debates 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, along with the compendium of select committee reports.

The debate on the Government’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 2005-06 financial year and their current operations. A member may have no more than two calls on each financial review.

Four hours are allowed for these two segments of the financial review debate. At the conclusion of the 4 hours, a single question is put on the provisions of the bill. There is no amendment or debate on this question. The Chairperson reports the bill to the House and it is set down for third reading forthwith. There is no debate on the third reading.

I turn to the schedule of proposed questions. Will members please turn to the report of the Finance and Expenditure Committee on the annual financial statements of the Government. The question is that the report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2006 be noted. I note that this report also relates to the Finance and Expenditure Committee’s financial review of Treasury, so the performance in the 2005-06 financial year and current operations of Treasury may also be debated.

Hon BILL ENGLISH (Deputy Leader—National) : One of the tasks that Treasury carries out with the funding that this House appropriates for it is fiscal policy. I wonder whether the Minister in the chair, the Hon Dr Michael Cullen, would be able to answer a few questions about Treasury advice on fiscal policy in some of the information that has been presented, based on Treasury analysis, in the last Reserve Bank Monetary Policy Statement. I am asking these questions of the Minister because he has developed an approach whereby he regards National’s fiscal policy as much more important than his own. His focus has been on what might have happened had National won the election and implemented the policies it campaigned on during that election campaign.

That debate is legitimate enough, but he is doing it as a way of avoiding an explanation of his own fiscal policy, which is increasingly confused. The story up until a few weeks ago was that fiscal policy was tight, and the measure of that was that the Government was running cash surpluses. But in the Monetary Policy Statement previous to this most recent March one, the Governor of the Reserve Bank used, for the first time, the word “expansionary”. He was referring to the prospective period, which is directly relevant to his forecasts for the next 3 years—roughly the time over which he is expected to manage inflation. The Reserve Bank Governor is always looking forward.

So it is not a commentary on other parties’ fiscal policies, it is about the Minister’s policies and whether he is willing to answer questions. A few weeks ago it was tight, then he came to the select committee and said: “Yes, it’s loose.” He could not really disagree with the Governor’s analysis that it was expansionary, but, since then, the Reserve Bank has laid out in significant detail just how expansionary the policy is. He has used the Treasury analysis of fiscal impulse. This actually is rocket science, I have to say. Calculating the fiscal impulse is a bit harder than understanding what the surplus means. Nevertheless, the picture is quite clear. The picture Treasury has painted is 3 years of positive fiscal impulse, which means that over the next 3 years monetary policy will be considerably looser than it has been.

The Governor of the Reserve Bank has put this in his document, but not because the Opposition thinks he should—it is up to him; he is independent. He has outlined it in great detail because it matters to his job of setting interest rates. The Minister of Finance needs to deal with this proposition because he has not done so, so far. His fiscal policy is significantly looser over the forecast period and that will have the effect, because the Governor of the Reserve Bank has said so, of keeping interest rates higher for longer. Maybe it did not cause him to put up interest rates just the other day; maybe it did—I do not know. The Reserve Bank Governor makes those decisions. But the fact that he has drawn so much attention to it tells us that it matters to him.

When he is sitting down to decide the interest rates that New Zealand households will be paying, not just on mortgages but on other forms of financing, such as overdrafts, credit card debt, hire purchase, interest-free offers from Harvey Norman, and all the other debt—the overnight cash rate affects all of them, not just the current obsession with housing—can Dr Cullen explain why he believes that his big spending plans are not fiscally expansionary, but that any tax cut would be? Can he explain whether he agrees with the Reserve Bank analysis, based on the analysis of his own officials? His own officials supply the data in the raw material. Does he agree with it? Does he agree with the Governor of the Reserve Bank, who says his policy is expansionary? Does he agree with the Treasury assessment that the next 3 years, 2007-09, will see significantly looser fiscal policy, as measured by figure 5.15, the fiscal impulse calculations, in the Monetary Policy Statement? Can he tell us whether it is sustainable to have core Government expenditure growing at almost twice the rate of nominal GDP—not real GDP, but nominal GDP—as table 5.2, total core spending and selected components, 2005-07, shows?

Does he believe it is sustainable? I want him to just answer that question. Given that the Government is now on about sustainability, where nominal GDP—[Interruption] Oh, he is going to ask me some questions. That is fine. I am happy to sit in the chair as Minister of Finance and answer those questions. That table shows that nominal GDP over 2005-07 has grown at 9 percent and expenditure has grown at 17 percent.

Hon Dr MICHAEL CULLEN (Minister of Finance) : Can I try to explain to the member, because he really should not listen to the Brethren when it comes to fiscal policy. They are not good guides to fiscal policy. Even if they do wander into his electorate office by mistake, they are obviously not intending to discuss anything that might impact upon National Party funding. Let me try to explain to him what the measure of fiscal impulse is. It is not a measure of whether policy is tight or loose.

Hon Bill English: Looser.

Hon Dr MICHAEL CULLEN: That is right—looser. So, basically, if the nuts are completely tightened up and they are untightened very slightly, Mr English would argue that they are loose nuts. Maybe the National Party does have a lot of loose nuts wandering around, but the fact is that in the Labour Party the nuts are still pretty tight, I have to say. Indeed, can I quote to him no better source than his co-leader, Mr Key, who says the Government has been running such huge surpluses—

Hon Bill English: That’s right.

Hon Dr MICHAEL CULLEN: “That’s right”, he says. That is the problem with Mr English. He does not listen, even to his own interjections, from one second to the next. He says: “Yes, the Government has been running huge surpluses.”, and he says that the Government should not have been running such huge surpluses. That is what Mr Key says.

Hon Bill English: No.

Hon Dr MICHAEL CULLEN: No, he does not say that? Well, Mr Key has been saying that the Government should not run such huge surpluses. Mr English is saying that it should run such huge surpluses. I could try to tell him about his policy, but that would be a very short speech indeed. I am going to concentrate on the contradictions in the various statements, because National does not have a policy. Its members went through a whole Agenda television programme saying: “We don’t have a policy on that yet, and we probably won’t before the election. But never mind, we’ll tell you sooner or later what it may be.” The smiling assassin, the “Muesli Bar Kid”, is making sure there is no actual substance in the muesli bar that comes out.

So the member does not understand that we are still running a cash surplus probably this year. That means we are funding all our investment spending out of current revenue. That is not a loose fiscal policy. The member does not expect us to say that we are going to be running surpluses of 7 percent of GDP every year. Is that what National said? That is not what National said at the last election. At the last election it said that it could continue to increase spending in all the core areas and have, by year 3, $4 billion a year of tax cuts. Mr Key said, very clearly, that fiscal policy was too tight and should be loosened. So where has the great growth come? The biggest proportionate growth is in spending on roads and public transport. It has gone up 52 percent in the last 3 years. Mr English would tell us—

Hon Bill English: That’s right.

Hon Dr MICHAEL CULLEN: “That’s right”, he says. Which road would he not have built? Which bus would he not have run? Which train carriage would he not have helped the Government to purchase? That is what he has to answer. And then we have had a 21 percent increase in Vote Health, and a lot of that has been in primary health care. There are cheaper doctors’ visits and cheaper pharmaceuticals.Who would Mr English charge more to go to the doctor? Who would he charge more to get a pharmaceutical? His health spokesperson tells us that we should fund every drug that every pharmaceutical company thinks might do somebody any good and can drum up an interest group to come and march on Parliament about. That is what Mr Ryall has said. Every time any health group has gone on strike, Mr Ryall has said that the Minister of Health should step in and make sure the district health boards give away and grant them whatever they asked for in the first place in terms of a wage increase.

So although Mr English is playing with his nuts and trying to tighten them, all his colleagues have got the nuts completely off the thread at this point and they are running around on the floor of the Chamber being chased by his colleagues all over the show. The reality is that we are running a tight fiscal policy, and yes, it is more expansionary than it was last year—

Hon Bill English: Aha!

Hon Dr MICHAEL CULLEN: Well, we were. Mr Key said that we were taking $11 billion more tax than we should. Does that mean we were running a loose fiscal policy?

Hon Bill English: You are pushing interest rates up.

Hon Dr MICHAEL CULLEN: Oh, we are pushing interest rates up by still running a tight fiscal policy. That member says: “Yippee, we shouldn’t do anything about that, but just make sure interest rates go up.” He said that Dr Bollard had failed to use the mechanism of pushing interest rates up. Then when Dr Bollard did put interest rates up, Mr English said: “Oh, that shouldn’t have been done.”

That is the wonderful thing about being close to people like the Exclusive Brethren. One is surely going to be saved, whatever one does or whatever one says.

R DOUG WOOLERTON (NZ First) : Anybody listening to Parliament would be forgiven for thinking that this debate is about a rerun of the last election, because National is talking about the affordability of tax cuts—but there is a modification to that, which I will tell members about shortly. The Labour Government is saying it wants to provide services. We saw that same debate just before the last adjournment when the National Party, and in particular Bill English, was looking for a reason to back down on its tax promises. It is National’s task to search and question the Labour Party, but backing down is what this is all about. National is now saying that the promises made at the last election by the Labour Party are expansionary. Its next words will be that tax cuts cannot be afforded. Then it will say: “Well, there you are! We promised them at the last election, but we will no longer be able to keep those promises for the 2008 election because Labour has spent the money.” In actual fact, Dr Cullen is running with the regime that he promised. He is fulfilling promises that he laid out at the last election, and that is what Governments should do—absolutely.

I was pleased to hear, in the financial statements of the Government, that the New Zealand Superannuation Fund is on target and even gaining momentum. The people of New Zealand are starting to understand the wisdom of savings as proposed by Winston Peters and New Zealand First years and years ago. In fact, we are experiencing the sort of thing that has happened in Australia with superannuation savings. It is so successful. Indeed, Australia has an abundance of money, and that money is coming to New Zealand to buy our businesses. That is where the money is coming from, and that is where the money will come from in the future.

Years ago, New Zealand First talked about superannuation savings and said that should happen. Years ago, Winston Peters said it should happen. I might tell members that when we were in coalition with National it withdrew its support from New Zealand First’s proposal. In fact, I would go so far as to say that National sabotaged that proposal at the time when New Zealand First was in coalition with National. Now the worth of those proposals is being proven, not only in New Zealand but in Australia. In fact, it is being lauded. I would like to hear someone at some stage say: “Yes, New Zealand First was quite right back then, and we should give them credit for that. We should look favourably on those sorts of proposals.” New Zealand First, of course, would go further with the superannuation fund and put it in named accounts. We proposed that back then and we propose that today.

I will say right now that I believe, and we believe, that National in some way or other will make a raid on that superannuation fund, if it ever gets into power. If it were not to raid it directly, it would borrow against it. In other words, it would rack up deficits and spend that money on ill-considered tax savings. That is what I believe the discussion has been about this afternoon, and it saddens me that National is still looking for an excuse to climb down from those tax promises. We will see more of that.

People probably do not know about Mr John Key’s contribution when we were discussing the financial statements of the Government of New Zealand in the Finance and Expenditure Committee. I am sure my chairman will confirm what I am saying. Mr Key was not the leader of the National Party at that time, but he was talking about the Auckland stadium.

SHANE JONES (Labour) : Kia ora anōtātou. The 1st of April is going to be a great day, reflective of the brilliant work that our Government is doing. We are going to remind our key constituencies, as a consequence of high-quality economic stewardship, that the most vulnerable elements in society who totally pledge their support and their commitment to a social democratic approach are to be rewarded. At the time that they are being rewarded, they are witnessing Mr Key seeking to ape, and seeking to ride in the wake of, our successes. That man wanders around Aotearoa, attending every single opportunity or event, and pinching, aping, emulating, or borrowing, but never saying an original thing. Then he comes back and checks either with his caucus or with Mr English as to whether what he has said will actually be tolerable or can be embraced by the true-blue brigade, which Mr English hopes will eventually enable him to return to the area that he ruined when he tried for the big prize well beyond his years and experience.

Unfortunately it is not only Mr English or Mr Key who are making blunders and mistakes. My whanaunga here from the Māori Party made a tragic miscalculation over the last 24 hours, when they grossly misread the views of the Māori community in terms of tolerating, acquiescing to, or putting up with levels of family violence. What did I read in the newspaper, at a time when leadership and bold stands are required? I read that Tariana Turia was not only wavering but preparing to embrace the wretched amendment currently being peddled by the member for Whanganui, who, when he cannot read the data about traffic statistics and police business, is serving up an amendment that will only make it more difficult for us to stand against family and domestic violence. That was a very bleak day in terms of the number of Māori Party supporters—diminishing by the day, I have no doubt, when they watch their leaders at war with each other. Members may ask what that has to do with broad economic considerations. I say that for every family that witnesses the perpetration or the casualties of violence, there is an enormous economic cost to our society. And who is left to pick up the pieces? It is the poor, long-suffering taxpayer or community groups. I say to our colleagues from the Māori Party that they should not play short-cut politics while their whānau are getting an uppercut because of excessive family violence.

However, I will go back to the sterling work undertaken by the Finance and Expenditure Committee. As Mr Woolerton has referred to, we had the interesting spectacle of Dr Bollard being challenged by Mr Bill English as to whether the levers he has in terms of monetary policy were being misused, and were doing more harm than good. What did Dr Bollard say back to Mr English? He said: “As you know, Mr Bill English, when you sat in the meeting I outlined and elaborated on what the options are.” The coded message being given was that Mr English should not come to meetings with Dr Bollard, seize upon very sensitive, potentially confidential information, and then, when the heat comes on, move out of the meeting and not admit that Dr Bollard and National’s leader equally acknowledge that there are some flaws in terms of relying exclusively on monetary policy to deal with problems such as an enlarging currency rate and the expanding cost of housing. So it was interesting to watch the morose, highly wrought Mr English come back from the deep south and challenge Dr Bollard, who, with the style and poise of a consummate cricket player, just flicked him aside—as Mr English has been flicked aside by the electorate in earlier times.

R Doug Woolerton: That’s right.

SHANE JONES: Actually, I must agree with the kaumātua—no, I will not say the kaumātua; the pakeke, Mr Woolerton—one of the senior members of our committee, who recently pointed out that the savings policy represents a key plank for economic transformation. As a consequence of having the KiwiSaver scheme as an adjunct to the Cullen fund, our economic policy represents savings on behalf of those who are either unable or unwilling to save, or who hope to ride long and hard into the distance without savings. Kia ora tātou.

DARREN HUGHES (Labour—Otaki) : It is a great time to be speaking for the Government on this side of the debate. From the end of 1999, when the Labour-led Government came to office, we have been growing at an average annual rate of 3 percent. That is faster than the average of the developed countries that we like to compare ourselves with. We are growing faster than Europe, Japan, the US, and the UK, and as fast as Australia. In fact, the New Zealand economy is a quarter larger today than it was in 1999.

We also have one of the lowest levels of unemployment in the OECD and, despite the usual innumerate claims from members of the Opposition, this is not due to people shifting beneficiaries around to different categories, but because the absolute number of those on benefits has fallen dramatically since those members were last in power. Unemployment is now at levels that Mr Bill English once said would be unachievable.

Although we have strong growth, which we are debating in this debate, through increased prosperity throughout the country, there are obviously challenges on the horizon. The domestic economy has performed persistently much stronger than the export sector, and we are seeing the evidence of that in a current account deficit making up nearly 10 percent of GDP. One of the reasons for that, I believe, is that households are not saving enough.

Saving is a hugely important issue. Despite the Reserve Bank highlighting New Zealand’s poor savings rate in last week’s Monetary Policy Statement, this has received little focus in the ensuing discussions, including in the contributions from the Opposition in the House today. The Reserve Bank report in the Monetary Policy Statement notes that household savings rates are currently running at minus 17.5 percent, which means that for every dollar a New Zealand family earns, it is spending $1.18. The Reserve Bank describes this as dissaving, and notes that the current rates of household dissavings are unsustainable.

This dissaving is fuelling consumption and it is a major driver behind the Reserve Bank’s decision to increase interest rates last week and of course, as we know, the export sector suffers most of the burden when those interest rates go up. The resulting higher exchange rate makes exports less competitive and businesses have to pay more for capital, but it is not the export sector that is forcing these increasing inflationary pressures.

The Government, through fiscal policy, has an important role to play in supporting monetary policy, as well. To put it bluntly, there is no point in cutting taxes or in increasing spending in major ways if it results in higher mortgage costs or even in an inflationary spiral. Even Bill English managed to realise this when he stated that it is not a time to give away extensive tax cuts.

Of course, that is not what Bill English said in the Chamber this afternoon. Unfortunately, he did not get around to telling John Key this, because the very next day they were once again contradicting each other, proving once again that it is not a very happy time to be in the National Party. Mr Key is one of those who believe that every time the Government’s cash surplus is updated, the Government can simply spend its cash reserves. Mr Key usually calls for the Government to reduce its operating surplus while at the very same time, on the very same day, Mr English blames the Government for spending too much money—in effect, calling for larger Government surpluses. There is a word for that, of course.

Holding these kinds of mutually contradictory positions might be OK when one is in Opposition, but it is not a privilege we have while in Government. So the Government is trying to be active on a range of fronts to take the pressure off this monetary policy, increase the savings, and develop our export sector. Cash surpluses have been used to pay down debts steadily. Gross debt is now around 20 percent of GDP and we no longer carry any net debt at all—something I think New Zealanders should be very proud of, when we take into account the New Zealand Superannuation Fund. It is the first time since we have had responsible Government in New Zealand that this has been achieved.

New Zealand has better public finances than nearly all the OECD countries. According to Standard and Poor’s, due to our strong fiscal position and the Superannuation Fund, we are one of the best-prepared nations when it comes to dealing with the challenges that will come from an ageing population, which obviously the Government is very concerned about as well. The Superannuation Fund will ease that pressure on Government finances into the future.

We are trying to boost the savings rate with the introduction of KiwiSaver, as Mr Jones mentioned, which is a unique voluntary, workplace-based savings scheme for all employees. The introduction could hardly be better timed, given the Reserve Bank’s warning about household dissaving and the need to manage domestic demand pressure across the economy. I believe that this will be historic legislation, as workers are asked to set aside either 4 percent or 8 percent of their incomes into KiwiSaver.

Its unique feature is that it has automatic enrolment. With 700,000 people starting a new job each year, one would like to think that over the course of time that will be a catalyst to embrace KiwiSaver across the economy—particularly with the $1,000 contribution as part of the card commitment that Labour gave at the last election. There are very strong incentives for young people to join at the beginning of their workforce life, so that they can build up a strong savings habit, which, of course, will multiply their benefits in later life. By making employer contributions tax exempt, we are making it even more attractive for workers and for employers to see this as a positive economic tool in order to boost the New Zealand domestic economy and to make things easier across the export markets. KiwiSaver will deepen the pool of capital available for development, manage domestic demand pressure, and increase our household savings rate. KiwiSaver should help to take the pressure off our export sector and also off interest rates.

CHARLES CHAUVEL (Labour) : It is a pleasure to rise to speak in this debate as the newest member of the Finance and Expenditure Committee—[Interruption]; that is right—and to follow fine speeches such as that of the Minister of Finance, the chair of the committee, and Darren Hughes, as well as Doug Woolerton’s contribution, which was a notable one, in my respectful opinion. I would just remind the Committee that 1 April is an important date, as an earlier speaker said, not only for the reason that he mentioned, but also because it will see increases to the Working for Families payments made to families that require assistance. As the Governor of the Reserve Bank told the committee in the evidence he gave before us on Thursday on the Monetary Policy Statement, that package itself already has added 6 percent on average to the incomes of those families in receipt of it—6 percent in real terms. That is a real achievement for this Government. The KiwiSaver scheme, as has been mentioned, comes into effect on 1 April, and the minimum wage is increased, as well as 4 weeks’ annual leave becoming available to working New Zealanders.

Those are fine achievements by any judgment and they demonstrate that this Government’s record of responsible fiscal management is intact. We do not promise to spend more than we have in the bank and we are careful to make sure that any promises on spending are sustainable and well targeted. This is a drastic contrast with the record of the National Party in Government. I saw the National Party in the late 1980s, as the 1990 election approached, promise all things to all people. This was a hidden agenda.

Hon Member: Sounds familiar.

CHARLES CHAUVEL: Yes, we can remember the “decent society”, as my colleague said. Well, what a joke that was. In the 1990s, when National came into Government, its hidden agenda was revealed. I say to members opposite that that is not a record that they can afford to repeat if they want to see democracy preserved in New Zealand. Members opposite must not repeat that disastrous record if they ever again have the opportunity to be in Government.

One can already see the signs of that sort of agenda being laid out. Over 30 or 40 promises on spending have been made by Opposition spokespeople in the last year. All are against a promised framework of tax cuts from the Leader of the Opposition and the spokesperson on finance. Tony Ryall promised increased places in medical training. John Key promised bulk funding at the top rate for education, and funding for food in schools, and sports and community groups. Chester Borrows promised more police, and Wayne Mapp went along with him. There was a promise to abolish parole and all the required extra prison places that that would need, compulsory DNA testing of all convicts, merging the Ministry of Justice with the Department of Corrections, expanding rehabilitation programmes, work schemes, and prison health. That was Tony Ryall again. Chester Borrows and Anne Tolley promised more resources for youth justice, the provision of youth justice beds, and new Youth Court options. Bob Clarkson promised a new High Court in Tauranga. Chris Auchinvole promised a community law service for the West Coast.

Colin King promised electronic signage on all State highways. John Carter promised to fund local government for its leaky homes liability arising from court action. Funding a task force to determine Auckland’s future was John Key’s promise. David Bennett promised more core services in Hamilton. Tim Groser and Chris Finlayson promised increased budgetary expenditure in arts, culture, and heritage. Phil Heatley promised more fisheries officers. Paul Hutchison promised more investment into research and development, increasing the overall public and private investment from 0.68 percent of GDP. Colin King promised high-speed broadband access for the Hurunui. Shane Ardern promised to spend more money to eradicate varroa, improve biosecurity education, and introduce a new emergency response category and more container inspections.

The Bluegreens promised more money for emission reduction technology. Nick Smith promised to create an environmental protection agency, funding initiatives for thousands of volunteers and dozens of organisation and community conservation projects, and sharing the cost of a joint commitment with the agricultural sector to make progress on water quality through National’s proposed sustainability investment fund. Jackie Blue promised to fund the expansion of the Ministry of Women’s Affairs into an advocacy role within government. Judith Collins promised to put more money into homes for veterans, genetic testing of all veterans’ children, and tax refunds for those who served in the Viet Nam War. National cannot cut taxes and do all that.

• Reports noted.

Dr PITA SHARPLES (Co-Leader—Māori Party) : Kia ora. I am pleased to be able to speak on the financial review of the Ministry of Fisheries, which is known in fishing circles as the “Titanic review”. That ministry is the same ministry that is responsible for introducing a range of strategies to tinker with allocation, which an unnamed member from Labour’s Māori caucus said yesterday was akin to “moving around the deckchairs on the Titanic.”

The 2005-06 financial review of the Ministry of Fisheries describes the ministry’s role as being to manage the process for gaining access to or for allocating fisheries, and to ensure that those who use those resources comply with the legislation. The Primary Production Committee noted that the Office of the Controller and Auditor-General had given four ratings of “good” and one of “satisfactory” to the agency’s financial and service performance. So how can it be that a member of the Government’s own Māori caucus is so dissatisfied with the performance of the Ministry of Fisheries that his thoughts turned to the most catastrophic maritime disaster of all time? The issue is all about fish. Māori fishers throughout Aotearoa have united in their anger against any attempt by the Government to expropriate Māori property that has been recognised through the deeds of settlement.

The financial review glosses over the gigantic collision ahead on the horizon between the shared fisheries consultation and the massive disquiet of commercial, recreational, and customary fishers. The understatement of all understatements is made in the financial review’s comment: “The ministry recognises that the value these different groups derive from our fisheries resources cannot always be measured in monetary terms.” When one is looking at the value derived from the fisheries resources, one can see that a pretty good place to start is with the value of the Treaty of Waitangi. A full and final settlement was made in good faith between the Crown and Māori in the 1992 deed of settlement. The courts have specified that valuing the Treaty would require that both sides act in good faith and honourably towards each other, and that the Crown actively protect Māori rights and interests, make informed decisions, and avoid providing impediments and the creation of new grievances. That sounds pretty good to me. The Primary Production Committee also indicated that it was looking forward with interest to the results of the shared fisheries process. That was until the massive crash into “Jimmy the iceberg” occurred.

The Māori fishing sector has stated that it considers that the Shared Fisheries document will undermine the value of Māori fishing investments and the deed of settlement. Māori fishers have been stunned that the Ministry of Fisheries has not entered into specific consultation on the shared fisheries proposals with iwi or even with Te Ohu Kai Moana Trustee Ltd. Is that what the Office of the Controller and Auditor-General describes as being satisfactory? The Māori Party thinks not. Is it good practice that the reduction in value of the Māori commercial sector will have a direct and an immediate impact on investment decisions made by iwi who have received Māori fishing quota? The Māori Party thinks not. And how exactly does the Government intend to maintain good faith with its Treaty partner when, despite a Government promise to compensate Māori if they lose any quota, the same unnamed Labour Māori MP says that in fact there is no agenda to compensate them at all?

A mere 12 days ago iwi representatives, Te Ohu Kai Moana Trustee Ltd, and Aotearoa Fisheries Ltd, along with the presidents of the New Zealand Big Game Fishing Council, the New Zealand Recreational Fishing Council, and Option4, met to discuss the shared fisheries proposal. All of the groups agreed that the discussion process on the shared fisheries proposal was woefully inadequate, that the document published by the Ministry of Fisheries was divisive, and that the ministry’s submission form was disgraceful. Is this situation a state of crisis, a policy Titanic, a mutiny awaiting, or a Government that is being shipwrecked by its own members? Will it be another case of a man being overboard? I guess we can find our answers washed up in the flotsam and jetsam on the foreshore.

Hon JIM ANDERTON (Minister of Fisheries) : I was very saddened to hear that speech by Pita Sharples. The Ministry of Fisheries had significant consultation with iwi up and down the country—from one end to the other. What does that mean? It means consultation. How can that member, who usually talks sense in this Chamber, say there was no consultation when I know there was considerable and significant consultation? Consultation, of course, does not always mean that one agrees with everything that is done in the consultation process, but it does mean that one is consulted.

The idea that the shared fisheries does not deal with issues that are of importance to Māori is just simple nonsense. Who comprises Māori fisheries? Recreational fisheries are very heavily dominated by Māori people. That is No. 1. Customary fisheries are absolutely dominated by Māori people. Commercial fisheries are made up of something like 30 to 40 percent Māori people. So are Māori people involved in all of these shared fisheries issues? Of course they are.

What does the Shared Fisheries paper state? It states that the Fisheries Act 1996 does not provide clear guidance on how the obligations under the fisheries deed of settlement need to be effected in the provision made for customary fishing when allocating the total allowable catch. So the proposal in the Shared Fisheries document—and many Māori people who have spoken to the Committee on this clearly have not read my submission, and I wonder whether the member has read it—states that allocation rules should recognise that actual customary take authorised under the customary fishing regulations, or regulation 27 or 27A of the Fishing (Amateur Fishing) Regulations, is to be provided for before allocation to the amateur and commercial sectors in order to align the Fisheries Act with the obligations created by the fisheries settlement.

How much better than that can it get? In other words, Māori customary fisheries are being provided for before anyone else, commercial or recreational. How much better than that can it be? For a representative of Māori to get up in this Chamber and say that it is just a big takeover, when that is in the document and will be put into the legislation where it is not clear, now makes what the member said an absolute nonsense.

Then we come to the issue of compensation. In terms of Government proposals to change allocations or access, any significant cost that would be imposed on the commercial sector could be assessed and the need for redress considered. That is in the document. It goes on to state that there will be provision for a specific process for consideration of redress to the commercial sector. I have made it clear that on my watch as Minister of Fisheries there will be no confiscation of private property rights and no compensatory transfer of allocation. I have said that.

Let me just say that in terms of commercial fishing, the quota system is sacrosanct. It is the best system to sustain our fisheries that we have and no Government—certainly not this Government—will interfere with that. No Government will interfere with the deed of settlement, so, basically, we have a situation whereby we are trying to deal with allocations across the shared fisheries—the iconic species of the inshore fisheries of New Zealand.

And, guess what, I am told on one hand that it is all sweetness and light! The member Pita Sharples just said that the Recreational Fishing Council, the Big Game Fishing Council, the Seafood Industry Council, and all the rest are in total agreement. Get a life! I have a document from the Recreational Fishing Council that states that it went to a meeting where it was completely misrepresented by the commercial fisheries and Te Ohu Kai Moana. I know that. I have two documents, one of which says even worse things about that meeting—it says that it was conned and misrepresented.

At the same time as Pita Sharples speaks in the debate and I reply, the recreational fisheries are suing the Government for giving too much kahawai to the commercial fisheries. And, guess what? On the other hand the commercial fisheries are suing the Government for giving too much kahawai to the recreational fisheries. And these are the guys who say that it is all hunky-dory and that they get on well with each other. Give us a break! They are employing lawyers. The recreational guys are paying lawyers, the commercial guys are paying lawyers, and we are paying Crown Law a fortune—and what for? It is so that we can deal with what we are told are non-issues. So why are they all in court arguing about them, and spending all this money? I rest my case.

• Report noted.

KATHERINE RICH (National) : I am going to spend my 5 minutes talking about the issue of the day, which is the Government’s pre-election promise and policy to offer all 3 and 4-year-old children in New Zealand 20 free hours of early childhood education. What might have sounded like a slick election slogan around the Labour Party campaign table has proved to be exceptionally complex for the present Government, and what a shambles it has become. We have seen the Government slip and slide from a position where all 3 and 4-year-old children in teacher-led facilities were going to receive 20 hours’ free education, to a position whereby the Minister says that around 92,000 children might get it, to his saying that up to 90,000 children could get it—which could mean that 12 New Zealand children get it and he has met his own benchmark—to his saying that hopefully up to 92,000 children will receive it. The Minister has stared down the barrel of camera after camera and made comments to parents along the lines of: “Well, it is simple. You just go down to your local early childhood centre and say”: ‘I have a 3 or 4-year-old; I’m here for my 20 free hours.’ ” What he has failed to say is that many parents will go down to their local centre and say that they have a 3 or 4-year-old and they are there for their 20 free hours. Those parents will be told: “Sorry, sunshine, it’s not on offer, because the Government has set a rate that means we have to compromise on the quality of our early childhood education provision and we’re not going to offer it.”

The Government’s plan was initially targeted at community centres, but in the last week or so we have seen that even the Auckland Kindergarten Association, which oversees 107 kindergartens, has said: “If we accept this deal, our centres will be worse off.” There has been a collapse of a few brain synapses on the other side of the Chamber because Government members do not understand that if they offer a deal that makes centres worse off, they will not be keen to accept it. Why would they accept an arrangement whereby they will get less money than they do now? It is basic common sense and it is basic governance. The Government has totally underestimated that centres take very seriously the quality of their early childhood education provision and they see that to take on and implement this policy is to seriously compromise quality.

Government members will say that parents will pay for a few extras and they will give a few examples like museum trips and other bits and pieces and sundry costs, but centres are saying something quite different. They are saying that if we accept this, it will have an impact on the quality of the basic provision of early childhood education in this country. We have seen the number of weasel words surrounding this policy, but pre-election most parents were left with the distinct impression from the Minister and the Prime Minister that every 3 or 4-year-old child in a teacher-led facility would have access to this policy, but they will not. That is where a basic fraud is being played out on New Zealand parents. Pre-election, the impression was that they would get that access. Parents will follow the advice of the Minister, and turn up to their local centre and say they are there for their 20 free hours, but they will not get access to it.

Access to this policy and actually getting it are concepts that are worlds apart. It is not what was promised by this Government at all. That is why Kiwi mums and dads are rightly aggrieved. They were led to believe they would get 20 free hours but they will not get anything near that.

We heard Trevor Mallard talk about it as being a discount. He said in the House: “Who wants to turn down a $92 discount?”. I think that was a lapse on the part of that Minister and it gave a clear indication that that is exactly what the Government was thinking it might be. It is nothing more than a subsidy. In fact, the Minister himself has accepted that it is a subsidy, so why do they not call it what it is? But calling it 20 free hours when the Government is not providing enough to cover the basic costs of early childhood education provision is just a fraud being played out on New Zealand parents. The Minister needs to take a call and explain exactly how many kids will get it.

Hon BRIAN DONNELLY (NZ First) : I rise to speak to the financial review of the Ministry of Education for the 2005-06 period. The review showed the level of activity that continues with regard to the ministry imposing requirements on schools to provide compelling evidence of accountability. The result has been more and more red tape, paperwork, and compliance costs. The outcome of such an inexorable process is that staff energies are diverted away from core business: that of interacting with students in order to facilitate learning.

New Zealand First says that the time has come to put the joy back into teaching, and that the joy of teaching does not come from filling out the latest form for the Ministry of Education. As those in this Chamber who have been teachers know, that joy comes from working with children. It comes from the beam in a child’s eye when success is achieved, and it comes from sharing the exhilaration with a student as she or he leaps a barrier that the day before had seemed impossible. The question New Zealand First is therefore asking is, who reads all the information generated by the schools—all the reports and plans, etc.? We would moot that much of the material produced, at the cost of active time with students, goes unread.

I will provide an example. I will not mention the school concerned, but the document from which I am quoting is a genuine governance document. The document looks at annual goals, for example, and I will provide members with one of them: to have high levels of literacy in years 9 and 10. The measure is “Year 10 Students average and above (Stanines 5-9)”. The baseline, which is the figure for the year before, is 57 percent, and the target is 70 percent for the year in question. The result is 39 percent. The document talks about the future action being continuing literacy development, but it demonstrates that measuring a piece of string does not make it any longer. It also mentions literacy and professional development for all year 9 and 10 teachers.

I will mention goal number 4, which talks about “ ‘CARE’ Values” underpinning the Waikikamukau college operations. It talks about the number of stand-downs being the measure, and the baseline for the particular year is 80, and the target is 70. The result, in fact, is 131, with a variance of 61. But this is what is written—and I kid members not—as the future action to be taken. It states quite clearly in that governance manual that the future action to be taken is to “Continue the flogging until morale improves”. I will table a piece of paper at the end of my speech to demonstrate that that is what is stated in that document. I want to know who read that stuff, who did not pick that up, and who allowed that sort of statement to continue to be made in that document. I would suggest that somebody was simply taking the mickey out of the system, and that he or she put that in knowing full well that no one would read it and no one would respond to it.

I also have to mention that the ministry is asking schools to meet deadlines. If it is to do so, surely it must also meet the standards it expects of the institutions it serves. I say to Minister Steve Maharey that I am sorry, but I have to point out that there have been some errors within his ministry. The review report acknowledges the introduction of a central electronic enrolment management system called ENROL, which New Zealand First has been calling for ever since it came into this House. The ministry informed the Education and Science Committee that the system should reduce compliance costs to schools and enable them to attract transient students. Primary schools were to come on to the system in 2007. Unfortunately, the reality has been that the system has not reduced compliance costs, and has created a great deal of additional work for schools. One of the reasons is that the ministry did not meet its own commitments and deadlines to the schools. Unfortunately, the excuse that the ministry used when asked why it had not done so was that it had been too busy.

Principals have been requested, for example, to provide information they were not aware they had to supply. Schools were required to give each student’s address, and the ministry seems to have been unaware that there is still no uniform rural numbering system across New Zealand—maybe one or two phone calls would have sufficed to realise that. So the ministry has ended up with teachers running around and putting dots on maps. I say to the ministry that that is not good enough. If it is to have a high expectation of schools, it must model those same high standards to schools.

Schools, for example, were requested to forward lists of pupil absences for 2 days before, and 2 days after, 1 March. It was not until 2 March that schools received information that that was totally optional—in many cases, after the schools had attempted to put that information in place. That brings me to my major point. If a student is not enrolled at a school on 1 March, there is no funding available through the 1 March return for that particular child. That system has gone on for a long time. For example, if a child leaves a Christchurch school halfway through the week before 1 March, travels up to Whangarei, and enrols there on 3 March, there will be no funding for that child.

PAULA BENNETT (National) : I wish to pick up on a point made by the Minister Steve Maharey in the financial review today about the 20 free hours of early childhood education hoax that has been promised to parents and that will clearly not be delivered. I would like to pick up on something that may be of interest to Mr Donnelly. I was looking at the statistics. Quite simply, for the area north of Auckland, 77 teacher-led services may or may not opt into the 20 free hours policy. There are 94 non - teacher-led services that will not even have the option of opting in or out. I ask Mr Donnelly and I ask the Minister in particular, through the financial review, about those parents and children. There are simply not enough spaces when 94 centres are not teacher-led. That is just simple maths—it is simple. But the Minister says to the parents that it is simple, and that they just rock up to the centre and say they are there for their 20 free hours for their 3 and 4-year-olds. As soon as Mr Maharey said that, “ping” went my email. A parent who lived in central Wellington turned round and asked how simple it was for her when there were waiting lists going out of the door, and when she enrolled her children she could not even get them into a centre before they were 3 years and 10 months anyway, let alone for the 20 hours’ free childhood education.

I was quite encouraged to hear that the Minister himself said he would go out and talk to and listen to centres. I thought I would help him along a little bit with that, and share some of the correspondence I have received in the last couple of weeks that will quite clearly point out that this is not a case of National Party rhetoric; this is the simple reality for centres and, as a consequence, for parents who are hoping against hope that the Minister will be able to live up to his promise.

One of the emails states: “I am writing from my personal experience as a kindergarten teacher who has had close to 20 years’ experience, and how the 20 hours free will change kindergartens. Helen Clark has now really thrown the spanner in the works. Many trained kindergarten teachers are leaving the service disgruntled and unhappy about the whole future plans that may lie ahead in the future. The 20 hours free has left teachers and disillusioned parents angry, disappointed, and, hey, has anyone really thought about the children?”.

Another email states: “I am writing to express my concern regarding the implementation of the 20 free hours childcare scheme. I am a full-time working mother in a demanding profession. It is fair to say that I am a swinging voter, and that my decision to vote for Labour in the last election was based on the promise of 20 free hours. Both of my children have attended day care. … We were disappointed to learn from our childcare provider that they were unable to commit to participation in the Government scheme. This is due to the level of subsidy being proposed not being sufficient to maintain their current level of service, which includes such aspects as hot lunches, computer education, and, at the end of the day, quality education for them.”

Then we skip to an email from another centre: “As you will know, staffing is a huge concern for us, because of the shortage of qualified teachers and the increasing demand. Due to Labour’s strategic plan, new graduates are asking for and receiving higher wages than those that have been in ECE for up to 30 years. Pay parity is a joke. Wages have gone way beyond the equivalent in primary and secondary, and it is simply not sustainable.”

Another email reads: “Dear Mr Maharey, can you please explain to me how our centres can offer 20 free hours to our families, when based on our current rate of funding we will be eligible for $4.47 per hour from the Government? We are currently charging our families $6. Who will make up the shortfall? Because the Government has in effect taken $1.53 off our hourly fee rate. What we are most concerned about is the quality of care that we actually deliver. I am deeply disappointed that the Government has yet again misled the families in this country, who they profess to be advocating for.”

There is just another one for the Minister, because I know he is out there willing to listen to the centres and the playcentre sector: “We have grave concerns for under-fives as a result of the above policy. Children are unable to even begin to attend kindy until 3 years 10 months because of waiting lists already. How are they going to go under 20 free hours?”. Another letter we have received states: “At our present fees rate of $4.95 per hour and 100 percent registered teacher funding—”

Hon BRIAN DONNELLY (NZ First) : I raise a point of order, Mr Chairperson. I apologise—I meant to do this following my speech. I seek leave to table the page of the annual variance report from the governance report I referred to in my speech.

• Document, by leave, laid on the Table of the House.

MOANA MACKEY (Labour) : I want to point out to the member who has just resumed her seat, Paula Bennett, that she could just have tabled all those letters, then maybe spent part of her 5 minutes actually telling us what National would do with the 20 free hours policy that will be in place should it—perish the thought—ever become the Government.

Paula Bennett: You can’t dis a policy that hasn’t been implemented!

MOANA MACKEY: I say to Ms Paula Bennett that I am happy to take a few seconds out of my speech to explain it. By the next election this policy will be implemented, and I want to know what the National Party would do with it. National members should not just tote out the standard line they have all been told to give in caucus, which is that it is not policy yet. They should tell us what National would do should it become the Government in 2008, lest we have another series of speeches from National members who waste the time of this Committee by simply reading out letters that could have been tabled. We are all very keen to know what National’s position is. Its members are all very concerned that there might be children in this country who miss out on this policy, yet at the same time they say they do not agree with this policy. They do not seem to notice the contradiction.

Contradictions have become just a matter of course in the National Party at the moment. Its leader, John Key, contradicts himself from supplementary question to supplementary question, so it probably should not surprise us in this Chamber that those members cannot get their key line straight on this 20 free hours policy, either.

I point out to the National Party that at the last election its policy was about tax credits. That party’s answer to everything is tax. Under them people could get a tax rebate for anything—and it was not just education; it was babysitting services. That is great, but what about those families that cannot afford to pay upfront—families that, since the last election, the National Party apparently now cares about? What about those families that cannot afford to pay upfront for early childhood services? They miss out under National’s policy, because all that National cares about is those few who can afford to pay at the top and all those families who are traditional National Party supporters. Again, that contradicts its line now that it cares about all those families in New Zealand who struggle.

Well, National has never cared about them before. National does not put in place any policies that actually support such families. The only difference now is that its members go around hoping that if they say the right thing—quietly, so that, hopefully, the media do not pick up on what they say and report it widely—they might get individual votes. But then at the election, of course, they will come back with a policy that will benefit the few and not the many, which is what we have come to expect.

That is not what this Labour-led Government believes in. This Labour Government wants to find a policy that works for everyone. We do not cop out just because it is difficult, and take the path of least resistance. The vision of this Labour-led Government is for quality early childhood education for 3 and 4-year-olds in New Zealand. We never said that it was going to be easy; we never used that as an excuse to go about enforcing policies that, once again, benefit the few and not the many. That is always National’s excuse. That is always its excuse for not bringing in policies that will be evenly spread around the entire community, in particular those sectors of the community that desperately need access to quality early childhood education.

The Education and Science Committee is doing an inquiry at the moment about children who seem to fall behind in the system. I have no doubt that when we look at its results we will find that a small percentage of kids do not engage in any early childhood education whatsoever, and that they will not under any of the policies that National puts up, either. At the end of the day I do not think that the National Party really cares. Despite its members saying that they want to appeal to people as being a softer, kinder, more caring Government, they simply do not put up their policies. I would love to see a U-turn on this policy, just as we have seen—or are about to see—on housing.

At the end of the day, when it comes to education for our 3 and 4-year-olds, only a Labour-led Government will deliver to all the kids in this country—not to just a few whose rich families support the National Party but to all of them. When that happens, maybe we will see fewer problems down the line with literacy and numeracy—problems that this Government is addressing along with all the other programmes that are going through.

The other day I went to Whakatane High School and was shown the results it has achieved from the Te Kotahitanga programme that is being rolled out. The principal wanted me to say in the Chamber what a fabulous job Whakatane High School is doing at being above the National average on many of the indicators for a decile school at its level. I gave him the assurance that I would continue to feed that back to the Minister so that he would know which programmes were going well. This is one that has been going well, and it is one we have looked at in our inquiry. The Labour Government will not be like the National Government and talk about decile 1 schools being awash with cash, which we can only imagine means that under a National Government that cash will go. Of course, these are the kids who, apparently, those members opposite say they now care about in these schools. I do not buy it.

The CHAIRPERSON (H V Ross Robertson): Before I call the next speaker, I just remind members that chaos may be the period of creation, but not in this place, and we will have order. For those members who are not in their seats and who are not taking part in this debate, I urge them to look at Speakers’ rulings 58/4 and 59/1.

COLIN KING (National—Kaikoura) : I draw it to the attention of the speaker who has just resumed her seat that there is an interesting article in the Gisborne Herald, stating that early childhood education centres may not be able to meet demands. That is quite evident. Unfortunately, the member also said that although it was not going to be easy to provide the service, it was going to be free. Does that not sound like a catchline? It is not going to be easy, but it is going to be free! Goodness me!

One thing about the 20 hours’ free early childhood education is that there will be winners and there will be losers. There always are, under Labour. There is Gateway, the Modern Apprenticeship scheme, and early childhood education. One word describes them: tokenism. We need only to look at Gateway. Many schools today see the opportunity to achieve something around Gateway, yet they are not being fully funded. They have to stretch the funding that is extended to them, in order to try to maximise that opportunity. I was at Fraser High School the other day. Five hundred young adults want to engage in that programme, but the school is being funded only to the level of 250. There are 9,000-odd Modern Apprentices at the moment. One hundred and twenty thousand people in industry are in apprenticeship-style training; Labour is funding only 10,000 of them.

Now we come to the early childhood education sector, and I say there will be winners and losers. I heard the Minister ask in the House today about what is making National so angry. I can tell him that what is making National so angry is the fact that he will cause perverse effects, and those effects will impact on my community of Kaikōura and on a lot of provinces and rural regions. The sad consequence of having a tired, worn-out Government is that it desperately hangs on to power by trying to give away as much as it can. In terms of what sounded like a wonderful cliché, the 20 hours’ free early childhood education was a cracker. However, we hear the comments made by the general public, who are saying that it is a disappointment when political parties do not put more thought into their promises.

Early childhood education, we know, is hugely important; it is something that has to be very helpful. The big problem with the 20 hours’ free early childhood education proposal of this Government is that it is poorly designed. In fact, it builds false hopes. It is a deception; it misleads parents. The reason it misleads parents is that when we get down and do the measurements around the availability of services, we find there is not the capacity to deliver the service.

For education to be teacher-led is a great thing; at the end of the day to have professionals leading early childhood education is a wonderful thing. However, a number of highly accomplished and successful centres are not in a financial position to move from where they are now to where they need to be, in order to be able to employ those teachers. When ministry representatives were in front of the Education and Science Committee, they had to admit they did not have the answers in terms of the issues that are very evident in provincial centres and rural areas. They said they had to go away and think about them, and would make recommendations to the Minister. That, again, is what came out at the last election. Government members across the other side of the House have not learnt the lesson, and they will be punished accordingly at the polling booths at the next election.

There is an inadequacy of capacity. Kindergartens and private providers are able to meet the criteria for teacher-led capacity. However, playcentres and kōhanga reo, which are mainly driven as voluntary services—run by excellent mums and dads—do not qualify. The Minister’s own modelling has told him that 47 percent of the capability has little opportunity to increase numbers or no opportunity to take on more numbers, and that 14 percent is unable to offer the service. My thoughts go out to a community in Blenheim, with a centre built up by a very enthusiastic mother, a former teacher by the name of Rebecca Thompson. She enthused enough people to get up and do it.

ALLAN PEACHEY (National—Tamaki) : The 20 hours debacle is just one more example of how the Minister of Education shows that he does not have the ability to get on top of the mess that was left for him by his predecessor Mr Mallard.

Darren Hughes: Oh, what rubbish!

ALLAN PEACHEY: The Prime Minister should have realised that; she has only—

Hon Member: Listen, and you may learn something.

Darren Hughes: Not from this guy.

ALLAN PEACHEY: It might be a good idea if members opposite remember that from Northcote to Invercargill, Labour MPs were thrown out of their seats at the election. I suggest that the member for Otaki listens to me a little more closely. The Prime Minister should have known—

Darren Hughes: I’m still in mine.

ALLAN PEACHEY: Oh, the member will be gone—at the next election, he will be gone. I tell him not to drop Helen’s handbag—he will be gone. The Prime Minister should have known that if she was prepared to put the education portfolio in the hands of a failed schoolteacher—and that is what Mr Mallard was; he knows it, and I know it—the end result would be a lowering of standards, a lowering of expectations, rehashed excuses for failure, and botched policy.

There is no greater botch than the 20 hours of early childhood education. That is what it is—

Darren Hughes: Is the member for it or against it?

ALLAN PEACHEY: Do I have to remind the member again how tenuous his hold on his seat is? I tell the member not to drop Helen’s handbag. This policy was made on the run, in a desperate panic reaction to the prospect of losing the 2005 election. That is all it is. And do New Zealanders not regret now that they let slip the opportunity to throw out the Labour Government?

Darren Hughes: Is the member for or against the policy?

ALLAN PEACHEY: And the member for Otaki would have gone, along with Labour. The Government had no idea at the time—and it is clear that it still has no idea—just how the 20 hours policy was going to work. Members opposite, the members of the Government, screamed from the rooftops that 92,000 children would definitely—yes, definitely—get 20 free hours. Then the Minister stepped in, and it became “up to” 92,000. Then it became “I hope it will be 92,000.”

The situation reminds me a little of the report we received from the Education Review Office that stated that “up to” 20 percent of children were not experiencing success at school. Ah, but then Government members paused, and realised what their own officials were telling them. So the spin came on again: there were “up to” 20 percent of children not doing as well at school as they should be doing.

Darren Hughes: Is the member for or against the policy?

ALLAN PEACHEY: Well, there he goes again—the callow member for Otaki. He should listen, because his seat will be gone. I tell him not to drop Helen’s handbag, because it is his only hope of coming back here. We have discovered, through the Education and Science Committee inquiry led so well by my colleague Mr Donnelly, that up to a third of New Zealand children are not learning to read, to write, and to calculate—yet all the members opposite can do is to shout across the floor of the House. I hope they are enjoying doing that, because very, very soon they will be gone.

The Minister had the opportunity in the House this afternoon to confirm that 92,000 children would get free early childhood education. He declined to take that opportunity. I invite him, when he rises to his feet after my speech, to address that issue. So what do we have here? It was a $140 million promise—an effort to influence the electorate, with no thought at all given to how it would work. The Minister of Education may well sit there looking bored, but, you know, that Minister must be sitting there thinking that with political friends like the previous Minister, he certainly does not need enemies.

Hon STEVE MAHAREY (Minister of Education) : That seems to be all of the speakers in the debate, so let me work through just a quick summary on this. First of all, I address Mr Brian Donnelly of New Zealand First, who raised some issues that I think are extremely important—the issues around compliance. I want to reassure Mr Donnelly—and of course he knows this already—that we are working hard with the sector around the area of compliance, to see whether we can drive those costs and time loads down. So we will see how we go.

But let me return to the other speakers in the debate, all of whom came from the National Party, and all of whom talked about the early childhood policy. I want to give a little prediction: by the time of the next election the National Party will support 20 hours’ free early childhood education. That is on the record. I think Mr Colin King will be campaigning in his electorate—he will probably lose it—around the issue, saying that the National Party supports the 20 hours free policy. Does anybody on the National benches want to say that that prediction is very unlikely to happen? I do not think so; no one is willing to say that. But until National adopts Labour’s policy on this, we will be treated to the most extraordinary scenario, as we have seen today. Mrs Katherine Rich, the spokesperson on education for the National Party, got up and attacked this policy, and, at the same time, anybody who looks at the web knows that National intends to scrap the policy.

Let us imagine we were in a hall now with early childhood people debating this policy, and Mr Hughes and Mr Peachey were there. If Mr Hughes got up and asked who in the hall wanted 20 hours’ free early childhood education, who backed this policy, the overwhelming answer—well, not even overwhelming; the 100 percent answer—would be: “Mr Hughes, we want this policy.” Mr Peachey would get up and say that he wanted to scrap it. If he asked who was for National, I think he would be killed in the rush.

The contrast between the policies at the moment is stark. We have a policy the entire sector wants; National has a policy the entire sector does not want. Yet we have to put up with the whingeing and whining, the moaning and groaning, of the education spokesperson, who, we are told today, does not even want the policy to be promoted. She is not allowed even to go out and tell people about the policy. Overall, we are spending $384 million on getting young people access to early childhood education, and the National Party does not want people to know about it.

Let us go to the other genius in the National Party—Ms Paula Bennett. She got up to tell us that she wanted not only people in the 3-4 year age group to get 20 hours free—this is the tax cut party talking—but every child in every form of early childhood care to get it, too. So I suppose that is the other National Party policy we had announced by the geniuses on the other side of the House today. They not only want to adopt our policies at some time—when they have finished whining about them—but want them to apply to everybody, and want a tax cut. How much more stupid will it get than this farce that is going on in the National Party? Every time its members get up they want more expenditure and more tax cuts.

Then we go to the other staggering proposal, by Mr Colin King. He got up and said he not only wants more early childhood education and backed the policy—but the policy has not been adopted yet by his leader, so he has to whine and moan about it—but loves a couple of other policies that Labour has put in place, too: Gateway and Modern Apprenticeships. I say to Mr King that I appreciate his support for those policies. No doubt he will campaign on them at the next election because they are such good policies, and will want to adopt them, as well, as part of his manifesto. But he also got up and said he was not satisfied with what is out there now. He wants every school in the country to have access to the Gateway policy—which, by the way, is the policy—and every child in the school to have access to it, as well. How much will that cost National and how will it afford it against its tax cut policy?

Finally we got to Mr Peachey. I was going to comment on what Mr Peachey had to say, because Mr Peachey is an educationalist and often says something that matters. But today I have to ask Mr Peachey to go and read his notes. In the 5 minutes he had allocated he said nothing other than that the member for Otaki should watch out for—I could not understand the rest because he was mumbling—something about his seat. We should expect at least some kind of major contribution from a member like that. He understands education; why did he not debate it?

• Report noted.

KATE WILKINSON (National) : In speaking to this Appropriation (2005/06 Financial Review) Bill I have to admit that it is somewhat alarming to study the annual report for the Police and note that the Police aim, which should have been a realistic aim, shows a 3 to 5-year outcome priority in four categories: to reduce violence, to reduce burglary, to reduce vehicle crime, and to reduce organised criminal activity. Yet in all four categories the indicator shows an increase in crime, not a reduction; a negative picture not a positive one. This Government has pledged to reduce burglaries, yet the resolution rate for burglaries has been falling over the past 4 years. This Government has pledged to be tough on crime, yet the figures simply do not bear this out. Over the past 12 months alone, crime has increased by 7 percent, yet this Government thinks crime is down. Violent crime has continued to trend upwards since this Government came to power. This is not a short-term statistical blip but a long-term trend. If members look at the figures since this Government came to power, violent crime has increased by 26 percent. If members look at the figures since this Government came to power, grievous assaults are up 54 percent. If members look at the figures since this Government came to power, serious assaults are up 30 percent. In the past year alone, violent crime is up 10.2 percent, grievous assaults are up 19 percent, homicides are up 31 percent, kidnapping—abduction—is up 46 percent, robberies are up 20 percent, serious assaults are up 13 percent, and the figures go up and up and on and on.

The Treasury report itself states crime is costing this country $9.1 billion—that is, $9.1 billion—and it is a sorry state to see that there has been no improvement whatsoever under this Government’s watch. The Law and Order Committee report in relation to the financial review noted concerns—and, in fact, the commissioner acknowledged those concerns—about organised crime and “accepts that the Police’s efforts in this area could be improved.” It further noted that “more effort needs to be directed into tackling organised crime.” So what do we do? Do we have more effort into tackling organised crime? No, we have a plan to recruit more police, which is laudable, it is great, but those police should not be recruited using lower standards. It is of extreme concern to read reports that Police National Headquarters admitted that recruits who failed some components of the training at police college were allowed into the workforce on limited duties until they had passed the relevant tests.

So what does this Government do? Does it concentrate on organised crime? No, it does not. It endorses a bill that will put even more pressure on our police force. It endorses a bill that will increase the number of criminals by making parents criminals if they smack their children. It endorses a bill with the suggestion that the police would have some discretion whether to prosecute if section 59 of the Crimes Act were repealed.

It has been noted in earlier debates throughout the day that Mr Peter McKenzie QC says “A law that leaves a large area for police discretion is not good law and places both the police and courts in difficulty. It is unfair both to the police and those with whom they deal to be required to operate with a law that fails to give clear guidelines.”

It is up to us to give those clear guidelines. Repealing section 59 on the terms of the bill does not do so. We should not be making the work of the police even more difficult by passing anti-smacking legislation that criminalises parents, and justifies it by saying that the police have a discretion whether to prosecute. The police should be out on the street trying to reduce crime, rather than trying to justify the exercise of a so-called discretion by answering a complaint to the Police Complaints Authority as to why they did not prosecute a parent for lightly smacking his or her child. That is the priority this Government gives to crime and not the proper priority to crime itself.

CHESTER BORROWS (National—Whanganui) : The huge concern before the public of New Zealand at the moment is just what we are doing around crime and around punishment. We will save the issue of punishment for the debate around the Department of Corrections.

What is the Government doing around crime, which is the province of the New Zealand Police? We have found in recent times that Treasury’s report has been scathing of the Government’s efforts in respect of policing. Labour has piped on about its crime reduction strategy, yet Treasury finds there is no overarching goal, it is not linked to justice sector spending, and there is limited measurement of outcomes. The review of the effectiveness interventions is “less than ideal”, to use its own words. It goes on to say that what is particularly disturbing is that the crime reduction strategy has no particular focus on stopping intergenerational crime, or consideration of the role of early intervention in areas such as education, health, income support, and housing—all of which impact on crime.

The fact is that when one is talking about crime, one is talking about something that is a multi-agency approach towards a social condition. When Labour came into Government in 1999 it promised it would crack down on burglary. Yet only 15.7 percent of all burglaries were resolved last year, and that is down on the year before. We heard from my colleague the statistics around increases in all sorts of crime—violent crime, grievous assaults, homicides, etc. No one appears to be asking the question of why New Zealand has these terrible violent crime statistics. We know, for instance, that Kiwis murder each other more frequently than the British do. No one seems to be looking at that in any real depth at all, yet there this huge problem is.

When we talk to those who want to report serious crime that is not violent crime—but that has just as much of an effect on New Zealanders’ ability to do business in this country—we find that it has become increasingly difficult for people to report, for instance, a fraud offence. Not long ago we heard from a private investigator who was contacted by a complainant who had been to the police to report an $80,000 theft as a servant incident. The police had told him to go away because they had no one to take a report of the crime, so the complainant went to the private investigator, who investigated. The investigator found and interviewed the offender. The offender coughed—he admitted what he had done. He admitted the whole offence. He admitted that he had a problem and that that was why he was pinching the money. The complainant went back to the police and said: “Here’s the offender, turn the key on him. Let’s put him before the court.” But the police said they would not do that unless they could be sure the offender would plead guilty. So the private investigator went back to the offender and got an undertaking on an affidavit form that he would plead guilty to a charge of theft as a servant—or its related offence, as it stands at the moment. Then the police finally took action. The offender got 200 hours’ community work and had to pay back $15,000 in reparation out of the $80,000 he stole.

What level of confidence can New Zealanders have in respect of the police’s ability to do their core business when we find that, amongst our community, every avenue of core police business is being done by a parallel organisation for people who have the money to be able to pay for crime services? That is not the country we grew up in, and it is not the country we want to live in. We want to know that when we ring a 111 emergency call centre, someone will come. We want to know that when we report a burglary, we will get more than a little slip in the mail that we can take along to our insurance company, and that, actually, someone in a blue suit will turn up and investigate the crime that has been reported. We do not want to have to go somewhere else. We do not want to ring and have to push button A for this and button B for that. We want a police service we can rely on.

One thing we should never do is try to hold the Minister of Police to account for what is happening within the department. It was interesting to see the “The Politician” cartoon in this morning’s Dominion Post.It asked what the police were saying about this culture of silence, to which the Minister’s reply was: “They won’t say.” Recently, I got absolutely caned for asking a question as to why the number of traffic infringement tickets had gone up from 311 in 2000-01 to 34,000 last year. What happened? I was absolutely bollocked for having the audacity even to ask the question. People have a right to answers. This is a Government, not a dictatorship.

DAVID BENNETT (National—Hamilton East) : In 2005 Annette King became the Minister of Police, and she inherited a portfolio that was in pretty good shape. Little did we know that she would do what she has done to health and transport and actually crucify such a good portfolio. We now have a police force that finds it very difficult to recruit the numbers required for Labour to meet its election pledges, and soaring crime rates have ravaged the public opinion of the institution.

In a December 2005 survey published by the Police Association, 96 percent of police officers said they did not have enough resources. This Government promised 1,000 new police plus ratios comparable with those of the Australian police by 2010. The latter promise requires about 1,400 extra officers; therefore this Minister needs to find 2,400 new officers. That is a huge ask. The Government has promised more than it can achieve.

In a June 2006 survey, New Zealanders thought that it was better not to relax recruitment standards for people joining the police but that it was better to increase the pay of police officers. Fifty-nine percent thought it was better to pay police officers more, while only 28 percent thought that relaxing standards was a good idea. In Hamilton, for example, it is commonplace for experienced officers to leave the force after many years of service. The bureaucracy and thanklessness of the job can often lead to a lack of faith in the system and in the Minister. Police officers feel they are part of an institution that is not valued and is not being resourced, and they certainly feel as individuals that they are not being paid for their work. It is a shame that people who give the best years of their life to this country through serving in the police force feel they have to leave that career after 20 or 30 years of serving our country just to look for some financial reward for their retirement.

That is the reality of the system we are facing at this stage. Police officers are disillusioned and are leaving the force in droves. Evidence of this is in the Government’s failure to meet its coalition deal of providing those extra police numbers. It simply cannot achieve that goal. The police force is losing too many experienced officers, so it is treading water on its recruitment plans.

The police’s recruitment drive has been a joke. In September 2006 there were 7,545 sworn officers, 14 fewer than when the recruitment drive began on 1 July. Only 13 days into the recruitment campaign, the police admitted that the number of police recruits was already below target and that they were moving to a fall-back plan. Well, I ask the Minister what stage of that plan we are at now. What is she doing now to make sure that the police achieve their goals?

There have been situations when the police have had to strengthen the thin blue line by putting civilians in uniforms. The Government has looked further afield and has tried to recruit from overseas, but most officers from overseas run a mile when they see the terms and conditions being offered. Then the police tried to reduce the recruitment standards. This has many limitations, as the public expects—and deserves—certain standards in its police force. Even with these relaxations, the Government still cannot meet its pledges. Perhaps if it actually reassured the police and recognised the years of service of our current police, then it would get a better staff retention rate. The Minister needs to support her force of police.

The Minister also needs to look at some of the issues the police are dealing with. They feel they are getting caught between the social issues of this country and the Government’s requirement to fulfil its election pledges. This Government will not even recognise that there is a group of New Zealanders who feel that this country does not offer hope and vision for them to go forward. If this Government cannot even recognise the problem, it certainly cannot provide solutions. It is not good enough for a generation of New Zealanders to grow up in youth gangs and think that that is their only option to gain pride and respect. It is not. Those kids need to know that there is another way of doing things. The Government has a role in that process and should not just leave it to police to pick up the pieces.

We will not get to that stage unless we have a change in Government. Only one person in this country is standing up for those people at this stage, and he is John Key. He is providing the vision to bring a new country and a new order to that new generation of New Zealanders.

• Report noted.

• Sitting suspended from 5.58 p.m. to 7.30 p.m.

GERRY BROWNLEE (National—Ilam) : Given the events of the last few weeks in the Department of Corrections and the events of the last few months in the Department of Labour, a look at this report from the Government Administration Committee on the States Services Commission in 2005-06 paints a very bleak picture of the activities of the State Service and, in particular, the office of the State Services Commissioner.

Today in the House we heard a stout defence of Mr Barry Matthews, who is the Chief Executive of the Department of Corrections and a gentleman who is directly employed by the State Services Commissioner. Although his report is to the Minister of Corrections, it is also to the State Services Commissioner. It is interesting to note that in this report, long before the debacle over the parole of Graeme Burton and the subsequent tragedies that occurred at his hands when the Department of Corrections should have ensured that he was incarcerated, the State Services Commission had had to justify some very considerable blowouts in the budget for the development and building of prisons.

Here we have a State Services Commissioner who has to acknowledge in the financial review of his department that there are problems around contracting that go right to the capability of management in his department, and he does nothing. He simply goes out and produces a report that says even though the Department of Corrections engaged in the activity of building prisons without a fixed price, and simply accepted the bills willy-nilly as they came in from the builder, it was not the department’s fault. There was nothing wrong with that—every cost was justifiable, etc. But this was not a small blowout. This was a whopper—well over $100 million. That amount, I might add, is similar to the blowout in the INCIS computer program that caused so much flak among the Labour Party members about 7 or 8 years ago.

Interestingly, Mr Barry Matthews was right at the heart of that problem, as well. But today we heard a stout defence of him by the Prime Minister. No doubt she would make a similarly stout defence of the commissioner, Dr Prebble. One has to ask why these people who have a track record of bumbling remain in prominent public positions. It is because the current Government has politicised the State Service and the office of the State Services Commissioner. The State Services Commissioner has allowed that to happen; in fact, he has encouraged it, in my view.

Recently, one of our members wrote to the State Services Commissioner expressing concern about the Department of Corrections, and 22 hours later that member released that letter publicly so that we could be seen to be doing the job politically that we are elected to do. The State Services Commissioner decided to reply to that particular member of Parliament that he not only was whitewashing the particular issues raised but also was immediately releasing this correspondence to the media because that appeared to be where the member wanted to conduct the business. That is completely unacceptable.

I note that in the year under review the State Services Commissioner undertook to develop a code of conduct for employees in State services and in State entities, and, I would presume, for anybody covered under the State Sector Act 1988. I wonder how he would measure himself against his code of conduct. I would think that Dr Prebble, as a man who is well interested in codes of conduct, would fall well short of the mark. I do not see how we could have a year when so much could go wrong. Remember the Television New Zealand (TVNZ) debacle. Effectively, the chief executive of TVNZ came along to Parliament and lied to the select committee. Dr Prebble excused that by saying it is very difficult for these guys because they have to represent the position of their Minister. Represent, not misrepresent—that is what a code of conduct would suggest should be done.

The question for Dr Prebble is how good his code of conduct is now, when he has the TVNZ issue, the Department of Corrections issue, and the Department of Labour issue. The Department of Labour issue is very interesting. Dr Prebble has recently sacked the chief executive; he has given him his marching orders. Yet the sacking is dressed up as some sort of voluntary exit. Over the next short while in the Committee some of the reasons for that action will be made clear. It is not a pretty picture, at all. I think everybody in this House should be very concerned that the State Service, an organisation that has a large number of people in it who are very dedicated and capable State servants, unfortunately is led by a State Services Commissioner who is happy to see his role politicised. I do not think there is any defence he can mount, in any case that relates to his activities where a question has been legitimately raised by the Opposition, that he can truly justify according to his code of conduct.

When we look back at the last year we see that the whole concept of misleading Parliament developed quite strongly. Remember Immigration New Zealand—“If we lie in unison, we will get away with it.”? That was in the same year. So we have layer upon layer of bureaucrats deciding that they will mislead Parliament, bureaucrats deciding that they will engage in the building of State-owned buildings without contracts, simply with a sign-off, and all because they know they have a State Services Commissioner who, no matter what they do, will leap in to defend them.

That is what interests us most about the predicament of Dr James Buwalda. He has been sacked, and no one has been told the full reasons why. But, of course, over the next couple of days those members over there who want to question the veracity of this will find out. The Minister Annette King knows, and the Minister will be required to answer questions in this House. We will see how well the Minister is served by her civil servants in that regard.

I come back to Barry Matthews. It perplexes us that no action at all appears to have been taken against Mr Matthews for appearing at a press conference and making that most insensitive claim that there is no blood on his hands. That is going a heck of a lot further than simply saying: “I can’t be held responsible for someone who breaks out of prison, when I’ve done all I can to keep him there.” It almost implies that it was expected that this particular prisoner would engage in the sort of activity that resulted in the tragedies we learnt of in late January. That is unacceptable from this particular department. I think it is high time that Dr Prebble enacted his code of conduct and asked Mr Matthews to reconsider his future. We know that he will not do that, because it would appear that Mr Matthews is a good friend of the Prime Minister and a good friend of the Labour-led Government. These days, being political in one’s work as a State servant brings rewards, rather than the sort of condemnation that it should bring.

As I said earlier, this criticism is very narrowly confined, because we have some excellent State servants, and I am sure there is every chance that under a new Government the State Service will return to the sort of standard we expect of it.

SUE KEDGLEY (Green) : One of the oddities in this particular session of Parliament is that the Minister of State Services is responsible for the development of a proposed new agency called the Australia New Zealand Therapeutic Products Authority. This agency is all about regulating health issues—medicines, medical devices, and dietary supplements—so it should fall within the health portfolio, as it did for the previous 6 years. But presumably Annette King, the previous Minister of Health, felt that, having put so much effort into this authority, she wanted to bring it to a successful fruition herself, so she got that part of the health portfolio taken with her into the State Services portfolio. So within this Budget we had $1 million spent last year on setting up this new authority—altogether about $6 million of taxpayers’ money has been spent. A whole army of officials went backwards and forwards between Australia and New Zealand with endless little meetings setting up this agency and getting quite carried away about it.

Now, of course, we find that all these years and years of negotiation and all this expenditure and taxpayers’ money could be for nothing, because it is rather looking as though the one thing Annette King forgot to do was ensure she had the numbers to pass the legislation. It is increasingly looking as if the Government could suffer an embarrassing defeat over the Therapeutic Products and Medicines Bill, with the announcement by Phillip Field that he will not be supporting it. It looks as if it is dead in the water. But while the bill is still before the House I think there are a few things we need to examine about this odd agency that the Minister of State Services has spent so much of her time negotiating.

First of all, the authority is being called an offshore entity, but it is set up under Australian legislation—Australian corporate law—and is going to be headquartered in Australia. The Minister has refused me 6 years’ worth of Official Information Act requests. I have asked for the minutes of the ministerial council about the decisions it has been making these 6 long years, and the Minister has refused all those Official Information Act requests. So much for democracy. But she did inadvertently give me one paper that stated there would be about 550 staff in the authority, 93 percent of whom would be Australian and 7 percent New Zealanders. I think that sums up what this authority is all about. It is 93 percent Australian, with a little clip-on of 7 percent New Zealand at the end.

In this offshore authority there will be an unelected and unaccountable managing director who will have completely unprecedented and virtually unconstrained powers to issue orders that would have the effect of law in New Zealand without ever having to come before our Parliament. When the select committee examined the treaty that sets up this agency we pointed out that these powers were completely unprecedented. We examined the treaty and said: “Look, what is this odd provision? It says that the managing director shall not be responsible to the board for decisions made by the managing director in the performance of the agency’s regulatory functions.” So this managing director will be able to issue orders about a huge range of subjects. He or she will have the statutory delegated decision-making powers of the Minister of Health or of the Minister of State Services, but will not be responsible to the board for any of its decisions.

So who will this managing director of this offshore entity set up under Australian law be responsible to? There are all sorts of alarming provisions in the bill that sets up the agency, including a provision that will give the new authority powers—again, unprecedented powers—of search and seizure so that an agency official of this offshore entity would be able to come to New Zealand, enter and search a business in New Zealand without a warrant, and impose penalties of up to $5 million without having to go through a normal judicial process. This is an extraordinarily odd provision.

Some of these issues really need to be examined because they have constitutional and wide-ranging implications. A very heavy-handed regulatory regime is proposed, which inevitably will increase the cost of dietary supplements and traditional remedies, and also the public’s access to them. The problem is that if, for example, somebody wanted to use a traditional remedy—shall we say, a herb called kawakawa—and put it into a dietary supplement, but it was not on an approved list, that particular traditional remedy, and literally hundreds of traditional Chinese herbal remedies, would become illegal if they were not on the approved list once the agency was in place. They would not be able to be sold in New Zealand even if they had been safely used for centuries and approved by an overseas regulatory authority such as the American Federal Food and Drug Administration.

So this raises very serious issues. Why should New Zealanders have their access to traditional Chinese remedies, for example, taken away from them because we sign up to some offshore entity that is based in Australia, with these managing director’s unlimited powers? I am not being hypothetical here. A Chinese herbalist out in Mana has 250 Chinese herbs that she administers. All of them have been approved by the American Food and Drug Administration and have been safely used for centuries. None of these are on an approved list in Australia, nor will they be approved in New Zealand, because they contain many ingredients and it would be far too expensive to licence these remedies. So they will become illegal in New Zealand.

I think the Government and all those officials with their endless little meetings backwards and forwards across the Tasman forgot to ask the people of New Zealand, and the people of New Zealand have become increasingly concerned about this treaty that the Government has signed and about this agency. They have said: “Hang on a minute.” Basically, what this Parliament would be doing is transferring control over all these dietary supplements and traditional remedies to an offshore agency, and Parliament would completely lose control over these matters into the future. More and more New Zealanders have become concerned about the constitutional implications of this authority. There are no Treaty of Waitangi provisions, and, once it has been put into place, it will basically be beyond the reach of MPs in this Parliament.

Another odd quirk is that the legislation that will set up this authority has been introduced into the New Zealand Parliament—it is currently before the Government Administration Committee—but it has not even been introduced into the Australian Parliament. So, presumably, the Australians could change the legislation after we have passed it here. No explanation has been given for that. We are also, effectively, almost signing a blank cheque with this particular agency, because all of the details of how it will operate are contained in rules and orders, and we do not know what those rules and orders are. So it is like signing a blank cheque. We have no idea, really, of the detail of how it will operate because, even though it is before the select committee, none of this has been consulted on.

The other issue, of course, is that Australians themselves are saying that the agency, as it operates in Australia, is draconian and heavy-handed. Many of them believe that it has been a disaster in Australia. They are not able to access many of the dietary supplements and traditional remedies that we have here, because, effectively, the agency, which is a pharmaceutical-type agency, regulates their dietary supplements according to a pharmaceutical paradigm. It has not approved many, many remedies and basic vitamins that are on sale here in New Zealand.

STEVE CHADWICK (Labour—Rotorua) : I wish to follow on from the previous speaker, Sue Kedgley, who was talking about the establishment of this trans-Tasman therapeutic agency, and about how incorrect and fallacious some information tabled in the House can be. That member is no longer on the Government Administration Committee, which is now looking at an entirely new agency. I chaired the Health Committee that first considered the inquiry into a proposed trans-Tasman regulatory agency, and the matter was of genuine concern to the New Zealand public. We produced a report and made recommendations to the Government, and those recommendations were taken into account. Then we looked at the agency itself, which was to be established under a treaty. Several of the issues raised about the treaty we considered, which were concerns of the Health Committee, have been taken into account in respect of the subordinate legislation that the Government Administration Committee is now considering. How strange it is that the previous speaker and I, who have both been on the select committee, see the world through entirely different glasses.

Proposals in respect of this agency were initiated by the previous National Government, when Bill English was the Minister of Health. I wonder what sort of discussion Mr English and Mr Key are having now as co-leaders of the National Party. I wonder what sort of discussion John Howard, who came to New Zealand, had with Mr Key about listening to Mr English, who first proposed the trans-Tasman agency. How divided the Opposition is, and what a lack of foresight its members are showing in Opposition.

The Opposition has an intransigent view in respect of this entirely new proposed trans-Tasman agency. It will not be Food Standards Australia New Zealand, as the member Sue Kedgley seems to believe. It will not be the Therapeutic Goods Administration that we know now. It will be a new agency set up—quite correctly—by law in Australia, but with subordinate law in New Zealand. The so-called bureaucrats that that member runs down have been working on the very issues that the Health Committee raised in terms of our concerns about issues of sovereignty, issues about the not unfettered powers of the managing director, and issues about the relationship with the new board that is yet to be established. All of those issues are now considered in the legislation before this committee.

That member went with me to Australia, where we looked at the Therapeutic Goods Administration. Every member of the Health Committee at the time agreed that we did need a new regulatory regime, and that in no way did Medsafe have the capacity to measure the harm, the risks, and the public safety issues that were before us with the ever-growing market of complementary health-care products in New Zealand. We all agree that it is a great market. It is a great opportunity for New Zealand. We are leaders in the development of many of these remedies, but it is absolutely critical, where there are health claims about any remedies, that there is a regulator to check out whether those health claims are scientifically robust. No one argues about that.

The other issue here is the one I heard in the House today. Taito Phillip Field is quite concerned—and, obviously, someone from the Opposition has already got that member on his own—about the role of rongoā, Pacific Island natural therapies, and new players that may want to come into the market, and he asked about whether we would be constraining the market. All of us are very concerned about issues of rongoā, and they will be excluded from this new agency. So it is important that we brief those members in their confusion—

Gerry Brownlee: Why?

STEVE CHADWICK: Because they do not make health claims. It is an old custom and practice of Māori to go out and collect—

Gerry Brownlee: Rubbish! Of course they do.

STEVE CHADWICK: No, they do not. They do not market those products commercially. That member of the Opposition is clearly confused.

I turn to some of the other claims we are hearing about the cost for new product registration. For goodness’ sake, if we have a joint regulator now, it will be the envy of the European Union. Its representatives have been over to look at this proposed new agency. They are impressed that new market entrants can come in from Singapore and Asia. This will be an ASEAN issue that will really strengthen us as a regulator internationally. I am confident that that legislation will be passed by this House.

• Report noted.

Dr JACKIE BLUE (National) : I am disappointed that the Minister of Health is not in the Chamber this evening.

The CHAIRPERSON (H V Ross Robertson): The member cannot refer to the absence of another member. Each and every one of us at different times has other matters to attend to.

Dr JACKIE BLUE: I apologise. The Minister has been strangely silent on the issue of Herceptin funding. The women of New Zealand want to hear from him. They want to know what he is thinking. The only voice we have heard to date is that of Pharmac, and I wonder whether Pharmac speaks for the Minister of Health. I know that women with breast cancer want to know the answer to that question.

To date, Pharmac’s actions on whether it will fund Herceptin have been totally hypocritical. Midway through last year it stated that it wanted to consider only data that was peer reviewed and published in an international journal. That is fair enough, we might say, even though many countries did not feel the need to wait for published material. Indeed, many countries started funding Herceptin from as early as a year ago, on the back of earlier trials and of data that had been presented mid-year at a conference. Pharmac wanted to see that data published in peer-reviewed material, and it got its wish—very recent data did appear in an internationally acclaimed journal.

But what has happened? Pharmac has absolutely ignored the published data, stating—unbelievably—that there is still insufficient evidence as to the frequency and timing of how Herceptin should be used. Rather, Pharmac has done an about-face and has conveniently cherry-picked unpublished data to make the case for a short 9-week course of Herceptin rather than a proven 12-month course. I understand that Pharmac is going around doing a roadshow and showing a PowerPoint demonstration that presents its own in-house analysis of non-published, short-course data in order to make its case. I have a bit of advice for the Minister of Health, and that is to get independent expert advice on Pharmac’s in-house analysis. The Minister could be very surprised.

My colleagues will be very interested to know that Pharmac’s recommendation for a short 9-week treatment is based on the FinHer trial, which involved only 232 women. Half of those women received Herceptin, and only 54 of those actually received the combination Herceptin regime that Pharmac is proposing in this clinical trial. On the back of a 12-month Herceptin trial, in which over 12,000 women participated, with proven results to back it, Pharmac has thrown science to the wind and now wants to back a regime that was used in only one trial that involved only 54 women—the results of which, I might add, were not statistically significant. I will say that again—it is an important point—Pharmac proposes to use the results of an unproven trial that involved only 54 women, as opposed to the proven results from trials that involved 12,000 women, to back its case. It is a case of 12,000 women versus 54. It is astonishing—I am sure members will agree on that. This proposal flies in the face of international opinion and is completely contradictory to Pharmac’s own original requirement that any funding for new medicine would be based on robust clinical evidence before being considered.

Pharmac wants to throw desperate women with aggressive breast cancer a few crumbs in an unproven, cut-price regime, while women in Australia, Finland, the UK, and Canada, along with women in 19 other OECD countries, are already gaining the benefits of a 12-month course. If the trial gets off the ground, New Zealand women will be part of an experiment, the results of which will not be available for at least 5 years. That will mean 5 years of women possibly taking an inferior regime before that was discovered. I wonder whether the Minister of Health has thought about the very serious ramifications of that scenario.

There is a very interesting twist in all of this, in that Pharmac is prepared to invest $3.2 million of what it calls “spare administration money” into this trial. Yes, it has found some loose change to throw at Kiwi women. We should remember that this is an organisation that comes under budget regularly, and last year it came under budget by over a staggering $19 million. Pharmac is an organisation that is more interested in not spending its budget, and it is not at all interested in increasing New Zealanders’ access to medicines. Time and time again we have seen Kiwis’ lack of access to medicines, and access to Herceptin is just another example.

There is a question that troubles me, and I hoped the Minister could take a call and answer it. The question is whether the $3.2 million of taxpayers’ money that Pharmac has found rattling around in its administration budget will be going to fund a clinical trial in New Zealand for New Zealand women, or whether it will end up overseas and not be used for Kiwi women, at all. I hope that question can be answered; it is one that has been bothering me. I do not think Kiwi taxpayers would be pleased to find out that their money was going to fund an international trial that did not involve Kiwi women.

A clinical trial is designed to answer specific scientific questions, and I do not have a problem with that if women are recruited freely and informed, and if they give consent. But what is very unclear in all of this is what women who do not want to take part in the trial will be offered—that is, what women who are off-trial will be offered. It seems to me, from the noises that Pharmac is making, that it is highly probable that women who are off-trial will be offered not the international best practice 12-month course but, rather, the short course. If that is the case, we are in a very murky situation, indeed. Women will not be entering the trial of their own free will. These women, who are desperate to have Herceptin, will be coerced in the hope that with the toss of a coin they will be lucky enough to get the long-arm 12-month treatment. Each and every woman will be hoping that Lady Luck is on her side.

I have one word for a trial in the form I have just described—where women who are off trial receive the unproven short course—and that word is “unethical”. I would be very surprised if an ethics committee would approve a trial in that particular format. But who knows? Pharmac’s tactic so far seems to be one of bullying. It might yet get its own way.

Members might ask what our own experts say about this situation and what our own oncologists advise. CaTSoP, which is Pharmac’s cancer subcommittee, reported in its November 2006 minutes that as a committee it had more confidence in the validity of the 12-month treatment. Its recommendation was for the 12-month regime. To read the CaTSoP minutes makes it clear that the experts were more comfortable with and preferred the 12-month Herceptin regime.

Let us look at a scenario whereby this clinical trial gets ethics approval and begins in New Zealand, and the off-trial option is the unproven short course. I know what I would do if I were one of those women. Yes, I would feel absolutely railroaded. Yes, I would feel very angry. But I would be desperate enough to go into the trial. I would, of course, be hoping that Lady Luck was on my side, that the roll of the dice would be on my side, and that I would get the proven long-arm 12-month treatment. If I were unlucky and did not get the 12-month course but drew the short straw by getting the short course, I would do everything in my power, after the course was completed, to self-fund the remaining 9 months of Herceptin. And many other women would do the same thing. If in time there were a cheaper generic version of Herceptin available for women in this country to bring in themselves, they would do it in droves. The results of any trial would make a farce of it. It would become a complete joke. The results of the trial would be contaminated by women who left the trial at its completion to self-fund and have the remaining 9-month course, and any results would be laughed at by the scientific community. The trial would have no credibility.

The Minister of Health, Pete Hodgson, in response to a question I posed to him in the House, said he would take the views of our experts, who are our oncology community. I seriously urge him to do that now. He needs to do it for women. He needs to start advocating for women in New Zealand with breast cancer.

JO GOODHEW (National—Aoraki) : I wish to spend time speaking on something that is very close to my heart, and that is that subject of aged care. As National’s spokeswoman on aged care, I have been going around the country conducting fora. I am finding a sector that is in disarray. We have growing numbers of elderly folk who are vulnerable and very concerned about their future. I am talking about the older folk who want to stay in their own home and seek access to home-based support services. I am talking about the older folk who, for whatever reason, find themselves in aged residential care—be that a rest home, hospital care, or dementia care.

How do I know about how those people are feeling? It is because I have been out there consulting with the sector—consulting in a listening way—and asking the people to tell me what the problems are for them. I have consulted at fora in my home electorate of Aoraki, and in Auckland, Wellington, Christchurch, Palmerston North, and Hamilton—and other fora have been lined up. Other dedicated National MPs in other parts of New Zealand have asked me to hold fora in their areas, as well. I have visited rest homes in Ōtaki, Hamilton, and many parts of New Zealand, and I have plans to see more. What did I find? I found a workforce in crisis—not just an aged residential care crisis but a home-based support service crisis.

Like many other National Party MPs, I have workers coming through the door of my electorate office and asking me to do something about the way the sector is at the moment. There is not only a crisis of numbers but a crisis of confidence. Most recently in Hamilton I was given to understand that there is frustration on the part of those in aged residential care, because the Minister Pete Hodgson and the Prime Minister repeatedly muddle the fact that aged residential care and retirement villages are not part of one and the same budget sheet. In fact, although some money may be made out of property investments on the part of retirement villages, there is a strong belief that there is no fat in the aged residential care sector—none whatsoever.

Maybe it is a philosophical bent on the part of the Minister and Prime Minister that leads them to say that these particular businesses and providers are ripping off the workers. That might explain why, in answer to a written question, the Minister told me today that he thinks the aged residential care sector is underfunded, and that he has instructed the unions—wait for it—to work with the district health boards to improve the wages. Hang on a minute! What are unions going to do in working with the district health boards to raise the wages? Maybe we will see strikes coming in the aged care sector. I sincerely hope not.

I say to the Minister that it is time to look at the whole sector and at exactly where it is going wrong. It is time to look at the fact that the aged residential care sector cannot afford to dedicate respite beds, so we have carers of the elderly at home getting sick as well as the elderly. It is time to look at the over-auditing—not to survey about over-auditing but to actually do some work to make sure there is some consistency in auditing so that the high compliance costs currently facing the sector are reduced.

It is anti-business rhetoric that makes this particular Government think that the providers are holding out on the workers. We see a Government that is unwilling to recognise through its district health boards that there have been cost implications from the legislation it brought down. I am talking about the Holidays Act and the raising of the minimum wage level. I too believe that workers in residential care and home-based support services need to be paid more, but it is not enough simply to say that more has to be found from the managers. That is not the way in which the Government should be looking at this situation.

I can tell members that this sector is in disarray and will need some serious work. That work cannot be done from Budget to Budget, which is all we are seeing at the moment. In one speech a year the Minister will announce: “Well, I’ll look at it in the Budget. I’ll throw some more money at it in the next Budget, and hope that solves the problem.” I say to the Minister that it is not good enough.

MARYAN STREET (Labour) : I stand to take a call in this discussion on the financial review of the 2005-06 year in the health portfolio. I want to draw attention to a number of things, and rather than focusing on single issues as the previous two speakers have done, I would like to try to traverse some of the gamut of the health portfolio and to demonstrate not only the complexity of the portfolio—which seems to escape members opposite, who enjoy the luxury of focusing on single issues—but also the successes in the performance of our health sector in the 2005-06 year.

We are frequently asked, when we say we have put an extra $2.2 billion into the health sector over the last 7 years, what we have to show for that investment. In fact the 2005-06 year is a very good year to look at for a return on investment in the health budget. What we can see in the roll-out of primary health care in particular, and the primary health care strategy of this Labour-led Government, is, first and foremost, a cut of about 50 percent in the cost of going to most doctors. That really reverberates for families right around the country. When they know that it now costs them about half of what it used to cost them to go to the doctor, it makes a difference. When we couple that with the lowered cost of prescription drugs, we know we are on to something that really makes a difference to New Zealand families. That is a success story.

Another thing I draw to the attention of members is that last year—the year under review—the Commonwealth Fund did some research on the health systems of seven OECD nations, with most of the 2006 information focusing on primary care. New Zealand came out first or second in roughly 60 percent of the indicators. Let me give some examples. Amongst the countries surveyed were the Netherlands, New Zealand, the United Kingdom, the United States, Australia, Germany, and Canada—countries that we like to compare ourselves with. Some of the highlights of that research showed that 90 percent of general practices in New Zealand have after-hours care arrangements, second only to the Netherlands and twice the rate of the United States. New Zealand general practitioners had the second-highest rate of utilising electronic patient records. New Zealand practices reported the highest usage of electronic laboratory results and hospital records, and New Zealand’s 5-year breast cancer survival rate was higher than the average of the seven countries, and better than that of Australia and Japan. On top of that, we have had an increase in the number of hip and knee replacement operations, and in the number of cataract operations. That was a significant election commitment by the Labour Party in the 2005 election.

I want to talk about the secondary health sector for a moment, although clearly the primary health sector is at the forefront of our movement in the health portfolio. In the secondary health sector we are funding, in addition to the extra hip and knee replacements and cataract operations, 10,000 extra elective surgery procedures over the next 4 years. Let me tell members some other success stories. If we were to listen only to a diet of Opposition speeches we would think that nothing good ever happened. Well, it is about time there was some balance in some of that information. I met with all three district health boards in Auckland last Friday afternoon. All three of those boards are now predicting that in 2007-08 they will break even.

Opposition members ask where we are seeing productivity. I can tell them that the Counties Manukau District Health Board is reporting a 4 percent productivity rate in the last year, and it will break even in the next year. There have also been huge successes and advances in the level of service that the Counties Manukau District Health Board—if I can use it as an example for a moment—has been delivering. It has been seeing something in the order of 750 people daily in schools. [Interruption] If members opposite listen to this they may learn something. Something really important that has been vexing us is obesity and diabetes; hence the inquiry that the Health Committee is engaged in at the moment. Because of some of the interventions of the Counties Manukau District Health Board, it can report that one school in its area has in the last year seen a drop in the body mass index of its year 9 students from, on average, 35 to 17.5—in 1 year. That kind of activity and intervention on the ground by a district health board, financed and supported by the commitment of this Labour Government, cannot be ignored.

The end of the 2005-06 financial year under review was when the first of the big multi-employer collective agreements came into effect in the health sector, which was the agreement affecting nurses. As at 1 July last year nurses got to $54,000 at the beginning of their fifth year of employment. That was because of a huge commitment to pay equity and equal pay for work of equal value. We applied that in the health sector because it was an area where it was needed. Last week the Capital and Coast District Health Board came to the Health Committee and reported that since those pay rates have been in place, the nursing retention rate at the Capital and Coast District Health Board has improved dramatically. It had a turnover rate in the order of 37 percent annually. It has now dropped to something in the order of 13 percent. So the money put into the wages and salaries of the people who work in our hospitals is paying off. That money has flowed across the health sector and across the various health professional occupations. What we are seeing for all those health professionals is improved retention and recruitment rates. Those things are testament to the success of the efforts of this Government in the 2005-06 year, in particular, and in earlier years.

I could talk about the fact that the mental health workforce has grown by 26 percent since we came into Government. I could talk about more training places for general practitioners and an extra $2 million to increase the number of general practitioner training places by over 25 percent for each of the next two training years. Enormously good things are going on.

There is an increase in productivity. In fact, our hospitals are busier than they have ever been, so there is an increase in activity. Hospitals report to us that in the 2005-06 year total in-patient surgical activity has increased by 5.7 percent. The number of New Zealanders receiving elective surgery has increased by 6.2 percent—on a case-weighted basis, that is 21.3 percent. Medical discharges reached 317,000 in 2005-06. That was a 29.5 percent increase on the figures of 1999-2000.

The figures go on and on. Money is being poured into the health system at the primary end and at the secondary end, and the productivity that is coming out of that is absolutely palpable. One other report from the Auckland District Health Board last week stated that that district health board was looking for hips. If members know of people who need hip replacements, then they should point those people in the direction of the Auckland District Health Board if their local one does not have the capacity. That is how the system works; people can be transferred.

The CHAIRPERSON (H V Ross Robertson): Before I call the vote, I just say to members that interjections are not permitted at all when they are directed at a member who does not have the call. I am looking to my left and my right.

• Report noted.

CHARLES CHAUVEL (Labour) : As the newest member of the Justice and Electoral Committee, it is a pleasure for me to rise to take a call on the 2005-06 financial review of the Ministry of Justice. I have read through the committee’s report, and I endorse what the committee said about the fine work of the coroners who have served New Zealand so well in the period until the consolidation of the legislation and the reappointment of coroners under their reconstituted role as full-time judicial officers. Those part-time officers of the court provided New Zealand with excellent service, and it is a wonderful thing to see that they were recently honoured at a dinner at Government House. It is appropriate to have honoured their work in that way, and I hope the Committee will endorse the Justice and Electoral Committee’s endorsement of their fine service.

In passing I also mention and endorse the praise delivered to justices of the peace. Along with Clayton Cosgrove, Rick Barker, Lynne Pillay, and Martin Gallagher, I had the honour of attending the Royal Federation of New Zealand Justices Associations conference in Napier over the weekend. It was great to see the fine work that those judicial officers give on a part-time and honorary basis to the nation.

I will also comment on the material appearing in the committee’s report relating to electronic filing. As the Attorney-General’s delegate on the Rules Committee, I can say that this matter was mentioned at a recent meeting of that committee. It is clear that electronic filing is a notion whose time has come. It is good to see that the Supreme Court and the Court of Appeal have adopted the method, and it is good to see the foreshadowing of electronic filing in the Court of Appeal. Clearly, it needs to be extended fully by the ministry to the High Court, the District Courts, and tribunals. It will be good to see that happen.

I will also comment on the material in the review relating to the building programme that has been embarked upon on behalf of the Government by the Ministry of Justice, which now incorporates responsibility for the Department for Courts. Clearly, the programme that is under way is the most ambitious since that undertaken by Sir Geoffrey Palmer between 1984 and 1989. In my view, the programme is to be praised and recognised, and it is a good thing that the disinvestment that occurred in the 1990s is now being remedied, with new courthouses in Queenstown and Greymouth and, of course, the construction that has occurred in the Auckland High Court, which obviously is a building at capacity. It would be remiss to fail to mention the construction of the Supreme Court, which will finally give us permanent housing in Wellington for our highest court, in a building that hopefully will be fitted to the role.

I conclude by touching on the committee’s review of electoral law. The committee called for this to occur on a prompt basis, following the 2005 general election inquiry. Clearly, it is necessary to review electoral law promptly, and to ensure that there is an adequate regime in place for the next election. It is necessary to ensure that there is proper transparency as to donations, that the affairs of third parties involving themselves in politics are above board and clear, and that there is an appropriate definition of election expenses in the legislation that is modern and conforms with the times—the Internet age in which we now live. In my view, there also needs to be a proper formula for the public funding of political parties, as recommended in the report of the Royal Commission on the Electoral System, which led to our current electoral system but has not yet been introduced. These are essential mechanisms to put in place if we are to see an election conducted without the risk of a plutocracy seeking to buy its way into Government. It is appropriate that there be a thoroughgoing review of legislation that is applicable in this area, so that the rules applying to elections are fully fair, and seen as such by the public. Thank you, Mr Chairperson.

CHRISTOPHER FINLAYSON (National) : I wish to touch briefly on three issues tonight. The first issue is electronic filing, the second is the strengthening of the Crown-Māori relationship, and the third is keeping the law up to date—all of which are referred to in the report of the Ministry of Justice, and all of which are illustrations of this typical third-term Government. It has no idealism, no vision, no energy, and no enthusiasm. Nowhere is that more obvious that in the justice area and in the three areas I want to touch on.

I could not believe my ears when I heard Mr Chauvel talk about electronic filing as though something had been done about it. It was real Sir Humphrey Appleby stuff from Yes, Minister. The reality of the matter is that the Rules Committee, which I have served on for many years, has been trying to advance the issue of electronic filing, and the Ministry of Justice, time and time again, wants to write reports on it and do scoping exercises—do everything but introduce it. I would be very interested to hear from the Minister in the chair, David Parker, just what he is going to do about the issue of electronic filing over the next few years. At the present time the situation is totally unsatisfactory and we are not getting any movement on that issue, at all. That is why the Justice and Electoral Committee raised the issue in its report.

The second point I will touch on is the whole issue of Treaty of Waitangi negotiations, and the vomit-inducing statements in the report of the Ministry of Justice that additional resources have been provided for research and report writing in the Waitangi Tribunal, and for increasing the negotiating capacity of the Office of Treaty Settlements. We all know that the Office of Treaty Settlements is not working, and the disaster for the Government over the Whenuakite Station a few weeks ago shows that. A letter went from Landcorp to the Office of Treaty Settlements, someone in that office simply rejected the need for the Crown to purchase Whenuakite Station, then we had a backtrack on the part of the Minister in charge of Landcorp. The situation was totally unsatisfactory. The Office of Treaty Settlements is not performing well.

The Waitangi Tribunal is hampered by lack of resources. I would like the Minister to answer these questions: who has replaced Professor Keith Sorrenson on the Waitangi Tribunal? Who are the historians appointed to the tribunal over the last 12 months? What steps have been taken by the ministry to provide additional resources to the tribunal, so that reports like the report of Wai 785 can be written? As I said in this place a couple of weeks ago, the final submissions on Wai 785 were heard in Wellington at the beginning of 2004, and we still do not have a report. So we have these weasel words in the report of the Ministry of Justice, but we do not have performance.

Nowhere is this hopeless situation of underperformance more manifest than in the responsibility of the Ministry of Justice to ensure that the law is responsive to changing needs. There are many illustrations where the law has not kept up to date. The law of limitation is one. The Government cannot even get technical things right. Study Paper 10, presented by the Law Commission in 2001, had a draft bill appended, yet the Government still cannot work on that to get draft legislation into this Parliament. It is no wonder the Order Paper is so shocking. It is no wonder there is nothing to discuss in this Chamber—except the protection of trout as a commercial species. This Government has not even got the energy to open Study Paper 10—which deals with mandatory orders against the Crown and tidies up judicial review—and to print the Judicature Amendment Bill and get it into the House for debate. It is a highly technical matter; it should not take very much effort at all.

But that is an illustration of this hopeless, third-term, uncertain, un-idealistic Government. It has run out of ideas. Even when the ideas are presented to it on a silver platter, as the Law Commission regularly does, its members simply cannot get off their backsides and do the sort of work that any self-respecting Government members would do. One of the great tragedies of being in Opposition is having to look across at the other side of the Chamber and see people who are so devoid of energy and idealism—I exempt the member for New Plymouth from this—

Hon Member: Oi!

CHRISTOPHER FINLAYSON: Oh no, I include him—sorry, I have to follow the party line. What I find so disappointing is that there is a heap of work this Parliament could be engaged in. There is non-party political, but none the less very important, legislation that could be worked on, and this Government does not care.

Dr PITA SHARPLES (Co-Leader—Māori Party) : The appropriations debate is a prime opportunity to remind the House of the constitutional role prescribed in Westminster-based parliamentary systems by which the Crown may tax, borrow, or spend only as authorised by Parliament. And what could possibly be more constitutionally important than the administration of due justice? We turn today to the Ministry of Justice and, in particular, the review of the Waitangi Tribunal.

Twenty years ago, in 1987, history was made in the Court of Appeal when in the case of the New Zealand Maori Council v Attorney-General it found that “The duty of the Crown is not merely passive but extends to the active protection of Maori people in the use of their lands and waters to the fullest extent practicable.” In reviewing the progress towards the duty of active protection, the Justice and Electoral Committee looked critically at the Ministry of Justice’s key objectives for 2005-06 in order to strengthen the relationship between the Crown and Māori. And so it should.

To get a sense of how well the ministry has done, one had only to turn last week to the 5-yearly report of the Human Rights Commission that reviewed progress in race relations. And what does the report state that the key challenge for future years should be? It is to strengthen the relationship between the Crown and Māori, as stated by Mr Finlayson. That is exactly what the Ministry of Justice intended to do but it failed abysmally.

We in the Māori Party know that ever since the settlement process began, claimants and lawyers have been expressing grave concerns about the process itself, the terms of settlement, the amount set aside for settlement, and the agency charged with managing the settlements. Those concerns have come from nearly all claimants and their lawyers from all parts of the country. Indeed, even the Justice and Electoral Committee pointed out, and Mr Finalyson mentioned this, that it was concerned that a number of reports were still taking a long time to complete, including the report of Te Tau Ihu—Wai 785—the hearings of which took 4 years to complete. There has been no report. The committee went further and declared that some Waitangi Tribunal hearings and reports were still taking too long to complete.

Tribunal hearings are often long and costly affairs. Iwi have also told us that because of the lengthy nature of the tribunal hearings and the fact that their rulings have no value, claimant groups are being pressured into direct negotiations with the Crown.

But it gets worse. Last Monday Cabinet, in its infinite wisdom, noted that “there is not currently a process for ensuring relevant Ministers are advised when Landcorp properties are being considered for sale”. Then, to make matters worse, by the end of the week Labour had announced that everything was going into the mix—that land banking, section 27B memorials, and protection mechanisms were all going to be put up for scrutiny. In other words, everything is a mess, and it is not just a case of the policy wheels falling off. For we know that all is not well in the Labour camp, with the Māori caucus referring issues to the “Minister Who Knows Everything”, and a great yawning chasm opening between the Māori caucus and the Ministers in the know. If this Government cannot even brief its own Māori members, what chance do whānau, hapū, and iwi have?

The select committee report rather weakly recommended that the ministry will improve on its satisfactory ratings in the near future. Well, the Māori Party is not satisfied with that. We cannot sit by and idly watch the Crown settle claims at about 2 percent of the real value of the claims, thereby forcing Māori to accept far less than their claims are worth. Yet we do not see the same standards being applied to the high country farm leases when those settlements occur. One law for all? Yeah, right! We also know that signing off on unfair settlements means that we sabotage the futures of our up and coming generations by getting them to finish what we could not do.

Under these circumstances, then, we believe it is time for us all to reflect on the settlement process and to urgently review the terms, the quantum, and the agency managing Treaty settlements. The Government’s crisis call to put a halt to the sale of all properties owned by Government departments and agencies has made this financial review an urgency.

If the hearings and reports take too long and are too costly, if one branch of Government does not advise the other, and if one faction of Government will not consult its own members, then how can anyone have any confidence in the Minister Mark Burton or in the Ministry of Justice? In the light of all these fatal flaws, the Māori Party is calling for a total review of the Treaty settlement process.

Dr RICHARD WORTH (National) : We have just listened to a stinging rebuke of the Government by Dr Pita Sharples. He has described it as an evil Government. He said that all was not well in the Labour camp. So, in the short comments that I make, I will invite this Government to fold its tents, clean its campsite, and depart.

This Government is hugely committed to tag lines. I would like to pick up on two of those tag lines that have a jurisprudential base and relate them to what is going wrong in the system—to what the Justice and Electoral Committee, with concern, has found. The first tag line is that “justice delayed is justice denied”. I would like to pick up the phrase and the theme that Dr Pita Sharples offered in a comment that he made so eloquently about the Waitangi Tribunal, because I am very concerned—and he is very concerned—that a number of reports are still taking far too long to complete. And there are many illustrations. I just take the example he offered of the northern South Island, or Te Tau Ihu, inquiry—Wai 785, as it is ineloquently named—the hearings for which took 4 years to complete. Four years! That took as long as would a major matter running to the heights of the judicial empire, from start to finish. That is wholly unsatisfactory. I join with Dr Sharples in his condemnation of processes that have produced that perverse illustration.

I am a member of the Justice and Electoral Committee—or was at the time—that was told that that case was particularly complicated. I doubt that. These are straightforward issues of injustice requiring swift and speedy remedy. And is that remedy granted? Not at all. So it is right to join with others in condemning this Government for its process that led to both an abuse of the legal system and a clear disparity in the fruits of judicial distribution. But that is just one example of the tag line that justice delayed is justice denied.

I look at what is going on in the High Court in Auckland, where the Minister for Courts will not listen to the pleas of judges and lawyers to remove from that court setting those methamphetamine cases that clog the court. There is no reason at all why those cases should be dealt with at that level. It is wholly appropriate for them to be dealt with at a lower level in the system, so that judges can get on and process important and compelling work. But, no, for some reason—perhaps perversity—the Minister for Courts will not yield to those arguments. Instead, he is absolutely determined, it seems to me, to perpetuate the tag line that justice delayed is justice denied.

I would like to speak at length on these matters but time, sadly, does not permit that outcome. So I will address another tag line. The tag line is that “the courts are open to everyone, like the Ritz Hotel”. What is the sophistry in that tag line? It is simply that these days, because of the ways the Government has structured the legal aid system, deserving cases are waiting to be resolved. But those cases cannot be resolved, because of the strictures around the legal aid system. Of course, we have seen the Government extend eligibility for legal aid. That is fine, many may say. That is fine, I would say, but what the Government has not done is provide appropriate remuneration for those who are tasked to take on the often very challenging task of tricky legal aid cases. So what have we seen? As the young whip on the Government side would know, we have seen a large number of lawyers no longer able or willing to take on legal aid cases. That is why I say that the courts are open to everyone, like the Ritz Hotel.

With the benefit of hindsight, and no longer being on the Justice and Electoral Committee—

Darren Hughes: Why not?

Dr RICHARD WORTH:—because I have moved to higher pastures—I would just say, in looking at this report, that I may have felt that some other matters deserved to be brought to the attention of the Committee. But time does not permit the opportunity to identify those issues. Indeed, there are headings in this report relating to review of electoral law, relating to the Waitangi Tribunal, relating to capital building, relating to the High Court of Auckland—of which I have briefly spoken—and relating to issues of environmental performance that in themselves are worth significant 5-minute blocks of time. But I will stop there and say that this report brings no credit to Government members.

KATE WILKINSON (National) : It is a pleasure to follow my learned colleague Dr Worth. This is a ministry, under the watch of a couple of Ministers, that has not exactly covered itself in glory in terms of performance. There have, admittedly, been some improvements, but there have also been some glowing deficiencies. I have to admit to being somewhat perplexed when the Minister recently stated that he did not agree that justice delayed was justice denied. We have constantly, for months and months, questioned the Minister on court delays, and what has happened? Absolutely nothing! In fact, in today’s Christchurch Press there is the headline: “Delays clear defendants”. A drug importer has gone free, because this case was part of a Blenheim court’s backlog. Blenheim for some time has dominated the numbers of criminal prosecutions that have been halted because of excessive delays. In fact, of the seven cases of justice delayed and justice denied in the 7 months since July last year, five have been from Blenheim.

The article in the Press states that the court was told that the defendant had gone through a depositions hearing, at which it was found there was sufficient evidence to put him on trial, but at five subsequent court hearings to set a date for his 3-day trial, no space was available. At the fifth hearing a trial was scheduled for 3 months’ time, but a week before it was due to begin, the trial date was vacated.

We asked in August last year how the Minister could justify his statement then of what he called “a steady improvement” in the court system over the last 6 years, when median waiting lists for a hearing date in the last 2 years in District Courts have ballooned, from 161 days to 372 days in Blenheim—which is the worst in the country. It is no wonder that Blenheim courts are again hitting the headlines for delayed justice and denied justice. Justice delayed in the Blenheim court, for a drug dealer, was undoubtedly justice denied. A 22-month wait between being arrested and having a trial date was deemed excessive and a breach of the defendant’s right to be tried without undue delay. This case was simple, and quite simply should have been tried within a year, the High Court ruled.

Then we are asked to believe that this Government is delivering speedy and effective, efficient justice for all New Zealanders. So what does this Government do to deliver such justice? It increases by 435,000 the number of New Zealanders eligible for legal aid. Yet women in Blenheim—again, in Blenheim—seeking a protection order have to represent themselves; they cannot get a lawyer to represent them. They often withdraw from the process because it is simply just too hard. Increasing eligibility does not help these women get access to justice, and the headlines have said it all—justice for all, except battered women. This Minister has sought to increase the demand for justice, but he blindly ignores the fact that justice cannot be supplied because there are no lawyers there to supply it. He denies that the number of family legal aid lawyers has dwindled from about 2,000 to 1,000 in a mere 12 months. The Minister has steadily received correspondence about lawyers withdrawing from legal aid work. He has constantly received letters from battered women who are representing themselves because they are unable to get legal representation, and giving up, yet he still insists that we have speedy, inexpensive access to justice for New Zealanders.

We have issues regarding court delays and waiting times that have been totally ignored by this Minister, and we have pointed them out to him on many, many occasions. We have issues regarding battered women who are unable to obtain legal representation and access to justice, and we have pointed that out to the Minister on many occasions. I ask the Minister what he is going to do about justice delayed, under our system.

CHRISTOPHER FINLAYSON (National) : The answer to the member’s obvious question is that nothing will be done; we will not get an answer in the Chamber tonight. But I want to continue on the theme, which is a core responsibility of the Ministry of Justice, of ensuring that the law is responsive to changing needs. In my earlier speech I spoke about Study Paper 10, a technical matter involving mandatory orders against the Crown and tidying up judicial review, yet Government members do not even have the wit let alone the energy to open appendix A and introduce a Judicature Amendment Bill when it is all there for them. It has all been provided by the Law Commission, but nothing has been done—and that is in the technical area.

If we read through the annual report of the Law Commission for 2005-06, we see an appendix setting out the various streams of work that have been undertaken by the commission in the 20 years since it has been formed. Let me just touch on a couple of areas where nothing has been done by this Government. The first is a report that was produced by the Law Commission in May 1998, entitled Apportionment of Civil Liability. Like the judicial review issue, it is a technical issue that should be able to be dealt with in a reasonably efficacious way. It is non-party political stuff but it is nonetheless important to the civil justice system. What is the comment that we receive from the Law Commission in its annual report? It is that the “Ministry of Justice does not currently have the resource capacity available to assess this.” It has not even got the ability to assess it, let alone introduce amending legislation to deal with the question of apportionment of civil liability.

Let us look at another issue that arose—costs in criminal cases. This is an important issue. The report was released by the Law Commission in May 2000 and what is the response of the Government? It says: “The Ministry of Justice officials will progress this work as other priorities allow.” So for 7 years nothing has happened in this area. Perhaps the worst example of this Government’s lack of energy and enthusiasm for law reform is the Limitation Act. In July 2000 the Law Commission published a report tidying up the Limitation Act. What was the response of the Minister of Justice? It was: “The Minister has considered a report from officials on the issues raised. Further work will proceed as other priorities allow.” This is classic “third term-itis”. The ministry and its Minister simply do not have the energy to implement even technical reports, yet they have the gall to publish in the Ministry of Justice annual report a chapter entitled “Ensuring the Law is Responsive to Changing Needs”. Instead of dealing with the real issues, they trumpet as some kind of huge legislative success utter trivia like the New Zealand Council of Law Reporting Amendment Act 2006 or the Judicature Amendment Act 2006. These are not even third-tier issues but very minor issues, indeed.

Under this Government and under the cohort of Ministers of Justice—none of whom seem to be up with the play—we do not have modernising legal frameworks. Law reform should be an essential role undertaken by any Government and it needs to be done in a regular manner with the support of the Opposition—and there would be support from Opposition parties in the areas that I have mentioned—but instead, nothing is happening and it reflects very, very poorly indeed on this washed-out administration.

The second point I wish to touch on—and it was also referred to by my friend Kate Wilkinson—is strengthening court processes and managing court workloads. The reality of the matter is, as I showed with the issue of electronic filing, that this has been a hardy annual that has come before the Justice and Electoral Committee on a number of occasions. It has been raised within the Rules Committee on many occasions and, indeed, things are so dire in this area that the Rules Committee has decided to proceed to introduce rules in the hope that at some stage in the next decade, something may be done on the issue of introducing electronic filing. Practitioners are using electronic methods for communicating with one another and serving documents, including affidavits, on one another, but this Government has such a bewildered approach to the management of the justice system that it cannot get on to this fundamental task.

The reality of the matter is that while this Government does nothing but commission reviews and reports, the situation in our High Court in Auckland just gets worse and worse. My understanding is that there is absolutely no space for any further judges. The judges’ chambers are all full, the courts are all full, and the situation in the High Court in Auckland is very unsatisfactory.

• Report noted.

JUDY TURNER (Deputy Leader—United Future) : My interest in this Government agency dates right back to way before even the infamous baseline review; it was certainly fuelled by that review. I believe that this current review needs to reflect on what progress has been made since that very important review.

The first thing I note is that the Government has piloted, in two sites, the differential response model. United Future is supportive of that. We believe that we might take some credit for it. With the assistance of the Minister for Social Development and Employment I was able to visit one of those sites and see how it is progressing. I was incredibly encouraged to see that great relationships are being built between the department and the community sector, that the medium to low risk cases are being worked through and interventions are being more speedily executed, and that some real relief is being provided to enable departmental workers to do some real, quality social work at the high-risk end of their caseloads. That is a great thing, and we would encourage the Minister to see that this model is rolled out as quickly as is practicable across the country.

We also note that there has been an amalgamation, and that the Department of Child, Youth and Family Services has come back under the Ministry of Social Development umbrella, as the Child, Youth and Family service. While we are still unclear as to why that was done, staff have assured us they see positive things in it and it will make a difference to the operation of the department.

For this brief speech, I want to focus on the call that United Future has been making for an independent complaints authority. Like most MPs—and maybe even more than some—I receive, probably on a weekly basis, letters and emails from people who have had dealings with the department and have complaints about the way their cases have been handled. As a member of Parliament I am not in a position—nor do I have the resources or the skills—to investigate these claims to determine whether they would in any way be upheld. I am sure that some of them would not be upheld; they are from disgruntled parents who have had an intervention done on them as a family and are not happy with that consequence.

However, I looked at the Police Complaints Authority. I looked at that authority because of the fact that, like Child, Youth and Family, the police enjoy statutory powers, and have great power to intervene in the lives of families and individual people. About 13 percent of the authority’s complaints—and it receives about 2,000 a year—are upheld. That represents, on average, about 343 cases. It occurred to me that if 13 percent of all the cases that come across my desk—and I am sure that is not an exhaustive list by any stretch of the imagination—would be upheld if closely investigated, that would represent a substantial number of mums and dads and their children who did not get a fair deal from this department.

Although none of us envy the work the social workers in this department have to contend with, it is still hugely important that the work that is done is quality work. I know that the Minister has acknowledged to me in the past that if and when the department gets it wrong, that would itself constitute child abuse. If children are wrongly removed and there is a failure on the part of the department to return them in a timely way to the care of their family, that would constitute abuse.

United Future has been calling for something akin to the Police Complaints Authority—an independent body where adults could go. Currently, if there are some questions as to how the department has handled a case as it pertains to a child, the Office of the Children’s Commissioner has a legislative mandate to investigate. That is a good thing, and I call on the Government to better resource that office in that role. It currently uses staff allocated to all sorts of other jobs within that office to do that investigative work, and it could do with some more resources.

We are in no way proposing to duplicate or take over the work of the Office of the Children’s Commissioner. We are asking for somewhere where adults can go—either adults who have been notifiers to the department and are not happy with the way the department has responded to the notification, or people who have been on the hard end of a notification, people to whom an intervention has happened, who are unhappy with how it has been handled and feel they were not listened to.

One of the other things that I call on the Government to consider, which is related to this complaints authority, is better support for the client base. I had a really interesting question asked of me by someone who used to work for the service. That person had been a social worker and was now on the staff of a non-governmental organisation. One of the questions that person asked me was who the clients of the service were. I said I presumed it was the children. That person said, no, it was the notifier. We need to think a lot about that particular issue.

Hon RUTH DYSON (Associate Minister for Social Development and Employment (CYF)) : I acknowledge the member Judy Turner, whose contribution we have just heard. I have listened to her advocacy for a complaints procedure for Child, Youth and Family for several months. I did not agree with it to start with. I sought further clarification from her, she gave it to me, and I am now very happy that policy work is looking at the range of available procedures and where there is a gap, and is ensuring that we do not overlap with organisations such as the Children’s Commissioner by making any further extension of complaints procedures within the department. So I acknowledge the work Judy Turner has done in that regard.

I make passing reference to the Children’s Commissioner and say how stunned I was to hear the member for Rangitikei, Simon Power, attack the Children’s Commissioner. I do not think it is appropriate to do so. I think she does a fine job, and she should not be undermined in this Chamber.

To refer to the financial review report, I was very pleased that this year the Social Services Committee was generally positive in its financial review of the Department of Child, Youth and Family Services and gave some very good, constructive feedback. It noted some favourable improvements in the performance of the department, particularly in areas such as response rates to notifications, the benefits of the merger between the Department of Child, Youth and Family Services and the Ministry of Social Development, and the recruitment of front-line staff. However, the report posed some challenges for the department, and I think that is a very important part of the accountability back to Parliament. The select committee seems to have undertaken that task extraordinarily well.

The issues of challenge were to ensure that we look at better statistical information on substantiated abuse notifications, the reform of foster care, and the implementation of the youth justice capability review. I begin by referring to the number of notifications the department receives. It was a particular point of discussion with the select committee. Of course, as this Committee has discussed many times in the past, the ideal would be that we had no abuse of children in our country and, therefore, no notifications. But we are actually seeing increased public awareness, decreased public tolerance, and increased notifications to the department because of those two factors, amongst others.

Another thing that I particularly acknowledge, because I support it, is the initiative by the police of referring far more rapidly children who are in situations of family violence who may not be identified immediately but who have clearly been exposed to violence rather than necessarily abused themselves. The growth rate of notifications to Child, Youth and Family in the year considered by the financial review is slightly slower than last year, so I think that is a good thing in terms of the overall management of the situation. It is important for the Committee to note—and, I hope, celebrate—the fact that the department has maintained the number of unallocated cases at below 1,000 since the middle of last year, and it has a much better understanding of the drivers of demand for its services.

I touch briefly on a point Judy Turner made with regard to the differential response model. I am very pleased that she took the time and effort to visit one of our sites and look at the differential response model, and I am even more pleased to hear her speak positively of it. It is a much better way of doing things. The department is working with non-governmental organisations so that we get a community-based response, which is a far more appropriate response for families who are in crisis, in need, or feeling frustrated to the point of not being able to operate functionally on their own. If we are able to help those families earlier, without the need for statutory intervention, then we will all be better off in terms of outcome. It is my view that inappropriate statutory intervention can not only cause disruption but also actually damage a family’s situation, so the more appropriate our response, the better. I certainly give a commitment to that member and the Committee that the differential response model will continue to roll out past the sites it is currently being piloted in.

I touch briefly on the youth justice capability. It was raised as a concern by the select committee. I reassure the Committee that the youth justice capability review project is progressing well and is meeting all its milestones now. We should see a considerable improvement in the organisational delivery of youth justice through those improvements.

Finally, I just acknowledge and thank my colleague from Rotorua, Steve Chadwick, for the support she has given to Child, Youth and Family in terms of the establishment of a new residential centre in the Bay of Plenty area. It is now confirmed that Parekārangi is the preferred site. That is a very good thing. The owners of the land there have also been very supportive not just in extending to a youth justice facility but also in reaching out further into the community. Those young people will have a chance to be returned to the community with the support of the landowners at Parekārangi. That is an excellent move for all of us. Thank you, Mr Chairperson.

• Report noted.

SIMON POWER (National—Rangitikei) : Of all the financial reviews that the Committee will listen to over this 4-hour debate, the year in review for the Department of Corrections is the worst. There is no doubt that the Department of Corrections has had probably, aside from the Ministry of Health, the worst 12 months in review of any Government department or ministry. In fact, a recent poll in the New Zealand Herald indicated that, aside from health, law and order and corrections issues were at the top of people’s minds throughout New Zealand. So poor has the reputation of this department become over the last 12 months that currently around Wellington there is a yarn that if a graduate joins the Department of Corrections as a policy analyst, he or she will be issued with an executive assistant, a BlackBerry, and a manager to give the blame to if something goes wrong.

In the last year in review, this department has dealt with a $130 million overspend on two of its prisons, issues relating to contraband getting in and out of its prisons at an alarming rate, and allegations of corruption at two of its prisons. At one prison in particular, Rimutaka Prison, two officials were today suspended, which reminds the Committee that those matters were initially denied by the Department of Corrections. It was not until the Minister stepped in that some of those issues were even looked at. The department has dealt with issues relating to cellphone use in prisons, LCD televisions, millions of dollars in costs to landscape new prisons, inmates allegedly fathering children from inside correctional facilities, a lack of drug and alcohol rehabilitation courses, a lack of close monitoring, and the replacement of rehabilitation courses after it was found in the last financial review that inmates who undertook those courses were more likely to reoffend than if they had not undertaken them in the first place.

We have had some positives. In particular, I have been watching with great interest the implementation of new drug rehabilitation courses and centres within our prisons. The Minister knows I have an interest in those matters, and I acknowledge that as a positive step forward for the department. I struggle with the terminology the department uses, such as “drug-free units”. My impression was that the whole of a jail should be drug-free.

In the year under review we have seen the tragic death of young Liam Ashley. The failure, systemically, by the department to get basic things right, such as separating out youths—under-18-year-olds—from dangerous prisoners, had tragic consequences. We have seen that case bore into the heart of some serious systemic incompetence in this department in the year in review. Of course, in the most recent days, as part of that continued systemic failure from the year in review, we have dealt with the tragedy of the killing by Mr Graeme Burton of an innocent person, Karl Kuchenbecker, in the hills outside of Wainuiōmata. At this time, in the second week of March, the department has already provided New Zealand with the quote of the year. At a press conference the department’s chief executive claimed: “there’s no blood on my hands.”

This department is in such trouble that in recent months the Prime Minister has been forced to step in and front the public handling of more than one issue over the period in review. The Prime Minister has seen fit to seek separate legal opinions from the Law Commission about whether the Parole Board, the probation service, and the Department of Corrections acted correctly. This clearly indicates that she has no confidence in this Minister or this department to deliver the outputs they are required to deliver as a department or a ministry or, frankly, to deliver her as the Prime Minister of this country the advice she needs in order to be able to answer the tough questions when more things go wrong—so much so that she simply bypasses this department now and seeks advice directly from the Law Commission.

It is also staggering to us on the Opposition side of the House that amongst all this chaos—this litany of things that go wrong in this department, which just seems to lurch from crisis to crisis—the department continues to deny that these problems exist. On one or two occasions the Minister himself has had to disagree publicly with the chief executive in order to move investigations into matters that the department itself did not want to be further investigated. More particularly, leading into the Prime Minister’s statement at the start of this year, the chief executive officer of the Department of Corrections told the New Zealand public that he was not aware of any changes to parole. Of course, the Prime Minister then announced those changes in her statement to the House on 13 February.

Against all of this background, the Government still has the nerve to be opposed to the private management of prisons. I will step back from the catastrophe of how the inept senior management of this department have been paid several million dollars in bonuses while these particular events have been occurring. Surely, the question on everybody’s mind would be whether the private management of our prisons could do any worse. Could the private sector get it any more wrong than the public sector has? Would it be capable of producing a list of incompetencies as lengthy as the one I have just recited to the Committee? There is not one single person in this Chamber who believes that somebody else running our prisons could not do a better job. In fact, the Minister knows—as I know the previous Minister, Paul Swain, knew—that the Auckland Central Remand Prison, which was privately managed, did a fantastic job. It was so good, in fact, that the then head of the Department of Corrections sent to the incoming Minister a document that stated: “We have a lot to learn from the way the private sector provides management skills in our prisons.”

In that regard, I look forward to my member’s bill being drawn from the ballot during this coming financial review. I look forward to the House supporting the progress of that bill, because, frankly, the year in review for the Department of Corrections could not have been any worse. The capability of the senior management of the department could not have been sloppier. Against that background, these people are still paying themselves bonuses and continuing to live in a culture, which has grown in this department, that continues to deny that things go wrong. This is in stark contrast, as I have said publicly, to the approach adopted by the chairperson of the Parole Board, who at least had the good sense to come out publicly and take some responsibility for the shambles that has occurred over the last few weeks.

This department will not get better in this coming year unless the Minister steps down or, at the very least, has the courage to deal to the senior management of this department who continue to run it, and are guided only by a culture of denial that things are going wrong. Time is running out for the public to be convinced that this Minister or this department are capable of doing anything that could go right. Frankly, there are no surprises when things continue to go wrong.

KATE WILKINSON (National) : The year 2004-05 certainly was not a good year for the Department of Corrections. It was, as my colleague has said, a year of budget blowouts, corruption, parole disasters, rehabilitation failures—you name it, the department has had it. Yet, remarkably, the department’s hands are clean, and not a smidgen of blame will the department accept.

We have heard that the State Services Commission report into cost escalation stated there were “a number of areas where the department failed to meet acceptable standards.” That is not satisfactory and that is not good; that is a failure.

This year we learnt about collaborative working arrangements. These are strange contractual beasts, whereby contractors do not submit fixed price quotes, and there is no control on cost escalation. The taxpayer pays the price, and the taxpayer takes the risk. There is absolutely no incentive to complete the project within budget, because there is no budget. These collaborative working arrangements are totally open-ended, commercially stupid, and unacceptable. Even Treasury expressed unease about these collaborative working arrangements. The States Services Commission itself warned that “it appeared that the benefits of the arrangement were emphasised to a much greater extent than the potential risks and costs.” So what happened? The obvious happened. The cost of constructing these four new prisons escalated to $890 million—an additional $490 million, which was nearly twice as much again.

To make matters worse, if one thinks they can be worse—they do get worse—the person responsible for introducing these collaborative working arrangements was paid $1.3 million. Consultants employed to bring efficiency to the construction project cost $455,000 in the first 5 months alone. When we have a blowout of $490 million, I would have thought that the person responsible for introducing that blowout should not be paid $1.3 million, and that consultants employed to bring efficiency who have obviously failed should not have cost the project an additional $455,000. This has not been the year of accountability for the Department of Corrections.

Contraband has increased. Those completing rehabilitation courses are more likely to reoffend than those who did not attend those courses. More prisoners are offending while on community work schemes. There are more lawsuits from prisoners, and they are claiming $8.6 million for some maltreatment. There are 43 grievance claims by staff so far, but, on the other side, $2 million was paid in staff bonuses. There was $31 million spent on consultants. There are fewer prisoners on drug rehabilitation programmes and fewer prisoners working. There is five times more methamphetamine in prisons. And the list goes on and on.

Hard on the heels of the Liam Ashley tragedy we have another tragedy, Graeme Burton. He was released on parole under the supervision of the Department of Corrections. The core business of the department, remember, includes the management of parole, and the department failed. Graeme Burton committed heinous offences whilst on parole. He breached parole, yet the department’s chief executive officer said: “We have complied with all our procedures in terms of the management of his probation.”, then said insensitively, as we have heard, that there was no blood on his hands. He said he acted within the required 7 days. But something went wrong, something went horribly wrong, and somebody must be responsible. During, and as a result of, that inaction—that denial of responsibility, that lack of acceptance of any accountability—an innocent man was murdered, a family was robbed of its father and husband, and other innocent persons were hurt.

The worst of it all is that this tragedy could and should have been averted. The next worst of it all is that lessons could at least have been learnt from this tragedy, but not whilst there is such a state of denial—the “It’s not my fault.” mentality. I ask the Minister of Corrections to take some responsibility, be accountable, and do something to halt the trend of tragedies.

CHESTER BORROWS (National—Whanganui) : Youth crime is growing in intensity. Violent crimes committed by offenders under the age of 16 have increased by 27 percent since 1999, and sex crimes committed by young people are up by 46 percent. This is during the tenure of a Government that promised that it would crack down on youth crime. Labour put that promise on its pledge card in 1999 and again in 2002. So one has to turn one’s mind towards wondering just how much this Government really cares about the risk factors for youth offending.

The Government set up a high-powered Minister’s group on youth offending. Who was on that? The members were the Minister for Social Development and Employment, the Minister of Education, the Minister of Corrections, the Minister of Police, and the Associate Minister for Social Development and Employment (CYF). Given the concern about youth offending and the pledges Labour members made in 1999 and 2002 they would get really stuck into it, let us look at whether a lot of innovation was put before the public. Let us see whether some real good was done. How often do the Ministers meet? Once a week? Once a month? That would have been pretty good; one would expect them to have come up with something. No, they did not meet for 3 years. That gives one an indication of just how much the Labour Government cares about youth crime.

Chris Auchinvole: 3 years?

CHESTER BORROWS: For 3 years there was not one meeting.

What about the programme to provide health and education assessments for young people who are attending family group conferences? Those are the young people who may well go on to find themselves in youth justice residences, so surely we would want to know what is going on inside their heads and inside their bodies. We know that 83 percent of all prisoners are addicted to some substance or another, usually alcohol or a drug of some kind, but frequently, and especially among young people, to glue and the rest of those sorts of substances, which wind them up and make them do crazy things. But no, we have not implemented anything to find out exactly what is going on inside our young people’s heads or inside their bodies. At the same time, we check them into cells and keep them there because the Labour Government does not care enough about them to do that. One of Labour’s key youth crime prevention programmes was a reducing youth offending programme. It has failed to reduce offending and reoffending at all during the tenure of this Government; in 3 years it has had $12 million to spend, to achieve nothing.

What we do know about the young people who end up going to jail is that the biggest single thing that can prevent them from going to jail is engagement in school. The common denominator of people who find themselves in jail is truancy—frequent, abject truancy. So the Labour Government made a promise that it would set up a national student database to combat truancy, to find out who was in school and who was not in school, to hold their parents and caregivers to account, and to make some prosecutions. In my electorate we have a school called Waverley High School, and it is undergoing some chronic pressures at the moment. It has been stated that up to half the students were absent on any one day. That is contested by a number of teachers and pupils, but we do know that truancy was at an all-time high and was a huge problem for local people in Waverley. How many, then, were referred to the district truancy service? Well, it does not appear that any of them have been referred. Apparently there was a register, or a bit of one from time to time, but no one cared enough to make any referrals at all.

One would expect the police to know who was on the street—young people out offending; real candidates for a life behind bars in jail. Let us see what they are doing; the Minister of Police is part of the high-powered Minister’s group on youth offending. Well, the police do not keep statistics on the number of truancy operations that they run. No doubt they would argue, probably quite rightly, that they are busy enough. But addressing truancy is a key plank in Labour’s policy towards reducing crime with young people. The police cannot tell us how often they have gone looking for truants or how many operations they have run to try to find them. If we look at the police national youth policing plan for 2005-06, we find truancy is mentioned once, and then only in a diagram that lists risk factors for youth.

This Labour Government has an appalling record on youth crime. Although youth crime is remaining relatively static, we do know that youth violent crime has grown exponentially under this Government, and there appears to be little that is happening to combat that. We are seeing huge concern about some areas to do with youth and children. For instance, with the vote that is before Parliament today, we have seen a whipped Labour Party voting to outlaw the smacking of children, yet we have young people who are running foul of the law being uncontrolled in our communities, and causing older people to be frightened in their homes. Those young people are behind home invasions in my electorate, shootings, and those sorts of things going on around the country. There is more youth homicide than we have ever seen before, and the Government is letting the country down badly in respect of youth offending.

Labour has had 8 years to deal with youth crime after putting it on its pledge cards, and nothing has happened. The youth prisons that have been built are costing $1 million a bed to construct, and about $300,000 a year per bed to maintain. There is no real strategy to keep youth out of those facilities, and it is just very unfortunate that after making the big promises, the Government is not following through with policies that will keep those young people away from a life of crime and safe at home.

Hon DAMIEN O'CONNOR (Minister of Corrections) : I welcome the opportunity to speak in this debate and to clarify a few facts that have been thrown into the Committee by the Opposition. I was interested to get a clear indication from Simon Power that the National Party policy, of course, will be to privatise the prisons in this country. I guess that follows on from its policies in the 1990s of privatising the railways, attempting to privatise health, and, of course, housing, in the naive belief that that was going to deliver better services to New Zealand.

I would just like to run through a few basic facts around the Department of Corrections because I think there is, from time to time, a misunderstanding, and perhaps a lack of appreciation, of the challenge that the department has. The prison muster, or the number of people in prisons, is currently over 7,700. It is not a figure that we should be proud of, but it is a reality that we have to manage on a day-to-day basis. We manage on a daily average over 26,000 non-custodial sentences. We have a staff of over 5,800, and we had an operating budget last year of $658 million compared with the last time the National Party was responsible—and I am sure it will not be for a long time yet—when there was a budget of $322 million. That is a huge investment in this area, and one that this Government has taken full responsibility for.

With such a huge responsibility and in such a difficult area of social responsibility no one could say that the system is perfect. No one could say that the system does not need improvements in some areas. As Minister, I think it is important, though, to keep things in balance. Yes, there were budget blowouts in the completion of four prisons on time, built in one of the hottest building climates that this country has had for a long, long time. In fact, the State Services Commissioner, in his report on the prison build situation, stated that the fact that new facilities had been and will be completed on time was impressive. That is not to say that new projects will not have a greater level of scrutiny; we do learn from mistakes that have been made, we acknowledge them, and we move on.

Simon Power referred to contraband issues within prisons. Yes, we acknowledge those issues. They are part and parcel of the international challenge of running prisons. However, compared with 1997 when over 28 percent of prisoners were identified as drug users within prisons, we now have reduced that number back to 13 percent last year. That is a huge improvement in a key operation in the corrections system—that is, trying to keep contraband out of our prisons.

We have from time to time, with such a large number of staff, individuals who will not abide by our protocols, procedures, or, indeed, the law. We will identify—as we have done today—individuals who have not upheld the law within the prison system and we will deal with those issues. That does not mean to say there is widespread corruption or widespread abuse of procedures. We have to acknowledge the fact that, for the most part, corrections staff, in a very difficult environment, carry out a very good job in protecting New Zealanders from some very dangerous individuals. There will be from time to time, as we have unfortunately seen, some mistakes. As I say, we have a responsibility to move on and to deal with those.

I will not labour the issue here other than to say that we will be moving ahead in the next year in some key areas. We are employing another 200 probation officers on top of the over 600 we have at the moment to manage 68,000 sentences, on average, that we manage in the community. Sixty-eight thousand is not a small number and, even with the full complement of the 600-plus to 800 probation officers, they have a challenging task that, I have to acknowledge, they do in a reasonably efficient and generally very safe way.

I will just go over a few other key achievements in areas that we will be focusing on. We were focusing on these areas in the Department of Corrections last year and we will continue to do so. We have been expanding the alcohol and drug units within the prisons. We had two, we opened one last year, and we have committed to another three. This will provide 500 places for intensive drug and alcohol treatment within the prison system. That, we believe, will play a large part in trying to reduce reoffending over time. We have established specialist crime intelligence units within the prisons to gather information that might lead us to a planned escape, as happened at Mount Eden Prison. That planned escape was thwarted because of intelligence gathered within the prison system, and I applaud the success of that unit, even though it has just been established.

We have appointed a new investigation team to act immediately and to investigate any claims of inappropriate behaviour or corruption within the prison system. That investigation team will answer directly to the chief executive, and I think it should reassure the public that if any accusation or claims are made, we will move swiftly to clarify the situation. It is, of course, an environment where accusations can be made easily, and it is important that we get to the truth of these accusations, rather than be chasing around on wild-goose chases because some prisoner or prison officer has made some inappropriate allegation. That can happen.

The member Simon Power referred to rehabilitation programmes. We have, in fact, revamped rehabilitation programmes and we are starting new rehabilitation programmes where it was identified that they were failing in their objective—that is, to reduce reoffending and recidivism. We stopped those programmes the minute we found out that they were not working. We have revamped them and we are re-implementing them, and we believe that they will do a very good job.

We have appointed specialist reintegration teams, made up of case workers who work directly with prisoners before they leave prison. So when prisoners go outside the wire—maybe on to probation, on to parole under the probation service, or on to other community sentences—we have people who are able to assist them with housing, with relationship management, and with making sure they get a bank account. This will enable them to reintegrate back into their families and into society. There are reintegration teams at every prison and they are starting to work very, very well.

Another area where there was some criticism of the department was where it was claimed that we did not have enough work opportunities or provide enough work for prisoners. We have moved to having a target of 60 percent of all prisoners being actively involved in work or training. We are moving up from our current 40 percent and through last year we have made significant improvements in that area. We now have 100 prisoners out on release to work—that is, they go out to jobs and come back every day. All these initiatives help prisoners to reintegrate back into society and reduce the chances of their reoffending.

Really, in conclusion, I do not accept the claim that the corrections system is failing. It has areas where we need to make changes and areas where we need to improve our performance—there is no doubt about that. But it is still doing a very good job in a very difficult environment, managing over 7,700 prisoners inside prison and over 68,000 community sentences every year. That is a big challenge and I think, on balance, the department does a reasonable job. I look forward to making further improvements and making the changes that are necessary as we move forward into the next year.

NICKY WAGNER (National) : I was pleased to see that the Chief Executive of the Department of Corrections, in his foreword to the 2005-06 annual report, committed to “protecting the public” and “reducing offending”. That is what New Zealanders expect of the Department of Corrections, and they expect the department to do it well. Seeing that the chief executive, Barry Matthews, chose not to sign his foreword or caption his photograph, I wondered whether his recent publicity had made him infamous—so we all knew who he was—or whether he did not want to be associated with the report. He said there was no blood on his hands.

As the National Party spokesperson on youth, I am particularly interested in the prison experience for young people. After all, young people are the most vulnerable of our prisoners and are the ones who would benefit most from support, mentoring, and effective education and training. They are the biggest threat to our society and are those who have the most to lose. I was particularly interested in the recidivism index for young people—those aged below 20 years. In each category—12 months after being released and 24 months after being released—those aged under 20 years had the worst results. After 12 months, 46 percent were re-imprisoned and 65 percent were reconvicted. What is even worse is that after 24 months a staggering 60 percent of young people were re-imprisoned and 82.4 percent were reconvicted. These figures were marginally worse than in 2004-05.

With this in mind I combed the report for initiatives and programmes that could help to reduce reoffending by young people. Obviously, a safe environment, keeping healthy, and good training programmes are essential basics. In terms of a safe environment, managing the prison population has been identified as a real problem. At times during the period under review the occupancy rate peaked at well over 100 percent. As we have heard, the construction of new capacity and the commissioning of new facilities has been fraught with cost overruns and delays, which have been well discussed in this Chamber. But my particular concern with this sort of overcrowding is just how safe the environment is that the Department of Corrections is providing for our young people.

In terms of keeping healthy, I am concerned about the level of drug taking in our prisons. Internationally the level of drug taking is on the high side; it is double that of Australia. As young people have the highest recidivism rates and are normally those most interested in taking risks, I surmise—because the statistics are not broken down by age—that they too have a higher level of drug taking. Of course, young minds and bodies are particularly vulnerable to drugs. This is an area that needs real work.

My colleague Chester Borrows has spoken of the Reducing Youth Offending Programme—and spoken of it as a failure. The Minister has mentioned it, too. The programme has been terminated, which is probably a good decision. I was very surprised to read: “new young offenders were held on a waiting list while changes in referral criteria and treatment priorities were determined.” That was for the first two quarters of the year. The programme will not be available in 2006-07. I do not know how members feel about that, but there will be few New Zealanders who consider it a satisfactory arrangement. Having young people in prison and on a waiting list before they can get help for their problems seems bizarre. Of course, the reoffending gets worse.

I was also concerned to see the percentage of prisoners whose sentencing plans were not in place, due to muster pressures and a reduction in numbers of sentencing planners. Although the performance standard was 100 percent in 2005-06, the rates varied between 75 and 92 percent. I worry about kids who are on a waiting list for a counselling programme and who have no sentencing plan.

Finally, in terms of education and training, in an ideal world, prison could provide the educational opportunities that so many of our young offenders have missed out on. Of course, we all know that the majority of offenders have low literacy and numeracy levels, and a good education programme could make a real difference and give the kids a better future.

In conclusion, this report indicates that the Department of Corrections is not doing a great job for young people in prison.

• Report noted.

Hon Dr NICK SMITH (National—Nelson) : This evening the National Opposition wants to raise a number of important issues about housing. We note in the Social Services Committee report a number of issues around leaky homes, the residential tenancy service, and the new Building Act. The first thing we note is the disaster around leaky homes that is ongoing and that is affecting so many New Zealanders. Within the Cabinet room we have the debacle of pass the parcel being played in respect of the problem of leaky homes. We see that in a couple of weeks’ time, on 1 April, the Weathertight Homes Resolution Service is being moved again. This time it is being moved from the Department of Building and Housing to the Ministry of Justice. We challenge the Government and ask how come it keeps passing around the Weathertight Homes Resolution Service. The Government may have got it wrong when it gave the service to the responsibility of the Department of Internal Affairs. The Government then switched the service from the Department of Internal Affairs to the Department of Building and Housing. The service has not been there 18 months and it is being moved again. We want to know from the Minister whether he will apologise for putting the service in the wrong place in the first place, and whether we can get some reassurance that we might actually get some progress on the issue of leaky homes, rather than see spending of over $17 million during a year in which there were only a very few resolutions and in which we found more new cases being lodged than being resolved.

The second issue I bring to the attention of members is in respect of the disastrous implementation of the new Building Act. The select committee noted that local authorities around New Zealand are struggling with the implementation of that new Act. In fact, it has now become a standard joke amongst builders that it takes longer to get a consent to build a house in New Zealand than it takes to actually build it. To what degree has bureaucracy gone mad under this Labour-led Government that it takes so long now to get a building consent that it is standard for the consent to take longer than it takes to build the house? The Registered Master Builders Federation has commented that the Building Act has added $20,000 to the cost of a home through red tape and bureaucratic impositions. I ask the Minister in the chair, the Hon Chris Carter, who has responsibility for the Housing New Zealand Corporation, how he can wax on about the cost of housing for New Zealanders when, through that Act, he is imposing huge additional costs.

I compliment my colleagues Phil Heatley and Bob Clarkson, both of whom have an intense interest in the issue of affordability of housing. They have rolled the Government and have this year forced a proper inquiry by the Commerce Committee into housing affordability.

Hon Chris Carter: Looking forward to it.

Hon Dr NICK SMITH: Well, so are we. We are looking forward to holding this Government accountable for its poor policy, which is making housing less affordable than at any time in New Zealand’s history.

• Report noted.