Hon BILL ENGLISH (Minister of Finance) : I move, That the Appropriation (2010/11 Supplementary Estimates) Bill and the Imprest Supply (First for 2011/12) Bill be now read a second time. These pieces of legislation are further steps in the ongoing supply from Parliament to the Government, consistent with the Budget that passed through this House in the last couple of months.

I think we are at a stage of recovery whereby, without overstating it, there is some confidence that the events of last year will not be repeated. By that I mean both the unexpected natural disasters and the growth that started in early 2010 but faded somewhat over the second half of the year. Those events will not be repeated.

It does us some good, I think, to keep in mind the factors that are positive for the growth of the economy over the next 2 or 3 years. By the growth of the economy I mean, in pretty straightforward terms, the prospects that people who do not have a job will be able to get one, and that people who do have a job will be able to get a pay rise, and the sense that the country will be better off. Some of those positive features include the lowest interest rates in 45 years. It has been the express goal of the Government to do what it can to keep interest rates lower for longer, on the basis that that will assist with the recovery of the economy, and that it will mean less pressure on the Reserve Bank to raise interest rates, with an indirect flow through to an even higher exchange rate.

The second positive factor is the strong export prices that the country is enjoying. There is no doubt that more people appear to be willing to pay more for more of our products than at any time, probably, in the last generation. New Zealand finds itself hooked to the China-Australia train. Australia is our biggest export market, and the growth of its economy has been driven significantly by demand for its iron ore and coal. A lot of that demand is sourced from China. China is moving to become our second-biggest market, independently of Australia, and is buying from us a different range of products than Australia does. It looks as if there is reason to believe that those prices could stay at reasonably high levels. It would be a surprise to anyone, I think, if commodity prices stayed at their current very high levels. Equally, I think it would be a surprise if they returned rapidly to the levels of 2 or 3 years ago. So stronger export prices will assist the ongoing growth of the economy.

Another favourable factor is the policies that the Government has followed over the last three Budgets, which lay down the platform for stronger economic growth. I refer to two policies in particular, because they are consistent with the single plan that the Government has followed across the last three Budgets.

The first policy is a high level of investment in infrastructure. Despite the global financial crisis and New Zealand’s recession, this Government committed early to extensive investment in productive infrastructure, and it has held to those commitments, because infrastructure investment is long term; its benefits are long term. In the short term, that programme has helped to deliver thousands of jobs to New Zealanders, particularly in the construction sector, which has otherwise fared very badly through this recession. In fact, the Government order book has seen something like 80 to 90 percent of non-residential construction in New Zealand over the last 2 or 3 years. That infrastructure investment continues now with the roll-out of ultra-fast broadband, which will deliver in the next 2 or 3 years to many businesses and households, and certainly to all schools, broadband speeds equivalent to those that currently apply in Singapore. I must commend the effort made by officials and Ministers in bringing together that particularly challenging commercial transaction. The infrastructure investment programme will continue.

The other longer-term change that the Government has made that I will mention is the changes to the tax system. We have followed some pretty simple principles here. Things that are not so good for the economy are taxed more; things that are good for the economy are taxed less. So we have put up the taxes on consumption and the effective tax rate on investment property. At the same time we have closed a number of loopholes in the tax system, particularly those applying to banks and companies. Alongside that, we have dropped income tax rates, tax on savings vehicles, and the company tax rate. There has been some ill-informed media commentary that the tax changes “haven’t worked”. Well, the last step in the changes was implemented only on 1 April this year, which, as I recall, was only 10 or 12 weeks ago. It is unlikely that a change designed to bring about a shift in the incentives in the economy, with benefits over 5 to 7 years, would have had dramatic impact in just a matter of months.

We are now in a situation where we have a sound tax system, and where 73 percent of New Zealanders now have a top statutory tax rate of 17.5c, so the incentives for anyone, including people who are on lower incomes, to work another hour or to save another dollar are simply better than they were. Those tax changes are consistent with the general thrust of the Government’s rebalancing of the economy. Those are a number of positive factors, and there are others.

There are, of course, some headwinds, and I will refer to the challenges to economic recovery. Some are shorter term and some are longer term. In the shorter-term category I would put the headwind of the high exchange rate. There is no doubt that that has put pressure on particularly our import substitution industries. Our commodity exporters have been compensated through high prices for the high exchange rate, but our import substitution industries do not get that benefit, and they have been particularly affected by it. A second headwind is simply the business of reducing debt. The story of economies in the developed world for the next 10 to 15 years will be about reducing debt, which reached very high levels, including here in New Zealand. That will make people cautious. We will not see the burst of credit growth or the spurt in the housing market that has traditionally picked up this economy.

Related to that will be constrained growth of credit, or restrained growth of lending. If we look back over New Zealand’s history over the last 20 years, we will see that lending—or borrowing; whatever we want to call it—has grown significantly faster than the economy through most of the last 20 years. The world is now sending us a message that that cannot continue. It will be quite a challenge, because from here on we will have to earn our higher incomes and greater wealth; we will not be able to borrow it from the world. Borrowing has been a significant source of growth in wealth and incomes, in particular over the last decade.

Having listened to the Budget debate and toured the country through the time of the Budget, I am impressed with the resilience that many New Zealanders have shown. Gail Kelly, the chief executive of Westpac, last week here in Wellington contrasted the positive and resilient attitude of New Zealand to the economic challenges with the somewhat less positive attitudes that are now prevalent in Australia. I would expect that over the next few years we will begin to close some of that gap.

Hon DAVID CUNLIFFE (Labour—New Lynn) : I move, That the words after “That” be omitted and the following substituted: “this House has no confidence in the Government, because of the current Government’s failure to create jobs, its lack of a credible plan for economic growth, the wildly diverging revenue forecasts, the unspecified and unmandated Budget cuts, and the broken promises on privatising State assets.”

As the Minister has said, he has been running around the country talking to people about the Budget. So have I, and what is clear from that dialogue with New Zealand is that this Budget will not and cannot achieve the objectives that the Government has set for it. Several of the issues that Mr English mentioned in his preceding remarks cannot go without response. The first is that he has lauded the so-called tax switch as the most important reform that a National Government has undertaken in the last 20 years. The only thing we can conclude from that is that National has not done much in 20 years, because the tax switch has been an abject failure, for four reasons.

Firstly, the tax switch was not fiscally neutral. It results in another $1 billion of overseas borrowing in the first 4 years, according to the Budget document’s own numbers. Secondly, it was not stimulatory to the economy, because it took money out of the pockets of hard-working people who spend every cent they earn, and put it in the pockets of wealthy New Zealanders who could afford to salt some of it away and take it out of circulation. The net impact of that was further contraction in the economy, not expansion. Thirdly, it was inequitable: two-thirds of the money went to the top third of income earners, and about 40 percent went to the top 10 percent. I ask whether it is any wonder that the rest of New Zealand is feeling the pinch, in the face of rising, rising prices and wages that are growing much less quickly than the rate of inflation, meaning a real-terms cut. The fourth reason that the tax package was a failure was that it did not close loopholes. That would be a bit like the Pope saying sin did not exist and therefore there were no sinners. It simply removed the top personal tax rate of 39c in the dollar, so that everything over 33c in the dollar, by definition, was avoidance free. It is a circular argument, and it cuts no ice with ordinary Kiwis.

The second comment I wish to make relates to the Minister’s remarks about headwinds and the high New Zealand dollar. Finally he has admitted that the dollar is too high. I know it is not appropriate for either him or me to talk about what the exchange rate should be in dollar terms, but let us say we have a consensus in this House that a high New Zealand dollar is giving us the so-called Dutch disease. Every exporter, apart from those exporting a few select commodities, is being withered on the vine by the fact that our exports are less and less competitive, and that cannot continue. So why does the Minister, almost in isolation, pretend that we have the best monetary policy in the world? When everybody, from the Reserve Bank to the Bank for International Settlements to the IMF to the OECD, is moving on things like macro-prudential regulation and counter-cyclical policies that support and supplement the official cash rate, why will the Minister’s Government not review the Reserve Bank of New Zealand Act, which is the purest, one would say most conservative, construction in the entire Western World? The Minister said the exchange rate is overvalued, so why will he not guide the Reserve Bank to do something about it? New Zealand exporters are deeply, deeply worried about the situation that they face.

There is one thing that the Labour Opposition will not disagree with. It is the idea that New Zealand carries too much debt. We agree with that idea. But, of course, 90 percent of that debt is private debt, and only 10 percent is public debt. Therefore, it beggars belief to think that any credible Government strategy could aim to solve the international debt problem by nibbling around the edges at the 10 percent that is public, while cutting back on the programmes that reduce the 90 percent that is private. Two things stand out. The first is the reduction to KiwiSaver. A blind man in a darkened room could say we have to get the savings rate up. Why would the Government’s centrepiece in its Budget be a reduction to the incentives for New Zealanders to save in KiwiSaver? There are shades of Muldoon doing away with Mr Kirk’s savings scheme. If we had that scheme now, we would be much better off relative to Australia. We might have a chance of closing the gap mentioned in Mr Boscawen’s question in question time that the Minister danced on the head of a pin about to avoid answering, because he knows the gap is getting wider month by month, year by year. His policies are not working.

Second, at 40 percent of GDP, gross Government debt is too high. Labour, when elected this November, will work strenuously to reduce it. But we will do so as part and parcel of an economic growth strategy that increases the number of people in jobs; increases the revenue flows to the Crown, which means we do not rack up debt; and increases the amount of economic growth, benefiting the private sector and lifting all boats in the economy. It is not just in New Zealand that cost cutting in the middle of a recession is likely to make recessionary conditions deeper. Cost cutting is likely to contract revenue flows, and must be balanced by offsetting investments that will get growth up in a prudent and responsible way. That is what a Labour Government will do.

If a doctor was taking the pulse of this economy, he or she would be worried, because the vital signs of the New Zealand economy are deeply troubling. I see Michael Woodhouse has perked his head up—yes, a ghost of medical times past. Take the blood pressure, the pulse rate, or the temperature of the economy, and what would we find? We can look at the unemployment rate, which is up from 3.4 percent to 6.5 percent. Economic growth is down from 4 percent to 5 percent under Labour to scrapping along at close to zero under National, with its rosy-glow forecasts and a “she’ll be right next year” approach, which was said last year and the year before and the year before. In question time today I was able to recite the very same line from the Minister of Finance that he has given in response to little blips in the confidence numbers every year for the last 3 years. Nothing changes, because there is no strategy to achieve change. An economic doctor would look at the vital signs of unemployment, see 270,000 people looking for work, and say that is not healthy. Much of it will last for generations.

An economic doctor would also look at prices rising faster than wages year on year to May, with 4.5 percent price increases, 7.1 percent food price increases, and a 1.9 percent increase in wages. The reason that New Zealanders are feeling worse off is that the vast majority are worse off. Mr English counters that by saying that real disposable average incomes have risen. Ah, well, let us strip down those numbers. How would one get to that result? Firstly, one would include the tax cuts brought in by the Labour Government in 2008. Secondly, one would manipulate the time series of the data to go from the low to the peak. Thirdly, one would look at an after-tax average that has been lifted by tax cuts to fat cats, and ignore the fact that more than 70 percent of New Zealanders have slipped backwards and that their real earnings now are less than they were—less than they were—under the Labour Government.

This Budget, on which the estimates we are debating are based, is not credible. Treasury and the Reserve Bank are nearly $4 billion apart in their revenue forecasts. There is $1 billion of unspecified cuts that no responsible Minister of Finance should have signed off on without knowing where they are coming from. The capital account is propped up by $5 billion to $7 billion of unmandated asset sales—privatisation, which the Government said it would not book without a mandate. But it has written them into the forecasts and hired the consultants to carry them out. That is to happen from as early as July this year, notwithstanding the fact that November is the date of the election. The Budget has no plan for jobs and growth. The vital signs of the economy are ailing. The Budget breaks election promises. The proof of the pudding is this: no matter what this week’s or last week’s little indicators might say, the rating agencies have retained the New Zealand economy on negative watch.

AMY ADAMS (National—Selwyn) : Budget 2011 and the Appropriation (2010/11 Supplementary Estimates) Bill are a continuation of the prudent and sensible economic management that the National-led Government has been rolling out in New Zealand since the 2008 election. When we took the reins of office, the global financial crisis was at its peak. However, New Zealand had gone into recession 3 years before anyone else. Our export sector was gasping its dying breaths after 9 years of a Labour Government that thought only Governments could create jobs, that the private sector should be kept out of the way and shrunk down, and that Government spending was the panacea for all ills. Labour delivered us lollies that we could not afford, in a desperate bid to cling to power.

When this Government took the reins in 2008, we started on a track of slowly turning round the large tanker that is this economy, to a point where it is now on a growth track, is sustainable, and is in a phase of job creation, income growth, and a raise in the standard of living for all New Zealanders. That has not happened by accident. In fact, not only have we had to contend with the situation as we inherited it and with the continuation of the global financial crisis, but we have had to contend with some horrific, unforeseen, and—I am sorry to take it into fiscal terms—terribly expensive episodes in the history of New Zealand. Yet despite all of that, we have continued with our plan. We have improved the tax system to change incentives, so that New Zealanders are encouraged and rewarded for getting ahead under their own steam. They are supported if they want to make a better future for their family. The incentives are set up to discourage them from continuing in the consumption-led debt orgy that they were in during the 9 years of the previous Government.

National has ensured that the Government parts of our economy are more efficient. We view every tax dollar we spend as like spending our own money. We think New Zealanders would want us to be just as careful with their money as we would be with our own. That is why we are insisting that our public services deliver faster, better, and smarter outcomes for New Zealanders and why we are insisting that they prioritise the front-line services that New Zealanders expect when they go to the doctor, go to school, or phone the police. When they look to the core Government services, they see it is the people on the front line who matter, not people in the back office in Wellington. Those are the parts of the public sector that we are continuing to support in this Budget and through these supplementary estimates, and that we are continuing to ask our Government sector to roll out and to improve all the time.

We have continued to reduce our reliance on foreign lenders. We have cut red tape in order to help the business sector continue to grow and create the sorts of jobs we want. We are continuing to improve the education system, so that as our young New Zealanders grow up and head into the workforce, they have the skills and confidence to get ahead and create a great life for them and their families. More important, they will do it here in New Zealand and feel that it is a good place to stay and prosper in. They will feel that this is a place where they can get ahead and where they can create a safe and prosperous future for their families. That is the vision of this Government. That is what we have been continuing to roll out over the past 2½ years, and this Government is certainly now taking another step on the path towards that.

One of the things I want to focus on that has been specific to the particular legislation in front of us and to the particular time period is the rebuilding of Canterbury. As I mentioned in my opening comments, this series of events could not have been anticipated by anyone. It seems almost shameful to even talk about it in monetary terms, but of course we must. We must look at the dollar cost of rebuilding Canterbury. It is a task that cannot properly be described in this House. I think most members of the House have probably had a chance to visit the province since 4 September and to see the extent of the devastation. I remind this House and anyone listening that that devastation is an ongoing saga for us all; it is not a fixed amount. I know that when we last talked to the Reserve Bank in the Finance and Expenditure Committee about the estimates, and certainly in relation to the estimates in this Budget, there was talk of a $15 billion to $20 billion rebuild cost. Some later estimates have suggested that even that figure was conservative. Those numbers and estimates were before the latest round of pretty terrifying earthquakes on Monday, 13 June, when we had a 5.7 magnitude quake rip through the region at around 1 o’clock in the afternoon, followed by one of 6.3 magnitude at half-past 2, which was as big as the deadly February quake. Those shakes alone have caused another 94 buildings in the central business district to be scheduled for demolition. They have caused untold further damage in the suburbs. They have caused continuing heartbreak for the people in the eastern suburbs who have had to dig out their homes once more.

This Budget sets up a fund of $5.5 billion for the rebuilding of Canterbury. This Government is making a tangible statement to the people of Canterbury that no matter what the economic conditions are, we will back the rebuilding of that province. We will be behind Canterbury and we will stay with Canterbury for as long as it takes, whatever it takes, because Christchurch is our second-biggest city. It is the home of our world-beating Crusaders—well, they certainly will be soon. It is a part of New Zealand that we are indelibly committed to. On top of that $5.5 billion is the extra $3.3 billion—that is billion dollars, in case I am saying it too quickly—that will be pumped out from the Government through the Earthquake Commission, ACC, and the like. Of course, the Government contribution to the rebuild is one small part of what will happen there. That sort of spending in Canterbury will help to lift GDP. That is good news for my region and is what I want to touch on. Our region—as devastated, exhausted, and stressed as it is right now, and where at times people are at their wits’ end—can have confidence in the future, because the spending of $20 billion or more in that region over the upcoming years will create an economic boom time for that region that is rightfully deserved.

This Budget will put more money than ever before into health and education—more money than ever before. An extra $2.2 billion will go into health. The Government has made changes to the health system in these tough economic times that have seen an extra 20,000 elective surgeries, an extra 1,000 nurses, an extra 500 doctors, and $54.5 million more going into maternity support services. The funding for maternity support services is something I am very, very proud to talk about on the streets of Selwyn and in my communities. That support for the maternity services and for the well child checks is something I think we can be very proud of. We should remember that one of this Government’s first actions on taking office was to ensure that Herceptin would be funded and paid for by the Government for every New Zealand woman who needed it and that families would not have to watch their loved ones die of breast cancer through a lack of Herceptin funding. I will continue to be very proud of that.

I will also talk briefly about water, because water is very, very important to the economy in Canterbury and particularly to the region of Selwyn. I for one am not an apologist for the fact that New Zealand should make the most of its natural advantages if we do so well and sustainably. The $35 million that the Government has set aside for the investigation of irrigation projects is to be commended, but there is a rider that we have to do it well. That is why it is important that we have also set aside a further $15 million for the Fresh Start for Fresh Water Clean-up fund, taking that fund to well over $260 million. That is going into the clean-up of fresh water.

I am very excited about the future for Canterbury, I am very excited by the fact that this National-led Government is standing behind it, and we have a very, very bright future ahead of us while we have the Minister of Finance, the Hon Bill English, in charge. He has taken this economy from the cot-case that it was when we inherited it in 2008 and has put it back on a projection where we have 4 percent growth forecast for next year, and, in fact, that is conservative. The Reserve Bank—

Hon Member: More bullish.

AMY ADAMS:—is more bullish in its projections. The New Zealand Institute of Economic Research is equally bullish. These forecasts have been borne out time and time again by the leading forecasting agencies—170,000 new jobs over 4 years. That is what that sort of growth means. It means 170,000 new jobs, because this Government has delivered a strong, sustainable, trustworthy programme of economic growth that will see us build a better future for all New Zealanders, where there is more prosperity, where there are safer communities, and where people have the chance to get ahead here in New Zealand and do not have to head off overseas or be indebted to our offshore lenders. It is a Budget that I am very proud to support.

Hon DAVID PARKER (Labour) : I am surprised at the contribution from the previous speaker, Amy Adams, because it really does not ring true, given that most New Zealanders are rightly worried about whether their jobs will be there next week and whether they will be able to meet the rising costs of living. Then when I heard Amy Adams say that her Government inherited an economy that was a cot-case, I thought that I really did have to put the record straight, because there is no doubt that the last Labour Government, the fifth Labour Government, was fiscally responsible. We ran Budget surpluses for 8 years in succession, each one of which was opposed by National. It was National that opposed Budget surpluses and called for tax cuts, which would have further fuelled the asset bubbles and the debt and inflation pressures that New Zealand, along with the rest of the Western World, had at that time. So when National tries to rewrite that history and say that we were fiscally irresponsible, it is just not correct. In stark contrast, the National Government has now got us to a position where this year we have a $16.7 billion deficit; so rather than running surpluses, we are running a very large deficit. Why? Because the economy is stagnant and is not growing.

I think the thing that disturbs me most about the Budget and the supplementary estimates is that every time the Government comes back to this House and asks for more money to spend, it has to open up and say that it is not collecting as much revenue as it thought it would, because the economy is not going as well as it had previously predicted; and, secondly, it is having to spend more money than it was previously predicting. Every time it comes back and the deficit grows.

After 2½ years of this current Government it is fair for the people of New Zealand to ask whether the Government is succeeding. When we ask whether it is succeeding, we have to ask which measure we should use. I think we should be generous. I think we should use the measures that National was elected upon—the promises that it made.

Moana Mackey: What were they?

Hon DAVID PARKER: Moana Mackey asks what they were. The first promise was that National would close the wage gap with Australia, and of course it has not. It has not. Despite record commodity prices in our major trading partners, Australia and China, the difference in income levels between New Zealand and Australia has widened. The gap has grown. National’s second promise was that it would cause a step change in the economy. Well, that has not happened. That phrase has even dropped out of those members’ language.

The more concerning thing for me is the underlying trend. In the documents that the Minister of Finance is required to produce as part of the Budget, two statistics really worry me. The first is our current account deficit. The current account deficit does blip into positive figures for this year, in substantial part because we get the reinsurance proceeds from the Canterbury earthquake coming into New Zealand. Therefore, that is new money coming into the economy, which, together with the money we get from our exports overseas, means that for this 1 year, we have a current account surplus—a very small one.

From every year here on until the end of the projection period, New Zealand’s current account deficit gets worse as we spend more as a country than we earn. Every year New Zealand’s current account deficit grows so that by the end of the forecast period it is back to 6.9 percent of GDP, which is a very substantial current account deficit. That flows through to New Zealand’s net asset position in the world, or, more correctly in our case, our net debt position in the world, because New Zealand increasingly owes more and more money overseas. I am not talking just about the gross debt, or the total amount of debt, but about the total indebtedness that New Zealand has to the rest of the world, and what the rest of the world owns in New Zealand, less what we own overseas. That is the measure that the Hon Bill English used repeatedly in this House earlier in the year as being what he said was the major indicator of New Zealand’s failing economy—that our net indebtedness position in the world was getting worse.

Then, what does this Budget show? It shows that in every year hereafter it gets worse still, so that by the end of the projection period, if National is re-elected and is in Government for 6 years, New Zealand’s net indebtedness, or its net international debt position, will get worse. It rises from minus 78.6 percent of GDP this year to minus 85.3 percent of GDP by 2015. This is all predicated on the National Government being re-elected at the end of the year, which we of course do not accept, but if National has its way and is re-elected, it is effectively saying that this great aspirational Government for New Zealand makes us poorer every year.

When Bill English goes home in the evening, he says: “Honey, I shrank the economy.” That is his key line: “Honey, I shrank the economy.”, or “Honey, I grew the debt.”, because New Zealand’s net international position gets worse every year from here on, according to the Budget projections.

The difference between what the Government is proposing and what the Labour Opposition proposes is that we really do think there is a need for material, structural change in the economy. Material, structural change in the economy is necessary if we are to avoid the trend that the current Government has for us of getting poorer as a country.

The economic settings of the country have been largely unchanged in the last couple of decades. There has been a little bit of a tweak made by the Government in terms of its income tax policy—which, in our view, disproportionately favoured those who are already best off; the top 10 percent of income earners garnered 42 percent of the income tax cuts—but the basic shape of the economy will not change, as is evidenced by the fact that our current account deficit goes up and our net debt goes up, as well. The only way that we will change that is if we change the breadth of our exports. We cannot catch up with the rest of the world and do better just by selling more primary produce.

Primary produce will continue to be important and Labour will support those traditional export industries, but where we differ from the Government is that we do not think that continued success in primary produce plus some more of what are generally low-value jobs in tourism will be enough to make the difference that needs to be made in New Zealand so that, once again, we start getting wealthier as a country, rather than poorer.

Mr English, in his contribution a few minutes ago, said we needed to get over borrowing for consumption, yet that is what this Budget shows. We have a return to a current account deficit and more borrowing, much of which will be consumed, leading to higher levels of debt long term. The only way out of that is to have broader exports, not just more exports from the pastoral sector.

The Hon David Carter came to the Commerce Committee on the estimates. In response to questioning by me as to why the Government was favouring subsidies for new irrigation schemes in the agricultural sector over support for other sectors of the export economy, Mr Carter, after denying for a start that it was a subsidy, in the end turned round and attacked me and said: “Well, the Labour Party might not support the agricultural sector but National does. It’s the only game in town.” Those were his words: “It’s the only game in town.” It is that narrow vision from National that has New Zealand destined to continue down this route of getting poorer every year.

We must broaden our exports. To do that, we need to favour our export sector with policy. We need changes to monetary policy. We need improvements to savings, rather than undermining KiwiSaver. We need changes to our tax system to make it fairer to exporters and less advantageous to the speculative sector. We need a range of microeconomic changes, including things like a research and development tax credit the likes of which the Labour Party has recently announced. We need a lot of additional sectoral-based initiatives in new areas of our economy that can produce export jobs. Without it the trend will continue: rising debt and more people moving to Australia. We are fast becoming a training ground for people who do not have a good job in which to utilise those skills, so they move to Australia. That is so much so that Julia Gillard, on a recent visit, said that Australia views New Zealand as a good country for the source of well-trained immigrants to Australia, who build that economy stronger, at a loss to ours. That is no more evident at the moment than it is in respect of the building trades where, despite the need for skilled trades to rebuild Christchurch and build in Auckland, we are losing them to Australia too.

Dr RUSSEL NORMAN (Co-Leader—Green) : The next economic wave of innovation is the smart, green economic revolution. It is a revolution in renewable energy, sustainable food, sustainable transport, green chemistry, cradle-to-cradle design, low-carbon buildings, and so much more. The green economic revolution presents an opportunity for New Zealand to create thousands of green jobs. It is a great opportunity. It is an opportunity to build from the platform of our “clean, green” reputation in order to sell high-value food to a world that is hungry for natural, safe food—a world that is willing to pay a premium for it. It is an opportunity to leverage our experience in clean energy generation to sell clean energy technologies to a world that is desperate for ways to cut carbon emissions. It is an opportunity to harness our smartest minds and our brightest entrepreneurs to embrace a $1.3 trillion global greentech market—a market that is not only the next big thing but also part of the solution to the survival of our very civilisation. The Green Party says that for the sake of our children, for the sake of our planet, and for the sake of our economy, let us ride that green economic wave.

Today I want to talk about one particular part of the green strategy to catch that global green wave, that global green economic revolution. If we want to catch the global green economic wave, we need to build on the success of our existing publicly owned energy companies. They are the launching platform for the smart, green New Zealand economy. Let me explain. These companies are the nucleus of the growing clean energy sector in New Zealand. All of them have some renewal generation experience. Even Solid Energy now has a biofuel operation, although it is otherwise involved in coal. These companies have the size and critical mass to compete internationally, unlike many other New Zealand companies. These energy companies have the kind of intellectual property and hands-on practical experience that is desperately sought after in a world that is hungry for clean energy and low-carbon energy. These publicly owned energy companies are worth more today than they were yesterday, and they will be worth much more tomorrow. That is why selling them is a huge mistake. They can form the nucleus of the clean energy sector in New Zealand—a sector with truly massive export potential. They have already started to look for export opportunities—for example, some of them are building geothermal generation in California right now, but in fact the sky is the limit for the export of clean energy technology. The clean energy sector is booming internationally right now. The solar, wind, and biofuels sector is worth $190 billion in sales this year, and it is projected to grow to $350 billion annually within the next decade. New Zealand can get a piece of that global action by being focused and strategic in building on our existing strengths.

We can also tap into the creative sectors in the private sector, beyond the public energy companies. The public energy companies are only the start. I believe that we have a fantastic entrepreneurial spirit in New Zealand. I believe that we have the imagination and the drive to patent new ideas and new technologies that will be part of the global green economic revolution.

We need to back ourselves, instead of relying on other people. Every year at the sustainable business awards there are dozens of new start-ups bubbling with great green ideas. An Investment New Zealand report identified 250 companies and organisations involved in researching, developing, and commercialising clean technologies in New Zealand right now. These cleantech entrepreneurs need a partner. They need a partner with expertise and capital in order to do the research, development testing, and marketing to launch their products into the world. That is where the publicly owned energy companies come in. The public energy companies can step up to form alliances with cleantech private partners. They can form partnerships with greentech bright sparks who have new ideas but need a strong partner. Supercharged public energy companies can form the hub of a network of clean-technology joint ventures. Some of them have already started—for example, Meridian owns 93 percent of Whisper Tech, but we can do so much more. Supercharged energy companies can launch our green entrepreneurs into the world together, at the same time as building a safer future for our kids. New Zealand would be renowned for its creative solutions to global problems and global challenges if we did that. Instead of us paying to use other people’s ideas, why not invent our own ideas, and they can buy ours for a change?

However, a small country like New Zealand will always face the risk that successful companies will be bought up by overseas owners and have their intellectual property, their headquarters, and their research moved offshore. What happens is we get left with a branch office that sends the profits offshore and has no focus on exporting from New Zealand. It is an all-too-familiar story, and it happened to Contact Energy. But we can do something about it: we can keep it Kiwi, we can keep the public energy companies in public ownership so that they stay here and form the launching platform for a clean energy export sector. We should keep the energy companies in public ownership so that they stay in New Zealand, but we should let them partner with private sector cleantech entrepreneurs. Those partnerships then have an anchor in New Zealand so that we get the ongoing benefits of jobs and research, and we do not lose critical mass overseas. Now that is what I call a mixed economy.

The Government’s so-called mixed-ownership model actually loses the public element of the mix, and ultimately leads to the loss of these companies to overseas owners as the anchor of public ownership diminishes. We miss the opportunity as a country to catch the green energy wave. That is not an economic strategy; that is a white flag. That is not a vision for New Zealand; that is a plane ticket for our best and our brightest. Why does this Government want to be a second-rate follower instead of a first-rate leader? National says that energy companies need access to capital. Well, fair enough, but we do not need to privatise them in order to give them that access. There is an alternative way to get access to capital, and that is for the publicly owned energy companies to issue green energy bonds directly to the people of New Zealand. It is a win-win solution.

After the debacle of the finance companies collapse, many New Zealanders are looking for a safe place for their retirement nest egg. Green energy bonds would provide such a safe place while giving public energy companies access to the capital that they need so that they can take advantage of global green energy opportunities. It keeps companies in public ownership and in New Zealand. Supercharged public energy companies partnered with bright, green Kiwi entrepreneurs, funded by Kiwi mums and dads with safe, green energy bonds—

The ASSISTANT SPEAKER (H V Ross Robertson): I am not signalling to the member; there is too much chatter going on.

Dr RUSSEL NORMAN: Supercharged public energy companies partnered with bright, green Kiwi entrepreneurs, funded by Kiwi mums and dads with safe, green energy bonds, exporting clean technology—now that is a vision for a bright future for our country. I say to National that we tried the old recipe of privatisation and foreign takeover in the 1980s and 1990s, and it did not work. We can have supercharged public energy companies partnered with cleantech entrepreneurs, funded by Kiwi mums and dads. We can have a clean, green economy that works for everyone.

It is our collective destiny to live at a time of extraordinary opportunity and extraordinary danger. There is a giant wave of economic opportunity headed in our direction. It is a green economic revolution. It is time to put up our heads, look forward, and start paddling for all we are worth, because our very children’s lives depend on it.

Hon JOHN BOSCAWEN (Leader—ACT) : It has been interesting sitting in the House this afternoon listening to the debate on the Imprest Supply (First for 2011/12) Bill and on the Appropriation (2010/11 Supplementary Estimates) Bill. I will go back and comment on some of the contributions made earlier this afternoon. If I was to summarise the speech made by the Hon Bill English I would say that it is the Government’s argument that the economy is improving, that there is a more positive atmosphere out there, and that New Zealanders are optimistic. Having gone through 2 or 3 years of recession, New Zealanders are optimistic. They are benefiting from the lowest interest rates in 45 years, albeit higher interest rates than in the euro countries, the United Kingdom, and the United States, but, nevertheless, the lowest interest rates New Zealanders have enjoyed for the last 45 years. They are also benefiting from very high export prices.

The Government’s economic magic—if we want to call it that; the ACT Party would not—or its economic prescription has been to invest in infrastructure and to rework the tax system to create an incentive for New Zealanders to work and to save. All tax rates have been reduced to a point where approximately three-quarters of New Zealanders pay no more than 17.5 percent in the dollar as a tax on their income. So, yes, that is a positive story to tell. Yes, there are signs that the economy is turning. But ACT has grave concerns about the assumptions in the Budget. The Budget’s prediction of a surplus in 2015 is based on a growth rate of 4 percent in 2014 and 3 percent in 2015. We think that those figures could be wildly optimistic, but for the moment those are the figures in the Budget.

It was interesting to listen also to the contribution of Amy Adams, a contribution that David Parker took great umbrage at. David Parker said that, on the contrary, the economy was not a cot-case when the National Government took it over; in actual fact it had 8 years of surpluses. Well, I have to say that the Labour Government probably did a good job during its first 6 years in Government. I see the smiles and the laughter from Mr Sam Lotu-Iiga. [Interruption] I say to Mr Lotu-Iiga, in response to his comments, that in 2004 Government spending under the Labour Government was 29 percent of GDP—29 percent of GDP. There was very tight fiscal restraint in the first 5 years of the last Labour Government. It got Government spending down to 29 percent of GDP. That compares with 36 percent today—36 percent. What followed those first 5 years of a Labour Government? It went on a huge orgy of spending. It blew all the good work it had previously done.

Hon Tau Henare: That’s right; orgy.

Hon JOHN BOSCAWEN: Absolutely; an orgy of spending. That Government tried to buy the 2005 election. That was exactly what it did. It bought the 2005 election and the people of New Zealand have been paying for it ever since. It commenced a whole series of programmes to try to buy support. Let us look simply at interest-free student loans. Sir, if you were a parent sending your child—

The ASSISTANT SPEAKER (H V Ross Robertson): No, no.

Hon JOHN BOSCAWEN: The parents of New Zealand who send their children to tertiary education would be absolutely foolish not to advise their children to borrow the absolute maximum amount they could. The student loan scheme we have had in this country since 2005 has encouraged students to go out and borrow everything they can, because they know they will have to pay it back in devalued dollars, if they pay it back at all. Mr Parker is right to feel umbrage at the fact that his Government’s economic management had been criticised in respect of the first 5 years. But after that the thing did turn into a cot-case, and National did take over a disaster.

Interestingly, Mr Parker highlighted the fact that this year will be the first year we run a current account surplus. This year will be the first time we have more money than we borrow from overseas. We will run a current account surplus. As he said, that is the measure that National uses to judge the change in wealth of our country. Interestingly, what Mr Parker did not say is that this year is the first year in 40 years—the first year in 40 years—that we have a current account surplus. Tragically, it is because of the earthquakes in Christchurch. Tragically, the current account surplus has happened only because billions of dollars have flowed into the New Zealand economy from foreign reinsurers and are forecasted to continue to flow. That is the reason we have a current account surplus. We have not had one since 1973—since 1973—nigh on 40 years.

So in the 9 years of the Labour Government that Mr Parker was so very proud of we ran a current account deficit. That was a current account deficit—the same sort of current account deficit that Mr Parker would castigate the National Government for forecasting that it will run until 2015. Let us look at the impact of a current account deficit. When New Zealand consumes more from overseas than what it exports overseas we run a current account deficit. We have to borrow from the rest of the world. The impact of that is to increase the value of our currency. Foreigners, if they are going to lend us their foreign dollars, need to buy New Zealand dollars, and that bids up the price of our currency. Nothing does more to undermine the viability of our exporters and our farming industries than an overvalued dollar.

Interestingly, Mr Parker talked about putting in place structural reforms, the reforms that would encourage exporters and the import substitution industries. One of the ways we can do that is to reduce New Zealand’s current account deficit but we can also do it by reducing our own internal deficit. We are forecast to run a deficit of $16.8 billion this year. We have to fund that from overseas. That is the equivalent of $300 million a week. It is not particularly relevant whether we borrow $380 billion this year and we over-borrow, and we under-borrow next year. The blunt reality is that we are spending as a country about $300 million per week more than what we are taking in in income. That money is being borrowed and it adds to our current account deficit.

If we are serious about putting in place the policies that will help our exporters and that will actually rebalance our economy in the way that both the Labour Party and the National Party say they want to do, we can do nothing more successful and nothing better than cut back, reduce our expenditure, and reduce waste. It is the shame of the Labour Government that in a desperate effort to buy the 2005 election, to get re-elected, it committed to extending the interest-free student loan scheme so that any person studying tertiary education at an institution would be absolutely foolish not to borrow the maximum. It also doubled—in fact, almost tripled—the cost of Working for Families. Working for Families is social welfare for people on, in some cases, over $100,000 a year, and the cost of Working for Families has gone from about $1 billion in 2005 before the election to just under $2.8 billion today.

If we actually want to restructure the economy, we have to make tough decisions. Yes, National has done a lot, and yes, it has made moves. It could have moved a lot faster, and it could have moved a lot earlier. It could have made some of the changes it has made in this year’s Budget 2 years ago. That is a lost opportunity. That opportunity is gone. If we really want to restructure this economy, if we really want to raise our living standards, and if we really want to reduce the income gap between Australia and New Zealand, we need to make those tough decisions. At question time I asked the Minister of Finance whether the gap between GDP per capita in Australia and New Zealand had widened or narrowed. He was not prepared to acknowledge that it had widened. We need to stop that. We need to turn it round. This country can be an awful lot more prosperous than it is, and the ACT Party has the policies to ensure that that happens.

RAHUI KATENE (Māori Party—Te Tai Tonga) : Coming to the Appropriation (2010/11 Supplementary Estimates) Bill today, I am reminded of a phrase used by Dr Martin Luther King: “the fierce urgency of now”. The fierce urgency of now is about all of us considering what is in the best interests of our iwi, hapū, whānau, and mokopuna. The Appropriation Bill provides us with a perfect opportunity to assess the progress the Māori Party has made in putting in place policy to make a better future for us all. In this term the Māori Party has secured more than $600 million for our people, and has convinced Government to recognise indigenous rights. No other party in the history of Parliament has achieved that.

Although plenty can be said from the sidelines, the real action is alongside Government. Evidence of that is very clearly outlined in this bill. In schedule 1 we see ample evidence in agriculture and forestry of our achievements as a result of our negotiations with the Government in respect of the emissions trading scheme. In Vote Agriculture and Forestry we see reference to implementation of the emissions trading scheme and indigenous forestry, climate change research, and the Afforestation Grants Scheme. I will just update the House on the progress achieved because of the Māori Party’s negotiations in this area. The Agriculture Emissions Trading Scheme Advisory Committee was formed to provide independent advice on bringing agriculture into the emissions trading scheme. It included the strategic advice of Roger Pikia, the Chief Executive of Te Arawa Group Holdings, as well as Edward Ellison, a sheep and beef farmer of Ngāi Tahu and Te Ātiawa whakapapa.

In afforestation, the Government has made a commitment to the Iwi Leadership Group to investigate land that could be made available for carbon farming. It has also agreed that officials will work with the Māori reference group executive to develop a standardised contract structure. In this respect, agriculture and forestry provide an excellent example of the type of progress Māori can expect when there is a strong and independent Māori voice sitting alongside Government. As constituents in Te Tai Tokerau have been telling us, it is better to be in the House, immersed in the action, than to be sitting on the outside, washing windows and waiting.

The emissions trading scheme reaped far more benefits for Māori as a result of our negotiations than in these two areas alone. Under our emissions trading scheme negotiations the Māori Party halved the petrol and power levy increase. Electricity prices would have increased by 10 percent; we got that reduced to 5 percent. Petrol and diesel prices would have increased by 7c per litre, and we got that down to 3.5c. In terms of dollars and cents, it would have cost the average whānau about $165 more per year if the Māori Party did not intervene. On top of that, approximately 6,000 low-income Māori whānau have had their homes insulated as a result of the Māori Party negotiating a 100 percent subsidy for housing insulation for those with a community services card. I will repeat that: 6,000 whānau have directly benefited from Warm Up New Zealand.

The next vote I come to is Vote Communications, and in particular broadband investment in rural supply and schools. The Māori Party has been delighted with the progress we have made in establishing Ngā Pū Waea, the Māori broadband working group. This work has three immediate impacts: first, the potential to monitor the price of mobile charges for the householder; second, the opportunity to increase digital accessibility for marae; and, third, it will lead to employment and training opportunities in information technology. All the statistics show us that an estimated 20 to 30 percent of New Zealanders do not have access to digital technology. This includes people living in rural and isolated areas; Māori, Pacific peoples, and other ethnic groups; people on lower incomes; people with disabilities; and older New Zealanders.

The broadband deal that the Māori Party has negotiated enables Māori to have access to cutting-edge technology while also providing opportunities for trade training and employment. The extended powers of Ngā Pū Waea mean that marae, kōhanga, kura, wānanga, iwi rūnanga, and Māori providers will also benefit from the roll-out of ultra-fast broadband.

The next vote I refer to is Vote Education. I am interested in the $5 million set aside as interventions for target student groups, the $3.5 million for support and resources for teachers, and the $2.6 million for strategic leadership in the sector. The Māori Party, in responding to calls from our people, has been adamant that we need to lift the performance of key educational institutions if we want to achieve the outcomes we so desperately need to see. In the 2011 Budget we have been able to make the gains that Māori have been calling for for so long. There is $9 million to support iwi to develop school community language initiatives; $3 million to Te Rūnanganui o ngā Kura Kaupapa Māori o Aotearoa for curriculum and resources based on the philosophy of Te Aho Matua; $8 million to realign kura transport assistance, which has been capped since 1995; $60 million to build new kura kaupapa Māori; $17 million to allow an additional 20 schools to participate in the Te Kotahitanga teacher training programme, which is training in cultural competencies; and $6.5 million for family-based literacy programmes in all decile 1, 2, and 3 schools.

I have heard various reports over the last few weeks from Labour list MP Mr Davis, who wants to promote education as part of a successful Māori future, and from former MP Mr Harawira, who speaks of his dream that every child will be able to read, write, and count. The Māori Party has far greater aspirations for all our tamariki. We are not just talking about wanting them to be successful; we are putting in place interventions so that they are. We are working with teachers to improve cultural competency. We are addressing transport barriers. We are supporting whānau to upskill in literacy. We are actively engaging with iwi. We are placing emphasis on te reo Māori. We are developing priorities that are designed to make education meaningful and relevant to all Māori children and young people. And we are doing those things by working with the Government, by exercising our leverage to ensure progress.

Finally, I commend the Hon Dr Pita Sharples, the Minister of Māori Affairs, for the investments outlined in the Māori affairs appropriation to provide integrated whānau social assistance. This appropriation has been responsible for the provision of Kaitoko Whānau. There are 50 workers nationwide who work with all members of the whānau to support them to access proper support, to advocate for their needs, and to ensure that as a whānau they are all moving forward together. Ōranga Whānau involves placing kuia into communities to work with new parents to give them support and guidance on being good parents and to raise happy, healthy tamariki. We have developed a very successful Māra Kai programme. We have funded over 450 māra kai nationwide to support whānau to grow their own kai and rebuild community connections at a time when money is tight. This is about community resilience. And, of course, there is Whānau Ora.

There is so much that could be described that emerges from having a relationship with Government. If anything, this update reminds us just how important it is to place the issues before the decision makers and the funders if we really want our aspirations to be achieved.

PESETA SAM LOTU-IIGA (National—Maungakiekie) : Thank you for the opportunity to speak on the Imprest Supply (First for 2011/12) Bill as well as the Appropriation (2010/11 Supplementary Estimates) Bill for this financial year. It is an honour to speak in this Parliament. Before I begin, I congratulate the Prime Minister on his address to the Australian Parliament yesterday. It was a historic speech: the first time the leader of this country has addressed the Australian Parliament, and the eighth time a foreign leader has spoken to the Australian Parliament.

One of the reasons why this National Government is delivering on its promises is because of its leadership. It is leadership not just from the Prime Minister but also from the Minister of Finance. It is about the economic plan that this National Government set out when it first took office in November 2008. It is an economic plan that relies on the tax system being streamlined and made more effective in order to allow New Zealanders who are out there working and saving to keep more of their real income. Real income after tax has never been better for New Zealanders than since this Government took office 2½ years ago.

Some of the other points made this afternoon are ones I would certainly like to reinforce in my speech. There was one about regulations. Under the Clark Labour Government regulations, red tape, and bureaucracy increased dramatically. I attended and spoke to the small-business conference last year with the honourable member Ross Robertson, and the one thing that small-business owners tell me in my electorate of Maungakiekie, and they also told me at this conference, was that red tape and regulations had got out of control for small businesses. That is what this Government has addressed in its 2½ years. It has addressed and cut red tape, and the Hon Rodney Hide has introduced legislation to deal with regulations, which is currently before the Commerce Committee. That is the type of regulation-cutting exercise that this Government is becoming more and more well known for.

In these financial hard times the Government has been committed to infrastructure spending. This Budget has demonstrated that commitment not just to build roads but also to build on our plan in relation to broadband delivery, the building of schools, the building of roads, and the building of hospitals. We all know—even the Labour Opposition would concede—that infrastructure spend is the type of spending long term that will increase our economic growth rates, increase productivity in this country, and provide better jobs and opportunities for our communities. So infrastructure is one of the key cornerstones that this National Government has put in place around its economic plan.

It is also about innovation and trade. We know that the Minister of Trade, the Hon Tim Groser, has been one of the hardest-working Ministers, negotiating free-trade agreements throughout the world. That has resulted in increased exports, and we heard this afternoon that the current account is in surplus for the first time in many years.

Hon Maryan Street: He hasn’t done one of his own yet.

PESETA SAM LOTU-IIGA: I ask the member Maryan Street what happened under the Labour Government when we had 5 consecutive years of export contraction. I will repeat that for the member: we had 5 consecutive years of export contraction. That was because under Labour, Government spending and growth in the Government sector crowded out private sector investment, crowded out exports, and crowded out this economy, which had been travelling so well throughout the 1990s under the National Government.

This Budget is also about Government services and making more effective savings in Government bureaucracy. We estimate that in the next 3 or 4 years we will get savings of just under a billion dollars. Let me emphasise that: savings of just under a billion dollars in Government services that had become so bloated under the Labour Government that they had expanded threefold. This Budget is not only about making Government services more effective but also about delivering more services to the front line. Let me just elaborate on how we are delivering those services to the front line. In 2008 we campaigned on bringing about more effective services in the front line, so it was about more nurses and it was about more police. We have seen that in South Auckland. We have seen what more police on the streets in South Auckland has done to crime rates in that area. We have seen the impact on our communities in South Auckland. People feel safer, and people feel more secure in their living environments and in their working environments. That is what front-line services and an increase in Government spending on the front line deliver to our communities.

It is also about education. In the last 2½ years this Government has stood for national standards. It has stood for standards in education whereby children and their parents understand what standards are required. If children do not achieve those standards, then the types of learning environments and resources that will be required to meet the standards expected of our children throughout this country—national standards, skills, training, and the like—will be very much part of this Government’s agenda in order to not only expand our economy but also to provide for our children going forward.

In terms of infrastructure spend, this Government, as I have already said, has put a vast amount of money into ultra-fast broadband: $942 million will complete the Government’s funding commitment, and $28 million will connect fibre to schools across the country. We have also seen in health and education the type of spending that will be more effective on the front line. We are looking at $18 million for 40 extra medical training places. We also have a bonding system whereby our young, our bright, and those who have recently graduated in nursing and medicine are better able to stay within the country rather than go overseas. That is the sort of bonding where they can realise their potential within our work environment in New Zealand.

Schools have had an increase in operational and capital expenditure over the last 3 years. I am particularly proud of our National Government for spending $550 million for early childhood education, particularly focused on those children who do not access early childhood education. We are talking specifically here about Māori, we are talking specifically here about Pasifika children, and we are talking specifically about those high-needs children who do not have that chance in life, that start to life that is so important in early childhood education. This Government is supporting the construction of many early childhood centres in those high-needs areas. I attended one such opening with the Minister of Pacific Island Affairs, the Hon Georgina te Heuheu. It was in Māngere, the place where I grew up in South Auckland. We saw the delight and the joy in the children’s eyes and in their parents’ eyes when they felt that their needs were being met through funding for their early childhood centres not just to get early childhood education but also language education in their respective Pacific languages, and that is a victory for this Government. It is a victory for those who are in high-needs areas.

I reiterate that this Government has a plan, and it is a plan that is about promoting jobs and opportunities. It is about promoting our front-line services. It is about having education and skills training in place in order for our youth to be better promoted into jobs and opportunities. It is about infrastructure spend and the long-term goals around economic prosperity and economic growth, which the Labour Party sadly does not understand. I support, obviously, this Budget. It is one that in these straitened, difficult times is prudent but which also invests in the future.

STUART NASH (Labour) : I must admit, the last speaker, Peseta Sam Lotu-Iiga, made some points that demand a reply. Firstly, that speaker talked about a spend in infrastructure. I can inform him that $71 million was allocated by the Labour Government to the Hawke’s Bay infrastructure build. What happened there? Mr Joyce summoned the chair of the regional council, Alan Dick, a past mayor and a very good man, to Wellington and told him that $71 million was being sucked out of Hawke’s Bay. This money was raised in the Bay, raised by the people of Napier, and raised by Mr Foss’ constituents in Hastings, only to be taken away—$71 million. How is that a spend in infrastructure?

The last speaker also talked about the spend in early childhood education. I would like that speaker to come with me and visit the Napier Kindergarten Association. I would like him to explain to the chief executive officer of that association that cutting $570,000 a year out of the budget of the Napier Kindergarten Association is a good move. If that is progress, then I will be damned. If that is good for the young people of New Zealand, then goodness me! Cutting $570,000 a year from the Napier Kindergarten Association budget is an absolute disgrace—it is a disgrace.

The other thing I will say is that the Māori Party member Rahui Katene has an absolute nerve standing up and saying that being aligned with National is good for Māori. How does that member justify an increase in GST to 15 percent, which all the statistics have proven hurt the most vulnerable in society—the most vulnerable? We all know that the shame of this country is that Māori are overrepresented in a lot of those statistics. The Māori Party member stands up and says they have done a lot of good stuff for Māori. I ask her to come to Maraenui in the Napier electorate and tell the people there what a wonderful thing the emissions trading scheme has been for them. They will shake their heads. They do not give a damn about the emissions trading scheme. They give a damn about the 20 percent increase in the price of fresh fruit and vegetables. They give a damn about the guts being ripped out of early childhood education in the Bay.

The Māori Party’s aligning with National has been an absolute disgrace, and that is one of the reasons why Hone, the “Mad Bugger”, left that party. Kelvin Davis knows, and that is why on Saturday he will be returned as the member of Parliament for Te Tai Tokerau. He is up there speaking the truth and representing Māori interests. Māori will finally realise that the only party that works hard for Māori is the New Zealand Labour Party. The New Zealand Labour Party has always been the party that works hard for Māori, and it will continue to be. On 27 November, when the Labour Government gathers, we will hold all the Māori seats, and that member knows it. I hope that member has her CV prepared, because she will need it.

I will make only three other points. This is a Government without an economic plan. The previous speaker stood up and said that there is a plan, but everything that Government has put forward either is destructive or rips wealth out of the guts of New Zealand. The first plan was to mine national parks. Gerry Brownlee stood up and said the Government was going to mine national parks. What happened? The people of New Zealand marched. There were no ads; they just marched. Through Twitter and Facebook they got together, and Gerry sat there looking more red-faced than normal because he was hugely embarrassed by such a gaffe: the mining of one of New Zealand’s true global competitive advantages—digging it up and destroying it. They call that a plan!

What was the next plan? The next plan was to give massive tax cuts to the very wealthy. Someone earning $1 million a year got $1,000 a week. Yet someone on the median wage in Napier got about five bucks a week. Let us remember that the cost of fresh fruit and veges has gone up by 20 percent. Someone on the median wage in Napier got five bucks a week. Someone on the average wage is struggling to pay the bills, and 75 percent of New Zealanders earn below the average wage. Yet someone who earns $1 million a year gets $1,000 a week. How is that fair at all? It is simply not fair.

The massive tax cuts have increased inequality in this country to levels that I thought, and certainly our forebears thought, could never exist. With inequality comes poverty, and poverty steals dreams. This Government talks about aspiration, but delivers the complete opposite. The thing that surprises me is that Economics 101, Keynesian economics—and Sam would have studied this at Cambridge University—says that in times of recession we give money to those who really need it and will spend it, because that stimulates demand. If we give money to those at the top end, all they do is retire debt or save it. When the economy is booming, that is not a bad outcome. But when it is in recession, it is the last thing we want. The Government needs to stimulate demand, yet it has done the complete opposite. I ask Sam whether they taught him that at Cambridge University. They must have. And John Boscawen knows that.

Peseta Sam Lotu-Iiga: Milton Friedman.

STUART NASH: That says it all. He has finally admitted it. Milton Friedman—the economic theories of the 1990s, of Thatcher and Reagan. The last time I heard that was when Jami-Lee Ross mentioned Thatcher and Reagan in the same sentence as his heroes. That is what National represents. Goodness me! That was a scary speech.

The next plan was to sell it: if it is not screwed down, let us screw it anyway and sell it! All we ask for is just a little honesty. When the Government talks about the mixed-ownership model, it should just call it what John Key called it: State asset sales. That is what he said: State asset sales. Let us be honest about this. Do not tell people that the shares will go to ma and pa investors, because we know that is not the truth. Members opposite know that is not the truth. We have one precedent: Contact Energy shares. Eighty percent of Contact Energy shares are owned by 0.1 percent of investors, and that is what will happen when that Government sells State assets. But the Government will not do that. It will not be around. Mr English and Mr Key say we should take that policy out to the public, and we are. The people of New Zealand cannot stand it; they hate it.

Another policy is to rip the guts out of KiwiSaver. Politicians told New Zealanders to save. We said that they needed to save. But these politicians say that people do not need to save, so they will take it away from them. No wonder the people of New Zealand are disillusioned with that Government. It is unbelievable.

What about research and development? The Government talks about innovation but the first thing it did was to go against the advice of Treasury and advice from its own Minister of Revenue and cut research and development. Then it cut Labour’s Fast Forward Fund, which was $1 billion set aside for innovation, and set up the Primary Growth Partnership. If we look in the supplementary estimates, we see that the Government did not spend anything. There was a $35 million underspend. Mr Joyce talks about broadband. The Māori Party talks about broadband. Well, if we look in the estimates we see that they underspent by $115 million. They have not delivered anything. This Government talks but does not walk. It talks but it does not walk that talk, and it is a shame and a disgrace; there is no doubt about that.

But people of New Zealand do not need to worry, because Labour has a plan. We will invest in innovation, we will bring back our research and development tax credit, and we will provide relief for the families of New Zealand who are struggling to pay their bills. We will have a tax system that is fair and that will ensure that everyone pays their fair share. Do members know what we will do? We will remove the GST from fresh fruit and vegetables, because we know that healthy lifestyle options are vital if we are to grow as a nation.

I reiterate only three things. Firstly, that is a Government without a solid, positive plan to grow this nation. Secondly, Labour has a plan. We will roll it out for the people of New Zealand to see, and there will be only one choice for every voter.

The ASSISTANT SPEAKER (Eric Roy): The member’s time has expired.

Hon TAU HENARE (National) : The previous speaker, Stuart Nash, is the brains trust of Labour. He is the new leadership of Labour. We are less than 6 months away from a general election, and Labour puts him up. We are less than 6 months away from the most important election that Labour members will ever fight in their lives, and they put him up.

He talked about the plan. I will read out to that member what the plan has been, and will be, going into and going past 26 November: “For the past three years the National-led Government has provided the responsible economic management that New Zealand was in such need of after nine years of Labour. When we took the reins of office the financial crisis had reached its peak and the New Zealand economy, which had gone into recession before anyone else, had shrunk three percent in a year, topping off five years of historically low growth. Exports had flattened out completely, government spending was out of control and the Treasury books showed never-ending budget deficits and Government debt spiralling out to 60 percent of GDP and beyond.”

I can go on and on about what we were faced with when we took over, but I want to read what the media and the people of this great land have been talking about.

Phil Twyford: Talk about the rates.

Hon TAU HENARE: Let us talk about the rates. That is right: let us talk about the west Auckland rates that Mr Twyford’s mates Bob Harvey and Penny Hulse have ratcheted up over the last 15 years. They made it impossible for businesses to work in west Auckland. In fact, they raised rates so high that they were subsidising everybody else. But I digress.

Here is what the Gisborne Herald editorial said on 20 May about the Budget: “The majority will appreciate the belt-tightening in a response to tough economic times and the scale of the Christchurch earthquakes—and the fact a government is not trying to bribe us with our own money in election year.” That refers to the complete bribe from the last Government on student loans. Just weeks out from the election, it came up with that doozy of a bribe. “National has delivered a reasonable Budget for the times,” said the Gisborne Herald.

The Waikato Times editorial of 25 May 2011 stated: “Labour Party leader Phil Goff is on the wrong track when he says he hopes to create up to $22 billion a year in new business by restoring tax credits to reward R&D.” When Phil Goff was asked about the detail, what did he say? He said to go and ask somebody else, to go and ask the policy guys, because they knew more about it than he did.

The Nelson Mail opinion article on 24 May said: “the Department of Labour estimates the $2 an hour hike to the lowest adult pay rate would carry the significant cost of 6,000 jobs. At a time when the economy is in desperate need of greater productivity, the apparent downside in a lift of this magnitude—no matter how just it might be—are obvious.” Labour members love to pin their election promises on raising the minimum wage to $15 an hour. They took a bus around the country to talk about GST. I asked the Leader of the Opposition whether he would cut back GST. He did not have an answer. He said we would have to wait and see.

Michael Woodhouse: What did the bus say? “Axe the Tax”.

Hon TAU HENARE: Labour was trying to dupe the rest of the nation into believing that Labour would axe the tax. But now we do not know whether it will.

It is pretty plain from all of the Treasury documents about the Budget that we are going to enter into a period of good times for this country. As I have said on many occasions in this House in the last couple of weeks—

Phil Twyford: Hope and pray.

Hon TAU HENARE: It is not about hoping and praying; it is actually about being back in black in 2014.

I just want to say something to Mr Twyford. It was pouring with rain on a wee Sunday afternoon, and most west Aucklanders were taking their rubbish out. But Mr Twyford was trying to figure out into which letterbox in our street he should put the only Labour paraphernalia that he had. I went out there, said hello to Mr Twyford, and checked my letterbox. There was nothing in it—there was nothing in it. I thought I would go next door to check that letterbox. This is not illegal, because it is my mother-in-law’s letterbox. There was no Labour paraphernalia in that letterbox either. So as it poured down with rain, I went to check the other neighbour’s letterbox; it just happens to be my brother-in-law’s. There was nothing in the letterbox. I saw that out of 50-odd letterboxes Mr Twyford put only one pamphlet in one letterbox, and even then he had trouble finding the number. Again I digress, because it was so much fun watching Mr Twyford in his little raincoat, running around hopefully, trying to get some more votes. Not in my street, he will not—not in my street, he will not. They are a class act out in west Auckland.

I say that by 2014 we will be back in black. Not only will we have already won the Rugby World Cup but we will be back in black—so much so that over that period 170,000 jobs will be created. Who can turn their heads and pooh-pooh the idea of 170,000 extra jobs in our country at a time when we really need our economy to go ahead? Quite frankly—and I do not want to sound arrogant—the planets are all aligning. The stars are there—

Hon Maryan Street: Back to Destiny Church for you.

Hon TAU HENARE: I must admit that I enjoyed my time at Destiny Church, and I am just waiting for the blessing to kick in, hopefully before 26 November. But I tell members that we do not rely on the blessings of anybody. We rely on good, hard, honest work by good, hard, honest Kiwis who want to see our country go ahead. Given what we have had to put up with over the last 2½ years in terms of natural disasters and the worldwide economic downturn, I think we have done pretty damned good—pretty damned good. We are looking at some good times just round the corner. That is why we have had to make some hard calls, which the Opposition will never ever get. Thank you, Mr Assistant Speaker Roy, for listening so diligently.

Hon MARYAN STREET (Labour) : National had 9 years in Opposition to come up with a decent plan for lifting our economy and driving it ahead into the future. It had 9 years to come up with a prescription that might have been innovative and might have given members opposite something to talk about. As it is, National members have nothing to say, so we are getting cliché upon cliché. Peseta Sam Lotu-Iiga gave a speech that was so full of clichés and so lacking in substance that it was an embarrassment. What we have from this Government is a vacuum where its economic policy ought to be—a complete vacuum. After 9 years of sitting around with nothing better to do except think up how National might run the country if it was given the opportunity to do so, it cannot come up with anything other than the same old prescription—the same old failed policies—of the 1990s: sell State assets, drive wages down, provide tax cuts for the wealthy, then hope and pray. We have had nothing new in this Budget or in the supplementary estimates, which is, after all, the thing under discussion at the moment.

We have not had one new idea out of this Government on which we could base some hope for the future. A cycleway does not count. It does not cut it, especially if people live in Nelson and the cycleway is designed to go round the latest open-cast mine on Dun Mountain, which is excavating more fossil fuels. Are people meant to be attracted to cycling round such a thing? In the time National has been in power, and even for the 9 years before that when it had time to think up policies, it has not come up with anything remotely credible or usable to underpin the future direction for our economy and for New Zealanders.

I will now talk about asset sales. This is one of those poverty-stricken ideas that this Government has put up, pretending to go to the country on 26 November seeking a mandate for asset sales, when in fact all the apparatus for the selling off of State-owned enterprises is being put in place now. Regardless of the fact that the Government does not yet have a mandate from New Zealanders for that purpose, it is going ahead. But it is a major con. Every family knows that if we hock off the family silver, we can do it only once.

Hon Members: Oh!

Hon MARYAN STREET: This may be a source of ennui to members opposite, but everybody in New Zealand understands it, which is why the policy is disapproved of two to one by New Zealanders. This Government would have people believe that mums and dads will be able to buy a share in State-owned enterprises that they already own. When those assets are sold, there will be no more dividends.

Let us have a look at some of the figures relating to these assets. For example, the four State-owned energy companies returned $732 million to the Crown last year. Those were the dividends to the Crown: $732 million from the four State-owned energy companies that this Government intends to sell. What could we get for that sum of money? We could get over 10,000 teachers, 12,000 police officers, 33,000 hip replacements, or nearly 70,000 university placements. We could get a lot with that money, so why would we sell lucrative State-owned assets, when they will inevitably go into foreign ownership? Why would we sell those assets when they are good earners, and when those dividends can be placed into interests that benefit New Zealanders?

The Acting Secretary to the Treasury said that the growth forecasts in the Budget are too optimistic. It is part of the con of this Government to say that good times are just round the corner. We just heard the previous speaker, Tau Henare, say that.

On top of that, National says that a way to get there is for every New Zealand family to come up with $4,000 in order to buy some shares in State-owned assets, which they already own as taxpayers. Where will people get that money from? When I look at the families who are struggling to get by in Nelson, and there are many of them—Nick Smith does not talk to them, but I do—I see that they are not the mums and dads who can afford to buy shares in a State-owned enterprise. They cannot afford to buy those shares.

Hon Dr Wayne Mapp: Their KiwiSaver. What do you think they’re saving into their KiwiSaver?

Hon MARYAN STREET: If they are contributing to KiwiSaver, as the member opposite interjects, that is as much as they can do, and it would be better if they were saving into that scheme. Why should they have to pay twice for an asset that they already own as taxpayers? Those assets are already earning money for them and for the Government to put into things that benefit Kiwi families more.

The other area where there is clearly a lack of a plan and a lack of anything substantial from this Government is in the area of jobs: job creation, job security, and higher wages. In fact the latest idea that the Government has come up with is to lower wages for young people. That is not a plan for economic recovery; that is a plan to displace older people from a very tight labour market. That is not a plan to increase skills, or to put young people on a firm footing for training, higher skills, and, inevitably, higher wages over time. This idea to lower wages instead of increase them beggars belief. How can it possibly be useful to the New Zealand economy? Has National given up on the idea of matching Australia? This takes us way backwards. It takes us backwards. It does not promote growth; it promotes displacing one older worker with a younger worker, when, in fact, the answer lies in more training and more apprenticeships in the first instance.

When Labour left office, we had 14,500 young people either having gone through or in the middle of Modern Apprenticeships—14,500. What did National do, as usual, when it came into Government? It cut Modern Apprenticeships. Employers did not appreciate it. Young people did not appreciate it. We have an escalation in youth unemployment as a result. Now this Government wants to trumpet the fact that it has more people in tertiary institutions. I am sorry, but they are not new places that this Government is paying for. They are places that the institutions were already carrying anyway, so let us not have any skiting on that score.

Having had 9 years to work out a prescription for pulling this economy through a difficult time, the Government has come up with nothing of any consequence or value. Thank you.

AARON GILMORE (National) : It is an absolute pleasure to stand and speak on the imprest supply debate and Appropriation Bill. We heard from the previous speaker, Maryan Street, and her speech just points out the problems that the Labour Party has. That prior speaker sits on the front bench of the Labour Party, and one would think those members would know something about basic economics. What we heard from that speaker was that in Nelson, apparently no one likes bikes and no one wants to use the cycleway. What we heard from that speaker is that those members do not understand that the coal that is mined on the West Coast is actually used to make steel overseas. It is not burned in power stations. As a former spokesperson, I understand, on the environment, one would think that member would know that.

You see, the problem we have with the Labour Party is that it does not know what it really wants. We heard from Stuart Nash earlier. Mr Nash is the inventor of the so-called great revenue tax—not the extra tax on profits but the revenue tax that the Labour Party came up with. He said we do not have a plan. I can tell that member that we have a wonderful plan. It is about getting our debt under control, about investing in our future, about investing in Canterbury, which has been broken, as my colleagues Amy Adams and Rahui Katene pointed out, and about jobs and putting in place 170,000 new jobs across the country. I can tell members that I was in Christchurch on Saturday and I picked up the Press. In the jobs section of the Press there were 22 pages of jobs—22 pages. Do members know how many pages of jobs there were in the Dominion Post? There were 4 pages. The reason is that we are about growing the economy in the real park, not in the public sector bureaucracy here in Wellington. We are about getting jobs where it matters, and those are the jobs that create sustainable growth and incomes for people. We actually looked—

Phil Twyford: Where are they, then?

AARON GILMORE: I tell Mr Twyford that he might need a job in a few months. There are plenty of jobs in Christchurch, so he should come down and we will give him a job. I could even give him a job working the back of a shovel. Maybe that member might learn a bit from that once or twice.

We have a situation where, yes, we will have a record deficit this year. We will have the biggest deficit New Zealand has ever seen, but it will halve next year and it will halve again the year after. The year after that, we will be in surplus. Under Labour we would have another $5 billion a year being borrowed—the borrow-and-hope strategy. Labour members do not understand even basic economics. They seem to be in Stuart Nash’s world, stuck in the 1920s. If we can borrow a huge amount of money and spend it on stuff, it will all come right. That seems to me absolute lunacy.

We have talked a bit about Canterbury. My area of Christchurch in particular in the north and east of the city has been terribly affected by coming up to 9,000 earthquakes in recent times. I was horrified by what we saw last Monday, standing there and going through some of the processes, and seeing the damage. I spent most of Friday and Saturday up to my knees in muck, digging out my parents’ house for the third time. That was quite devastating to go through.

This Government has committed $8.8 billion of Government money to the rebuild of Canterbury. It is important that it is a Canterbury rebuild, not a Christchurch rebuild.

There has been a lot of information discussed about where that money will be spent. I want to talk a little bit about the $5.5 billion that will be spent—not the $3.3 billion from ACC and the Earthquake Commission, but the $5.5 billion. It is quite critical. Of that $5.5 billion, $1.1 billion will be spent on rebuilding all the local body infrastructure—the roads, the power supply, and the water supply—which provides the infrastructure to everybody’s homes. I was very happy yesterday when the water supply in Christchurch became drinkable again for the first time in over a week. That was a very good step forward. The fact that we could not drink our water for a week was actually a hard and difficult thing for us to go through. The water supply is back on, but it is critically damaged and needs a lot of work.

Our sewer systems are critically damaged and they need millions spent on them—maybe hundreds of millions, I do not know. From the last count, there are about 20,000 homes in Christchurch that still cannot flush their toilets. The Government is putting significant amounts of money in the Budget to allow that to be fixed, and I think that is a good thing.

In addition, there are many broken schools in Christchurch. Many of the schools on my side of town, including the schools my children go to, had raw sewage flowing through them for 3 days following the earthquake we had on Monday. Fixing that costs money, and that money has been allocated in this Budget. We have high schools on my side of town that have been ruined beyond repair. One of them in particular is a high school called Avonside Girls’ High School, which has 1,200 girls who used to attend that school. That school is in very serious danger of never operating again on that site. There is $85 million allocated in the Budget to repair the schools that exist in Canterbury, and I think that is an admirable step forward.

There is also an additional about $500 million of contingency funding that has been put forward in the Budget for the recapitalisation or the potential recapitalisation of AMI Insurance. That might not mean anything for those people who have insurance with other companies, but the about 40 percent of Cantabrians, of whom I am one, who have their insurance with AMI are very concerned about the stability of the payouts they may receive following the earthquakes. This Government has put forward $500 million in its Budget to make sure that AMI is covered, and I think that is a good step forward.

We are quite concerned about some of the issues at some of the insurance companies and their behaviour. I personally have had some issues with local insurance companies. I will not name them here today, but many of the insurance companies in New Zealand need to pull up their socks and be a bit smarter, at best—and words I cannot use in this House, at worst—about how they should operate with the claims they are dealing with in Canterbury. We have somewhere in the region of 300,000 insurance claims that need to be dealt with, and $5.5 billion to be spent on that. But there is about $3.2 billion that has not yet been allocated in the Budget. One thing I have been surprised about is why, with all the hoo-ha we hear from Labour members, they have not asked where that $3.2 billion will be spent. It looks like a giant slush fund. Some people will say, well, maybe it is, because it is unallocated expenditure. I have never seen in this House anyone find out how a $3.2 billion unallocated slush fund will be spent. It is not exactly a slush fund; it is to be spent on things we do not yet know about. There is $3.2 billion to be spent on things we do not yet know about. Some of that is to be spent on remediating buildings and properties over and above the requirements of the Earthquake Commission. The Earthquake Commission has $3.3 billion, but there is another $3.2 billion that exists in the Budget numbers to spend on remediating land over and above the Earthquake Commission’s requirements. So I say to people who might be listening today in Christchurch that there is plenty of money there to make sure their homes and properties are repaired. The Government has allocated sufficient funds to make sure those people and their loved ones are safe and their homes are properly repaired and brought back to where they were.

I now want to talk a little bit about something else, something a bit different. That is the incompetence of the Labour Party. You see, in the last week we have had voodoo economics with those members talking about how they will fund things. They have talked about our tax cuts and how outrageous they are. Well, those members do not seem to remember that it was not just a drop in income taxes that resulted; we also put up the taxes on those dodgy property developers and speculators who exist in the place. Labour seems to forget that. Those property speculators are now paying hundreds of millions of dollars extra when under Labour they were getting away scot free. We care about making sure there is a balance in the tax system, and that is why we are making sure those property speculators and developers are paying their fair share. That is why we put up a change to make sure the international, multinational corporates are paying their fair share. It is not quite as simple as the Labour Party seems to think. Yes, income taxes have dropped, but many others are paying more and more. The Labour Party seems to be remiss in understanding those differences that exist.

I want to finally finish with a couple of extra comments that my colleague Tau Henare mentioned. Following the Budget, we had some interesting comments from two groups that I want to touch on. One was from the Salvation Army. It is not necessarily a good friend of the National Party all the time, but Major Campbell Roberts of the Salvation Army said: “we are relieved the Government hasn’t taken the opportunity … to prune social welfare. It shows that a centre-right Government can be fiscally prudent without gutting welfare.” That is the nature of a National Government. Age Concern’s National President, Liz Baxendine, said: “Older people are especially concerned about health care and this sector appears to have done well in this year’s Budget … Minister Tony Ryall says he’s committed to protecting and growing our public health services and we welcome that assurance.” This Government is investing more in those things that matter, not in those things that do not. That has to be welcomed and, given the polls we are seeing, the people of New Zealand up and down the country are wholly welcoming it. That has to be a good thing. Thank you very much.

MICHAEL WOODHOUSE (National) : As some members know, I am the head of a parliamentary liaison friendship group with Arthritis New Zealand. Last week at a breakfast meeting of that organisation there was the release of a document entitled New treatments for arthritis: Assessing their values in human terms. I sat through some amazing stories that patients had shared about how some of the new drugs that are now available have changed their lives. It was really, really appropriate that those drugs, which were initially funded under Labour but for which access has been significantly widened under this Government, have absolutely transformed their lives. So I was delighted by recent announcements by the Minister of Health that access to those drugs will be widened even further. Not only that; thanks to this Budget and the last two Budgets, Pharmac has been able to fund 52 new medicines—52 new medicines—and increase access to another 51 medicines. All of this has been possible because the combined pharmaceutical budget for 2011-12 is now $770 million, which is more than 9 percent up on last year. That is really consistent with the approach that this Government has taken to funding Vote Health and to funding what is important to New Zealanders.

What is important to New Zealanders is not policy analysts, not funding and planning managers, and not the plethora of back-office staff that grew like mushrooms under the previous Government in the health sector alone; what is important is more medicine, more surgery, faster radiation treatment, shorter stays in the emergency department, and better vaccination rates. All of those things are already having a marked impact on the health of New Zealanders.

But warmer homes are also important. To all the members on the other side who accuse this Government of not doing enough for public health and health promotion, I say they should go and talk to the residents of the 180,000 houses that have been insulated under the Warm Up New Zealand: Heat Smart initiative. Several hundred million dollars—

Hon Steve Chadwick: We know; we started insulation programmes.

MICHAEL WOODHOUSE: The member says she started it. Labour talked a good game, and I want to compare that with Labour’s promise during the 2008 election campaign with the Greens to invest a billion dollars in home insulation. That billion dollars was invested over 15 years, which is less than $40 million per annum in real terms. In just over 2 years this Government has invested over $400 million in real terms. So I am very happy to debate with Miss Chadwick or any other member on the other side about the quality and the quantity of the programme. That party talks; this Government delivers, and it delivers exponentially greater numbers of insulated houses. The public of New Zealand know that, because that is compassionate conservatism. That is what a responsible Government does in straightened times.

I shall talk about another area of significantly increased funding, because I think this area holds the key to the difference between theleft and the right. It is in respect of our rail infrastructure. It is true that on a point of principle National did not support the buy-back of our rail network, and it certainly did not support the previous Government paying a price that was between a quarter of a billion and half a billion dollars more than the fair value of that organisation, but we have it, and the National Government has committed billions of dollars of taxpayer funds, both operational and capital, as part of the turn-round plan for KiwiRail. Regardless of whether the taxpayers support that investment, they expect every ounce of value to be extracted from the investment, which is not something that can historically be said has been done with our rail services.

Some of that investment was for the electrification of Auckland rail and some of it was for rolling stock. Two weeks ago KiwiRail made some announcements about reductions in staff at the Hillside railway workshops and the Hutt Railway Workshops. Of course, that was met with quite a bit of disappointment and anger, and the member Ms Curran last week challenged me to say where I was on this issue. I am very happy to do that, because she knows where I am on this issue. She and I have been part of a working-group that was set up in Dunedin some 18 months ago to look at the opportunities that might be presented by the amount of money that the Government was investing in rail—in particular, in the electrification and the electric multiple units, the electric trains, that were being tendered for.

It quickly became apparent that Hillside did not have the necessary skills to build those carriages as a lead tenderer, and the focus of that group was to try to negotiate with, and present Dunedin in its best light to, the potential tenderers, which happened not to come from China, I have to say. The other big option was for the several thousand flat-deck wagons that are required to increase the rolling stock. Hillside did tender for them and it came third. That was extremely disappointing. We heard from members on the other side that the Government should immediately leap to rail’s aid and do something about it. Those members were not specific about how we should do that, whether it would be by a subsidy or by a tariff. Regardless of that, it would be a return to the bad old days when price, quality, and timeliness were not of paramount importance.

I am not so full of doom and gloom as Ms Curran is about the future for Hillside railway workshops, because I think they very much have a part to play in the future manufacturing infrastructure for Dunedin. If Ms Curran continues to walk around with the dark cloud over her head as she has over the last couple of years, much less couple of weeks, then one would perceive that the Hillside railway workshops do not have a future. I certainly do not believe that, and I certainly do not believe that a free-trade agreement that was put in place by the previous Labour Government and signed off by this Government with a country with which we now have bilateral trade of several billion dollars should be put at risk by the sorts of protectionism that some in this House would have the Government wrap around those industries. This is about quality and value for money. I am very encouraged to see that the members on the other side are agreeing with me, because plenty of other colleagues in that party do not.

Phil Twyford: Modern procurement policies.

MICHAEL WOODHOUSE: Let us talk about procurement policies, because we do have a comparison with the previous Labour Government in so far as the loan that was extended to the Wellington Regional Council for the Matangi tender, the electric trains for Wellington. I am really interested in the expectations on that purchaser, the Wellington Regional Council, when it was lent money by the Labour Government. Do members know what those expectations were? Nothing. Not a single expectation was placed. But there was the then Labour Minister of Transport at the signing ceremony saying what a fantastic thing this was. No one from the unions was complaining. No one from the unions at that time was asking where the jobs for Kiwis were and why the then Government did not pay a bit more to get the jobs. The Hutt Railway Workshops was only a stone’s throw away.

I find it remarkably inconsistent that Labour members are now lions in Opposition. They are roaring about the benefit of Kiwi jobs and protecting their union mates. I know those union people and I know that the Hutt Railway Workshops deliver a damn good product and would be horrified to think that it would need Government assistance to prop it up in the future. There is a future for the Hillside railway workshops and for the Hutt Railway Workshops, and I am very, very encouraged by the sorts of noises that are being made, except perhaps by the member for Dunedin South. It is job growth, is it not? I do not know how many times I have heard members on the other side of the House ask where the jobs are—170,000 jobs. I will tell those members—

Clare Curran: Go and tell them what you really think.

MICHAEL WOODHOUSE: I have just explained what I think, which is that this is about value for money.

Clare Curran: Go down to the meeting tomorrow night and tell them face to face.

MICHAEL WOODHOUSE: Actually, members on this side of the House do not keep running to their union mates when things go bad. We have laws to pass and a Government to be part of. I am sorry I will not be there. I would be very happy to do that, but I will not leave this House to go and say what I have already said. I am sure Ms Curran will be able to articulate that—as well as she has over the last couple of weeks, at least. There are jobs to be had, there are opportunities to be taken—

Clare Curran: Where?

MICHAEL WOODHOUSE: See, there it is. The member asks: “Where?”. Well, there has been a little matter of an earthquake and there is about $9 billion to be spent in that city alone over the next 2 years.

CLARE CURRAN (Labour—Dunedin South) : Thank you for the opportunity to speak in this debate, because I say the member opposite is a fraud.

Mr DEPUTY SPEAKER: That is a very unparliamentary comment to make. I ask the member to withdraw and apologise for that.

CLARE CURRAN: I withdraw and apologise. What we would like to hear from the member Michael Woodhouse, a National list member who lives in Dunedin, is that he will go to Dunedin and tell the people who work at the Hillside railway workshops what he thinks.

Michael Woodhouse has sat around the table for 18 months, telling the workers, the union, the Dunedin City Council, and the chamber of commerce how much he supports Hillside, but now we hear basically a story of collusion. It is about how to construct a story—that was what we hear from that side of the House—that would paint the work that is done by the workers at the Hillside and Woburn workshops in rail engineering as being somehow unaffordable. Michael Woodhouse said they could not meet the requirements in terms of price, quality, and timeliness. Yet I have heard him say, face to face at those meetings, how much he believes that that workforce and the rail engineering business can deliver. Now we hear today that he does not believe they can deliver.

Well, that is the fraud of this, and that—

Michael Woodhouse: I raise a point of order, Mr Speaker. The member may not have said it, but it is very clear from her earlier comments at whom that comment was directed. I would again ask that she withdraw and apologise.

Mr DEPUTY SPEAKER: I just caution the member who is speaking that these terms can cause concern to members of the House. I ask that in future she bears that in mind.

CLARE CURRAN: Forty-one skilled jobs are being lost at Hillside right now, because of the Government’s lack of investment in its own workforce and in its own nation. Instead, it wants to purchase rail from outside New Zealand for the lowest cost and of doubtful quality and doubtful timeliness. I spoke of collusion, because a story is being developed to make out that the workers at Hillside cannot produce the product, when we know that they can. And that member, a National list member who happens to live in Dunedin, knows that, too. Those 41 jobs, 41 families, and 41 incomes will be lost to Dunedin.

We heard again in question time today from the Prime Minister that 170,000 jobs will miraculously be produced in this country in the next 4 years. He cannot say where they are coming from. None of the Ministers whom I have seen come before the Commerce Committee, which I sit on, have been able to say where the jobs are coming from. They include David Carter, who is the Acting Minister for Economic Development. He was asked specifically what analysis had been done of the sectors that those jobs will come from, and he said there had been none. No analysis has been done, because it is a mirage—it is making stuff up. This Government and the member Michael Woodhouse are making stuff up. They are making a case so that the skilled workforce in New Zealand that has produced trains and has the skills to do that will not be able to do so any more, and the industry will close down as a result. The member will be accountable on that issue. I dare him to come to another one of those meetings, and I dare him to go to Cargill Enterprises tomorrow night at 7 o’clock and, face to face, tell the people there what he really thinks. Over the last few months he has been talking out of both sides of his mouth on this issue. Yes, that makes me angry, and so it should. It should make the people of Dunedin angry, and it should make the workers at Hillside angry.

What Kiwis want is to have security. They want to have jobs, and they want them to be skilled jobs. As members have heard, John Key and his Ministers cannot give people a credible answer. The Associate Minister of Tourism, Jonathan Coleman, came before the select committee last week. He was asked where the jobs would come from and what analysis there had been. He hummed and ha’ed for a few minutes, and then said maybe there would be about 5,000 jobs. Most of them will be in low-skilled, low-wage areas, and the ones that are created probably will not last very long. They will not be permanent jobs.

Then there is the Minister for Communications and Information Technology, who is handing over $1 billion of New Zealand taxpayers’ money to Telecom, a monopoly. That was brought forward in this year’s Budget. Concerns were raised in the last few days about the level of the skilled workforce needed in order to roll out his ultra-fast broadband scheme, and he breezily replied that we should not worry about that. He said there was no issue with skills, and if there was, the industry would fix that itself. Instead, the training standards body questioned in the last couple of days whether there will be enough skilled workers to service and maintain the Government’s $1 billion fibre internet network. That body sets the standards for telecommunications workers. It said the sector needs to think about training staff now, rather than waiting until they are needed. It warned that the industry may have to rely on overseas workers if needed, because the skills were not being developed now. What did the Minister for Communications and Information Technology say? He breezily said there was no immediate skills shortage, and that if funding was required, then it would be made available. He is not interested in actually looking at the facts.

The Minister for Communications and Information Technology has been asked to come clean on whether Telecom will employ a low-wage, foreign workforce through a company such as Visionstream, which started this practice 2 years ago. That move was fought tooth and nail by the workers and the union. He has been asked whether that is the plan—whether Telecom, in order to roll out ultra-fast broadband at the price that it is doing it for, needs to bring in a foreign workforce that is not as skilled as Kiwi workers are and that is prepared to work for less money than Kiwi workers are. We have asked whether he can confirm that the Government will actually commit to providing jobs for Kiwis, because this Government does not commit to that. Where is this Government committing to provide Kiwi jobs? Perhaps it is on a cycleway, with about a couple of hundred jobs. That is over 2½ years.

Where are the hundreds of thousands of jobs that are supposed to be produced miraculously in this economy? Where are they? That is what I would like to hear from the members across the way, rather than hear them running down the skills of our workforce and running down the skills of our rail engineering workforce at Hillside, and rather than hear the member opposite talking out of both sides of his mouth on the issue. Michael Woodhouse is supportive of Hillside when he is in Dunedin, but he then comes to this House and says, basically, we cannot deliver on price, we cannot deliver on quality, and we cannot deliver on timeliness. He should go to Dunedin and tell the people of Dunedin what he really thinks.

There is no plan for the creation of skilled jobs. This Government has no plan and there will be no plan, but 170,000 jobs are supposed to somehow miraculously appear in the next 4 years. I would like to know which sectors those jobs are coming from, who is driving them, what sorts of jobs they will be, what kinds of pay levels they will offer, and what kind of investment in skills is happening right now in respect of them. The Minister for Communications and Information Technology does not believe that we have an issue with regard to skills, despite the organisation that licenses those skills and trains people having said there is a problem. Somebody has got it wrong, and I would like to hear what members opposite think about that.

There is no plan, but in the meantime 41 skilled workers in Dunedin, with families and good incomes, are losing their jobs right now. Those jobs will not be replaced. What will those people do? They will either leave Dunedin or go offshore, because Australia is recruiting rail engineering workers. Australian firms, as the member across the way knows, have been in Dunedin to recruit workers, because they are building trains.

CHESTER BORROWS (National—Whanganui) : It is a pleasure to take a call in this debate, and I think what we have seen from the last speaker is that as long as the other side want to bang on about there being no jobs or there being no plan, it shows the rest of the world exactly where the Labour Party is coming from. It reminds me of a little quote that we have heard a number of times:

Two men look out through the same bars:

One sees the mud, and the other the stars.

What we have seen in that speech is a reflection of the aspiration that the Labour Party has for this country, which is absolutely zero. When this Government talks about the creation of 170,000 jobs it knows it can create an environment in this country where those people who have the ideas and who have the wherewithal to be able to create work for those who need work will do exactly that, because they have an environment created for them that is not punitive on aspiration, that is not punitive on good ideas, and that rewards success by the terms of trade that they can engage in not only within New Zealand but also around the world.

Yesterday I went to the Hāwera Training Centre Trust and I spoke to young people who are involved in trades training and alternative education. Those people are wanting to gain qualifications they had not previously obtained through the education system so they can get a job—not so they can just get any job but so they can get a job that will take them somewhere. I spoke to a young man there, a 14-year-old, who had been asked to draw a picture of the things that meant something to him. He drew a picture of an urupā, and he drew a picture of the Hāwera Training Centre, and he drew a picture of a prison, and he drew a picture of a Black Power glove in front of Taranaki. Those were the things that were important to him, and his aspiration was pretty much zilch as to where he was going. His father was in prison and was going to be there for a long time. This young man had almost zero aspiration for where he was going to. Can any member of this House give any indication of how the message of that last speaker’s speech would give any hope at all to that kid? There was nothing in that speech that would give somebody with the life expectations of that young 14-year-old boy any hope that life under a Government led by Phil Goff and the Labour Party would take them anywhere.

Last Friday night I met a man from Eltham. Eltham is a depressed area in terms of employment and in a number of different deciles, but this man, who 15 years ago was illiterate, had been running a motor cycle business. It went belly up, he had to get rid of everything and he started working on trailer couplings in his garage. He marketed those trailer couplings. His wife taught him to read. Then he started selling these things. He started employing people, and over the last 10 years he has built up a business where he was employing 33 people. He got a contract to make window winders in Toyota cars with a laser-cutting machine. He got another contract to make hinges for boot lids on Nissan and Holden vehicles. He got another contract to make power poles for BHP in Australia. He is an inventor. He is an entrepreneur. He has a workshop that has more robotic welders operating out of this business in Eltham than in any other single business in New Zealand of its size. He has recently invented some bars that clip on to bulldozer and digger tracks that stop sideways movement. Last month he went to Caterpillar in America. They have ordered containers for next year. Next year he will sell $12 million worth of these gadgets to America, and he now employs 70 people in businesses run out of his engineering shop in the back of the premises in Eltham. He has been employing one person a week for the last 10 weeks.

He is doing that in an environment that was created by this Government, which has some aspiration and some goals of where it wants to take this country, and has set about preparing this country for that. That is where those jobs will come from. Whenever National members have stood up on this side of the House and talked in that way, what have we heard from the other side? All we have ever heard is: “Where are the jobs, where are the jobs, where are the jobs?”. Those members have not a single plan or a single direction to show where they would take this country.

I want to talk about items in the Budget around youth and youth skills. We have seen money set aside in previous Budgets and in this Budget for the continuation of programmes like the Job Ops scheme, which gives $5,000 subsidies to employers to hire low-skilled young people and give them real work and experience. We have seen the intervention of the Community Max programme and Skills for Growth, which in Budget 2011 pays $5,000 to employers for employing and training young people in high-demand industries and setting them up for the future. We have seen the expansion of the Limited Service Volunteer courses. These are 6-week residential programmes run by the New Zealand Defence Force for those people who are unemployed and cannot find work. Recently I went to a graduation of six young people from Wanganui who attended a Limited Service Volunteer course in Canterbury, and the changes in their lives were phenomenal. A number of those young people had been sacked from the AFFCO works in Wanganui for various reasons. The chief executive officer of AFFCO was there and offered every one of them their job back, because—

Su’a William Sio: Did they get them back?

CHESTER BORROWS: Yes, they are all working at AFFCO now, because it works. It amazes me that just a few weeks ago I heard members on that side of the House complaining about the Limited Service Volunteer course and the expansion of it, because they felt that there was a resignation in young people that this was all they could hope for. The fact is that those Limited Service Volunteer courses turn the lights on for young people. They teach them about tipping out of bed first thing in the morning, having some breakfast, going to work, and doing something productive with their day. Members on that side of the House would rather those people stayed at home and did nothing, because as long as they never have to look at themselves for the wherewithal to get on in this life they will vote Labour, if they bother to vote at all. They have no aspiration for where they are going.

The trades academies incentive that has started under National is replacing back into high schools those old courses of woodwork and metalwork, which recognises that not every child in our schools will make a living from staring at a computer screen. Some kids do not learn from being folded into desks and chairs and being talked at for 10 years of their life. It is an absolute disaster that these young people can go to school for years and years and years, and under the previous Government 20 percent of them left high school with no qualifications and unable to read, write, and count functionally in order to operate in the modern world. But all we hear from members opposite are excuses about why that is OK. Well, this Government says that it is not OK.

I am also pleased to note that in the Budget $43 million has been set aside for assessment of young people in care. Young people in the care of the State in this country have a dumb deal, and that is a disaster. Thankfully, we will assess those young people’s health and education needs. We will make sure that during the time they spend in the care of the State they are looked after and nurtured in the way they deserve to be. We know some tragic statistics. We know that a young child growing up in a house where one parent went to jail is seven times more likely to go to jail than someone who did not have a parent in jail. If both parents went to jail that goes up to 15 times more likely. If they are living in the care of the state that rate is an atrocious 17 times more likely. One would think that with the intervention of the State their chances of success would be even better. The other statistic released in recent times is this: half of the young people who commit suicide in this country are in the care of the State.

Thank God for John Key as the Prime Minister of this country and for his Government. They are going to address those horrible statistics. We will be better for that. We look forward to hearing what Labour’s plan is, if it ever comes up with one. It had better hurry, because it will not be too long and the country is going to be distracted.

PHIL TWYFORD (Labour) : I am very happy to take a call in the debate on the Appropriation (2010/11 Supplementary Estimates) Bill and the Imprest Supply (First for 2011/12) Bill. It is good to follow Chester Borrows, one of the more moderate and open-minded members of the National caucus. He often makes an interesting contribution to these debates.

I would like to respond to some of the comments made a little earlier this afternoon by the Hon Tau Henare. He said—well, it is a little bit hard to know exactly what he said, but I feel it deserves a response. He is my neighbour in Te Atatū peninsular. I feel the need to set straight the record, because he painted a picture that was not entirely conversant with the facts of what happened on Sunday afternoon as the rain pelted down in Te Atatū peninsular.

I was there, in my raincoat, delivering leaflets for Kelvin Davis’ by-election campaign for Te Tai Tokerau. Kelvin Davis is a candidate who has clearly got the momentum now. The Prime Minister thinks he will win. I saw in the news that even Mrs Turia thinks that Kelvin Davis will win. His support is growing by the hour.

So there I was delivering Kelvin’s leaflets in Tawa Road in Te Atatū peninsular, and who should emerge from out of his house but the Hon Tau Henare, wearing his pyjamas at 4 o’clock in the afternoon. The hard-working National list member based in Te Atatū had, I think, just been watching the league on television, still wearing his pyjamas. But there we are—that is life in Te Atatū.

The Hon Tau Henare did say something that deserves a serious response. He was speaking about the rates that are being levied on West Auckland businesses. He said that this was very unfair. He said in the House a few days ago that it was a constitutional outrage that West Auckland businesses are paying 40 percent more than businesses in other parts of Auckland. He laid the blame at the door of Labour and of the Mayor of Auckland, Len Brown.

This is a prime example of the kind of convoluted, confused, and woolly thinking that we have come to expect from the National benches. This member, Tau Henare, voted for the National Government’s legislation that established the super-city last year and explicitly prohibited the Auckland Council from bringing in a unified rates regime, which could have been in place for the financial year we are just about to enter. That would have tackled the rates differential and would have put in place a level playing field so that West Auckland businesses would not be paying more than their fair share.

West Auckland businesses should not be paying more than businesses in other parts of the super-city, but because of the silly law that Tau Henare and National members voted for they are forced to pay more. It was put in place so that Aucklanders would not face a rates increase on the eve of the general election. Tau Henare does not seem to have comprehended that. He is on the rampage—he is out there now—campaigning up and down West Auckland against this terribly unfair rates rise.

That is not the only example of confused thinking. If there is one issue that is on the minds of the nation right now that illustrates, as my colleague Maryan Street put it earlier in this debate, the poverty of thinking of this National Government, it is asset sales. As we get closer to the election we are starting to see the elements of the National Government’s agenda emerge. What do we see? We see a punitive approach to welfare reform that seeks to drive mothers with young children back to work at a time of record unemployment.

What else do we see? In the last few days there have been pretty clear signals from the Prime Minister of a further undermining of the rights of workers in this country to bargain collectively for a fair share of the wealth they produce. It is not enough to sell our labour laws to a Hollywood corporation when it comes asking for law changes, and it is not enough to impose on New Zealand workers a situation where they can be fired at will in the first 90 days of their employment. No; there is more to come. It may be youth rates—who knows what else—but there is something that, the Prime Minister tells us, the unions will not like.

What else have we got? Well, we have cutting—cutting KiwiSaver, cutting research and development, and cutting Working for Families. Members on that side of the House deny it, but up to $50 a week will be taken out of the household budget of a two-parent family with four children earning up to $80,000 a year—$50 a week will taken out of their household budgets.

We can have a proper debate about Government spending. We can have a debate about what the right priorities are for our nation. That is a perfectly legitimate thing to do. But these cuts are not a plan. They do not offer any kind of rational strategy. They do not give people any hope that this Government has a plan to grow the economy, to get the New Zealand economy moving again, and to build our prosperity.

What else have we seen? Tax cuts were weighted to the top bracket of income earners. That is just another example of trickle-down economics. The country is borrowing $2.5 billion this year to fund the share of John Key’s tax cuts that went to the top 10 percent of earners. That is $2.5 billion put on the tab for future generations of New Zealanders to pay so that John Key could deliver to the National Party base his promised tax cuts. This is the tired old hack thinking we have come to expect from National.

The Government has nothing say about growth and nothing to say about building this country. Where is the thinking? Where are the ideas about innovation? How will we as a country grow a dozen more LanzaTechs? How will we make sure that the brilliant ideas coming out of our universities are captured and developed by New Zealand firms so that New Zealand shareholders get the long-term benefits?

What is this Government doing, having gone to all the trouble to amalgamate eight councils into one in Auckland, to ensure that our nation’s largest city becomes a hub of high-value, high-tech export firms generating value for our economy? We have seen nothing—no ideas, no policy, no strategy—in that area. How should we address the skills deficit and put the 70,000 unemployed young people into work and into training to make sure they have the skills and the qualifications to drive forward our firms and so that they can have secure, high-value, well-paid jobs for the future?

The Government’s plan to import Irish builders and tradespeople to rebuild Christchurch and its intention to import skilled labour from overseas to do the fibre rollout for ultra-fast broadband are two examples of an utter indictment of this Government’s failure to plan properly and to invest in our own people. Instead of wittering on for the last 2 years about cycleways and taking the sharper edges off the recession they should have increased skills training rather than cutting it.

The Government should have taken the cap off polytech funding and encouraged polytechs to open their doors and bring more students in. It is better to have our young people in training rather than sitting at home on the dole. New Zealanders know this; I hear this every week on the doorstep in Te Atatū. But for some reason this Government has no idea about the practical steps it could take to actually get this economy moving.

The problem lies not only in what the Government will not do—it is not going to invest in skills training, increase research and development, or seriously address the savings crisis—but in what it will do. The Government’s big idea is to sell off our most valuable and our best-performing State assets: the energy companies and Air New Zealand. It is sad but true that this kind of thinking is emanating out of National’s brains trust. One can imagine Steven Joyce and Gerry Brownlee sitting around the table with the boys from Crosby/Textor and trying to think up how they will sell one of the most unpopular policies the New Zealand public has ever had foisted upon it. How will they sell that to the voting public? How about mixed-ownership models? How about partial sell-downs? This is the best they can do. They want to sell the family silver. That is the only plan they have, and New Zealanders have seen it coming a mile away.

TIM MACINDOE (National—Hamilton West) : I begin by paying a compliment to my good friend and colleague Michael Woodhouse, the next member for Dunedin North, for his scholarly but well-grounded discourse. I also compliment my great friend the member for Whanganui, Chester Borrows, for his intelligent, compassionate analysis of this Government’s practical and effective measures to help young New Zealanders, and especially young New Zealanders who are at risk of going well and truly off the rails and having a life of no hope and no worthwhile future. Mr Borrows gave us a very clear indication of what this Government is doing and of this Prime Minister’s determination to assist those young people, ably supported by the Minister for Social Development and Employment and all members on this side of the House. It is a very comprehensive, effective programme.

Hon Steve Chadwick: What?

TIM MACINDOE: Ms Chadwick asked me: “What?”. I am delighted she has done that. I am happy to tell her again. Members on the other side of the House are incredibly slow learners. They think that if they keep saying often enough that the Government has no plan, a few people will start to believe it, yet I have lost count of the number of times they have been told what the plan is. In fact, those members were told what the plan was in the election campaign in 2008, because we campaigned on it. There are no surprises. We said what we needed to do and what we would do. Since 2008 we have been getting on and doing it, and we continue to do it. We are rolling out new initiatives and it is a very effective working plan—

Clare Curran: No, it’s not.

TIM MACINDOE: It is very effective. Ms Curran’s party left this nation in dire straits and in 2½ years—despite the most challenging conditions and some of the most appalling natural disasters, which were well out of our control—we have turned things round. The future is now looking better for this country than it has for a long time. Labour members really do not like acknowledging it, but they squandered the best decade in my lifetime—in my lifetime—of economic conditions and opportunities. They bequeathed to us a decade of deficits—a decade of deficits—at the end of the best economic conditions we have had.

We have heard this afternoon some very good speeches on this side of the House. How do the Opposition members reply? They chant: “Where’s the plan? Where are the jobs?” even though they have been told many, many times. The previous speaker, Phil Twyford, was the best they have been able to put up so far. At least at the outset he acknowledged what a fine speech Mr Borrows had delivered, and he acknowledged the fact that Mr Borrows had focused on some really important things that matter to New Zealand. But sadly Mr Twyford then took us on his “Twyford’s Tour of Te Tai Tokerau via Te Atatū”, where clearly he was royally entertained by the incomparable Tau Henare. I am glad he enjoyed that, because the rest of the tour obviously was not up to much. The best he could do was deliver a few leaflets and realise that the future is not very great for him in Te Atatū. But he demonstrated, as did the speakers before him, the complete lack of detail in the Labour members’ contributions and the fact that they rely solely on their catalogue of claptrap and clichés. That is all it has been.

I tell Ms Curran, Ms Chadwick, and Mr Twyford that I thought this year’s Budget was an outstanding achievement by an excellent Minister of Finance in a focused and very effective Government. Not only was this an outstanding Budget and an entirely appropriate one for our times but also I am very proud to support it. I am very proud to defend it and explain it in my electorate, and up in Hamilton, along with my good friend Mr Bennett, we are proud to campaign on it. On both sides of the river in the mighty city of Hamilton we are getting a fantastic reaction to a wonderful Budget. People up there say over and over again: “Thank goodness it is you lot in there running the country at the moment! What an absolute pickle we would be in if we had the other lot back.”

Hon Steve Chadwick: That’s not what we got at the Ag Fieldays.

TIM MACINDOE: That is exactly what they say, I say to Ms Chadwick. When she enjoys her early retirement in Rotorua after the election, she will find that people will say to her that Labour should have listened to them. People tried to tell those members; they would not get the message, and people had to tell them the hard way.

As I have said, Labour members hope that if they keep saying often enough that there is no plan, the public will believe it. But I tell the House that members of the public do not believe it at all, because they can see what we are doing. I remind members opposite about the Job Ops programme, the Community Max programme that we introduced, the industry partnership places that we have promoted, the Youth Guarantee, and the service academies. I wonder whether the members opposite, who have interjected constantly and asked where the jobs are and where the plan is, would like to stop chirping and chanting for just a moment, because I am giving them exactly what they have asked for. I am just a short way into a good list.

There is the Limited Service Volunteers scheme, and the places that Mr Borrows talked about. It is hugely important to people in my electorate and right around the country for those young people who really need some intensive and compassionate intervention, and a little bit of real belief in them. The Labour Opposition never believes in those people. It has this appalling mentality that about 20 to 25 percent of the New Zealand public, particularly young people, will never amount to much. Those members just put them in the too-hard basket, they patronise them, and they demean them with a lifetime on welfare and say that that will do. They do not worry about the fact that these people cannot ever seem to get ahead. They do not worry about the fact that there is actually great potential in each and every one of those people. They have for all their time in this House believed in this mentality that welfare is good, education is not so good, and job opportunities are not so good. They just condemn a growing number of New Zealanders to that pitiful future.

I will never do that. It is such an appalling way of thinking, and I am absolutely determined to do everything I can in the time I have as a member of this House to defeat that mentality and to promote the best interests of those who most need the active intervention of a caring Government.

Those are some of the things we are doing on the jobs front. In this year’s Budget there was the new Skills for Growth scheme with 4,000 places. It gives employers a $5,000 subsidy to employ and train young people in high-demand industries. That is a significant initiative. Suddenly the Labour members have gone quiet; I wonder why. It is important.

As I have said, this Budget is widely supported throughout the country, but just for a moment I will focus on the reaction of my own region. The Waikato Times is a paper that is certainly not in the bed of the National Party; it takes quite an independent stance. But in an editorial following the Budget, we were told the following: “Labour Party leader Phil Goff is on the wrong track, … when he says he hopes to create up to $22 billion a year in new business by restoring tax credits to reward R&D. The snag is his intention to pay for this assistance by requiring farmers to pick up the formidable costs of their greenhouse gas emissions over five years.”

I was up at the Fieldays just outside my electorate last week and I can tell members that the reaction to the Government was outstanding. The mood was fantastic, and the one thing that came through time and time again was farmers saying: “Imagine if we had that Labour Government back and they brought us into the emissions trading scheme before the rest of our international trading partners—those we have to compete with on the international economy.” They said that they would keep that party out of Government for as long as they possibly can because it just does not understand.

I will come back to the Waikato Times, which further stated: “Mr Goff’s plan would lift farm production costs and risk blunting the world competitiveness of our dairy and meat industries in an uncertain bid to sharpen the innovative edge of businesses generally. That amounts to an unacceptable economic gamble.” We are living in times where the last thing we should do is to indulge in unacceptable economic gambles.

Budget 2011 sets out our next steps to build faster growth, to increase our national savings, and to create sustainable jobs built on savings, exports, and productive investments. That is a summary of what this Budget is all about, and over 3 years we have achieved a huge amount to turn things round. Labour members do not like to admit the position they left us in, but it was dire. At the end of the best decade of economic conditions they left us in the worst of conditions. I am proud to be part of a Government that is turning the situation round, and I will be proud to be part of a Government that continues to take us forward in the years ahead.

DAVID BENNETT (National—Hamilton East) : I will follow on from that great speech by my colleague from Hamilton West, Mr Tim Macindoe. He will deliver a stunning electorate victory in that seat for National at the next election, because he has worked hard and he has delivered for the people of Hamilton. He has shown them the vision and the strategy that will deliver a strong future for all New Zealanders, and particularly the people of Hamilton, who deserve it and need it after many years of having to listen to Labour rhetoric.

Today in this debate we see the true colours of Labour members. They do not care about New Zealand’s growth prospects. They do not care about New Zealanders. They do not care about jobs. They do not care about wages. All Labour members care about is themselves. Being in power is all that Labour members ever wanted, ever will want, and ever can hope for, because that is how they argue their case. Labour members say that they know best and know how to do these things, and that they do not actually need to look to our people for inspiration or give our people the tools to make their own future. That is the difference between the two political parties, and this Budget has shown that.

In this Budget New Zealanders are given the tools to build their economic future. We are giving the New Zealand public the tools they want and that many Governments around the world cannot deliver. This country has some of the lowest interest rates in the world, which means that hard-working Kiwi families have low interest rates for their biggest expense: their mortgage. The second thing low interest rates mean is that people can invest in productive industries knowing that they are paying low interest rates, so they can deliver that productive growth to the economy.

Having low interest rates is a key and fundamental result of this Budget—something that Labour did not deliver when it was in Government and that it would not be able to deliver at this time, because its economic policy would lead to high interest rates. Labour’s spend in its Budgets would lead to a situation where New Zealand families have to pay more for their mortgage interest rates. It would lead to a situation where New Zealand businesses could not invest, because they would be paying higher interest rates. That is the difference between this Budget and what a Labour Budget would have given us. It would have stifled the economy and contracted the economy in some of the most difficult times. Labour has no plan to pay for Christchurch. It has no way of delivering a plan that will help pay for Christchurch and grow this economy.

I actually take offence when I hear members on the Labour side of the House go on about the assets of this country. They say that all New Zealanders own them and that the investment programme National has promoted through the Budget is a bad idea. I will give them a local example from Hamilton and I want them to think about it. In Hamilton we have Tainui Group Holdings. Tainui Group Holdings has a policy of investing locally. It has used the Treaty settlement very wisely, and is now the biggest commercial player in the Waikato region. Together with other iwi around the country it will become one of the biggest investment players in this country. Tainui Group Holdings has used local money locally and has invested successfully.

Look at what else happens in our region. We have a number of community trusts that do not invest locally. They put their money on the US stock exchange. Does that money deliver benefits for the people of Hamilton and the Waikato? Not to the same extent it would if it was delivered through the Tainui Group Holdings model: not only do the returns go to the Waikato people, but the actual capital investment is used in the best interests of creating a stronger and more vibrant region.

What is happening with our superannuation funds in New Zealand? Are we investing those funds locally? No, we are not. Where are we sending that money? It is going offshore. Labour wants to send New Zealand money overseas. That is what it has always set up in its investment programme. Do members know why it wants to do that? Labour wants to send New Zealand money overseas because then it is not accountable for it. If the investment does not go well, if the right decisions are not made about it, or if no decisions are made about it, Labour is not accountable. It can say that some investment adviser who is looking after that money overseas is accountable. That is the folly in the Labour argument. It is not backing New Zealanders.

Hon David Cunliffe: The member doesn’t even believe it himself.

DAVID BENNETT: No, I do. The member should go to Hamilton. Mr Cunliffe says he does not believe it. He is sitting there realising the folly of his ways because the Hamilton example, where they invest locally, pays greater dividends in capital returns. Labour would want to see that money go offshore so that the assets of other countries can be built up. New Zealanders would be confined to a situation where they have to look across the Ditch to see the benefits they want, rather than having those here.

Today we are living in a situation where there is not enough food around the world. There will be not enough food for the next 100 years. What do Waikato and New Zealand have as a strategic advantage? We make food. We make food competitively and it is the best quality in the world. New Zealand has the chance to be one of the most successful countries in the world. People will need what we make for the next generation. The question is whether we will invest in our country and make profits here, or send our money overseas thinking that it is safer to let someone else have control of it so that we can sit in our pretty little world and say we never had to make any choices.

That is what Labour members would do. They would sit back, redistribute money, and say it is not their fault; it is someone else’s fault. National is not taking that approach. We are going to invest in our country. We know that we have the people here to deliver the returns. We know that we have the future in the sense that we are a food-producing country. The stars are in alignment, because people need our products. We know that if we invest and create a stable economic environment where there are low interest rates and a well-educated and successful workforce, we can take advantage of those opportunities. That is the plan. It is such a hard plan that Labour members cannot work it out. They cannot see as far into the future as that, because a Labour plan is something that is given to them on a platter. They do not have to think about it and they do not have to work for it; it is merely a redistribution plan. That is the difference and that is why this Budget is so important. Thank you.

Mr DEPUTY SPEAKER: This debate has concluded. We have an amendment in the name of the Hon David Cunliffe.