The CHAIRPERSON (Hon Clem Simich): The 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, the question will be put that the vote stand part. 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 hours of 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, and they will be called in order of seniority of Ministers, commencing with the Speaker’s votes. Copies of the order of votes to be considered are available at the Table.

Hon BILL ENGLISH (Deputy Leader—National) : I wonder whether the Minister in the chair, the Hon Dr Michael Cullen, is able to answer a couple of questions regarding the Government’s KiwiSaver proposals. First, there now seems to be a good deal of confusion and, even more, concern about where KiwiSaver might be headed, so can the Minister tell us whether the Government is actually proposing some legislation? It is difficult to get to grips fully with the detail, or implied detail, of the Hon Trevor Mallard’s proposals until, or unless, there is legislation, so we would like to know about that.

Secondly, given this issue is very contentious, more among employees in my view than among employers—a very contentious issue—can the Government give some reassurance that if it decides to put this measure on a fast track, as some kind of pretence at a costless pre-election bribe, it will allow an opportunity for those people who, in every workplace in New Zealand, will be affected by it to have some say on it? Just in case anyone is concerned about why people should be allowed some say on what sounds like a technical measure, can the Minister explain why the Government is moving away from a long-held principle of employment law—the principle of equal remuneration—and does he concede that the proposal put up by Trevor Mallard will have the effect that people who were on the same pay, working alongside each other in a workplace doing the same job, will end up on different pay? The one who is able to go into KiwiSaver will be paid more, and the other who cannot or does not want to go into KiwiSaver will be paid less. In the terms that the Minister originally proposed, that strikes us as divisive and unfair in any workplace, because in every workplace there are people who cannot afford to go into KiwiSaver, or who for their own good reasons, like wanting to pay off their own debt, do not go into KiwiSaver. But the Government seems keen to punish them.

I might point out to the Minister the comments of Matt McCarten, one of his erstwhile colleagues, or erstwhile allies—not a colleague but an ally, and now a strong opponent, from what I can see—who has pointed out that the people who will be hardest hit by this are the low paid. A small proportion of the workforce can go into KiwiSaver and become a privileged few in the workplace at the expense of other workers. That is really the key issue. If some people are to get paid more because the Government has legislated for it, others are to get paid less.

Can the Minister answer some of the questions about borrowing, which he raised yesterday with some vigour and enthusiasm? Can he contradict, as he should, what he said in the House today? Will he confirm that in the 2008 Budget the Government, as the Minister has acknowledged, clocks up an average cash deficit of $3.5 billion over the next 4 years, and can he confirm that he is financing that deficit in two ways—first, by selling State assets: $4.6 billion of financial securities, which are just as much an asset—

Hon Dr Michael Cullen: Ha, ha!

Hon BILL ENGLISH: Oh, so they are not real assets? They are $4.5 billion worth, with the taxpayer’s name on them, and he is going to sell them to cover his cash deficit.

But that is only half. He is going to borrow $4.5 billion to cover the other half of his cash deficit. So how will the Minister in the chair manage to do that? It will be, perhaps, in the fashion of Mr Peters’ approach—you know, the guy who is doing it is the one who is most vigorously accusing everyone else of doing it. In this case Dr Cullen is actually doing the borrowing, and apparently that is less significant, less politically relevant, than the hypothesis that a National Government might do some borrowing. I would like the Minister just to clear up his position. After his having said for 7 years that any tax cut means borrowing, how does he now explain the fact that in the 2008 Budget he is cutting taxes—contradicting everything he has ever said—and that he is borrowing?

Hon Dr MICHAEL CULLEN (Minister of Finance) : The member is being just too clever by half. Earlier today he tried to claim that there was something significant about the fact that there had been borrowing in the past, when, in fact, we said we were borrowing for measures for the Government. Let me just try to take the member through it.

Firstly, thanks to past borrowing practices, Government repayments of debt are very lumpy. Debt comes up for repayment from year to year in highly variable amounts, so the Government has to borrow in order to repay the previous debt when it does not have a sufficient cash surplus on top of everything else to repay that debt in that year. Secondly, in response to the financial markets and as proper fiscal and economic management, the Government has had a programme of a constant level of bond issuance over recent years, at about $3.5 billion a year, so that the markets have certainty and those in investment companies and the like have the assurance that high-quality money is out there in terms of Government bonds, etc.

Thirdly, of course, over the last 4 or 5 years we have forecast that we will be moving from substantial cash surpluses to substantial cash deficits. It may come as a surprise to the member, having forgotten what it is like to be in Government, but one actually bases one’s Budget on one’s forecast, not on what one sees in the rear-vision mirror. One does not get to the end of the year and say: “Oh, my goodness me! I should have borrowed $5 billion in the last year. Let us go and borrow it now.” One actually tries to forecast what one’s cash flows will be required to be, and one borrows and obtains revenue on the basis of those cash flows.

Of course, the forecasts are sometimes wrong, and adjustments have to be made to that borrowing. And yes, indeed, part of the way in which we are moving into cash deficits, and the reason why we are moving into cash deficits over the next 4 years in order to fund the Government’s programme, is that we are running down the cash on hand, which has built up because we have borrowed—

Hon Bill English: Yeah—State assets.

Hon Dr MICHAEL CULLEN: Mr English is being too clever again, and he should not try so hard to do that, because it does not become him. Although Mr Key says National would not sell State assets, the member is now telling me that a National Government would not run down the cash on hand. Well, if National is not planning to run down the cash on hand in order to fund additional tax cuts over and above the current programme, then how on earth is it planning to fund them except by selling some other State assets, by massively slashing State expenditure, or by having massive further borrowing? Mr English should not try to be too clever when he comes into this Chamber, because he is not good enough to cope with that kind of clever argument once somebody responds to him.

The fact is that nobody in the public thinks that running down the cash on hand is the same as selling Television New Zealand, selling State assets in terms of the electricity generators, selling KiwiRail, or selling Kiwibank. But Mr English says it is the same thing. National says it will not sell State assets, and even if it had built up cash surpluses it would never ever run down those cash surpluses, nor would it not do so in order to fund $50 a week more in tax reductions than the Government has already promised. The National Party has promised another $50 a week over and above what the Government has already legislated for; that is the test the National members have set themselves, and National is saying it can do that without extra borrowing, when we have cash deficits of $3.5 billion a year because we are running down the cash on hand to practically zero over that 4-year period.

Hon Bill English: Selling State assets.

Hon Dr MICHAEL CULLEN: And the member says that is selling State assets. So when the member has money in the bank and he goes and buys a fridge, he has sold his money. That is Mr English’s notion of budgeting. When he has money in his savings account and he cashes it up to purchase an overseas holiday, he has sold his money in the bank. That is Mr English’s view of what cash on hand actually means.

This is the man who wants to be the Minister of Finance in this country! We will have a kind of deep, rural ignoramus plus a fast-money, short-term financial market manipulator running the Government’s finances if National gets into power. It is no wonder, in response to the Working for Families statements, that Mr Key is being caned in every editorial up and down the country, all of which ask who can believe this man and who can believe what National is saying. Mr English is smiling and laughing—members should look at him. He was on TV3 last night, looking shamefaced, and repeating the lines from Crosby/Textor: “We won’t borrow for tax cuts. I had better not say any more.” He said on TV3 last night: “I had better not say any more.”, because anything more he said would have got him further into trouble on this matter.

TIM GROSER (National) : If I am not mistaken this is the last scheduled confidence motion of this Parliament, and we are discussing Vote Finance, which is the very heart of any Government’s programme.

It occurs to me that members of the public listening to this debate may have also listened to the first half of question time today, when some very serious questions were raised by our leader, John Key, about the integrity of a Minister—we were not seeking to answer those questions, but to raise them with the Prime Minister. We received purely procedural answers designed to deflect those questions, and I wonder whether the Government realises that a rather more serious confidence motion will be before it shortly. No doubt it will cobble together sufficient votes to pass this bill, but ultimately I think that the words of the Prime Minister herself apply here. She said that the fate of this Government will be decided in the court of public opinion, and it is perfectly clear to us that the mood of this country is that it is ready for change.

When we look at the overall economic record of this Government within the context of this bill, we see a complete shift in the underlying circumstances of our country. In 2000 the Government was like a kid taking over a candy shop. We had had stellar labour productivity growth, averaging 3.2 percent, in each of the previous 3 years. We had a GDP growth rate of 4.1 percent, at an average of 3.5 percent per year, from 1992 through to 2000. Inflation was at around 2 percent. Unemployment had been falling rapidly from 1991 and was clearly scheduled to fall further. We had the best terms of trade that any Government had enjoyed for 25 years. We had the base laid for massive growing surpluses, which could have been used when the times were good to re-incentivise the New Zealand middle class. Broadly speaking, that was the inheritance that Labour took into office in its first years.

Hon David Carter: Where did it go wrong?

TIM GROSER: Where those members went wrong, to put it bluntly, was on every single one of those fronts. Let us just go through the record. We now have inflation above 4 percent and probably heading for 5 percent. The great cushion of the last few years, which was assistance on the inflationary front from the tradable sector, has disappeared, and because nothing has been done to address the problems in the non-tradable sector, we now have a major problem on top of an older existing problem. We have an economy that is technically, no doubt, in recession. In spite of the last small reduction in the official cash rate by the Governor of the Reserve Bank in response to a much, much more difficult economic outlook, we still have among the highest interest rates in the developed world. Productivity has tanked. The general picture is one of a very, very different economic framework from the one this Government inherited 9 years ago. In case people think that these are merely abstract economic statistics, I beg to differ. I think that the political rubber has absolutely hit the middle of the road down main street New Zealand, and New Zealanders are feeling this in their daily lives. They are feeling the impact of this as they go about their daily business.

I am particularly concerned about the rise of inflation, given the old cliché that inflation, like pregnancy, is a little hard to contain, and I would like to ask whether the musings of the Minister’s colleague Mr Mallard, when he indicated—and I will reconstruct his remarks as I do not have the exact quotation here—that the central planning framework had worked OK for a decade but now does not look so hot, is something that we should simply disregard as Mr Mallard playing the bad cop, or does it actually indicate that the Government is thinking about giving up? Does it indicate that we are looking at more fundamental changes that will simply lock in inflationary expectations at this much higher level, with all the consequences that we learnt about for so many years in the 1980s as we adjusted out of double-digit inflation? Is that the way of the future?

CHARLES CHAUVEL (Chairperson of the Finance and Expenditure Committee) : I apologise to the House—I have just been to the dentist so I might sound a bit strange, but there we go. It is ironic to have heard the last two speakers on the economy, and this is so for a number of reasons. The first reason is that National will not say how it will respond to the current global situation, and that is the fundamental point to make in this debate, in my view. Here at home, people are feeling pain at the petrol pump and at the supermarket checkout, but these problems are not of New Zealand’s making. On the other hand, we need to do what we can to manage the economy through these challenges. Labour has put aside money during the good years, and with that money is providing relief where relief is needed. But John Key and Bill English refuse to tell us what public services they would cut to pay for bigger tax cuts, and John Key and Bill English refuse to tell us how much they would borrow to pay for those promises.

There is another reason it is ironic to hear members on the other side speak on the economy, and that is that their numbers do not add up. National will either have to cut public services or borrow to pay for tax cuts. Those are the two choices. It is as simple as that.

It is interesting, just talking about the record, to hear Mr Groser distort the figures. Crown debt never dropped below 35 percent of GDP under National in the 1990s—so much for the halcyon age that he imagined existed then! Labour has paid back National’s debt and brought it down to sustainable levels, and gross debt is now close to 20 percent of GDP. That is a very responsible level. This has saved the taxpayer billions in debt repayments, and therefore the householder billions and billions in mortgage repayments. It has allowed Labour to run surpluses in the good years so that it can provide relief and economic stimulus when it is needed. The numbers from the other side just do not add up.

There is another reason why it is interesting to hear members from the other side speak on the economy, and that is that they clearly do want to increase debt. I refer to John Key’s words on radio recently. Kevin List, the presenter, asked: “What level of debt is acceptable, then?”. The reply: “We’re sort of comfortable with a notional debt to GDP of around 25 percent.” Well, increasing Crown debt to 25 percent of GDP would cost about an extra $700 million a year in debt-servicing costs alone, and drive up the average mortgage costs for the householder untold. National is willing to borrow for tax cuts, and it is happy to let our children and grandchildren pay for them. That is not fair.

Last time the global situation worsened, National cut superannuation and public services, and on this side of the Chamber we know that it would do that again. When this Government came into power, the economy was faltering, make no mistake about it. Government debt was unsustainable, and unemployment close to 8 percent. Mr Carter thinks it is funny, but I remember the child poverty rates peaking at one in three New Zealanders in the 1990s. What sort of record is that to brag about in this Chamber and to try to distort the numbers? Remember that our hospitals, our schools, and roads were crumbling from decades of under-investment. I remember the cash registers in our public hospitals. This Government would never countenance that sort of travesty.

Labour is responding to global pressures and providing relief to families. We have provided targeted support where it is needed most, without cutting spending, or borrowing to finance that support. Labour has also provided support for businesses, families, and savers. It has lowered doctors’ fees and prescription charges. The cost of most doctors’ visits has dropped by an average of $22. The prescription fee has been lowered to $3 from $15—cut by a factor of five. Labour has provided 20 free hours’ early education for 3 and 4-year-olds, provided zero percent interest on student loans, increased the minimum wage nine times in 9 years, and increased superannuation. As I said, we have put the money aside during the good years so that we can deliver relief when relief is needed. When there is a need to stimulate the economy, when stimulus is needed, it is done in a responsible fashion.

On 1 October 2008 there will be a $10.6 billion programme of tax cuts delivered and fast-tracking boosts to Working for Families. We know that relief is needed as soon as possible and we are delivering it to hard-working Kiwi families. Our tax cuts are responsible and fair to workers. We are not interested in a bidding war. We will do the right thing because it is the right thing for families and the economy, and by the third year of our tax cut programme we will be delivering $50 a week or more to around 50 percent of all households.

CHRIS TREMAIN (National—Napier) : I rise to take a call on the estimates debate, and to discuss two particular issues very relevant to the Minister of Finance’s own home town of Napier—two issues that deal specifically with Vote Finance. The first is on page 131, where we see $8 million appropriated to the Hawke’s Bay Regional Airport. Something that is missing here, which I also want to talk about, is the $12.3 million appropriated in the 2006-07 year to the Hawke’s Bay District Health Board for the sale of the Napier Hill site. I am keen to ask the Minister a couple of questions about both of those financial issues as they relate to that electorate.

I will start with the Hawke’s Bay Regional Airport, which is an issue that has been on the agenda for many years now since this Labour Government has been in office. Dr Cullen and other MPs in that region have campaigned for years on the basis that they would deliver corporatisation of that airport to the region. They have talked that one up on a local level, on and on. They have just had major discussions with the local mayors about this issue; to this point they have not delivered on it. I want to ask the Minister about the $8 million that has been appropriated. Does he seriously think that it will come through and be appropriated in this financial year, or will we see it being reversed at the end of the financial year? In that regard, I also ask the Minister whether he is genuinely consulting with local iwi in the area. Is he consulting with Minister Parekura Horomia’s electorate?

Hon Parekura Horomia: Yes, he is.

CHRIS TREMAIN: I say to the Minister that I am hearing from the local iwi that they are not being consulted on this issue. They believe the land underlying that particular airport is still available for settlement while it is owned by the two councils. I will be interested to hear from the Minister whether he is in consultation and helping to move that issue forward, because I believe that is an unresolved key issue. That is the first thing.

The second thing I want to discuss with the Minister is the Hawke’s Bay District Health Board and the sale of the Napier Hill hospital site. In the 2006-07 year $12.3 million accrued into the accounts of the Hawke’s Bay District Health Board for the sale of the hill site. Now the question here is that 2 years ago the sale price was $24 million, and 7 or 8 years ago $3 million was transferred back to the Hawke’s Bay District Health Board when it was transferred to the Crown Health Financing Agency, because that was the amount that was recognised on the books. Since that point in time the Crown Health Financing Agency has incurred significant costs in selling the hospital site, but it has now allowed the Hawke’s Bay District Health Board to accrue $12.3 million through to its profit and loss account over the last financial year. Now—and I would be interested to hear from the Minister on this—it looks as though the current proposed purchaser of the property is not going to settle and has deposited only $1.5 million.

Hon Dr Michael Cullen: A bad real estate agent!

CHRIS TREMAIN: Well, it certainly was not this real estate agent; in fact, we stayed totally clear of it. But I want to know from the Minister what the prospect for that settlement is. Will it go through? Will Hawke’s Bay be in the gun not just for the $12.3 million for the sale of the Napier Hill site but also for the $8 million for the Hawke’s Bay Regional Airport? Is that another thing that will go through, or are these just more hollow promises from this Labour Government to that electorate? I would be interested to know whether the Minister has been consulting the local iwi up there to see whether both these issues will be sorted out.

R DOUG WOOLERTON (NZ First) : By and large, over the last number of years New Zealand First has supported wholeheartedly the stance on finance that the Labour-led Government has mapped out for us, and its actions. It is interesting to see that the National Party, in its wisdom, is now changing over to many of the policies it previously railed against. By election time I do not think there will be many policies put in place by the Labour Government that National will undo after all.

It is interesting to see, though, that the National Party’s spokesperson on finance is, in his comments, doing what I have seen him do a number of times just prior to announcing another policy. What he and Mr Groser are saying in shorthand in their speeches is that because Labour has spent all the money, National will not be able to deliver on its promised tax cuts. I would like to say that now, because people should understand what is going on over there and what those speeches actually mean. In this case they mean that National will not be giving more tax cuts than those laid out on the table by the Labour-led Government. That is what those speeches were about—nothing more and nothing less than that.

New Zealand First has wholeheartedly supported KiwiSaver and it has supported Working for Families. We have supported those moves enthusiastically. Sadly, there are two areas where we have not been able to agree with the Labour-led Government. One of those concerns the Reserve Bank of New Zealand Act. We have said, as friends, that we would like to see the Governor of the Reserve Bank widen his target from just inflation and take into account exporters and employment in this country. It is time to move beyond the single target of inflation, because we believe—and this has been proven, in our view, over the last year or two—that that is having a detrimental effect. That is No. 1.

The other area we disagree with the Government on is one that is dear to our hearts—that is, New Zealand ownership. We were sorry that the Minister in the chair, Dr Cullen, and the other Minister saw fit to agree to a 100 percent takeover by Nutritek of a new dairy company south of Timaru called New Zealand Dairies Ltd. We were sorry to see that happen. We also believe—and I notice an article in the Independent goes on about this—that it should not be possible for other countries to own dairy companies in New Zealand at the level of 100 percent. We believe that is detrimental and that all of the profits from that wonderful industry should be retained in this country for the benefit of farmers, their families, and ultimately of every citizen of New Zealand. We are sad that moves were made to allow those things to happen. I am sure that people are aware that our laws in this country work on the basis of precedents. If we have a situation where a 100 percent takeover by Nutritek is approved by the Overseas Investment Office, then it will be very hard in the future to refuse other companies—companies that at the present time are minor shareholders in, admittedly, smaller dairy companies around the country—a 100 percent shareholding when that time comes.

We always have to understand our relative size in world trade when it comes to these matters, and we can see the day coming when we will have unfriendly takeovers going on throughout the country. And, yes, we can see the day coming when, if this takeover is allowed, unfriendly shareholders will involve themselves in Fonterra also.

• Vote Finance agreed to.

CHRISTOPHER FINLAYSON (National) : I think it is a matter of agreement in this House that Treaty negotiations are an extremely important part of Government activity and should be multipartisan, and that has always been the approach of the National Party. A few weeks ago I had the misfortune to appear on a programme with the Minister of Māori Affairs and the Associate Minister in charge of Treaty of Waitangi Negotiations. The Associate Minister said on Television One that National had not voted for a single settlement under Labour—this despite the fact that he himself was a member of the Māori Affairs Committee when we voted for six different settlements. The Prime Minister herself, zealous as always for the truth, set the same high standard we have come to expect from Labour when she made the same claim at Waitangi Day earlier this year.

The latest line coming from Labour’s spin doctors is that the new Moses, the great Dr Michael Cullen, has injected fresh life into Treaty settlements—

Hon Member: Should be Beelzebub.

CHRISTOPHER FINLAYSON: —probably it should be Beelzebub—since taking over the portfolio late last year. But nothing is as admirable in politics as a short memory. Just a few minutes ago Mr Chauvel told us that he was still under the influence of a local anaesthetic as a result of his visit to the dentist, and we were all greatly disturbed for him. Dr Cullen is trying to give the nation a general anaesthetic, because what we are asked to forget is that Treasury has been involved in Treaty negotiations throughout, and that for 8 long years Dr Cullen sat silent in Cabinet with a complete lack of concern, or apparent lack of concern, for the complete lack of meaningful progress in this vitally important area. Just what was he doing in Cabinet when there was such inactivity from his two predecessors?

But he has never been particularly good at handing back money to the people who deserve it. If anything shows this in stark light, it is that he has got to legislate for his election year tax cuts, because after 2005 no one believes he can be trusted any longer.

In the last few months—and it is a source of pleasure for me and the National Party—we are finally seeing some agreements signed. But when one looks at the agreements that have been signed, one sees that, far from being evidence of significant progress, they illustrate just how slow Treaty negotiations have become under this Government. Members should look, for example, at the agreement in principle for the Taranaki whānui, which comes nearly 5 years after the release of the Wellington district report by the tribunal. This Government has to take responsibility for its actions—a point thrown into stark light by the admission last year from the Minister of Māori Affairs that this Labour Government has been all about expediency.

Hon Parekura Horomia: That’s right.

CHRISTOPHER FINLAYSON: He says “That’s right.” Notwithstanding the recent flurry of activity, this Government’s performance in this critically important area is very, very poor. Just one settlement has been taken from start to finish in 9 years. The Labour Government can say what it wants to through the ninth floor, but, ignoring the ninth floor spin, nothing can hide the fact that if the Te Arawa and Central North Island Iwi Collective legislation is passed this year—and we will certainly be cooperating to ensure it is—it will triple the number of settlements that Labour has taken from start to finish.

To put it another way, Dr Cullen’s crowning achievement is to start and finish twice as many settlements as Mark Burton and Margaret Wilson managed in 8 years. What an achievement! Labour should be ashamed of itself for those failures. It stands condemned for negligence in the conduct of one of the most important projects in this country’s history, one that was started by Mat Rata, continued under Geoffrey Palmer, continued by the National Government in the 1990s, and has ground to a halt under this Government.

I would like to hear from the Minister of Māori Affairs. He is also one of the guilty ones. What did he do in Cabinet? Did he ever ask any questions about why there was so little progress in Treaty negotiations? On the Willie Jackson programme he had the gall to say that Labour inherited a mess in this area. That was the third of the spins from the ninth floor. It is simply untrue and the Minister knows it. He did not inherit a mess, he inherited a Treaty negotiations system that was working well, and all that was required was for this Government to continue the good work, and it did nothing.

DAVE HEREORA (Labour) : I want to make some remarks in relation to the comments made by the previous speaker. He was all gloom and doom. At the end of the day we have to ask ourselves: have the National members supported the negotiations and agreements that we have so far? My understanding is that, no, they have not supported them. If the member is talking about slowing the process down, I tell him that is exactly why the process gets slowed down.

I do think it is important to acknowledge the very fine work of the Minister in charge of Treaty of Waitangi Negotiations, Michael Cullen, in relation to the appropriation that is being sought for 2008-09. The Māori Affairs Committee heard that the Office of Treaty Settlements had a large volume of work to complete its negotiations, and I think that is reflected in the recent settlements over the last 2 weeks with Te Arawa and with regard to the central North Island claims—huge settlements. The committee is in the process of ensuring that we hear the submissions on the bills relating to those settlements in a timely fashion. I also note that an allocation has been set aside in the appropriation to provide for an additional negotiating team to assist the Office of Treaty Settlements to get through these agreements and negotiations.

I think that, all in all, there has been some very important progress in this area, and finally I want to acknowledge the work of Minister Cullen in relation to those changes. Kia ora.

• Vote agreed to.

Hon DAVID CARTER (Chairperson of the Primary Production Committee): During question time in Parliament today I raised an issue around the Sustainable Farming Fund to which the Minister did not have the answer, and I certainly hope he has done some homework since he has been back at his office.

Firstly, I think the point needs to be made that the Sustainable Farming Fund has an appropriation of approximately $8.5 million, and it was initiated by the previous Minister of Agriculture, the Hon Jim Sutton. On the whole I think it has been reasonably well regarded and well respected by farmers in New Zealand. I think the concept of the Sustainable Farming Fund has been good. But in this particular case, an application was made in May 2002 to sustainably develop a pāua production system on the East Cape. It was approved, subject to some further information being provided, which was certainly obtained by late 2003. From that date onwards the applicant continued to write to the Minister’s staff—to a particular adviser to the Minister now, Mr Kevin Steel—on numerous occasions. When the applicant became frustrated that he was not getting answers from Mr Steel, he wrote to the Director-General of Agriculture and Forestry, he wrote to the Minister himself, and he wrote to the Minister of Māori Affairs. That went on for 5 long years, before the Minister finally made sure that the approval occurred and $250,000 was paid over.

If the Sustainable Farming Fund is to obtain and remain with any credibility at all, then applications to it that receive approval deserve far better treatment than occurred in that particular case. The Minister in the chair, the Hon Jim Anderton, has now had a chance to refresh his knowledge of the facts on this matter, and I certainly hope he will answer the questions about it more sensibly than he did in the House this afternoon, when he took to his normal bluster and made a personal attack on me as National’s agriculture spokesperson.

The second point I want to raise, which I felt was significant in the examination of Vote Agriculture and Forestry and of Vote Biosecurity, is an issue around animal welfare. I congratulate the Minister on the role he played in working with the farming sector throughout New Zealand on the response to a particularly nasty and widespread drought over the last season. But that drought has raised and will continue to raise an issue around animal welfare, and addressing that issue will require resources to be made available within the Ministry of Agriculture and Forestry to make sure that the facilities and the capabilities are there to assist the farmers of New Zealand. We raised that issue with the Minister in debating last year’s estimates, and he acknowledged that the appropriation of $2.572 million for that work was not enough. He assured us then that he would do substantially better in the next round of the Budget, which is the one we are debating today. He successfully achieved an appropriation of $2.64 million—an increase of only $68,000. That was of concern to the whole of the Primary Production Committee. I know that the Minister will not have the opportunity now to present another Budget bid next year to make sure he addresses that problem better, but I assure him that his successor will do so.

The final thing I want to raise is again a commendation to the Minister on his work in recognising the importance of an animal identification and traceability system within this country. Some farmers are opposed to that, because inevitably it will place costs on farming operations. But it is essential, for a number of reasons, for us to catch up with other countries that have better traceability systems than we have in this country.

R Doug Woolerton: You rubbished dog microchipping.

Hon DAVID CARTER: We are talking about sheep and cattle, I say to Mr Woolerton. Even New Zealand First does not advocate that we process dogs and export them overseas. Getting away from the Spencer Trust for just one moment, if we may, I was saying it is essential that we have a traceability system in this country, and the first reason we need it is that our markets will require increasing amounts of accountability and traceability. The second reason that we need to have such traceability arises in the event of a biosecurity outbreak. I know that my colleague Shane Ardern will shortly be talking more specifically about Vote Biosecurity, but it is essential that in the event of an outbreak—and we all hope there is no serious outbreak, but we must be prepared for the fact that one could occur—we are able to trace instantly the location of such livestock throughout New Zealand.

Hon JIM ANDERTON (Minister of Agriculture) : I have just a brief response. Firstly, it is interesting for the Committee to note that the Sustainable Farming Fund, which has been going during the whole period of this Government, was not going in the period of the previous Government, so we would not have been able to get any applications approved because there was not any money to approve. This fund has had 3,000 applications—500 of them have been approved—and the best that the National Party can do, 3 months out from an election, is claim that there was a mix-up on one application, out of 3,000. Boy oh boy, has any Minister of Agriculture ever had an easier ride than that? That is the only thing that the Opposition spokesperson on agriculture, David Carter, can find wrong—one out of 3,000 applications, 500 of which were approved. That is somewhere between $40 million to $50 million of research funding for agriculture, and the real problem is that one $250,000 grant fell through the cracks. Well, if it did that is not a bad record, actually. I bet that there is fear and trepidation about how many of these things might happen on the watch of any spokesperson on agriculture that the National Party might appoint. Agriculture is a $22 billion industry sector. What we have heard from the National Party is—shock, horror—that there was one application out of 3,000 for a quarter of a million dollars that went down the gurgler. Fine, it was approved, and, sure, there might have been some problems, but Lord save us—is that all? Is that it? That is amazing.

Animal welfare is an issue. This year I was able to get funding from Cabinet and the Ministry of Agriculture and Forestry for $300,000 to be given to the Royal New Zealand Society for the Prevention of Cruelty to Animals—the RSPCA—and that was valued by that organisation. I readily concede that there is more work is to be done in the area of animal welfare, and I accept that it is one of our weakest areas. But when one comes to a Budget round, one has to prioritise. The priority for us, from an overall viewpoint, was animal identification. That had to be got up and running—and year on year that had not happened. I made it my No. 1 priority to get it up and running, and I did it. Now most of the farming community, with the odd exception from Federated Farmers, think it is the best thing since sliced bread. Animal identification had to happen; if we did not have it, we might have lost our trade. We now have animal identification, and I have one question to ask National members. How could they have more money to spend on sustainable farming, animal welfare, and animal identification and traceability, when they would cut out all those bureaucrats—which National says we have not got? We need more of them in animal welfare, but National would cut them out—even the ones we already have.

Hon David Carter: We’ll get rid of the hopeless ones.

Hon JIM ANDERTON: Oh, I see; National will not get rid of those ones. We now know that animal welfare bureaucrats are OK. Is it the nurses, doctors, or teachers that National will get rid of? This is the problem. It is “almost certainly likely”—whatever that means. That is the mantra for the National Party. So it is almost certainly likely that National will or will not do something about bureaucrats, but not the ones it wants. We will watch this space as we move along, because that kind of nonsense, and the nonsense that we have heard from the member here, is just laughable. If that is as good as it gets from the National Party on a $22 billion industry sector, then I have had the easiest ride that any Minister of Agriculture has ever had.

SHANE ARDERN (National—Taranaki-King Country) : I thank the Minister in the chair, the Hon Jim Anderton, for giving me the opening line “a $22 billion industry”. He is right—it is the backbone of the country, and I acknowledge the Minister for saying on many occasions that it is the backbone of the country. In fact, I am absolutely surprised by the road to Damascus experience that the Minister has had in this portfolio. We have memories of a time when the Minister was not the Minister of Agriculture, and at that time those in the primary sector were a bunch of bleaters, whiners, whingers, bludgers, and goodness knows what else that Mr Trotter and his ilk, along with Mr Anderton, could dream up to describe them.

I want to speak briefly about Vote Agriculture and Forestry—because “Vote Forestry” does not exist; it is within Vote Agriculture and Forestry—and the amount of money relating to the flagship policy of the Labour Government. That has been, of course, to get New Zealand into a carbon-neutral position. When one looks at this vote, one finds that the amount of money going into forestry is so minuscule that it is almost difficult to determine what the amount is. The same Government claims that forestry holds the key to the very key issue of climate change. I have analysed the figures, and I see that one of the highlights in the Budget was that in the forestry part of Vote Agriculture and Forestry, the Government was going to transfer Timberlands West Coast Ltd to a Crown forestry company. But there is no budget for that. So it will take out what was, of course, a sustainably managed large section of New Zealand, Timberlands West Coast, which was not only making a profit but also controlling the vector in the area in terms of the possum population, and other vectors in terms of the spread of TB. It was also providing a market for some of our indigenous forests.

It is the hypocrisy—I know that that is a word that is not allowed in the House—it is the duplicity of this argument I am aware of as I stand in front of a rimu desk arguing the point about the sustainability of Timberlands West Coast. I do not want to spend too much time on it, but it is going now, apparently, to the Minister’s control, into a Crown entity of some sort or another, and there is no budget for it. We know that it will suck up funds and not have any possible outcome.

One looks at that in the context of sustainable management of the SILMA forests—the South Island Landless Maoris Act forest organisation—down in Southland, where $700,000 was allocated. This is where the double standards that apply in this Government really hit the road. First of all, we have Timberlands West Coast, where any forestry is closed down. It is not allowed even to extract wind-blown forest for cabinetmaking or other such finery. But at the bottom of the South Island one is allowed to cut it down, clear-fell it, and do what one likes, because of a historic Act of Parliament that goes right back to the beginning of the 20th century—and $700,000 has been put aside for that.

An amount of $100,000 has been put aside for a forest sink initiative. Goodness knows what that means. I ask members to listen to these figures. In the context of the $22 billion industries that the Minister talked about, we have $2.6 million for a climate change plan of action. That is interesting, given that under the term of this Minister and this Government we have seen the highest levels of deforestation in this country in the history of New Zealand. Back in 1951 we had sustainable growth in forest plantations in this country, and that was the case right up until recently. Now we are seeing clear-felling, almost, of our indigenous forest, without any progress in terms of planting. Planting trees, clearly, does hold the future for getting this country out of its current environmental situation.

I say to the Minister that I was interested when the Government set up the Forest Industry Development Agenda. I thought that was a good initiative. I thought: “At last! Here is a pan-industry group, with the Government, which clearly may have an opportunity to show some leadership, and talking regularly with the Minister.” Within 12 months of that organisation being set up, the forestry industry said it would not talk to the Minister. It said it would not have a bar of it. So that initiative fell over as well.

Hon JIM ANDERTON (Minister of Agriculture) : I will make an offer to the member Shane Ardern, who has just resumed his seat. I will personally pay to him, out of my own account, the level of profit that he claims Timberlands has made, if he will pay to me the deficit—if there is one—of Timberlands. He said it is a profitable outfit—

Shane Ardern: Not now.

Hon JIM ANDERTON: Oh, I see. Now we get it. He is like his great leader: it is “almost certainly likely” that Timberlands did not make a profit! We cannot take that seriously, so we will forget it.

As for the trees that the National Government planted all over the countryside—which he now claims credit for—I say he should go and have a look at where it planted them. It planted them on the tops of mountains, where no one could get to them. It planted them everywhere, because there were tax incentives. When Labour became the Government and I became the Minister for Industry and Regional Development, the first thing that people in the forestry industry said to me was that they would not invest in New Zealand any more unless the Government built roads into the forests that they had been incentivised to plant, because otherwise they could not harvest them. The Government had to come up with $60 million in funding for roads in Northland and on the East Coast, to get access to all the trees that had been planted because of National’s tax incentives. National incentivised, through tax, the planting of them, but it had no plan to harvest them. All those trees would have rotted on the ground because there was no way of harvesting them.

I had to go all around the world to talk to the international corporations that owned the trees. They said: “We’re out of there.” The National Government had incentivised everybody to plant trees, those corporations had bought them and paid their rates, and then they found that there were no roads. They said that they would now invest in the Philippines. Honestly, people have short memories about that Government and what it did, given all the stuff they claim credit for now.

Crown Forestry Group manages forests. If Timberlands is transferred to Crown Forestry Group, which is the intention, it will manage it. If Timberlands is such a great outfit, we will see all sorts of people lined up to buy it. But people should not hold their breath. Timberlands will be managed by Crown Forestry Group. It does a magnificent job of managing forests for people. It has been able to hand back, through the Treaty settlement process, to our tangata whenua forests that are in a pristine state, that have been well cared for, that have been well managed, and that have made a profit for the Crown, and for iwi where there have been lease arrangements. I would not knock Crown Forestry Group; it is one of the best institutions we have.

So it is all in order. We now know that it is not likely that what the member said about profits will actually happen—if the member meant it; he might have said something else. I do not see anything else of substance in his speech that we need to deal with.

Dr ASHRAF CHOUDHARY (Labour) : We have now heard from two Opposition MPs, and they have not even bothered to mention the biggest item in the Budget—I do not even know that they remember it. This item is the Fast Forward fund, the biggest ticket in the Budget regarding farming in this country. It is a $22 billion industry, and the Opposition spokesperson did not even bother to mention this item—

Hon Jim Anderton: They’re embarrassed.

Dr ASHRAF CHOUDHARY: They are embarrassed, because $700 million has gone into research and development, and every industry, every research institute, all the academics, and all the stakeholders have applauded this initiative by the Minister. They are very proud of what he has done. But the Opposition did not even bother to mention this item in the Budget.

I must say that I am very proud of this Government. It has taken the initiative to put a large amount of money into research and development, which will trigger a whole lot of funds from the private industry. Private industry and the Government sector will combine all their efforts together to set up those funds. Already the Government has set up New Zealand Fast Forward Fund Ltd, which will manage these funds. It will be calling for applications for research and for different projects. Clearly this kind of funding is a blessing for the future of this country and for the future of our sheep and dairy farming. I have spoken to a lot of scientists around the country who are very proud that a Labour-led Government has taken this initiative to provide such an amount of funds for agriculture. I am delighted with that initiative.

Similarly, the initiative in relation to the drought that we had earlier this year involved a committee that was set up to make sure that help would be provided to any farmers who needed help, anywhere in the country.

In relation to the national animal identification and traceability initiative, I am again very, very pleased that this initiative, which was started in 2006, has now come to fruition. It is important for our export industry, when our meats get overseas, that we are able to trace these products back to a particular farm, industry, and packing house. With those brief comments I commend Vote Agriculture and Forestry to the Committee.

Hon JIM ANDERTON (Minister of Agriculture) : I must rise to thank the member Dr Ashraf Choudhary for raising the issue of the Fast Forward scheme. I gave an interview on Radio Live this morning. The interviewer asked me what I had to say about Mr Carter, the National Party spokesperson on agriculture, who said that Fast Forward was a big con job. Last week we had cornerstone stakeholders in Fast Forward, including Dairy New Zealand, which is in on the con; Meat and Wool New Zealand, which is in on the con; the Meat Industry Association, which is in on it, too; New Zealand Aquaculture, which has been conned as well; Zespri, which is easy to con—it is pretty small beer, and one can deal with them—Fonterra, which is in on the con, too; and PGG Wrightson, with Craig Norgate, who is in on the con! All those groups have been conned by me; I must be really good at this! Even better than that, I have conned them to the point where they are putting $10 million in as cornerstone shareholders—$10 million each—and the arable industry is all lined up, including Horticulture New Zealand. This is the con job that the National Party would have us believe has happened.

You know, all of the sectors of this $22 billion industry think that the Fast Forward scheme, which invests $2,000 million in research, science and technology, market development, and branding New Zealand, is the biggest initiative that has ever been taken for the primary sector industry in New Zealand. They are all very credible, but one sector, which has no credibility at all, opposes it. That sector is over there—the National Party. Wherever we go in New Zealand to speak to farmers, those farmers ask what is up with National and why it will not support this initiative. I tell them that they had better ask National. The answer is that it is a con trick!

Now, $700 million is sitting in the account and waiting for the interest to accumulate. The private sector is putting up its money—$1,000 million over the next 10 to 15 years. So that is $2,000 million, yet this is a con job! How does that work? National members are the people who claim that they want to run the country in 3 or 4 months’ time, but they cannot even recognise the biggest initiative that has ever been taken in scientific research and development in the primary sector. And when National members come here to ask questions about it, having said that it is a con job to the rest of the country, what are those questions about? They ask one question about a project in the Sustainable Farming Fund and one other question about Timberlands. One could buy and sell the whole lot of that with one of the cornerstone shareholders’ deposits, yet they are all in a con! Really, that should embarrass Mr Ardern, it should embarrass Mr Carter, and it should embarrass Mr Key—although it is “almost certainly likely” that it will not. That should tell members everything about the commitment National has to the agriculture sector of New Zealand.

Let me give credit to my Labour colleagues. What did they really gain after putting up $700 million, going to $1,000 million, for the primary sector in New Zealand, which they know is not their core constituency? Labour did this because it is absolutely the right thing to do for New Zealand and for the economic and social well-being of New Zealanders. That is the principle that this Government operates on. I do not have the faintest idea what principle that lot on the other side of the Chamber operates on.

Dr RUSSEL NORMAN (Co-Leader—Green) : I am glad that the Minister in the chair, the Hon Jim Anderton, referred to the Sustainable Farming Fund, because two kinds of transformation are under way in agriculture in New Zealand that are quite unsustainable at the moment, and this Government is not really addressing them.

The first transformation is the undermining of the New Zealand - owned producer cooperative Fonterra. As a result of restructuring, we are now starting to see the beginnings of the unravelling of the New Zealand ownership of the dairy industry. That is an incredibly important industry, and I totally agree with the comments made earlier by Doug Woolerton on this issue. It is a really dramatic development when we see Fonterra being undermined by foreign ownership, and we are seeing that from all over the show. The biggest part of the current account deficit, we should remember, involves transfers overseas to pay off debt, and transferring profits to overseas-owned corporations.

The second great transformation that is under way in agriculture in this country is the rise of large-scale industrial intensive dairying. That is a wholly new kind of ball game. We have not seen dairying as intensive as this or on this kind of scale before in New Zealand. It is seldom recognised that a kind of revolution is under way and is happening right across the country, from the top of the country to the bottom. As I travel around this country, I visit farms right across it that are being transformed. We are seeing much higher inputs of water—water is being added on an immense scale—and much greater inputs of external feeds than previously. Our imports of palm kernel, for example, have increased dramatically, by about a thousand-fold in the last 8 years, and they are being fed to animals in the dairy sector. Our inputs of fertiliser have increased dramatically over that time. Electricity is being used to run the giant pivot irrigators, which anyone who has been to the Canterbury Plains will be extremely familiar with. That means the amount of electricity being used has increased dramatically as well. We have seen an intensification and a kind of industrialisation of primary production.

On the one hand people might say the intensification makes dairying more productive—and that is, of course, true. But it also increases its environmental impact dramatically. We are seeing that particularly with regard to our waterways. Right across the country our waterways are in deep trouble. They are in trouble from two things. On the one hand there is the issue of abstraction. There is much, much greater abstraction of water for irrigation than occurred previously, and we are seeing the drying up of some of our major rivers, particularly in the Canterbury Plains but elsewhere as well—and now in Southland. The other great contributor is, of course, the runoff or the pollution. That is both runoff that goes across the surface and straight into the waterways, and also runoff that goes through our groundwater—the fertiliser that is leaching through to our groundwater, as well as the urine and faeces from cows that ends up in our waterways. Right across the country we are seeing a decline in the quality of our rivers and lakes as a result of the intensification and industrialisation of agriculture.

If we close our eyes to that decline in water quality, then we are undermining one of the single most important economic assets we have: the “clean, green” brand of New Zealand. “100% Pure New Zealand” is the basis on which we have built our two biggest export industries: tourism and primary production. “100% Pure New Zealand” and the “clean, green” brand are fundamental to the economic future of this country. That branding and that reality are being undermined by what is happening as a result of the out-of-control intensification of agriculture right now, from the top to the bottom of this country.

We have called on the Government many times to intervene to slow down that process. We need to impose a moratorium on the issue of new consents to discharge to water, particularly in at-risk catchments. Regional councils right across the country know the at-risk catchments; we all know lots of them. We need to have a moratorium in order to create some breathing space so that we can address the problem. We need to have a moratorium on new water consents not only to discharge to water but also to take water—abstraction consents. Those two things together would create a bit of breathing space. Beyond that, we need to have a much more effective national environmental standard and a national policy statement. Obviously we are pleased that the Government has finally announced the national policy statement on water. It took quite a long time—an extremely long time—and—

Dail Jones: I hope it wasn’t watered down!

Dr RUSSEL NORMAN: —it was a bit watered down, but none the less we are glad that it appeared. But the national policy statement is still incredibly weak; it needs to be much stronger than it is. And the process is too slow. My guess is that it could take anywhere from 10 years to, maybe, 12 years before district plans are actually changed as a result of that national policy statement, once all the different steps involved have been gone through—that is, getting the national policy statement through, and all the rest of it.

We need to take urgent action on cleaning up our water.

Hon JIM ANDERTON (Minister of Agriculture) : I thank the member for his contribution. I have to say that for some people in this Chamber, and in New Zealand, the glass is always half empty—it is never half full, ever. It is always the negative side of a position that is put rather than the positive side. I would point out to the member who has just spoken that the dairy farmers in New Zealand have just earned—this is profit through dividend payments to them—$3,000 million, which has been pumped back into the rural provincial economies of New Zealand, and which is the only real thing sustaining some of those economies now. If we had the moratorium and everything stopped, as the member suggests, that $3 billion would not be there. If it was not there, there would be massive unemployment in the regions of New Zealand, there would be a slow-down in the overall growth of the country, and the Government would have no revenue to do all the things we want to do in respect of the environment, and in the health and education systems. So where is that half of the glass that the member mentions? He does not even mention it. He does not say what would happen if the counterfactual was there and we did not have that revenue. I have the view that the Green Party would be cheering if the dairy farmers had lost $3,000 million; if the price of dairy products had gone down and we had lost $3 billion, they would think that that would be good. It would be a disaster! But, no, the glass is always half-empty.

As far as environmental protection is concerned, I say this: I come from Sydenham, which is an urban electorate, and I lived in Western Springs, which is pretty urban—it is right in the heart of Auckland City now—so I cannot claim any agricultural roots, but I can tell members that some of the best conservationists in New Zealand are farmers, and amongst those best conservationists are dairy farmers. I would invite the member to go up to Taranaki and have a good look at an area he would describe as “dirty dairying”—I am pretty sure of that. If he went there, he would find that 95 percent of the dairy farmers—for anyone who cannot understand, that is just about every dairy farmer, and I think that anyone who does not join gets his or her milkshed burnt down—are in a programme that is bridging all the streams so that the dairy cows are not going into them, fencing them all off so they are not polluted, planting 300,000 to 400,000 trees every year at their own expense and doing it themselves, and fencing off erodible areas on their farms. In 10 or 15 years’ time the Taranaki district will have a completely different aspect from the air, from the ground, or from anywhere you like, than it does now. Where in that speech from the Green Party representative was there any recognition of that? But if one dairy farmer there did something wrong, he or she would be splattered all over the place.

I suggest to the new member that he take a step back, for goodness’ sake, breathe quietly for a while, have a good look around, and get the facts right. The facts are that our farming industry is as pristine as anywhere in the world. Of course there are things that have to be done better—of course there are. But I have been to most countries and have had a look at the environmental standards in them and I can tell members that in New Zealand we have among the best environmental measures in the world. Of course we could do better, but it would be good if people sometimes sold their country up rather than down and actually congratulated people on doing the things that we really want them to do, which earn us respect around the world and the kind of income that makes us a First World country. If we did not have a successful agriculture industry—including dairy—we would be a Second World, or even a Third World country, because we are 12,000 miles away from our markets. It is only efficiency, innovation and creativity, and the science-based industry that we have that make us the country we are. We should cheer that along and celebrate it every day instead of saying some of the mealy-mouthed stuff that I hear from people who are always looking at the worst side of life instead of the good side. I think people’s lives must be pretty bloody miserable when they do that; my life is not like that.

• Vote agreed to.

CHESTER BORROWS (National—Whanganui) : I wish to speak in respect of Vote Corrections; a number of issues have raised their heads in the last 12 months in respect of this very volatile area of jurisdiction. A number of lessons have been learnt—thankfully—from some of the tragedies that have occurred in the Department of Corrections in the last couple of years. Obviously I am referring to the death of Liam Ashley, and the murder of Karl Kuchenbecker by Mr Burton. I am pleased to see that a number of initiatives or processes have been put in place to ensure someone is watching, because the lack of people watching in respect of Burton ranged across some Government departments, but particularly the Community Probation Service. It was disappointing and embarrassing to read the coroner’s report and the attention that was drawn to failures in respect of process at the time leading up to Christmas, when people took their eye off the ball, people went on leave, people were not checking their trays, and people were not handing over vital information, which resulted in this particularly abhorrent offender continuing to commit crimes—to stand over, to rob, and to threaten. That was all known by people within the Community Probation Service, those supervising parole, and, it must be said, a number of people within the New Zealand Police.

In respect of Vote Corrections, though, I want to concentrate on a couple of areas. The first one is rehabilitation. People within the corrections system being available or open to rehabilitation is not something people like to know much about. People like to think of prisoners eating bread and water and doing precious little else. The fact is that in our society, where we have such a high incarceration rate within our judicial system, we know that people who are in jail will, sooner or later, get out of jail; they will come back into society. Surely the underpinning theme of anyone who goes to jail must be that they have to come out better than they went in. The fact is that within our judicial system we do not even try to do anything with those who, most commonly, are there for a period of under 2 years.

The last time I visited a jail I talked to a chap who was in prison for a serious drug offence. It was the first time he had done a lag; he got 8 years for a drug-dealing offence. He was a fairly young father and he was obviously not amongst friends—he was absolutely scared stiff of being in jail. He had heard the cell door slam behind him and realised what he had lost, and he wanted to do something about it. It was a serious offence and so he got 8 years, yet he wanted from day one to do something about his drug problem. But because he was not eligible for parole until he had done two-thirds of his sentence—and good job—he was not eligible for anything else either.

The vast majority of people in our prisons are in jail for 2 years or less, and if they are in jail for 2 years or less they cannot get any help with rehabilitation. This is at a time when about 83 percent of people in our prisons are illiterate and innumerate, or close to it, yet we do nothing to assist them with literacy and numeracy. Around the same percentage—83 percent of people in our jails—have an alcohol or drug dependency, yet we do nothing about them, either, if the length of time they are in jail is less than 2 years. It seems absolutely ridiculous to me that we would just cast these people aside. We have to put our hand up and take responsibility for the fact that they are there and they will get out. We have a society to protect. Surely the primary task of a Government is to look after the safety and the security of its prisoners.

Here is an opportunity. If things were in the right place, if gangs were not running the prisons, and if we had people with the willingness and charge to do so, we could use effectively the period of time when these people are away from other influences. Some would say that rehabilitation does not work, and it is true that some of the programmes that have been run over a number of years were found to be more conducive to recidivism than turning people away from offending. But it is a real tragedy to read, for instance, the comments of Ms Nāmana—in jail, of course, for killing “Lillybing”. She said that while she was in prison she had not been rehabilitated, and she claimed that while she was there she had access to a range of drugs including pure methamphetamine, and that she had a cellphone on which she downloaded pornography and developed gang associations.

Another area I would like to discuss is community probation. We have a system in this country where people released on parole are released into the care of community probation officers. We have a terrible situation at the moment where about 40 percent of our community probation officers have less than 2 years’ experience, yet every prisoner, from the least offender to the most horrific offender, will come out of jail and go into their care. We have seen—as I mentioned earlier—the results of failing to properly maintain and monitor people who are on parole for the most horrific of crimes.

One of the jobs people within the community probation sector do is monitor community work projects and community-based sentences. The problem there is a complete lack of commitment to those community-based sentences because the offenders have no fear, for instance, of what prison may hold for them. In the year 2006-07—we do not have the figures for the current year—29 percent of people on a community-based sentence breached it, then headed back to court for yet another sentence. Surely we need to get to a situation where people are offered all the help they can get and all the help they need to turn them away from the profits of their offending. We need to ensure that those left in charge of them have every ability, resource, and commitment to ensuring that those community-based sentences are in fact abided by, and that their victims are protected by ensuring that they are living where they are supposed to be living, that they are associating with those they are supposed to associate with, that they are attending the counselling courses they should be—whether they relate to drug and alcohol or family violence offending—and making sure they are not creating more victims.

But the problem is that, with 29 percent of people breaching community-based sentences, offenders tend to breach them at a time when they are committing more offences. The reason why they are happy to breach them is that they know that they are fronting on further charges and that there is no deterrent to not attending those community-based sentences.

There is a hell of a lot of work to do within the Department of Corrections. A number of new prison beds have been provided for, and, as a result of the work of my colleague Simon Power in drawing attention to some of the deficiencies within the system, the Government has moved—of course, it had to move—to tighten up on some of those areas. But as long as people come out of jail in a worse state than when they went in, and as long as people do not adhere to community-based sentences when we are putting more and more people on community-based sentences rather than putting them in prison, we have two glaringly obvious areas for a lot of work to be done. It is time this Government woke up to that challenge. Thank you.

Hon DAVID BENSON-POPE (Labour—Dunedin South) : Well, that challenge is being faced up to. I would like to thank the previous speaker, Chester Borrows, for a relatively rational analysis of some of the issues that we face in the Department of Corrections. It is certainly not the sort of analysis we would have got from the “hang ’em high” brigade, but I guess in a time of policy inoculation it is quite important to tell people what they want to hear and not actually talk about what any other party might do to change the situation.

Before I start the call, I observe that, of course, a lot of the people, especially the younger people, who are presenting us with social issues at the moment are the creation of the National Government’s “Budget to end all Budgets” and the slashing and burning of community support and social support that was characteristic of the previous administration. Many of those young people—or not so young people—in our prisons now who are illiterate or innumerate missed out on those skills at the time of the National Government.

So if ever we needed to have a cross-party, non-partisan approach to social issues of this kind, it is on an issue like this. But it has not escaped the attention of most of the community that we are much tougher because of our changes to sentencing laws. I guess one of the interesting dimensions of this job is realising there is—I suppose—a lag in terms of the performance of the judiciary with regard to their response not so much to the expectations of Parliament but to the expectations they identify in the community. I am pleased to see that a lot of members of the judiciary are facing up to that increased expectation right now.

It is obvious that there is a significantly increased prison muster. Why else would this Government have committed over $600 million to building new prisons? I have to say that although we do not shirk, or shrink from, the responsibility of looking after the bad buggers who are out there, we should not be proud as a community of our incarceration rate. It is actually a disgrace. It would be interesting to see whether this bullet can be bitten—perhaps that is the wrong analogy—during the election campaign, and whether this nation finally starts to face up to the appalling statistics of incarceration by age and by ethnicity that are the reality in this country. That is not to say that anyone will be soft on crime, or that the $600 million - plus for the three new prisons I just referred to will be wasted, but this is an issue that our whole community needs to grapple with, and that is why I complimented Mr Borrows on a mostly rational approach to this debate.

This debate can be had only if people look at the issues—and do not scratch the sores—and actually try to find solutions. The previous speaker did not go that way, and I will come back to the National Party’s policy in this area in a moment. We should focus, as the previous speaker did, on rehabilitation. The issues around literacy and numeracy are key, and I am particularly pleased with the major changes there have been in approaches integrated with the Ministry of Social Development to put work brokers—from the beginning of sentence time, not in the last few months before release—alongside people to help them acquire the skills they will need when they move from a locked-up situation out into the workforce.

Mr Borrows made a really interesting comment. He talked about people coming out from prison better than when they go in. Well, it is sure as hell a lot harder to come out now. When National was in power the security of the prisons was appalling. One of the major improvements that this Government has made is in that level of security, and the huge reduction in escape figures demonstrates that. There has also been a massive reduction in drug use in our prisons. I am pleased to say that prisoners are already seeing the effect of the initiatives around access to cellphones, which as everyone knows are extremely easy to conceal on the person, and also the jamming of cellphone transmissions, which is being introduced into our prisons as we speak. Clearly, that will have a huge effect on people’s behaviour in prisons henceforth.

I would love to talk about National’s solutions to these issues. Clearly, Labour has a pretty impressive track record in the corrections area. Is everything perfect? No. Will everything ever be perfect in this area? No. As a community we have some really big challenges to face, and I believe this Government has put its money where its mouth is in previous estimates, and in these estimates, to address those issues and address them responsibly.

As I said earlier, I would love to talk about National’s corrections policy. I cannot, though, because National does not have one. Of course, even if National did have one, it might be a policy like its policy on Iraq, where National did a complete turn-round. Or it might be like the John Key policy on climate change, in which climate change was a hoax one week, and was “always believed” in the following week. Or it might be like the National Party policy on KiwiRail, which John Key described as a dumb idea one week, but then told us a couple of weeks later that he supported the purchase. Or it might be like the National Party policy on our antinuclear legislation, which we know the National Party was keen to see gone by lunchtime. Or it might be like the John Key policy on KiwiSaver, a policy that according to the leader of the National Party was one day fundamentally flawed and a few weeks later was obviously successful. Or, most recently, of course, it might be like the National Party policy on that “communism by stealth” policy—the Working for Families policy—which one week was an appalling compulsory welfare scheme, one that was going to be, and let us get the quote absolutely correct, opposed by the National Party “with every bone in our bodies”. Well, I will leave listeners and members present in the House to make their decisions about how many bones Mr Key has in his body, now that he has told this House and this community that the National Party will be adopting that most successful scheme in its entirety.

I look forward, as the community should, to seeing some policy and solutions from the National Party in this area. When it does release its policy, if it does ever release anything, it would be really useful to the community if the National Party gave us more than the four bullet points it tends to give the community in most other areas. What this community is entitled to, and what this community is demanding, is the 30 or 40 pages of background that would give us the real National Party agenda. Not too many people are interested in the National Party saying: “Oh, we’re going to do what they do.” Labour members are grateful that National members find our policy so successful. What the electors want to see in a few months’ time is the reality of the two-faced party that sits on the Opposition benches.

• Vote agreed to.

KATE WILKINSON (National) : Yesterday it was revealed that there has been a $29 million spending blowout on the legal aid system. The Press further announced that this spending had “rung alarm bells”. Well, it is about time that alarm bells started to ring. This is especially important as the Justice and Electoral Committee had some time ago expressed concern that the Legal Services Agency “needed to significantly improve its performance”, and that it was disappointed problems it had raised in previous reports had not been addressed.

A potential legal aid crisis has been looming for some time and it is only now that some alarm bells are starting to ring. When this Government increased the eligibility to legal aid by some 435,000 recipients to 1.3 million, did it consider the cost or, more important, did it consider the ability to supply that increased demand? Anecdotal evidence abounded that there were simply not enough lawyers prepared to take on legal aid work. The fact that the number of active family legal aid lawyers dwindled from 2,012 to 1,017 in 12 months did not ring alarm bells with this Government. The fact that the number of active criminal legal aid lawyers declined from 1,084 to 846 in 12 months did not ring alarm bells with this Government. The fact that victims in some areas have to appear in court by themselves without any legal representation at all because they could not get a legal aid lawyer to represent them did not ring alarm bells with this Government. The fact that if the number of people eligible for legal aid was increased, then that may just increase the number of legal aid grants did not seem to register with this Government.

We now have the suggestion that there has been a $29 million spending blowout, and the alarm bells are just starting to ring. We have a problem. Yes, we do need some answers. We should be able to expect clarification in answers not only in relation to the $29 million spending blowout but also to the questions raised in the 2006-07 financial review. Those questions related to the fact that at the time providers did not meet demand in some areas of the country. That situation continues. What has been done to address concerns about the quality of legal aid providers—concerns exacerbated by the current legal aid system? What has this Government done to address the concerns of the board of the New Zealand Law Society, which were, first, that it had no confidence in the commitment of the Legal Services Agency to address outstanding issues relating to legal aid remuneration; and, second, that it was profoundly concerned about imminent risks to legal aid services on a national scale?

What is the Government doing to address the problem of the declining provision of legal aid? On top of that we have had the Serious Fraud Office fiasco and the muddle related to that. If we look at the record of this Government and at the time line, we see that it is indeed apparent that it is a muddle. It has been a procession of strategies, reports, working groups, and proposals, resulting in delays and unfulfilled promises. In 2004—4 years ago—the crime reduction strategy joint Ministers group agreed that a new Organised Crime Strategy was a priority for 2004. In June 2005, the Ministry of Justice tried to set up a workshop with agencies involved with gangs to establish a task force, but that was canned. In November 2006 the Minister of Justice promised to review the number of off-licence liquor stores and nothing happened until June 2008. In May 2007 the Prime Minister said the officials were working on an Organised Crime Strategy, which had been due to be completed in about 10 months. In July 2007 the Minister of Justice said the Organised Crime Strategy “is proposed to be completed in the last quarter of 2007”. It was not released until April 2008.

Hon ANNETTE KING (Minister of Justice) : First of all, I thank the very good people in the Ministry of Justice for the work they do on behalf of New Zealanders. I could not let this moment go by, however, without saying that I am rather confused by the speech that I have just heard. Before I became Minister of Justice I used to sit in this House and watch the previous speaker rise and ask why there was not more money for legal aid, and say that legal aid services could not be provided and the system was collapsing. She said this mean Government was not giving additional money. She used to say the Government should be paying more, yet she has just said there is a blowout in the amount the Government is paying for legal services. I am not sure what the member wants, other than to have 5 minutes of a good old moan.

I say to the member that the 2008 Budget gave a 10 percent increase in payments to lawyers who provide legal aid, and at the same time, speaking as Minister of Justice, I said that the Government would undertake a review of the services provided that use legal aid funding, including opportunities for cost saving, reprioritisation, and innovative delivery of services. I tell the member that the Law Society has not only welcomed that review but praised it. It is not a matter of alarm bells starting to ring; it is a matter of the Government saying that it puts a considerable amount of money into legal aid and that is the way the Government gives access to justice for people who are poor, and we do not resile from that. But we need to ensure we get the best value for money out of that funding.

The previous speaker has gone up and down the country campaigning for more money for legal aid but I say it would have been really nice today if she had said: “Thank you, Government, for increasing legal aid funding by 10 percent in this last Budget.” It would have been nice if she had said that she welcomed the review to make sure New Zealand gets value for money. I thought the National Party said it stood for value for money to ensure we get innovation and the best use out of the funding that is put into legal aid. I say to the previous speaker that her story is kind of mixed up: either there is too much funding or not enough. Which one is it? Then she went on to talk about the Government’s muddled approach to organised crime. I tell the member that until we became the Government there was no approach to organised crime, and do not tell me there was no organised crime in this country before we became the Government. Organised crime has been around for years. We set out to put in place in a comprehensive way all the building blocks needed to tackle organised crime. We put in place the Organised Crime Strategy and the organisation needed. We are putting in place the legislation and also the personnel to undertake a proper approach to organised crime.

This Government has done incredibly well in this respect. There is a lot of work to do, as we see those involved changing from the old idea of a few gang members wearing patches to becoming highly sophisticated groups of people whom one does not recognise as gang members, because they wear flash Gucci suits, or recognise as organised criminals. But those people purvey drugs, launder money, and are involved in paedophile rings, and so on. The agency that this Government is putting together, with the support of other parties in this Parliament, will certainly go a long way to address those issues.

The previous speaker also mentioned liquor. Debates in this House about liquor really frustrate me because I often hear the most terrible cant. Some members stand up and make heartfelt speeches about the supply of liquor, but they were the very ones who trailed out to the lobby to vote to allow younger people to drink. Then they make speeches about how important liquor laws are, but when it comes to the crunch in this Parliament, when trying to make changes to liquor laws, we find great difficulty in getting them through.

I tell people who are listening to this debate that this Government has done a lot of work on liquor laws, and I say to those members that my colleague Lianne Dalziel will certainly be presenting the next part of the picture when it comes to tightening up the supply of liquor in this country.

LYNNE PILLAY (Chairperson of the Justice and Electoral Committee): It is an absolute pleasure to stand and speak after our hard-working and amazing Minister of Justice, Annette King. I want to acknowledge her and, at the risk of repeating the message, I have to say that I too am absolutely astounded at Kate Wilkinson’s speech. “Honest Kate” though, who was—

The CHAIRPERSON (H V Ross Robertson): Order!

LYNNE PILLAY: Sorry, Mr Chair. Kate Wilkinson is a member of a party that is not the party of compulsion, but when in Government last, it dropped legal aid rates. National has been banging on, as we all have, about the importance of reviewing legal aid rates and raising them. That is exactly what our Minister of Justice has done, and I think that is fantastic.

I want to talk, also, about victims’ rights, which this Government sees as so important. I acknowledge the former member Nandor Tanczos, who suggested the inquiry into victims’ rights. It was a very good inquiry. The Justice and Electoral Committee went on the trip to Melbourne to look at victims’ rights, and legal aid as well. We thought we could get some meaningful information and advice to enhance those services in New Zealand.

Hon Annette King: Who went?

LYNNE PILLAY: Every Labour member of the select committee went; the Green member went and it was fantastic to see it. Hone Harawira came along with us for some of the time and worked very hard whilst he was there, but National Party members of the committee hijacked the trip. They did not come. As a result of that trip, we now see enhanced victims’ rights in this country, and also a Victims’ Charter, which is a direct result of the information we gained. We have further resources for victims’ support. It has reinforced the importance of our Government’s commitment to victims’ rights in our country.

Hone Harawira: Great trip!

LYNNE PILLAY: Thank you very much. The member says it was a great trip, and I acknowledge that the member contributed greatly for the time that he was there. I acknowledge also Ann Hartley; like all of us she believed in the importance of victims’ rights and getting information on legal aid. It is very unfortunate that the National committee members were too busy politicking, in wanting to go to their conference, and did not go on the trip so they could spend time looking at improving the situation for victims in New Zealand.

I congratulate also the Law Commission. The select committee has looked at a lot of the commission’s recommendations. A lot of bills have resulted from its recommendations. I acknowledge the hard work of the commission and the useful advice it has given us on a variety of different bills and issues before the very hard-working and ably chaired select committee.

I cannot speak without mentioning section 59 of the Crimes Act, and all the work of the Law Commission in assisting us. I pay tribute to the members of our caucus, who stood firm in relation to section 59 because there was a need for change. They did not freeload, or whip up a frenzy, or hand out misinformation. [Interruption]

I acknowledge poor Chester Borrows, who has just chipped in. He worked very hard. I did not agree with his amendment, but he did put the time in and he listened. His party just rode roughshod over him and his amendment. National members whipped up a storm and then, at the eleventh hour, they followed the leader, because they thought: “Gosh! We thought there were a lot of votes in this. Maybe it is backfiring on us.” So the National Party, which is not the party of compulsion, changed its mind again. We see that party changing its mind further on a variety of different things.

I have to say that Kate Wilkinson, who is on the committee, has really worked very hard and has sometimes made quite a contribution. But it was particularly distressing to hear Kate Wilkinson denigrating legal aid and the Government’s response to that issue. I find that really sad.

CHESTER BORROWS (National—Whanganui) : I just want to make a few points in relation to the Serious Fraud Office (Abolition and Transitional Provisions) Bill and some of the precursors to it. We must remember that in about September last year this issue was raised when the Law and Order Committee was reviewing the—

Hon David Benson-Pope: I raise a point of order, Mr Chairperson. It is my understanding that Vote Serious Fraud has actually been dealt with earlier under Dr Cullen’s chairmanship. It was certainly voted on.

The CHAIRPERSON (H V Ross Robertson): If that is the case, then the member needs to come to—

CHESTER BORROWS: I ask for a point of clarification, Mr Chair. The Minister was talking about the Organised and Financial Crime Agency of New Zealand. That relates to organised crime and to serious fraud as a part of it, so I was addressing that matter.

The CHAIRPERSON (H V Ross Robertson): I just say that this is a vote about justice, and although one member may respond to another member’s comments, it does not actually mean that it comes into the debate. The member needs to talk to Vote Justice.

CHESTER BORROWS: Thank you, Mr Chair. In relation to the Organised and Financial Crime Agency of the police and its investigation of serious fraud as it relates to organised crime, points have been made in respect of the way in which that works. The select committee heard from the New Zealand Police last week and the week before about how they intend that agency to work. But an interesting point was raised by the police—

The CHAIRPERSON (H V Ross Robertson): I am sorry to interrupt the member, but I ask whether he is doing this under the Police vote.

CHESTER BORROWS: Vote Justice.

The CHAIRPERSON (H V Ross Robertson): The member is doing this under Vote Justice?

CHESTER BORROWS: Yes.

The CHAIRPERSON (H V Ross Robertson): Well, the member is starting to stray into the Police vote, which is the next one. I urge the member to try to speak strictly to the Justice vote.

CHESTER BORROWS: The Minister was speaking in relation to that legislation and the work that was being done by the Ministry of Justice in relation to addressing organised crime in New Zealand. That will be worked out by the Organised and Financial Crime Agency, so it is a Ministry of Justice initiative that is being operated through the police—that is the point that I was making.

In respect of Serious Fraud Office assistance in working on organised crime, the point was made by the police that a number of the investigations they have run have been addressing organised crime, but they have had a serious fraud aspect to them. The problem we have in respect of that is that the Serious Fraud Office is being disestablished as part of a Ministry of Justice initiative. Members will recall that that was announced in September last year, at a time when that initiative was travelling through the select committee process and was with the Law and Order Committee. We found out after questioning Serious Fraud Office officials that the Serious Fraud Office was advised that this could happen only 2 weeks before.

The fear we have in respect of that is the derogation of powers moving away from serious fraud investigation through this Ministry of Justice initiative at a time when mum and dad investors are losing millions and millions of dollars through financial investments. This is removing Serious Fraud Office investigations to the New Zealand Police at a time when the police, by their own admission, are doing a very poor job in relation to fraud investigations.

Ron Mark: I raise a point of order, Mr Chairperson. I know that you were quite distracted, so you may not have heard the content of the speech, but we are now straying into a depth of matters relating to the Serious Fraud Office, which the member had every opportunity to speak to earlier in the day. I simply ask that the rules apply to everybody.

The CHAIRPERSON (H V Ross Robertson): I thank the member. For the benefit of members, if members look to page 177 of the Budget 2008 Estimates of Appropriations, they will see that it talks about policy advice. It states: “This appropriation is limited to policy advice, legal advice and research, and evaluation in relation to civil, criminal and constitutional law, foreshore and seabed policy and treaty negotiation advice and providing agreed services to the Minister of Justice, Minister for Courts and the Minister in Charge of Treaty Negotiations.” If the member can bring his speech within those guidelines, then he can continue; it is fine.

CHESTER BORROWS: I am always happy to learn, Mr Chair, and I look forward to encouraging this debate when we move on to police matters.

• Vote agreed to.

RON MARK (Chairperson of the Law and Order Committee): It is a pleasure to rise to speak on Vote Police on behalf of New Zealand First, largely because there is a lot of good news in there. There is also a lot of good news in the report back from the Law and Order Committee on Vote Police because of the agreement and understanding entered into between the Labour-led Government and New Zealand First as part of the confidence and supply agreement.

It is timely for us to reflect on some of the criticisms made by members of the National Party and by the National Opposition spokesperson on police at the time of the announcement of the agreement between New Zealand First and the Government for an extra 1,000 police officers. I point out that when our agreement was struck there were people who said that it could not be done, it would not be done, and there would not be that level of interest. People such as Chester Borrows and Simon Power were very, very quick to assert their knowledge of the police force and to tell the whole nation that the Police College could not handle that number of recruits. Well, coming up to 3 years on, the recruitment figures are slightly ahead of target, and the way they are going we not only will achieve 1,000 extra police and recruit the extra 250 support staff, but also are already on track to start looking at the next part of the New Zealand First agreement with the Government.

I find it very interesting that of all the criticism of the Government and New Zealand First for having a policy to dramatically increase police numbers, those people never commented on the second part of the agreement, which would see the Government of the day—Labour—move towards adopting the same policing ratios per capita as Australia.

It is interesting that it took about a year before the National Party copied that New Zealand First policy and started doing private interviews around the country, saying that the National Party policy would have a police per capita ratio that is equitable with that of Australia. Well, we got there about 5 years ago with our policy. The National Party got it wrong again—duh! We were at that point 5 years ago, which begs the question as to what the hell National has been doing for 9 years in Opposition if the only thing it can do is to steal other people’s policies. I suggest that those members have been unemployed for 9 years, that their policy is devoid of originality and any depth, and that the only policy they have that has any depth or substance, or is in any way achievable, is the policy they steal from New Zealand First.

Vote Police makes good reading. If we take the first line, we see that it states that the appropriation for the police in 2008-09 is a total of—

David Bennett: When are you paying it back?

RON MARK: There is the boy from San Francisco talking. He should tell members what he does in San Francisco and why he goes there so often. I will get him later. He does not wear a flower in his hair—that I can tell members. He is like me; he does not have much hair, so I would ask what he does there. San Francisco is a funny place, is it not? It is well known in many circles for certain things.

Anyway, the total appropriation for Vote Police is $1,445.785 million—an increase of 9 percent. That is an increase in the police budget of 9 percent. What we are seeing, with the increase in the police budget, and the increase in police staffing, is the biggest increase of police resourcing, if not a single increase in one term of Government, in the history of this nation. Contrast that with when Tony Smith was a Minister—I mean Tony Ryall. It is hard; one gets confused. “Tony Smith”, “Nick Ryall”—they seem to me like one and the same. They are just as crazy as each other. When Tony Ryall was Minister of Police in the National Government he had a policy of slash and burn. In those days we heard about police cars with 300,000 kilometres on the clock, about dented cars with no warrants, and officers complaining they were repairing the cars out the back of their police stations because there was no money.

Hon Member: No Tasers.

RON MARK: Well, New Zealand First is pleased to see that the police are still considering Tasers; we just wish they would hurry up and issue them. We will not rest until we see a Taser on every duty belt of every front-line police officer on the beat. National is jumping on the bandwagon saying “Yeah, yeah!”. It agrees with that policy, as well. Contrast that with what National said it would do for police safety. National was going to issue body armour. Well, 9 long years went by and nothing happened.

New Zealand First is pleased to say that we are quite happy with the appropriations for police. The only thing concerning us is if certain people get control of the Government benches and cut the budget again.

CHESTER BORROWS (National—Whanganui) : I want to talk about a couple of matters in relation to the Police vote, and we will see if we get to the Serious Fraud Office. The first matter is one that we raised at the estimates hearing at the Finance and Expenditure Committee not too long ago. I guess the glaring disappointment over the last few years has been the public’s loss of confidence in the police, and their loss of respect for them, after the Schollum, Shipton, and Rickards fiasco. That was something that had gone on over a period of over a decade—over a couple of tenures of Government—and was washed up, thankfully, over the last few years.

I hope we can move quite quickly to put that behind us. But, unfortunately, there are a set of circumstances around the Bazley report, and the recommendations that came out of that, that stick in the craw slightly. One of them, I guess, was the length of time it took to deal with Mr Rickards. That is the system of justice we have, I guess, and the employment laws we had to operate in as far as the Government and dealing with his employment situation were concerned.

The whole purpose of the Bazley report was to deal with sexual conduct within the New Zealand Police. What we have found is that we now have a code of conduct that does not deal with sexual misconduct, at all. In asking those questions around the New Zealand Police administration, the comments of Dame Margaret Bazley, when she stated in her report that in her view the implementation of a code of conduct for sworn police is a critical requirement for the effective management of sexual misconduct, did not seem to be addressed at all.

It is a real shame that although the code of conduct covers a wide ambit, and does that very well, this glaring, expected requirement is not there. It is difficult to word—I understand that—but the point is that this is what everybody was looking for. The delays are undermining the assertion that the New Zealand Police are taking the recommendations of the commission of inquiry seriously, because what has happened now is that the New Zealand Police has said it will write and implement a document that will run parallel to the code of conduct, and that has never been addressed. We are hoping that it will be released soon. We were told that it would be released in June. It is, apparently, going to the Minister in July, which is nearly over, so we expect to see that before too long.

I want to comment on another matter. My colleague Ron Mark has talked about police numbers, and police numbers have obviously come up. We have seen two tranches and we expect to see the other tranche completed within the term, and I offer my congratulations on the implementation of that. We have to say, of course—and the member will remember this well, because he has a vice-like memory—that that was National Party policy at the last election. The Government said it was rubbish. The Prime Minister said that anyone who was talking about extending police numbers in the thousands was not on the same planet. The Government conceded 250 community cops, and now it has conceded that they will be part of the 1,000 police and the 250 support staff.

I recently had cause visit to South Auckland, and what bothers me there is that I believe that the success of any Government administration in respect of the police will be measured by how well it does policing in South Auckland. If we look at some narrow points—because I have only 1 minute left of a 5-minute speech—we see that the frightening prospect we have there at the moment is that there are, for instance, 157½ members of the Manukau district criminal investigation branch. Eighty percent of those staff members are not qualified as detectives. How does that affect the ability of the police to perform? Well, there were 56 aggravated robberies of commercial premises, such as the robbery of the liquor store of Navtej Singh, between January and June this year, and only five of them were solved.

Thankfully, a special task force has been mounted to investigate commercial aggravated robberies, and it has solved 20 in the last month. But the terrible thing, the hugely distracting thing, about that is that when those officers looked at the files they found that the suspects and the number plates of the vehicles were named, but they did not have the staff to address it. They did not have the staff working in those areas. There were nearly 500 street robberies in the Manukau district in that same period of time, and they are not receiving attention. So although we can do a lot with staff numbers, what is important is the placement of those staff and their ability to respond according to public expectation and to cover those horrific homicides that crop up from time to time and drag staff in from somewhere else. There is no real salvation in being able to investigate murders when one is dragging staff away from investigating crimes that the public expects will be addressed.

• Debate interrupted.