Hon Dr MICHAEL CULLEN (Minister of Finance) : I move, That the Appropriation (2004/05 Supplementary Estimates) Bill and the Imprest Supply (First for 2005/06) Bill be now read a second time. This will be, of course, the last imprest supply bill before the election. It is a good time to place on the record certain key facts. It is a good time to ask some key questions of the desperate and dateless members opposite us.

This Government has a proud record, and we are grateful for the support we have received from parties in the House. We have seen economic growth at the highest sustained level for 30-odd years in New Zealand. We have outstripped Australia for 4 years in a row, which the National Government never achieved. We have seen the growth and innovation framework, which is guiding that economic policy. We have seen employment rising, with 260,000 new jobs, the vast majority of which are full-time jobs. We have seen unemployment dropping to record low levels since the modern indices began. We have seen poverty falling for the first time for many years in New Zealand, and that is before the Working for Families package started to come into force in any great sense on 1 April this year. We have seen health spending rise. We have seen mortality rates fall and life expectancy rates rise. We have seen the growth of primary health-care organisations, cheaper doctors’ visits, cheaper pharmaceuticals, and increased operations across the board.

We have seen a restoration of the level of New Zealand superannuation, which was cut by the National Government in 1999, at the same time that it legislated for a tax cut. One paid for the other then, as it would again in the future under a National Government. We have seen the setting up of the New Zealand Superannuation Fund, which secures the future of New Zealand superannuation, and, finally, the National Party has had to accept that that fund is a permanent part of New Zealand’s public policy.

We have seen successful industrial relations reform, which has seen record low levels of industrial disputes, and, indeed, underemployed institutions for settling industrial disputes. We have seen the introduction of paid parental leave and so much else. Moving forward we will see the introduction of the KiwiSaver scheme to help average, ordinary, hard-working, battling Kiwis save for their future, their retirement, and their deposit on a first home, and this Labour-led Government is the first party in 30 years to introduce those sorts of measures.

We will see, on 1 April next year, stage 2 of Working for Families, which will deliver to many two-child, low to middle income working households $30, $40, or $50 a week extra in the hand, which could never be matched by any tax cuts the Opposition can offer. On 1 July next year we will see the introduction of the rates rebate scheme, which will help tens upon tens of thousands of superannuitants pay the rates they struggle with at the present time. We will see, on 1 April next year, the introduction—indeed some of it was on 1 April this year—of business tax changes and the simplification of that scheme.

From members opposite, all we have heard offered against that is one thing: tax cuts. National has become like the ACT party these days. Tax cuts is the answer from the members opposite to everything, from paedophilia to boils on the back, as far as one can tell. How do we solve the problem of too many people being in accident and emergency departments? Give them a tax cut! Give them a tax cut, and they will leave, bleeding but happy—marching into the golden future they will go under a National Government.

We ask now: where is the beef? It has been promised for so long. It is a case of Salome with about 97 veils on, and only five have gone; there are still 92 left to go. Under National, there would be tax cuts by Christmas, then it was by 1 April next year, then it was in 6 or 9 years, then it was for the top end, then it was for the middle, then it was for the top again, then it was for everybody. So it goes on and on in utter confusion.

Watching Dr Brash against Simon Dallow on Saturday morning was an exercise in elderly confusion. Like an ageing courtesan, the National Party is trying to keep its policy covered up until the lights have gone out, the election is on, and the public cannot really see what is actually underneath. And underlying that policy is a whole set of myths. The first myth is big government. The National Government never got government spending below 32 percent of GDP. It is 30 percent of GDP now. After Working for Families and all the other things, it will rise back to 32 percent of GDP and stay there. Where is this big government that Labour has been putting in place?

The second myth is high tax. Australians have two tax rates above our top tax rate, and tax on top of their higher taxes in terms of Medicare, compulsory superannuation, capital gains tax, stamp duty—and so on, and so on.

The third myth is that National can deliver a lot to the ordinary, hard-working Kiwi by means of tax cuts. What would the Australians deliver for the equivalent of a billion dollars or so a year if it was in New Zealand? Six dollars a week! Will that be the big bribe? That will not fill up a billboard, will it? Not even half a billboard would be filled up by $6 a week from the Opposition—and it is not what people are expecting, or have been led to believe, if National were to be elected.

National is now promising significant tax cuts for all workers. We know what that means. People are expecting about 30 bucks a week from National. National has promised movements in every threshold, and to get back to 5 percent on the top rate means raising the top threshold to $80,000. It has promised to cut the top rate from 39c to 36c. It has promised to cut the company tax rate from 33c to 30c. It has promised to divert all the money out of the Government account, over time, into the National Land Transport Fund. It has promised to scrap the carbon tax. What does that add up to? It adds up to $4 billion a year to start with, rising to $5 billion a year by 2007-08. That is the cost of National’s policy. That cannot be done by simply cutting the number of public servants in Wellington. There are not enough to go around. If we cut the lot of them, there would not be enough left over.

The fourth myth is that we can pay for tax cuts next year, and the year after, and the year after, and the year after, with this year’s cash surplus. But this year’s cash surplus will be all gone by 30 June. It has been used to pay off debt. It has gone into the superannuation fund. It has gone here, it has gone there, it has gone everywhere. None of it will be left on 1 July.

So what will pay for these tax cuts, come a National Government, if it is ever elected? We know the consequences. Firstly, higher interest rates, because that much looser fiscal policy must mean tighter monetary policy, and it must mean higher interest rates. Those hard-working, battling Kiwis will pay more on their mortgage to pay for John Key’s tax cuts. He will be laughing all the way and putting more of his money offshore, as it all is at the present time. He will continue to invest overseas, rather than in the future of this country, as we learnt today in question time. It is pretty obvious what that was all about. The hard-working, battling Kiwi will be the person who has to pay for that.

National would have to cut into core spending. The billboard is right. It is tax, or it is a cut. It is tax or a cut in health; it is tax or a cut in superannuation; it is tax or a cut in education; it is tax or a cut in law and order. That is what the battle is about, as we lead into this election over the next few weeks. Electing a National Government would be the 1990s all over again—cuts, cuts, and cuts to pay for tax cuts for those who are better off. We saw it in 1996, 1998, and 1999.

The real question for New Zealanders is very, very simple. Can they afford National? The answer for the great majority of New Zealanders is very simple. No, they cannot afford National. Only a small minority can afford a National Government. That is why National will not release its policy until the last possible moment. If it is released too soon it will be clear there are holes in the policy, it will be clear it does not add up, it will be clear it will make this country worse off, it will be clear it will make most New Zealanders worse off, and it will be back to the misery and strife of the 1990s under Ruth Richardson and Bill Birch. Bring it on, in 2005, for this election.

JOHN KEY (National—Helensville) : What a revealing speech that was from the Minister of Finance in the House this afternoon. The entire Cabinet was whipped to come to the House to listen to his speech on the Appropriation Bill. Government members were desperate to try to give their Minister of Finance some encouragement, because they know a Minister of Finance on the rack when they see one. They were so desperate that they forced the entire Cabinet to come to the House to listen to his speech. About the best thing we can say is that they looked slightly more enthused with that speech than they did with his Budget speech. When Dr Cullen rose on 19 May and read the Budget, the entire Cabinet looked bored. Darren Hughes was out in the lobby, giving No-Doz tablets to back-bench members. It was a disgrace. It was nothing short of a public relations disaster—a public relations disaster that will cause the end of a number of casualties. Mike Munro was not happy that he was not told of this strategy. He was not told what was going on. He was unhappy.

Darren Hughes: I raise a point of order, Madam Speaker. I want to make it clear that the Government is happy for a 5-minute suspension in the debate to allow there to be more than one National Party MP in the House listening to Mr Key. It is very unfair of his colleagues.

Madam DEPUTY SPEAKER: The member will please be seated. He knows that is not a point of order on which to interrupt a member’s speech.

JOHN KEY: The truth is that I do not need a whole lot of people to try to prop me up and tell me that I delivered a good Budget when I know it was a bad one. I do not need my mates around me. I am quite confident in what I am doing. I am not the one who is lying in bed at night, wondering how I could have got an available cash surplus of about $4 billion—and we will work our way through those numbers in a moment—and how I could have been so out of touch with the people of New Zealand.

Mark my words, this Government is on the way out, because it has become arrogant and it is not listening. I was on Newstalk ZB the day after the Budget was delivered, with Michael Cullen. He was asked the hard question. He was asked why there were no tax cuts in the Budget, and he gave this answer: “According to our polling, people don’t want them.” That is what happens when a Government is run on the basis of looking backwards at the polls. It forgets what the average, battling mainstream New Zealander cares about. It is not about a bunch of flaky policies and programmes that the Government is dreaming up, with thousands of bureaucrats, left, right, and centre; it is about real New Zealanders not being forced to line up in queues at Work and Income, to be turned into beneficiaries. When Michael Cullen can come to the House and tell New Zealand families why they have to pay the top personal rate of taxation, at 39c in the dollar, and at the same time ask them to line up at Work and Income, then he will be able to answer a question that at the moment they are scratching their heads over.

The Budget was an absolute disaster. The “deep, dark secret” that Mike Williams went out and told New Zealanders about was meant to be some great tax cut. Mike Williams knows that. He has tried to argue, through his Minister of Finance, that it was the KiwiSaver. Last time I looked, I do not think the Labour Government would like to hear what Mike Williams thinks the KiwiSaver scheme is. He thinks it is a dirty, dark Tory secret. Mike Williams was trying to do one thing, and that was to pump up this Budget—to pump up the fact that there was some sort of tax cut. The truth of it is that there was no tax cut. The people of New Zealand know what the “deep, dark secret” is; they absolutely know. It is that under this Labour Government, for as long as Labour is in office, there will never be a tax cut. That is why the people are rejecting Labour, and that is why they will reject it come election day. It does not matter whether the election is in July, or August, or September. This lot will be gone, because the people of New Zealand are sick and tired of a bunch of bureaucrats being employed while their families’ belts are being tightened, because the Government wants to go out and spend their money, thinking it can do so on their behalf. That is the truth of it.

The “deep, dark secret” is that there will never be a tax cut under Labour. If it cannot afford a cut when there is an available cash surplus of around $4 billion, when there is an operating balance excluding revaluations and accounting changes of $7.4 billion for the second year in a row, just tell me the conditions under which we can have a tax cut. There never ever will be one.

This is a Government that is out of control. Every time I get up and talk about the number of bureaucrats who have been hired in Wellington, the Minister of State Services wants to stand up and say that I am somehow deluded, that I must be wrong, and that no extra bureaucrats have been hired. Answer me this question: if they are all the same people who are being transferred in from other Government departments, if they are already on the payroll, then why has the amount of commercial real estate that the Government has taken here in Wellington gone from 360,000 square metres to over 500,000 square metres in the last 5 years? Tell me why the core State sector has gone up from 30,000 to at least 38,000, if not more. Tell me why Treasury is writing to the Government, to tell it that its policies are out of control, that 80 percent of Government departments have been hiring, recklessly, that there is no increase in productivity, and that there will have to be cuts.

Last Friday, Treasury put on its website the Budget discussion document. I urge people to read that document. It states quite clearly that Labour’s policies are not working, that reprioritisation has to take place, and that cuts have to happen. That is the advice coming from Treasury, not just once to the State sector but also in the Budget advice document. Mark my words, there was a reason for a lot of people coming down to the Chamber to listen to Michael Cullen this afternoon, and it had nothing to do with the quality of his speech or of the outcome; it had to do with the fact that this Government has got it so horribly wrong, and the polls it is seeing internally are telling it that it is the end.

Government members shake their heads. That is exactly why they are in trouble. They are in denial. We know that the NBR poll has been done by UMR pollsters. We know that UMR has been on the phone to the Prime Minister and to Michael Cullen. We know that in today’s New Zealand Herald there was just a hint that maybe Dr Michael Cullen might be forced to bring forward those indexation changes. We know when the Minister of Finance is in serious trouble. We know that this is not the confident Michael Cullen who ruled the Chamber, that this is a Michael Cullen who is under pressure. I have said many times before that when Michael Cullen was given the portfolio of Attorney-General it was the straw that broke the camel’s back—and boy, did we not see that on Budget day when he made such a hash! He has argued that the available cash is $2.4 billion. Well, what does he argue is the $700 million in cash that he is giving to the Reserve Bank? Is that a consumption item? Why does he include $723 million of student loans that have been repaid at over the Government bond rate? There are billions and billions of dollars of cash.

The Minister came into the House and told us that New Zealanders should feel good, because they pay less tax than Australians. He does not understand—and he should, because he is the Minister of Revenue—that New Zealand has a broad-base low rate of taxation. That means that people in New Zealand can deduct virtually nothing from their income, whereas for people in Australia there are many, many deductions before they get there. A few weeks before the Budget I asked Michael Cullen in this House what he thought of the Australian Budget from Peter Costello and what he would do to match a situation where Australia will attract bright, young, hard-working entrepreneurial people. He stood in the House and answered that we should be happy, because in Australia 80 percent of people will face a top personal rate of 30c in the dollar and, somehow, in New Zealand, it is a great thing that 75 percent of people will face a top personal rate of 21c in the dollars. That tells us just how out of touch Michael Cullen is. What he has just told the people of New Zealand is that it is a good thing that 80 percent of Australians earn $70,000, or less, and a good thing that 75 percent of New Zealanders earn $38,000, or less.

National does not believe that earning $38,000, or less, is as good as it gets. We do believe in increasing the pie. We do not believe in redistribution. We do believe in those good old-fashioned principles that have made New Zealand go forward—in taking the opportunity to tell New Zealanders that they can keep more of what they earn and that we will join with them as a Government and share the upside and the good times. Michael Cullen is a finance manager and a Minister of Finance who has proved he wants to balance the books on the revenue side. There will be more Labour speeches and more Labour cronies sitting in those seats—and boy will Labour need them when it is under so much pressure!

BILL GUDGEON (NZ First) : The Grow Up Free From Poverty report was commissioned last January, and nobody knew just how many people were falling through the gaps in international aid. Major charities wanted to know how children, often the worst casualties of poverty, saw their own situations. Children in 18 developing countries reported that they did not see enough of their parents. Stigmatised by AIDS or disability, many knew that their best hope of living was in the sex trade. The biggest problem was their parents’ alcoholism and, according to the report, that was at the top of the agenda.

What is happening in New Zealand—a developed nation, supposedly? We have an accident and emergency department without a hospital, or it could be the other way around; we have a hospital without an accident and emergency department. We have families who are suffering, children without parental guidance, and Government departments unskilled to carry out the responsibilities placed before them.

I quote from the Sunday Star-Times of 12 June: “CYF alerted before baby died. Family, nurses, lawyers, and a doctor raised concerns about the treatment of 7-month-old Kathleen Harris-Talivai.” There has been famine and poverty in many parts of the world, but here in New Zealand it is becoming all too common that physical abuse beyond description is part of what happens every day. How can a Child, Youth and Family Services worker advise that the child in question would be better off with his or her parents, when there is evidence before the worker that the child is being physically abused? Why does it have to be like this?

The social policies of this Government have a part to play in what is happening in our communities. In speaking to a high-profile identity of the Ngāti Porou iwi, it was stated that many of our people have lost the work ethic, and along with that have come the negative results of idleness. Family as we understand it—father, mother, and children—are starting to become an issue that is fading into the sunset, and other agendas are coming to the fore. The reason why there is instability in our society is that there is a lack of good parenting skills, and the social engineering of this Government has contributed much to that agenda.

The elderly have been neglected, especially those who have served our nation in the armed forces. This Government will give aid offshore, but no consideration will be given to 35 servicemen in the Montecillo Veterans Home and Hospital in Dunedin. The Agent Orange debacle is still unclear and there is still no result as to what compensation should be given. The last words I heard from the Montecillo veteran were these: “Remind the Governments”—and that includes National and Labour—“of their promises that they made to us when we returned from the war.” What were those promises? They were that the veterans would be taken care of.

Let me remind this Government again: $10 billion given to the armed forces works out at less than 1 percent, and we still have a skeleton armed forces programme running. How can that be, when defence should at the top of the agenda for any country and every country, especially the democratic nations?

JIM PETERS (NZ First) : In the grand speech made by the Minister of Finance he asked the question whether New Zealanders can afford National. The real question he should have asked was: “Can we afford Labour yet again?”. The answer from New Zealand First is: “Absolutely no; we cannot.”

The Minister of Finance covered the various issues that he sees as the components of his platform, forgetting absolutely that in 1999 this Government inherited a very stable rural and farming economy, and that nothing Labour has done since then has added one whit—perhaps a few months of help to Fonterra. That is the backbone it inherited. Looking at it from the rural economy point of view, 6 frittered away and wasted years is that proud Government’s record. No wonder the Minister was so voluble, making grand statements about the future; he did that on the backbone of frittered years, when this Government has had, in terms of the land-use economies, the best years that I can remember for a decade and a half, if not more. At the end of that time, all we have seen are wasted time and wasted policies.

But let us come back to the central, core issue, which is this. Last week the most amazing announcement was made by the Minister of Education that the head of the Education Review Office was taking 4 months’ leave to oversee the exam system for the New Zealand Qualifications Authority. What an indictment on that Government’s proud record—as espoused by the Minister of Finance—that, as we speak, an officer has to go from one Government department, supposedly concerned with the audit and review of education, somehow to bring some sort of sensibility to the New Zealand Qualifications Authority! What an indictment! What confidence in our Government does that give our young students, who are halfway through the examination year? It is absolutely deplorable.

But it is no wonder, because that is the sort of thing I see happening throughout the education portfolio. The Ministry of Education has people beavering away in the back room—the bureaucratic army that John Key talked about—putting together key competencies to overturn the traditional framework of education that the secondary school system has had for the past decade. People are beavering away to put together social, key competencies.

What would one expect, therefore, of an agency such as the Teachers Council, which is empowered by the Education Standards Act 2001 to have certain key duties? One such duty is to determine the standards for teacher registration and the issue of practising certificates. That is meant to be the prime aim of the functions of the Teachers Council. As well, it is to develop a code of ethics for teachers. One would expect that the Ministry of Education would have some ability, therefore, to go ahead and implement the intended changes to the Teachers Council, which came from the Teacher Registration Board.

I can report to the House that that is an abysmal failure. It is not just that three separate heads have resigned, and been given good payouts in the process. A year ago I raised these matters at the Education and Science Committee, where I was assured by Ministry of Education officials that the actual functions of the Teachers Council were working. So the House will be surprised to hear that the supplementary estimates do not have any additional votes for the Teachers Council, to try to establish—which it has not done so far—and maintain its function of leadership in the education sector, and also to carry out the simple process of teacher registration. That system is just not working as it ought to. Is it very surprising to me, therefore, to be able to tell the House that the Teachers Council has not functioned in any way as designed by legislation? There are people out there in front of classrooms who do not hold even limited authority to teach. There are people in front of our young children today who have not been registered in any form at all. There are teachers who were registered but are no longer registered. The whole system has failed dismally—that is, the Teachers Council’s monitoring of educational standards and enhancement of the teaching profession, as outlined in the Act, and as mentioned several times by the Minister.

Therefore, all the good words I hear about the education sector—all the trial projects, the short-term funding, all the issues about raising the standard of teaching—have failed. Teachers are still the most important part of the school area. All the aids are but a supplement to having a sound, effective teacher in front of a classroom. At the present time, this Government has failed. It has failed with regard to a supply of competent teachers. It has failed with regard to teacher registration and competence. Unfortunately, and most of all, it has failed the young people of today. As I said last week, youngsters are asking the Government to give them assurance. No such assurance can be given by the Minister of Finance with regard to his Budget, or by the Minister of Education.

Hon STEVE MAHAREY (Minister for Social Development and Employment) : Like most members in the House, I am pleased to take part in the debate on the Appropriation (2004/05 Supplementary Estimates) Bill and Imprest Supply (First for 2005/06) Bill because, if there is one thing that defines why we are here, it is this particular debate. It is the debate where we get to talk about how taxpayers’ money will be spent. It means we are charged at this time to say how we have sensibly applied their money to the kinds of issues that make a difference to New Zealanders. After all, the whole point of collecting tax is that it is impossible for individual citizens—and perhaps the richest amongst us have learnt that it is even impossible for them—to be able to buy their own hospitals, lay down their own roads, run their own schools, or do all the myriad of things that taxpayers’ money is raised for.

This is the dividing line between the left and right in politics. On the right, people want less and less money because they personally have more and, therefore, they can do more for themselves. As we move into the “average person” category, they realise that if they do not make a contribution through the taxation, they will not get the kinds of things that allow them to educate their kids, keep them healthy, keep them housed, keep them fed, and get them a job, and do all the things that go with a civilised society.

This election will be very much about that dividing line, whereby people come down on the side of how much we will apply to those issues of collective concern and how much we will return to those who already have privilege. “Privilege”, as far as the National Party and the ACT party are concerned, is its own reward. The more one has the more one will get, under the National Party.

Given that background of why this debate is important, I want to applaud Dr Cullen’s Budget. I think it was the kind of Budget that said: “No, this intends to be a long-term Government.” It says that we are going to carry on responsibly applying the money we raised from taxpayers to issues that are of concern to them. And what a record! There are 6 years of achievement behind Dr Cullen’s administration of those taxes. He is able to point to growth in every single year, above that of the OECD average. He can point to more paid jobs than ever in the history of this country. He can point to having an unemployment rate that is at the head of the OECD—that is, 3.9 percent. The only country with a rate lower than ours is Korea at 3.8 percent. Fewer people are now on a benefit, by hundreds of thousands, than there used to be in this country. I will come back to that point.

There has been continual investment in issues that matter to New Zealanders, and in this Budget Dr Cullen has said that he wants to maintain a strong and credible fiscal stance. In other words, he wants to balance the books, make sure the chequebook is in good shape, and ensure we can pay our way forward so that we do not go back to booming and busting the economy, as was done under previous administrations. We will make sure we can pay our own way. Dr Cullen wants to be fair. He wants to include New Zealanders in the good things that are happening. He wants to ensure that every single Kiwi has a stake in this country and that Kiwis know they can get into a house, afford their education, and have a future here as working New Zealanders, and he wants to build the conditions for growth. What a change!

Dr Cullen wants to build the conditions for growth, as opposed to what we saw from 1972 to 1998, when incomes were dropping. People in this country had become so used to things going down, they wondered if they could ever go up. Since then they have. The conditions for growth have been set in place, and this Budget is about that. There are no bribes, no rush of blood to the head, and no saying that we will do things that we cannot sustain into the future. This Budget is about carrying on laying the foundations for long-term Government, long-term growth, long-term prosperity, and long-term social justice in this country. That is what this Budget was about.

Now, I have to say that in my portfolios I am delighted at what we are doing. In the social development area, I have no doubt that this Budget will do more for people who are on a benefit, but it will also make the debate around beneficiaries even more difficult for National Party members. They can fudge and they can change the figures, but in the end they will have to face the fact that Dr Brash used to say, in his querulous way, that the National Party will get the number of people on benefits down from 500,000. Then, unfortunately for him, he discovered the number was not 500,000; he was including superannuitants. So he had to stop doing that, because he did not want to be caught out on that one.

Dr Brash then said that National would get the number of people on benefits below 400,000. But, unfortunately for him, we have got it below 400,000. So he used to say—and I notice in the newspaper today he is still saying it—that National will get it below 300,000. He says it in that querulous, baloney-led way of his. I have news for him! There are 298,000 beneficiaries now. The number is below 300,000. The number of working-age people on a benefit right now is 298,000. He says that he will lower that figure in 10 years. He says he will take that figure of 298,000—although I am sure it will be lower by the time we have an election, because it keeps dropping—and reduce it by 100,000 in 10 years. That is 10,000 a year. He could do that by doing nothing. Does National have a policy or not?

What is the point of the National Party policy, which is so ambitious that the National Party promises a drop over 10 years, whereby in 5 years we have taken the number from a little over 400,000 to 298,000? Those are the kind of promises one makes when one is 64 years old. Don Brash will be 74 by the time that promise matures—he will be living in Trinidad or somewhere by then, on his gains from the Reserve Bank. So that is not a promise, at all.

In the jobs area, National tells us that it would get more people into jobs, against this Government’s record that shows more people are employed than ever. Don Brash will have more people in employment than ever, when we have more than ever in employment. We have fewer people on benefits—we have a 3.9 percent unemployment rate. We have a superb record on this. Who believes anybody else would do better than this Government has, after it was left with the deficit of the 1990s?

Don Brash says he will fire people who are in the public service. Let us put aside nurses and let us put aside teachers whom he might have to get rid of—let us put aside all those people and just talk about core public servants. When I got my job in the tertiary education area, I asked the Ministry of Education, under the National Government, to send me the people who were doing industry training so I could talk about the rebirth of modern apprenticeships with them. Bill Birch had cancelled apprenticeships in 1992 and we had a major problem: we did not have people being trained. So I asked the ministry to send across the people doing the training. One very thin man turned up in my office to inform me that he spent a quarter of his time on industry training. It is no wonder that there was no Modern Apprenticeships scheme. It is no wonder that there was nothing going on in industry training. It is no wonder that we had a deficit in the people trained to do our skills in our factories. It was because there was nobody in the National Government—nobody in its bureaucracy—who was employed to do anything about training. That is why we have a deficit.

Training cannot be left to the market; if one wants apprentices, everybody has to pitch in and do something about it. We do need at least one whole person to get up each day, and say: “My job is to do something about training.”—at least one! To have a quarter of a person working on it is a bit low. But that is what National wants to do. It wants to take the public service back to the days when it could do nothing.

Research, science, and technology are the driving forces of innovation in this country. Funding has increased by 56 percent since this Government came to power back in 1999. That is the single biggest increase in that budget in the history of funding for science, research, and technology. Is anybody against that? Does anybody think that is wrong? Does anybody want to say that we should not be driving innovation through science? Does anybody want to have those kinds of things cut—apart from Tariana Turia, who does not believe in science anyway? Is anybody against that kind of thing?

What about housing? The KiwiSaver project and the mortgage insurance scheme are getting first home buyers into homes. What about building State houses, lowering the cost of housing, and all the innovative partnerships we have running with Abbeyfield and other community groups who are building houses across this country—is anybody against that kind of spending at all?

I ask members to look at broadcasting. Is anybody against the notion that we should have an independent culture in this country and a strong screen production centre where we are able to produce programmes, films, and television about ourselves that create jobs and create pride? That is why young people like this country these days. They love the notion that they can get a job, have a future, and get an education, and that they live in the kind of exciting country we get from the cultural policies we have been investing in. Can members imagine Don Brash investing in something that might lead to a CD—if he knows what a CD is? That simply will not happen with someone as boring and as out of date as Dr Brash, who would not know Shihad from Pacifier.

Katherine Rich: Neither would Helen Clark!

Hon STEVE MAHAREY: Ms Rich knows who Pacifier is, which is good. Helen Clark would know who Pacifier are; actually, she knows them personally. This is the debate that divides this House—on this side we will invest in this country; on that side they will not.

RODNEY HIDE (Leader—ACT) : For the benefit of anyone who is still listening at the end of that speech, I will say it was from Steve Maharey—the smarmy one, as described by his former ministerial colleague John Tamihere. I remember John Tamihere telling the nation that he went to meetings with the smarmy one and was given copious notes, but when he came out they did not add up to anything—there was no substance. We saw that with Steve Maharey in his speech today. We heard Mr Maharey talk about the Budget as being a good use of money and talk about the results of that. We saw last week the human face of Labour’s health policy, and we saw the response from Labour when confronted with the human face of its failed health policy.

Let me remind members what that response was. A man with Huntington’s disease was in pain, and when he went to the dentist he was unable to get his teeth attended to. He was stuck on a waiting list for more than a year. That was the promise of the health waiting system—to wait more than a year, because his case was said to be semi-urgent. Wellington Hospital told him that there were people in far more pain than him, and that he should be happy to wait a year. When that case was raised in the House, we saw the response of the caring Minister of Health. Her response was to get the man’s records and say that he was not in pain! Well, that was news to him. That was news to his mum. [Interruption] The Minister of Health laughs now. She thinks that is funny, because she got away with it. Then she told the House that the man had gone to his dentist on a routine check-up. Well, that was not true, and the Minister now knows it was not true. The man went to the dentist because he had toothache, and he had to wait a year to get it attended to in her health system.

What has happened now? The Minister met with the man’s mother in her office. She got home, and suddenly someone from our health system was on the phone, wanting to see Alvin to look at his teeth, and, yes, he has a date. Why? It is because Annette King was embarrassed. But the sad thing about it is that Alvin is just one of 180—

Jill Pettis: The member would just say “Go private.”

RODNEY HIDE: The member they refer to in the Labour caucus—I am sure in a kind and endearing way—as “paint stripper” or “fish wife” yells out, because she does not want to hear about people and the results of the Government’s health policy. Why does she not just listen and try to help people, for a change? The problem is that we got help for Alvin, but 180,000 people are queued up on our health waiting lists.

Let me walk through the numbers in this Budget. In 1999 the health budget was $6.1 billion. It is now $9.7 billion. It has increased—[Interruption] Jill Pettis yells out about how marvellous that is, because, being a lefty, she thinks that spending money is a good thing as long as it is other people’s money. Health spending has increased by $3.6 billion a year, or 57 percent. One might say: “Wow, I bet that bought a lot of operations.” The figures show that we have increased the number of operations by 1.3 percent. Let us think about it. Annette King has increased the health budget by 57 percent, to increase the number of operations by 1.3 percent. What a useless Minister of Health she is. And members should get this: the number of New Zealanders has increased by 4.3 percent, so the number of operations per capita has gone backwards.

Back in 1999, Annette King said that the waiting list of 96,000 was criminal. Now she does not release the numbers. We have had to work for—[Interruption] The Minister looks up. She knows that is a fact. We have had to—

Hon Annette King: That’s a lie.

RODNEY HIDE: The Minister can call out that I am lying. We have the dose on her, because she has, in this House. The waiting list was 96,000. The budget was increased by $3.6 billion, but what has happened to the health waiting list? It has blown up to 180,000. The number of people on the waiting list has—

Hon Annette King: What rubbish!

RODNEY HIDE: Annette King calls out that that is rubbish. We know why that is. It is because people now have to wait in order to get on to the waiting list. That is the reality of health under Annette King. She still cannot get over the fact that a man with toothache cannot get a $5,000 operation in our health system without waiting at least a year.

The number of people who died while on our health waiting lists was 850 in 1999. Last year, under Annette King, 1,200 people died on our health waiting lists. Annette King sits there and laughs. She knows the numbers, and she should not be laughing at them.

Hon Annette King: I raise a point of order, Madam Speaker. I am quite happy to sit here and listen to that drivel, but I will not have that member say that I am laughing at the comments he is making. It is certainly true that I would laugh at him, but not at the comments he is making.

Madam DEPUTY SPEAKER: That is not a point of order.

RODNEY HIDE: The Minister can sit there and—she has admitted it—laugh through her speech about the failure of her policy, laugh at the people who are queued up in pain, and laugh about people having to wait in order to get on the waiting list. Treasury itself says that the Minister is out of control. We have the report. It states that the Minister has blown the budget and that health spending is unsustainable. I have never seen a report like it. Treasury advised Michael Cullen to go back to Annette King and tell her to redo the numbers, because her priorities were wrong and the Budget was under stress. We have seen the wasteful spending—$3.6 billion has been spent on health, with no result. More people are waiting than ever before, and more are upset with the health system than ever before.

Then we have the prospect of tax cuts. Mike Williams told the people of New Zealand that there was a deep, dark secret in the Budget, and when I went into the lock-up, I found it. It was a tax cut of $34. I thought wow, that was not bad for someone in the 20c in the dollar tax-rate range. Then I looked at it again. I had thought the tax cut was $34 per week, but it turned out that it was $34 per year—a packet of Wrigley’s chewing gum per week. Then I read a bit more, and found that the cut would not occur until 2008. So people will receive a packet of chewing gum as a tax cut, but they will have to wait 3 years for it under Labour. Michael Cullen says that he cannot afford tax cuts. I say to Michael Cullen, Annette King, and Clayton Cosgrove that New Zealanders cannot afford to keep paying their tax. They cannot afford to fund wānanga, hip-hop tours, and million-dollar grants to rich American companies. They cannot afford to keep paying that tax and make ends meet. That is the situation in this Budget that we are voting on. Currently, the Government’s spending total is $53 billion per year. In the next 5 years it is set to grow, according to Michael Cullen, to $73 billion per year. That is 45 percent faster than the rate the economy is growing at. This Government is forecasting Government spending to grow 45 percent faster than the rate the economy will grow at.

I look at this figure. When we are thinking about what the Government can and cannot afford, the key figure to look at is the net wealth of the Government. Currently, the net wealth of the Government is $35.5 billion. That is the figure when we take all the assets the Government has and deduct all the liabilities. Our Government is solvent and is worth $35.5 billion. Over the next 5 years our Government’s net worth will be $63.1 billion. This Government is a rich Government. It is accumulating wealth at the expense of New Zealanders. The wealth of the Government is increasing at an astonishing $5.5 billion per year, which, interestingly, matches the maximum cost of ACT’s tax policy. If we just held the net wealth of the Government constant, we could pay for ACT’s policy. The net wealth of the Government is going up at the rate of 12 percent. That is all news to Clayton Cosgrove. He sits on the Finance and Expenditure Committee and is the only person who, I noticed when I was on the committee, could sleep while in the chair. It is unbelievable to watch. He actually does not follow anything that goes on in those debates.

The Government’s wealth is growing by $5.5 billion per year. We can afford tax cuts. I say that the people of New Zealand cannot afford to keep paying for this Government and for the wasteful spending that we see. That is why they will give their party vote to ACT at the next election.

KATHERINE RICH (National) : If anybody wants to upset Labour right now, he or she need only mention the media’s and the public’s reaction to the Budget. Mike Williams made it incredibly difficult for the Labour Party, I have to say, by going around various meetings in Auckland and around the country, and by giving interviews saying that in the Budget was a deep, dark secret. It was so deep that very few people could ascertain what it was when they first went through the Budget documents—or could not find it, at all. When it transpired that the deep, dark secret was 67c in 3 years’ time, was it any wonder that the New Zealand public shrugged their shoulders and asked: “Is that it? Is that as good as it gets?”

New Zealanders understand, having just had the best economic conditions in a generation, that they should be in a position whereby they can get something back for their work—something back for the hard work they have done over the last 6 or so years. Michael Cullen, as the Minister of Finance, has had the best economic conditions that many Ministers have faced in a long time. If we are not able to have tax cuts after those sorts of conditions, the question most Kiwis are asking is when they can ever be relieved of some of the burden of tax. Members on that side of the House said that no more taxes would be imposed except on a few who earned over $60,000 per year. More taxes have been levied on New Zealanders over the last short period of time than have been levied on most generations prior to the last 6 years.

If we cannot afford a tax cut now, when will we ever be able to afford one? That is a key issue and the key question on the lips of many New Zealanders. That is the reason, I suppose, that the Budget was not well received by the general public. I am not talking about the wealthy—which the Prime Minister and the Minister of Finance seem to think is anybody who earns over $38,000 per year—but about those hard-working Kiwis, the bulk of our citizens, who earn less than that and who want something more in their pockets at the end of the week. They are the people who pay for everything. They do not have a community services card. They pay for everything and face the increasing costs of petrol, Nana’s sherry, and carbon emissions tax. They are paying for absolutely everything and getting nothing back.

Well, we on this side of the House do not think that people earning $38,000 per annum are wealthy. We do not think that people earning $60,000 per annum are wealthy. If we look at our own communities, we will find doctors, nurses, some teachers, and police who earn over $60,000 and who are now caught in that top tax rate. We do not see those people as being the wealthy elite. If we think that those people who earn $60,000 should front up to Work and Income New Zealand to get some kind of handout, then there is little future for our economy.

This bill does not set aside money to fix the tax problem we have in this country. This bill will not give New Zealanders more than just 67c in 3 years’ time. This bill will not set aside money to fix the current problems with the police, which basically leave some Kiwis ringing 111 and getting a cab, not a cop. This bill and this Budget will not fix the current debacle with the National Certificate of Educational Achievement and New Zealand Scholarship. It will not give any relief to hard-working families—the families who get up every day and go to work—

Jill Pettis: Yes, the Working for Families package.

KATHERINE RICH: Is it not interesting that Ms Pettis is now talking about the Working for Families package? That was last year’s story. Labour has dredged it up—understanding that its Budget has fallen as flat as a pancake—to try to make things a bit better when it argues in front of Kiwis who say that its Budget has been such a disappointment to most Kiwis.

We have seen an extra $3.5 billion spent on health. We have seen a whole lot of spending in other areas as well, but we have seen little gain. It was interesting to hear Michael Cullen in the Chamber take credit for good weather, good commodity prices, good economic conditions, and good employment numbers, when that member over there knows that the good conditions we have faced have, frankly, had nothing to do with this Government.

Jill Pettis: One hundred and thirty million dollars has nothing to do with the weather.

KATHERINE RICH: Is it any wonder that Michael Laws of Wanganui says he has some nutters in his town, when Jill Pettis sits over there and makes such inane comments? Labour thinks that for a person to be wealthy, he or she must earn more than $38,000 per year. Well, I can say that we on this side of the House have bigger and better dreams and aspirations for this country. When Kiwis are earning $38,000 per year and the Government’s answer is to make them front up to Work and Income New Zealand to get a handout, then I do not think the Government is asking the right questions. The answer is not further entrenching welfare dependency in this country; the answer is helping people to be independent. Working for Families will provide relief for only about 14,000 extra families who were not already caught up in the welfare system, and I do not think that that is something to crow about.

Moana Mackey: Spin, spin.

KATHERINE RICH: Members on that side might say: “Spin, spin.”, but they are the ones who are spinning. They are the ones who are facing Mike Munro, deeply concerned about the way the spin was handled when it came to the Budget. It is members on that side of the House who are angry that they were let down by Michael Cullen after being told that everything would be all right. They were told: “Keep quiet, boys and girls. There’s going to be something in the Budget that will keep all your punters happy.”, and it did not happen. Sixty-seven cents in 3 years’ time—I bet that will go down well in Gisborne! When those members are standing on the hustings and talking about what Labour is promising, that will not go down terribly well. Mr Hide said it was enough to buy a packet of chewing gum. Actually, it is not. A packet of chewing gum costs 70c. With 67c, one would have to wait till the next year to have enough to get a packet of chewing gum.

Some of the other ideas the Government has talked about today did not catch the imagination of New Zealanders, either. They fell asleep at talk of the KiwiSaver programme. Their eyes glazed over when they were told about the deal for first home buyers. When one looks at the deal for first home buyers, one realises that one would have to buy a house that was so cheap that many Kiwis probably would not want to live in it anyway, and one cannot buy houses for the value that allows one to qualify.

The Budget has been a deep disappointment to the Labour Party, and Labour members know that. They can sit there and smile, point, and carry on, but they know they do not have anything to go out and sell on the hustings, and that their people are just as disappointed. It is interesting that Michael Cullen said that the reason there was not much more in the Budget was that the Government’s own polling said that tax was not an issue. It just goes to show how decisions are made in this country right now that if a poll indicates that something is wanted or not wanted, that is the way this Government makes its decision.

It is interesting that Michael Cullen said that tax was not an issue, yet post-Budget it was one of the major issues of interest to this country. Kiwis are finding it harder to get by as they spend more at the petrol pump and spend more on their petrol and more on their goods and services—all taxes and levies from a Government that said that it would not raise any taxes or additional levies. So I think Labour has quite some explaining to do. Instead of talking about what the National Party will do, Government members should stand up and say why they are so excited about their Budget and why they think it is a vision for New Zealand.

Darren Hughes: They have.

KATHERINE RICH: No, they have not. They have stood up and talked about the National Party, which I think demonstrates a deep sensitivity and a deep understanding of what the problem is. We on this side of the House are delighted that the Government has fallen flat on its face with a Budget that has not excited anybody at all, because it allows us to demonstrate a difference in terms of what National will be offering at the coming election. Kiwis will see through what the Labour Government is offering. It is all about spin. Government members are deeply disappointed. They might be pretending that they are as happy as sandboys, but we know they are disappointed with what Michael Cullen has delivered.

ROD DONALD (Co-Leader—Green) : Today—

Clayton Cosgrove: Don’t talk about oil!

ROD DONALD: I will be talking about oil. I thank Mr Cosgrove for reminding me. I will talk about it later, so I ask the member to be patient.

Today we are talking about the supplementary estimates and we are also debating an Imprest Supply Bill. That imprest supply bill will give the Government the money it needs to run the country if an election is held before the Budget is passed. This year I am confident that the Budget will pass its third reading before the House rises for the general election, in the same way that 3 years ago I was confident that the Government would pull the plug before the Budget was passed. In fact, just before the supplementary estimates debate started 3 years ago, Prime Minister Helen Clark told the whole country that we would have a snap election. That was on 11 June 2002. At that point we knew what was ahead of us. We had an election date, and I wish Helen Clark would give us the same courtesy now and set an election date. But I would have to say that she did not need to call a snap election on 11 June 2002, and she certainly does not need to call one now.

I would like to look back briefly over the last 3 years at the Government’s report card in relation to the debate that took place on 11 June 2002. Labour has passed some good legislation in some crucial areas, but it is interesting to see what it has not advanced. On that date in 2002, the Marine Reserves Bill was waiting for its first reading in Parliament. It got that first reading after the election, thanks to support from the Green Party, but it still languishes at the Local Government and Environment Committee, because the Government is more interested in advancing legislation on marine farming than it is in marine reserves. We call on the Government—Mr Cosgrove may be leaving the Chamber; I hope he will stay and hear what I have to say about peak oil. The Marine Reserves Bill is still stuck in the select committee, because Labour lacks a serious commitment to increasing the number and area of marine reserves in New Zealand. We have to contrast its dragging the chain on conservation with its pushing ahead on economic growth.

Another bill that was held up by the snap election was the Minimum Wage Amendment Bill. The Greens supported it. The Minimum Wage Amendment Bill is another example of legislation United Future has opposed in this Parliament, but we are very pleased to give our support to Labour on such legislation, because we are just as committed to social justice as we are to protecting the environment and making the economy sustainable. It is good that the minimum wage does continue to increase. It is now $9.50 an hour—a lot more than when National was last in power. But it is not enough. It is not good enough. New Zealand workers deserve at least $12 an hour, because without that level of income one simply cannot bring up a family in any sense of decency. I know that most New Zealanders would rather get a wage that is enough to live on than have to rely on family support or any other Government handout. So we advocated for that legislation, and we made some progress there. We advocated for the transfer of undertakings, and that legislation has finally managed to get through in the last 3 years. In fact, 17 bills passed in this term of Parliament have passed only because of support from the Green Party. Those bills simply would not be law without it. There would be no Supreme Court, no Māori Television Service, no Care of Children Act, no Criminal Records (Clean Slate) Act, no Climate Change Response Act, and so on, without the support of the Green Party.

The Government has certainly learnt a lot in the last 3 years, and those pieces of legislation are examples of what it has learnt. The Labour-Progressive minority Government has done a very good job of managing this House. As an advocate of MMP, I would like to give it credit for that. Despite having only 53 seats out of 120, it has successfully mustered a majority for most of its legislation by turning to a number of parties for support. United Future has been the only party to vote for two Budgets—because Labour was intransigent on genetic engineering and therefore did not enjoy our confidence—and seven other bills have passed only because of United Future. As I said, the Greens are responsible for the passage of 17 bills, and New Zealand First was the only non-Government party to vote for the Foreshore and Seabed Bill. We got a warning in the last term of Parliament, when Labour relied on New Zealand First for the passage of two bills, both of which have turned to custard in various ways. So members should look out for what will happen to the Foreshore and Seabed Act.

Despite what the critics say, MMP has not led to the tail wagging the dog. Indeed, before Christmas Labour worked with United Future, the Greens, and New Zealand First in turn to pass legislation under urgency. However, it is disappointing but not surprising that Labour’s management of the economy and of voters’ expectations is not as good as its management of Parliament. Let us face it, Dr Cullen’s Budget was a public relations disaster. As I said at our recent conference, Arnold Nordmeyer is Michael Cullen’s hero, but that did not mean he had to deliver such a grey Budget. It was timid on issues such as tax cuts where it should have been bold. Last year’s Budget was bold, with Working for Families, and we supported that. In the last term, the superannuation fund was bold, even though we opposed it. But this time, as everyone says, 67c a week in 2008 for low and middle income earners has done nothing to excite voters and everything to turn them off Labour. What is more, Dr Cullen’s failure to address mounting student debt is alienating a whole generation of young people, their parents, and their grandparents.

Labour’s KiwiSaver package is a good move, but for many people with no discretionary income it only highlights the growing gap between the haves and the have-nots. Homestart was another good idea. It basically restores what National axed in 1992, but it is still only a token gesture in the face of rocketing house prices. So instead of Labour forcing through the Overseas Investment Bill under urgency later this week, it should be banning the sale of all land to foreign investors, because those sales are artificially inflating the price of entry-level properties. Inflating house prices mean that the Kiwi home, instead of being a dream to aspire to, has become a nightmare for first home seekers.

I give Dr Cullen credit for one thing: pinching the title from my 2001 conference speech on his superannuation fund—which I called “Invest now to secure the future”—for his Budget, which he calls “Securing our future”. That Budget, I am afraid, will not go far enough to securing the future for the nation, as Dr Cullen proposes, because he continues to gamble a big slice of our taxes on the overseas sharemarket instead of using that money for sustainable infrastructure to future-proof our economy, to educate and train our young people so that they can be productive citizens, and to meet the community’s health, housing, and social needs. There is not enough money going into protecting the environment, either.

The supplementary estimates, if I may discuss them briefly, put aside some money to deal with flooding. That is a good thing—there is something like $32 million in the supplementary estimates—but where is the money going for planting forests where they are needed? One of the environmental commitments that this Government should be making is reforestation of marginal land, as well as long-term measures to put the brakes on climate change. In going beyond reforesting headwaters, the Government would be making some bold moves to tackle climate change. The Government is not doing enough to reduce our dependence on fossil fuels in this country, and I point it to the Green Party’s energy package, which has recently been announced. That package gives the Government a very clear plan of what we need in New Zealand.

Some of our proposals would have been in those supplementary estimates, had the Government been committed to protecting the environment, to making our economy more sustainable, and to improving the quality of life of New Zealanders. At the top of that list is half a million solar water heaters for homes in New Zealand, which is something that we will be campaigning for strongly after the election, along with a sustainable energy commission, a one-stop advisory shop for households, and not using coal to generate electricity, because the use of coal only adds to our carbon emissions and will put the Government in an even worse position than it appears to be in in relation to carbon credits. We say to the Government that it should look at the Green Party’s energy policy, and its tax policy, which makes the first $5,000 of income tax-free, so that people can afford to pay not only for the increasing cost of power but also for doing the good things, like insulating their homes and putting in energy-efficient light bulbs, etc.

Hon PHIL GOFF (Minister of Foreign Affairs and Trade) : It was a bit rich to hear the Greens, who apparently want to spend more money on everything, joining the National Party chorus by saying that they want more tax cuts. We have heard from the National Party already that that is the big promise for this election, but its members will not tell us what those tax cuts would be and where they would come from.

We know where the tax cuts would come from and where the money would go. We know that the money would go to the rich, because Don Brash has said it would. In fact, he said he could spend a third of the surplus, and that would cover cutting company tax rates and the top personal tax rate to 30 percent. So we know that the money would go to the rich, and we know that it would come from ordinary New Zealanders and from the areas where Government spends most money.

National superannuation would not be safe from National. It promised in 1990—I remember it; I was on the campaign—that there would be no superannuation cuts. There were no ifs, no buts, no maybes. What did National do? It increased the surtax to the highest level ever. I remember Lockwood Smith talking about student fees. He said they would be removed, and that if they were not removed, he would resign. He doubled the fees, and he stayed there for 6 years. One cannot trust the National Party. I am sorry that the Greens would choose to align themselves with it.

This election will be about track record and leadership in Government. It will be about credibility and about vision. On every front, it will be the Labour-led Government that wins the support of New Zealanders, because of 6 years of competent, stable, consistent Government. I have been in this House long enough to know that different parties over different times have gone into election campaigns making promises, and then have reneged on those promises. Then parliamentarians wonder why their credibility in the wider electorate fell as low as it did. I am proud to have been a member of a Labour-led Government that promised only what it could deliver, and delivered on what it promised. That is refreshing in terms of New Zealand’s political history. It is about credibility, reliability, and trust.

We know that the National Party is promising everything. It put out a law and order policy, and I got my people to cost it. It would spend $722 million more a year on law and order, plus $1.8 billion in capital expenditure. Over a 10-year period, it would be a $9 billion promise. That, from the party that says it will cut taxes and slash Government income! It will spend a whole lot more on law on order—but where will the money come from? Nobody on the National benches will tell us. There is absolute silence from those members. There is not even an interjection from the crowded National benches, because they cannot answer that question. We all know that the money would come from ordinary New Zealanders. They would get it in the neck.

Many New Zealanders will remember the 1990s, the age of Ruth Richardson, Bill Birch, and Jenny Shipley. But they should not forget those who are still in Parliament—Lockwood Smith, Bill English, David Carter—

Hon Harry Duynhoven: Nick Smith.

Hon PHIL GOFF: —Nick Smith, Tony Ryall—all the old, failed, tired hacks from the past, who expect us to believe them now. Tony Ryall is the only Minister of Justice in this country’s history who has faced a referendum on his term as Minister of Justice. In that referendum, 92 percent of New Zealanders showed that they had no time for the absolute and abysmal failure of the National Government to deliver. We have delivered in law and order. We have delivered the lowest crime rates in 23 years. We have delivered the best police resolution rates in 22 years. We have now put another 1,200-plus police staff into the police force. Compare that with National’s plans, which we uncovered when we became Government, to slash police numbers by 540 to pay for the failed INCIS scheme! How can National have credibility when its members look at their track record of their failure to deliver? We can stand proudly beside our track record and say that we have delivered for this country.

Let us look at what we have delivered. We have delivered the best growth rates that this country has seen in decades. For 4 years in a row we have had higher growth than our bigger cousins across the Tasman, in Australia. We have delivered 260,000 additional jobs—260,000 more New Zealanders able to pay their way, able to contribute through the taxation system, and able to improve their standards of living and the strength of the county. We have lowered poverty, and we will lower it further. That is something we are particularly proud of. We will pull from a third to a half of kids currently living under the poverty line out of that poverty, through the Working for Families package.

That is something to be proud of—not big tax cuts for former Governors of the Reserve Bank, chief executives, or merchant bankers. That is what the National Party stands for. Its leader and its finance spokesperson are former bankers, and they are standing up for the rich and powerful, giving them all the assistance they need—or do not need, as the case may be. They are ignoring the people on the ground who need the help—the kids who need a decent education and the people in the health system who need better health-care.

And that is what Labour has delivered; we have cut the cost of going to a doctor. That is the key thing that saw people end up in hospital—because they could not afford to get to the doctor. Through primary health organisations we have lowered the cost. We have lowered the cost of pharmaceuticals. We have committed to delivering more operations; more orthopaedic and cataract operations are provided for in the latest Budget. We are making New Zealanders healthier. People are better off under Labour, and when they think about the choices, they will come to that conclusion.

We have delivered paid parental leave. We are about to deliver 4 weeks’ holiday. Don Brash said that he was against that and that the country would go bankrupt, but when he looked at the polls he thought he had better say he was for it. We know about National in the past saying it is against things, changing its mind to make it look as if it is for them, and, when it is safely elected, changing its mind back again.

Then, of course, we have the nuclear-free policy. National does not have the courage of its convictions. It has a bill, introduced by ACT, before the House that says this country will cease to be nuclear-free. A senior National MP told the Agenda programme on Saturday that Don Brash and most of the National caucus do not believe in a nuclear-free New Zealand. Will they come out and tell New Zealanders that? Not on your life! They know that, two to one, New Zealanders are in favour of the policy, so those members will dissemble about it, and betray their promises if they think they can get away with doing that—just as they have done in the past.

The tax cuts are a myth. Yes, of course we would like to pay less tax, but we know there is a cost to tax cuts, and that cost is a cut in the expenditure that is badly needed for the people of this country. We are giving superannuitants a rates rebate, which will be the first decent increase in rates rebates in more than 30 years. We are looking after health needs. We have reversed National’s cuts in superannuation. That would be the first thing to go under National’s policy. We know that what those members are promising simply does not add up. We know that the Australians spent $22 billion on tax cuts last month in their Budget, but what did that deliver to the average income earner on between $23,000 and $58,000 a year? Six dollars a week! In my electorate, on 1 April this year families on the average wage with three kids got 55 bucks more a week—$55 more in the pocket to help them meet the needs of their growing families, at the time that they need that assistance.

Those sorts of benefits in real, disposable income can never be delivered through tax cuts. Tax cuts would help the wealthy. Tax cuts would mean a cut in the major social expenditure areas of health and education. Tax cuts, as the OECD reported to us, would end up being inflationary, and we would end up with higher interest rates. What the National Party would give on the one hand, it would take back in additional interest rates on the other.

I am proud to be in this party that has delivered for New Zealand. I am proud to be in this party that has competent leadership. Can we remember Don Brash on the foot-and-mouth hoax? He was going to produce what Annabel Young, the chief executive officer of Federated Farmers, said would have been New Zealand’s Chernobyl. We cannot rely on him. We have a competent and able Prime Minister; we will still have that person as Prime Minister after the election this year.

GORDON COPELAND (United Future) : It is very clear that between now and the election the Minister of Finance, Dr Michael Cullen, will try to convince the nation that there is no room for tax cuts following this year’s election. However, this assumes that any alternative Government would carry on with his expenditure plans exactly as he has determined them, and that they would be funded in exactly the same way as he has intended. In other words, there is only one form by which the Government can spend its money and fund its way forward, and that is the way that Michael Cullen has determined—there is only one form of architecture for the house. Well, that might be true for the house that Michael built, but let us be clear that there are alternatives.

Dr Michael Cullen’s Budget is not carved in stone; it is not Holy Writ, and it can be changed. If someone else—for example, a sensible, stable, prudent, reliable centre party—were to be part of a coalition after the election, then it will be changed. I mean, let us get real. Dr Cullen is running a massive, multibillion dollar surplus but, at the same time, he is saying that there is no room for tax cuts until 2008. Hello—is something missing in that statement, somewhere? Of course there is room for tax cuts, and they will be happening if United Future has something to do with it. We have a good track record in that regard.

The other day in the House, Minister Steve Maharey said that the previous Government had cut taxes. Well, let me tell the Minister that the previous Government was a National - New Zealand First Government, and under that Government there were no cuts in taxes. In fact, the National - New Zealand First Government actually reversed the tax cuts that had been announced by the previous Government. That previous Government—guess what?—was a National - United Future Government. So it is very, very clear from our track record that every time United Future is brought into the frame, taxes go down; when we are not in the frame, taxes go up.

United Future will be cutting taxes in a number of ways. First of all, we want income-splitting for couples who are raising children. It is quite unfair that a person who has no dependents pays exactly the same tax as a man or a woman who is supporting, maybe, a spouse and two or three children. That is quite unfair; we want to bring it to an end, and income splitting will do that. We want to reduce the company tax rate, over 3 years, from 33c in the dollar to 30c in the dollar, and we want to introduce a $3,000 tax-free threshold.

I would like to ask the Hon Phil Goff, who just resumed his seat, how that puts more money in the pockets of the rich. Can anybody tell me that? It puts more money in the pockets of everyone. Every single taxpayer would get more money, every child would get more money, every tertiary student would get more money, and every superannuitant would get more money. In fact, there are no exceptions to that rule. That is not putting money into the pockets of the rich. That may be the National Party’s tax policy. Eventually, I guess, we will get to hear what that policy is—maybe about 2 weeks before election day, the way things are going? But United Future’s policy is to give a tax reduction to every single taxpayer, and that will do it.

We will also adjust the tax brackets by $5,000, so that the income threshold of $38,000 will go to $43,000 for those on a tax rate of 33c in the dollar, and the income threshold of $60,000 will go to $65,000 for those on a tax rate of 39c in the dollar. We will do it not in 2008 but in 2006—1 April 2006. And it gets even better. United Future will raise the amount of money that ends up in the pockets of New Zealand’s 476,000 superannuitants. In our tax cuts we are also offering them a boost in their annual amount of superannuation. We will do that, first of all, because they will benefit from the $3,000 zero tax threshold and, secondly, because we want to take out an anomaly in the present formula for calculating superannuation, where it is always based on retrospective data in relation to the cost of living and the average wage. We would make that formula rather prospective, so that on 1 April every year the calculation would be done based upon what we expect the consumer price index and the average wage to be over the next 12 months. That is a fair policy. It means that superannuitants actually get the right amount—65 percent after tax—of the average weekly wage, concurrent with the movements in that wage, rather than always being on the back foot and being behind.

We will take GST off rates, which again will leave money in the pockets of superannuitants and all other residential ratepayers in this country. How much will that cost? Well, I can tell the House that it will cost a little less than $2.5 billion to bring in all those very, very sensible and very good tax cuts. It will leave money in the pockets of families. It will leave money in the pockets of companies. It will leave money in the pockets of children. Fancy, at the moment we tax the earnings of kids—their pocket money. We put a tax on it. We want to get rid of that. We put a tax on the few dollars that tertiary students earn while they are trying to pay their way through a university education. We will bring that to an end, as well. We will leave more money in the pockets of children. They will have some pocket money—the actual amount that is given to them as pocket money, and not reduced through taxation. As I mentioned, we will put quite significant amounts of money into the pockets of superannuitants, and give them a fairer deal as we move forward.

Now when we think about it, let us put that in context. United Future says that it will give tax reductions of about $2.5 billion. Michael Cullen says that there is no room to give tax reductions of $2.5 billion. He has said so in the House several times already. When I ask him a question about any old thing these days, he comes back and says: “If we go ahead with the tax cuts that that member is proposing there will be no room for expenditure on health, there will be no room for expenditure on education, there will be no room for expenditure on police, and there will be no room for expenditure on defence.” But does he ever mention the fact that he is actually budgeting for a surplus of between $6 billion and $7 billion a year? How come he is silent about that reality? I think the silence needs to come to an end.

I think that the media also needs to do some pretty simple basic arithmetic here, because the people of New Zealand certainly are. They say that if the Government has a $6 billion to $7 billion surplus and a party comes along and says that it will leave $2.5 billion of that amount in people’s pockets and people’s purses so that they can have more money to service their debt and more money to provide an adequate income to their families, so that they can give their families the health and education services they want for them and ensure that they are able to have some little family celebrations occasionally, with plum pudding and the like—so that they can do all those things that we take for granted as part of the New Zealand tradition—it is no reply if they are told that that cannot be done because Dr Cullen’s surplus is only $6 billion to $7 billion. How big does a surplus have to be before we can afford tax cuts?

Let us do the simple arithmetic. Let us follow the logic through. I challenge the media today to get stuck in and say: “Let’s unbundle all of this.” We are collecting that $6 billion or $7 billion surplus from taxpayers; that is where it comes from. So when we say we cannot afford tax cuts, United Future says that Dr Cullen is wrong. We certainly can. If we have something to do with this, we will. It is time to shift aside from the simplistic analysis that the Minister of Finance is giving to the nation on this. If he cannot afford tax cuts—and that is what he is saying; that the nation cannot afford tax cuts, and it would be better if he said that the Labour Government cannot afford tax cuts—well, let us get some new advice from somebody else. Let us get some new vision from someone outside the Labour Party that will see more money in everyone’s pockets. At the same time can I say that by just rearranging the architecture and the balance sheet of the nation, we can, at one and the same time, by innovation, and by doing things differently, ensure that we continue to build a world-class health system, education system, police system, and so on in this country. We do not have to have this false dichotomy that says that we cannot do both. We can, and if United Future has anything to do with it, we will.

Hon MARK GOSCHE (Labour—Maungakiekie) : A couple of things came out of the Budget last week that I should comment on. One of them was something that is an absolute rarity—it is as rare as National Party members in this House getting up to speak. It was the emergence of a National Party piece of policy. Paul Adams and I got to hear it first-hand on Friday in Auckland. What was it? It was the National Party’s policy on helping the disability providers—the people who care for people with disabilities in New Zealand. What was it? It was from its spokesperson, Sandra Goudie, and she said this: “We’re going to help the disability provider employers. We are going to take penal rates off the workers in that sector who work on public holidays.” Who are they? They are the people who go into the homes on public holidays and look after the elderly and those with disabilities. To help the sector, Sandra Goudie has promised that the National Party will repeal the Holidays Act and take away penal rates from those hard-working, low-paid New Zealand workers, most of whom do it for love, not for money.

That is the National Party’s policy that we heard last week. What a doozy! National members will go out on the hustings and tell those workers that the way to solve the shortage of the workforce in the disability sector is to whack the workers over the head and take some money off them. Well, contrast that with the policy of this Government. We have put money into that sector, badly needed money, so that those workers can, in fact, be trained, so that they can be paid more, and so they can go into the homes of the elderly and the disabled and work and get recognition for that work. But National Party members, true to form, say: “Nah, we’re not having that.” Low-paid New Zealand workers—some of the lowest-paid, hardest-working people in this country, who look after the elderly and the disabled—are to be punished to pay for the tax cuts for the rich!

Well, what does one expect of the National Party when one looks back at its track record? Remember the tax cuts of the 1990s? How were they funded? National sold 13,000 State houses—that is how it funded the tax cuts—after it had already sold the railways. Of course, this Government has had to buy the railways back because that was an absolute failure as we saw our railway system stripped away and the money was ripped off by the people whom the Government sold it to. That left us with an enormous burden on the roads because our rail system was not doing its bit.

I suppose, to fund the next round of tax cuts, if Dr Brash ever gets his way, National has not much that it could sell, but he said he will sell Kiwibank. That will be great for the low-paid, medium-income New Zealanders who are lining up at that bank to take advantage of the lower interest rates that no other bank would actually offer! Through the home ownership scheme, this Government is, in fact, helping more and more people into home ownership through the mortgage insurance scheme, which is another good feature of this Budget, as is also the KiwiSaver scheme that will put $10,000 into the pockets of hard-working Kiwi families so that they can buy their first home. That scheme will be delivered through the likes of Kiwibank that Dr Brash wants to sell.

Let us look a little deeper, because to cut the tax from 39c down to 30c, which National said it would do, and the company tax down from 33c to 30c, will cost about $2 billion, and not one single low-paid or medium-income family will see a cent as a result of that, because they do not pay the top tax rate of 39c, nor do they pay company tax. But $2 billion will be down the tubes, gone, and cannot be spent on health, and it cannot be spent on education. As Dr Cullen said, one will get a tax policy, but it is actually a cut in health, a cut in education, a cut in defence, and a cut in law and order.

But hang on. Let us see what National has promised to spend if it ever gets a chance to be the Government again—well, $2 billion on cutting tax for the wealthy and for the companies, and it wants to spend $4.5 billion on transport over the next 10 years. that is pretty miserable, but nevertheless, it is new spending. It has promised to build the Waikato expressway. It has promised $120 million for Northland roads, $110 million for Tauranga, and so on and so forth. Wherever National members visit, they promise to spend.

But there is a hidden issue. How will they fund that? They will have toll roads. What is a toll? It is a tax. So Dr Brash is going to say that the wealthy can have a tax cut, and the companies can have a tax cut, but all those other fellows will have to pay to build the new roads by paying tolls. How will they manage that? That is what we want to know. They will also have to pay more for education for their kids, and for tertiary education for their older kids.

Everybody knows what happened in the 1990s as a result of taxes being cut. There was not any money to supply our education system with what it needed. Labour has put millions and millions into bringing back to some sort of reality the spending on schools, the spending on tertiary education, and the spending on health. National members would also be opposed—and we know they are—to the half a billion dollars that this Government has stumped up with to pay nurses. The most highly rated profession in this country is nursing. It is not politicians, it is not the police, but nurses. This Government recognises that we cannot afford to import nurses to work in our hospitals while we export our trained nurses to the rest of the world so that they can earn a decent living. So that half a billion dollars cannot happen if there is a tax cut and if all that money is spent on roads—as the National Party said it would do.

Then there is the $4 billion they have said they will spend on defence so that we can be equal to Australia. They have committed to spending $722 million a year on law and order. Members will remember that National is going to abolish parole. When they do that they will have to build more prisons. They cannot just have the prisoners wandering around in the paddock. They will have to build more prisons, and, at $220 million each, they will have to build a lot of prisons when they abolish parole.

Where will that money come from? That is what the country wants to know. Where is Dr Brash, who prides himself on being an economist, and a miserable one at that? He put up interest rates, year after year, so that New Zealanders could not afford to buy a house. Rates of homeownership plummeted to record lows as a result of his regime of interest rates. Dr Brash is saying that his party, if it is ever elected to Government, will help low to medium income families. Well, let us hear how he will give them a tax cut and spend the extra $4 billion, which Labour has in its Budget for health. How will he keep the promise to elderly New Zealanders, who have seen this Budget take away asset testing, or the first steps towards it? Where will he find the extra $18 million that is going into home-based care situations, which I have talked about? Sandra Goudie has said that those workers do not deserve that, and she will take their penal rates off them.

What about the $71 million for residential aged-care that this Budget stumped up with? What about the $297 million to lift quality in tertiary education? In this Budget there is $45 million for industry and trade training, to make up for the fact that last time National was in Government it did away with trade training and apprenticeships. So now we have nobody to build our roads, our hospitals, our schools, and all the infrastructure this country is crying out for.

It is not voodoo economics; it is something worse when a party can tell people it will give them a tax cut but it will not tell them how much, when, or whether they will get it, but it will still be asking people to vote for it and trust it. That is what the National Party will say. That is what we know National will say. But we want the hard questions put to them by our media and by the public. How can we have all the things we have now in health, education, defence, and law and order, and have a tax cut too, and how can they afford to do that when they have already promised to spend more and more on roading, transport, law and order, etc.? It just does not add up, and any person who scrutinises National’s voodoo economics, will see right through it—and through Dr Brash and his colleagues.

At least Sandra Goudie was honest enough to come up with a stupid, dumb, ignorant policy—that was better than none at all—when she said that the lowest-paid, the most caring workers in this country. will lose their penal rates on weekends and holidays, and that will be the one piece of party policy that we can guarantee National will deliver on if it is ever allowed to. That is how it will fund its tax cuts. They will take it from the lowest paid.

KENNETH WANG (ACT) : One thing is absolutely true in this debate about how taxpayers’ money is to be collected and spent. We are debating this bill under urgency, but I am wondering why we are debating it in such a big rush. The one thing that is clear to me is that this Government wants to spend more. It wants to spend more and more. This bill is about grabbing money from hard-working New Zealanders and squandering it. If we look at the figures, we see more tax collection. Actually, we do not need to look at the detail; we need to look only at the ballpark figures to see that tax revenue is at a record level, and that $3.4 billion will have been collected by the end of this financial year. That figure is in addition to all the levies, penalties, fees, and fines, so overall we are looking at nearly $5 billion in revenue collection this year. There will be even more waste, and we will see Government expenditure jump up to a record high of $6.5 billion, more than the previous year, as the forecast shows.

What is the revenue being collected for? We all know what it should be for. It is meant to help ordinary New Zealanders and their families, but we all know that it will be spent on hip-hop tours, wānanga—which is a raced based policy—and social engineering. A story in the Dominion Post today, under the headline: “Taxpayers fund $1m grant to US company”, tells us that taxpayers are funding a company called Navman. I want to draw members’ attention to the fact that 3 years ago this Government, via Industry New Zealand, spent $23,000 of taxpayers’ money on that same company, by paying for its American owners to stay at Huka Lodge and be taken on a fishing trip. That money was squandered, and I wonder how the Government can spend more money—up to $1 million—on that American company. This is an example of grabbing taxpayers’ money and spending it on corporate welfare.

We have to look at Labour’s repeated claims that the proposed tax cuts are just for the rich. I would like to draw members’ attention to the fact that tax cuts are not for the rich, as we see when we look at what ordinary New Zealanders are saying. I personally encounter many New Zealanders who run their own businesses, while battling to raise their families. Are taxi drivers rich? Are they being bracketed with the rich who will be ripping off the system? Members may recall what I said in my maiden speech at the end of last year. Dairy owners are battling for their lives to keep their shops open, with the help of family members who are all struggling. What about the people in the public service, like police officers, teachers, and nurses? Are they rich? Certainly not. They are hard-working New Zealanders. At the most, their incomes can be bracketed as just middle-class incomes. What have they got? We all know what they have got. They have got a packet of chewing gum a week, but not yet—they have to wait for 3 years.

ACT knows what it is to be rich. Those people are bracketed as rich by Labour. Those people, hard-working New Zealanders, are being labelled by Labour as rich. I can say that they are certainly not rich.

IAN EWEN-STREET (Green) : I would like to address an anomaly that I have picked up in the agriculture supplementary estimates. In 2004 there were two major flood events—one in the Bay of Plenty and one in the lower North Island, in the Wanganui-Horowhenua region. The estimates have given $6 million to the Bay of Plenty and over $26 million to the lower North Island for farm restoration. That sounds really good. I applaud the Government for giving that money to farmers. But for farm restoration? Basically that says that we have had those severe storm events, the farm has been destroyed or the farming operation has been interrupted in some way or another, but here is money so that the farmer can put the farm back to the way it was before the event. That may have been fine back in the days before we were aware of climate change, when we could do whatever we liked and be fairly certain that pastoral land would be sustainable in the long term. But Cyclone Bola proved that that was simply not the case—that land use actually plays a major part. If we simply restore pasture to pasture after it has been devastated by a flood, we will not stop the same thing from happening again in the future.

At the time of the floods I implored the Minister to consider the afforestation of marginal lands, and he agreed with me. But let us look at the estimates. Forestry encouragement, under the estimates, has zero dollars. There is absolutely nothing for developing forestry. If we had forests on marginal lands, those lands would not slip. Trees actually hold the soil together on the steeper slopes. We have to say that climate change is here to stay. I am not suggesting for one moment that if we plant trees on marginal land, those trees will change the climate. Of course they will not. But what they will do is ameliorate the effects of climate change. When we talk about one-in-100-year flood events or storm events, we simply have to say that that is no longer the case. We are looking at maybe one-in-10-year events.

I think the Government should take a much stronger line in terms of climate change factors, and think about land use that will mitigate the effect of future events. One of the things that I think we should do is to get a realistic and updated assessment of the erosion susceptibility of soils, particularly in hill country. It just makes sense to convert marginal pastoral land use to some other land use. I accept that in the short term, farmers who are farming sheep and cattle, pastoral farmers, simply cannot afford to close up their paddocks and plant trees, or allow them to revert to native bush. But we do have to say that those farmers need to be supported in some way, so that their land use will not have a detrimental effect on people further downstream. We need to find out what crops—whether trees or other crops—are appropriate to topography, to vehicle access, to soil type, to steepness of slope, and all that sort of thing. It makes sense for us to grow trees.

Clayton Cosgrove: What about hair?

IAN EWEN-STREET: We could grow hair, as well. That would slow down one kind of erosion, I suppose.

One thing that I think we could have done in the supplementary estimates, rather than giving money to farmers and telling them to go back and restore their farms, was to say farmers had to come up with a plan that would make their farms more sustainable in the longer term. Farmers should have to come up with a management plan for their farms before they get the money. So if the farm has a variety of soil types, for argument’s sake, the farmer could say the class 7 soils would be put under trees, and the higher class soils would be kept for pasture, and what have you. That sort of thing is very easy for the Government to do. It is a condition of the farmer receiving the money. Most farmers would simply say that it makes sense. Why does the Government not do that? I do not know. We are not talking about rocket science. It is a simple thing to do to simply put a condition on the money.

I think it also makes sense to have a public insurance scheme to cover events like the floods. Why does the Earthquake Commission look after residential properties, but not farming properties?

Hon ANNETTE KING (Minister of Health) : I am very pleased to speak in the appropriation debate. This is an opportunity for parties to showcase their policy for the forthcoming election. This is the last appropriation debate we will have before we go to the polls. Parties are able to come into this House and set out clearly for the voters of New Zealand what they intend to do.

I have to say that I have been underwhelmed by the contributions from the National spokesperson and the ACT spokesperson. John Key’s speech was less than memorable. He managed to attract an audience of one—Lindsay Tisch. He was the only person who turned up to hear John Key’s speech. That would not be unusual, except that I was in the House on the day John Key gave his Budget speech. Some members will recall that on that day he had an audience of one—Lindsay Tisch. I want to ask National members why they do not like John Key. Why will they not come into the Chamber to support and listen to John Key? I can only assume it is because he has absolutely nothing to say. That is what his speech was. It was full of nothing. It was empty blancmange. There was not a bit of policy, not a single principle. All his speech was, was a rant, a rage, and a whinge.

Then I listened to the verbal diatribe—or was it verbal diarrhoea?—that poured out of the mouth of Rodney Hide. But I have to say that I looked at him when he was giving his speech, and I pitied him. I felt pity for that man. He is a sad case. He is a sad man. He is desperate and he is dateless, because nobody wants to play with that party. He is undermined by his own members. He spent the whole weekend trying to shore up his leadership of that disappearing party. He is outshone daily by Richard Prebble, the previous leader. He is out principled by Ken Shirley. He is out of sorts, he is out of condition, and he is out of here. That is the truth about Rodney Hide. No Parliament, I have to say, needs to have a malicious fabricator, but that is what Rodney Hide is.

Kenneth Wang: I raise a point of order, Mr Speaker. I think you should draw it to the member’s attention that this debate is about the 2004-05 supplementary estimates. It has nothing to do with leadership. I think this speech is totally out of order.

Darren Hughes: I understand and respect the member’s sensitivity about the state of the ACT leadership, but this debate is traditionally a wide-ranging debate. I am sure the Minister was well within the Standing Orders, but we respect that party’s sensitivity at this time.

The ASSISTANT SPEAKER (Hon Clem Simich): I thank the member for his help.

Hon ANNETTE KING: I know that the member has not been here long and that this is his first appropriation debate. He probably did not listen to his own leader’s speech, which was very wide ranging.

I have to say that I do not think this Parliament needs a malicious fabricator. Rodney Hide makes up figures, he makes up stories, and he is full of blatherskite. I do not think this Parliament will miss that, at all. I am waiting to hear the National Party’s health policy. I suppose New Zealanders are, as well. We get a lot of negative whingeing and moaning from National’s health spokesperson. He goes around New Zealand, saying how it is all bad; how the whole health system is in crisis. Most people scratch their heads and say that when one looks at the patient satisfaction surveys, one can see that 88 percent of patients think that the health system is very good indeed. However, I thought that Dr Hutchison might, in the near future, like to give us some health policy. We have waited for 6 years, and we are prepared to wait another 6 weeks or so. However, I did get a little glimpse of what we are likely to get from the National Party’s health policy on television during Queen’s Birthday weekend, when Dr Hutchison gave the first hint. He said that National’s health policy in relation to elective surgery was to bring back waiting lists.

Hon Members: Oh!

Hon ANNETTE KING: Yes, members heard me right. He said: “We’ll bring back waiting lists.” I was interested to hear a person from the Association of Salaried Medical Specialists say that putting people on waiting lists would not improve their health one way or the other. However, we now know that part of the National Party’s health policy will be to bring back waiting lists. That is a complete turn-round from National’s policy, which was clearly set out by Bill English on 16 September 1997. It was a policy that National set about to implement from 1998, and it was called the booking system. When we became the Government we looked at that policy and asked how it worked. We asked whether it was a good policy, whether we should continue with it, and whether we should try to improve it. We thought that it was an honest policy. It was one of the few that we got out of the National Party in the 1990s, but it was an honest policy.

The booking system told people whether they would get an operation, when they would get an operation, whether they were close to getting an operation or could expect to get one, and whether they would not get one within the resources. That system was set up through a series of interventions that were made in the late 1990s. First of all, Bill English said that we needed to get people off waiting lists and he said that the way to get them off waiting lists was, first of all, to just keep raising the sustainable threshold. That would get them off any waiting lists. Then, by 1998, National started to implement that policy. So I can only assume that, having implemented it, they now think we will go back to a waiting list system where 96,000 people waited and waited. They were the same people—they were not going on a list, being seen, and going off a list. They were the same people, and some of them had waited for 12 years. Some had waited 8 or 10 years, or whatever. Some of those people never went on a holiday, because they were scared that a letter might come from a hospital saying that their name had been taken off the list and they would be offered an operation. Now we have a party that says it will go back to putting people on waiting lists—[Interruption]—and David Carter thinks that is fantastic. I say that it is dishonest to tell people that by putting them on a list they might get an operation. A health organisation should be able to tell people what can be done and when it can be done within the resources it has.

The other thing Paul Hutchison has taken to doing is going around New Zealand telling people how terrible everything is. He was in Tairāwhiti just last week, and he said that the number of people waiting for operations and the number of people getting operations in Tairāwhiti was worse than it was in the past. Well, I have to tell members that he made that up. I have the latest information from the Tairāwhiti District Health Board, and it shows that it is doing more operations than it was in the past. It is doing more operations this year than it did last year, and people there are scratching their heads as to why he came to their place and said that in the media. We do not need that sort of dishonesty when it comes to the health system. Members should look at what is really going on. They will see that huge progress has been made by the many, many doctors and nurses who work within our health system.

Kenneth Wang said that our doctors and nurses are not overpaid. He is absolutely right. They would have been paid a whole heap less if we had not put money in this Budget to settle the biggest nurses’ pay claim this country has ever seen. Half a billion dollars of health money will go to increase the wages of nurses in New Zealand. Let me hear ACT deny that that is good expenditure of money. Over the last 3 years our doctors in our hospitals have had a 50 percent increase in their pay. Why did we do that? We cannot run a health system unless we have doctors, nurses, hospitals, and facilities, and we have to invest money in that. It does not happen by itself. We respect that investment. We want that investment. Finally, we are starting to see that investment pay off in New Zealand. The rebuilding of a public health system takes money and time. We under-invested in health right throughout the 1990s. Only now have we got it to some state of equilibrium, and 60 percent of that expenditure has gone into the wages and salaries of our health professionals in particular.

We have heard a lot about the growth in numbers of bureaucrats. I have to tell members that more people have been employed in the health system, but the growth in bureaucrats—which has been thrown around—has been 0.4 percent over that whole 6 years. Only 0.4 percent of that increase has been in so-called bureaucrats. Of course, the bureaucrats are the booking clerks, the people who ensure that people will have operations, and the people who answer the telephones. They are the sort of people that National said it will get rid of. National said it would take that money and put it into health. Well, a person will be lucky to get an extra ingrown toenail operation out of getting rid of the bureaucrats—as National calls them—in the health system. I am very proud of what we have done for health in our Budget, and we intend to do more when we return to Government.

Hon DAVID CARTER (National) : It is a delight to follow the Minister of Health and her contribution in this debate on the supplementary estimates. I start by saying to the Minister that we have, and New Zealand has, lost faith in her. One has only to look at the headlines in the Dominion Post today, and the Minister had the opportunity to do something about that and she chose to ignore it totally. The headline stated: “Emergency overload; Hospital A & E staff struggling to cope”. It goes on to state: “Wellington Hospital’s emergency department is bursting at the seams … Patients are spilling into hallways and staff are struggling to cope. One staff member described the situation as ‘near crisis’.” Yet we have had 10 minutes of absolute garbage from the Minister of Health and she refuses to address the real issues and the reason why the public of New Zealand have no faith in that Minister or the health policies of this Government.

As we debate the supplementary estimates today, it is the final debate in this year’s Budget, and will not Dr Cullen and his Labour Government friends be pleased to see this debate out of Parliament, once and for all! Because as we all know, this Budget has been a total disaster for the Labour Government. Helen Clerk had the—I was going to say the “audacity”, but I think it would be truthful to say the “stupidity”, to say that that is the Budget that Labour wants to campaign on. I say to Annette King, and the few members of the Labour Government sitting in the cross benches, to make my day! I am happy to debate with the people of New Zealand the absolute generosity of Dr Cullen when he promises hard-working middle-income New Zealanders a tax cut of 67c a week, provided they wait around in New Zealand for the next 3 years!

What arrogance a Minister of Finance displays by coming into this House, acknowledging to taxpayers throughout New Zealand that they are paying too much tax, and then having the stupidity and the arrogance to say that Labour recognises that New Zealanders, particularly middle-income New Zealanders, are overtaxed, and if they stick with the Government it will give them 67c, but they have to hang around New Zealand for the next 3 years! That was just the most stupid thing that Dr Cullen could ever have done, and Labour Government members now on the opposite side of the House hang their heads in shame, to think that they were part of such a Budget policy this year. [Interruption]

I welcome the opportunity to debate with Harry Duynhoven, on any platform he likes, Labour’s tax cut of 67c a week against National’s tax cut policy, which will be announced in the not too distant future. If he thinks his Government’s policy will be a winner, he is as out of touch as Dr Cullen. I suspect he is, because that is what has happened to the Government. It has become so arrogant, so out of touch, it is failing to realise what New Zealanders are really worried about.

Hon Harry Duynhoven: Which electorate do you represent?

Hon DAVID CARTER: I want to take the opportunity to talk about some aspects of the supplementary estimates, but first I will pick up on the rather inane interjection from Harry Duynhoven. I tell him that I represent the farmers of New Zealand, who have had enough of that Government. I refer particularly to Supplementary Estimates of Appropriations at page 12, which talks of $2.649 million more being put towards Jim Sutton’s campaign to develop public access in this country. That is on top of the money that had already been spent in last year’s appropriations. That is on top of the $2 million being budgeted next year for the next 3 years by Jim Sutton and Helen Clark, as they progress an agenda to open up the privately owned farmland of New Zealand to people who Helen Clark thinks should be allowed to wander over that land.

If Harry Duynhoven thinks that that policy is popular, he is as out of touch with New Zealanders as he could possibly be. He should realise that the issue is a major concern for New Zealand farmers. Now, he is nodding his head. He is actually one of the few who have woken up to the fact, and acknowledged, that this is a major concern for farmers. Farmers who live in isolated areas know they do not have the resources of the police force. They know the situation where Peter Bentley was being beaten to a pulp, and his wife was on the phone ringing 111, and the police kept Mrs Bentley talking on that phone, and would not let her get off that call to ring the neighbours for help. No help arrived, for a matter of an hour or more. That is why farmers feel so deeply about this public access debacle being advanced by Helen Clark and Jim Sutton.

Hon Harry Duynhoven: What about foreign ownership?

Hon DAVID CARTER: I tell Harry Duynhoven that it is not for some selfish reason that farmers want to lock up their land. They are willing to let the people of New Zealand wander over their land, but they want to be shown the respect of being asked. They are the ones who have spent their hard-earned cash buying the farm in the first place, and they want the opportunity of saying yes or no to people who ask whether they can wander.

I remind Harry Duynhoven that it has worked well for 160 years, and all that goodwill is about to be destroyed. I look forward to seeing that member, and the other few members of the Labour caucus currently in the House, being on the steps of Parliament on Thursday week when thousands of farmers are going to descend on this Parliament to again lodge their protest over this public access debate. It is the No. 1 concern that New Zealand farmers have at the moment, and they have absolute disgust for Jim Sutton as he continues surreptitiously to advance that policy.

We tell him to table the legislation. We have been asking him all year to table it. We heard a few weasel words over the weekend saying the legislation will be in the House before the election. We took the opportunity to ask the Minister a direct question at question time today, and his answer as to when he would table the legislation was: “When we are ready.” Jim Sutton should wake up, and listen to and feel the concern of farmers.

I bring to the House’s attention one other interesting supplementary estimate—that is, the $3.133 million being added to the budget of the Weathertight Homes Resolution Service. That is a bureaucracy chewing up $18.5 million a year, but it is meant to be out there resolving the disputes and problems around leaky homes. The House has been told time and time again that the number of cases being brought before the resolution service, well and truly exceeds the cases resolved so far. At the current rate it will take over 100 years to resolve the claims.

I was amazed at some interesting statistics that Nick Smith provided. It is costing over $100,000 of bureaucracy to resolve the average claim. That typifies this Government, whereby it throws money into a bureaucracy, and employs heaps more civil servants in Wellington, and thinks that that will resolve the problems of this country. It is no wonder New Zealanders feel grossly overtaxed when they know their hard-earned taxpayer money goes into building a bureaucracy that is some 40 percent bigger than it was 6 long years ago. I say to middle New Zealand: “Help is on the way. Tax cuts will be delivered, but you’ll have to vote for a change of Government to get them.” I trust that middle-income New Zealand will do that.

CLAYTON COSGROVE (Labour—Waimakariri) : As my colleague Harry Duynhoven said, the previous speaker, for the benefit of those who did not know this, was one David Carter, the former failed finance spokesperson who was sacked by his leader, sacked off the front bench twice—

Darren Hughes: Twice?

CLAYTON COSGROVE: Twice. And now in theory David Carter is National’s spokesperson on agriculture and the leader of the C-team within the National Party. I first want to address a couple of points that Mr Carter made. He talked about the accident and emergency department at Wellington Hospital bursting at the seams. Well, there is a reason for that, I tell him, as he scuttles off like a paddle crab. There are not enough beds in the emergency department, because the department is not big enough. We can ask why that is. I am not a medical practitioner, but I assume that when an emergency department is being planned, one projects out on a population basis and finds out what the demands will be over the life of that building over the next 10 or 20 years. But when the planning approval was given for that building in 1999, by the previous National Government, of course, it did not make provision for enough beds in the department, nor for enough room in that department to put in those beds. That is why, sadly, the accident and emergency department at Wellington Hospital, as the member read from the headline in the Dominion Post, is bursting at the seams. National could not run a bath, let alone set up the planning and project it forward for an appropriate medical facility for the people of Wellington. That is the truth.

Then we come to the issue of leaky buildings. My colleague Mr Duynhoven reminded me that before I arrived in this place, the warnings were there. One can just ask any builder in my electorate. I talked with one last week. He said the warnings on the leaky homes issue were around for 10 years before 1999. There were warnings about the Rockcote, the polystyrene, the lack of gaps, and the lack of ventilation all causing leaks in houses.

Brent Catchpole: Why did George Hawkins refuse to acknowledge that?

CLAYTON COSGROVE: The previous speaker got up, but before Mr Catchpole, or “Tadpole”, or whatever his name is, was in this place—

The ASSISTANT SPEAKER (Hon Clem Simich): Please withdraw that comment.

CLAYTON COSGROVE: I withdraw. Before that member was in the House, so he should zip up and listen, for 10 years before 1999 the building industry was warning Nick Smith and the then Government about leaky homes. The question I have for Mr Carter, as he embarks on his road to Damascus - like experience, is what the devil did he do, or Nick Smith as Minister do, in 10 years to correct that problem? They did nothing.

In addressing the appropriations I want to touch on Mr Hide’s speech, just briefly. I know that the Minister of Health has commented on it. But what a sad speech it was from a very, very sour member. [Interruption] Mr Wang needs to read the Standing Orders. This is a wide debate. What a sour speech that speech from Rodney Hide was. That was Custer’s Last Stand—or, maybe from “Old Yeller” it was “Custard’s” last stand—because the great delight I will have at the next election, when I stand up on the stump—[] Mr Tisch should stump up and give us a policy. When I stand up on the stump, I will debate our policy of providing $83 a week for Sue and Nick, who have a couple of kids and earn $32,000 a year—which would take a 9c in the dollar tax rate, if one was to do so under a slash-and-burn policy like National’s.

The one thing I will take great delight in after we do win this election is that that crew over there, which includes Mr Wang and the so-called leader of the ACT party, will not be here. That cancer, in political terms, will be excised and cut out of this place—and I say that not in a disrespectful way. That wound will be excised from this Parliament. Gone will be the days of wading through the political sewer, and bringing this Parliament and its members into disrepute. I say to Mr Hide that he should remember, when he is outside this place as a citizen in the free world, there will be 120 of us who will be inside, and then we may see that member and a few of his mates called to account. I look forward to that day. “Old Yeller” will be right outside this place, and we will hold him to account.

I want to go back; I have digressed. This debate on the appropriations goes like this: National members want a tax cut that, by their own figures, if one dumps in excise cuts, cuts to company tax, cuts to personal tax—you name it—will add up to, in effect, $5.5 billion, which is half the Health vote. They say, when asked how they will get the dough, that they will cut out all the so-called waste in the Government. If we look at the figures when National was in office, we see Government expenditure was 33 percent of GDP. What is it now, with that so-called waste?

Hon Harry Duynhoven: 30!

CLAYTON COSGROVE: Thirty percent, my colleague says. What is it forecast to be once the Working for Families package is fully implemented?

Darren Hughes: 32!

CLAYTON COSGROVE: Thirty-two percent—1 percent lower than when the National has-beens were in Government. I ask those members how they would do that, because $5.5 billion is half the Health vote. That is not cutting waste out of the Health vote; that is gutting health. There will be no health system if $5.5 billion is cut out. The question is: which hospitals would they close? I say Mr Tisch should stump up with a policy. Which hospitals and which pre-schools in my electorate would he close? Would National do what it threatened to do in my electorate before I became the member in 1999, which was to gut and close Rangiora Hospital and Oxford Hospital—are the National members going to run that up the flagpole? By God, I will enjoy defending those hospitals. I will be in the trenches defending them if ever, after the election, National managed to implement that particular policy.

I was on CTV with Gerry Brownlee—there was not much room on the screen, I have to say. I asked him where he would get the money for tax cuts from, and he could not answer that. He said to me in the advertisement break that it was a bit like treading water—that until National announces its policy, it has to keep treading. National members have bleated on, and some may sink like deadweights. I say to them that they should get the tax policy out. If they are so proud of it, they should do two things: first, announce it today; and second, put it before the Finance and Expenditure Committee system that even National signed up to unanimously, whereby Treasury would gain a consultant—which it has done—who could cost all the political parties’ tax policies. Even the ACT party dipped into that one and submitted its policy—Mr Prebble must have been in charge that day. The Green Party submitted its policy. United Future submitted its policy. Labour’s policy is out there. It has been picked over, trodden on, booted around, and chewed around for years. Which party did not submit the tax policy that it is so proud of? That crew—the National Party. We have done one costing, and now there is a second round. Treasury does not get involved in politics. It has hired a reputable economic consultancy firm. But why will National not have its policy costed?

I predict that National will announce its tax policy, but that in no way will National go anywhere near anybody who would independently cost that policy. National will not go near anyone to have that done, because it knows the hidden traps that are in its policy. The hidden traps are that every member of Parliament, including Mr Wang over there on the Opposition benches, will get a couple of hundred bucks a week, I predict, out of a Don Brash tax policy. Mr Wang and a few others talked about hard-working Kiwis. Well, what would they know about hard-working Kiwis? What would every battler on $32,000 or $37,000 a year get from the so-called tax cut? Nothing. What would Nick and Sue in Oxford in my electorate get? Members should hunt them down and talk to them, because they are now receiving $82 a week as of this year, but under a National Party tax cut they would get nothing. If I am on $55,000 a year, what would I get from a National Party tax cut? I may get $5 a week. [Interruption] I hear an interjection from over there in the Opposition. Mr Hide says our policy would only buy a stick of gum. I suppose $5 would buy a triple meat burger for Rodney Hide. But a family of four kids and two parents earning $55,000, under our Working for Families system today, and given their rent and other costs, gets $150 a week. I said before that it would require a drop to a 9c in the dollar tax rate to give a family on $55,000 a year the equivalent of $150 a week—and I assume that at that point so little tax would be coming in that it would be a case of “the last one out switches the light off.”

That is where the debate will lie for those working people. After this appropriations debate, at the appropriate time, that is what we will go out and debate at the election. Then we will match Labour’s record with National’s record. The only record National can stand on is what it did last time it was in Government in respect of the pension. I ask where National would make the cuts—in health, in hospitals, or in the police? Where would it do that? The people want to know, and National should be honest enough to stump up and give them a tax policy.

RON MARK (NZ First) : I tell all the listeners sitting in their cars that the speech we were just treated to from Clayton Cosgrove was his “Please make me a Minister next time.” speech.

Hon Annette King: He doesn’t need to say please. He’s doing all right.

RON MARK: Oh, so Clayton Cosgrove is going to be a Minister in the next Government?

Hon Annette King: Oh yes, you wait and see.

RON MARK: That is a very fine announcement from the Minister of Health, who will be departing, along with her entire front bench, as Labour leaves Government.

That factor brings me nicely to the point I wanted to make. It is one thing to have a debate and a speech targeted on the facts; it is quite another thing to have a member of Parliament stand up and use sarcasm, vindictiveness, and nastiness—to call one member a paddle crab; to call another member yellow and not be pulled up by the Chair; and to imply that another member is so big and fat that he did not fit on the TV screen in a particular interview. If that is the sort of arrogance this Government wants to bring to the next Parliament and to the next Cabinet, then so be it, but I suggest to Annette King that it is a little bit presumptuous to assume that Labour will be in Government.

I point to another comment. There was a little interchange that speaks very loudly of the culture. When Mr David Carter spoke—and, God knows, I am not here to defend him—he was questioned by Government members as to what seat he holds and what constituency he represents. Immediately to the fore came Judith Tizard, Annette King, Harry Duynhoven, and Georgina Beyer, to ridicule him as though he were some sort of B-class MP because he does not have a constituency. Here is the point: Georgina Beyer is herself now on the list; the Deputy Prime Minister of this country, the Hon Dr Michael Cullen, is a list MP. It smacks again of an arrogance that can be demonstrated only by people who believe that they are beyond reproach, and that they are, as constituency MPs, more important than list MPs.

It brings to mind the Jill Pettis comment, in answer to a question from a person on the street as to whether she could govern with New Zealand First. Her answer was: “They’re so unsophisticated.” Imagine that comment being reiterated in the freezing works, amongst the hard-core Labour vote! Imagine that comment on the marae! If Winston Peters is less sophisticated than Jill Pettis, and if that is the proviso the chief Government whip is going to bring to the negotiating table—that she wants to govern only with people who are sophisticated—then it suggests that Labour is a country mile away from its roots. The people on the marae, the tangata whenua, whom Labour so proudly claims to represent, are not going to take kindly to that sort of arrogance.

It is the sort of arrogance displayed by Mr Maharey, who made all sorts of promises in Opposition, then became a Minister and reversed his position. That act created the “Maharey principle”, which is the ability to say one thing when in Opposition and do another when in Government. It was most aptly summed up, not by Mr Cosgrove in his very sad speech, but by Dr Cullen himself, who said in the House: “We won. You lost. Eat that!”. That sums it up. Mr Carter was quite right when he pointed out that the commentary we hear from Labour MPs and Ministers is pure arrogance.

The Budget is my next point. I have just come from a Grey Power meeting in Porirua on law and order, which the Hon George Hawkins attended. I give him 10 out of 10 for attending—brave chap. He is a nice chap, actually. I have known George Hawkins for a very long time—since he was a member of the Mike Moore team. But for him to stand and justify the Budget, the supplementary estimates, and the expenditure of money in this Government’s coffers, by telling the people of Porirua this afternoon that crime is falling, was summed up by the reaction of the audience members, who crossed their arms and put their heads down and shook them. After the meeting was over I asked a number of people whether they knew of anyone in their family who had been a victim of crime and who had not reported that crime, and if so, to tell me why it was not reported. All the people standing around me said that of course they did—not one member of their family, but many members. For the Minister to justify his reduction in crime-fighting expenditure, an insignificant increase in the police budget, and an insignificant increase in police numbers over 4 years, by telling those elderly people, who have read in the papers of another two elderly people murdered in their home, that crime is falling smacks of either stupidity or arrogance—one can take one’s choice.

The same man said that burglary rates are down. Burglary rates are not down—reports of burglaries are down. Let us ask any policeman, policewoman, or citizen whether he or she believes that burglaries are down. Let us go to the national crime statistics and the victimisation statistics. They state that crime is under-reported by a massive 60 percent. Do we see a commensurate increase in expenditure in this Budget? Do we see a commensurate concentration on burglaries? No. When I went to the Northern Communications Centre I saw all the burglary cases from that night being stacked up as priority three, to be looked at not on Saturday, not on Sunday, but some time on Monday. How does that settle with average New Zealanders? Average New Zealanders who have had their home burgled try not to disturb the scene, because they truly believe that when they ring the police, a policeman or policewoman will come around to examine the scene, collect DNA, and collect fingerprints, and that then the family will be free to get on and clean up the burglar’s mess—that home-invasive mess. But that is not what happens. We all sat there—Marc Alexander, myself, and Martin Gallagher—and watched all those burglaries be classified as priority three, to be left for the Monday or Tuesday. In fact, we now know that burglary scenes are never investigated on the night or day they are reported—never. And the Government has the nerve to tell us that burglaries are down? No.

Reported burglaries are down for economic reasons. First, most people do not have home contents insurance. They can make no claim. So there is no point in their reporting the crime, because they know full well that it will never be solved, and they do not need a claim number from the police, because they will not put in an insurance claim. Second, those people who do have home contents insurance policies will make an evaluation as to whether they want to affect their no-claims bonus or excess. They will make a value decision as to whether they will report the burglary. Again, for the Government to talk of its pride about the police budget is a very, very sad thing. It belies its true commitment to resolving crime and bringing crime rates down.

For Mr Hawkins to say that the road toll is down and that that justifies the quota ticketing system is a nonsense. Speeders are not the only people who kill on our roads. What kills on our roads is bad engineering. If people need proof of that, they should go out on State Highway 1 and look at the good engineering that has been done to divide off those lanes along the coast. That sort of thing reduces road fatalities. Education—the excellent advertisements on television—reduce road fatalities. None of the people in Grey Power believe that the quota ticketing system on its own, which collects $100 million per year, is responsible for reducing the road toll. Children reduce the road toll when they tell their mum, dad, and grandad to put their seatbelt on. That comes from education. The quota ticketing system is about one thing and one thing alone: redressing the balance and bringing $96 million in revenue into the coffers. Engineering, education, and road safety together reduce the road toll, not quota ticketing on its own. Nobody believed the Minister when he tried to say that it did.

As for the lowering of standards in police recruiting, nothing in this Budget or these supplementary estimates suggests that this Government is serious about bringing safety to our streets with a serious increase in police numbers. For the Government to crow about 247 officers over 4 years is pathetic. We need 2,500 officers now. Auckland—[Interruption] The Minister Judith Tizard laughs. She should read the police’s own report from 2002. They needed then an extra 100 response units, and they still do not have them.

Hon PETE HODGSON (Minister of Transport) : There are, apparently, 2 minutes left, so I will not embark on the major part of my contribution to the debate until after the meal break. Instead, I want to respond to some of the comments made by the member who has just resumed his seat. He has with this Government a point of agreement and some points of disagreement, and I want to tease out his arguments a little.

He had a point of agreement when he said—and he said it only the once—that enforcement alone will not improve road safety. He is right. We agree with that. We think enforcement alone will not improve road safety, and we are not supporting an enforcement-alone approach. That is why the advertisements on television that the member referred to are running. They are being paid for courtesy of the safety administration programme run by this Government. That is why more money is going into road safety engineering this year than ever before. That is why roads that are being built or refurbished today are safer than ever before. That is why the median strip along Centennial Highway that the member referred to went in under this Government. We understand that engineering, education, and enforcement together matter. What will not work is education and engineering. What will not work is two out of three. That just will not work. Two out of three will not do. Education, engineering, and enforcement together are mutually reinforcing.

It is not OK for the member who has just resumed his seat to suggest—and here is the point of difference—that this Government has enforcement in order to raise revenue. We do not. We would like nothing more than to collect nothing from speeding tickets. We would like nothing more than for nobody to receive a speeding ticket. It would suit us down to the ground. We would lose money. Actually, if we take a venal approach to it and talk about money only, instead of lives, we can say that we would probably make money on that, because we would avoid the costs of hospitalisation of people whose cars have been crunched, and the accident compensation costs that are inflicted upon society.

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

Hon PETE HODGSON: I have one question to ask the National Party. Where is its policy? Where is its policy on tax cuts? A policy on anything would do, but I ask where the policy on tax cuts is. The reason I am asking is that the National Party does not have a very good record of following through. It did not follow through on Ōrewa I. It did not follow through on imprisoning a whole lot of people in jails that had not been built and that it did not have the money to build. It did not follow through very well on what it said about taking babies from solo mums and putting them out for adoption. It has caused itself quite a headache by having lots of little dabs about where it might go if it were ever to become the Government, but never following through.

Now the weeks since the Budget are beginning to count. There has been no follow-through. Colin Espiner said in the weekend Press: “If National doesn’t release its tax-cuts policy—not just drop hints—in the next fortnight it will drop back behind Labour in the polls.” It will do that anyway, but the question is where is the tax policy. The reason it matters is that the ACT party has in the interim managed to put out its tax policy. All the details of that policy are out in the public arena. It makes no sense, of course, but it is out there. United Future has put out its tax cuts policy. The Greens have even decided they have things to say on taxation. But the National Party has simply said that it would give mighty big tax cuts. It is not saying how big or for how many—unless we add them all up. Let us add up all the hints that have been dropped about 39 percent becoming 36 percent and 33 percent becoming 30 percent, and about making sure that an extra $600 million—coming out of taxpayers’ pockets—is spent on roads, as well as about getting rid of this tax, that tax, or the other tax because National does not like it. When we add it all up, we get a very big number.

It has not yet been confirmed in a tax policy statement from the National Party. Why not? Because the National Party is starting to work out that it is not a minor party, that it cannot drop big tax numbers without coming under the immediate scrutiny of the finance sector, of the Labour Government, and of anyone who knows anything about how to drive an abacus. The National Party knows that it has to come up with a tax policy that is saleable, and it has gone and oversold. It cannot possibly put together a tax policy that would give the cuts of $30, $40, or $50 a week that New Zealand families would say is good enough—because that is the sort of money, just for starters, they are getting from the first part of Labour’s Working for Families package. So if National intends to give $30, $40, or $50 a week to New Zealand families, it needs to tell us where the money would come from.

Dr Wayne Mapp: The surplus.

Hon PETE HODGSON: The associate professor of something or other from an earlier time has interjected that he thinks the word is “surplus”. I have news for that gentleman: there is none. The operating balance excluding revaluations and accounting changes is a surplus that is spent on capital investment, the Cullen fund, retiring debt, building hospitals, and building schools. There is no surplus. So we have promises for rich New Zealanders and for middle-income New Zealanders. We have promises of cuts in the carbon tax, in company tax, and in income tax, and we have promises of no cuts in services. That does not add up.

The National Party has got itself into the beginning of a hole. It said that it would give New Zealanders tax cuts of consequence, it said that every New Zealander would be better off as a result of tax cuts from National, and it has worked out that it cannot afford the money. The only way it can afford tax cuts is either to borrow in order to fund them—and, guess what, the word “Muldoonist” was used against Don Brash, the leader of the National Party, in the New Zealand Herald today by a widely respected commentator—or to make swingeing cuts to health, education, social welfare, justice, and law and order. Those are the two options: borrow and hope, or swingeing cuts to social and security services.

The National Party is in a hole. It had a great time a few weeks ago. It is in a hole now, and it will have to announce its policy soon, because otherwise the hole will get bigger. That is the problem faced by the National Party. The hole will not get any smaller; it will get bigger and bigger. As the expectations of tax cuts rise in the country, as the smart alec two-word signs go up around the country, showing the difference between Labour and National, and as National thereby comes under the spotlight, questions will be asked more and more often by commentators and then by the public: “Where are the tax cuts? Where is the difference? What will this election be about?”. If it is not about tax cuts, then the public already knows how it will vote; people will vote for the Government they know and love so well. But if National can pull 5 billion bucks worth of magic from somewhere and call it tax cuts, then people in New Zealand might want to give it a bit of a chance.

So National has an opportunity to go to the people and say: “This is what we mean by tax cuts.” Then the debate can begin. Then we can decide whether this nation wants the Government to become an even smaller part of the country—whether the Government becomes even leaner and meaner and cuts spending on health and education much harder than National ever did in the 1990s. [Interruption] The member might remember that when the big benefit cuts took place at the beginning of the 1990s, the amount of money taken out of the economy was $1.3 billion—only a quarter of what is needed. We would need four times the money raised by the “mother of all Budgets” in order to get anywhere near the amount of money National has already promised to give New Zealanders. So National has to decide whether it will front up. Will it be tax cuts by Christmas? Will it be tax cuts by 1 April? Will it be tax cuts in the first 3 years? Or will it be tax cuts only when we can afford them, which is on the never-never?

Hon BILL ENGLISH (National—Clutha-Southland) : Labour ought to listen to what people are saying about its 67c tax cuts.

Jill Pettis: Not much.

Hon BILL ENGLISH: That is right. In fact, they are saying worse than not much. It would be better if they were saying nothing. If I were that member I would think it better if the drivers on the taxi rank outside Auckland airport were saying nothing about the 67c tax cut. Instead, they are talking to every single passenger about what a waste of time it is, and, more importantly, about how they feel taken for granted. That is the strategic hole Labour has fallen into. Dr Cullen has been so busy trying to buy the election in 2008 that he has forgotten that Labour has to get some votes in 2005.

Hon Dr Michael Cullen: Oh, you’re going to buy them!

Hon BILL ENGLISH: Well, that was what he was meant to be doing. He has taken voters for granted. The Labour back bench will realise one of the long-term truths of politics: the punters are never grateful. The voters in New Zealand have a healthy disrespect for Government. The less damage the Government does, the more the voters may be grateful. But if Labour thinks that people ought to be grateful for getting back their own money, the lesson of history is that they will not be. Voters who think they are taken for granted do not behave well at the ballot box when a Government is looking for support. That is the problem.

There are middle and higher-income New Zealanders who have supported Labour at the last couple of elections, and Dr Cullen and Ms Clark, in particular, have made the arrogant assumption that these people are social democrats of some kind. Well, they are not. They are good, conservative, mainstream Kiwis, and their support has to be earned by any party. National used to take them for granted, and it learnt the hard way that it cannot. Now Labour is taking those people for granted.

That breach of trust between those voters and Labour is at the heart of Labour’s problems now. Dr Cullen and Helen Clark just assumed that because they were so magnificent, those people would keep voting for them. I know that Dr Cullen is talking about the last election campaign—all sorts of lessons were learnt from that—but the pity is that he does not appear to have learnt them.

I will spend some time on Dr Cullen’s accounting, because it is quite important. He has tried to change the definition of the Government’s surplus. He has tried to take us back 15 years—in fact, more than 15 years; it is now getting on to almost 20 years—when the Government accounts ran on—[Interruption] The early 1990s. It was Mode B (Gross) and Mode B (Net), and all that stuff. He is trying to take us back to when the Government just ran a simple fruiterers cash-register system of “cash in, cash out”.

In fact, there has been bipartisan agreement for almost two decades, if one includes the time that the policy was in the making, that “cash in, cash out” was not the way to run a modern Government; that, in fact, accrual accounting mattered. Dr Cullen had one chance to change the rules, which he took when he came in as Minister of Finance. He said that the current surplus was not a good way of measuring the activities of Government, so he would change it. That was his opportunity, and he changed it to the operating balance excluding revaluation and accounting charges.

That turned out to be a bit of a puff of smoke in the wind, because the operating balance excluding revaluation and accounting charges has been significantly different from the operating surplus in only 1 year. It makes a big difference to the management of Cabinet expenditure, because nothing undermines Cabinet Ministers’ self-discipline more than finding that they have been made to make savings, and then finding that the surplus gets dramatically changed because of a revaluation of the Growth Services Fund. They do not like that at all, because $500 million can just get changed overnight, on an accounting change, when they have spent months hacking away, saving $100 million.

Dr Cullen changed the system, but he did not change it to a cash system. If he had really believed what he now says about how the Government should account for its activities, he would have changed it then. He now knows that because he left it until it suited him, the public have no idea what he is talking about. As far as the public are concerned, they believe the numbers. Why would one blame them? We spent two decades educating the public about good public policy and good public accounting, and when they see a $4 billion, $5 billion, or $7 billion surplus, they believe the numbers.

In the last 3 or 4 months Dr Cullen has taken on the job of trying to change the public’s mind. If Dr Cullen is as clever as he thinks he is, he should know that it would take a good 5 years to change the public’s view; to tell them that the actual surplus is not the surplus, or to explain to the public that he has got all these other uses to which he puts the surplus, which means that there is not really a surplus at all.

Hon Dr Michael Cullen: So it’s not true, then?

Hon BILL ENGLISH: No, the point is that he had the opportunity to change the rules and he left it too late. Now the public believe the numbers that have been published. They believe that the Government has an operating surplus. It is going to be very difficult for Dr Cullen in the next 3 months to change the rules that have been in place for 20 years.

Dr Wayne Mapp: He will fail.

Hon BILL ENGLISH: No, it is worse than that. He has failed. The time for that argument is over. The look on his back-benchers’ faces shows what a revelation it has been for them. They believed what he told them, which was that because he was so smart the public would change their minds just because he said they should. But, in fact, they have not.

I will spend a little bit of time on the Government’s spending; in particular, in my own area of education. I have had, as everyone else has had, the released Official Information Act request on the Budget bilaterals for education. It shows a bureaucracy and Government completely at sea when it comes to understanding what it is doing with the money that it is spending on education. The Treasury reports on the bilaterals make it quite clear that the Government has no concept of value for money in education. It has had almost no control over the expenditure of money in education—particularly in tertiary education. The official documentation of the last 3 years outlines a trail of incompetence and waste. The public, because they have seen so much of it, have now come to understand the incompetence of the Government with their money.

That is the other thing Dr Cullen will have to come to grips with. Although he sees himself as some kind of fiscal hawk who has ridden the Cabinet and caucus hard on spending, the public increasingly believe exactly the opposite, because they see the evidence. In the public mind, value for money matters. It matters more than collaboration, cohesiveness, and partnership—all those weasel words of the day that mean no one is accountable under this Government. The public want value for money. If there is $3 billion more spent on health, they want to see $3 billion more of health services. The problem is that they see almost no extra health services. If they see a couple of billion extra dollars spent on education, they like to think that some people are learning something. But they have discovered that that is not happening, either.

Jill Pettis: Extra institutions.

Hon BILL ENGLISH: As that member will find out, our polytechs—public institutions of which she is supportive—will all get into huge financial problems over the next couple of years, despite the expenditure of huge amounts of money by the Government.

Hon RICK BARKER (Minister for Courts) : That was the leader-in-waiting for the National Party, but—regrettably for the National Party—he is also the leader who took that party to the biggest defeat in its history. The biggest defeat that National has ever suffered in an election was under that man, Bill English. It just shows the value of the currency of his opinion. It is also worthy of note that he had some time in the finance portfolio. I reiterate the point made to the House earlier by Clayton Cosgrove that the Finance and Expenditure Committee had agreed that it would have Treasury examine the tax and finance policies of each party independently, in order to offer the public a fair opinion of those policies. The only party that will not put its policy through that process is the National Party, because it is afraid of what will be found—and it has good reason to be afraid. The other policies it has put forward, like, for example, social welfare, have been justifiably trashed. Its members do not talk about social welfare policies any more.

Hon David Carter: Ha, ha!

Hon RICK BARKER: Opposition members may laugh, but let us go back for the joke. The joke is that National’s leader, Don Brash, said that the party would have the unemployed line up outside a post office. That was the National Party’s policy on social welfare. We all know—except the out-of-touch National Party—that post offices have long since gone. The National Party then went on to say that women who refused to name the father of their children would have to face a financial penalty. The bad news for the National Party is that that is now the case. The National Party then said that there would be a 90-day trial period for beneficiaries who were trying to find work. Again, the National Party was wrong, because that is already policy. It also said that it would have people work for the dole—that if people could not find jobs, National would get them jobs in the community. Analysis of its own policy back in the terrible 1990s shows that that did not work. The people who were put on make-work schemes were less likely than others to find jobs.

The Labour-Progressive Government has been outstandingly successful in employment. When we came into office, we inherited approximately 160,000 people who were on the dole. The National Government in 9 years had managed to increase the number of unemployed from approximately 100,000 to 160,000. This Government has taken that number down by 100,000—100,000 people are off the dole, so while there were approximately 160,000 people unemployed, there are now about 60,000. There are 22 percent fewer people on benefits than there were before. This Government has been spectacularly successful in reducing youth unemployment and long-term unemployment, and I say to Bill English that the public will be very grateful for that.

When I was an MP in the 1990s, parents came to my electorate office and were desperate with concerns about their children’s prospects for a job. That is no longer a particular concern for parents, because this Government has increased the number of people in industry training by approximately 80,000. It has almost doubled the figure. The National Government got rid of apprenticeships; Labour reinstated apprenticeships, and it is giving kids jobs, hopes, and skills.

We have increased industry training funds, so the whole emphasis of this Government has been on creating jobs, giving New Zealanders skills to get those jobs, and filling job vacancies with New Zealanders in preference to importing people from overseas. It has been spectacularly successful. New Zealand now has the second-lowest unemployment rate in the OECD. When in our history can we recall New Zealand having fewer unemployed than Australia, Britain, the United States, Germany, Japan—almost anywhere? When can we recall the time in its history when New Zealand had a greater participation rate by the workforce in work? That is a remarkable achievement, and the public will be very grateful to this Government for leading such a remarkable turn-round. This country now has hope and opportunity, unlike the situation that will be put forward by the National Party.

National is saying that it will give people tax cuts, and we are talking there about approximately $5 billion worth of tax cuts. Now, the public are not as stupid as that. They will know that $5 billion worth of tax cuts will have to be paid for from somewhere. What will National cut? It has lined up what it calls a “bloated civil service”. Well, will it cut the extra 2,700 teachers this Government has put on stream? Will it cut the extra 3,300 nurses who are employed under this Government? Will it cut the extra 950 medical staff, or the extra 1,250 clinical support staff? This Government has invested heavily in public services, to make sure they are functioning and workable for the New Zealand public.

We used to have public services that were malfunctioning; they did not have staff or resources. This Government has invested heavily in roads, jobs, education, and health services. New Zealand, after 6 years of a Labour Government, is a vastly better place than it was when we inherited it. It is not perfect; we know there is more work to be done. That is why this Labour-led Government will campaign hard in the next election on its record: lower numbers unemployed, more people in jobs, wealthier people, and a Working for Families package that means we have reduced child poverty. On every front, and against every measure, New Zealand is a better place today than it was before this Government came to office. We have a proud record, and we are prepared to stand and have our years in Government compared with the nasty 1990s of the previous National Government.