The CHAIRPERSON (Ann Hartley): The new Standing Orders provide for 8 hours of debate on the estimates. Each member may have no more than two speeches of 5 minutes on each vote. The estimates debate should be relevant to the Government’s current spending plans as contained in the Estimates of Appropriations. As each vote is reached, a question will be put that that vote stand part of the schedules. If it is the wish of the Committee, I will put the question on groups of votes, by Minister, until a vote is reached that members seek to debate. A separate question on this vote will then be proposed from the Chair. Should it be the wish of the Committee, a question may be proposed on two or more related votes for the purpose of debating them together.

At the conclusion of the 8-hour debate, any remaining votes and the remaining provisions of the bill will be put as one question. The Government indicates which votes are available for debate. I understand that all votes are available in order of seniority of Ministers, commencing with the Speaker’s votes. A list setting out the order is on the Table.

LINDSAY TISCH (Junior Whip—National) : I raise a point of order, Madam Chairperson. I just want clarification of the number of speaking spots for each speaker. I understand that normally we would be able to have more than two. You indicated that each member could make a maximum of only two speeches. I seek clarification on that point.

The CHAIRPERSON (Ann Hartley): It is two speeches on each vote. However, the member could seek leave to have more, if that was where he—

LINDSAY TISCH: When we look at the categories of votes, we see that there are a number of separate votes under each of them. In the first group of votes—those under Mr Speaker—there are five votes. We could have our speakers speak 10 times?

The CHAIRPERSON (Ann Hartley): Yes, that is right—twice on each vote.

STEPHEN FRANKS (ACT) : I rise on behalf of my colleague Deborah Coddington, who has raised for the people of New Zealand the Prime Minister’s contribution to pride in New Zealand in the sending of a dunny that brays like a donkey to Venice. It is very easy for people in the arts world to despise and reject any notion that the hoi polloi, those of us who are not the insiders, should have a view on what the Government should pay for by way of art. Of course, we are all expected and encouraged to have a view on high art, architecture, major public buildings, and the beautification of roads and other things that are useful, and we all welcome the extent of the improvement to our environment that the arts and the artists can create. But this Government turns artists into beneficiaries. It encourages them to feel that New Zealand is a poor country.

Of course, it may be relevant that the average wealth of New Zealanders—the average savings of New Zealanders—is a quarter of that of even the Australians, who are not rich, and it may be that in an impoverished country there is no one else to sponsor art other than the Government. But it is extremely precious for the people whom the Prime Minister has set out to sponsor, and to turn into political clients, to complain when New Zealanders have a view on what they are paying for. It is more than precious for them to object that we should simply accept the judgment of the experts. The Prime Minister, in her role as patron of the arts, should accept that she must be judged on the art they create and on the people whom she puts into power to spend the taxes of ordinary people on these artists.

We are told by Creative New Zealand that in recent years the members of et al have produced “rich and poetic installations that combine sound text and found objects”—whatever those are—and that the results are “profound and disturbing”. We are all proud to know that New Zealand is going to offer in Venice—“layered and immersive installations which explore the link between science, technology and areas of behaviour reformation, involving political ideologies and fringe religious practices, are particularly pertinent at this time.”

Hon Ken Shirley: What a load of crap.

STEPHEN FRANKS: What a load of crap. What a load of drivel, and we are paying for it. Let me go on further. It states that the project for Venice this year “builds on the success of recent projects. Et al’s sculptural installations create highly charged environments packed with outdated and junked computer hardware and scrawled messages on instruction cards and wall charts. Rows of chairs, examination tables, computer stations and flickering screens in grey rooms activated with electronic noise, suggest a kind of pseudo science as well as a disturbing view of religious fanaticism.” It will “exploit an alluring quality” in the collective’s own work. What is this alluring quality? It is “the absence of the artist”. It is rich enough on its own; it does not need more.

Then we get an explanation in the footnote of who the artists are that the Government is sponsoring to Venice: “p.mule, blanche ready-made trust, bud shoop, cj (Arthur) craig and sons, constance strange, L budd, Lillian budd, lionel b, marlenecubewell, minervabetts, merit groting, mythic investments”—I like that; that could be a new summary for the Prime Minister’s entire investment in the arts—“and popular productions.” I think that one was misnamed.

I ask the Prime Minister what we are about, with $500,000 of taxpayers’ hard-earned money—from taxpayers who actually do try to beautify New Zealand and the world; taxpayers who build gardens, who buy things that they like, who buy CDs, and who pay to sponsor the music they prefer. What are we doing when this Government sponsors such tripe?

Rt Hon HELEN CLARK (Minister for Arts, Culture and Heritage) : I want to respond to the member, because there are a number of fundamental untruths in what he said. I also want to make some other points about the matter. Firstly, to suggest that I, as Prime Minister, had any role in choosing this work—

Stephen Franks: I raise a point of order, Madam Chairperson. It is unparliamentary to suggest that there are fundamental untruths in what I said. Maybe she could allege that I was mistaken. However, the word “untruths” implies that I have consciously said something false.

The CHAIRPERSON (Ann Hartley): I will ask the Prime Minister to reword that.

Rt Hon HELEN CLARK: They are fundamental errors, but then the member should be in a position to know why he is wrong. The member would be well aware that the Minister for Arts, Culture and Heritage does not select the work that represents New Zealand at an exhibition off shore; absolutely not. To suggest, as the member did, that the Minister for Arts, Culture and Heritage must be judged on the art created by New Zealanders is to suggest a sort of Nazi or Stalinistic view of the world that I personally could not buy into.

The second error is that if the member had bothered to research his comments, he would have been aware that the previous “piece of art” by that artist, of the donkey, etc., is not what is being submitted to the Venice Biennale. What happens is that a piece of art is created for the area that New Zealand is allocated at the Biennale. It is submitted as a concept at this stage, and on the basis of a range of concept proposals the selection committee has chosen. The position is that Creative New Zealand is, of course, funded by the New Zealand taxpayer. It is accountable through the normal mechanisms, including through a select committee process, and members should take the opportunity during the estimates to call in Creative New Zealand and hold it accountable for its processes.

The Creative New Zealand organisation then delegated the work of selecting an artist and curator team to a selection committee. In my view, it is there that the process has gone awry. I will not make comments about the quality of the artist, or the quality of the artist’s work. That is for others. I do think it is perfectly legitimate for the public to debate the nature of the art. But as Minister for Arts, Culture and Heritage, I will not go around demeaning individual artists. But what is a matter of considerable concern to me is that, firstly, this presence at the Biennale came about because there was an invitation from the Italian Government to the New Zealand Government for there to be New Zealand representation. The New Zealand Government takes the view that those who represent New Zealand at the Biennale should be capable of representing it. Indeed, the criteria set out in the selection committee’s brief states: “The key personnel have a proven track record of undertaking the ambassadorial and publicity responsibilities required in a major international exhibition project

Clearly, that criteria has not been met. Key personnel must include the artist. The artist must therefore be able to be named, and be able to give interviews and perform other ambassadorial functions. Obviously, there has been interaction with me, the Associate Minister for Arts, Culture and Heritage, and Creative New Zealand, as we have expressed our concern about what appears to be a breach of the selection criteria. As a result I am now advised that the artist will engage extensively with international arts professionals at the event, she will conduct selected interviews with international arts media, and she will provide responses in writing to questions. That still leaves me with some concerns, because the artist does not wish to disclose her identity.

I think this is a salutary lesson for Creative New Zealand, that if it delegates to a selection committee the least it can do is ensure that it follows its own criteria. I can assure the member that that will have a bearing on my thinking about resourcing levels for Creative New Zealand in the future.

• Vote agreed to.

NANDOR TANCZOS (Green) : I seek leave to have Vote Communications Security and Intelligence treated separately, in order for the Green Party to cast its vote on that.

The CHAIRPERSON (Ann Hartley): I will put that now, as a question. The question is that Vote Communications Security and Intelligence stand part of the schedules. All those in favour please say Aye, to the contrary—

NANDOR TANCZOS (Green) : No.

The CHAIRPERSON (Ann Hartley): The Ayes have it.

NANDOR TANCZOS (Green) : A party vote is called for.

The CHAIRPERSON (Ann Hartley): The clerk will conduct a party vote.

Jill Pettis: What are we voting on?

The CHAIRPERSON (Ann Hartley): We are voting on Communications Security and Intelligence.

LINDSAY TISCH (Junior Whip—National) : I raise a point of order, Madam Chairperson. I just want clarification. When the Prime Minister left the chair I understood that we would be looking at those votes individually. She has left the chair, and we have moved on to Dr Cullen. That is fine. However, now we are going back, and I thought we would have to seek the leave of the Committee to look at those votes individually. That is what I am asking. We have come back to Vote Communications Security and Intelligence, which is the Prime Minister’s responsibility.

The CHAIRPERSON (Ann Hartley): No, I said in opening that I would put the votes as a block unless there was any objection. Then they would be put one at a time.

LINDSAY TISCH: Madam Chairperson, you have actually put the votes. We have now moved on. It was only after that that Mr Tanczos asked for his vote to be recorded separately. So he should seek leave to do that.

Rt Hon WINSTON PETERS (Leader—NZ First) : I raise a point of order, Madam Chairperson. The problem with your ruling is this. You put the votes and only one voice vote was heard in this Chamber. That was the Green member saying no. On that basis they must win that vote.

Dail Jones: That is correct.

Rt Hon WINSTON PETERS: That is what happened here. If no one said yes, and one member said no, then that vote, being only one voice, must surely win here.

The CHAIRPERSON (Ann Hartley): As the member knows, it is not a matter of decibels of sound. It is a matter of me calling the vote as I heard it.

Rt Hon WINSTON PETERS (Leader—NZ First) : Madam Chairperson, you called the vote. You are required to determine where lies the majority. If only one person in a House with 120 members raises his or her voice, that person is the majority. The rest are taken to be in agreement or to have abstained.

Hon Ken Shirley: Silence is compliance.

Rt Hon WINSTON PETERS: Yes, come on.

The CHAIRPERSON (Ann Hartley): I thank the member. No, the result is not declared on the voices. It is up to me to declare the result.

Rt Hon WINSTON PETERS (Leader—NZ First) : I raise a point of order, Madam Chairperson. It is not up to you to determine that at all. That is why we have had a procedure for hundreds of years whereby members vote by a series of mechanisms, but they must do something to have their vote recorded. They cannot do nothing and be assumed to be on either side of the debate or the argument. With respect, it is up to you, regardless of the voices, to determine where the majority lies. With the greatest respect, you are assuming a dictatorial role that is not allowed for by the rules that guide your office and how you should behave. I am saying to you that if only one person intimated his or her vote, therein lies the majority, and it is not up to you to decide otherwise.

Hon BRIAN DONNELLY (NZ First) : I raise a point of order, Madam Chairperson. I refer you to the situation that occurred in 1999 when National had two members in the House, and I think Rodney Hide was representing ACT. He left the House, and the question was put. John Carter, who was the National whip, chased after him in the House, and no one made any call at that particular time. In fact, the Speaker was recalled on this particular issue. It was a confidence matter. The Opposition at that time claimed that because no one had called on that particular vote, then the vote had to go the way that the Opposition had called. As it was, the Chair at the time was Geoff Braybrooke, and he put the vote a second time. David Carter, who was the Minister in the chair, made a call. It was on the basis of David Carter’s call that the Chair then allowed a party vote to be called for. But had that not been the case, it was quite clear at that time that it would have gone in this particular favour. That particular vote was a matter of confidence. I refer back to that incident.

Hon Dr MICHAEL CULLEN (Leader of the House) : When the Chair or the Speaker is declaring a vote I am sure he or she is judging where the majority lies, in terms of the votes cast. The fact that one member of the Committee even called for a vote to be taken on the matter separately—

Rt Hon Winston Peters: No, he called on the vote.

Hon Dr MICHAEL CULLEN: Let me finish my sentence or two. He called for a vote to be taken separately on the issue. [Interruption] Yes, the member did. He actually rose on a point of order and sought to take that vote separately from the other votes in this section, and then voted against. The Chair was perfectly in order to assume that the other parties present were voting in favour, and called the vote in favour of the affirmative, particularly on an estimates position where clearly the two Government parties automatically can be assumed to be voting in favour of the motion.

I have been in this House on a number of occasions when people have not voted on their voice—even in the days when there were divisions. It was not necessarily assumed that they were not voting at that point. But if the member wants to take up the estimates time, which is a time-limited debate, with points of order of this sort, then that can certainly happen, but I would have thought the Opposition’s time was better spent on debate.

Rt Hon WINSTON PETERS (Leader—NZ First) : In respect of what Dr Cullen has said, the Green member called for a party vote in addition to his having voiced his opposition. That is the sequence of events on the chronology. Surely there is no way we can have people saying: “Well, actually, I’ve been here a long time and you can assume what people are going to do next.” That is an amazing statement that Dr Cullen made. You called for the vote, Madam Chair, because it means something. You called for the vote because it is the only way you can measure where the vote might lie, and anything short of that is expeditious nonsense.

Hon Dr MICHAEL CULLEN (Leader of the House) : Confusion now seems to be developing. It is perfectly appropriate for the member to call for a vote, because the Chair had ruled in favour of the affirmative. As the member had voice voted in favour of the negative, he was perfectly entitled to call for an actual party vote in that case. It would have been inappropriate for a member who had voted with the affirmative to have called for a party vote, because only people who voted against the declaration of what was the majority can call for a party vote following the voice votes.

Rt Hon Winston Peters: There was no voice; that’s the point!

Hon Dr MICHAEL CULLEN: I again point out to the member that people frequently vote on the voices in this House, but the Speaker and the Chair are able to make their own judgments about where the majority lies. The very purpose of calling for such a vote is not just for the fun of having another vote; it is because people are actually questioning whether the Speaker’s judgment was correct in their call. The decisions of the Speaker and the Chair are not final on the basis of the voice vote. If that were so, we would have no procedure for anything before the voice vote, and, indeed, Governments would feel very comfortable in many instances. It would not matter what the numbers were in the House, they would somehow have the numbers on the basis of the voting because all they would have to do is to get a declaration in their favour on the voice vote.

Rt Hon WINSTON PETERS (Leader—NZ First) : The reality is that there was no voice vote in favour of the Ayes, and there was an Opposition vote in respect of the Noes. That member then asked—and Dr Cullen has got himself into a real fix now—for a party vote and he was denied it. The only thing that possibly can stand now is the “No” vote from the Greens.

Hon Dr MICHAEL CULLEN (Leader of the House) : The member has not been denied a party vote. We were just in the process of proceeding to a party vote when points of order were raised about the calling of the voice vote.

Hon BRIAN DONNELLY (NZ First) : I do not have a history of purely and simply playing games, but this case does disturb me. Why do we take the voice vote in the first place? The reason why we have a party vote is that purely and simply on the voice, at times, it is impossible for the Chair to decide the numbers, one way or the other, but in this case it was quite clear that there was no vote in favour of the Ayes and there was one vote in favour of the Noes. If, for example, there was a mumbling along the lines that some parties were in favour of the Ayes, I would be quite happy to accept that that would then logically lead to the opportunity for a party vote. However, regardless of the sophistry of Dr Cullen, there was no Ayes vote, and that really is the decision that we have to make. We are not doing it for triviality; we are doing it for the precedent it will set for this House.

Hon Dr MICHAEL CULLEN (Leader of the House) : There are many occasions in this House where four or five parties vote in one direction and a couple of parties vote in the other direction, but the couple of parties are noisier than the four or five parties voting in favour. The numbers are overwhelming when it comes to the party vote, but on the voices, if one was to go by sheer noise—in this case, one versus nil—it would have been called in favour of the minority. That is not the basis on which the Chair makes the judgment on a voice vote.

NANDOR TANCZOS (Green) : While I am obviously sympathetic to the view being put forward by Mr Peters, I am looking at Standing Order 141, which states: “The Speaker asks members to answer ‘Aye’ or ‘No’ to the question and states the result of the voice vote. Any member present may then call for a further vote to be held.” However, Standing Order 142 states: “Where a further vote is called for, a party vote is held unless the subject of the vote is to be treated as a conscience issue.” If I had held my mouth perhaps the point would be correct, but, unfortunately, I actually called for a party vote and it appears to me that under the Standing Orders a party vote is then required to be held.

The CHAIRPERSON (Ann Hartley): The point is that the Chair declares the results on the basis of where the Chair considers the majority lies. That is exactly what I did. I declared the result, and a party vote was called for. We are in the process of calling a party vote.

Rt Hon Winston Peters: I raise a point of order—

The CHAIRPERSON (Ann Hartley): I have ruled on the point of order.

Rt Hon WINSTON PETERS (Leader—NZ First) : I know that you have attempted to, but I want to get some clarification. You let Dr Cullen speak, after you had said he would the last person to speak. The fact here is that there is no requirement for a party vote if the Chair properly reads the vote that has already been recorded. No one from the Labour Party called for a party vote, nor did anyone else for that matter, but it is because you said that the sole voice vote was lost that he then called for a party vote. He would not have done so if you had said yes. It is axiomatic, for goodness sake. I want to ask you a very simple question: unless you are a soothsayer or a clairvoyant how did you work out the result of that vote, given that only one person said no and no one said yes?

The CHAIRPERSON (Ann Hartley): As was said in the discussion, it is up to the Chair to call the vote. As often happens in this House, the people who call for the Ayes can often be louder than or not as loud as the people who call for the Noes.

Rt Hon Winston Peters: No one called for the Ayes; that’s the point.

The CHAIRPERSON (Ann Hartley): I say to Mr Peters that I have given a fair bit of latitude in this discussion. I am saying very clearly that it is up to the Chair to declare the result. I am now proceeding with the party vote.

LINDSAY TISCH (Junior Whip—National) : My point goes back to the first point that I made right at the beginning of this debate when we were considering the five votes. You put the motion then—

Hon Dr Michael Cullen: No.

LINDSAY TISCH: The Minister shakes his head, but it was my understanding that we voted at that time. Following that, however, Mr Tanczos said that he wanted to treat Communications, Security and Intelligence as a separate vote. Now Hansard will record this, and I am sure I am right because that is the point that I brought up originally. It is fine for him then to ask for a separate vote, but in my view he should have sought leave to have the vote taken separately because you had already put the vote on all five. Then Mr Tanczos came forward and wanted that vote treated separately. I am sure that Hansard will support the proposition I have put.

Now I am not saying that that is wrong. I am just saying that that was my understanding and is the reason why I brought that proposition to your attention at the beginning of this debate. National is quite happy for another vote to be taken, if the member wishes to seek leave to do so.

Hon Dr MICHAEL CULLEN (Leader of the House) : The point is to get exactly right what you did, because what you did was exactly what you are supposed to do as the Chair. That is, you called certain votes one after the other. You explained at the start you would call votes, down to the point where a party seeks to speak on that particular vote, and then up to that point any previous votes are actually put. You had not actually reached the point where any votes had been put, but you proceeded to the second or third on the list, and Mr Tanczos quite properly asked for the vote on Communications, Security and Intelligence to be put separately, which in my view he is entitled to do. It may have been a fraction late, but he sought support for that to happen. It was granted. The vote was put. You declared the voice vote. He has now called for a party vote, and that is the point we are at.

The CHAIRPERSON (Ann Hartley): I tell Mr Tisch that that is absolutely correct. I said in the beginning that I would call the votes slowly. If any member wants them put in any other way than the way in which I am calling them, it is up to the member to say so, which is exactly what Mr Tanczos did. I will now put the party vote on Vote Communications, Security and Intelligence.

JOHN KEY (National—Helensville) : Everybody knows that this is a tax, spend, and wasteful Government, and we need no more evidence of that than to look at Vote Finance—a $57 million expenditure item in Budget 2004. Where has the wasted money gone? There has been $2.8 million for taxation advice. I have some advice for the Minister of Finance: one does not need to spend $2.8 million to know that raising the top rate of personal taxation is causing havoc amongst the business community of New Zealand, and that by raising the top rate of taxation every small business in New Zealand has to pay more in compliance costs. One does not need to spend $2.8 million to know that this was simply an ”envy tax”, and that it puts the wrong incentives into the economy. This is a tax, waste, and spend Government; everybody knows that, and one does not need to read Vote Finance to know that.

I do want to point, in particular, to $3.29 million of expenditure by the Government in Vote Finance in relation to purchasing advice on the ownership and performance of Crown companies and Government institutions. That $3.29 million was, and is, proposed to be spent by the Government on advice on the purchase and performance of Crown companies. What a waste of money that is, because when I looked at the heads of agreements for TrackCo announced on the Government website, or on the Treasury website, just a few days ago what did I see? The first thing I saw was that despite the Government spending $3.29 million in this area, no due diligence was undertaken by this Government when it bought TrackCo—no due diligence whatsoever. Why was that the case? Well, Treasury was kind enough to outline its reasons why no due diligence was taken, and there are some real beauties.

The first example of those reasons wasthat TrackCo was costing only $1—the Government did not need to do due diligence on it because it was costing only $1. Well, hello, has anybody in the Government worked out that we are buying hundreds of millions of dollars worth of a liability? The fact that it cost $1, I am sure, meant it did not come into part of the $3.29 million the Government is to spend on advice. The second little beauty contained in the heads of agreement in relation to due diligence was this one: the Government was going to buy TrackCo anyway, so it would not bother having due diligence done on TrackCo. Well, putting to one side what an arrogant statement that is for any Government about any purchase, one of the reasons why the Government owning a multitude of businesses can very often be the wrong thing is that “we are going to do it anyway” is no reason to fail to carry out due diligence. But maybe the best reason came last, and it was simply in the statementthat the best information was held within Toll Holdings, and therefore that information would come to the Government when it purchased TrackCo anyway. The best information held by the existing owner, Toll Holdings, would come to the Government anyway. Well, has anybody in the Government worked out that it could well be in the interests of Toll Holdings—the existing owner—to have that number as high as possible? After all, those who have looked at the deal for just a cursory moment will have seen that anything under $200 million is picked up by the taxpayer of New Zealand, so it could be well within Toll Holdings’ interest to keep the number high.

Secondly, if all this failure to do due diligence on a large liability that was being purchased by the Crown was not bad enough, what did we see on Friday? We saw the reason why no due diligence was necessary, despite the fact that Dr Cullen has tried to tell the public of New Zealand on nationwide television that everything spent above $200 million on the track would be recouped through the access charge. Even he, the Minister of Finance, who has a keen sense of humour, could not keep from breaking in to a smile when he made that comment on nationwide television. But what did we see on Friday? We saw the absolute classic about the board of TrackCo, the company that the Government did not do the due diligence on because it is paying only $1 for it, and because it is going to buy it anyway. We saw three additions to the TrackCo board—jobs for the boys, with famous sort of Labour Party people like the President of the Labour Party, Mike Williams, being famously appointed to TrackCo. That is why the Government did not need to do due diligence. That is why $3.29 million has been wasted if this Government is telling the people of New Zealand that it is spending that money on getting advice, because the Government does not need to get advice when it does not do due diligence, and when it stacks the board with its mates it can get through whatever pork-barrel politics it likes.

Hon Dr MICHAEL CULLEN (Minister of Finance) : I am pleased to take the first call in this debate and to respond to one or two of the slightly hysterical comments made by Mr Key. He is still learning the role, of course. Can I take him first of all through his first little topic, which was why do we have a 39c in the dollar top taxation rate? The obvious question in reply to that is why is National not promising to abolish it, as its top priority? That was National’s policy up to only a few months ago, and then Dr Brash looked at the numbers and, dithering, said: “Ah! This doesn’t look too good. This isn’t what the public wants. We’ll start talking about tax cuts for low and middle income earners instead.” —even though he said, last year, that one would have to cut the top taxation rate to get the economy moving. Despite the fact that we did not cut the top taxation rate, the economy is moving so strongly now that a northern market commentator is expecting interest rate rises—on which I cannot comment, being the only person in the country who cannot comment on interest rate rises—by the Reserve Bank within the near future. What we see is that the economy is growing extraordinarily strongly, despite the fact that various rather large pips keep squeaking occasionally because there is a very small squeeze on them. That comes, of course, from a party that once had a 66c in the dollar top taxation rate on people earning certainly less than $60,000 a year. Taxation cuts was the first winner today from Mr Key; he is going to run on the policy that the top taxation rate should be lowered. That would not affect the great majority of New Zealanders, most of whom would be delighted if they earned $60,000 a year. Most of them do not earn as much money as that, and do not expect to do so at any stage during their working lives.

But let me turn to Mr Key’s second little topic, about the railways. He said the National Party’s policy was that the Government should not have bought the railway track back. Well, that is a really popular policy, as well! I think that something like 80 percent of New Zealanders think this Government should have bought the railway track back. Why did we buy it back? We bought it back because a previous National Government sold the railway track—against Treasury advice. The sale of that asset is the only one I know of when Treasury’s advice should have been taken. When National sold the railways Treasury said the track should not be sold, because the track was the infrastructure and the Government needed to make sure it was maintained and kept in place. But what happened? The track was run down over the next years to a parlous state. Now, Mr Key says: “Oh my goodness! It’s going to cost some money to fix up the railway track”—which National sold off.

But then Mr Key says the railways board we appointed is stacked with well-known left-leaning socialists—Labour Party supporters.

John Key: Hacks.

Hon Dr MICHAEL CULLEN: “Hacks” is the word National members used. I am sure that Cameron Moore, former president of the Canterbury Manufacturers Association—a person, I suspect, of somewhat conservative political leanings; he certainly was like that when he was head prefect of Christ’s College some 40-odd years ago—will be somewhat offended to be described as a Labour Party hack. Now, who was National’s No. 2 exhibit as a Labour Party hack? It was Dr Clive Matthewson. Well, apart from the fact that he is the uncle of Katherine Rich—we will not dwell upon that for too long; we would not want to suggest, by any chance, I had been sort of suborned by the delights of Mrs Rich on this matter—what we can say about Dr Matthewson is that the last time he was in Parliament, let us remind ourselves, he voted for a National Government on confidence and supply. Such a generous Minister or so non-hacked off am I—or so happy is he—in terms of somebody who had been a good friend but who left the Labour Party, crossed the floor and voted with National, that I have appointed him to the board of TrackCo. Why? Because Dr Matthewson happens to be an able person. He happens to be a civil engineer, and he brings crucial skills to the job.

Mr Key has suddenly gone very quiet. Let me point out that in 1996 Mr Key was still overseas, practising dodgy things on the international finance market—manipulating paper money all over the place. He was not aware that in 1996 there was a party then called the United party, which Dr Matthewson was the leader of, and which entered into, in effect, a coalition agreement with the then National Government, and saved National’s bacon—kept it in power. I appointed Dr Matthewson and Cam Moore to the board, and appointed other people to the board who are able people.

John Key: Mates.

Hon Dr MICHAEL CULLEN: It is probably that I have lots of mates, and Mr Key does not have any. It is very hard for me to appoint people who are not mates of mine to the board of anything. I apologise for that fact.

Rt Hon WINSTON PETERS (Leader—NZ First) : There is nothing so embarrassing as watching two guilty parties pointing the finger at each other. I recall very well 20 July 1993, when the then National Government, with a foolish Minister of Finance called Richardson, sold New Zealand Rail for $328 million. That was a massive underpricing of the company, and within 3 months, as the international market heard about it—and Mr Key as well—the share price for Wisconsin central railroad and Fay Richwhite went up by a massive $182 million, every dollar of which was lost to the New Zealand taxpayer. Those are the facts. Back then, of course, on 20 July 1993 the Labour Party said that it supported the sale.

Hon Member: Can’t believe that.

Rt Hon WINSTON PETERS: Yes, it did. If one looks at the press statements one sees Labour supported the sale back in 1993. So here we have those two parties, both as guilty as sin when it comes to selling the taxpayer’s hard-earned constructed assets, and one of them is trying to make out that it is innocent. They are both as guilty as sin. Do members know what National said back in 1993? It said it thought it would cost $200 million to do some upgrading, and it could not afford it. New Zealand Rail back then, of course, was making a significant profit. It is a lie to say it was making a loss; it was making a significant profit.

But what happened? Here are the facts. The financier of National’s 1984, 1987, and 1990 campaigns—Fay Richwhite—in October 1992 got itself made the financial adviser to New Zealand Rail. In April 1993, barely 6 months later, it jumped the table and said hello boys, it was the buyer. The National Party—Mr Key’s party, which he thinks should be in Government—was so naive and stupid it did not put New Zealand Rail to the market. It gave those insiders the full run, and sold New Zealand Rail at a bargain-basement price. Did the new owners construct $200 million of reconstruction repairs and maintenance? No, they did not. They then recapitalised New Zealand Rail, drained and sucked everything out of it, and shot through. They are the same people whom Don Brash met when he was last in Europe. They are all the same old players looking for the same old favours, smack in behind this National Party Opposition. That is why National cannot be trusted anywhere on the Treasury benches, without being totally controlled and on a very hard leash.

Mr Key is right about due diligence, because this is a case of history, sadly, repeating itself. There was no due diligence back then, and there is none now. Why on earth would Toll want this track? All over the Hawke’s Bay, and all over this country, there are significant costs awaiting the New Zealand railways, when it comes to our track. Bridges need repair and construction, and the new genius running the finance portfolio, Dr Cullen, says he will get taxpayers to pay for that. He says Toll can run the railways and make all the profit, and we will pay Toll to have the very machinery and mechanism by which it may ply its service. How stupid can one be? I have to tell New Zealand taxpayers they are tigers for punishment. They have to be, if they fall for this one. Mr Key is right—except that he is the last person in the whole wide world to make out that argument, because he comes not with the clean hands of equity or truth but with his hands totally soiled, with the DNA and blood all over them.

There is only one party that can be trusted on these matters, and that party is New Zealand First. We do not sell State assets, and particularly ones that are making a profit. But here is the extraordinary thing. I ask Dr Cullen what costs are contemplated by the taxpayer now in respect of our railways, our tracks, our bridges, and every other facility. What is the taxpayer in for now? I then ask him to tell me that what this Government has done is smart. We got the railway back; we actually were the owners of it just a little while ago. This Labour Government claims to be different from Labour in 1984 and 1990, and it has sold the railway.

PAUL ADAMS (United Future) : I would like to speak on finance. I want to focus particularly on one area of taxation—GST. We collected close to $10 billion in GST last year. If there is any evidence that shows United Future is a party that is truly in the centre, it is our campaign to fight against the tax on a tax that is the GST on rates. Some great billboards have gone up around the country—and members may have noticed them—stating that there should be no tax on a tax.

This is a serious issue. I will take a moment to consider that the Government loves to collect taxes. There is no doubt about that. A Government needs taxes. But the people of New Zealand, the ones that members and I know, do not like paying taxes and they definitely do not like paying a tax on a tax, such as GST on rates. One can only imagine the human outcry if we decided to put 12.5 percent GST on the PAYE that we collect from workers. Yet this tax is a tax on the workers in this country.

Businesses can claim back the GST that they pay on their rates, but can the elderly claim back the GST they pay on their rates? No, they cannot. I believe that the elderly in Australia do not have to pay GST on their rates. In New Zealand, it is the workers, as they earn their money, who have to pay GST on these rates.

I believe in GST. I think it is a very good and fair tax system. I believe it is a tax system that collects tax for running the country, from everybody who passes through this country. But once it becomes a tax on a tax, we will stand against it. It will be interesting to see what happens when it comes to the vote on my fellow member Gordon Copeland’s member’s bill, because this is a very unfair tax system. I have heard from many people as we have spoken around the country against GST on rates, and they have supported us. Tax collected on false pretences—

Rt Hon Winston Peters: Why are you voting for it?

PAUL ADAMS: —is something that Mr Peters would disagree with. Yet I believe we started with a tax on a tax, and now we move into other things like the development contributions that we have in my own home town of Albany. I read in the paper that the costs of a home and land in the Auckland area are getting out of hand. It states on the North Shore City Council’s website that before one even starts to build a minor dwelling in the little area of Albany one will be paying around $60,000 by the time one cuts off the little piece of land and pays the reserve contribution, permit costs, and development costs.

This cost of $60,000 is nothing short of a tax under another name. This has happened under a Government that said it would not increase taxes, yet we have seen these types of stealth taxes beginning to increase over every little area—here a little, there a little. But United Future will fight for this one. We are pleased that our member’s bill has come out of the draw and that we can put it to this House so we can flush out the true colours of some of these parties as we debate these taxes upon taxes. It will be very interesting to sit and observe. The elderly people in this country will be extremely interested to see who supports Gordon Copeland’s bill to see that GST on rates is removed, because we believe—

Craig McNair: Talk about the Budget.

PAUL ADAMS: This is about revenue. This is a tax on a tax and, as I said, the Government has collected just under $10 billion in GST over this last 12-month period. I believe that that is an incredible amount of money. I agree that we need to see how the expenditure on a lot of these departments is going. We should give the poor taxpayers in this country a break and reduce some of these overheads, not keep increasing them.

Rt Hon WINSTON PETERS (Leader—NZ First) : I seek leave for an extension of time for the United Future party to now tell us why they are voting for this Budget, which has that very tax in it.

The CHAIRPERSON (H V Ross Robertson): Under Speaker’s rulings 1/5 and 1/6, a member cannot seek leave for someone else.

Rt Hon WINSTON PETERS: I am moving an extension of time.

The CHAIRPERSON (H V Ross Robertson): The House is the master of its own destiny. Is there any objection? There is.

CLAYTON COSGROVE (Labour—Waimakariri) : The speech preceding my United Future colleague’s speech was very interesting, because Mr Peters demonstrated that amnesia is here to stay in respect of the New Zealand First Party. If we look at the unemployment figures during the time that Mr Peters was Treasurer and compare them with what we have now, we see a huge gap. So let us bring this debate on finance and revenue estimates, and the progress of the economy, back to some bedrock facts. We have Huey, Dewey, and Louie over there in New Zealand First. I say to Mr Mark—[Interruption]

The CHAIRPERSON (H V Ross Robertson): I am sorry to interrupt the member. I know it is the first day back, but can I ask members to please look at Speaker’s ruling 56/1. Interjections are to be rare, reasonable, relevant, restrained, and, as a former colleague—the honourable member Geoff Braybrooke—said, if at all possible, witty.

Ron Mark: I raise a point of order, Mr Chairman. In keeping entirely within the Standing Orders, could you remind members that they are to refer to other members in the House by their honourable names, not nicknames such as “Huey, Dewey, and Louie”. To do such a thing would result in me calling that member “Punch and Grow”, or something like that. We could not have that, could we?

The CHAIRPERSON (H V Ross Robertson): The member is right—Speaker’s rulings 26/7 and 26/8.

CLAYTON COSGROVE: Mr Speaker, I thank you for your indulgence. I would tell Mr Mark to stick to ski trips that never existed. He needs to get his facts straight.

I will now concentrate on this finance and revenue debate, and look at some hard facts, which of course the Opposition will not like. From 1990 to 1999 the economic growth figures under the National Government averaged 2.6 percent. Now New Zealand is enjoying the most sustained period of economic growth in three decades. Suddenly the silence from Mr Key is deafening. The figures show that our annual growth rate was 3.4 percent on average in the past 3 years—well above the OECD average of 1 percent.

If we are to have a debate about the finance and revenue estimates, we should deal with the facts. I will look at tax, which we have heard a lot about today. The latest statement on the National Party’s tax policy—when it finally sorts it out, because we know that Dr Brash is a bit agnostic and uncomfortable, or whatever—along with its ACT partners, would give Dr Brash and Mr Hide and others in this place an extra $600 a week. Somebody below $39,000 would get zip, and that is the difference.

What have we done in these estimates? We have put a package together that targets middle and low income hard-working New Zealanders. I would have thought that that mob on the other side of the House would actually be in favour of giving the workers—whom the Opposition says from time to time that it represents, as long as they are on six-figure salaries—a little bit back. Under this Budget, low and middle income workers, if they are on $39,000 with kids, get $150 a week extra. If they are on $55,000 with kids, they get up to around $200 a week extra. I think it is good to go to hard-working families and say that if they work, look after their kids, and do the right things, the Government will stand beside them and assist. But the only people the Opposition will stand beside are those who drip in Christian Dior earrings and jewellery, and have elegant diamond pens. The National and Act parties will stand beside those people who have, like Mr Key as he told the Finance and Expenditure Committee, the black American Express card. I must confess that I had never heard of a black American Express card. I think I had a gold one, but I never heard of a black one. I am told one has to do a number of things in the private sector for American Express to show that amount of faith and trust to get a black American Express card.

Let us look at it. The Opposition has called for company taxes to be lowered. They have always said how badly New Zealand does and how over-regulated we are compared with Australia in respect of tax. Here is what the Chief Executive Officer of Fletcher Building, Ralph Waters, had to say: “If I didn’t choose New Zealand’s 33 percent regime against Australia’s lower rate but with payroll and capital gains taxes, as well as stamp duty added on, then I shouldn’t be doing the job I am.”

If we look at Australia’s top two rates of personal tax, they are ahead of our top rate. Australia’s company tax rate, on the face of it, is lower than ours, but if we add in their equivalent of accident compensation—I think their equivalent of accident compensation is about double ours—Medicare, and payroll, then their rates are, far and away, higher than ours. But that is the sort of dynamic place that the National Party wants to take us.

Let us look at these finance and revenue estimates and what will be achieved this year, and what previous estimates under Dr Cullen have achieved. If we look at unemployment, the number of Kiwis in work has grown by 193,000 in 4 years under Labour. In 1999, when Labour came in, the unemployment rate was 6.3 percent. Where are we now? We are just tilting over 4 percent, or just tilting under, depending on what one reads. I challenge Mr Key to match those facts.

JOHN KEY (National—Helensville) : What an illuminating debate this has been. There was Clayton Cosgrove, the head of the Finance and Expenditure Committee, who one would think would know better, because one would think he had been reading the reports that come from Treasury, produced out of the $3.29 million worth of policy advice given to the Minister of Finance. One would think he would read those reports. Those reports indicate quite clearly that Treasury has significant concerns about the growth rate. Treasury does not apportion any of the growth rate to the current policies of this Government; it apportions them to the reforms of the 1980s. So do members of the OECD and any other external commentators who have taken a moment just to have a look at our things.

When we look at the policy advice provided to the Minister of Finance pre the Budget, Treasury was quite clear in the things it wanted the Minister to do. One of them was to address the top rate of personal taxation, and I think the second one, off the top of my head—I read the report only three or four times, clearly more times than the Minister of Finance read it—was to cut the company rate of taxation.

Treasury does not believe in the Clayton Cosgrove - Michael Cullen definition of forming tax policies for companies. It does not believe that we have to take the best of our system—let us say, no payroll tax and no capital gains tax—and then take the best of the Australian system, a lower nominal rate. Treasury is a lateral thinker in the world of finance. It knows—OK, I am extending things slightly—that one can design tax policy that, indeed, has the best of the New Zealand system:no capital gains tax and no payroll tax; and the best of the Australian system: a lower company rate of taxation.

The next point I want to address just for a moment is that the Minister of Finance stated that he believed I said that the Government should not have bought the railway tracks. That was not the statement I made, at all. The Minister should go and reflect on that. The statement I made was that the taxpayers of New Zealand have a right to know that due diligence was done when the Crown, on behalf of the people of New Zealand, assumed a huge liability.

Darren Hughes: What wishy-washy stuff is this?

JOHN KEY: I say to Mr Hughes that if we had done some due diligence, we could understand. It may be a great shock to Mr Hughes, but my 20 years in the finance industry were not spent telling companies to go out and buy whatever they felt like, willy-nilly, without doing any due diligence, because they were buying a huge black hole at $1 and should ignore the liabilities, because they were going to do it anyway, or because the best information was held by the seller.

It is quite standard practice to do due diligence. It is not an unusual sort of thing. In fact, given the amount of time that Chris McKenzie and the group had up in Auckland, I would have thought that they must have been doing something. They were obviously enjoying the Auckland lifestyle and having a few laughs. Clearly they were not doing due diligence work, and I say to Mr Hughes that they told us that. That is just a very interesting point to note.

Can I also reflect on the comment made by the member for United Future about abolishing GST on rates. What a misguided policy that is—putting to one side, of course, the $230-odd million that they would be expected to find somewhere else. One of the great principles of the New Zealand GST system is that GST is on everything. We do not have it not on uncooked chickens and on cooked chickens; we do not have it on this and on that. We have it on everything. It is a fair system and we understand the rules. I might add that just last week I saw employees of the local authority in the area I live in, out chopping trees.

Darren Hughes: Which one’s that?

JOHN KEY: In a number of places. They were chopping trees, and if I had undertaken that myself, I would have had to pay GST. It is a fundamentally flawed policy.

I want to talk just for a moment in Vote Finance about the build-up of the State sector. There was a very interesting answer to a parliamentary question I asked just a few weeks ago. The information that came back stated that in 2000 the Government had at its disposal about 1,700 policy analysts. Now we find that at the end of 2003—and this number will already be considerably larger now, because we are 7 months into the year; and I might add that it is 2 years to the day since the election of 2002, but that is an aside—there are now 650 more policy analysts than that.

PANSY WONG (National) : I would like to continue the theme of the articulate National finance spokesperson John Key, who is very well respected in the business and economic sectors. He raised a very good point about whether the Labour Government understands business, and whether the New Zealand public can trust the Labour Government to manage New Zealand’s economic direction. I want to use a very tidy example, one of the Labour Government’s economic initiatives, to demonstrate what typifies Labour’s approach to business activities. Firstly, Labour is ignorant of what makes business tick; secondly, it believes in throwing money away just to make itself feel good; and, thirdly, it has very little respect for how it uses taxpayers’ money.

I want to use the example of the Export Credit Office, which was opened with fanfare and was trumpeted by the then Associate Minister of Foreign Affairs and Trade, Pete Hodgson. He said in 2001 that the export credit scheme was part of the Government’s drive to improve export growth. The Government reckoned that the scheme started with good research and consultation, and that it was the solution for New Zealand’s small exporters. He predicted that as soon as the office opened up for business, small exporters would be queuing to take up this credit insurance. The Government was so confident about it that Cabinet was told that the Export Credit Office would recover its costs and would not cost taxpayers a cent, that it would not compete with commercial providers—that was written into its contract—and that the scheme would operate for New Zealand’s small and medium-sized enterprises.

After the scheme had operated for 12 months, research was conducted to find out why none of the small exporters had taken up the offer from the Export Credit Office. The report told us that, in hindsight, when the Export Credit Office was set up the extent and significance of the gaps why small exporters were not able to export to foreign markets had not been quantified. So the Labour Government, as usual, had charged into unknown territory and claimed it had a solution. Over $1 million was used to set up the office and almost $1 million was spent every successive year to prop up that office, without, in effect, any understanding of the problems facing small exporters in increasing their business.

So in the review of the finance estimates that was conducted recently, I once again raised this issue with the Minister of Finance, and asked how many export contracts that office—$3 million and 3 years later—had actually signed.

John Key: How many?

PANSY WONG: The answer was zilch—none. Then the Minister—and I think this is a very worrying thing, which I want to share with the public—said that although the office had not signed up any contracts, he reckoned that $3 million was a small price to pay in order to have the Export Credit Office, which provides some underpinning of confidence for small exporters. So the Labour Government was very generous with the taxpayers’ money, spending $1 million a year to give exporters some confidence.

Hon Dr MICHAEL CULLEN (Minister of Finance) : In reply, I thank members for their sometimes lucid participation in the debate—at least, from Mr Clayton Cosgrove.

Mr Peters asked a number of questions about the TrackCo issue and why the Government is putting money into the track. It is because, firstly, the track needs it; secondly, the public interest is in keeping expanding traffic on the rail; and, thirdly, if the Government does not do it, the cost will fall back on the public anyway, through increased costs of roading. Unfortunately, there is no no-cost option for the Government in this particular area.

The TrackCo deal is a very simple one. Basically, we have agreed to put $200 million of capital upfront into upgrading of the track and delayed maintenance. Toll, as a consequence, is committed to a level of upgrading of its own capital equipment, and the Government will recover, by way of charging, any expenditure above the $200 million. In terms of due diligence, firstly, I think it is fair to say that the Government knew more about the nature of the track than Toll did when it bought Tranz Rail. We could not actually warn it about it, because of the nature of legislation around companies, etc. Secondly, as I said, we will recover expenditure above $200 million in terms of the charging regime.

With regard to Mr Adams and the issue of GST on rates, I say that in my view it will stay in force. We certainly oppose it. I remind the member that it passed the Labour caucus in 1984 by one vote, which was that of Mr Dunne. He actually voted for imposing GST on rates. I can say that I voted against it at that point. Had Mr Dunne voted against it in 1984, GST would not have been imposed upon rates; it would have lost in the Labour caucus by one vote. But since that time, firstly, we have learnt that we were right, in terms of the majority position—that is, that keeping the GST system simple and as broadly based as possible is actually central. It is one of the reasons we have the best value-added tax in the world. It is a much better value-added tax than the Australian goods and services tax. Secondly, in fact, rates have increasingly become a fee for service of one sort or another, and are less and less related to ability to pay, or variable. The more rates are a fee for service, the more the case is absolutely clear that GST should be applied. Finally, I point out that even if GST on rates is seen as a tax upon a tax, it is not the only case; GST is applied on top of excise duties on petrol, tobacco, and alcohol products, but that does not seem to arouse the same concern.

Mr Key came back to the good old issue of the top rate of income tax. If that is the National Party’s obsession, and clearly it is the thing that sends its members to sleep at night—thinking about reducing that top income tax rate—why is it not National’s “Key” policy, so to speak? It does not seem to be its “Key” policy; it is not even its “Brash” policy now. It used to be. It has kind of dropped down in relevance, in terms of the National Party’s approach.

As for the company tax rate, I say that the only beneficiaries from lowering the company tax rate are foreign investors in New Zealand. For New Zealand investors it is an imputation credit. If it were a classical tax regime, then the argument might be different, but there is an imputation tax regime in New Zealand on company tax, and therefore it is only a timing issue. As long as New Zealand public companies pay out just about all of their profits by way of dividends, their argument is extremely weak, because it is clear they are not ploughing their profits back into growth. And that is another issue the Government is looking at.

Of course, the National Party cannot get its position right on this issue, or its position right on the track. Mr Key could not tell us what the National Party’s position on buying back the track was. He was asked during his speech, but he would not give it. The problem is, of course, those members have to wait for the signals from “Foggy Bottom” before they know what their position should be on any particular issue before the New Zealand public, whereas we in the Labour Government make our own decisions.

Finally, I will address the issues raised by Pansy Wong, who has this obsession with the Export Credit Office. What has happened is that a lot of deals have gone though as a result of the Export Credit Office being in place. There are now exporters who can indicate their ability to finance for greater than 1 year. I have a whole series of examples here of exporters who have been able to proceed because of the existence of the Export Credit Office. It has been successful in that respect. I have examples of a Canterbury exporter, an Auckland exporter able to offer finance, a marine exporter offering finance terms, and a communications company offering finance terms. They were able to proceed to make those offers because the Export Credit Office was standing in the background. The fact that, in the end, they did not need to use it is actually—if Mrs Wong cares to think about it—a positive, because therefore no Government money was actually put at risk in any of those deals. But the fact that the Government backing was there enabled those exports to occur. If Mrs Wong is telling us that National would remove the Export Credit Office, I say to her: “Make our day.”

The CHAIRPERSON (H V Ross Robertson): I call the honourable member Katherine Rich. Is the member speaking on Vote Social Development?

KATHERINE RICH (National) : Yes, and on Vote Community and Voluntary Sector.

LINDSAY TISCH (Junior Whip—National) : I raise a point of order, Mr Chairperson. I would like to clarify that. On the schedule we have the first vote under the Hon Steve Maharey as Vote Community and Voluntary Sector, and Katherine Rich will take a call on that. We will have other speakers later on taking calls on the fourth vote under that Minister, Vote Social Development. I understand that the first vote under that Minister, on the schedule as presented to us and tabled, is Vote Community and Voluntary Sector.

The CHAIRPERSON (H V Ross Robertson): I have it down here that there is a separate vote for Vote Social Development, but I do have Vote Community and Voluntary Sector, Vote Employment, and Vote Housing being taken together. Can we get this cleared up?

LINDSAY TISCH: We do not mind the Chairperson calling Vote Social Development first, but on the schedule presented to us that is the fourth vote under the Hon Steve Maharey. If the Chairperson wants to take Vote Social Development before the other three, we will not object to it.

The CHAIRPERSON (H V Ross Robertson): We will proceed with Vote Community and Voluntary Sector.

KATHERINE RICH (National) : What a mess this portfolio is—what an absolute shambles. We have seen some major community programmes—some organisations that did good community work throughout New Zealand—reduced to an absolute shambles. I am referring to the Community Employment Group and the various programmes and activities that that organisation carries out within New Zealand. New Zealanders were pretty proud of that group in 1999. At that time it was run by a future Labour Cabinet Minister, Parekura Horomia, and undertook a wide range of community projects up and down the country that were good, basic, common-sense projects. But Labour came in and wanted to put in place its far-flung, bizarre programmes and partnerships, and about eight different programmes later, we now have just a remnant of what was a very well-run section of Government.

We have seen in the estimates process that there will be no change in the way community employment is delivered. We have seen vague objectives, loose applications of guidelines—that is, if the guidelines for grant applications have been followed at all—and some results that cannot be described in any better terms than “dubious” and “waste of money”.

I am referring to projects like the now infamous hip hop tour. As my colleagues on this side of the Chamber know, given the $26,000 that was spent on that tour, our concern is not about the music. Members on this side have nothing against hip hop as a musical genre, but some community members are asking whether taxpayers should be asked to spend good money on researching how hip hop came to New Zealand—somehow, we are supposed to think, via Paris, Samoa, and Hawaii. That is where the applicants said they chilled out and had a very relaxing time. Most people concluded that it was not a good way to spend taxpayers’ money, except for the Minister and the then general manager, who went on National Radio and said he thought that it was a pretty good way. We on this side of the Chamber totally disagree.

Some of the reports that have been released lately look at the way guidelines have not been applied when it comes to grant applications, and the way some groups barely look at the guidelines at all before they are handed taxpayers’ money. We think the Community Employment Group needs to get back to basics—the good, common-sense approach to community development—and to take out what is fast becoming a lot of rhetoric and garbage spoken about that area.

A lot of the Minister’s speeches go something like: “Blah, blah, social capability; blah, blah, social capacity building; blah, blah, whole of Government; blah, blah, joined-up Government; blah, blah, interconnectedness.” I can basically rewrite some of his speeches myself. I thought: “Gee, this social capability term is very interesting. I’ll look it up.” Treasury was very helpful, so here is the definition: the term “social capability” is defined as “society’s capacity for collective action in a variety of spheres, including non-market and market, involving voluntary interactions as well as the coercive powers of the state.”

Well, that clears things up. I feel a lot happier. If one feels like Manuel of Fawlty Towers in saying: “¿Qué?”, one is not alone. And that is where a lot of New Zealanders are at the moment—putting their heads to one side and asking what this is all about. I do not think New Zealanders want to talk about such vague academic concepts. They do not want issues like community development to be an academic subject. I think they do want to get back to some basics, and do want this particular organisation to fund programmes that are actually going to make a difference.

We are not talking about researching hip hop tours. We are not talking about sending people off shore who did not know how to research, and freely admitted they knew nothing about hip hop before they went. We are not talking about craft trips to Melbourne. New Zealanders do not fairly expect that we will use taxpayers’ funding to fund projects of a dubious quality, particularly when one looks up and down the country and sees hard-working community organisations that find it really difficult to raise funds and provide some of the basic services that New Zealanders hold dear, like Plunket or the Women’s Refuge. There are many organisations that were absolutely gobsmacked when they saw the long list of projects and programmes that had been funded through that particular organisation.

We want more than a shake-up, and we were not made to feel confident in dealing with this particular part of the Budget when various officials came before the select committee. We felt very concerned that not only had we seen $21 million go into a black hole last year but we had the concern that it would happen again, because the guidelines have not changed. We are still seeing a very loose application of guidelines.

A lot of money is being spent in areas where most Kiwis would really question the reason for some of that expenditure. So we have to get out of some of those kinds of strange projects that make New Zealanders just shake their heads. We have to ensure that if taxpayers’ money is going to be spent, it is going to be spent well and spent on things that actually make a difference.

One of my favourite Community Employment Group projects, in relation to which I have just received an answer to a parliamentary question today, will interest people. I asked about a project that received funding to look at the best way for the people of a particular marae to communicate with one another. The answer came back that almost $2,000 had been spent on the development of a website. I said that was great, and asked where the website was. I asked them to give me the proof that there was a website. The Community Employment Group came back and said that it was all right and I was not to worry about it, because the field worker had sighted the website so it was in existence. But I said no. Being a trusty Opposition member, I wanted to see the proof. Here it is. This is a printout of a website—one page—and the information on it states: “NgātiKere site coming soon.” That is the website; that is what we got for $2,000.

When it comes to serious investment in Māori leadership, Māori land partnerships, or the various programmes that that Minister has imposed on the Community Employment Group—as a result of ideology as opposed to the desire to allow the organisation to continue its work—I think if that group could get back to some of the basics over the coming year, then we would see some improvement. This is not about throwing the baby out with the bath water. It is about tightening some of the guidelines so that some of the taxpayers’ money being spent in this area is, first, going into projects that do make a difference; second, going into projects without such bizarre and vague objectives that nobody can really understand what they are anyway; and third, going into projects that are described in terms that actually mean something.

I think we need to move away from making this community and voluntary sector an academic subject, and move back into something that communities can understand and implement. This vote is not supposed to be a slush fund for all and sundry. It is supposed to fund a programme that can assist communities to develop locally. By that, I mean various projects that have worked in the past. One could look at going to Ranfurly to see the work that has been done there on its art deco project, or look at the Otago rail trail project. They are good, solid, thoughtful community development projects, not hip hop tours to Hawaii whereby someone gets $26,000 to go and “chill out” at the taxpayers’ expense.

When the Minister takes a call he might like to tell us whether those applicants from the Social Entrepreneur Fund will pay back their grant. We have also seen that particular fund go by the way, thankfully. Although the Minister says fund applicants are all community champions and examples of human innovation, a lot of other members on the Government side of the Chamber obviously agreed with members on this side, which is why we have seen that entire project canned as a result of concerns raised by the Opposition. We need to get better accountability and we need to ensure that money is spent wisely and in areas that will really make a difference to local communities.

Hon STEVE MAHAREY (Minister for Social Development and Employment) : I rise to say that I agree with almost everything that the member who has just sat down said. In fact, I cannot think of anything she has said today that I did not agree with.

Katherine Rich: The Social Entrepreneur Fund is crap?

Hon STEVE MAHAREY: No, I think the Social Entrepreneur Fund is a very sound idea, and I will come back to that. The member did not actually use the bovine excreta phrase when she was on her feet, but we will come back to that in a moment.

I should say that the member is attracting a great deal of interest from me. I have a vast collection of music, and I am very impressed with the fact that the member has just purchased the Guns N’ Roses compilation and has identified “Sweet Child O’ Mine” as her favourite song. I think that is a real sign that she is a little bit more colourful than we had thought up until now. It was interesting to hear. “Welcome to the Jungle” happens to be my favourite Guns N’ Roses song, and I welcome the member to this particular jungle.

I go back to my earlier point that I agree with what the member has said. The community and voluntary sector is an area of Government spending that I know the member has a strong personal interest in. She has been able, through very close connections to people close to her, to follow its development over the last decade and a half. As a result she is well aware that the Community Employment Group has done a great number of things that members right around this Chamber would applaud. They have things going on in their electorates right now that they want to hang on to. They have mayors who are very keen for this kind of funding to carry on, and people throughout the networks in their communities who want to see that work carry on. In the region I come from and the region of Horowhenua, which the excellent member for Otaki comes from, there has been Community Employment Group work around floods, for example, over the last little while. So this is a group that has its finger on the pulse of the community. For a long time it has been close to the community and has done a lot of things that we want to see it do.

However, the member raised a very important point—that groups like this, of course, are born out of very high levels of unemployment. They deal with people who are individually disadvantaged in communities that are disadvantaged. They have been working to try to ensure that they provide a platform for those individuals and communities to expand their possibilities in enterprise, so that they can create more opportunities for employment. We happen to be in an environment, as the member intimated, that is very different from the way it was when this group began. In other words, we have an unemployment rate of 4.3 percent. It is the fourth lowest in the OECD. We have more people employed than ever before in the history of this country. We have rising wages. I recently drove through the community of the excellent member for Wairarapa, Ms Beyer, who has led development in the Wairarapa over the last little while. I looked at one small town after the other where there were local coffee bars and other small businesses starting up. It was very colourful. There were flowers along the street in places like Carterton, making the place look extremely attractive. It has been very much the vision of Georgina Beyer over the years to have a thriving community building on its wood, tourism, trying to get small businesses together, and all those kinds of things. There is also the wine industry and horticulture. She has been tireless in promoting that kind of vision, and we can see it happening.

As a result of this outstanding change in fortune, we are looking at the Community Employment Group through a different lens. We are asking what the role is of a group dealing with disadvantaged communities and individuals in the 21st century, against this very optimistic backdrop brought about by the Labour-led Government and its outstanding MPs. I know that the member opposite was reflecting on that. As an Opposition member, she is well aware that she is looking at a Government that is doing incredibly well. The country is on a roll, and she is reflecting to herself on whether this organisation, which has been very successful in the past, should carry on in its present form.

In my view, the answer is probably not, which is why last year, in November, I asked it to look at its grant system, why I asked it to review itself, and why, in the near future, we will be talking about the future of the Community Employment Group. We need to be talking about what it does as a core function being perhaps done in a different kind of form. That is where I think we are going.

In raising those points today the member demonstrates, as usual, the fact that she is a very able Opposition member, and that she has been doing some very good work in thinking about something that her and her family have been close to for some time. She is affirming the group’s core function of working with disadvantaged communities. She is acknowledging that, under Labour, there are fewer of them, because we are doing so well. She is acknowledging that individuals who might be served by the Community Employment Group are fewer in number, because they are now gainfully employed and living exciting lives throughout the country. She is saying that, given the success of the Government, we are now in a situation where we need to rethink the form of that organisation. I am saying I agree with her. I think we are as one on this, and can work together to have the function provided in a way that does serve New Zealanders in the 21st century, rather than have the group carry on exactly as it is. I agree with her entirely, and we will do that.

• Vote agreed to.

JUDITH COLLINS (National—Clevedon) : It has been very interesting listening to the speeches this afternoon in this estimates debate. I welcome back the Hon Steve Maharey, the Minister in the chair. I hope everything is fine. We have missed him. Certainly, we have missed his sense of humour, which I think was so aptly displayed in that last speech. What a comedian! It is certainly good to have him back again for the time that he will be a Minister, which will not be long.

Today I shall talk about employment. I certainly noted that the Minister referred several times to employment rates in New Zealand. He forgot to mention all the people who shift off the employment benefit and go on to the sickness benefit or the invalids benefit. At the end of last week, and just this week, doctors have been saying that they are sick of Work and Income people sending unemployment beneficiaries to them, having told them to tell the doctors to give them a sickness form. I note that the Minister has previously been quoted as saying that sometimes unemployed people get sick. Well, we know that. Lots of people get sick. That does not mean to say that they end up on a sickness benefit. Many of us would know of people who we would think could be on a sickness benefit, but they are not. Many of us know people who are on an invalids benefit, yet can commit criminal activities, can have children, can do things like pick kiwifruit, and all sorts of jobs that they get paid for under the table. Many of us know of such people in our electorates and just generally.

Not too many people are fooled by the contention of the Minister that the number of people on the sickness benefit is suddenly increasing—35 percent under Labour, in the last 4 years—because we have an ageing population. Does the Minister think we all came down in the last rain shower? When people are past the age of 65 they get superannuation. That is what we call being aged. Being aged is not being 50, 55, or 60; being those ages does not necessarily mean that suddenly all those people cannot work. We know that it is a “have”, the doctors know that it is a “have”, and the people of New Zealand know that it is a “have”, and they have had enough of it. They are saying constantly in the polls that they have had enough. They have had enough of that politically correct rubbish. They have had enough of burglars and sexual predators who happen to have been on a sickness benefit, an invalids benefit, or an unemployment benefit, because they are supposedly too sick or too ill to work, or are unable to get work.

Many of us see in our electorates and around the country that a number of people in small businesses are really, really hurting under this Government. Small businesses are finding it difficult to find staff who are stable, to compete with bigger firms, to pay all the extra holiday pay, and to do everything else that this Government is imposing on them. That will have a detrimental effect on employment.

I know that the previous Minister in the chair talked a lot about how the Budget is helping families and all of that. Has he taken a couple of kids to the movies lately? Does he actually realise what the cost of living is under this Government, and that there have been substantial increases in the cost of living? The more that we tell people that it is OK to be on a benefit, and that they can survive on it and earn some money under the table, the worse it gets. In fact, the cost of taking kids to the movies now is pretty horrendous. Just the other day I took a couple of kids to the movies, and at the end of the day, after I had got all the things they thought were a requirement in going to the movies, there was not an awful lot of change out of about $70 or $80—after parking and everything else. Many, many families in this country could not afford to do that. Certainly, I felt it was not something I would do again in a hurry.

Costs are constantly being imposed. They do not just go on to businesses; they go straight back through the system to the very people who can least afford it. We are talking here about the families. They are the ones who can least afford it. Our just doling out a few dollars here and a few dollars there does not help them. Those people want some relief. They want some relief in taxes and they want it now.

Hon STEVE MAHAREY (Minister for Social Development and Employment) : I was just waiting to see whether any other member wanted to speak on employment. I really do appreciate members giving the Government an opportunity to speak on this topic.

I remember when I first came into Parliament, which was some time ago, back in the 1990s. Soon after that we were entertained—or whatever the National Government thought it was doing at the time; it treated it almost like entertainment—by cuts in the benefits of people throughout this country by up to—

Judith Collins: Did you put them back?

Hon STEVE MAHAREY: Yes, we have, actually. Incomes of people were cut by up to 30 percent.

I tell people who are new in the House, and maybe were not around politics at that time, that that is where the food bank industry came from. It came from those cuts. I can remember the Christmas after the cuts had taken place. I had asked Mrs Shipley in the House what the impact would be of those cuts in people’s incomes—whether we would see poverty, and what kinds of problems might emerge. She had said that she did not know, and that the Government would wait and see. About 12 months later we saw that households no longer could put food on the table. I remember ringing Peter Gresham, who was the Minister of Social Welfare at that time, and a member for an area not far away from my Palmerston North constituency, and saying to him that I had queues outside every church in my city, that people were queuing all over the place, because in the post-Christmas period they simply could not feed their kids. I remember he came home from his holiday and introduced changes to the benefit system, because people simply could not live on the benefits that had been cut by the Shipley-led National Government at that time.

One other thing that happened in 1992 was that unemployment hit 11.9 percent, under a National Government. That meant that there were unemployment rates of 30 percent amongst Pacific Island people, and we had unemployment rates of plus 30 percent amongst Māori people. We had entire communities of people around this country where no one had paid employment, under the National Government. So when we look at employment and unemployment today I want to say thank you to the National Opposition for giving this Government’s members an opportunity to say that we are very pleased that in 1999 the people of this country put us into Government; that we now have the fourth-lowest rate of unemployment in the developed world, at 4.3 percent; and that more people are gainfully employed in this country, as we sit here today, than ever in the history of this country. More people are going out every day, earning an income, and taking it home, and being able to put food on the table. They have a future for themselves because we now have more people in gainful employment than ever in the history of this country.

National members say we need to do something about the number of sickness and invalids benefits, and I know that they want us to do that because they could not do anything. There was an 84 percent increase in the number of invalids benefits during the 1990s—84 percent—and, from memory, an around 65 percent increase in the number of sickness benefits during that time. But they point to the one little window when there was a change. That one little window was when Mr Sowry and Mr McCardle decided they would abolish the sickness benefit—there was to be no sickness any more; people could not get sick under the National Government—and put all those people on the community wage. In other words, they blurred the figures for those 2 years, because they amalgamated a range of benefits under the umbrella of the community wage.

National members now come into the Chamber and say: “Let’s compare the period when we abolished the sickness benefit with the sickness benefit situation now.” Nobody, except Dr Newman, would accept that kind of shell game, because good public policy is about comparing an apple with an apple, so that one can make the difference and say one is improving things. The National Government abolished the sickness benefit for a couple of years, before we changed it back to being a sickness benefit because we do acknowledge that people get conditions or diseases that mean they cannot go to work, that mean they are out of work for a short period of time. That is what a sickness benefit is for, so we have put it back in place. But to compare the period now with the period when there was no sickness benefit is an extraordinary piece of charlatanism in terms of trying to say: “Well, we did one thing and you’re doing another.” Let us compare apples with apples.

Under that Government, the number of sickness and invalids benefits went through the roof, and it had not one single policy that would change it. Do we? Yes, we do. We have a change that means that in April this year, against the backdrop of a very positive employment and unemployment situation, we introduced radical new policies around the sickness benefit and the invalids benefit. They are the kinds of policies that people right throughout the OECD are following closely because we do better than they do. We have better policies than they do, so they are following us. New Zealand is once again getting back into a position, thankfully, of being a leader in social policy, rather than having no social policy, which is what we had under the National Government. Once again we are leaders in this policy, and we will try to address these problems.

The last point I want to make is this. If people around this country are listening to this debate—and I am sure there are many thousands riveted to what we have been saying here this afternoon—they can compare these two policies. We are interested in ensuring that people are treated fairly when they are sick or have a disability. We will treat them fairly. We will ensure that, where it is possible, they will get an operation, they will get treatment for their condition, we will train them, we will support them in the workplace, we will fund the transition to work, and we will be extraordinarily positive in opening security and opportunity for those people. That is what we will do. What would a National Government do? It might abolish the sickness benefit again, it might introduce time-limited benefits, and it might tell people that it will introduce work-capacity testing again of the kind that was a disaster for people with mental health problems in the late 1990s. We have not heard one single idea from these people that they had not already tried in the 1990s, and those ideas caused them to lose heavily the election in 1999. People were sick of the mean-spirited, hopeless, misguided policies that the National Government introduced in the 1990s. People are now looking at more people being employed than ever, the lowest unemployment rate we have had in 20 years, optimistic communities all over the country looking for more, and a fair and just Government that is now beginning to do things about the sickness benefit and the invalids benefit.

I have one last point to make. Dr Newman said on the radio today that she would provide me with individual cases of doctors who have been browbeaten by a Work and Income person. I have the senior people from Work and Income and the Ministry of Social Development sitting behind me now, and they are anxious to hear about such a case. We have not heard of one single case yet. Dr Newman promised me today on National Radio, on Morning Report, to provide individual cases. We are eager to hear of those cases. I say to Katherine Rich and Mrs Collins over there that we are eager to hear from them too. If we have individual cases of doctors who are being browbeaten to the extent that they break their ethical position and give medical judgments that do not have a sound basis, because they feel threatened by one of our clients at their clinics—if that sort of scenario is playing out, if there are individual cases of doctors around this country having to do unethical things or to make judgments that are not soundly medically based, because they feel threatened—we want to know about them.

I make this invitation now, and I extend it to tomorrow. If we can hear of those cases, we will support those doctors to make ethically and medically sound judgments on the people who are in front of them, because what do we want in terms of Work and Income? We want one thing. We want those doctors to tell us whether that person is sick within the terms of that benefit, disabled within the terms of that benefit, or fit to be a job seeker under the terms of the unemployment benefit. That is what we want. We have no policy for anything else other than that. If there are individual circumstances that Ms Rich or Dr Newman knows about, we are eager and waiting to hear of them. We want to support those doctors to be able to do the right thing. We look forward to hearing of those cases, because we have not heard of them yet.

• Vote agreed to.

KATHERINE RICH (National) : It is very interesting to hear the comments made by the Minister for Social Development and Employment when he reflects on the past few years. We have just had the best economic conditions in a generation, and, certainly, in my lifetime, but very little of that—none of it, in fact—has anything to do with what the Government has done in the social development area. It is also interesting to see the absolute amnesia that some Labour Party members have about the reforms in the 1980s and the 1990s. Although they carry on and complain about the changes that were made to the benefit system, very few changes were made by this Government when it came into Government. It did not put the benefit levels back up again. It whinged on about it and talked about it, but it did not put the benefit levels up again, and it has not really undone any of the major reforms of the 1980s and the 1990s under the two successive Labour and National Governments.

Despite having had those excellent economic conditions, we now have more people dependent on welfare than ever. We have more people who are dependent on the State for their income than ever. When we look at the estimates and the Budget we see predictions that the numbers of people on all the major benefits will go up over the next few years. This is a time when we should see serious chunks taken out of the welfare system, yet we have seen a huge increase in the numbers on the invalids benefit and a 35 percent increase in the numbers on the sickness benefit.

I do not know where the Minister gets his figure of an 84 percent increase during National’s time, because if we look at the period 1993 to 1999 we see that the increase was about 14 percent, and that was an expected increase if we consider population growth and the expected rates of disability and illness. In the last 2 years before National left Government, the numbers on those benefits were going down. The number on the sickness benefit was in decline, yet if we compare that with the position during the first 2 years under Labour, we see that the number went up by 21 percent.

There was a reason for that. Most of the variables within the community remained constant, but we saw a huge change in Government policy that was ideologically driven. We now have over 330,000 New Zealanders of working age on a benefit, and in those households live 250,000 kids. That is a huge proportion of our community who are on welfare, and living a subsistence life in many cases; it is basically the population of Christchurch, Dunedin, and Invercargill put together. We should have bigger aspirations for our communities.

If we look at what was presented by this Government, we realise that we did not see any vision or a grand plan. We saw a lot of spending, which was supposed to bring in the votes, but I think New Zealanders saw through that. They looked at the Working for Families package, and they realised that the Government was embarking on a huge vote-buying exercise that was not designed to make a skerrick of difference to most New Zealanders’ lives. Why should they champion making more New Zealand families dependent on welfare?

On this side, we do not think that is something to crow about. We do not think it is a good thing to make more New Zealanders dependent on a State handout in order to live their daily lives. If we look at some of the respected members of our communities, such as teachers, policemen, nurses, and the Waihī family, for example, we find people who would be described as professionals saying they cannot get by in this country any more on basic salaries. We have to come to the realisation that this country is not a wealthy nation, and that we have to make some big changes if we are to become anything other than the retirement village of the South Pacific. We have to try to keep our best and our brightest on these shores, and not have them go off shore—[Interruption]—as I am sure many of the member for Otaki’s friends and university colleagues have done. We need to look at a better way of providing welfare, so that we can ensure that those who are in need get it but we do not create an ongoing trap.

We on this side have bigger aspirations. We do not believe that people who go on to welfare have to stay there. We believe that most people are capable of doing something, and that staring at a wall is not a great way to leave many New Zealanders. No wonder we see many New Zealanders go from the unemployment benefit to the sickness benefit! A lot of that increase comes from depression. Well, if there is anything to make anybody depressed it is being inactive and sitting at home, it is losing self-esteem, and it is having decreasing morale. That is why we are seeing some major changes.

Dr MURIEL NEWMAN (Deputy Leader—ACT) : I want to address the explosion in sickness benefit numbers and the failure of this Government to stem the surge. To begin with, I ask the Minister whether he has contacted Dr Andrew Causer and Dr Rod Hickey, whose comments appeared in the lead story in the New Zealand Herald yesterday. Those doctors were expressing concern that Work and Income case managers are advising people to go on to a sickness benefit, even though the doctors believe that most of them are not sick. The Minister made an outrageous statement earlier in the House saying that we were not providing him with information, but yesterday New Zealand’s largest national newspaper named two doctors, one of whom has been in contact with me. The Minister also has a Medical Council—an independent practitioners association—that has expressed huge concern about this issue.

I ask the Minister to take a call and tell us whether he and his department have been in touch with those brave medical practitioners. I say “brave” advisedly, because anybody who stands up to this Government is a brave person. I would like the Minister to tell us right now exactly what he has done about the concerns that those two doctors raised in New Zealand’s largest daily newspaper.

I received this correspondence from one of those doctors: “I am a GP. Many WINZ clients are sent to our clinic for sickness benefit forms to be completed. Most are unhappy with life rather than having true depression, and yet WINZ pushes them all on to a sickness benefit. I believe WINZ is being directed to push people on to the sickness benefit to make their job easier, because it means they no longer have to try to find work for these people, and also it makes the unemployment statistics look artificially good.”

The New Zealand Herald editorial also talked about this issue stating: “But if the doctors’ allegations are correct, it suggests subterfuge and a dereliction of departmental responsibility. Should it be established that a deliberate policy is being orchestrated, resignations should follow. Trickery of such nature would demand nothing less.” I suggest the Minister has failed New Zealand if, in fact, he has failed to follow up on the allegations made in the New Zealand Herald yesterday. The information I have claims that some 95 percent of many of the people who are currently going on to the sickness benefit are fit to work. If that is the case, I suggest that this Government is actually condoning benefit fraud on a massive scale.

The sickness benefit costs around $500 million a year. If we add the $1 billion a year that it costs New Zealanders to fund the invalids benefit, that is a massive amount of money. The New Zealand Herald actually makes the very interesting statement that most of the savings made in respect of the dole—savings this Government has crowed about over the last 18 months—are being swallowed up by greater spending on the sickness benefit and invalids benefit.

The sickness benefit was established, in the way that we know it, in the late 1930s. In 40 years only 7,500 New Zealanders were on a sickness benefit, but in just 4 years of this Labour Government the number has gone up by 11,000. Under its jurisdiction the number has gone up more than 1½ times what it took 40 years to reach. The only time that relentless rise in numbers actually halted was when the sickness benefit was put into a work-capacity testing regime. In other words, where case managers asked people: “What can we do to help you to get well enough to go back to work?”. That was all it was. It was done in the spirit that people were on a temporary sickness benefit because they were not able to work right there and then, but that they would get well enough to go back to work. That is the key issue this Government is failing to address.

JUDITH COLLINS (National—Clevedon) : That was a great contribution from Dr Muriel Newman. When the Minister stood up before and made some very interesting comments, he talked about food banks. Well, I would like to ask him: “Where are the food banks today?”. The food banks are there, they are growing, and organisers are constantly saying the banks are under stress. Those people are constantly saying that things are getting worse, not better, under this Labour Government. After 5 years of a Labour Government the food banks are still there and growing.

I have been looking at some of the initiatives under the social development portfolio, and some of the best things in that particular portfolio were put in place under a National Government: Family Start, Strengthening Families, and Social Workers in Schools were all initiatives under a National Government. They are all still there, but unfortunately because they are not initiatives of this Government, nothing much is happening with them. No improvements are being made, no increases are being made, and no expansion of Family Start is being made past the 16 areas it already works in.

Today I have been reading Making New Zealand Fit for Children:,a booklet from Unicef New Zealand. There are 40-odd pages about making New Zealand fit for children, and lots of things in relation to social welfare policy, or—what do we call it now—social development. I cannot find one thing in the booklet that says children need fathers. I look in there and cannot find one thing that says children need parents. There is nothing about that in there, and of course that is exactly in line with this Government’s and this Minister’s views that it does not really matter about fathers. It does not really matter about what structure a family is, but as long as it is a group of individuals who all feel like having the occasional group hug, then that will be a family.

Well, that is not a family—not by a long shot. It does not matter how many programmes this Government brings in to operate in that area—and there will not be that many—because until we get some absolute basics right and a Minister in the chair who understands that families need to function before they can do their job, we will not get any improvement.

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

JUDITH COLLINS: Before the dinner break we were talking about things like food banks, and the fact that they are still here and growing. There was a certain amount of cackling coming over from the Government side at those comments so, fortuitously, I just happen to have a report from today’s New Zealand Press Association that states: “Hard-up Northland families are resorting to living in cars during winter, say emergency housing providers.” The date of the article is not 27 July 2000; it is 27 July 2004. It is today’s report, and continues: “Whangarei services say they are fully booked as families flock to them after relationship break-ups or to escape over-crowding or abuse. Some of their worst cases include: A woman living in a van with her two daughters, aged 7 and 14, for nearly four months.” What does the Minister say about that? The cases also include: “A woman and her two sons, aged 4 and 11, sleeping in a car for a week.”, and “A man in his 20s sleeping in a car with his 15-year-old brother for three days.” Whangarei services say that people are being forced out by expensive rents. They say it is the wet and cold weather that bring more people in—and the number is growing. They are saying that normally they get two or three calls a week, and now they are getting 25 or more.

That is what is happening under this Labour Government. So despite all the rhetoric and all the talk about how the Government is throwing money away—giving money here, there, and everywhere—the money is not getting where it needs to be.

That brings me to the issue of young Māori. I am really pleased to see Tariana Turia back in the Chamber today, and I am really pleased to see that, even if I do not agree with everything she says, she is a woman of principle. That is something this Labour Government is very, very slack about. That woman actually does stand up for people, and she does stand up for her own people, even if her views are somewhat misguided sometimes. But we should give her her due. She has acknowledged that the party that has done the most for Māori New Zealand is the National Party. We should remember that today.

Hon STEVE MAHAREY (Minister for Social Development and Employment) : I thank the members of the Opposition for the opportunity to talk about social development. It has been a debate, shall we say, and speakers have canvassed a number of issues. I want quickly to answer some of them.

We began with Katherine Rich acknowledging that we find ourselves, as she said, in excellent economic conditions. I thank the Opposition for that acknowledgment—that the stewardship of this Government does indeed go alongside some quite extraordinary economic conditions, as the Minister of Finance pointed out earlier today. I think one of the things that Katherine Rich often brings, with the leadership of Dr Brash, is a kind of honesty to these kinds of debates, and it was refreshing today to have an Opposition spokesperson so openly acknowledge that we are working in good economic conditions—indeed, in her own words, “excellent economic conditions”. They are, of course, attributable to the leadership that has been provided by this Government for over 5 years now. Many people, of course, on the Opposition did predict—

Dr Muriel Newman: Absolute luck.

Hon STEVE MAHAREY:—that a change of Government to a Labour-led Government would lead to things like falling levels of employment, higher levels of unemployment, and an underperforming economy. I know they began by saying we had had luck for a year, then they said we had had luck for 2 years, then it was luck for 3 years, then it was luck for 4 years, and now even they are beginning to say, I think, that after 5 years maybe we are doing some things right.

Katherine Rich today had that kind of open honesty that is coming through from the National Party lately, as they acknowledge just how well things are doing. But I must say that from there she went downhill. She then began saying that the number of people on welfare had gone up. Ms Rich knows that that is not true. She knows that. We, in fact, are looking at a much lower number of people on benefits now than when we became the Government in 1999. Indeed, in just crude terms we are talking about a good 100,000 fewer people.

That is why, for example, when we look at the estimates we see we are returning so much money all the time to Treasury from the welfare budget, because we are coming under the forecasts all the time. So we are able to say: “We don’t need to pull that money down that you budgeted for us to get, because we’re seeing so many fewer people on a benefit, and they’re passing through so much more quickly.” That is something I think that Katherine Rich needs to go back to, and she needs to spend a bit of time getting in touch with those figures. I know that sometimes in politics it is a good idea to be unaware, shall we say, of the reality of the figures, so one can make one’s argument, but really after 5 years of watching the progress of this Government we do think it is probably time for her to have a look at them. She will understand that the numbers of beneficiaries across the whole board have dramatically declined in the last 5 years and that we are doing extraordinarily well.

She called for vision from the Government, and of course, all one has to do is visit the website to find lots of papers on strategies, and so on. But we are still waiting for one new idea from Katherine Rich. We have heard about times on benefits for people who do not work for the dole, and we have heard about work-capacity testing—all the failed ideas of the 1990s have been brought out again. Sometimes I wonder whether what the National Party is doing—because it knows it does not really have any ideas—is kind of pushing these ideas out so that people have something to talk about, while it hides the fact that it does not have a new idea about welfare, at all. So we would invite National Party members to give us a bit of vision, as Katherine Rich has asked for, because it would be very interesting to debate with them.

Then we went on to Judith Collins, who talked about the issue of people going across from the sickness benefit to the unemployment benefit. I just want to reiterate to people in the Chamber that Work and Income does not have a policy to encourage people off the unemployment benefit on to the sickness benefit. In fact, the Committee might like to share in some of the stats of the last little while—that is, over the past 6 years. From 1999 to now we have seen 1.1 million placements, so to speak, off the unemployment benefit—people moving off to go to something else. Only 73,000 of those went from the unemployment benefit to the sickness benefit during all of that time. Only 73,000 of that 1.1 million migrated, and 52,000 went the other way—that is, they went from the sickness benefit to the unemployment benefit. Because we want them to get a job of course. They get well, as people who are on the sickness benefit do, then they go back on to the unemployment benefit and go off, hopefully, into some kind of job. We have a good story to tell here, and I do thank Opposition members for giving us an opportunity to tell them about the April strategy, and how that is unrolling now and helping people who are on sickness or invalids benefits to begin looking at opportunities to get a job.

We then went on to Mrs Newman, who talked about the fact that I had asked her for cases that would tell us that doctors had been bullied into giving people forms that said they were sick. She went away this afternoon, when I asked her after the Committee rose, and she has given me a case. I will not read out the name because she told me she wants me to treat it with respect, but I just want to point out how this debate is based on such difficult information. This email says: “I believe Work and Income New Zealand”—it is not ‘Work and Income New Zealand’ at all these days; it is just ‘Work and Income’; the words ‘New Zealand’ have been gone for a long time—“is being directed to push people on to the sickness benefit to make their job easier, because it means they no longer have to try to find work for these people and also make the unemployment statistics look artificially good.” If we had a chance to talk to this doctor—because all I have here is “Hi, I’m a GP,”—I would say that it is not called Work and Income New Zealand; it is called Work and Income. There is no policy to push people from the sickness benefit—

Hon Bill English: There is.

Hon STEVE MAHAREY: No, I tell Mr English that there is not. People who have a history in the organisation—and Mr English has because he was in Treasury—will know that one of the things that often triggers this debate is the reminder of what the criteria are for the sickness and invalids benefits. When doctors get that reminder they often reply and talk about it. They recently got a reminder and that is what probably triggered this person.

I say to this person that going on to the sickness benefit does not get someone out of looking for a job. Throughout they will be work tested, but I say to members on the other side that we will not work test the sickness benefit. Those people are sick. It might be the policy of ACT to do so, but we are not going to do it. Unlike the National Party we have lower caseloads, we have introduced enhanced case management, we have provided more money, we have provided more tools, and we will even get operations for these people, so they can return to work. In other words, it would not serve case managers at all to be saying: “I would like you on a sickness benefit.”, because then they would find themselves with an enhanced case-management process dealing with exactly the same people and trying to move them into part-time work.

So this doctor simply needs to pick up the phone, ring Work and Income, and ask: “Do you have a policy?”. We will say “No.” “What’s your name?” We could tell the doctor it is Work and Income, and not Work and Income New Zealand. We could also explain that it would do people no good at all to be back on the sickness benefit in terms of a job, because those people would find themselves very actively managed there as well—since April—to try to get them into part-time work. Now, I would say to Dr Newman that that is the problem with this debate. I do not have a doctor here, or a person I can go and see. This doctor is clearly wrong and if we could get in touch with him we would tell him so.

I say also to the member that on Thursday the national commissioner will be with the Medical Association. Its members have been invited because they asked to meet, today. The association has been asked to bring together all the information from actual doctors with actual cases to give to us, and we will deal with them. We do not want supposition, misunderstanding, rumour, or unsubstantiated things from the newspaper; we want real stories from the Medical Association. If any doctor in this country feels that he or she is being browbeaten into giving people sickness benefit forms to say they are sick when they are not, we want to get alongside that doctor and assist him or her to give good, sound medical judgments so that we get the right information.

The frontline of Work and Income is not staffed by general practitioners. We have to rely on what doctors say—and we will. We want to work with the Medical Association. Can we be more transparent or open than that? Can we try any harder than that? I will personally visit doctors, if they want me to, to tell them how they can work with us so they are not browbeaten by our clients or anybody else. How can we get more transparent and open than that? We cannot. That is the offer we are making, that is the offer Work and Income is making; and we will deal with that issue.

I thank members for the debate. It would have been good if it had been based on facts, but I enjoyed it anyway.

• Vote agreed to.

ROD DONALD (Co-Leader—Green) : I will focus my 5-minute speech on the trade negotiations budget and ask whether New Zealand gets value for money for all of Mr Sutton’s overseas trips. The irony of this Budget process is that Mr Goff is accountable for how the money is spent, while Mr Sutton is overseas spending it. I would like Mr Goff to explain exactly what benefit New Zealand has gained from the $4.6 million increase in spending on World Trade Organization negotiations, bilateral so-called closer economic partnerships, and free-trade agreements during the last 5 years. While he is about it, he could tell the Committee what the opportunity cost has been of not spending that money on more productive ways to make our economy self-reliant.

The evidence strongly suggests that the more money the Labour Government spends on imposing its free-trade agenda on New Zealand, the worse our trading position gets. Statistics New Zealand’s trade figures, released today, reinforce this point. Two years ago New Zealand had a trade surplus of $521 million for the year to June, and our exports stood at $32.3 billion for that year. Today, because the Government pursues disadvantageous trade deals, such as the New Zealand - Singapore Closer Economic Partnership, our exports have dropped to under $30 billion and the modest trade surplus has turned into a massive trade deficit—over $3.5 billion for the year to June. I am sure Mr Goff will offer all sorts of excuses for the deterioration in New Zealand’s international trading position. Some excuses have a ring of truth, such as the impact of New Zealand’s higher dollar and the increasing cost of fuel imports.

But, hang on a second, why did our dollar go so high in the first place? In part that is because of the Government’s foreign investment policy, which pushes up the value of the New Zealand dollar—all part of the free-trade and investment agenda. Fuel spending has gone up in part because we waste fuel unnecessarily transporting identical goods back and forth within New Zealand, between Australia and New Zealand, and between New Zealand and other countries. Again, it is all in pursuit of free trade, rather than in pursuit of sustainability.

New Zealand certainly has not got value for money from the trade negotiations budget for the Singapore free-trade deal. Before that deal took effect New Zealand’s trade deficit was a mere $24 million with that country. Now it has blown out to $323 million. Yes, some of that is because of petroleum imports, but the Government cannot hide from the fact that New Zealand’s exports to Singapore have actually declined by $180 million in the last 3 years. There has been a 37 percent decline since the closer economic partnership took effect.

If that is not bad enough, Mr Sutton and his officials did not even seem to know this basic information. When Jim Sutton described the New Zealand - Singapore Closer Economic Partnership as a “stunning success” a couple of weeks ago, he had absolutely no evidence to back up his claim. The Singapore Trade Minister tried to come to his rescue, but was not convincing. Belatedly, Mr Sutton’s office tried to explain away the decline in exports by claiming that a lot of goods had been diverted to Malaysia in the last 3 years. So I ask the Minister why our exports to Malaysia have gone down by $50 million in that time.

The meeting with the Singapore Trade Minister was meant to be a review of the closer economic relations deal—it was not. There was no report published on the deal, no analysis of why the deal has been a one-way street in Singapore’s favour, and no thorough scrutiny of the fact that 46 percent of the shipments from Singapore that were tested for rules-of-origin compliance failed the test. Why was there a complete lack of scrutiny by the Minister and his officials? Perhaps they were too busy trying to do new deals with Thailand and China than look into what has gone wrong with our deal with Singapore.

Why does the Labour Government want to sign a free-trade agreement with the corrupt Thai Government, and another deal with the cruel Chinese Government? These proposed deals make a mockery of the Speech from the Throne in 1999 when Labour made commitments to incorporate labour and environmental standards in free-trade agreements. How can the Labour Government even begin to negotiate a free-trade agreement with countries that refuse to ratify core ILO conventions, let alone ensure that the ones they have signed are complied with?

How can it in all conscience consign Thai workers, including half a million children, to lives of poverty by giving tariff-free access to goods made in sweatshops where pay rates are only 77c an hour? How can it welcome the Thai Prime Minister, Mr ThaksinShinawatra to New Zealand when it is becoming increasingly obvious that he is corrupt and runs a corrupt regime? Members need not take my word for it. They need only read an article such as the one in the Melbourne Age.

Hon PHIL GOFF (Minister of Foreign Affairs and Trade) : Sometimes the people of this country must wonder when they listen to speeches on trade by the Green Party. That party seems to fail completely to understand that New Zealand is a trading country, and that for both its survival and its prosperity it needs to have access to markets around the world. If the Green Party had its way, somehow right around the world there would be free-trade agreements, none of which encompassed New Zealand. There New Zealand would be, relying on a world market to sell its very largely commodity-based exports, locked out of all of those markets, and refusing on principle to trade with our fourth-biggest market, China, because we did not agree with its politics. Maybe we should refuse to trade with our second-biggest market, the United States, because we do not agree with everything it says. That is a view of the world that is remarkably simplistic and naive, and that sort of attitude really raises questions about the Greens’ readiness to participate in a Government.

I have to say that the Uruguay round for the General Agreement on Tariffs and Trade has resulted in the advantaging of this country to the tune of billions of dollars a year, yet Rod Donald was against that. We would benefit from more billions of dollars each year if we could get the Doha development agenda through, but Rod Donald is against that. What I do not understand about what Rod Donald is saying is that he seems not to have picked up a very basic point, which is that in order for Third World developing countries to thrive in the world today they need access to markets in the developed world, and they need the developed world to cease spending—as OECD countries do—$361 billion a year in export subsidies. That is nearly a billion dollars a day.

The only way we can stop that is by getting the Doha development agenda through, with the critical clause that Jim Sutton is fighting for right now on behalf of New Zealand and the developing world, to ensure that the United States and the European Union step back from the position they have held for many years of subsidising their exports and therefore stopping the Third World from using its comparable advantages to get into their markets. Worse still, that position is stopping the Third World from exporting anywhere else, because the developed world is subsidising its products in a way that puts the developing world out of business. There is only one way to deal with that situation. It is through the Doha development agenda, and that is what Jim Sutton is fighting for right now. I would have expected that member to support him in that, instead of making that dreary liturgy of doomsday and negativism.

I put this to the member: New Zealand’s longest standing free-trade agreement is Closer Economic Relations with Australia. It was 20 years old last year. What has that done for New Zealand? At the time, Mr Donald and his colleagues said that Closer Economic Relations would destroy New Zealand, that we would be overrun by the larger country, Australia, that we could not possibly do it, and that it would damage us hugely. Has it damaged us hugely? No. In that 20 years, New Zealand exports have doubled in real terms with Australia. We now send across the Tasman one-fifth of what we export; before Closer Economic Relations it was about one-tenth. That has been a remarkable success story, which has led to New Zealand being able to develop the level of prosperity we have today. Closer Economic Relations is a success story for New Zealand exporters, and a success story for the Australians. The two countries together have a combined market of $24 million, giving our manufacturers—because Australia is our biggest market for manufacturing—a domestic market that enables them to survive and to compete with the world. And Mr Donald said that that was a bad thing.

Is Uruguay a bad thing? It makes us billions of dollars per year. Is Closer Economic Relations a bad thing? Our economy survives on it. What is more, the free-trade agreements that will be negotiated with Thailand and China, hopefully with Singapore and Chile in the Pacific Three Closer Economic Partnership, and hopefully also with the whole of the ASEAN block, will deliver huge benefits to New Zealand. Although we do not have blockages of trade to this country, those countries have huge blockages—huge tariffs and non-tariff barriers—stopping our entry.

This is win-win for New Zealand. It is time that Rod Donald woke up to that fact and supported the efforts that have been given bipartisan support across the House for years to ensure that New Zealand can go ahead to thrive and prosper in the world instead of being locked out of international markets and having a crumbling economy. That is what the Green policy stands for in this area, and it really is not good enough. Mr Donald needs to do some work to understand why it is vital that we continue to fight in the world for access for New Zealand exporters into those markets.

• Vote agreed to.

NANDOR TANCZOS (Green) : My co-leader and I will be doing the good cop, bad cop routine with Mr Goff.

Hon Phil Goff: I am likely to agree with you, Nandor.

NANDOR TANCZOS: I quite agree with my co-leader in terms of trade issues. The Minister has to walk a tightrope when it comes to matters of justice, because there is always the need to head off the more extreme policies and promises of parties that are desperate to get into Government, and the need to do what the Minister knows the evidence shows actually works to reduce crime and lower the crime rate.

That tightrope just became looser because we are coming up to an election year, and the “rash Brash” promises of abolishing parole for most offenders, lowering the age of criminal culpability, and ignoring a number of other international conventions about protecting the rights of prisoners will all go out the window. There is an agenda around the world right now among right-wing Governments to do away with international conventions to protect the rights of prisoners, so it is no surprise that Mr Brash is following his American idol in that regard. But the reality is that there are no simple solutions to reducing crime, and politicians who offer silver bullets are simply misleading the public. That is not to say there is nothing we can do about crime, but the answers are much more complex.

There is a desire for tougher sentences—that is understandable—but it leads us down a dead-end road of building more and more prisons to lock up more and more people for inevitably increasing amounts of crime. The fact is that prisons do not reduce the rate of reoffending to any significant degree, and longer sentences are no better than shorter sentences at reducing reoffending. The real danger is that that focus diverts resources into building prisons, and away from more effective initiatives. It is sad that the Minister constantly boasts that we have a rising prison population. That fact is an indictment on our country, whereas we should be looking at how we keep people out of prisons.

Let us look at the things that are being promised at the moment, such as truth in sentencing and no parole. There are problems with parole, there is no doubt about that—we see that in the newspapers—but the problems are particularly around monitoring. The answer is not to abolish parole; the answer is to make sure that parole is properly resourced so that there is proper monitoring and so that we know what is going on. Resourcing is a significant part of that. This is not an argument to end parole, because the reality is that parole does work. We have just to look at the recidivism index, which shows that in the 24 months after release by the Parole Board, 15.6 percent of those released on discretionary parole were reconvicted of an offence, compared with 28.7 percent of those released on automatic release. We can assume that the same would go for people who are kept to the end of their sentence and then released without parole. There is ample evidence from overseas, as well, that shows that parole and reintegrative programmes result in greatly decreased recidivism rates.

That is really where we have to start looking. We have to start looking at a real package of what we are going to do to reduce crime. Everyone in this Chamber knows that the real answer is around crime prevention and early intervention, and, to Mr Goff’s credit, he has put resources into those issues. He has come before the Justice and Electoral Committee numerous times and laid out some of the different pilot schemes that have been put into place around early intervention and crime prevention.

I visited a scheme in the Hawke’s Bay where there were incredible successes in working with young people who were serious offenders at a young age—people who have been convicted of 16 to 20 offences of burglary, and the like. They have very close monitoring and hands-on mentoring by extremely dedicated staff, with amazing results. I visited a young man who had never been employed in his life, and now he is attending school and doing well in his exams. He has been doing part-time work at a local business and is turning his life around. This also indicates that it is not just about Government intervention, but that the community has to get on board. The community has to support rehabilitation. The community has to be prepared to give people a chance and give them another go to turn their lives around. If people come out of prison, or wherever, and have no chance of work or of getting any kind of decent income, it is inevitable that many of them will go back to crime. So I acknowledge the work that Mr Goff has done on that.

It needs to go further. We have pilot schemes, but we need to expand them out. We need to look at a whole range of strategies aimed at the community and the family, not just at individuals. We need to look at how we can strengthen families, parenting skills, and the like.

Hon PHIL GOFF (Minister of Justice) : Having disagreed somewhat strongly in the last debate with Nandor Tanczos’s colleague, I take the opportunity to acknowledge the rational stand that Nandor Tanczos has taken in the House on law and order. It is an election year next year, when everything winds up, and everybody wants to be the hanging judge and the toughest on law and order. I have been around in politics for about 24 or 25 years, and I have heard at every election from parties in Opposition—

Hon Bill English: It used to be you, Phil.

Hon PHIL GOFF: I have heard mostly from Bill English’s party. He will remember that Jim Bolger was promising capital punishment, and we remember that in 1990 there was all this talk about the National Government getting tougher. National is the classic “lion in Opposition, lamb in Government”. Let us face it: it did nothing in Government. In 9 years National did not change the sentencing legislation or the parole legislation.

The one thing I disagree with Mr Tanczos about was his statement that I boast about our rising prison population. I do not boast about it; I regret it. I would rather it not be rising, but the truth is that by the time people have developed the entrenched recidivism of many in our community, by the time they have reached that stage, there are very few ways that we can protect the community, other than to take them out of circulation. We have the second-highest rate of imprisonment in the Western World, but it is well behind that of the United States, which is 700 per 100,000. The United States has 2 million people in prison. One in three of its black population at some time will be in the justice system. That is not a model we want to emulate. We already take a tougher line on imprisonment than any other Western country we would like to compare ourselves with—the Australians, the Canadians, the English, or the Scots. I do not welcome that, and that is why we have put the emphasis that Nandor Tanczos mentioned; that is why we not only are being tough on those people whom we have to be tough on, but are trying to deal with the causes of crime and trying to put fences at the top of the cliff.

The best way of doing that is through early intervention, at ages 0 to 5, when we have some chance of turning a kid’s life round. There are kids growing up in an unstable, insecure environment marked by abuse and lacking in love and security. We know that those sorts of environments produce criminals. Criminals are less likely to be born than to be created, and we have to do more in the early intervention area. This year we have foreshadowed that Budget 2005 will have a particular emphasis on early intervention. That is not to say we are not doing it now. What are we dealing with in Project Early? We are dealing with kiddies between the ages of 3 and 8 who are playing up in school, and have behavioural problems that are obvious. We are intervening at that point, and in 80 percent of the cases of those under the age of 7, we are able permanently to remedy the factors behind their behavioural problems. How much better to resolve the problem there than to have the human wastage and taxpayer’s expenditure caused by our letting that problem get worse and worse until we are forced to put people into jail! So we have to deal with the problem at both ends. We need to deal with the concept of restorative justice, and I know that the member has provided good support for that.

But we will hear, because it is an election year, that suddenly things are in crisis. Well, it is some crisis! The crime rate in New Zealand, according to police statistics—I never produce these statistics; these are police statistics—is 13.8 percent lower than it was at its peak, in 1996. Am I satisfied? No, of course I am not satisfied. There is more that we must and need to do—and we are doing that.

Jill Pettis: They’ve gone very quiet.

Hon PHIL GOFF: They have gone very quiet. We have put record expenditure into policing, and we now spend more than a billion dollars on it. We have 400 more police officers, and they are doing the job we expect them to do. We have a record number of sworn police. We have tougher sentences, and I pay tribute again to Nandor Tanczos. The Green Party members supported the Sentencing Act and the Parole Act. That was not the “first, best” solution, but they acknowledged that those changes needed to be done, so that somebody like William Bell, who clearly poses a threat to the community and who cannot be given a second chance, is locked away for life. It will be 30 years before he can be considered for parole. That is tragic for that individual, but it is necessary for society. That person, under the National Party Government in earlier times, would have done 7 years in prison for murder. Now he is doing 30, and he will probably spend a lifetime in prison.

Where we have needed to, we have toughened the laws. We have toughened the DNA laws. Don Brash talks about DNA testing of everybody who is arrested. That is 110,000 people a year at $200 a pop. So we would have DNA sampling of somebody who has been arrested for being drunk and disorderly? Well, that will make the world a safer place! We have already dealt with that. The National Party was on the committee when we dealt with it. Mr Tanczos was on the committee. Anybody who commits a serious crime, including burglary, which has been redefined as a serious crime, will be liable for DNA testing, and everyone who is convicted and imprisoned will have DNA taken. We have done what we needed to do there.

The public opinion polls on the parole issue actually showed that the public thought Don Brash had gone too far. Yes, there are mistakes in the parole laws. We are constantly trying to improve them and make sure that the Parole Board gets it right. We have required the Parole Board to have as its paramount consideration the safety of the community, and not to release anyone who poses an undue risk. That is set out in legislation as clearly as it can be set out.

We are making the changes, crime is going down, and the laws have got tougher where they needed to be tougher, and they will continue to be tougher. We will move on the matter of the proceeds of crime, to get the proceeds off the gang bosses. By setting a civil rather than a criminal standard of proof, we can get our hands on the money that motorbike gang bosses and presidents can actually keep at the moment because the laws are not adequate. Those changes are being made. I am proud of what we have achieved in this country. It is not perfect but we do a lot better than others. We have a far lower rate of serious crime in this country than the English, the Canadians, the Scots, and the Australians have. We do better, and we are already tougher, in those areas. It would be a terrible shame if this National Party decided it would, as it has already shown, abandon any pretence of principle and go for the lowest common denominator—whether it be race or crime. Most of the population knows that it will not come to anything, anyway, because when National had 9 years to do something about this, it did absolutely nothing.

MURRAY SMITH (United Future) : There is evidence that the wheels are falling off our justice system. If Mr Goff wants a crisis, then he needs to see it in his own portfolio. The merger of the Department for Courts with the Ministry of Justice has demonstrated that, and as the ministry takes and assumes the primary responsibility for that sector, it is absolutely important that some major changes take place rapidly.

In the estimates report of the Justice and Electoral Committee it said with regard to Vote Justice that the ministry had acknowledged it had “inherited a range of complex capability issues and risks” as a result of the merger. If we look beyond that to see exactly what it means, we find that the ministry informed the select committee that there was a culture clash between the Ministry of Justice and the courts sector, and that morale was particularly poor among the courts staff. So we find that problems are arising in the courts and justice ministry that have yet to be resolved, and that are hugely problematic.

The latest example, of course, has been the row around the Supreme Court and this Government. It is clear that, on the issue of the Supreme Court, the relationship between judges and the Government is fraught with tension. That should not surprise anybody, given the way that the Supreme Court was created. It was created against the tide of public opinion, and against the strong opposition of the business, legal, and Māori sectors. It was created with judges feeling that the politicisation of their positions had reached an intolerable state, and now we find the Chief Justice complaining about a lack of operational resources. That tells us less about the operational resources and more about the deteriorating relationship between the judiciary and the executive. The public arm-wrestling between the executive and judiciary for supremacy does neither any credit. When we see reports in the newspapers saying that Margaret Wilson has “snapped back at criticisms of her Supreme Court by the Chief Justice, Dame Sian Elias, as tensions between the government and the judiciary reach breaking point.”, people will inevitably have a lack of confidence in our systems. The Attorney-General is meant to be the independent arbiter between the two; however, on one day she supports the Chief Justice’s right to comment in the face of the Prime Minister’s criticism, and on the next day she rails against the Chief Justice, as again demonstrated in the Sunday Star-Times in its report on the issues. It is clear that this Government needs to sort this matter out, and it is clear also that at the moment there is nobody attempting to do that.

Of course, the primary issue that surrounds this matter is the court’s right to create law, and how far that right extends. I suggest that the move from the select committee to try to put into the Supreme Court Bill some outline of the role that the Supreme Court should have—which the Government squashed—is now something the Government thinks might have been a better idea.

But the court’s right to create law, and the matter of whether the courts should take the social and political consequences of their decisions into account, are key issues. They have been issues since, particularly, 1980 and the Lesa decision—the decision regarding Samoan rights to New Zealand citizenship. The Court of Appeal actually stated that the decision was influenced by political considerations. On the other hand, there is the decision in the foreshore and seabed case, where the court refused to intrude into the social and political consequences of its decision, and left it to Parliament to make a decision. The irony of that is that the Government has taken a contradictory approach. It is smarting over the foreshore and seabed decision, where the Government did not look at the political consequences, but is also sending warning shots across the bow of Supreme Court judges in particular not to engage in judicial activism. Once again, the Sunday Star-Times reported: “The set-to comes hard on the heels of Deputy Prime Minister Michael Cullen’s attack on activist judges, a thinly veiled reference to government unhappiness at the foreshore and seabed decision.” It is time that the Government took some action in order to do that, but the Attorney-General, whose unique role is to ensure it happens, gives us little confidence so far that she can be a peacemaker in this situation.

The second issue is resourcing. The Government is struggling in order to resource the justice sector properly. The Chief Justice, I must say, needs to advocate for all courts, not just the ones she sits on.

• Vote agreed to.

SUE KEDGLEY (Green) : The ongoing crisis of the lead contamination of cornflour in our food supply has demonstrated just how inadequate, poorly resourced, and ill-equipped our food safety agency is to protect the safety of our food supply. Lead contamination up to 100 times our legal limit in a staple product like cornflour is an extremely serious breach of our regulations, but the response of the Food Safety Authority to this food safety crisis has so far been woefully inadequate. Indeed, consumers’ confidence in the safety of our food and the ability of the agency to protect our food supply has been rocked by this incident. I have had furious consumers emailing and phoning me all day asking how a poisonous hazardous substance like lead could find its way into our food supply and remain there for 6 months undetected, and why, when finally this contamination was found by accident in a 5-yearly survey of our food, it took 10 days for the Food Safety Authority to tell New Zealanders it had discovered significant contamination of cornflour in our food supply.

The Acting Minister said in the Chamber today that the Government had “acted swiftly” on the issue, had “exposed a problem”, and was “moving on it quickly”, and I wondered whether he meant that as some sort of joke. Does he consider that taking 6 months to track down a significant contamination is “acting swiftly”, and that taking 11 days before bothering to tell New Zealanders or issuing any press release about a significant contamination of our food supply is a swift and adequate response? What a joke!

Why does the Minister for Food Safety not use her powers under section 40 of the Food Act to recall all products that have been found to contain cornflour contaminated with lead up to 100 times more than is permissible by law? Let us remember that only a number of months ago the Minister for Food Safety mandatorily recalled 700 dietary supplements, even though there was no demonstrable risk from those products, and, indeed, no investigation has shown that that mandatory recall of 700 products was essential. But here is a known contamination by a poisonous hazardous substance, and the Minister is refusing to issue a mandatory recall. Why has the Government once again put the interests of food manufacturers ahead of consumers, and refused to release even a list of the foods known to have been contaminated with lead? Surely, we consumers have a right to be told the truth of the situation, and to know what products are contaminated, so that we can make up our minds whether we want to eat them. We do not want to have some arrogant food safety agency saying: “I’m not going to tell you, because we’ve decided that this level of contamination is safe.” I have called, and I will be repeating my call, not just for the products to be identified and for that information to be released publicly, but also for the test results of all the foods that have been contaminated to be released.

Why is the Food Safety Authority running around telling New Zealanders that there are no short-term or long-term risks from consuming cornflour contaminated with lead up to 100 times the legal limit? Is it unaware of international research showing that there is no safe level of lead, and that even in low concentrations it can impair children’s intellectual ability? Had it talked to the Ministry of Health before it issued this falsely reassuring and, indeed, inaccurate and dishonest advice? Consumers just want to be told the truth. They want the Food Safety Authority to be honest and to give impartial, fair, and balanced advice, but what they seem to be getting is propaganda.

The other issue that consumers need reassuring on is whether the contaminated cornflour that we have been told about is simply the tip of the iceberg, or whether the contamination is far more widespread than we might know. Originally, we were told that only 45 tonnes of cornflour were contaminated with lead, but now it turns out that two more batches of 45 tonnes were contaminated with lead.

Hon DAMIEN O'CONNOR (Associate Minister of Health) : I was not going to take a call, but I cannot sit here and see the Food Safety Authority accused of being dishonest. That is absolutely outrageous, and the sooner that member is more honest in her criticism—and she is entitled to criticise the operations of the Food Safety Authority—the sooner New Zealanders will know what is going on. The authority was established in 2002 and has been in place since then. It has been formulating policies and systems to ensure that the food that we consume and process in this country, and the food we export as well, is safe.

I would like to tell the member that lead is a naturally occurring substance, and that there are probably minute trace elements and particles of lead in most of the things that we consume. The issue here is the level. Clearly, the level found in the cornflour was above—in fact, in some of the samples it was estimated to be 100 times above—what we consider to be a safe human consumption level. Indications at this point are that the contamination has occurred not from the corn itself, but from some process of transportation, whether it be from the ship, a truck, or whatever. But somehow, there has been contamination. The fact that we identified that and were able to move on it quickly says that the systems put in place by an organisation that has only been up and running since 2002 are very, very good. The authority has moved to eliminate any risk to the New Zealand public and consumers, because the systems have identified and told us the product lines that we have to test and those that should be withdrawn. That has occurred, and I would like to congratulate the staff of the authority—not sit back and allow them to be accused time and time again by the Green Party and Sue Kedgley, who misleads or attempts to mislead the New Zealand public into believing that the Food Safety Authority is working against them. That is not true. It is there to protect the consumers of this country. It is also there to ensure that we, as an economy, are able to export quality, safe food around the world.

I just ask the Green Party once again to be more honest in its criticism and assessment of what is happening with regard to the Food Safety Authority.

BARBARA STEWART (NZ First) : On behalf of New Zealand First, I rise to speak in the estimates debate. It was pleasing to see there is an increase in the health budget of 3.5 percent. The increase can be considered to be an attempt to regain our First World health system. The Minister of Health, in her Budget debate speech, stated that our rate of intervention lagged well behind that of the international average of countries like Australia, Canada, and Britain that we often compare ourselves with, and we hope that this Budget increase will make a difference to those statistics. On a positive note we are pleased, too, that the Government is taking some constructive steps in addressing meningococcal disease. While that is a little late in coming, we support its efforts on that front. They are definitely needed. Many parents, particularly in south Auckland, have welcomed the initiative, and we know that there are many other parents right throughout New Zealand who are anxiously waiting for the treatment regime to come to their area.

Although the Government has made some improvements with the cancer control strategy, we in New Zealand First still find it very disturbing that we require our cancer patients to travel to Australia for treatment. If we want to have a First World health service, we need to be able to treat those patients at home. It was very disturbing to read the article titled “The big C” in this week’s edition of the Listener, which stated: “When it comes to surviving cancer, you’re better off living in Australia, or just about any developed country, than here.”

That is quite disturbing. The article lists many shortcomings that we are all aware of: issues like waiting times for radiotherapy and surgery, workforce shortages, flagging research, and lack of funding for drugs that are available in Australia. We all know that delays in treatment here cost lives. We need really good coordinated care, allowing patients to be investigated and diagnosed quickly, and to have the proper access to treatment right here in New Zealand. We presently have piecemeal services and fragmented information about those patients. It is to be hoped that the implementation plan for the New Zealand cancer control strategy will be completed on time, at the end of July, and that the strategy and the increase in the health budget may, hopefully, address many of the shortages that were listed in the article.

One of the areas, too, that is of prime concern to New Zealand First is that of dental care for adolescents. We know that area is in a state of crisis, with very few dentists offering a free service for high school children because it is not worth their while to provide it. We believe that urgent action is required, because lack of oral health-care results in other problems that are far more expensive to treat. It is rapidly getting to a situation in which free dental care for adolescents is difficult to access, which is leading to a situation in which those who can afford to pay for the dental service do so and those who cannot pay go without. So it is really time for the Minister to become proactive in that area. I know she has said she has some good ideas that she will work through, so that adolescents receive dental care in a timely manner.

Free health-care for under-6s must really mean free health-care, not health care with additional fees. We are now reaping the results of several years of successive Governments not providing a subsidy to doctors that is adequate to ensure that all under-6s get free doctors’ visits. We are seeing rampant glue ear and asthma rates in low socio-economic areas, and that is all preventable with the right care. We hope that some of the additional money put aside in the Budget will actually be used for that purpose.

One other area of concern for New Zealand First is the need for nurses to be paid adequately, in order to ensure that we stem the flow of qualified nurses and doctors to Australia and elsewhere. We know that nurses are the basis of our health-care system, and they are now leaving New Zealand in greater numbers than ever before.

SUE KEDGLEY (Green) : I would like to focus initially on one particular aspect of the health budget, which is the implementation of the Government’s recently released Healthy Eating - Healthy Action plan to reduce obesity in New Zealand. The Ministry of Health recently put out a report that acknowledged 8,000 to 9,000 New Zealanders die from what it called dietary-related risk factors a year. That is so astonishing that it is almost hard to believe, but it is true, and it therefore suggests that much of our focus in health should be on improving the diet of New Zealanders. Twice as many people are estimated to die from dietary-related factors than from smoking, but whereas the Government has put a tremendous across-the-board effort and resources into a major effort to reduce the health risks of smoking, when it comes to the healthy eating plan and the tackling of obesity, it has, unfortunately—and to our great astonishment— provided no new resources. We looked in vain through the Estimates for such resources. Essentially, the Government is full of wonderful recommendations and good ideas, but there are no resources and no national leadership, and there is a laissez-faire approach that basically relies on voluntary action by the food industry. It treats the whole issue of obesity as if it could be solved by personal responsibility. Unfortunately, that wonderful plan with all its wonderful ideas has about as much chance, in my view, of curbing obesity in New Zealand as I have of flying to the moon.

What is needed, if we are to turn around and improve the diet of New Zealanders and, in particular, our children, is leadership, resources, and for the Government to be prepared to tackle the hard issues. There is nothing here in the Estimates calling for any restrictions on the advertising of energy-dense, low-nutrient foods for children, which the World Health Organization states is one of the major underlying issues that contribute to obesity, and nothing about removing the selling of high-sugar soft drinks from schools and hospitals, or even a requirement for comprehensive nutrition education in all schools and preschools—or, indeed, for the teaching of cooking skills in our schools.

When the Minister came before the select committee she said the Government was not going to take a bossy nanny State approach, and the food industry had shown great willingness to work on this issue.

We are delighted if the food industry is prepared to collaborate with the Government, but we ask whether the food industry’s collaboration is part of a public relations initiative to try to stave off the necessity for regulation. I suspect it is the latter, and, frankly, it is naive to expect the industry to curb its highly profitable promotion of fatty, sugary foods to children. We have had the experience of the marketing undertaken by the tobacco and the baby milk industries, which has shown that voluntary approaches are ineffective. They are great for public relations, but they do not actually bring about the changes that are needed if we are to seriously reduce the number of New Zealanders who die of dietary-related factors from the present level of 8,000 to 9,000 a year. The World Health Organization points out that for every dollar that it spends on trying to improve the nutrition of the world’s population, $5 is spent by the food industry on promoting unhealthy processed food.

The truth is there is so much pressure on children to eat unhealthy food that it is becoming more and more difficult for parents to get children to eat ordinary nutritional food—to eat a healthy balanced diet. We have children who are becoming addicted to bad eating habits and to unhealthy food at a very young age, and that can, of course, condemn them literally to a lifetime of ill health. So there is little point in fiddling around the edges and trying to say all sorts of wonderful platitudes about our concern about obesity in New Zealand, if we are going to allow the children of our nation to be bombarded with unhealthy food.

HEATHER ROY (ACT) : I rise on behalf of ACT New Zealand to speak to the 2004-05 Vote Health estimates. I recently asked a question of the Minister of Health about the funding for Plunket Line for the forthcoming year 2004-05, and the Minister was not able to answer my question. She was not able to tell me, at the time anyway, that the Plunket Line funding was actually going to be very dependent on the funding for Healthline, because Plunket Line was about to be incorporated into the American-based system of Healthline. In fact, it has been contracted to an Australian branch of the 16th biggest company in America. So Plunket Line, which like Plunket itself has become a New Zealand icon since its inception in 1994, is really now on its last legs.

Plunket Line has helped hundreds of thousands of New Zealand families over the last 10 years. At the same time that Plunket services have been progressively withdrawn and made less available to New Zealand families, Plunket Line has taken up the slack and has been available in a very timely fashion to young parents and caregivers who are experiencing difficulties with their young families and young children. It was with great sadness yesterday—for the ACT party and for those of us on this side of the House—that we saw a 4-page press release from the Minister of Health telling us of Plunket Line’s demise and trying to put in very positive terms the fact that Healthline would be taking it over.

We should look back to the 1999 election. Just before the general election, the then Leader of the Opposition, Helen Clark, and the health spokesperson for the Opposition, Annette King, both lent their support to Plunket Line. Not only did they lend their support to it, they backed it to the hilt. They launched a petition, gathering 60,000 signatures, and promised—and many New Zealanders remember this—that under a Labour Government Plunket Line would not close due to a lack of funding. It was one of the credit card pledges—squashed on to that tiny little credit card—and was one of the most important planks for the Labour Government. What do we see today? Five years later, we are seeing the demise of Plunket Line and it being absorbed into Healthline.

My parliamentary questions have shown that the 0800 number for Plunket Line—the thing that has helped Plunket Line retain its unique identity—is also to go. Members should not listen to the talk about the 0800 number being retained, because I have a reply to a parliamentary question that states that as Healthline is rolled out, the 0800 number will remain until it is replaced by a single number, where callers can choose to receive well-child and parenting advice.

When people ring Plunket Line they have already chosen whom they want to speak to. They do not want to speak to somebody reading off a computer screen; they want to speak to a Plunket nurse.

Jill Pettis: I managed to bring up my son without ringing anybody except my mother.

HEATHER ROY: Perhaps the member would like to take a call.

An announcement was made yesterday, but it would appear that things are not as rosy as the Minister of Health, Annette King, tried to make out in her 4-page press release. We know that this would have been a big news item last night had not the Minister of Health refused to speak to Television New Zealand. The reason she refused to be interviewed by Television New Zealand is that the Prime Minister was caught off guard. When she was asked about Plunket Line she did not know what was happening, despite the fact that she had made such a song and dance in 1999. The item that was screened about 2 weeks ago is now the subject of an ongoing complaint. So the Minister of Health will not speak to Television New Zealand about Plunket Line, because she is very unhappy with the decision to roll it into Healthline.

Sir Truby King, who was responsible almost 100 years ago for the establishment of Plunket to help families, would turn in his grave if he knew what had happened—under a Labour Government—to the state of Plunket in this country, and now to Plunket Line. Plunket Line is about to be disestablished.

Hon DAMIEN O'CONNOR (Acting Minister of Health) : It is very frustrating to sit here and listen to the garbage coming from the ACT member, who is intent on unnecessarily stirring up and putting fear into the minds of parents up and down this country.

Hon Bill English: Plunket Line is gone.

Hon DAMIEN O'CONNOR: Plunket Line has not gone. Under the tenure of the Hon Bill English, Plunket almost went down the drain. We stepped in and secured its future. All one has to do is ask the chief executive of Plunket himself, Mr Paul Baigent, who says that the move is an exciting one for Plunket Line, because it secures its future. It will provide a 24-hour, nationwide service. The problem with the Opposition speakers in the debate, and with Mr English as well, is that they will not listen and they do not want to hear the truth.

The fact is that Healthline has been piloted in my region, along with the regions of Northland, the East Coast, Gisborne, and Canterbury, very, very successfully, providing a service for people who have neither the transport nor the ability to get directly to a general practitioner, a nurse, or an emergency department, and the assessment of Healthline has been very, very positive. In fact, 97 percent of people calling had a higher satisfaction rate than was expected, and 85 percent of calls were answered within 20 seconds. I doubt whether there is another health service in the world that could match that sort of service delivery.

The fact is that Plunket Line, which was an invaluable service for parents up and down this country, has been under constant threat. Plunket admitted that it has struggled to get funding for that ongoing service. The Government has secured Plunket Line along with Healthline, and committed to roll out that service to the entire country. We ran the four pilots on Healthline, proved its success, and then moved to secure Plunket Line services for parents throughout this country. That is a good-news story. No matter what Heather Roy does to try to twist that around, that is one of the success stories of this Government, along with the billions of dollars of funding.

Hon Bill English: Why didn’t the Minister go on television?

Hon DAMIEN O'CONNOR: I cannot speak for the Minister. I am not concerned, and I am not sure whether the Minister is concerned, about going on television. Mr Bill English is suffering from withdrawal symptoms. He finds it hard to get on television now. The Minister does not have to go on television to roll out what is one of the most crucial, vital, and appreciated services in this country in order to secure its future.

The Plunket Line is being wrapped in with the Healthline, and it will now be extended across the whole country. This is another of the remarkable success stories that we have rolled out across this country under a Labour-led Government in the area of health care.

R DOUG WOOLERTON (NZ First) : It hurts me, as a non-member of the Government, to say that New Zealand First supports the changes that have been made in Vote Agriculture and Forestry, because for too long this extremely important ministry, the Ministry of Agriculture and Forestry, has languished. It has been the victim of change after change and of far too much fragmentation. It has long been a concern of the Primary Production Committee that the ministry could not respond in time—and it has proved to be so—to incursions of pests from overseas and to problems within this country because of relying on outside contractors for, in our view, far too much of its service. We support the moves that have been made, because that issue is now being addressed. We are seeing the Ministry of Agriculture and Forestry taking a lead role amongst the other areas of ministry it is responsible for, such as biosecurity, and it is advising on trade and research for and on behalf of the Government. We are very pleased to see that happening, because it is bringing a focus back into this most important ministry.

One cannot explain more clearly the importance of this ministry without mentioning one part of it—the dairy industry—that provides, give or take, 25 percent of New Zealand’s exports. This industry went through massive change in the restructuring of its boards. I was a member of the committee that looked at the restructuring of the producer boards. I am pleased and proud to say that I was a strong advocate of the cooperative model that has been adopted by Fonterra, and I reaffirm tonight my belief in the cooperative model. I believe that Fonterra is producing the results we expected of it. I am proud to say that I was one of the few who predicted a great future for Fonterra, and the move has been seen to be the right one.

I was also delighted—and I did not expect this to happen—to see Vote Food Safety included under the Ministry of Agriculture and Forestry rather than the Ministry of Health. I know that not all of my colleagues would have been as pleased as I was to see that happen, but I think that is where it should be. The food process starts at the farm. Recently we saw on television a much publicised event where mice were found in vegetables from Australia, under the McCain brand. I suppose I did not need to mention the brand, but it was the McCain brand. That happened in agriculture—out in the paddocks and the cornfields—but, ultimately, the food ends up on people’s plates, sustaining the population. It is the checks, the food security, and the food safety that make sure that mice, rats tails, or other gremlins, do not end up on one’s plate. I would like to think that what happened to that food in Australia could not, or would not, happen in New Zealand—and I hope I am not proved wrong by the next television programme I see when I get home.

I am very pleased to see Vote Food Safety under the Ministry of Agriculture and Forestry. That is where it should be. We can go from the pasture to the plate or from the cornfield to the cornflakes—one or the other—but I think that if it were under Vote Health, the focus would be different.

• Vote agreed to.

Hon BILL ENGLISH (National—Clutha-Southland) : First, we have the extraordinary spectacle of a Minister of Education sitting in the Chamber who will not even take the chair. That tells us about his lack of confidence in the administration of his own portfolio.

Well might he lack confidence, because the Associate Minister of Education (Tertiary Education) is a failed tertiary education Minister. His policy has no credibility in the tertiary sector, and I shall tell members why. He may be the most plausible Minister, but he does not create policy; he creates a kind of fog. People can never quite get hold of it. It looks like it will stop us, but when we get in there it does not stop us. We can never describe it properly, and we come out afterwards with a cold, clammy feeling.

This is what this Minister has been doing. Here is Steve Maharey’s strategy. These are the tertiary reforms. I will quote from a Ministry of Education document: “The reforms are fundamentally about shifts in ways in thinking and relating”—that is what it is about—“achieved through dialogue around aims and objectives, and steering through a clear set of strategies and the integrated funding framework.”

Simon Power: What’s that?

Hon BILL ENGLISH: It sounds so good; it just rolls off the tongue—“shifts in ways in thinking and relating”. [Interruption] No, I will not tell members who else would say that. So that is the“Mahareyism”.

Hon Steve Maharey: Does the member want an extension?

Hon BILL ENGLISH: Does the Minister want more of it? The interesting thing about this is the Ministry of Education itself has no faith in the strategy. I have looked through its document that talks about the Tertiary Education Commission’s latest expulsion, or product, or whatever one calls it—the differentiation document—and the Ministry of Education has almost nothing to say about it. It regards the document as incoherent, as repetitive, and as having no sense of priority. In fact, there is one interesting bit in here where it states that what the document states is at odds with all the other decisions that have been made. The Department of Labour and Treasury essentially say: “Don’t do it. Don’t put out the document about the tertiary landscape and differentiation, because it will put things backwards, not forwards.”

After 4½ years of “Mahareyisms” about “shifts in ways in thinking and doing”, here is the verdict of the people who supported him. From 1999 he was a very popular Minister. He had widespread support in the tertiary sector. Well, here is what the tertiary sector thinks about the strategy. This is the vice-chancellors’ comments: “What is the point of laboriously putting in place charters and profiles and a raft of other accountability measures when the system is haemorrhaging dollars right before your very eyes?”. That, of course, is a reference to the runaway expenditure on community education funding, but also the vast increase in low-level courses such as life skills that this Minister has funded. He has created this whole mechanism, this whole big room of ropes and pulleys, to see whether he can get the mouse to eat the cheese. That is what it is all about—a whole big room of ropes and pulleys to see whether he can get the mouse to eat the cheese. What happened? The mouse just went off somewhere else.

I have found that no one is taking any notice. I go round the tertiary sector saying: “Why don’t you oppose this? Why don’t you get worked up about it when you know that it can’t work?”. They just say: “We’re not worried about it, because it doesn’t make any difference to us.” That would not matter except that this financial year the Government will spend $45 million on the Tertiary Education Commission, and no one is taking any notice of it, because it does not do anything. It is a “Mahareyism”. It is a “shift in ways of thinking” full stop. It does not do anything. It is not a shift in the system, and it is not a shift in strategy, or activity, or what students are doing; it is just a “shift in ways of thinking”—a $45 million shift.

This Minister has lost his credibility, and that is why he will get reshuffled by Ms Clark out of this portfolio towards the end of the year. Having talked and talked and talked, then, when they finished talking, reported and reported and reported, nothing has happened.

Hon BRIAN DONNELLY (NZ First) : The point that Bill English made about the Tertiary Education Advisory Commission total vote was interesting. One would have thought that with the charters and profiles having got through there would be a reduction in the vote requirement for the commission. In fact, it is to be increased from $25 million to $45.617 million. One has to ask some very serious questions as to why there was almost a doubling of the requirement for the Tertiary Education Advisory Commission.

However, I want to refer to a contribution made a little earlier today by Paul Adams of United Future. He gave quite a powerful contribution with regard to GST on rates. What came through was that GST on rates is an evil thing. By the time he had finished I believed that if this House continued to have GST on rates, hellfire and brimstone would be borne down upon us. However, I point out to Mr Adams, and to United Future, that this is an appropriations bill. In those appropriations, which only this Parliament can make, there is GST on rates. When United Future votes for this particular Budget it will be voting for GST on rates, as it did last year with last year’s appropriations bill, so I really would like some explanation. Could United Future please ensure that hellfire and brimstone will not rain down upon this House, as a result of its vote.

I come back to Vote Education. There are just a couple of things that I would like to focus on, one of which is tertiary student allowances. Everybody knows that members on both sides of the House are concerned about student debt. However, people do not seem to realise that the majority of student debt is not made up of loans for fees, but loans for living allowances. Loans for living allowances are not universal, as New Zealand First would like and that we negotiated with National in 1996 to have. It did not come to fruition because the coalition broke down.

Darren Hughes: Never trust any of them again!

Hon BRIAN DONNELLY: That was Jenny Shipley, and she was the great betrayer. Nevertheless, there is a problem, and to an extent this Budget recognises it because it shifts up slightly—only very slightly—the actual thresholds at which the rebate first comes in, from $28,000 to $33,700, and it shifts up the threshold where it completely goes away, from $50,752 to $62,000. So the Government, and this Budget, recognise there is a problem but it has made only a very, very minor change. We believe that the Government needs to go a whole lot further if it is to overcome some of the inherent injustices that exist within the system as it stands, when the student allowance is assessed on parental income. That is what it is based upon—parental income.

I know of a student who told me her father had left when she was 3 years of age and had never contributed a cent to her upbringing. Yet when it came to assessment for a student allowance he was living overseas, his income was assessed there, and she did not get any student allowance. There is the rub! It is unfair.

However, this Government has also made three other changes to student allowances. The first one is that people who were married and under the age of 25 were not assessed on their parents’ incomes, but were assessed on their own and their spouse’s incomes. The Government has changed that. So to any parent who has marched his or her daughter up the aisle and thought that now his or her daughter is financially independent of himself or herself, at the age of 19 or 20, I say sorry but this Government believes that those parents should be financially liable until their daughter turns 25. This is the same Government that believes that 12 and 13-year-olds can be given the morning-after pill without their parents having any knowledge of it, or being provided with help through State-funded agencies, yet at the same time it is saying that even if the person is married the parents are financially liable.

The other issue is about people who have gone to work. They could have left school, taken a low-paid job, reached the age of 23 or 24 and then decided it was time to get an education so they could get a better job. In the past they were not considered to be financially dependent upon their parents. Under this Budget they will now become classed in that way. We believe this is totally unfair. The Government says that the reason it has had to do this is very simple. The current policies are in breach of the Human Rights Act.

BERNIE OGILVY (United Future) : I want to say a few things about the export education funding in the appropriations. Forty million dollars has been set aside for the next 4 years. Yet we know, in this Committee, that there is over $2 billion coming back for this nation through export education. This is a huge business, and I do not believe anyone is unaware of that by this date. It is such a good business that it earns for our nation, by way of GST and income taxes, probably $500 million. It is a huge business, it makes huge dollars, it is increasing and growing each year, and I say that this is very good for our nation.

I think the $40 million that has been set aside in this appropriation is great, but it does not completely say what we should deal with with a business of this size. One of the things I was appalled by in the select committee, when I asked some questions about who runs this business in the New Zealand Qualifications Authority, was that 106 staff run the entire thing. I asked very specifically who ran it, and was told that everybody ran it. I want to ask the Government: if one were running a $2 billion business, surely one would want somebody like a Ralph Norris, at least, at the head of the show, because he knows how to run that level of business. It is a great shame, I believe, when 106 people running a huge business are, in their own words, non-business types.

I believe this is a business that could grow to $20 billion and move forward. I believe the Government ought to be really, really stressing how to invest in the best people to make this business work. I am very, very pleased, by the way, that it is making huge profits. I am troubled that many people around this country are perplexed that they have to pay an export levy each year—which adds up, I am told, to about $3.5 million or maybe a bit more—which is collected by fees from all those who have language schools in New Zealand and run those programmes. A lot of angst was suffered to get that $3.5 million. Considering the half a billion-dollar surplus, at least, that comes back to the Government by way of profits through tax, I ask why the Government wants $3.5 million from providers around the country when, in point of fact, the business is making such an enormous profit. This policy has put a whole lot of people’s backs up—everybody from universities, polytechnics, and private training providers—the whole lot were opposed to the export levy from day one.

So the only advice I have to the Government at this point is that it is great to see the expenditure, but why cause so much anguish in and among the industry of education? I am very, very sad that basically—as someone told me over the weekend—the Labour Government is really becoming a closet capitalist party, and making money and profits; yet denying this.

SIMON POWER (National—Rangitikei) : It is always tricky following a United Future member because one is always of the view that he or she could sit down at any stage, regardless of whether the bell has gone, and without too much notice one finds oneself taking the call at that point.

I want to follow on from my colleague the Hon Bill English who talked about the mist of language that Steve Maharey uses to describe what is going on in the tertiary sector. I say to my colleague the Hon Bill English that there is one thing in tertiary education that is emerging from the mist, and that is a huge bureaucracy. It is worth raising this issue for the Minister, and I hope he does take a call to respond to some of the issues that have been raised by the Hon Bill English and myself, because during the second reading of the Tertiary Education Reform Bill on 30 May 2002, the Minister had this to say: “This is a significant change, but I do not want it to be a bureaucratic change. I want it to be a smart change—”

Hon Bill English: He did not say that!

SIMON POWER: He did say that. “I want it to be a smart change—not heavy intervention, but one that will ensure that in the end most providers are able to do this for themselves”—and this is the clincher—“rather than through some gigantic bureaucracy.”

I tell the Minister that it is worth raising this. On its establishment in 2003, the Tertiary Education Commission inherited 235 staff. Rather than slimming it down, to be a light-handed guiding strategic device, by January 2004 the commission was employing 324 staff. At that point, in 2003, it had already spent $7.8 million on contractors and the outsourcing of work. And that raises the question: what were the 324 people doing? What were they actually doing, that $7.8 million had to be spent on consultants and contractors? A parliamentary question showed us that $1 million alone went to BurleighEvatt to create the charters and profiles system. Well, call me provincial, but is that not what the Tertiary Education Commission is for? Is it not the commission’s job to create the charters and profiles system? What on earth was going on, when 12 of these employees are being paid more than $100,000 a year?

So what did the Tertiary Education Commission do? It decided it would restructure the second and third tier management, to reflect the streamlined approach that the Minister wanted. Some of those job advertisements, I have to tell the Committee, make some of the best reading one will ever see: Manager of Instrument Steering; Management of Sector Engagement—the most bizarre things that members will ever have heard. What happened at the end of the big restructuring of the Tertiary Education Commission? The Minister knows the answer. After restructuring the second and third tier management, four jobs changed.

Hon Bill English: Surely it was 400?

SIMON POWER: No, I tell Mr English that it was four jobs. So there are still 320 people working at the Tertiary Education Commission, with $8 million being spent on contractors and consultants. How did they go? What happened? Well, the release of the inaugural Performance-based Research Fund report resulted in a court case, so that went well. The Tertiary Education Commission failed to prevent a $105 million blowout in the spending of low-value, non-assessed, non - New Zealand Qualifications Authority approved community education courses. It delayed the funding category review for another year and, of course, the late landscape document was widely criticised by the Ministry of Education, Treasury, Te PuniKōkiri, and the Department of Labour.

So what is going on in the mist? Well, if one believes that, which is all true—

Hon Bill English: A shift in thinking!

SIMON POWER: Bill English says it is a shift in thinking. It is actually a whole lot of people running around, trying to find consultants to do their jobs. That basically seems to me to be what is happening.

Referring to the New Zealand Vice-Chancellor’s letter that the Hon Bill English referred to earlier, it is worth noting this comment that was made on the community education situation: “There are a number of aspects of this situation which quite frankly we find unbelievable, given the plethora of steering instruments, reporting requirements, and accountabilities to which all tertiary institutions are subject.” My colleague Maurice Williamson, who held this portfolio before I did, said to me early on: “This is a difficult piece of legislation to oppose if you believe it’s going to be a light-handed steering instrument.”

Hon Maurice Williamson: I did say that.

SIMON POWER: That is exactly what he said. It is not, and the Minister has some serious questions to answer.

DONNA AWATERE HUATA (Independent) : I would like to raise the issue of the $198 million that the Government intends to cut from community education 5.1 funding over the next 4 years. I am not so much criticising the cut in the community education 5.1 funding as such, because we know that it has blown out over the past few years to unacceptable levels, but I do take issue with the Government over the way that it is intending to impose those cuts.

We know that the Christchurch Polytechnic received $15 million for its Cool IT programme, and the question that I raise is what level of accountability was raised with Christchurch Polytechnic. What I want to know from the Associate Minister is how did it ever get to that pass—that $15 million could be paid out for a programme where there was no accountability, or that a polytechnic could act completely against the objective and the intention of that programme. I want to know how many people who went on the Cool IT programme finished the course, how many of those who received the disk actually put it in their computer, and what the outcome of that course was. We do not know. As a result of the actions of a few irresponsible members of the polytech sector, everyone is to be penalised. The Eastern Institute of Technology received, I think it was, $18 million for its te reo Māori course through the radio; I am asking the Minister why it ever got that money and why an investigation was not carried out a lot sooner. I want to know why everyone in that sector is to be penalised because of the foolish and irresponsible actions of a few.

I have to raise with the Minister this issue: if these providers had been Māori providers, we can only posit or speculate about what the outcome might have been.

Hon Bill English: They would have been slammed.

DONNA AWATERE HUATA: They would have been slammed from one end of the country to the other. If it had been a Wānanga, this would never have happened. If it had been, let us face it, even the Pipi Foundation, which, at least, with all its faults, did deliver what it was contracted to deliver, this would never have happened. But for Christchurch Polytechnic to get away with $15 million and the Eastern Institute of Technology with $18 million, and to have nothing done, brings to mind there is one rule for Māori providers and another for Pākehā providers.

Another example was the Modern Age Institute of Learning. Millions of dollars went missing from the student account. That money should have been there for those students. What happened to it? It just disappeared. The New Zealand Qualifications Authority put all the documents into the hands of the Serious Fraud Office, but the office decided to do nothing—absolutely nothing. Oh, how wonderful it is to be Pākehā in this country! Similarly, there was the case of the Paramount Institute. What happened to the money that was supposed to be there for students? Nothing! It went into a black hole. When complaints were laid with the Serious Fraud Office, the office decided to do nothing—absolutely nothing. Oh, how wonderful it is to be white in this country! We need only think back a few years to Aotearoa Television. Complaints were laid about that organisation. What did the Serious Fraud Office find, when it finally got to have a look at it? It found that no money had gone missing, and that the organisation had delivered on all its objectives. Oh, how wonderful it is to be Pākehā in this country, at times!

I am concerned that this particular kind of funding is of most benefit to Māori communities—especially, to marae courses. In relation to Te Whare Wānanga o Awanuiārangi courses that have been run on marae, I was told that a number of those who had been through those courses have gone on to do certificate courses, and are now doing degree courses. There even are records of masters students having gone through those community education courses. So those courses are one way in which the Māori community is able to reactivate, and they have been true to the spirit of the funding. People have learnt to learn again. For the whole sector to be slammed because of the actions of a few—let us face it—Pākehā polytechs just beggars belief. I just find it breathtakingly stupid that the Tertiary Education Commission, the New Zealand Qualifications Authority, and the Minister would respond in this way.

I turn to the $36 million that is to be spent on international education, which is another example of breathtaking stupidity. If the New Zealand Qualifications Authority had done its job and stopped the Modern Age Institute of Learning and the Paramount Institute from falling over, then New Zealand might not have the miserable reputation we now have in places like China, Korea, and other parts of the world. For a few million dollars we could have stopped that. Then there was Carich, which had several thousand overseas students. If the Tertiary Education Commission could have pulled its finger out of its sensitive places and acted more quickly so that Carich did not go to the wall, then maybe we would not have such a lousy reputation. I say to the Minister: “Give us a break!”.

Hon STEVE MAHAREY (Associate Minister of Education (Tertiary Education)) : I want just to reflect for a moment. I am not sure whether the debate has finished, because I see that Mr English is still a little edgy in his chair. We may hear some more from him, so I may have to come back to answer his questions. I want to reflect just a little on what I often call the “Maharey-Williamson changes”, and the reason I call them that is I think the one person in the National Party who has the wisdom to understand what is happening in tertiary education is Maurice Williamson.

The reason he understands it is he knows that the market model requires a body to run it. Members will remember the changes that took place in Maurice Williamson’s head when he went to Scandinavia and it was explained to him that if we wanted a strategic approach to our investment at a tertiary level, we had to have a body that would make the investment—that there had to be a more organised approach to it; it could not be run just by student demand. He understood that, but he could not get it across to the members currently on the National front bench. They slagged him off, basically, by disagreeing with his model, and he ended up at No. 29. But I am very pleased to see that he is working his way back through the ranks, slowly but surely, on the basis of his understanding, because then, at least, he will probably reintroduce to his caucus the notion that this approach requires a body like the Tertiary Education Commission. There may be an argument over how it works, how many staff it has, how much money it spends, etc., but if we are going to have a strategic model, then somebody has to do it. That is what we are building here.

I thought it was ironic, to use the word used by my junior whip colleague, that on a day when we were talking in the House at question time about the Innovation and Development Fund, which is money that goes directly into the sector—$1.8 million to go off and do specific innovations that will help connections between universities and business; money for biotechnology skills; and so on—when we were talking about a range of money that it would not have been possible to provide to the tertiary sector under the National Government, and that was received as manna from heaven by the university vice-chancellors, who could not get any of this money under a National Government, Bill English should rise and say we do not want this kind of approach. I could go through all the achievements of the Tertiary Education Commission over the last little while, but let me just take one—the Performance-based Research Fund. We asked the commission to put that policy in place. We thought that the money for research should be taken out of the equivalent full-time student funding, because it was being spread too thinly, we did not know whether any accountability was taking place, we did not know who was spending it, there were people who were not research active but were still getting money, and, astoundingly, there were many people—in fact, a worrying number of people—at the post-graduate level, teaching post-graduate courses, who did not do any research, yet we were paying them for it.

So we have said: “Don’t do that.”, and I think, on reflection, that the Performance-based Research Fund policy development is probably one of the best pieces of policy ever seen in this country, frankly. It was done by the sector. It worked in a very, very cooperative way. It now has a stand-up model, which most people around the world are looking at and saying is better than the British one, better than the Florida one, better than the Canadian one. I think we have a model that will have to be tweaked and developed, but if Mr English wants one piece of evidence that the Tertiary Education Commission can do, and has done, something to transform—the word used by a number of my old colleagues, and probably some of his too—the tertiary sector, it is that policy. It has transformed the sector, because if we talk to any of—

Hon Bill English: It has not transformed it.

Hon STEVE MAHAREY: Mr English, as usual, misses the point, because he is a rather stupid man when it comes to tertiary education. So let me just say that academics like Paul Callaghan, the members of the Royal Society in this country and the Royal Society in the UK, would say that if there is one thing that has transformed the universities of this country, and anybody who is involved in academic research, it is the Performance-based Research Fund. I know that Mr English is now going to say he would repeal the research fund. I know that because he is sitting over there saying it is no good. So the National Party is committed to repealing the fund. We are not. It has transformed the way that academics do research in this country. It is the way that we will change their behaviour. The only person over there, once again, who is silent is Mr Williamson, because he understands exactly that it has transformed that culture. It has been a fantastic success. Unfortunately for Mr English, who does not do any kinds of brave changes—I cannot remember a single thing he achieved when he was a Minister, and when he was leader he did not achieve anything, which is why he is not leader any more—we have changed that culture through these kinds of developments. I know that when we are on the election platform next year, and I am saying we will have a Performance-based Research Fund, and the National Party is saying it would not, I know who the academics are going to vote for. They are going to vote for us.

Mr English’s contribution really, on the whole, is ironic and one that does not acknowledge that major changes, like the Performance-based Research Fund, have been very significant. The single biggest change I can think of in academic life in my lifetime is that Performance-based Research Fund. That is how big it is. It has made that kind of change. Unfortunately for Mr English, I was the academic and not him, so I probably know.

The second point is about Bernie Ogilvy. I thought the United Future contribution, as always, was a very good one. He gave a contribution tonight that, unlike the ones by Mr English, actually did make a contribution in terms of something that has got to happen with export education. It is a very large, $2 billion business. It is something that now is a significant player in our economy, and we have to make sure that we organise that industry and do not have it run by every disparate player in the country, individually. I think that is a very important point he made. I hope that is what is happening under Trevor Mallard’s leadership, as we are moving towards that kind of very significant industry being more integrated and being led properly in the way that it should be.

Brian Donnelly, as usual, made a very good speech as well, particularly about student allowances and debt. Yes, we have made changes this year. Yes, they have made a difference. I personally think that we, as people who represent taxpayers, will have to do more in this area. I think we have a very significant issue around student debt. We have tried as a Government to turn it back with interest-free loans, by trying to keep fees low, by ensuring that allowances are extended, and by doing a range of smaller things, particularly in terms of work for students. But, frankly, I think the people who sit in here—with the exception of people like Simon Power, who is a little younger than people like me who went through tertiary education without this debt burden—are still struggling with making sure that we do something significant about reducing that debt. But this Government has tried to put its money where its mouth is and move it forward.

I think Simon Power and I are proud to be provincial—that is what I would say. He said “call me provincial”, as if that was bad; it is not, and we would both fit into that category. I think he raised some interesting points about the Tertiary Education Commission. I think we have to ensure that we end up with a Tertiary Education Commission that does not see itself as the centre of the system. It is supposed to be there as a funding body and to assist the institutions themselves to develop good relationships with people who are trying to use their university, polytechnic, or whatever—the student, the business community, the iwi. That is the relationship that should be strong. But let me remind Simon Power that if we want a more strategic, focused approach, which is making decisions about where money is invested, there needs to be some kind of central body to do it, and I am glad he agrees with that.

Donna Awatere Huata, ironically I think, raised the issue of accountability. I understand that she takes it very seriously. Let me say that the 5.1 funding, which is a policy put in place by—and Bill English was not the Minister then—the National Government, last year blew out in a way which was unacceptable. Because we do have funding mechanisms in place where we can deal with that, we have. We are trying to get ourselves a system where, yes, there is community education, and, yes, people are accountable. I say to Donna Awatere Huata that she is wrong, that we will hold people accountable for this expenditure. In the case of Christchurch Polytechnic we have an audit going on now. If that audit comes back and we find that that money has not been accounted for properly, we will act on that institution in the same way as we would with anybody else. It will have to front up with the money, account for it, and do the same thing as any other organisation would be required to do. I will not be panicked into doing things before we have proper information, before we have the proper dialogue that should go on, but we will always make sure that taxpayers’ money is accounted for properly. If Christchurch Polytechnic cannot do it, then it will, unfortunately, have to account for the money that is there, because that is the requirement of this Government—that people do front up.

Those seem to be the major points. I think Mr English wants to speak again, so I will sit down. If, when he is finished, there are points I need to account for, I will rise and do that.

Hon BILL ENGLISH (National—Clutha-Southland) : The Minister is about $100 million late. He could have easily fixed 5.1 by firing the so-called professionals who are running three or four of our polytechnics, and who simply broke the rules in a very unethical and unprofessional manner. If he fired the councils that he appoints, because they would not fire the chief executives, everyone would get the message. Instead, what he has done is cut millions from the funding of every regional polytechnic, including most of the ones that behaved themselves admirably and did not take the opportunity.

The other question I have for the Minister is this: where are his officials? Clearly, Ministers are not taking the estimates seriously. There are no officials present, so if one asks a question, such as I will be asking, there is no one to tell me the answer. Here is the question. The Government has funded a pretty extensive assessment project through Auckland University. The product, asTTle, is now out in the schools. I have been debating with the Ministry of Education and the Minister about access to the asTTle data, because it now has 100,000 students on it and the data has been calibrated to produce finely judged testing. That system is working in our schools right now. I asked for that data under the Official Information Act, and I received a scrambled reply from the ministry that said I am allowed a briefing on it. But even though the ministry has total ownership of intellectual property in that data, the letter does not say it will not release it, it just does not address the issue.

So I ask the Minister tonight whether he will give me the performance data from asTTle. I know it is there. It is called trial data, but it does not matter what it is called; the ministry owns it. It is all packaged up and accessible. It is not in raw read-only form, like the data from the ministry that the Minister gives to me when he is using smart-alec tactics. It is all there, ready to go. One can press the button and look at it, and Professor John Hattie will show it to anyone who goes to his office. So if I can see it in his office, why will the Minister not give me that data, under the Official Information Act? It is owned by the taxpayer, paid for by the taxpayer, and readily available. I am allowed a verbal briefing on it apparently and, I presume, some presentations on a screen, but I am not allowed the trial data. I want to know from the Minister, why?

I also want him to explain why he does not have officials here to answer our questions, because that is what has always happened in the 13 years, almost 14, years that I have been in this Parliament. At estimates time, Ministers sit in the chair, with the officials nearby, and answer questions. Where are they? I want to know where they are, and why this Government is so arrogant that it thinks it does not have to bring officials here to answer questions about why publicly funded data is not being given to this Parliament, even though the Ombudsman intervened to make sure I got some versions of it. Why is that the case?

Where are the officials who can answer questions about the $80 million blowout and the deep-seated conflicts of interest at Christchurch Polytechnic? They are being protected because they have done their job as badly as this Minister has. There are a whole lot of questions about education spending, and they just cannot answer with any integrity. There is an $80 million blowout. What could our schools have done if they had that amount to spend on information technology, or their operations grant? What could have been done with $80 million to appease the Minister’s crocodile tears about student debt? He will go around half-crying to student audiences for the next 15 months about how he wished he could do something. Well he blew the money! For all his steering, control, and strategy he blew huge amounts of money—millions of dollars—on the least strategic, least important, and lowest value waste of education that could be found in any tertiary system. He blew it. So where are the officials, and why are they not here to answer our questions? What is so special about the Minister and his officials that they do not have to front up? I also ask the Minister to tell me about asTTle. It is publicly funded data. I have asked for it and I am allowed a briefing. Where is the data?

Hon STEVE MAHAREY (Associate Minister of Education (Tertiary Education)) : I will answer those “quiet” questions from Mr English. He needs to watch that blood pressure—that is all I will say. He has had his answer, as far as I understand, about the asTTle data: he is allowed a briefing.

Hon Bill English: No, no. Why can’t I have the data?

Hon STEVE MAHAREY: I am telling the member that he should go ahead and take that briefing.

Hon Bill English: Why can’t I have the data?

Hon STEVE MAHAREY: I heard the question in the first instance, and I have just given the answer. I will explain for people at home. The way it works in here is that we have a turn each. Mr English has just had his turn, but he is continuing it from his chair. The answer to the question is that he has been offered a briefing on the asTTle data, and I would take it, if I were him. I cannot think of any other question he asked about that point.

Hon Bill English: I raise a point of order, Madam Chairperson. Have officials been prevented from coming into the Chamber? Are they being kept outside by order of the Chair or by some other request from an MP? Clearly, the Minister is not going to answer the question as to why he thinks they are not in here, to answer those sorts of technical questions we cannot expect the Minister to know the answer to. I want to be clear with you, Madam Chairperson, about whether officials have been prevented from coming into the Chamber.

The CHAIRPERSON (Ann Hartley): No. It is entirely up to the Minister.

• Vote agreed to.

Hon BILL ENGLISH (National—Clutha-Southland) : I hope the Minister will condescend to answer some questions I have about the Education Review Office and the role it fills in supervising the National Certificate of Educational Achievement (NCEA). Members will remember that some months ago there was publicity around Cambridge High School, and the Government moved very quickly to tell the public that it was sending the New Zealand Qualifications Authority and the Education Review Office into that school to investigate allegations that pupils were essentially being given credits under the NCEA—credits for which other New Zealand students have to work very hard.

I predicted at the time that the New Zealand Qualifications Authority and the Education Review Office would not find anything wrong, because the NCEA system is something to which those offices are ideologically committed—quite irrationally committed, because they will not contemplate any criticism. They were essentially going in, therefore, to examine their own role. They were going in as auditors when they had already been there. The New Zealand Qualifications Authority had certified the standards and the Education Review Office had been in the school, but the Minister was sending them back—the burglars were going back to see whether they had committed a crime. I think that is a shame for the students of Cambridge High School and for the credibility of the NCEA, a qualification that I had hoped would succeed.

I ask these questions because I have been given material in the last few days that compounds my concerns about exactly the issues that have been raised about Cambridge High School. I want to give the Minister the benefit of this description of activity related to Student A at an unnamed high school. He received his work book for a particular unit standard on 31 February 2004. That was the date on it. In case anyone is unclear, there are not 31 days in February; there were only 29 this year. The booklet was completed and three credits were awarded on 2 March. Let us put aside the 31 February date; let us say that the student received the book on Friday 27 February. By 2 March, which I think was Tuesday, the student had been awarded three credits, and an entire unit standard.

Simon Power: Bright boy.

Hon BILL ENGLISH: Bright boy. The student thinks that he may have had a 1-hour lesson on 27 February, the day he received the book, and maybe a 1-hour lesson on 1 March. I have to check whether those are days of the week on which the school could have been open, because it looks to me that they could have been on a weekend. So this looks to be a student in one of our schools—and I have the booklet—who received three credits at NCEA level one in 3 days, and who maybe had had some lessons. I will set out to verify that.

That booklet is one of a collection of booklets that include other rather startling items of information, like unit standards that were sat in 2003—at least, unit standards whose work was carried out by the pupil in 2003—and that were all signed off on the same day as the 2004 ones, some 12 months after the student had allegedly sat the standards. Now, those standards are not insignificant. A fifth-former or sixth-former—a year 11 or 12 student—can tell us that for some three-credit standards, weeks of work are involved in order to get them. But it happens that there are some three-credit standards one can get in 3 days with about an hour’s lesson. There is other material in those booklets whereby credits have been awarded and no teacher has signed the book. There are some booklets whereby students appear to have signed off each other’s work, because if we go down the roll, we find that the signature is not actually the name of a teacher but is the name of another student on the roll.

Simon Power: Peer review.

Hon BILL ENGLISH: Peer review; student-driven learning. I want the Minister to tell us: firstly, why we should have any faith in the Education Review Office’s examination of Cambridge High School; and secondly, is there anyone credible to whom I can give this information so that we can clean up the nasty tail end of the NCEA.

Hon STEVE MAHAREY (Associate Minister of Education (Tertiary Education)) : On the second issue, I simply invite the member to make that information available to the Minister of Education, because he would be very interested in the kinds of facts that the member is exploring. I can tell from Mr English’s speech that he wants to verify some of the things that are in the booklets himself. Obviously, he should do that and then pass on the information to the Minister’s office.

In relation to the Education Review Office review of Cambridge High School, and whether the Education Review Office can be relied upon, I draw the member’s attention to the notes that have come from the Education and Science Committee, where the issue was discussed in relation to Education Review Office reviews and where questions were definitely raised. Issues were also raised about the Education Review Office being connected to other agencies so that it can have better access to data. The committee arrived at the conclusion that the new agreements that are being made around the Education Review Office, the New Zealand Qualifications Authority, and so on, give more faith that the Education Review Office reviews can be relied on in relation to Cambridge High School. So, yes, the issue is a live one, and it has been discussed and dealt with in the notes from the Education and Science Committee.

Once again, on the second issue, the member should verify the data, as he wants to do, and then I think the place that the information should go to is the Minister’s office.

• Vote agreed to.

PETER BROWN (Deputy Leader—NZ First) : I would like to put two questions to the Minister. First of all, is he happy with the state of affairs with regard to energy in this country right now, and, secondly, does he believe that that state of affairs has become worse, better, or remained the same since the Labour Government came to power? If he thinks it has become worse, perhaps he could kindly tell us why, because there are people hurting out there, and hurting badly. They are facing price rise after price rise; they do not know when it will come or how it will come, and, furthermore, they do not believe they can take it any more.

Energy—electricity—is essential, and at one time this country had an abundance of it, but now it has slipped away, and we are barely keeping pace with what we need. The whole portfolio needs a ray of fresh thinking. Specifically, there are three aims. We must guarantee security of supply—that is essential. We have had two dry years, and business and individuals have suffered. We must make electricity available at a reasonable price to all New Zealanders, and available at the flick of a switch, and we must have increasing capacity. We must have more investment in the industry so that we can increase capacity. They are the three principle aims of the electricity industry. Our fourth aim would be to educate and encourage people, and, dare I say it, give some incentive for people to conserve energy. I have been told that in Australia, for example, the Government is offering financial incentives for people to install solar heating in their homes and wherever. It would make a huge difference here if many homes adopted solar heating for their water heating.

The Government recently announced that in October it will make it compulsory for retailers to offer the 30c plus GST maximum line charge for people who will use less than 8,000 kilowatts a year. That is a move in the right direction. Up until now, I understand that that has been voluntary and has been adopted by only one or two retailers but not everybody. The Minister is going to make it compulsory. But the public, by and large, do not understand it. Indeed, MPs in this Chamber do not understand it. Stephen Franks is on record as saying that that will give the high-flying businessman the opportunity for cheap power in his holiday home, and in an article by Ken Shirley of ACT, Mr Shirley endorsed that view. My understanding is that that is not true, and perhaps the Minister will advise this Parliament as to what the truth is. My understanding is that a person who goes on to that cheap line price will pay extra on a per unit basis and will gain something only if he or she uses less than 8,000 kilowatts per year. I understand also that it is aimed at only the individual’s principal home.

Cheap gas is running low, and New Zealanders are concerned. Hydroelectricity over the last 2 years has proved unreliable, basically because when our lakes are full they hold a capacity for only a few weeks, or a couple of months at most, I understand. So if we have a dry season, then we cannot depend totally on hydro power. Wind power is only a bit player, yet I think the Minister is pushing that like nobody’s business. But many, many people are concerned about the noise of wind generators, and they do not want to see windmills scattered all over hillsides. I understand that even if we adopt wind power in a fairly significant form, it could be only a bit player in the power game. But we have got an abundance of coal. There are huge coal resources in this country—15 billion tonnes. I am told that something close to 9 billion tonnes is reasonably accessible. Yet in reading the select committee’s report on coal, one has to wonder where the Government is going in terms of that fuel. We have an abundance of it.

Hon PETE HODGSON (Minister of Energy) : I thank the member for his comments and acknowledge his ongoing interest in the energy portfolio and his knowledge of it. He wanted to know whether I am happy with the situation, and he wanted to know whether it has got better or worse. Well no, I am not happy with the situation.

I think the energy portfolio is quite a challenging one, and I think New Zealand is going through an energy transition. When one tries to work out why that is, one could say: “Oh, we are trying to fix up the Bradford reforms and all of that.”, but that will not do. The underlying cause of the energy transition we are going through is this: the Māui gasfield is running out. That gasfield had two characteristics. One was that it was very big. When it was discovered, it was big by world standards. Even now, it is big by New Zealand standards, but it is running out. The second characteristic of the Māui gasfield was that the gas was cheap. The gas was cheap because when the contract was signed 30 years ago the price inflator on Māui gas was allowed to be half the price of inflation. So right through the 1970s and right through the 1980s the price of Māui gas was rising at half the price of what then was a very high inflation rate, so that by now the well-head price for gas is NZ$1.80 or thereabouts a gigajoule. Let me just say that that is cheap.

New fields are being discovered. The member is wrong to suggest that gas is running low—gas is not running low—but he is right to suggest that cheap gas is running low. There are new fields. Pohokura is one, and McKee and Mangahewa are a couple of others that are running now. Dear old Kapuni does not seem to want to stop, Kupe will be around in another couple of years, and so on. Those gas fields, especially Pohokura and Kupe, will all sell their gas at a much higher price—maybe at twice the price; a 100 percent increase. So when the member says that we have price rises in electricity, that is the underlying reason. There are others, but that is the underlying reason. The future of electricity prices is not that they will return to where they were in the 1980s—they just will not. The member said we used to have an abundance of supply. We still do have an abundance of supply, but we do not have an abundance of cheap supply, and I invite the member to reflect on that. The cheap gasfield is gone, and the cheap hydro sites have gone—we can use them only once.

The member made a couple of other comments. He said that there is a bunch of things—he said there were four things, and then he added a fifth or whatever it was—that he thought were important for energy. I would simply say that I roughly agree with that list. I roughly agree, and I like the idea of security of supply at the top of the list. The member then went on to talk about incentivising conservation. I think probably he would prefer to use the language of incentivising energy efficiency, because conservation tends to mean going without and efficiency tends to mean using the same amount of energy but smarter. I would say to members that this Government has more than trebled the effort into energy efficiency over the last 4 years. The budget has more than trebled. That is a very, very significant increase and, in the same breath, much of it is still in front of us. There is still a lot of low fruit to pick in this country.

The member instanced solar water heaters. He told us that Australia has a subsidy system for solar water heaters. So do we—New Zealand has solar water-heating system subsidies. In fact, in the last Budget, that quantum doubled. The amount of money put in was doubled. The idea is not to subsidise every household, however. The idea is to grow quietly the level of solar water-heating installation by 30 to 40 percent a year until at some point—probably in the next couple of years—the number of units is so high that the price comes down and then the market transforms. At that point, solar water-heating will become more available and affordable for many other people. So that is the gain there.

Then the member went on to compliment the Government—and I thank him—on the 30c plus GST low fixed-charge option. He went on to say that the ACT party and the National Party had claimed this would mean rich people with baches would get cheap electricity, and he asked what was good and socialist about that. Well, of course, they are wrong, and the member is right. The ACT party and the National Party got it wrong, and that is because they keep changing their energy spokespeople and they do not have people who understand the energy portfolio—unlike New Zealand First.

I would say to the member that when he says that wind has only a small contribution to make, at the moment he is right. But the potential for wind is around 3,000 megawatts. Our total generation at the moment is around 8,000 megawatts, so let us not write it off. He talked about noise—I think he is wrong—and he talked about people not liking them. The member did not read the public opinion poll that was recently done by the Energy Efficiency and Conservation Authority, which said wind was easily the most favoured generator in New Zealand. It went down to a lower level and asked: “But what if it is close to you? What if you can see it? What if you can hear it? What if you can see and hear it? How do you feel?”, and still the level of support remained very high. So the member ought not to tell New Zealanders what they think about wind, because we have just polled them, and I think he should update his information.

The member says we have a lot of coal and should be using it. Nothing stops us except price. Coal is more expensive than wind, geothermal, hydro, or a combined-cycle gas turbine generally. Sometimes it is cheaper, and if there is an existing plant that has already been paid for, we should put coal in it by all means. That is why Huntly runs on coal. But generally speaking, the reason we do not have a coal plant built in New Zealand is not that the Government has a law against it—we do not. It is just that it tends not to match the price that can be achieved by other forms of generation.

• Vote agreed to.

MIKE WARD (Green) : During the select committee examination of the transport estimates, it was encouraging to hear the Minister acknowledge the importance of what may be seen by some to be fringe transport modes. The Minister made the point that when one takes into account the other threats to human health, then cycling, walking, catching the bus, and all those other means of transport take on a different look. I will quote his words, because I found them particularly encouraging: “The road toll also includes the indirect toll that my predecessor gave some publicity to when he was the Minister and now, probably, even though it is only a statistic, larger than the road toll from death by accidents, the effect on human health of transport is material. If we start thinking about human health and safety, that means that Transfund is going to have to pay attention to emission levels.”

He referred to cycling as being something for which the Greens get laughed at, but when one takes into account the type 2 diabetes epidemic, it has a different focus. We get a glimmering of the holistic thinking that says, in this area, that the Government’s claim to a whole-of-Government approach is more than lip service. However, the Minister acknowledged that there are gaps in the ministry’s expertise. When I examine the transport estimates and Transfund’s spending programme, I see little evidence that the gaps are likely to be filled in the near future.

So where are the gaps? The Land Transport Management Act clearly states that we have to look at demand management. The Minister acknowledges the need to change the way New Zealanders get themselves and their products around. We applaud the construction of dedicated cycle and pedestrian ways in towns and cities around the country, and the improvement in public transport services in some parts of the country and the restoration of rail in others. While some are doing well, others are much less successful.

I have to ask why, when Wellington has 25 percent, or $25 million, of its Transfund funding directed at public transport, the top of the South Island—my region—with approximately a quarter of the population, devotes 0.7 percent, or $200,000, of its allocation to public transport. Why do so few communities have well-developed cycle strategies and cycleway construction programmes? The programmes give the amount of $100,000 over and over, but have nothing down about where that money will be spent. Why is 80.5 percent of the national land transport programme funding still devoted to roads and a mere 0.3 percent to research, and why is most of that devoted to roads and motor vehicles, and so little to finding ways to persuade more of us to choose travel options that are less likely to overheat the planet or rush to use my grandchildren’s share of this planet’s fossil fuels? There is a gap in the country’s expertise, and it is in the area of behaviour change.

To its credit, the Government has ratified the Kyoto Protocol. It has acknowledged the need to play our part in reducing our greenhouse gas emissions. It has recognised that transport solutions need to be sustainable and to not contribute to the diseases of inactivity, obesity, and air pollution. To date it has done little to contribute to reducing our dependence on the motorcar, cool the planet, persuade us to live closer to where we need to be, or choose more appropriate modes of transport for our trips around.

More disappointing, however, is the Government’s reluctance to insist on the research or the expertise necessary to understand the mechanisms of change to provide local authorities with the kind of advice that cities like mine so clearly need if they are to pursue a sustainable transport future. I am aware that when Transfund decides what money to hand out, it decides on the basis of regional land transport strategies, and those regional land transport strategies are clearly made by people who do not have the expertise, or even any notion half the time, of the kind of transport options that they ought to be pursuing. It is not reasonable to expect Nelson—

• Vote agreed to.

• Progress reported.