RUSSELL FAIRBROTHER (Labour—Napier) : I am lucky enough in my electorate of Napier to have an organisation called the Sensible Sentencing Trust. It has spawned another organisation called the Red Raincoat NZ Trust, which has similar but different aims. The Sensible Sentencing Trust has been active in the marketplace for about 4 years. It encourages public support to drive up the length of sentencing of criminals, the level of sentence, and how people are dealt with in prison. Much of what the trust says is extreme, but the general message it seeks to impart is well received by the public at large.

Among Sensible Sentencing Trust members is a realisation that we can push sentencing only so far before we have to deal with the real cause of the problem—namely, the causes of crime. Garth McVicar, who has put so much of his time, effort, and own money into the trust, is realising that his efforts must be directed toward trying to prevent crime—perhaps even more strongly than the efforts to punish those who commit crime. For that I laud him and give him what encouragement I can.

Running alongside that trust is a new trust called the Red Raincoat NZ Trust, the name of which stems from the garment that young Teresa Cormack was wearing on her 6th birthday—the day of her last trip to school. The aim of that trust follows that of a similar sort of trust in Australia—it works to try to personalise the support that victims get. The aim is to deal with victims of serious crime, educate them, and get them past their own totally consuming grief into a position where they can empathise with others who are in a similarly aggrieved situation. The trust aims to provide support and perhaps counselling to help victims through that terrible trauma. Both those trusts are very, very worthwhile in aim, and, whilst they attract a lot of controversy, in my view they have had considerable success—certainly the Sensible Sentencing Trust has—in increasing the length of sentences. I hope they can continue so that their work as to the causes of crime may be equally successful.

The irony, however, is that, in the same week the Budget was announced, I received a letter from Garth McVicar on behalf of the Sensible Sentencing Trust. That followed an approach I had from the originators of the Red Raincoat NZ Trust. I imagine that every MP received the same letter from the Sensible Sentencing Trust. The letter asked for help in determining whether the trust should continue. The workload it has assumed is getting too large for the few volunteers who have run it so enthusiastically and well for the last 4 years. The letter hinted—and I do not suggest improperly; in fact, quite properly—for advice as to what income or support streams it could access so that its work could continue. Of course, the letter was really asking whether the Government could provide any assistance to enable the Sensible Sentencing Trust to continue. The approach of the Red Raincoat NZ Trust was similar.

That takes me to the quandary of this current debate, which is highlighted in terms of tax cuts. Many people who have been advocating the work of the Sensible Sentencing Trust appear to be from parties that are, at the same time, urging wholesale tax cuts, as though this Government was one of the overspenders in the history of the nation and was bringing about financial ruin. I find that quite strange, because requests for Government assistance come from wide and afar, and from both serious and less-serious organisations. I would not at all hesitate to put the Sensible Sentencing Trust and the Red Raincoat NZ Trust into the category of very serious, well-meaning, and successful organisations. If there was an income stream from the Government that I could attach them to, I would certainly help to do that. But to do that, I would then meet the outcry from those people in this House who stand up and support the trusts on the law and order issue, but who at the same time want tax cuts.

This is the quandary I find myself faced with: do I go to Garth McVicar and say that no, I think that tax cuts will be the popular thing and I therefore cannot support him, or do I say that I will stand in the face of the cry for tax cuts made by people who have made some political name by supporting his trust? Those people are advocating tax cuts but, equally, they do not seem to give their own help to Mr McVicar’s trust, and he has had to come to the Government cap in hand for money. Do I say that the Government will support him in the face of that cry for greater tax cuts?

It takes me to a greater issue—that of looking at the records of Government spending as against gross domestic product. If we are in a situation whereby we require tax cuts—the cries for them being so urgent—it must be because the Government’s spending has got out of control. That would seem to be the basis of the argument from the National Party, which is running around making such useless but derogatory statements as that it would reduce the number of pen-pushers. It does not identify which pen-pushers—unless they are the pen-pushers who support National’s research unit. But we do not know about that. It also, perhaps, might mean the people who sit in this House and waste valuable time, because if one stopped and worked out how much per minute it cost to run this place, one would absolutely tear one’s hair out at the amount of time wasted on a lot of words with no content. It has been at my displeasure to listen to much of this Budget debate, and we have heard name-calling, invective, ridicule, and very little substantive argument.

We were wondering what this tax-cut argument was really about, so I looked for some criteria we could assess it against. My research seems to suggest—and I stand corrected if someone can find research better than mine; I do not claim to be an economist—that in terms of percentage of gross domestic product, this Government is spending no more than the National Government of 9 years during the 1990s spent, and I do not see any record of its spending any more than any other previous Governments. So in relation to those now saying that the Government is spending too much money, and that we need to reduce Government spending so we can afford tax cuts, I ask whether they are saying that their Government during the 1990s was totally useless, misaligned, and wasteful, or whether it is just that the empty barrels that make a lot of noise are choosing to pick a bogeyman that will appeal to people in the street.

Hawke’s Bay is a very popular place to live in, and Napier is the most popular, but what has been witnessed in Napier is a real housing frenzy. The only people to profit have been real estate agents, as house prices have been driven up. We have seen people with smaller families move to larger houses so that they have more space than they need. They have bought electronic equipment and two or three cars, and taken holidays that are not necessary—that their forebears and even the generation before them never had. But the need is for still more money as we consume more than we can afford. As people buy flasher and bigger houses and bigger sections for smaller families, we find that those with lots of money are putting up fences with security gates controlled by buttons from inside, out of some imagined fear that people are going to raid them and find a lot of money in their safes. That is in the face of decreasing crime.

The larger part of my electorate, however, is the part I travel every week as I door-knock, where people on modest incomes live in modest houses. Those people are already receiving $60 a week from 1 April this year, from the Government’s targeted tax cuts. They are receiving $60 a week more, and within 2 years—that is, by 1 April 2007—that amount will go up to $100 per week. They are people not chasing bigger houses for smaller families, not chasing European cars to get to the shopping centre, and not driving 4-wheel drives to go and park in car parks. Those families do an honest day’s work for an honest wage, send their children to State-run schools, budget carefully and provide their children with responsible ambitions. They live in houses with low fences, relate to their neighbours, like the community in which they live, and are quite pleased with their modest accomplishments.

I find, as I walk around the neighbourhood, that they are thankful for the extra $60 a week in the pay packet that this Government has provided. So when some in my electorate cry for tax cuts I say, yes, we are giving tax cuts, but our tax cuts are targeted. They are targeted towards those in the community who need them. They are targeted towards the decent people who do not have delusions of grandeur, and who do not want to copy the lifestyles of the rich and famous. All they want to do is build families on solid, honest family values, where mum and dad like each other and like each of their children, and where their children accept responsibility and do chores without expecting to be paid for that. Those children go to school and achieve good or modest success and attendance grades, and they take part in extracurricular activities for no reward except a sense of personal achievement.

In my electorate, as I move around it every weekend—and I wish I could do it during the week, too, but I am down here, unfortunately—I meet those really decent people, where a sense of personal responsibility is the value they most espouse. They accept the money they are getting from this Government, which is already $60 a week and which will be increasing within 2 years to $100 a week.

STEPHEN FRANKS (ACT) : I was very pleased to hear Mr Fairbrother from Napier begin his Budget speech by referring to the Sensible Sentencing Trust and the Red Raincoat NZ Trust. For those listeners who do not know what the Red Raincoat NZ Trust is, I believe that it is a trust prompted by the red raincoat of the girl found on the beach, Teresa Cormack—or Kirsa Jensen?

Shane Ardern: Teresa Cormack.

STEPHEN FRANKS: I was also pleased to hear the member put into context the fact that money that goes to one purpose is, necessarily, taken from some other purpose. It is taken either from taxpayers or, through a change in priority, from something else that the Government is already spending money on. So the member, Mr Fairbrother, was not just giving a Budget speech and pretending that somehow the Government is simply handing out largesse created by bureaucrats or by the Government in Wellington; he was quite properly recognising that something that goes from the Government comes from somewhere. It shows the kinds of priorities the Government has. It is a practical, tangible demonstration of what the community values, what people vote for, and what the Government values.

I thought then of what this House spent its time on last week, and of what Mr Fairbrother voted for when we passed the Prisoners’ and Victims’ Claims Bill. We passed the bill—after many, many hours, and after days of consideration by the House and the select committee—to set up some new tribunals called the victims’ special claims tribunals. The Government has, in this Budget, budgeted to spend $534,000 to set up the tribunals. They will comprise District Court judges who, presumably, will also be doing other things to fight the crime wave we are suffering from. Each year after this, the Budget expects to spend $379,000 a year on the tribunals.

Why do I mention this in relation to the Sensible Sentencing Trust and the Red Raincoat NZ Trust? The reason is that the tribunals are to be set up to supervise and re-channel money that goes to prisoners for alleged abuses of human rights while they are in prison or on probation. The Government is promising there will be very little of that, because it is going to make sure that prison guards have a proper disciplinary process and that proper appeal systems and other remedies are available to make sure there is not very much. In fact, even before the Government has taken any of those steps, we know that over the last 10 years the amount available for the tribunals to throw around has been about $60,000 a year.

So there we have some indication of what this Government’s priorities are. It will spend half a million dollars this year and $379,000 a year for the next 4 years for a tribunal to distribute, at most, $60,000 a year. It could have taken every victim of an offender who got an award from one of those breaches of human rights and given that victim four times what the prisoner got, with no process of fault-finding at all. It could have said just that it recognised the hurt that would be caused when the victim saw the prisoner getting a windfall payment for some alleged abuse of human rights, and that it would give out to that prisoner’s victim four times what the prisoner got—and it would still be ahead.

This Government is spending more than $1 million to distribute $60,000 a year. Can we think of a better example of the priorities of a Government that spends all its time spinning? It never asks itself whether something is a sensible use of tax money or why it is doing something, because it knows that what it is doing is simply to cover its political tail. It has no interest in victims. Mr Fairbrother had an opportunity to vote against the Prisoners’ and Victims’ Claims Bill. Probably, had he advised the Prime Minister or the Minister of Justice that in conscience he could not support what he knew to be a useless piece of legislation, the bill would not have appeared on the Order Paper—at least, until after the election. The Government would not have stood for the embarrassment of an honest and obviously distressed man having to cross the floor to vote against the piece of legislative tripe this Budget is providing for.

A new tribunal that will cost half a million dollars a year to set up will get $379,000 a year from now on in order to distribute money to victims—and victims will have to have Lotto odds against getting any claims through, because they get no new grounds of claim. The Accident Compensation Corporation still prevents them from claiming for personal injury. So it will be a very rare victim who qualifies to go in front of a victims’ special claims tribunal. But if there is such a tribunal, then, on past experience, it will be able to qualify to distribute amongst the victims—and there will be hundreds of them—60,000 bucks. And the Government spends $379,000 a year to be able to do it. So I tell Mr Fairbrother that that is the explanation of what the Government’s priorities are.

Mr Fairbrother talked about matching tax cuts against benefits. Let us look at one or two of the other spending priorities of this Government. If we look under Vote Corrections, what do we find are the key Government goals most directly supported by this vote? [Interruption] They are pretty naked about it, anyway—“maintain trust in Government.” So the Government says to the prison service that its most direct object is not to keep bad people locked up, not to protect people from those who are just incorrigibly evil, but instead, and I will read it: “The key Government goals most directly supported by Vote Corrections are:”—under the first bullet point—“maintain trust in Government”. There is silence. I do not see too much pride from the Government benches when the members in them hear that that is the No. 1 goal of Vote Corrections.

What is the second goal? I suppose it might be about protecting people from criminals. It is: “strengthen national identity”—code for “love for the Government’s social policy”. The second goal is: “strengthen national identity and uphold the principles of the Treaty of Waitangi”. This is the prison service. Its first goal is to maintain trust in Government and its second goal is to uphold the principles of the Treaty of Waitangi. What a load of tosh! This is the Government’s Budget. If Government members were not so totally soaked in political correctness, they would read this and think: “Why do we put this in writing? We are sinking ourselves.”

The third objective of the prison service—wait for it—is: “reduce inequalities in health, education, employment and housing”. We still do not have anything to do with bad people. We still do not have anything about criminals and about keeping people safe. What about the people in Feilding at the moment—the people in Feilding who do not know who has committed the recent crime there? They can quite rightly suspect it is probably somebody who recently has been released well before the end of his or her prison sentence, because 80 percent of offenders do reoffend, and they can probably assume there would have been—[Interruption]

Part of the Corrections budget was $30 million for psychological reports and $107 million for legal aid lawyers. Mr Fairbrother, I am sure, got a lot of that. Mr Fairbrother started his speech in the Budget debate with some crocodile tears for the Sensible Sentencing Trust. That trust could have done with three-thousandth of this Government’s Budget on law and order and justice. Three thousandth of it has gone to Victim Support. Just a tiny fraction of what is going on legal aid could have gone to Victim Support, to the Sensible Sentencing Trust, and to the Red Raincoat NZ Trust, and all of them would have been over the moon with delight. Garth McVicar deserves the half million dollars that is being utterly wasted on the useless victims’ special claims tribunal. The Red Raincoat NZ Trust deserves just a fraction of what is going on legal aid. The Budget states what the Government’s real priorities are: lawyers like Mr Fairbrother.

Hon STEVE MAHAREY (Minister for Social Development and Employment) : It is good to follow on from the valedictory speech of Mr Franks, and to pay compliments to Mr Russell Fairbrother who, as usual, I thought, gave a very thoughtful, erudite, even speech on the issues of crime and punishment. Of course, he was not giving a valedictory speech; he will be here to do something about it post the next election. Budget 2005 was the sixth Budget delivered by Dr Michael Cullen. I doubt whether anybody—as long as he or she is not churlish, or paid to be the Opposition, as the Opposition are—would say anything other than that this has been a staggering run by Michael Cullen. I cannot think of a Finance Minister anywhere in the world who would not have liked to rise, as Michael Cullen has, year after year and deliver the kind of Budget that allows him or her to talk about growth, to talk about jobs, to talk about a surplus, to talk about declining debt, to talk about employment, to talk about unemployment going down, to talk about the number of people on benefits going down, and to talk about investment. Everything that Michael Cullen is investing in matters to New Zealanders. That is what he has been able to talk about for 6 short years.

Again, this year in 2005, Michael Cullen rose in the House and gave us a Budget that featured not only all the good things that have gone on for the last five Budgets, but he added to it by saying that to continue his theme of saving he will now create KiwiSaver, a new work-based savings scheme that will also allow people to get their first home. About 5,000 struggling Kiwi families will get their first home. He also reduced taxes for businesses across the country, and moved taxes in the form of putting more taxes on carbon and less on business, which is the way of the future. He put additional spending into core areas such as education and health. Michael Cullen enhanced the security of New Zealanders by investing in the police, in defence, in Working for Families, and in the elderly. He also went on to support the now longstanding pathway to growth that this Government has overseen.

People in the House may have forgotten this—people forget about the 1990s a bit—but from 1972 to 1998 the incomes of New Zealanders dropped. They dropped year after year. Then something happened in 1999: it was called the Labour-led Government. That was the change. The Government did not do it on its own; it had some good conditions. But this Government changed the settings of policy—Michael Cullen did that; he was the one who led it—and we have now had 6 years of growth. I am delighted that in this Budget we will do more for early intervention for families, and for people who are on illness and sickness benefits to go back to work. We will help people in regions across the country to get into work. We will help young people to get started again. We will invest more in research, science, and technology—the single biggest increase in research, science, and technology was in this Budget. We will help more people to get a house. We are going to build more houses. We are going to make up for the deficit of 13,000 State houses that were sold by the previous National Government, which was on its way to selling the entire 70,000. If National had got back into Government, the entire 70,000 State houses would have gone on the block. In broadcasting the nation-building process of making television programmes, of supporting the independent screen industry, of having independent radio, all the nation-building activity that is represented in the arts and culture of this country, which give it the soul that we are all so proud of now, got more investment. And young people also got more investment, and they will have more of a say in what goes on in this country.

What does the National Party say? The National Party has said that if one has ingrown toenails, if one wants to grow one’s business, if one wants to buy a house, if one wants a school, or if one wants to do anything at all in this country, one has to have a tax cut. I suppose what someone does with that tax cut is to buy his or her own hospital, school, or road, because by Christmas National would have not just tax cuts but big ones. National promised us by Christmas, by Santa Claus, by the time we eat our Christmas dinner, and by the end of December of this year, monstrous tax cuts—billions of dollars worth of tax cuts.

Darren Hughes: Is National still going to do that?

Hon STEVE MAHAREY: My hopeful colleague from Ōtaki, Mr Hughes, asks whether National is still going to do that. He does not want the tax cuts; he wants investment in health, education, roads, and all those things. But he wonders how the National Party could be as stupid as that.

When a journalist rang to ask me what I thought about the tax cut policy of the National Party, I said that now and again in politics I say to myself: “Thank you, Jesus. Thank you, Jesus, that the Opposition can as stupid as this.”, because that policy is what keeps National on the Opposition benches. I said that on the occasion of hearing Mr John Key and Mr Don Brash argue about major, billions of dollars worth of tax cuts.

We have the scene set now for a big election campaign. The story of success over 6 years, after 30 years of falling fortunes in this country, is that there have been 6 short years of gain for New Zealanders, finally. That is our record, against the rerun of failed 1990s policies—because that is all they can be. It will be a question of going forward or backwards, come this election campaign—nothing more than that. We can go forward with things that are working, or have another larrup at the things of the 1990s that drove us into the major deficit that this Government has been trying to address in the last little while. Six years ago, when we came into office—and New Zealanders will be reminded of this time and time again come this election campaign—no one even trusted the Government to make a difference, never mind thought the Government made a difference. People did not even think that it was possible for the Government to make a difference, after we had had Richardson, Shipley, and other people who had wrecked the country. They did not even trust the Government to make a difference. We spent 3 years saying what we would do and doing it, and when we went to the election 3 years ago, people had rebuilt their trust in the Government. They thought it did make a difference in their lives. They thought that the Government did make promises and keep them, and did make a difference—that government can be positive. So 3 years ago we said let us move from doing that to building the platform again, and we did that as well.

We have a success story. We are proud of the achievements that National says it will not continue. National says that it wants to change the formula radically. That is an important point. National is not saying that it will just do better on the basis of that fantastic formula—not that it will do better on housing, or jobs, or growth, or whatever else—but that it will scrap that formula, forced by billions of dollars of tax cuts. So we will go back to boom and bust rather than steady growth. We will go back to unemployed people being told that they are the natural consequence of trying to get the economy right, and that they should be grateful to be unemployed because they are helping the nation. We will have every single region shrinking again, as the regions did in the 1990s. We will have cuts to education and health. We will have a food bank industry back. We will see the investment in transport shrink. We will have no defence spending, and no arts and culture spending—we will have just tax cuts. And it will be a first-term MP who asks us to believe that he can deliver on those tax cuts making a difference for New Zealanders. Don Brash is desperate to get there, of course, which is why he is promising that. He is 60, and he knows that if he doesn’t get there this time—

Darren Hughes: 64!

Hon STEVE MAHAREY: He is 64. If he does not get there this time he knows all the Young Turks are just waiting to take him out, so he will promise anything that it takes, including tax cuts and more spending on everything, so that he can bribe people back into thinking that he can become the Prime Minister.

Well, I do not think Don Brash will become the Prime Minister. This is what I think will happen if the National Party ever gets there. Don Brash would not become the Prime Minister, because he is not popular enough. The man who would become Prime Minister is the man who craves greatness in the shape of the man he is named after—that is, Mr Winston Peters. Mr Winston Peters is also 60. Two old men in a hurry is what we are watching here. They now have to make it—or they lose it. So Winston Peters will say: “I am the most popular person. I am in the coalition. I want to be the Prime Minister!”. All through the campaign we will remind New Zealanders that on the shoulder of “Mogadon Don” is “Winston Call me Churchill Peters”. The man who wants to be king, finally, in his twilight years as he waits for the Zimmer frame, will be saying: “Don, move aside for me because the only thing I have to my record is bringing down the National Government. That’s all I have, but I want to be famous. I crave success and greatness, and this is my hour.” So come the election, if the National Party were to win, the Prime Minister would not be Don Brash; it would be Winston Peters. Is there any more fearful image than that?

The ASSISTANT SPEAKER (Hon Clem Simich): The next five members will make 5-minute contributions, with a bell at 4 minutes.

IAN EWEN-STREET (Green) : It seems slightly inappropriate, following a speech about the twilight years and the Zimmer frame, to talk about something as important as “rock snot”, but that is what has fallen to me today. There is an algae called Didymospheniageminata, which rejoices in the nickname of “rock snot”. It is an algae that inhabits rivers. It forms rat’s tails. When it is dry it looks like toilet paper. It feels like wet cotton wool. It chokes everything in the river. It destroys the whole river ecosystem. We have an infestation of “rock snot” in New Zealand. In Southland, 200 kilometres of the Waiau River and the Mararoa River are infested with this algae. One might say that Southland is an awful long way away, it is only two rivers, it is not a problem. However, I am sorry, there is a problem because it takes only one or two cells of that algae to spread to another river system. What is even more pertinent is that although it is widespread in the Northern Hemisphere, it has never ever been eradicated from anywhere in the world.

The Government knows well about “rock snot” but it is not trying to eradicate it, it is simply trying to control it. Why is that? Is it too hard? Maybe it is too hard. It is difficult to eradicate, and, as I say, it has never been eradicated anywhere else, but the question is: why are we not trying to eradicate it? What happened with the foot-and-mouth hoax—and thank goodness it was a hoax—on Waiheke Island? The Government spent $1 million a day to deal with that. Why is it that the Government spends tens of millions of dollars spraying the people of west Auckland to get rid of the painted apple moth; more millions of dollars spraying the people of Hamilton to get rid of one dead Asian gypsy moth; and millions of dollars before that to get rid of the white spotted tussock moth, but it does not spend money to get rid of other things that infest this country, like the mosquito carrying the Ross River virus, the fall web worm, and, perhaps more pertinent, the varroa bee mite?

Where does that line get drawn? Who makes the decision about what gets eradicated and what does not? I put it to the House that the line is drawn on economic grounds, not environmental grounds—on whether something looks as though it would cost the economy, as foot-and-mouth certainly would. Foot-and-mouth would bring the economy to its knees in a week if it really did become established here. So things that look like they are a long way away, like two rivers in Southland, just get controlled. But what happens if “rock snot” does get away on us, if it does infest more rivers, if it does get into Lake Manapouri, and if it does start clogging TrustPower’s turbines, or whoever the generator is down there? Then it will become an economic problem. Then we will say: “Hey, whoa, perhaps we had better spend some money on this.” But by then, of course, it will not just be two rivers, it will be a whole network of rivers. It will be too late, but it will still be a huge economic problem.

The question we have to keep asking ourselves is: do we need to allow these things into the country and then try to eradicate them, or do we stop them at the border? I have been a critic for some years of border control biosecurity, but I have to say that in the last 2 years in particular border control has actually become very good. I am very happy with airport control, with international mail centre control, and I am pleased to say that after about 3 or 4 years of harassment from me and many other people, the Government has moved from 24 percent container inspection to 100 percent.

The problem with the 100 percent container inspections is that a lot of them are done at what are called devanning centres. These centres are where the containers are shipped to, opened, and unloaded. The people who do the inspections are the people who run the devanning centres. Now there is a conflict of interest, if ever there was one. Why does this Budget not have money to put into independent inspectors going to each of the devanning centres to open each of these overseas containers, to check for biosecurity threats?

KENNETH WANG (ACT) : We are debating Budget 2005, and I wish to draw members’ attention to the point that a group of important New Zealanders in our society are being overlooked. They are the small-business owners. Members on one side of the House are saying that cutting tax rates would be beneficial for the rich, and members on the other side say that tax cuts are good for the economy. We often overlook those small businesses that form 90 percent of our economy.

Maybe I can qualify what is being said because I am the member of the House who knows best about those people who run their own businesses, day and night. I wonder how many members of the current Labour Government know how hard it is to run one’s own business, and how many members, including our Minister of Finance, did run their own businesses. As a small-business owner I used to work day and night. I know how hard it is to keep the life of both one’s business and one’s family going. I know that the first obligation is to satisfy the taxman, because everyone knows what happens if we do not.

I would also like to draw members’ attention to the anxious expectation in our society before the Budget was released. The National Business Review, at the end of April this year, quoted that the latest NBR - Phillips Fox poll showed that over 62 percent of people thought the current tax rates were too high. The public has spoken. They wish to have a lower tax system that would allow them to get on with their lives—particularly those people who are running their own businesses.

If we say that this Budget is a great opportunity missed, I would say it is a nightmare for business owners. Not only will they miss out on the results of a so-called booming economy, but they are facing a much chillier winter season coming. Our Government is now predicting much slower economic growth, and much harder conditions for them to run their own businesses.

I have been told constantly by members on the other side of the House that tax cuts will benefit the rich. I would like to challenge the definition. Those people who run their own businesses, be it a shop, working as a plumber or an electrician, or even working in a small business like I had, which employed four or five people, are qualified as rich. These are what the members on that side of the House call the honest members of our society. They value family values in that they are very, very responsible and they are certainly sensible members of the public. They should not be qualified as being rich, because they know they are at the bottom of the list of what has been considered the “rich list”. They have to satisfy the taxman and they have to pay their own employees their wages first, before they can pay their own family members. Yet they have been qualified as rich and they are being put at the bottom of the list in this Government’s Budget. They should be located at the top.

MAHARA OKEROA (Labour—Te Tai Tonga) : I rise with some dismay. I will read some quotations from a former Labour Government Minister, who is now the leader of the Māori Party, with regard to the Budget: “Tangata whenua have been snubbed.” Here is another quote: “Well, they mention the word ‘Kiwi’ 26 times but we’re absolutely invisible in this Budget, and this is a Government.” Further: “I try very hard to be respectful and not get into negative debate about the Government, but I think the time has come for us to start speaking out about what is a very, very clear trend from this Labour Government, and the worst thing about it is those Māori members who are meant to represent our interests are going along with it.” Yeah, right!

Let me illustrate what I am trying to say. Let me take one of the major parts of our Budget, which is education. We understand that education is the key to unlocking a better future for Māori. It is the first step in our progress through employment, then to enterprise. So what do we have in this Budget? In early childhood education we are going to spend another $28.4 million to expand the early childhood education discretionary grant scheme. This will fund the building of 55 to 65 more community-based centres over the next 4 years, in the areas of need. Are we going to benefit as Māori? Absolutely! What does it mean for Māori? It means that our children will get a better start in life. Our communities will become better equipped with education for our tamariki, and 20 hours a week of free community-based early childhood education means that money is not an obstacle when educating our young. How innovative, visionary, and far-seeing!

As part of that education package we are also going to invest in information technology. Next year the Government will invest nearly $60 million into information and communications technology in schools, including more bilingual web-based resources. On top of that we are going to spend another $3.2 million, over 4 years, for WhakaaroMātauranga, which will maintain the Te Mana information programme and increase the number of Māori liaison officers, pouwhakataki, working between the communities and the education sector.

Even more so—and a lot of Māori teachers have really pushed for this one—teachers of Māori language will have more classroom release time to participate in professional development. Māori teachers become guidance counsellors, career advisers, sports managers, and sports coaches—they become a person for every season as far as secondary school teaching is concerned—and this is a recognition of that.

What about when they get to tertiary level? We are going to have a $57 million student support package that will give Māori further opportunities to participate in tertiary education. There is a new initiative, as well. It is called the KapohiangāRawa programme, and has funding of $14.8 million over 4 years for outreach and community workers to work with whānau, to provide information and advice on education, career planning, financial management, and housing. This programme will play a critical role in moving individuals and their whānau from dependency to development.

What does it mean for Māori? It means that our teachers are able to get more time to undertake training to better their te reo skills and also to become better teachers. After all, this Government, at whatever level in education, has a total commitment to quality of outcomes, and that affects our children.

I find a 5-minute speech quite bracing, actually, because when one breathes, it is all over. However, let me conclude, in the last half-minute I have, by saying that in my visits around the biggest electorate in New Zealand, Te Tai Tonga southern Māori electorate, the thinking people in our electorate want three things, and they all start with “c”. One is consistency. They need consistency to have confidence that what we are doing in health, education, and other social indicators will continue; they want continuity of already established policies and practices; and finally, they need to have confidence, and that confidence is based on an inherent sense of political stability.

JUDY TURNER (Deputy Leader—United Future) : It is interesting that in a recent poll voters said that health was the No. 1 issue of concern to them, and I want to talk a bit about Government spending in that regard.

When we look at health there are, I think, three main issues. The first one I want to talk about is probably the key issue that affects every household, and that is how much it costs to go to one’s local general practitioner. It is appalling to think that visits to the doctor by vulnerable members of the community, children and the elderly in particular, are constrained by cost. As a parent I have been in that situation of wondering whether to wait to see whether the child gets more sick before making that visit, or to spend the money now. Certainly, the primary health organisations that have been established have been set up with the intention of bringing down those prices.

Hon Annette King: They are.

JUDY TURNER: I say to the Minister of Health that, anecdotally, there is some evidence around the country that not all general practitioners are cooperating, and that some rather hefty bills are being paid by those who would have expected, now that their general practitioner is part of a primary health organisation, that cost to start to come down. I understand that general practitioners have always been allowed to set their own fees. As primary health organisations, they are expected to consider and factor into their charges the subsidies that the Government pays them. At present I think it is about $36.40 for the under-sixes and about $26 for everybody else.

Hon Annette King: Not everybody yet.

JUDY TURNER: No; I think it is about 3.7 million of our population, which is a pretty good rate, I have to say—a very high take-up of people now enrolled in primary health organisations.

The concern that some of us have, in the middle of all of that, is to make sure that what we are setting out to achieve is a destination that we are arriving at. One of the concerns I have is avoidable hospital visits. The recent report, the Health and Independence Report, put out by the Director-General of Health, an annual report on the state of public health, mentions that we can certainly measure primary health care outcomes by whether there is a reduction in the number of hospitalisations that are characterised as potentially avoidable or fully avoidable. The theory is that if people go to their doctor early enough because it is affordable, then the number of people turning up at hospital whose hospital visit could have been avoided will go down. What concerns me is that although for the last few years the number seemed to level out, for a while we had a situation—I think it was in the 1990s—where the admission rate was going up by about 3 percent a year. Certainly, since about 2001 that figure stabilised. I guess we are hoping to see that figure tracking down, but unfortunately, in the last little bracket of time, it has tracked up again ever so slightly.

The concern is that avoidable hospital admissions of our Māori population continue to increase by about 1.1 percent a year. Of even more concern is the fact that for our Pacific Island community—and both Māori and Pacific Islanders are groups that have been targeted by the primary health organisation scheme—a 4.2 percent increase in the number of avoidable hospital visits is experienced most years. It is tracking upwards. I think we need to start looking at those measurements, to check that we are really delivering, because that is a key—

Hon Annette King: It’s only been going for 2½ years. Give it a chance!

JUDY TURNER: Well, after 2½ years I think some tracking down of, particularly, the Māori and Pacific Island figures, about which we have always been concerned, should start to happen.

In the time I have left I want to talk about waiting lists. United Future would like to see the Government address the fact that a country our size cannot afford to have wasted capacity. Many times we do have wasted capacity in the private sector. We would like to see contestable funding made available, particularly to reduce waiting lists. I would also like to mention that, as was talked about in question time today, the development of the health workforce is probably the greatest future crisis facing our country, and we need to be very proactive in this regard.

HELEN DUNCAN (Labour) : This Budget is from a Labour-led Government, and this Budget is about Labour values. It is about maintaining a strong and credible fiscal stance. It is about being fair and inclusive. It is about helping Kiwis to build a stake in their country, and it is about building the conditions for growth. This Budget is about securing our future for the nation as a whole, and for New Zealand families and New Zealanders individually. We are focused on improving the long-term economic and social health of all New Zealanders, and our careful financial management to date means that we can continue to invest in the important areas of health, education, and social services. This is our sixth Budget, and it builds on the strong fiscal position that we have created.

Budget 2005 commits additional resources to health, which will total over $1.09 billion by 2008-09. That is a fantastic amount of money. We have never spent so much money on health in New Zealand before, and a good part of that reflects meeting in full the cost of maintaining real population-adjusted spending in the health and disability sector. That is beginning to show in the fact that good primary health care means that tertiary health care costs can then come down.

We are increasing our investment in early childhood education. Everyone who cares about education knows how important that sector is. It sets the tone for everything that follows. Our investment in early childhood education will increase by $152 million over 4 years. That is a staggering amount of money, and we will continue to deliver on our commitment to make early childhood education more affordable, more accessible, and of the highest possible quality for all New Zealand families. Our commitment, too, to provide more and better-paid teachers in our schools continues, and there is a total investment of $1.43 billion since Budget 2004. That is a lot of extra money that is going into education, and it is being felt in our schools, where the number of staff over and above those needed for roll growth just continues to grow.

We have also put in place what I think is a wonderful new initiative to help New Zealanders to save and build a stake in their country. The new KiwiSaver scheme will come into operation on 1 April 2007, and it will be linked to a new scheme to assist modest to middle income families with the deposit for a first home. There will be encouragement for all New Zealanders to become involved in the KiwiSaver scheme. Those who have saved for a minimum of 3 years will then qualify for an additional subsidy of $1,000 a year, up to a maximum of 5 years, at the time of the purchase of their first new home. Let us just think about it. We may be able to get homeownership levels back to what they were when we had a Labour Government before. That is what we really need. We need to have New Zealanders owning their own homes and feeling that they have a stake in the future of their country. If a couple are both KiwiSavers, they will get $10,000 towards a deposit for their first home, and that has to be good.

We are working to make the tax system simpler for small and medium businesses. The tax compliance system is getting easier. I have a son who runs his own business. He started off by employing two people, and he now employs six. He thinks that the things we have done towards tax compliance for small business are just wonderful.

Dail Jones: Name one.

HELEN DUNCAN: Depreciation rates. The forms are so much easier to fill out now. There are fewer and fewer forms, and compliance costs have gone down and down.

This is a good Budget, and it will be good for all New Zealanders.

BRENT CATCHPOLE (NZ First) : I rise to speak on Budget 2005. I have done quite a lot of research into the leaky homes resolution service particularly, and I have searched through the Budget from cover to cover, without finding anything that showed this Government’s intention to stand up to its responsibilities. There is no figure in the Budget that shows the Government even cares about its responsibilities to the leaky homes resolution service. Seven Ministers—and I notice that one of them has just walked into the House—have presided over the problem under this Government. The attrition rate is incredible. I guess that the extent of the problem is such that as we become more and more aware of it, those Ministers are very quick to give the hospital pass to one of their poor, unsuspecting colleagues. That is what seems to be happening. The Minister who has just walked into the House presided over the very time that the weathertight homes debacle was very much in the media, but he totally ignored the problem that was happening.

Russell Fairbrother: Boring.

BRENT CATCHPOLE: Russell Fairbrother is calling out “Boring.” Does that member think that this particular situation is boring to the people who suffer from the problem of owning leaky homes? The Minister who is in this House presided over the situation.

I shall cite an issue that I discussed with that Minister. He claimed that no house in New Zealand would leak if it was built correctly under the building code. I think that every single house in this country, including the one that we are in now, has leaked at some stage during its life. There are particular situations whereby as the ground dries out, foundations move and crack, and that is not something that has been factored into that Minister’s reckoning. I tell Mr Fairbrother that this problem is not just a mere irritation that can be brushed off. It is huge.

At the time of the weathertight homes inquiry I did some estimates and checking with the industry. The estimates that came back as to the magnitude of the problem—and I have some of those calculations here—showed that repairing the leaky homes would cost in excess of $2 billion. I am afraid that those estimates are a little shy of the amount now that we have realised just how big the problem is, and how much it will cost to repair those homes. That is now estimated to cost around $5 billion, which is a lot of money for homeowners to find in order to pay for their leaky houses. It is not a laughing matter; it is serious.

At the time, I estimated that about 20,000 homes would be affected. From May 1996 to June 2002, 139,000 permits were issued for homes, and it has now become clear that many of those homes will suffer from this problem. We have not seen anything but a fraction of the problem, because in many cases the issue of those homes being leaky has not appeared yet. Perhaps in 10 years’ time a hot-water cylinder will burst or start to leak quietly, and the timber in behind that cylinder will start to rot. Because the timber is untreated it will rot, and that rot will travel from one end of the building to the other.

New Zealand First believes that this Government is not playing its part with regard to this problem. It is not putting money into the Weathertight Homes Resolution Service to make sure that it is providing a service. New Zealand First wants to see more money put into that service, to make sure that it can provide a satisfactory resolution for affected homeowners. The Government has provided a figure of 2,109 claims against the resolution service as at 28 February 2005. That figure has now increased to 3,500. The service is currently managing to resolve 120 claims a year. That is a ridiculous situation, and the longer it goes on the more problems will appear and the more expensive it will be to repair those homes. This Government needs to put more money into the resolution service, as New Zealand First will do when it becomes the Government. The resolution service needs to be properly funded so that it can perform the tasks it was set up to do. At the moment the service is not being funded adequately.

Even worse than that, the Building Industry Authority is being sheltered from its responsibilities by this Government. They have been palmed off on Treasury, so that the Building Industry Authority cannot be sued. In fact, the Budget has provided $4.5 million to fight against legal claims. That is $4.5 million that individual homeowners have no means of matching—they do not have a show of matching those figures. The Crown Law Office stated that it would not pay up if the Building Industry Authority is found to be guilty until the authority has been through all possible court proceedings. Every single appeal that it can possibly make to delay proceedings is another means by which this Government can avoid its responsibility. New Zealand First says that that is not good enough. It wants to see that turned round and things done to ensure that homeowners have a proper format to be able to claim against the authority.

The authority is responsible for a lot of the problems, which started in 1996. In fact, Standards New Zealand started them when it agreed to the standard for kiln-dried. Then, in 1998, the authority approved the system of using untreated timber, matched with monolithic cladding and no wall cavities. As a result of leaking homes appearing, the authority then stuck its head in the sand and refused to acknowledge the problem. During that time it had the Barrett report from Canada and numerous other reports from overseas that showed that the problem existed and had grown. The Minister Mr Hawkins knew, and refused to acknowledge, that a problem was happening. He stuck his head in the sand, along with the authority. Maybe the authority refused to acknowledge the problem and did not tell the Minister about it, but he certainly did not read his mail during that time. He received letters from various members of the industry right throughout that time, explaining that the problem was huge and that he had to do something about it.

New Zealand First wants to see money put into the resolution service, so that people can have the service that was predicted to occur. But, no, those people have to front up with lawyers, at a huge cost to themselves, to be able to fight. The only claim that has been successful was from the owners of a multiple complex. Owners that are body corporates cannot go before the resolution service, so all homeowners in multiple complexes that are under body corporates have to go to court anyway. Therefore, the figures on the resolution service’s website are misleading, because the true extent of the number of houses and homes that are affected does not appear in the statistics. The Minister is laughing. He thinks it is a joke that people have to go to court and resolve the issue in that way, and that the authority refuses to participate in the very service that this Government has set up to help those people. Again, the authority is the one that is refusing to acknowledge the problem. It is ignoring it, and it is going round the long way by making people have to pay to go to court, which will cost them a huge amount of money.

New Zealand First says that the Government should put more money into the resolution service, so that the problem of leaky homes can be resolved.

LIANNE DALZIEL (Labour—Christchurch East) :My team in the Christchurch East electorate and I have been out door-knocking every weekend, and what good news we have found on the doorstep—very good news. A working father with his wife and three children is almost $100 a week better off because of this Government’s Working for Families package. That is what Working for Families means for ordinary New Zealanders, and I think it is time that the story was told. Of course, his is not the only family that is better off, but he was keen for me to be told how much that boost to income means for his whole family. My team was pleased to tell him that there was much more to come in terms of that with the in-work payment kicking in, in April next year.

Those lower to middle income working families know that there is no way that an across-the-board tax cut could ever return what the Working for Families package has returned to families with children. They know that I do not need a tax cut. I am on a high income, and I do not have children to look after, either. Why should I have a tax cut? But that is actually the question we should be asking the National Party. Why do National members think that I should receive a tax cut and not the family in my electorate, with a wife at home and three children to support?

If we think about it, we realise the Working for Families package is a targeted tax cut. That is what it is. It is delivering to those who need extra dollars in their pocket each week, because they are raising our next generation. They are responsible for the children of our country, and they are the people whom this Government gives the tax cuts to—not to the rich mates in big business, as some parties in this House would prefer. There is no way that families in Christchurch East could get the kind of extra income that they are receiving under this Government from a tax cut that, by its nature, is designed to benefit most the richest people in New Zealand, who receive the most out of across-the-board tax cuts.

I have difficulty with the Opposition’s promise of tax cuts by Christmas. If we listened to the Leader of the Opposition on the radio the other day, he said that none could be implemented before 1 April next year, anyway, so the question of which Christmas is the real issue there. But the real question that everyone wants to know the answer to—which the National Party refuses to answer and on which those members remain steadfastly silent—is where the money will come from for those tax cuts.

The information I have is that every cent knocked off the top personal tax rate of 39c in the dollar costs $115 million, every cent taken off the upper middle rate of 33c costs $95 million, every cent taken off the lower middle rate of 21c costs $325 million, and every cent taken off the bottom rate of 15c costs $215 million. The approximate cost of just changing the personal rates from 33c and 39c to 30c is $1.725 billion. Where on earth does $1.725 billion come from? The National Party keeps very quiet about that point, because there has to be a reduction on the spending side of the ledger if there is to be a reduction on the income side of the ledger. I am absolutely gobsmacked that somebody who calls himself a former Governor of the Reserve Bank does not know basic economics—if we are to cut our income, then we have to cut our expenditure to match.

The Opposition has to front up and tell New Zealand how it would pay for the tax cuts. The question I ask is whether it would stop the in-work payment next year, which will see my constituent another $50 a week better off. Is that how Opposition members would make sure that they have enough for their big business supporters, who have personal annual incomes of hundreds of thousands of dollars a year—by taking away the targeted tax cut? Maybe they would cut the public service. What does the National Party mean when it talks about the public service? How many of the extra 2,700 teachers we have employed would it lay off? How many of the 3,300 extra nurses who have been employed under a Labour Government would be cut? How many of the 950 extra medical staff who have been employed, the 1,250 extra non-clinical support staff, the 398 extra social workers at Child, Youth and Family Services, the 138 extra probation officers, the 820 extra prison officers, and the 1,080 extra police who have been employed would be cut? Which jobs are on the line because the Opposition has to find the money to pay for that tax cut?

Fortunately, we will not need to find out what the Opposition plans to cut, because the electorate will not buy the nonsense of tax cuts as promised across the board by Opposition parties. People will not accept the mantra of tax cuts without knowing how they are to be paid for. Not knowing how much they plan to cut on both sides of the ledger leads me to suspect that the cuts are deep and will hurt a lot, and that they obviously go into health and education.

This Government has committed enormous funding increases to both health and education, and the results are now showing very clearly. Many more operations are happening in our public hospitals today because this Government has funded them. This Government also funded the mobile bus that is taking surgical services out to small provincial hospitals that would otherwise be closed. The previous National Government failed to fund the bus; this Government said that it was an exciting innovation and it put the money behind it. Under this Government, better primary health services have been coordinated through primary health organisations. There is much better pay for nurses, and there are brand new hospitals and equipment so that the job can be done. I went to the opening of the new Christchurch Women’s Hospital a few weeks ago. Do people know when the closing and rebuilding of the old Christchurch Women’s Hospital was first discussed? It was first discussed in 1990. Then there was a change of Government, and, guess what: there was no money for the rebuilding of Christchurch Women’s Hospital for 10 long years, and now we have a Labour Government, which gave the hospital the capital expenditure to continue.

What about education? We have had enormous advances as a result of this Government’s commitment to education. If we look at the commitment to early childhood education, the evidence shows that it makes a real difference. The Opposition wants to destroy the State school network. It wants to reintroduce vouchers. It wants selecting schools, which will deny kids the right to go to their neighbourhood school. The Opposition calls it parental choice, but it is not; it is the schools’ choice. They can say: “No, we don’t want you. You’re not good enough for our school.” Increased funding to private schools would be matched by decreased funding to public schools. At the tertiary level, it was the Opposition that introduced the student loan scheme, and we as a Government have worked hard to make the scheme fairer.

What about employment relations? The nurses can kiss their multi-employer collective agreement goodbye should National ever occupy the Treasury benches. University staff will not get a multi-employer collective agreement off the ground. The teachers will not get a multi-employer collective agreement. National Party members have made it very clear at select committee meetings that that is the one thing they regret not dealing to when they had the chance with the Employment Contracts Act.

This Budget is good news for my electorate. It builds on last year’s Budget announcements. I have not mentioned the real opportunity for homeownership and encouragement to save provided by the fantastic initiative KiwiSaver. I think it is brilliant, and the reaction to it in my electorate has been very positive indeed. The Budget provides $17 million more for cataract operations, a 10-year package for defence—the list just goes on and on. No matter how the Opposition tries to spin it, this is a good Government with inspirational leadership and the best Minister of Finance this country has ever had.

The ASSISTANT SPEAKER (H V Ross Robertson): I wish to advise the House that United Future members have split their call into two 5-minute calls, and for their benefit the bell will ring with 1 minute to go.

BERNIE OGILVY (United Future) : I want to look in particular at education in the Budget and in the appropriations that have been put before us. We in United Future are of the mind that the kernel of life is to build a child. It is much easier to build a child than to repair an adult. The family is the core of our country. The previous speaker indicated that this Government has been endeavouring to reach out to the family, and that what is good for the family is good for the country. United Future wishes to shift the emphasis of educational policy towards a very fundamental matter: learning.

United Future affirms that the home is where the first teacher works. I note that this Budget provides very little additional help for teaching in the home, for Parents as First Teachers. In the home the kitchen table becomes the first school desk, and in many cases the child’s bedroom wall becomes the first chalkboard—unfortunately for some parents. We take the view that the responsibility rests with parents to make choices as to what their children learn and where they learn—at a pre-school, at a school, or at home.

We believe that the child should receive the money wherever the child is being educated. We say that to build a child is easier than to repair an adult. I do not think many people in this country lack concern—and they are very concerned—that over 25 percent of our children cannot read or write and are mathematically illiterate when they leave primary school. That is an indictment on the system. I know that the Government is trying to address the problem and has set money aside to do so, but it is not being addressed in the areas that we know that it applies to the most.

The schools that have the indicators for these difficulties are not being addressed correctly. The assembly line of inflexibility, and the lack of innovation, are paralysing children. We think that the one-size-fits-all approach of the 19th century needs to be strongly scrutinised, and maybe even dismantled in some areas, so that we can prepare our children and our grandchildren for the 21st century. We need to prepare citizens to handle the future, not the past. Major, major emphasis needs to be laid on that. We do not think that this Budget lays much emphasis on the long term. There are promises for the future, but nothing for people now.

Part of what we feel is missed out in this Budget with regard to learning concerns the mandate, to which I have alluded already, to build capable, free citizens through literacy. We think that this Government, and all future Governments, strongly need to restore literacy and numeracy to their rightful place at the very centre of the school curriculum. If that is done—and it should have been emphasised in the Budget—I believe that there will be some hope for people in the future coming out of our education systems able to contribute as free citizens.

Also, we believe that as part of addressing critical literacy problems we need to promote relevant alternative education programmes for boys and girls, covering both core and non-core subjects. Recreation and sport need to be exploited more as learning possibilities for our young children. Alternative education programmes that best suit the learning styles of children and the future aspirations of students needed to be provided for in this Budget, but I saw nothing there that makes that possible.

United Future will help to strengthen families—everyone across the nation knows that—in order to end up with an intelligent, knowledgable, capable, caring, and compassionate New Zealand.

MARC ALEXANDER (United Future) : I was going to spend my time talking about criminal justice issues. I will spend a little time on that, but I want to talk also about tax cuts, because I was enraged by the speech from the honourable member Lianne Dalziel. I think she got it absolutely wrong, and, in fact, it is she who should go back and learn what economics is really all about.

I will begin with policing. There was plenty in this Budget to help policing along, but none of it was quite enough. The Budget allocated $45 million for the call centres. That money is much needed, but unfortunately it is short-sighted to think that just throwing money at the call centres will somehow magically transform things, when the call centres themselves may not actually be the centre of the problem. The problem is that we do not have enough police out there on the beat—out on the street and in squad cars—to effect whatever the call centres request. Having spent some time at a call centre with the Law and Order Committee, I can tell the House that the people who work in the call centres work very, very hard and are sometimes unfortunately tainted by problems that are not of their own making. Very often the problem is actually the fact that the squad car simply cannot respond adequately to what the call centre requests. I take my hat off to the people who work in the call centres, because they do incredible work in sometimes very arduous and strenuous circumstances.

One of the things we need—and we did not see much about it in the Budget—is more cops. We need at least another 2,000 beat cops out on the street, being visible and reducing the possibility of crime. But those beat cops alone will not be able do anything unless we adequately support them with decent equipment. We also need the police to articulate what level of policing they can achieve with what level of funding, so that real debate can be held outside ministerial control, which can often shut down the argument unfairly. We need to see the interaction between the police, and the repercussions and consequences of what they do, and the court system, which catches up—in other words, dealing effectively with the 35,000 extra cases that have yet to see the inside of a courtroom. It is stupid to expect the police to do it all. We need the whole system to work together to achieve that. And we need more money for the Institute of Environmental Science and Research, to help balance the police, in terms of capacity.

I want to spend a bit of time on the tax cuts. Why do we not have tax cuts now, at a time when unemployment is down and productivity is up? We are increasingly expected to believe that there ought to be a disconnect between work and reward. It is utter madness. It is one of the reasons why 600 of our brightest and best are leaving the country every single week, which is 10 times the rate of Australia. Why? Because they will get better rewards elsewhere. Those are the people who, if they stay in this country, will help our productivity and will provide goods and services. They are the innovative ones who create opportunities. Yet we are discouraging them by telling them that it is the Government’s job to decide how much money they should earn, not the market. The market mechanism is the most efficient way of telling people the value of what they do; the Government should not intervene.

The Working for Families package is precisely the mechanism by which the Government has undermined the market mechanism. It is fundamentally flawed and wrong. The Government should never be set up in a situation where it determines the value of a person’s contribution to society. Once a Government does that, it can use the tax mechanism to shore up political support for the kinds of credits that it can then provide to one group of the public against another, in order to try to shore up its own support and its voter bases. It is not for the Government to decide; it is for the market to decide, because with the other way round—the present system—Government departments benefit from the windfall, rather than those people who created the wealth in the first place. The tax system is the only way that we can properly address how to reward people and their valuable contributions to society—away from the grubby, greedy fingers of this Government.

Hon PETE HODGSON (Minister of Transport) : I rise to speak in favour of the motion for the Budget debate, and to say that I am very proud of this Government. It has brought down a Budget that is fiscally responsible, and that invests in health and education—the things that are at the cornerstone of a good society. It has a bunch of initiatives to help New Zealanders to save and to build a stake in their country through the KiwiSaver scheme, and it is building the conditions for growth in the way that it has approached its taxation policy.

On the fiscal responsibility front, the very first issue, this country had its very economic sovereignty in doubt only 20 years ago because of earlier borrow-and-hope policies of a previous National Government. By the time a Labour Government was swept into power in 1984, we were closing our foreign exchange, we were devaluing out of necessity, and we had ourselves a society that was deeply indebted. Quietly, that debt has been reduced. Quietly, we have got our levels of gross debt to GDP down to levels that are amongst the best in the Western World. We have done that at the same time as we have pre-saved for superannuation through the Cullen fund, so that when the demographic bulge hits the country, we, unlike Japan or France, will be able to weather that demographic bulge somewhat.

That fiscally credible stance is to be characterised as at serious variance from what the National Party is likely to try to win this election on. It will run on tax cuts, even though we have a cash surplus that over the out-years equals about zero. We have a cash surplus of $2.4 billion for the year in question. It reduces to about zero in 2005-06, and then moves into deficit for the following 3 years, with an average of about $1.9 billion a year. We do not have room for tax cuts, but that has not stopped the National Party saying to people that it will bribe them with their own money.

The question then arises as to where it would get the money from. Would it borrow in order to pay for tax cuts? Is that what we will see again? Will we see a return to the Muldoon era—the man who said that he was a very good manager of the New Zealand economy? He sold the idea that he was a good economic manager when he was in Opposition in the 1972-75 period, and then, between 1975 and 1984, we learnt that that man could not run a bath. We learnt that New Zealand had run itself into a debt far more serious than that of almost any other country. We had remarkable regulation on our finance sector, which meant that this country more or less ground to a halt.

There was the price freeze—wages were in the freezer, and prices were in the butter warmer, as people remember those years. We cannot go back to that. Yet if there were to be a tax cut now, funded by borrowing, that is what the future would look like. So there must be another alternative. That would be a tax cut funded by cuts to services—to health, education, and the police—which the previous speaker made mention of. That is not the future either. The Government is very proud to be putting more money, not less, into health and education. I am now an Associate Minister of Health. I can tell members that more than $1 billion of extra money went into health in the course of this Budget. We have gone from about $10 billion to about $11 billion, or thereabouts.

It is a very substantial increase, and it is occasioned by all manner of things. Certainly, everyone would agree that the nurses’ increase is valuable. That is probably the best part of 10 percent of this year’s increase. I think everyone would be in agreement that phasing out National’s hated asset tests is a very good thing. That is the best part of 10 percent of the health budget. But wait, there is more. Hundreds of thousands of New Zealanders have some form of disability—some of which are serious and some of which are less serious. New Zealanders with disabilities have been excluded from our society for far too long. By working through the New Zealand Disability Strategy—and I acknowledge the work of my colleague the Hon Ruth Dyson in that respect—we now have a substantial increase for people with disabilities, for all manner of things. People who are not safe can be made safe. People who want to get back to work are encouraged to do so. People who want supported independent living can have supported independent living. We have moved so far in this country over recent years, and we are about to move a step further as we seek to further include New Zealanders with disabilities.

Then there is the issue of the health of older people. This is the rest home stuff. Probably the thick end of 10 percent of the budget went into rest homes, into dementia care, and, of course, into home-based care, which is where more and more New Zealanders want to spend more and more of their lives. They do not want to go into rest homes early. They do not want to go into dementia units early. They want to stay at home—in their own home—and be better supported. So there is a very substantial increase in home-based support services coming through in the Budget.

Let us not forget the doubling of the orthopaedic surgery that was announced in last year’s Budget, and how that rolled out last year and will continue to roll out in the next 3 years. There has been a doubling in the amount of surgery on knees and hips going on in this country over the course of 4 years. That is a very substantial increase. Members should also consider Annette King’s announcement just prior to the Budget, referring to this year’s health budget, which was to see a 50 percent increase in cataract surgery.

Can we see the trend there? If the better health of older people means that they will be able to stay in their own homes longer and longer, it would be a really good idea if they could see better. So the cataract backlog will get dealt to. Annette King has worked with ophthalmologists and opticians to ensure that that is the case. That is the sort of money we are spending in health.

The roll-out of the primary health organisations is continuing. On 1 July, 18 to 24-year-olds join those who get cheap access to doctors and prescriptions. Prescriptions will be $3 for anyone aged 0 to 24, and anyone aged 65 and over. Over the following couple of years, that will be rolled out to the rest of the New Zealand population, and that is in the health budget, too.

Another example is the meningococcal B roll-out. It has gone well—it is going well in my home town of Dunedin as we speak—and the lives of children and, often, babies will be saved. That is the sort of thing people can expect from a Government that puts emphasis on health and education—and we cannot put health and education expenditure up if we have tax cuts. Instead, we would return to the days when people got an extra $10 a week in their pockets, only to be charged $200 a day in hospital part-charges, as occurred in 1991, 1992, and 1993.

Do not forget those days. Hospital part-charges are within living memory. They were brought in by a National Government. That is the sort of future we are likely to see if ever that party were to be re-elected to Government.

I will go on to the new initiatives to help New Zealanders save and build a stake in their country. The KiwiSaver programme is intended to begin operation on 1 April 2007. We say that we are a property-owning democracy, but right through the 1990s, the rich-poor gap in this country grew to the point where people could not afford to buy a house, because they could not afford the deposit. Even if people could, they could not afford the mortgage, because the Governor of the Reserve Bank was Don Brash, and for over half the time he held that job household interest rates were at 10 percent or higher. That is why fewer and fewer New Zealanders are owning their own property, and why the KiwiSaver scheme has been introduced.

I will make a couple of remarks on the business growth package. It is a remarkable thing that about $620 million, or thereabouts, is being given back to business in tax changes other than by changing the headline rate. The easiest thing in the world to do would be to say that the 33c in the dollar tax rate will become 30c, or 28c, or whatever. But a smart Government does not do that. A smart Government says that it will look at fringe benefit taxes, depreciation, and whether it can target taxation at companies that are more likely to be transformational, New Zealand - owned, going through a rapid growth phase, and needing the high turnover of their capital stock in order to increase that growth. If a company is going through a rapid growth phase, there is no profit to tax. If we give help to those companies that are going to be the future—those companies that are growing fast and doing well—then we end up with a transformational tax system, instead of one that simply gives money willy-nilly to any business at all.

With those few remarks, I endorse this Budget and hope that it is passed unscathed.

KATHERINE RICH (National) : Michael Cullen’s disappointment at how the general public and the media received his Budget was palpable. He was quite surprised, I think, that New Zealanders turned up their noses at the tax cuts he presented, and were not that fussed on his KiwiSaver programme, and that businesses were not more appreciative of changes made to fringe benefit taxes. Of course, businesses did not see the Budget as a great handout. They saw the changes to fringe benefit taxes as being something that corrected past anomalies.

We can tell that the Government is snippy about the way the public has received its Budget because, having listened to most of the speeches in this debate, we know that most of the Government speeches have not been about the Budget, at all. They have been about the National Party and what the Government imagines that the National Party will or will not do. That is quite a telling point. The speeches have not been about what is great in the Budget. They have not been singing the praises of the Budget. They have referred to what National will do. That demonstrates some sensitivity on that side of the House, because those members too are disappointed. This Budget was presented as being the saviour of Labour, but Michael Cullen broke one of the golden rules of politics—undersell and over-deliver.

That was made more difficult by no one less than the Labour Party President, Mike Williams, who, when interviewed about the Budget, said there was a “deep, dark secret” in it that had to do with tax. The Government dismissed those claims and said that media reporters had interviewed their own typewriters, but, lo and behold, it was gobsmacked when the tapes were replayed and showed that Mike Williams had actually made those comments. The people who oversold the Budget were members of the Labour Party. They went around and said that there would be a deep, dark secret, so it is no wonder that the New Zealand public were very disappointed when the deep, dark secret turned out to be 67c per week in 3 years’ time.

Most New Zealanders in this country will get 67c. That is not enough to buy a hamburger, or even to buy a packet of chewing gum, although that has been used as the example. That is not enough to buy anything—not even a bottle of milk. The Budget will give 67c, and that side of the House wonders why New Zealanders looked at that tax cut and said: “Yeah, right! You must be playing a joke on us.” Sixty-seven cents is nothing to write home about. The disappointment that this Budget was not a king hit—and, in fact, was a big flop—has been palpable. Labour has itself to blame for the way it sold the Budget; the media were disappointed, and showed that in their reports of the Budget.

Once again we see a Budget that does not really have a lot in it. We notice a change in tack; Labour is now talking about the Working for Families package. But, of course, that was the story Labour told in last year’s Budget. As if Labour is desperately trying to make some headway in promoting this Budget, that package has been dragged out of the archives and is being used to argue why this Budget is so good. But it comes back to one point: 67c per week in 3 years’ time does not make a Budget to write home about.

I will make a couple of comments about accident compensation. I am pretty disappointed by the Budget with regard to accident compensation. Nothing in the Budget will make any major changes to some of the problems that I think are being faced by the clients of the Accident Compensation Corporation (ACC) who have cause to ring it for various issues. It will come as a surprise to members that if a person had cause to ring the ACC in March of this year, 44 percent of the time it was likely that he or she would have hung up in absolute frustration. Forty-four percent of all calls to an inquiry centre at the ACC ended up not with someone answering the phone, not with someone dealing with the concern, but with a client totally frustrated and hanging up the phone in disgust. That was because of a change in technology at a call centre that was not well implemented. We have seen a lot of puff and rhetoric about this Budget, but very little in terms of substance.

I will also make a few comments about some of the other areas of social policy that still remain of interest to me. One of the untold stories in this Budget is really the deterioration of the welfare system when, in fact, we have had 5 or 6 years of the best economic conditions—certainly the best in my lifetime. This Budget does not answer some of the key questions of why, after such good economic conditions, it is now projected that 76,000 New Zealanders will be on the invalids benefit this year. That is an increase of 43 percent. This Government has added 22,000 people to the invalids benefit. [Interruption] Mr Fairbrother thinks that is a great thing. He is saying that it is marvellous. I say it is an absolutely shocking statistic. I can see that Labour members are upset by those statistics, and so is the rest of New Zealand.

The figures in respect of the sickness benefit are exactly the same. This Government has added 14,000 New Zealanders to the number of people on that benefit since 1999—that is an increase of 43 percent—and Labour dares to crow about unemployment rates. We all know that many of those people have just shifted from one benefit to another—they have just been trapped on one benefit and moved to another.

Let us look at the amount that has been spent after the best economic conditions in a generation. I have questions to ask of those members across the floor. Why has the amount that we spend on welfare gone up, not down? Why has the amount that we spend on the invalids benefit gone up, not down? Why has the number of people on the invalids benefit gone up by nearly 23,000 people, not down? It is the same for the sickness benefit, as well. Why has the number of people on the sickness benefit increased so dramatically? Those are the untold stories in the Budget. We will not find a good explanation of why that is the case, because that is a story that Labour does not want told.

That is the case even when we look at areas like the special benefit. In 1999-2000, $35 million was spent on the special benefit. Members would be shocked to hear that spending on that benefit is projected to be $150 million in this Budget. So when Labour says that it has made changes to the welfare system that have brought improvements, I say that that is absolute rubbish! We have seen more people go into that welfare system never to return, and that is one of the stories that Labour refuses to tell. While it crows about employment figures it forgets the increases to those major benefit areas.

Government members really should concentrate their speeches on the Budget and they should be less interested in National. I think the continued discussion of what Labour thinks National will do demonstrates that Labour knows we will be the next Government, and that it is frustrated because the New Zealand public has not bought in to its Budget. The general public have looked at Labour’s Budget, turned up their noses, and said, of 67c in 3 years’ time: “Well, we are not going to get excited about that.” The Government is disguising its total disappointment that the New Zealand public have seen through its Budget and have not got excited. The public have not been excited by things like the KiwiSaver programme when what they want is more in the pocket.

Hon HARRY DUYNHOVEN (Minister for Transport Safety) : I am astounded! That is a member of the National Party whom I actually have a little bit of time for—one who I thought was more able than most—and she did not even use her total speaking time. Every now and then, as an MP one considers why one is here, and what one has come to Parliament to achieve. Recently, I reread my maiden speech, just to check that my aims were still the same as they were then. A lot has happened during my 15 years as an MP. I came into the House with no children, and I now have three. I am pleased that the same values that Labour and I have always stood for remain, and are reflected in this Budget: fairness, helping New Zealanders to build a stake in their country, providing security for the future, and building the conditions for growth, while all the time a strong and credible fiscal stance is being maintained. Traditionally, those things were expressed as the right to a job, to good housing, to health care for the sick, to education for all, and to security in old age.

We have just heard a speech from one of the most able members of the National Party, who, because she was reasonably able, was demoted a while back. That member, to begin with, said that every speech she had heard from Labour was about what was wrong with National, and she then proceeded to ignore completely the last two Labour speakers. They hardly touched on National at all, but talked about the Budget and the good things it was doing, while she devoted her entire speech to bashing Labour without actually saying what National would have done differently.

Mr Brash used to say that there were too many beneficiaries, and that he would take 100,000 of them and get them off benefits. That was what National was going to do. Well, National is too late, I tell Mr Brash. When Labour came in, the legacy left by the previous National Government in 1999 was, I believe, 400,000 beneficiaries, but we have fewer than 300,000 people, in total, on all sorts of benefits today. So Mr Brash is too late, and he should think of another new slogan. The unemployment rate was 6.9 percent of the workforce when Labour came into Government; it is now 3.6 percent—the lowest rate in the OECD. I have friends in Germany and in other countries of Europe who are astounded at how well New Zealand has done, over a period when their countries have struggled. In New Zealand a combination of policies has seen progress continue to be made. All that we hear from the National Party now is the same faded old nonsense we heard in the 1990s, when the word “intervention” hardly existed in the lexicon of words, and when the word “plan” was just anathema to National.

We have turned this country round. This Labour Government can be very proud of what it has achieved, because it has done a huge amount. As I said before, our Budget will build upon the strong fiscal position we have created. It is a very responsible Budget, and is the sixth this Government has put in place. It invests in health and education, and commits additional resources to health that will total over $1.09 billion a year by the 2008-09 year. We are increasing our investment in early childhood education by $152 million over 4 years, as we continue to deliver on our commitment to make early childhood education more affordable, more accessible, and more inclusive, and of the best quality possible for all New Zealand families. We are already seeing the benefit of that. My wife is a primary school teacher, and I know how much of a difference the policy of increasing the funding in the early childhood education sector has already made in our schoolrooms.

Our commitment to having more and better-paid teachers in our schools continues, with a total investment of $1.43 billion since Budget 2004. I think—and the Minister of Education is here; he will correct me if I am wrong—there has been a 29 percent increase in the overall education budget since we have been the Government. That is a huge difference, and even if people look only at simple little figures, and I am doing this especially for the benefit of the member for Taranaki - King Country, Mr Ardern, who just wrote the most appalling column—

Hon Trevor Mallard: A simple figure.

Hon HARRY DUYNHOVEN: A simple figure of 13.3 percent, I tell Mr Ardern, is the increase, above inflation and above roll growth, in schools’ operational funding, on average, since we have been the Government—from 1999. So in the period in which we have been the Government, in real terms there has been a 13.3 percent increase in the operational budget of schools, above roll growth and above inflation. I tell the member that his article in the Opunake and Coastal News is the most negative, whingeing article I ever thought I would read from an MP.

Hon Trevor Mallard: You are not quoting from that—because there is some outrageous stuff in there.

Hon HARRY DUYNHOVEN: There is some outrageous nonsense in there, and I will not quote from it, although I will say that it is the most negative article I have seen.

We as a Government have struggled very hard with a number of issues, but the major one is the building up of a momentum in this country that sees the regions prosper. That is one of the really significant things that has happened under this Government. We have seen the conditions for growth improve dramatically. I can look at my own region. These last 4 years have been the first time in my 15 years of being a parliamentarian that there really has been an era of continued strong growth—when the problem has not been one of how to keep a specialist in Taranaki, but of how to find more specialists in Taranaki and of how to bring more of them to Taranaki. The problem used to lie in finding enough work to keep the ones we had busy. Now we have so much going on in our regions right around the country—not just in Taranaki but, obviously, Taranaki as usual leads the way—that we have a situation where we are continually expanding. Every company asks me where to find extra engineers, extra welders, extra fitters and turners, extra builders, and extra electricians. That is because the previous Government simply neglected the apprenticeship system totally. I come from the trades sector originally, and I then went into teaching apprentices and into teaching at high schools. In this transition time, we have seen our country change dramatically. But we have also seen a continuing demand for tradespeople, and this Government has done something about it. I am delighted to say that this Budget goes on to reinforce that, by putting more money into the sector.

In the regions we have had significant growth. The regions now lead the country—not the money markets, but the regions. We look at the productive activities going on, and we know that we need tradespeople to underpin those activities, which is one of the things that this Government should be, and is, especially proud of. We have revamped the apprenticeship system and made it attractive for young people to consider a career in the trades. Recently, at New Plymouth Boys’ High School I attended a major careers Expo that focused on the trades. I was absolutely delighted at the number of young people who were there with their parents, and who were expressing a real interest in becoming skilled people in our community—tradespeople. I have told this story to some of my colleagues: it is really invigorating for a tradesperson to hear an accountant moaning about the price of a plumber. I think that actually says something about society. We do need to value our tradespeople, and this Government has done so. Our Modern Apprenticeships programme has already exceeded expectations; we continually have to revamp the targets. I am only sorry that we cannot take on every young person who wants to be an apprentice, but we are working on it.

I am really pleased that during the time of this Government we have focused on the substantial things that build up a country, and that see our pride in what we are able to do increased—even things such as the cultural activities of this country, in terms of the money that has been put into New Zealand music, New Zealand arts, and New Zealand drama. All those things make up our sense of well-being about being New Zealanders, and we can export that good feeling to the world. One can look at the films that are being made here, and see that in my area, as well, there is another film coming on. We see how good it is to be in New Zealand and how we can bring people here to partake in that. People want to come to our country—they want to visit and be part of this country. New Zealanders want to see a continuing, progressive, Labour-led Government go on, and this Budget was certainly part of that.

I agree with one or two of the previous speakers that the Budget has not been received as well by the public as it should have been. That is largely due to the fact that many of the good stories about the spending in this Budget, such as the family support package spoken so eloquently about by Lianne Dalziel, were already out in the public arena before the Budget was delivered. The Opposition, meanly and miserly, talks about a tax cut of 67c a week, or whatever it may be. The Opposition members forget that the average family with children will be better off by many tens of dollars or $100 a week, and forget all about the tax cuts in Australia that, in a similar circumstance to that of New Zealand, delivered $6 a week.

The ASSISTANT SPEAKER (H V Ross Robertson): Before I call the next member, I say I have been asked to advise the House that New Zealand First will split its 10-minute speech, with two members having 5 minutes each. The bell will ring at 4 minutes, so the members will know they have 1 minute left.

Russell Fairbrother: I raise a point of order, Mr Speaker. Can I move that both speakers speak together, to save themselves some time?

The ASSISTANT SPEAKER (H V Ross Robertson): That is not a point of order. I thank the member very much.

BARBARA STEWART (NZ First) : On behalf of New Zealand First I rise to speak to the health section of the Budget. New Zealand First believes that health is a critical investment in our people, and we need, and we want, a properly funded and resourced public health service. New Zealand First believes that we should be seeing increased funding for health. We want to see health funding reach comparable levels with European nations such as France, which spends around 10 percent of GDP on health. There is a lot of work to be done in the health area—a lot of work. That was emphasised in the recent New Zealand Herald polls that showed that very few voters believe that the hospital services have improved, despite the extra billions of dollars that the Government has spent, and that health continues to be one of the areas of greatest concern; in fact, it is a No. 1 concern.

The increases in the health budget will not provide any solutions to the many health problems that New Zealanders have, and they barely allow the sector to actually tread water. When we heard that there was to be a deep, dark secret in the 2005 Budget, I had hoped that it was going to be in the health area. I was particularly looking for action on children’s health. After all is said and done, we have a Working for Families package, so it was logical to consider that with a focus on families, the health of children and young people would also be a priority in the increased health vote. We had hoped that the price of visits to general practitioners for children and the elderly could be reduced, because we know that hospitalisation can be reduced for those two groups. But we were disappointed. There was nothing in that area at all. One would never have believed—

Hon Trevor Mallard: The member always wants to spend.

BARBARA STEWART: We do want to spend more. We would never have believed that with a Labour Government we would see the establishment of a charity hospital in Christchurch. While that is an example of the generosity and dedication of the medical profession, it is basically a response to the failure of the public hospital system to provide early intervention treatment. Without early intervention it is likely that the conditions of those patients would deteriorate, and their pain and suffering would increase. The greater significance of that charity hospital is the wake-up call it must give to the Government.

In my wish list for election year I expectantly looked to see some money put aside for oral health. Again I was disappointed. We know that the current system is not meeting the demands of children and teenagers. This area is under pressure. There is an overall shortage of resources—a shortage of resources that was not met in this Budget either. This is one area that I believe that the Minister of Health would have been very keen to resolve. There is no hope of getting on top of the problems that exist in this area, unless there is considerable investment. But no, there is not a mention for this area at all. All the surveys show that children’s teeth are deteriorating and that rapid action is needed. We really need to see some action here. We still have no money set aside for our teenagers’ oral health. It is a well known fact that dentists find teenagers uneconomical to treat, and the number of dentists who now provide free dental treatment for adolescents is minimal. That situation requires urgent attention, and we are looking for a lot of action in that area.

We had also hoped that money would be set aside to retain our medical doctors in New Zealand. What is the point of training up our doctors, nurses, pharmacists, and other medical professionals to actually export them overseas? We know that every hospital needs trained medical staff, and it is to be hoped that the Minister resolves the situation before it goes from serious to critical.

PITA PARAONE (NZ First) : I rise to speak on behalf of New Zealand First—of course, the only politically non-aligned party in this House—and to comment on the impact, or lack of impact, this Budget will have on Māori.

In the speech from the Minister of Finance there was not one mention of Māori. In his previous five Budget speeches, almost every other sentence referred to Māori. One cannot be surprised if Māori feel aggrieved and left out. Despite a lot of rhetoric and jargon about improving outcomes for Māori and realising Māori potential, the sad fact is that in the crucial areas of health, housing, education, and employment, this Budget will deliver very little direct benefit for them. New initiatives such as KapohiangāRawa are all very well and good, but not if they come at the expense of delivery of health services or the provision of housing.

This year’s Budget shows a decrease in funding for Māori health from last year’s Budget, so I fail to see how it will contribute to improved health outcomes for Māori. For patients visiting general practitioners, mental health problems are more common among Māori than non-Māori, according to a recent University of Otago study. The researchers concluded that effective interventions need to explicitly address mental health, and that ethnicity needs to be taken into account in the way that those interventions are designed and delivered. I do not see how reducing the funding for Māori health will enable effective management of this problem or, indeed, Māori health outcomes in general. Despite several years of programmes such as closing the gaps and “reducing inequalities”, Māori health status remains considerably lower than that of non-Māori across a range of health indicators, including life expectancy.

Māori are concentrated in lower-paid occupations. The country is currently enjoying a relatively low rate of unemployment, but the Māori rate of unemployment is more than double that of non-Māori, and Māori continue to be disproportionately involved in the criminal justice system. None of this is news to anyone, yet the Budget does nothing to address those serious problems. The Government has continually extolled the point that Māori unemployment is at a record low due to its efforts. I suppose that that is true, when one considers that many have been placed into lower-paid jobs, or even moved to another benefit. Of course, we know the real reason for the reduction, and that is that Māori have gone off to Australia, to better wages and living conditions. Just ask the Māori Party! I suggest to the Māori Labour members that their constituents will remember this in the next few weeks.

Where is the foresight that this Labour Government so prides itself on? Where is the vision from a Government that takes pride in striving to eliminate the disparities between Māori and non-Māori? Where is the money to achieve those lofty goals? That is the vinegar question. The answer is not in this Budget. The only targeted Māori spending is for the provision of liaison services and community workers to, amongst other things, encourage Māori into tertiary education. New Zealand First sees education as the way forward for Māori, but let us not forget that tertiary education in this country comes at a very high financial cost. It is rather remiss to spend money encouraging Māori into tertiary study, without also addressing the affordability problems that they will surely encounter.

Too many Māori are living in substandard housing, and I do not see much in this Budget to address that. It is all very well to encourage people to save for a house, but there are a couple of glaring problems with that approach. One is that the price of housing is way out of reach for people on low and even middle incomes. No matter how much out of their pay packet they try to put away, the price of housing just keeps running ahead of them, and they have very little hope of catching up. That is reflected in the low uptake of the Government’s much-lauded mortgage insurance scheme of 2 years ago, whereby no-deposit loans would be given on houses worth up to $100,000. Excuse me, but has anyone in the Government checked the price of real estate lately? One would be hard-pressed to find a tin shack in Auckland or Wellington for that price. The Jobs Jolt programme makes it a waste of time buying in the only areas where people might possibly qualify for that scheme. Secondly, Māori are concentrated in low-paying jobs that barely pay the bills as it is. Members should try supporting a family and saving money on under $30,000 a year.

During last year’s Budget debate much was said about the anticipated Hui Taumata.

Hon TREVOR MALLARD (Minister of Education) : Mr Assistant Speaker, you would have seen a slight reluctance for me to get to my feet, and it was not only because the very good speech made by the member was being interrupted—a speech that was a few facts short, but generally much more constructive than many—but also because I knew that the next slot, which I am taking, is allocated to the Māori Party. Now, there might be something incongruous about me taking the spot that is allocated to the Māori Party, and some people might see some irony in this particular occasion. But I am quite happy to say that if Tariana Turia does not want to use her slot, I am very happy to do so, because I think it is important that the perspectives of people, whether they are indigenous to Whanganui or indigenous to Wainuiōmata, are put to this House.

The Māori Party, for the second time in the Budget debate, has failed to take the call. I will not comment on absence from or presence in the House, Mr Assistant Speaker, but it has failed to take the call for a second time. It has only one member. It is not a hard thing to do. One has to turn up to the House, stand up at the right time, say “Mr Speaker”, then one has 10 minutes to lay out the policy of one’s party or make other comments on the Budget. Can Tariana Turia turn up to the House, take the call, stand up, and give us 10 minutes on policy? No, she cannot. That is just typical of a lazy approach to parliamentary life—someone who does not pull her weight in Parliament, and I think it is very, very sad.

Turning to the Budget, I want to acknowledge and welcome Maurice Williamson to the House, a member who should be a front-bench member. If National did things on talent, there is no doubt that Maurice Williamson would be seated on the front bench. In fact, he would probably be seated in one of the two seats occupied by the leader and the deputy leader, if it were done on talent.

Pita Paraone: Both of the seats!

Hon TREVOR MALLARD: Both of the seats, by golly! Well, he certainly has more talent than the pair of them put together. But, on the basis of appointments in the National Party, that does not necessarily guarantee promotion, and on occasion the willingness of someone to be frank and truthful with their leadership results in him or her being pushed further back. National is a party that does not really allow for discussion and debate around policy. It does not allow for the promotion of talent. It is more about who the leader’s mates are, or who, in this particular case, yells and screams and makes the loudest noises—

Darren Hughes: Throws pensioners downstairs.

Hon TREVOR MALLARD: Throws pensioners downstairs.

Darren Hughes: Watch out Dr Brash!

Hon TREVOR MALLARD: Well, that is slightly unfair, although I saw a very good Facelift last night. I thought Facelift was wonderful. For those people who do not know, it is on Television One just before the news. It has masks, and in this particular case they had someone with the body shape of Gerry Brownlee wearing the Don Brash mask, and he made a lot more sense than the person who was just wearing the Don Brash mask without the Gerry Brownlee body. Maybe that is true; maybe it is their intention to hide Don Brash away during the campaign, and let Gerry Brownlee pretend to be their leader. But I am still running my book on the National Party and who will be the leader in October. Currently, I would say it is running pretty evenly at three to two, John Key and Bill English. I note that Maurice Williamson is nodding. I think he nodded more at John Key than Bill English—I think that is probably right. But it was a three to two combination, and the most favoured combination is John Key as leader and Bill English as his deputy. Bill English is someone who is sitting there, who can organise and do the work, who was not a bad deputy in the past—but who certainly has about the same charisma as Don Brash, so there is not much future in him. John Key is the “Flash Harry” of the National Party who has been rapidly promoted. One thing I do know is that when he is the Leader of the Opposition after the election he will bring Maurice Williamson up to the front bench because he recognises talent.

What we are waiting for—and I was waiting for it right through Don Brash’s speech—is a bit of policy. Don Brash should just tell us about the tax cuts. He said that the changes would be there by Christmas. Now he says that they will not be there by Christmas. I want to know how much the cuts will be. Is it true that he will promise $50 a worker—$50 a person? That is $5 billion worth of tax cuts every year. That is what I am told he would do—$50 for every family. If that is true, $5 billion has to be collected from somewhere. Where will it be collected from? Will it be about half the Health vote? Will he cut half the Education vote? He could not possibly cut out $5 billion without affecting pensions.

Georgina Beyer: Oh, yes he could.

Hon TREVOR MALLARD: I do not think he could do it without affecting pensions. He would have to cut pensions. He has wandered around and so far I think he has promised another $3 billion or $4 billion worth of roads. The transport spokesperson, Maurice Williamson, nods. It will be another $3 billion or $4 billion of roads over a 3-year period. In that case, some pretty substantial cuts will have to occur. If National is not going to do the cuts, then it will add to the debt. It will be $5 billion in the first year, $10 billion in the second year, $15 billion in the third year, and $20 billion in the fourth year. Anyone who has a mortgage should be very, very afraid of that sort of policy. It would be the sort of policy that would move mortgage rates not 1 percent, but a lot more than that. We would be back to the days of double-digit mortgages in New Zealand, with a responsible Governor of the Reserve Bank and a very, very loose fiscal policy. That is the choice.

So what are the National members going to do? My view is that although they might give the $5 billion of tax cuts, they will not only give one family $50 but they will take $150 off the most worthy families—those that are getting family support from this Government in the changes that are occurring over a period of time. They will take some of it back. So maybe interest rates will not hit 12 or 13 percent; they might stay just in double digits. I think that is an indictment on them. What they want to do is give a lot of funds to their very, very rich mates, through a change in the tax rates. They want to give the average income earner $50 a week. But to give $50 a week requires roughly a $5 billion hole. The idea that anyone could do that without cuts is just not a reason—

Darren Hughes: They haven’t denied it in the whole Budget debate.

Hon TREVOR MALLARD: No, none of them has. In fact, Maurice Williamson has spent much of this speech nodding in agreement with the comments I have made. I know that that member is not asleep because he is smiling. He does not have many pleasant dreams—especially as part of that caucus. I just want to ask how many members are prepared to bet on Don Brash being the leader of the National Party come Christmas. Not one! Not a single National Party member is prepared to commit himself or herself to believing that Don Brash will be the leader of the National Party come Christmas. National is a sad party. But even a sad and divided National Party of the past would have had a pretence of unity. Those members have lost it. It has gone, and so is Don Brash.

Hon MAURICE WILLIAMSON (National—Pakuranga) : In a 10-minute speech like this, especially when it is cut into two parts by the dinner break, it is very hard to cover more than one specific subject. I want to speak to my adoring drive time audience that often listens at this time on a Tuesday night, in the hope that the whips have given me this slot. However, I say to that adoring drive time audience that it would not matter even if I were speaking at 7 o’clock, 8 o’clock, or 9 o’clock, because they would still be an adoring drive time audience in a place like Auckland—

Hon David Carter: They’re all in their cars.

Hon MAURICE WILLIAMSON: They are in their cars still at this time of night, and they will be there for hours. If they live on the Whangaparāoa Peninsula, it could be for 4 hours.

I looked towards this Budget for a final acknowledgment of one fact—and I say this to cast the blame on both sides—that historically for around 20 years now, under both Labour and National, we have grossly underspent on our roading network. Members should not be foolish enough to be like one Labour member who said the other day: “Oh well, National has been in power longer than we have for the last 20 years.” That is not true. We have done nine of those years and Labour has done 11. Even under National Certificate of Educational Achievement (NCEA) maths, nine is still fewer than 11, I think—I will have to check with NCEA. So let us not get into the blame about “your father can beat my father”. The fact is that for 20 years we have grossly underspent on our roading network.

Let me give this House the figures. Until 1985, New Zealand used to spend around 1.3 percent of its GDP on roading, and that is actually the OECD average. Through the 1960s, the 1970s, and up until 1985—I have the graphs if anyone wants to have a look at them—that spending stayed at a pretty constant 1.3 percent of GDP. In 1985 it took a tumble to under 1 percent. That does not sound like much but it is more than a 30 percent drop in the expenditure on roading in this country. I am happy to say that that occurred during the Labour Government of the 1980s but it stayed there when National was in power during the 1990s, and it is still there today. The amount of money spent on roading under this current Government is just under 1 percent of GDP.

This is not a speech about blame on either side, because we have both been there—Labour slightly more than National; this is a plea for members of this House to start focusing. If we keep spending as little as we do on roading, this economy will grind to a standstill.

I looked towards alternative jurisdictions. I will not talk about Australia as a country; I will talk about the three states: Victoria, New South Wales, and Queensland—all of which are as big as New Zealand. Every one of those three states is not only spending the 1.3 percent of GDP as public expenditure—or more in the case of New South Wales and Victoria—but they have significant private expenditure on the roading network, as well. Why? Because they have realised that if they do not upgrade their roading infrastructure, their economies will collapse.

I say to this Government that when this Budget was to be released I was really looking forward to seeing some extra money for roading. I did not give a lot of hope to it, because when Don Brash made the commitment 2 months ago that if National becomes the Government at the next election, it will move all the petrol tax over a period of time—

Darren Hughes: 6 years.

Hon MAURICE WILLIAMSON: Darren Hughes says: “6 years.” as if that is some silly little number. Actually, 6 years is a very appropriate time to move over an amount like $600 million. If we put $600 million extra into the road account tomorrow—bearing in mind we spend only around $400 million a year on new roading today—we would more than double the funding for new roading, and the contractors would not be able to cope. We would see a dramatic ramping up of prices and very little roll-out of tarmac. That is very well accepted across the industry. It was very well accepted when I talked to Labor Ministers in Australia. They said: “Don’t ramp it up at too high a rate or you will just get a soak-up of prices.” But everybody agrees that over a 6-year time frame, to ramp it up by $100 million, by $200 million, then by $300 million, and eventually to get to that magical $600 million, is a good policy. I am proud that the National Party has announced it.

I am proud to campaign against any Labour member who does not think we need to spend more on roads. The Automobile Association did a massive survey of the general public, and 89 percent of the people surveyed believed that every cent collected in petrol tax should go to roading. That is what the Automobile Association survey showed. When Michael Cullen came out and bagged Don Brash for the announcement, and said: “What an outrage; what a disgraceful announcement!”, he ruined any hope I had of seeing some extra spending in the Budget.

But, lo and behold, when the Budget was being read I flicked through the commentary and I came to a page stating that Michael Cullen had found $100 million for the first year. That is exactly what National had announced in its first year—$100 million extra for roading—and Dr Cullen had bagged the National Party as being fiscally irresponsible. What is the sum in this Labour Government’s first year? It is $100 million. I thought to myself: “Oh no, don’t tell me they are going to go the whole lot—go the $200 million, the $300 million, the $400 million, the $500 million, and then, finally, the whole $600 million. That will take away the major platform we can campaign against; it will have gone.” But no, the Government is not doing that.

The sum is just $100 million for each of three years, and that is it; that, totally, is what is in the current Budget. So Michael Cullen has acknowledged the need for more money for roading, even though 2 weeks before he said there was no need. He said that Don Brash was foolish, and that there was no need for more money for roading. But suddenly he has gone and put in $100 million. That is a good start for year 1, but by year 2 it is falling badly, and by year 3 it is right off the mark.

Let me give the Auckland drive time audience an example of what they would miss out on under the Labour Government if it were to stay in power. A road in the southern part of the Auckland isthmus is called State Highway 20. Anybody who has come out of Māngere Airport and tried to head into the city at, say, 5 o’clock at night will know what a nightmare that road is, because it crosses Māngere Bridge and suddenly hits a little suburban street called Hillsborough Road—and people go nowhere, simply nowhere.

But there has been a plan for two decades to complete State Highway 20, and to link it to Manukau City in the south and to the north-western motorway in the north. It would mean that all the traffic heading up the southern motorway could veer left at Manukau, as could the airport traffic, and go right on through. That would complete the artery.

But when the Auckland regional land transport plan was released recently—the 10-year plan, I remind members—can the House guess what? The completion of that road is not in the 10-year plan; the completion of State Highway 20 through Mount Roskill and Mount Albert has gone from the 10-year plan. I am telling my drive time audience right now that not only will they face a mess trying to get out of the airport to get home tonight but they will have to face it for at least 10 years—even before we start building.

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

Hon MAURICE WILLIAMSON: I am really disappointed that my speech was broken up by the dinner break. However, the good news is that I was speaking to my adoring drive time audience, who in Auckland will still be the drive time audience because only an hour and a half has gone by and most of them will be only halfway home.

I was explaining how State Highway 20, both the connection through Mount Roskill and Mount Albert that joins the north-western motorway into the Te Atatū area where Tau Henare will be the next member of Parliament, and the road that joins back down to Manukau City where another member of Parliament may be under a lot of pressure, is not even in the 10-year plan. It is not even in the 10-year plan for construction.

But I have a better example. I see Dianne Yates in the House, and I know that Dianne Yates and Martin Gallagher are always going on in the Waikato Times about how the Waikato expressway is really important. Let me give them some numbers. The Waikato expressway’s total cost is $750 million. That is the cost to complete it all the way from Rangiriri—through Huntly, Ngāruawāhia, Hamilton, and the Cambridge bypass—and to join up again. What has the Government committed to that for the next decade?

Lindsay Tisch: How much?

Hon MAURICE WILLIAMSON: It has committed $230 million. I know this is NCEA maths at its best, but it still works. That is a $520 million shortfall over the next decade.

What do those members do? They say they go to meetings and put pressure on Michael Cullen. They say they want the Waikato expressway. I want to tell those members and the good voters of Hamilton that they will not see even a quarter of the Waikato expressway built over the next decade on the current funding plan.

But I ask members to hang on and wait—there is more; help is on the way. The National Party, when it becomes the Government, having announced that every cent of the petrol tax will be moved over to the road account—[Interruption] Mrs Yates should listen to these numbers and then she will really start to understand them. That means that $4.5 billion extra in the next decade will be spent on road funding. OK—it is a nice figure; $4.5 billion. The Waikato’s share of road funding historically has been around 12 percent. Right—let us do the NCEA maths: $4.5 billion multiplied by 12 percent comes to $540 million. Can members guess what the shortfall is? It is $520 million. Again, NCEA rules.

The amount of money the National Party is committing to road funding, prorated to the Waikato region, is enough to fully complete the Waikato expressway. So I say to all those people sitting in the drive time traffic in Hamilton tonight and probably getting knocked on the window by David Bennett and Tim Macindoe: “Hang on. Help is on the way. The National Government is going to fund your roads even though this Government won’t.”

SHANE ARDERN (National—Taranaki-King Country) : On Thursday, 19 May Dr Cullen came down to this House and presented his sixth and last Budget. We were all surprised, including the Labour members. They sat there like stunned mullets. Dr Michael Cullen, word has it, is a very intelligent gentleman; I think I am being fair when I say tonight that everyone in New Zealand who has ever had anything to do with Michael Cullen would say that he is a man of some intelligence. Why, then, on 19 May, when he had such a golden opportunity to present some real vision, some leadership, some real depth to New Zealand, did he turn up with what can only be described as a damp squib—something that did not make it? [Interruption] The member for Whanganui may bay over there, but she would be wise to take note of what is happening in Whanganui with Chester Borrows out there tapping on the door. She has not long to stay in this Parliament.

So what did we get out of the Budget? What came out of it? Well, hard-working New Zealanders can expect 67c worth of tax cuts in 2008. I am sure they are very grateful to the Hon Dr Michael Cullen for that, but the reality is that most New Zealanders are not, and they can see straight through what has happened here. The reality is that Dr Michael Cullen underestimated the wisdom of New Zealanders. He thought that a whole lot of flimflam and spin and promotional material—I believe that $21 million has been budgeted to promote the Working for Families package and various other bits of ninth floor propaganda—would be enough to carry his Budget forward and that New Zealanders would sit up and take notice. They sat up and took notice, all right. In fact, they listened with great interest to the president of the Labour Party when he said that the Budget would contain some deep, dark secrets. Well, it certainly did. It had secrets so deep and so dark that nobody has yet been able to understand or find exactly what they are.

So what have we had from the Michael Cullen Budget? We have a health system that is in decline and is failing. There has been $3 billion of extra spending over the 6 years of the Labour Government but fewer surgical procedures at the end of the period. We have an education system that is in total disarray. Mark my words—if Labour is ever allowed to get back on the Treasury benches, which seems very unlikely, the rural school closure programme will be back on the agenda, and 300 rural schools that were earmarked for closure will be on that agenda. There are 300 schools in total that are earmarked to close.

Rest homes all over the country are closing because they cannot meet their commitments. Elderly people who have put their faith in Dr Michael Cullen, Helen Clark, and the Labour Government are very concerned about what their future may be and what is going to happen post the closure of their rural rest homes or care facilities.

The No. 1 earner for the economy, agriculture, got nothing. Even the member for Whanganui knows that agriculture is important for New Zealand, but agriculture got nothing. It got zero, not a brass razoo, not even a mention. There was not a single cent for agriculture in Dr Cullen’s sixth Budget.

We talk with great passion about science and research, and I know that there were some discussions in the House today about that. How much of that extra spending that is going into science is going to AgResearch? I see the member for Hamilton West nodding, and acknowledging that it is clearly not enough. One of the major science research units in New Zealand is in her electorate. The reality is that very little was set aside for any of that.

Let us look at what has happened in my own portfolio area, biosecurity. We had the recent foot-and-mouth scare on Waiheke Island, which should have been a wake-up call for all New Zealanders. Had that scare become a reality, it could have plunged New Zealand into Third World status. In fact, Treasury has forecast that $12 billion would be slashed off our GDP in the first 3 years after a foot-and-mouth outbreak. So what did we get out of the Budget in that regard? Not much. We are looking at a potential foot-and-mouth outbreak that the Government was involved in—so what did we get in regard to that? Not much. Nothing.

What we have is 337 people daily bringing biosecurity risk products into this country. We have 196 biosecurity risk containers entering our ports every day. What does that say? It says clearly that the $200 instant fine we currently have is not working. Here was a potential for Dr Cullen to add to his fiscal surplus of $7 billion or find another way of raising some money to invest in biosecurity. We had 19.9 tonnes of fruit fly material imported into New Zealand last year on the person; 9.3 tonnes of meat and poultry products imported into New Zealand last year on the person; 3 tonnes of seeds; 2.7 tonnes of dairy products; and 5,829 plant items. How do we know that? We know that because the Ministry of Agriculture and Forestry biosecurity intercepted and found that. One could say, well, they are doing a great job. But the reality is that the Ministry of Agriculture and Forestry’s own audit says that at best it is catching 90 percent.

We are very exposed, and Dr Cullen, with his $7 billion surplus, and Helen Clark, with her opportunity like no other Prime Minister has ever had, could have addressed that in this Budget, and they totally failed to acknowledge the importance of that issue. There has been a little bit of rats and mice here and there, and, as I said, it could have been a cure.

There is also the question of vehicle checks. Vehicles come into this country from all around the world, but mainly from Japan, where clearly the biosecurity risk is high and the check process is inadequate. Why was that not addressed? The painted apple moth has so far cost $52,794,000. One would think, based on the amount the Government invested in trying to eradicate the painted apple moth—and it finally had some success—with a $7 billion surplus, it would have invested more upfront in biosecurity on surveillance and trying to prevent those incursions coming across our border. So far $10 million dollars has been spent in relation to the varroa bee mite, and another $750 million will be budgeted annually to try to stop it from travelling to the South Island.

With regard to the saltmarsh mosquito, $36 million has been spent so far. It is not rocket science to suggest that if the Government spent a little bit more upfront and stopped some of those incursions, potentially it would have a fiscal advantage, not a disadvantage.

The Minister over there is waving her pen. I am sure she will take a call to explain that there was some money in the Budget. However, I can tell the Minister that, it clearly is not working, and it clearly is not enough. The Government currently spends—wait for this big figure—$62 million a year on containment or attempted eradication. Another $4 million, $5 million, or $10 million—I do not have the figures to say how much would have been necessary in the Budget—could have enhanced that substantially.

I know that the Minister over there has a strong view on this. I suggest that she, as the Associate Minister for Biosecurity, should take a call to tell the House why she and Minister Jim Sutton failed to recognise the importance of this issue, particularly in the light of the recent foot-and-mouth scare on Waiheke Island. Why did they not put some real horsepower into this issue, which is concerning a huge amount of New Zealanders? [Interruption] I welcome the Minister’s interjection. I do not know whether any of it is comprehensive.

Hon Marian Hobbs: Tax cuts equal biosecurity cuts.

SHANE ARDERN: I have just explained to the Minister how better biosecurity could be achieved, which would be by investing in better surveillance.

We come back to Dr Michael Cullen’s Budget, which will be his last one. As I said, most people would say that he is an intelligent gent. Why then has he failed so miserably in this Budget? The only thing I can put it down to is that he has finally been worn down by the socialists around him, and the Prime Minister, who told him that focus group work and poll work shows that the people should have a tax cut, and the tax cut will be 67c in 3 years—2008. Well done, Dr Michael Cullen!

Hon PAUL SWAIN (Minister of Labour) : I am very pleased to rise to speak in the Budget 2005 debate. As a Labour member of Parliament, I am very, very proud of Labour’s record. This is our sixth Budget, and this Labour Government has put money in the pockets of working families, rebuilt the infrastructure, and put money back into health and education, as compared with National, which I shall talk about in a minute.

I thought it was a bit rich for Maurice Williamson to talk in this House about roading in Auckland. What was the single biggest issue that faced this Government when it came into office in 1999? It was the under-investment in the transport infrastructure for 9 long years under National. Most people in Auckland know that. Now, National has the cheek to say in this House that the billions of dollars we are spending up there is not enough. National ran down that infrastructure. One could not see a bulldozer or a roadworks sign in Auckland for years and years. But what is the big complaint that some of our electorate offices—offices like that of Judith Tizard—get now? It is that people are concerned about the congestion caused by roadworks, because so much work is going on up there. So any attempt by the National Party to say that it was the party that did so much for transport is just ridiculous. People will not forget the fact that the National Party was the party that was going to privatise the roads. Do members remember that? That policy was hated by councils up and down this country, and they campaigned against it. So that little policy still lies in Maurice Williamson’s bottom drawer, and it will be back again.

Finally, now, there is a bit of a contrast. We are finally starting to hear some of the things that the National Party might do—not what it will do but what it might do—and we shall investigate that a little more. On the one hand, we have the Labour Party, which is fiscally responsible and has been so for 6 years, because it is important to put a few little nuts away from the tree just in case things go a bit soft. That is the way it is done. Then, of course, Labour has been investing in health and education. That is the important thing to do, given that they were also run down under a National-led Government during the 1990s. National talks about health, education, investment, and spending. Part of the problem has been investing in the infrastructure, like paying for nurses’ salaries—because they were leaving and going overseas—paying for doctors’ salaries, and things like that. That is very, very important. The Working for Families package is a tax cut. That is money going into the pockets of ordinary working families. That is a tax cut that is targeted to people who need it the most, and that is the Labour way of doing things, which I have always talked about, and I have talked about infrastructure.

On the other hand, of course, is the National Party’s policy. How would one sum it up in three basic sentences? Well, first of all National will spend more, and I will talk about that in just a minute. In my own area, National is talking about spending over a billion dollars on new prisons, because it will get rid of parole, or something like that. National will spend more. How will it fund that? It will borrow. Have members heard of that before—spending and borrowing? Yes. It goes back to the Muldoon era. It is typical Tory economics—spend now and put a mortgage on the rest of New Zealand for years and years to come. We have heard it all before. Then, just to chuck a little bit of spice into the mix, National will cut taxes. So it will spend more and cut taxes. In the old days that was called voodoo economics—somehow one could have one’s cake and eat it too. Somehow, one can cut huge amounts of money out of the system, yet somehow provide more services for people. Most people now, in the 21st century, realise that that cannot be done. [Interruption] Well, National members will say that, of course, and they will slip and slide.

What did the National Party say about tax cuts? Initially, John Key, all hot and flushed, said on television: “There’s going to be a Budget. Tax cuts before lunchtime.” Then we heard that because of the timing of the year and things like that, it might just take a little time to work out the policy and pass legislation, etc. They had forgotten about that. So the tax cuts could come in sometime around April next year. Now we are hearing that tax cuts will probably be phased in over a number of years—9 years, actually. I think that is what National is talking about when it comes to phasing them in. I do not think that the people in New Zealand will have missed the fact that huge tax cuts were promised by the Howard-led Government in Australia—and what did the average working person get?

Hon Marian Hobbs: Six dollars.

Hon PAUL SWAIN: I do not think that when New Zealanders are hearing “tax cuts” they are thinking “$6”. They are thinking more like $30, or $40, or $50, or $60. People have to work out whether the National Party is talking about, or promising, $40, or $50, or $60 in tax cuts. That is what people are expecting. National has talked this up to a point where the average person is thinking: “I’m going to get $30, $40, or $50 off my taxes.” Well, if that is the case, the average person has to consider two things. First, there will be a lot of cuts in spending, and I can tell members that one does not get much for a couple of hip-hop tours that are cancelled. The hip-hop tour was worth just a few bucks compared with the billions and billions of dollars that will be needed to fund a tax cut of $30, or $40, or $50. We know what will happen. Everyone knows that. When Dr Brash was the Governor of the Reserve Bank he said on many occasions: “If you fiscally stimulate like that with tax cuts interest rates will rise.” So ordinary people’s mortgages would go up and, as the cost of living rose, the impact of those tax cuts would go down. The worth of the tax cuts would be eroded. The cost of living would rise and people’s standard of living would be eroded. Everybody knows that. In fact, there is no free lunch any more in New Zealand. What we spend, we have to earn. Now the National Party wants to ruin the work that has been done under Michael Cullen, who has kept a steady hand on the tiller for 6 years. The National Party wants to borrow, spend, and cut taxes. It is an outrageous proposal, and the vast majority of New Zealanders will see through it.

The real thing, though, that people will judge at the election is how much things have got better in health and education. I remember being an electorate member of Parliament prior to 1999—and the National Party has the cheek to talk about waiting times now! Then, the reality was that everybody was told they would be looked at, and that could have been by Christmas, the next Christmas, or whichever Christmas—for years and years and years. We have put real money into health, we have put real money into education, and we have put real money into infrastructure. What about the Working for Families package? If we take an average family working 60 hours a week and earning, say, $37,400 a year before tax, on 4 October that family was $42 a week better off through the childcare subsidy. On 1 April 2005 that family had $40 per week more in family assistance. On 3 October 2005 it will have $6 more per week through the childcare subsidy. On 1 April 2006 it will have $55 more in family assistance per week. On 1 April 2007 it will have $20 more in family assistance. That is a total of about $160 per week. People can compare that with the $6—potentially—that family would receive from the National Party.

People need to start thinking about the sums, because if someone comes along and promises something that sounds too good to be true, the general law of economics is that it always is too good to be true. We cannot cut taxes, promise to spend more on defence and prisons, and then borrow at the same time. The effect of doing that is interest rate rises. So we look forward to going into this election campaign. We want to start to see the colour of the Opposition members’ eyes, because they will slip and slide. They will talk about the 4 weeks’ annual leave—yes, it is in; no, it is not. They will talk about the Employment Relations Act—in, out, in. What about our nuclear-free stance? Will that be gone by lunchtime? What about superannuation? The fund was to go, but now it is back, and those members will have to nail their colours to the mast. This election is about the difference between a Labour-led Government, which cares about New Zealand and New Zealand families, versus that party, which will promise anything to get into Government. The fact of the matter is that the people of New Zealand are not as silly as that.

Hon JUDITH TIZARD (Minister of Consumer Affairs) : It is my great pleasure to support this Budget, just as I have supported the last 6 years of a responsible Labour Government that has worked for New Zealand—for all children, for all New Zealand families, and for all New Zealand communities—so that we have the building blocks we need to made a great future for every New Zealander. This is the only Government that has understood that every New Zealander is vital, not just to this country’s present but also to its future. We must invest. We must invest in children, in health, in education, and in research and development. We must develop all our capacities so that New Zealanders can go forward together.

What do we hear from the other side of the House? We hear that Opposition members would cut taxes and increase spending on health, education, and biodiversity. I was very encouraged when Shane Ardern told us that the National Party wanted to increase biosecurity funding. So what does he say to Don Brash, who said that we should have covered up the hoax when we were threatened with foot-and-mouth disease? That was what the National Party’s response was. It was not better investment in biosecurity, but to lie, cheat, and lose the trust of our trading partners and of our producers. That is a scandal. I would almost say that that response is treason when it is in an area that is as important as New Zealand’s biosecurity.

Lindsay Tisch: I raise a point of order, Mr Speaker. The member has just accused the Leader of the Opposition of lying and cheating, and she then went on to say that it is a matter of treason. I find that completely unacceptable, and I ask that she withdraw and apologise for those comments.

Clayton Cosgrove: Come on, stumpy!

The ASSISTANT SPEAKER (H V Ross Robertson): I thank the member for his contribution.

Lindsay Tisch: I raise a point of order, Mr Speaker—

The ASSISTANT SPEAKER (H V Ross Robertson): I am already on a point of order.

Lindsay Tisch: While I was speaking and you were answering my query, the member opposite interjected while you were making your ruling. [Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): No, that only makes the matter worse. Can I say that I thought the member was skating on thin ice, and we have to be careful, of course, of the words we use in any debates. What was being said was close to an imputation, and members cannot get around rules against unparliamentary language by circumlocution. So I would ask the member to withdraw and continue her speech.

Hon JUDITH TIZARD: I withdraw. National Party members cannot hide from what they have said. They cannot hide from the fact that they are proposing to put New Zealand into a diabolical position, where they would borrow for their own political advantage. Indeed, tonight I have just come past a certain restaurant in Wellington, where I had been to a meeting up the road, and I saw Rodney Hide waltzing in, arm in arm with Katherine Rich. Now, sometimes we have to make some awful compromises in politics, but I say that if that is as far as the National Party is prepared to go, I think we should just dismiss all of its ludicrous, irresponsible, and damaging statements about this Budget and what the National Party is proposing to do.

We know that tax cuts will mean health cuts, tax cuts will mean education cuts, tax cuts will mean biosecurity cuts, and tax cuts will mean cuts in arts, in innovation, in business, in research, in design, in export, and in law and order. We know perfectly well that the people who oppose us will say anything to get into Government, because they believe they were born to rule. They believe they were born to look after their self-interest, and that they were born to rule. I have to say that New Zealanders will deal with them as they dealt with them in 1999 and 2002, because this Government has put in place a solid, hard-working Budget that maintains a strong and credible fiscal position.

It is fair, it is inclusive, and it actually says to New Zealand: “We treasure every child in this country and, yes, we will give you tax cuts.” We will give tax cuts to low and middle income families with children first. That is where we will put the tax cuts—not into the fat cats, who just want to have a more expensive bottle of wine down at the Green Parrot.

I say that this Budget builds every New Zealander’s stake in our country, it is building conditions for growth, and it is securing our future. I am proud to be part of this Government. I am proud to work with a Prime Minister and a Minister of Finance who understand that all of New Zealand has to work together. I am appalled to hear Maurice Williamson standing up and saying that he will put money from roading taxes straight back into roads, but then he said “over time”. I hope people will listen to that, because I hope they are the people zipping down the new Whangaparāoa road and across the Puhinui viaduct, the people who are going along the extension of State Highway 20, and the people who are looking at that new bridge across Herald Island and all those major works on the North Shore busway.

I hope those people are, as we speak, zipping down the new double-tracked western rail lines—so that we can do transport and public transport at the same time—and people who are pulling into those new stations, and who are looking at the huge amount of work that this Government is doing. The Government is putting over $500,000 of new work per day into Auckland.

What does Maurice Williamson say? He says that National has made a commitment. Well, I remember Maurice Williamson saying in 1999 that he had made a commitment, but his commitment was to Better Transport, Better Roads. What was Better Transport, Better Roads? It was a proposal to flog off New Zealand’s roads and make New Zealanders pay to drive down them. We are proposing more roads and better roads, not charging New Zealanders for the right to drive on their own roads.

I am absolutely appalled that Maurice Williamson has the cheek to say that he supports a tax cut for rich people and then to say that he will borrow for the basic services every New Zealander needs now and will need in the future. We are facing a vast increase in the number of older New Zealanders, and an increase in the education and health needs of younger New Zealanders.

I am very proud to be the Minister with responsibility for Auckland Issues, and I want to talk briefly about the broader range of measures in that area. I am very proud of what we have done in transport. No, we have not fixed it. Indeed, the most common complaint I now hear is about roading works. People are complaining about the work we are doing because we are determined to spend more than $500,000 a day and to go on doing so. But we do not want to see the whole of Auckland gridlocked, unlike the Automobile Association, with the failed National candidate for the Tamaki electorate and the Employers and Manufacturers Association (Northern).

Members of the Employers and Manufacturers Association approach me weekly saying: “We are so embarrassed about what that idiot Alasdair Thompson says.” I ask why they keep employing him. After all, he was a failed Social Credit Party candidate in Thames. He was actually quite a good mayor in Thames, but I suggest that Alasdair, having sold his soul, is now just proving how thoroughly he has sold it. He is telling lies about what is being done in transport in Auckland, and I am ashamed to see him dragging along people who should and do know better. Ports of Auckland told me: “We had no idea all this work was being done.” I said: “But I send information to you monthly.”, and got the answer: “Yes, but Alasdair Thompson tells us different.”

So we have a political agenda running here, and all I can say to that is: “Yeah, right!”. Let us see the combination of good roads and good public transport system we will deliver—because we know that National never will.

I was at Middlemore Hospital on Friday, seeing doctors and nurses. These are the terrible bureaucrats the National Party tells us this Budget is supporting, those people who have good incomes—all of those, for example, whose incomes have gone up over $60,000. I am delighted that many more New Zealanders are being paid over $60,000—

Hon Marian Hobbs: Nurses and teachers.

Hon JUDITH TIZARD: Particularly nurses and teachers. The nurses I saw said how much they are enjoying working for the first time in a hospital in a difficult area like Middlemore where they have good equipment and good staffing, and where they have retained more senior specialists and junior doctors than ever before. They tell me they enjoy working there. What they are most proud of is that in some areas, like diabetes, they are doing fewer operations—because one does not cut healthy limbs off people with diabetes who have had the treatment they need to keep their limbs healthy.

I am delighted by what we have done in many areas, including health and education. The National Party’s proposals for making Auckland gridlocked again by removing our very good and fair zoning system for schools is a catastrophe and indicates how badly out of date National is.

I want to talk about the new jobs partnership, for example, whereby this Government is working with the Auckland chamber of commerce to provide good jobs for new residents. I want to talk about what we are doing with local government in so many areas of sustainable cities—youth development, energy, water, clean air in Auckland. I want to talk about what is happening in the arts, where we are developing good New Zealand films and great New Zealand music. We have seen better funding for community arts, professional arts, and regional museums. We are seeing massive investment in these areas, and New Zealanders are responding with energy, optimism, and hope for the future. That is what a Labour Government and a Labour Budget are about.

The ASSISTANT SPEAKER (H V Ross Robertson): I have been advised by United Future that it wishes to split its call into two 5-minute calls.

MURRAY SMITH (United Future) : United Future is delighted to have once again achieved significant policy progress through this Budget. After the Budget we consulted with the Government and asked what it was happy for us to claim as being United Future’s successes out of this process. We came up with a list of $300 million worth of policy initiatives that came out of United Future’s Budget bids. In fact, when we add the tax cuts, the sum comes to $1 billion worth of policy proposals.

Once again we have achieved considerable success in furthering New Zealand, as we have done in every Budget that has been issued since we arrived in Parliament 3 years ago. Prior to our arrival the word “family” was hardly ever mentioned—it was certainly not mentioned in Budgets for some time before we arrived—but it is hard to see now how that could have possibly been so. United Future’s arrival here has really put family on the map.

We have identified, with the Government, 29 different provisions in this Budget that are a direct result of Budget bids we made to the Minister of Finance. Those include a $70.9 million boost for residential care funding to enable a much-needed improvement in staff wages and conditions; the allowing of withdrawals from the Government’s new workplace retirement savings scheme for first-home purchasers, and a $5,000 grant to scheme participants; an increase in the student earnings threshold from $135 to $180 per week before the student allowance is affected; an increase in the parental income threshold for students with siblings who are also students, from $2,200 to $7,000; $7 million for numeracy and literacy programmes in the workplace; $6 million to expand the Modern Apprenticeships scheme, providing another 500 places; $47 million for family early intervention programmes; the extension of paid parental leave to self-employed women, benefiting an estimated 2,173 mothers; $6.2 million over 4 years for counselling to help parents reduce the impact of separation on their children; a rise in the legal aid thresholds, enabling 1.2 million people to get legal aid—up from 765,000; an additional $73.6 million to provide another 245 police; an $18.7 million increase in home-based support funding; $27.7 million to help more sickness and invalids beneficiaries move into work; $4.4 million over 4 years for services to help prisoners reintegrate into society; $3 million for elder abuse programmes; and an extra $100 million in the National Land Transport Fund over 2006-07. Those are just some of the things we have achieved through the Budget process.

Of course, we would have liked to write the Budget. Maybe one day we will write the Budget. There are things in the Budget that concern us, and we did not get everything we would have liked to get. We are particularly concerned about some measures that did not go as far as we would have liked. Nevertheless, we have a remarkable list of achievements.

Some 29 different policies have been implemented in the Budget that will benefit families in this nation. Without United Future, that would not have happened. Through our position here, in the last 3 years we have achieved every one of our key policies from the last election campaign. That is a remarkable achievement. No other party—not even Labour, probably—can say that it has achieved that measure of success. With only eight votes out of 120, we have certainly boxed above our weight and achieved a great deal in our time here.

Obviously, there are more things that we would like to see. We would like to see a lot more progress in terms of our finance policy and our tax policy. We would have liked to see the tax bands increased immediately and by far more significant amounts. We asked for a 13 percent increase. At least we have seen the establishment of the policy whereby the tax bands will be increased, even though we will have to wait for the delivery. We may be able to speed that up in next year’s Budget.

Bonding of tertiary graduates is another key scheme we want to see extended. Only 500 students have been getting those bonds, and we would like to see the scheme extended far more broadly. Another key measure we would like to see is preparatory work on a voluntary savings scheme in order to provide incentives for parents to set aside money for their children’s tertiary education. So we need to do a lot more for families, but we have done a lot for them already.

LARRY BALDOCK (United Future) : I, too, rise to speak in the Budget debate, and I would like to address the issue of transport spending, particularly spending on the building of new roads in New Zealand. United Future has, in the last 3 years, made a real project of seeing that there was more funding. When we came into Parliament in 2002, the Government was proudly announcing that it would spend an extra $225 million. We have seen that figure increase to nearly $500 million per year over the last 3 years. Now, in this Budget, the Government has agreed to add to that another $100 million per year from 2006 to 2009.

United Future members are not backward in coming forward in claiming credit for that, because we have been the “Roads Party” in Parliament. We have constantly reminded the Government that New Zealand’s transport infrastructure has a huge deficit to catch up on, and we are pleased to see this progress. We welcome the news from the National Party that it is promising to spend all the money that is diverted from the road transport fuel tax. But the important thing the voters of New Zealand should understand is that they need to have United Future in Parliament to make sure that either the Labour Party or the National Party keeps its word and continues the progress that has been made over the last 3 years.

New Zealand First, of course, came into Parliament in 1996 with laudable aims of reducing the amount that was diverted and spending more money on roads. But we all know that its term of office did not last. All the laudable aims it may have had and all the promises it may have made to the electorate came to nought because it could not maintain the stability that is necessary for Governments to achieve what they have promised the electorate. It is important for New Zealanders to understand that if they want roads to continue to be constructed in New Zealand, they need to make sure that United Future is the party that holds the major parties honest in this Parliament so that they continue to make progress on roads.

We have also seen development through the transport legislation that has been introduced in this term. Penlink is just about ready to go with a toll road project, and the new harbour bridge in Tauranga is to be continued. Those projects are a very necessary part of the infrastructure that is required in those areas. Although we have seen a lot more money being spent, it is not enough. We still need to see more spent in order to bring our roading network up to First World standards, so that we can have not only efficient transport across the country but also safe transport. Too many people are still being killed on our roads because our roads are not up to standard. United Future will continue, throughout the rest of this term and into the next term, to push for further spending on roads in New Zealand.

Earlier today, in question time, the Green Party suggested to the Minister of Transport that we cannot “motorway” our way out of congestion in Auckland. But we cannot “walking bus” our way out of it either. We welcome the walking bus programme in Auckland. It is a good idea, but in no way will it solve the congestion in that city. Nor will public transport on its own. Public transport is great and we should be encouraging people to use buses, but if we do not build roads for those buses to travel on, pretty soon people will be sitting in buses in very slow-moving, congested bus lanes around Auckland because we have not built the necessary roads that we need. So it is ludicrous to suggest that we cannot “motorway” ourselves out of the problem and that we can solve it all by just shifting to walking buses and public transport.

One of the problems—and I am sure the Minister must be frustrated—is that certain regions are not doing anything with the money that has been given to them during this 3-year term. It must be incredibly frustrating that the Auckland regional authorities are still arguing and bickering about how they will solve the roading problem up there. Likewise, down here in Wellington we still have people unwilling to take the bold steps necessary to see that Transmission Gully is finally begun. Transmission Gully is the only answer to the problems we have in the Wellington region.

We have had all sorts of discussions about the inner city bypass in Wellington, and there have been unending protests by Green members trying to stop it, but it will not solve Wellington’s problems because we still have only one tunnel through Mount Victoria, and it will not be possible to fit all the traffic through that one tunnel even when the inner city bypass has been completed. We need regions, like Tauranga, that are ready to go and have thought through what they need in their transport areas. Tauranga will take every cent that the Government gives it and spend that money wisely. Tauranga will see the problem solved there, and I urge the Government to be very generous to the people in Tauranga in the coming months.

DIANNE YATES (Labour—Hamilton East) : I have just had an idea for a new comedy by our wonderful film director Peter Jackson. I think it would be a really, really interesting fantasy movie. It would have Don Brash all dressed in red in a Santa suit, grinning from ear to ear and walking down the street saying: “Tax cuts! Tax cuts! Tax cuts!”. Coming along behind him, with a great big black bag, would be John Key as “Black Peter”, who would be putting them all back in the bag again—before Christmas. Don Brash is promising, like some Santa Claus, that he will give us tax cuts before Christmas, and John Key is saying: “Don’t be stupid; you can never do it. Don’t be silly!”. Yet this man, who is making such absolutely ridiculous promises, was the Governor of the Reserve Bank.

I am proud of our Budget. I am proud that this Budget from Michael Cullen is a family-friendly Budget. I am particularly proud of the family assistance in theWorking for Families package. That family assistance is financial help for families with children. It is paid by the Inland Revenue Department to families whose main income is from working. Some people out there think it is just for beneficiaries. Some people think it is a benefit, when it is actually paid by the Inland Revenue Department.

Family assistance, as we are reminded in this wonderful booklet I have, is made up of four types of payments for which people may qualify. There is family support, which increased for many people on 1 April this year. Then there is the in-work payment, which replaces the child tax credit. That is tax relief. In addition to noting the help people can have with childcare costs and affordable housing, detailed in the pamphlet that all New Zealanders should have by now, Is Your Family Entitled to Extra Money?, I want to give members the example of Sale and Barbara, who will be $169 better off through family support. They have three children, aged 5, 9, and 12. They live in Onehunga. Sale works fulltime and earns $52,000 per year before tax. Sale and Barbara pay a mortgage of $385 a week, and get an accommodation supplement to help with their mortgage.

Last year they got $14 more in their accommodation supplement, and were better off. On 1 April this year, they got $41 more in accommodation supplement and $44 more through family assistance. That took them to $99 a week. So they have gone from having $14 more on 1 October 2004 to having $55 more on 1 April 2005, and they will have $99 more on 1 October 2005. In April 2006 they will receive $40 more in family assistance, which will take them to $139 more, and by April 2007, they will have $30 more. That is a total of $169 more a week. Just think how many groceries that would buy!

Hon Marian Hobbs: That’s a tax cut!

DIANNE YATES: It is a tax cut. Now, the National Party would have to cut tax at a rate of 9c in the dollar to beat that. It would have to be 9c in the dollar, I tell Mr Brash.

Darren Hughes: That can’t be right!

DIANNE YATES: That is why I am telling him we have to make that fantasy movie of Don Brash making things up in his Santa Claus suit and John Key coming along, as I just said, saying: “That can’t be right! Put it all back in the bag, because the kids are not going to get that this Christmas. Let’s be real.”

We have just heard people talking about roads—Maurice Williamson talked about roads—and a lovely person wrote to the Waikato Times recently, saying that a few weeks ago Don Brash stood up in Parliament and opposed the motor spirits tax. A week later Don Brash turned up in Hamilton and said he would spend $750 million of that tax in the Waikato. The person wrote a letter and said that a week is a long time in politics for “Santa Claus” Don Brash—and not only that but the editor of the Waikato Times had written an editorial that said “Yeah, right!”. He had not believed a word of Don Brash’s statements, either. So there is that strange Santa Claus promising things, and poor old John Key—who has a few brains—coming along behind him and saying, “Uh, uh. Come on, Santa Claus, put it back in my bag. You cannot possibly deliver this.” It is, as we have said, a false promise.

Not only do I think that Working for Families is excellent but I think that the KiwiSaver scheme will encourage people to save. Why? It will do that so that people can have that Kiwi dream of homeownership. I want to point out a number of things in terms of homeownership that Labour has delivered to families. We have brought in income-related rents. We have brought in Kiwibank. Now we have brought in this KiwiSaver scheme that will encourage people to have their own homes and that will give families stability and security. Having stability and a home provides for better educational outcomes for children and also for better health outcomes for families. That is what is important about homeownership.

Mr Brash has made his promises. We in this House all remember when National was in Government before and gave us tax cuts. Who were the first people to miss out? Effectively, there were three cuts to superannuation. All those people who are a little bit older than I am and who are retired should just forget it if they are thinking of voting for National. I say to those people who are thinking they will get home ownership with Dr Brash’s tax cuts—if he ever got around to implementing them—that those tax cuts would mean enormous rises in interest rates. People would have to forget homeownership with those rises in interest rates. So there we have it.

Comparisons have also been made between New Zealand and Australia. Australians are what—$6 per week better off? What can people do with that? They cannot even go to a movie on $6 per week, let alone take their kids.

Jill Pettis: Baloney!

DIANNE YATES: It is absolute baloney. In this last week I have attended the Janus conference of women in Wellington. It was about looking back and looking forward. Let us look back at Labour’s accomplishments for women. We have the family allowance, more people in work, paid parental leave, cheaper visits to the doctor for children, subsidised quality childcare, more money for out-of-school care and recreation in the recent Budget, and more childhood education—and I thank Michael Cullen for the new playcentre and new early childhood centre in my electorate. We have lower and fairer tertiary costs, increased family incomes, more affordable housing, 4 weeks’ secured leave—what was Dr Brash going to do to those holidays?—guaranteed Plunket funding, women Modern Apprentices, and huge support for New Zealand’s arts and culture. Those are things that Labour has delivered over a period of time. Women at that conference in Wellington congratulated Labour on the work it has done.

I note not only all that but that women are on our front bench in this House. We have a woman Prime Minister. I ask people to look at the party list of other parties in this House to see how those parties regard women in our society. When National was in power, it made cuts affecting the elderly and cuts to benefits affecting children. In respect of women, let us not forget those wonderful stories about Michael Savage and Peter Fraser. They said that how a Government treats women, children, and old people in society is how we can judge the kind of Government we have.

I also quickly acknowledge Shane Ardern’s remarks. Two hundred and four million dollars are going into research, and there was a letter in the Waikato Times from agricultural research people who said thank you for the Vote Science, Research and Technology increases, which will make things much better for them. I thank the Government for the Waikato Innovation Park and the money going into the aviation cluster, and I thank Michael Cullen for economic development in my electorate—which we never had before. We had meetings with National for 13 years when it was in power, but we never saw that development.

There is a lot for us to say thank you for, and a lot to anticipate in this Budget. A great deal of development is going on, and we Labour MPs are extremely glad for the growth and development in our electorates. I say again that not only is this a family-friendly Budget but it is also a Budget for economic development.

MIKE WARD (Green) : Dr Cullen’s Budget begins: “Budget 2005 is about securing the future. Securing the future for the nation as a whole and securing the future for New Zealand families and New Zealanders individually.” Securing the future is exactly what the business of Government ought to be about, and elements in this Budget do just that. As Rod Donald said when he spoke in the Budget debate, the homeownership deposit subsidy and the extra 1,300 State houses are steps in the right direction.

Lulu is my newest grandchild. She is just 16 days old. Does this Budget secure her future? I see that Dr Cullen is expecting the economy to grow at an annual rate of 2.5 percent. At that rate, by the time Lulu is 30 our economy will be twice as big as it is now. I have to ask where the evidence is that such growth will make her future more secure. What would have grown and at what cost, and how will those things that have grown benefit Lulu? At a recent forum on the United Nations Decade of Education for Sustainable Development, Helen Beaumont, the Assistant Parliamentary Commissioner for the Environment, pointed out that in the 20 years between 1981 and 2001, New Zealand’s population grew by 19 percent, while its GDP grew by 55 percent. In that same period, its energy use increased by 61 percent, motorcar ownership increased by 67 percent, and the amount of stuff Aucklanders threw away increased by an outrageous 131 percent. It is difficult to see how, on a finite, rapidly overheating planet, any of those figures contribute to the security of my grandchildren.

What does the 2005 Budget say about reducing our energy usage, our motorcar ownership, and our wastefulness? Will the additional goods and services that contribute to the doubling of New Zealand’s economy over the next 30 years be stuff that New Zealanders really need? Where will it be produced, and will it be produced sustainably? Will the homes we build contribute to our already excessive energy demand, or will they be warm, comfortable, and designed to take advantage of the heat of the sun? Will those homes be close enough to the places that the occupants need to be so that the people who live in them can get a little exercise by walking or cycling to some of their destinations, thus avoiding the lifestyle diseases that threaten a blowout in our health budget in Lulu’s generation? How many of the new products are likely to be made in New Zealand, and will they be made to last? My fear is that although there are glimmerings of the notion of sustainability in this Budget, it is largely about perpetuating the status quo and the unsustainable. As important as the Land Transport Management Act and carbon taxes are, they only begin to address the excesses of our profligate lifestyles. Although New Zealanders may be better placed to survive the risks of water and food shortages, and all the threats that peak oil, climate change, and the other risks dealt with in the millennium report are likely to spawn, prevention—as difficult as that may be—still provides the only possible protection.

The pursuit of growth, in the face of all the evidence that it is responsible for the risks that threaten our very survival, has to be the ultimate foolishness. But should I be surprised? Ronald Wright, in his book A Short History of Progress, writes that far from being unusual, throughout history it has been normal practice for societies to pursue, right to the end and with increasing enthusiasm, the very practices that have been their undoing, in spite of all the evidence that they would be well advised to desist. Did the Easter Islanders actually believe, as they chopped down the last tree in order to construct and move their last great stone statue, that by so doing their island would be magically reforested? Could anyone be so foolish? If Ronald Wright is to be believed, such foolishness is the norm. We need look no further than our own civilisation and the actions of successive Governments all over the world to see that, in spite of all our learning and 10,000 years of civilisation, we are no wiser than our predecessors.

The evidence of the destructive consequences of growth is clearly visible for all to see. Our planet is dangerously overheated, with overcrowded highways; dammed and polluted rivers; fished-out oceans; escalating oil prices; and looming food, water, and energy shortages. Here in New Zealand, too many families working too many hours and accumulating too much stuff, with too little time and energy for the activities that it takes to be a family. There is likely to be at least a doubling—and possibly a trebling—of carbon dioxide levels by the end of this century. Although we may be a little more protective of our own environment and our own forests these days, we continue to import, use, recycle, and dispose of vast quantities of wood and paper products from the two football fields of forest that are removed every second in other parts of the world. Even if we manage to attain the Packaging Accord 2004’s target of a 70 percent recovery rate for paper, the bulk of that is likely to wind up in vast coal-fired recycling plants like those that leach toxins into the highly polluted Pearl River in China.

Although we may have been spared having to breathe polluted air, the planet that those coal-fired boilers are overheating is our planet. Although we may feel virtuous each time we toss another page into the recycling bin, we might like to ask whether we needed to print it off in the first place, whether it was printed on both sides, and whether we actually read it. Although it may be possible to reclaim the fibre in the paper, it is quite possible that the land cleared in order to make the paper is already sliding into an ocean somewhere, and that the energy that was used to produce it is already overheating the planet—and that is certainly not recoverable. So what does this Budget do to minimise New Zealand’s mountains of waste? New Zealand has an admirable waste strategy, and last year the Government signed a voluntary packaging accord with business and local authorities. Most New Zealand councils have signed up to a policy of zero waste, and many have implemented kerbside recycling schemes, but although we are recycling more stuff, are we less wasteful? If the burgeoning skips, wheelie bins, and profits of the waste companies are any indication, it would appear that we most certainly are not.

I would like to thank now the people who have made us aware of waste—the Zero Waste people, the WānakaWastebusters, the Nelson Environment Centre, the innovative waste people in Kaikōura, the people in Kaitāia, Raglan, Ashburton, Alexandra, Waiheke Island, and a host of other community organisations and people up and down the country who have spent many years collecting, sorting, and composting waste, finding markets, and educating their councils and communities about waste. My thanks go to all the people who have beavered away in the waste sector over many years, many of them volunteers and all of them passionate. We have never been so aware of the issue of waste, or so conscious of the need to recycle. It is now time to move to the next phase: to move up the hierarchy, and to reduce and to reuse. It is time to avoid producing and taking home products with an extremely limited shelf life, wrapped in vastly more packaging than is necessary. It is time to turn New Zealanders into careful consumers, and to tackle, finally, the cargo-cult mentality that has made shopping the preferred recreational activity and over-indebtedness and extreme waste the norm for far too many New Zealanders. It is now time for the Government to get behind the community sector and put teeth and commitment into the New Zealand waste strategy and the Packaging Accord 2004.

As important as encouragement and education may be, they have not slowed down the creation of a vast waste industry with a vested interest in the production of more waste. New Zealand needs a dedicated waste authority, funded out of landfill levies on residual waste, to administer landfill bans on the many other products that we already have uses for, and the extended producer responsibility measures that will provide a cash flow for the community sector and level up the playing field for all those responsible companies that genuinely want to reuse or minimise their packaging, cut their waste, and produce and market products that are made to last and that can be repaired.

The Minister for the Environment ought to find the Green plan for minimising waste extremely attractive—and I am pleased to see the Minister in the Chamber—because it is an excellent example of “the polluter pays” model. Although the Government may have some distance to go before it adopts triple bottom line accounting practices, that is no reason why even the Minister of Finance should not be delighted with practices that reduce the degradation of the environment and produce real social benefits at the expense of the wasteful. The measures we are advocating are not cutting-edge. They are already employed in other enlightened countries and states. The community waste sector has been asking for them for many years, and they have been endorsed by the staff dealing with waste in councils throughout New Zealand. Some of the measures will already be familiar to older New Zealanders; for example the container deposits that once kept broken glass from our roads and beaches provided pocket money for generations of New Zealand children, Scouts, Guides, Brownies, and sports teams. If similar but somewhat larger subsidies and deposits were paid on the purchase of new motorcars, would that put an end to abandoned motor vehicles? Maybe.

I spoke earlier about the futility of mindless growth. Reducing waste while providing opportunities for good economic activity also has the advantage of reducing costs in other areas. There are obvious costs in the collecting and disposing of ten million kilograms of waste every day in New Zealand, but there are the environmental benefits of reducing resource use and energy consumption, there are the social benefits of putting people to useful work, and there are the quality-of-life benefits that accrue to communities and families who are not working every waking hour in order to pay for stuff—clothes, furniture, appliances, toys, and things they frequently do not need and probably will not get a lot of pleasure out of—and packages where no packaging is necessary.

Some people are concerned that if we consume less, we will work less, and they wonder what we will spend our time doing. I have to ask them what they would like to spend their time doing. Perhaps we could go back to working fewer hours and having time to spend with the people we like. I come back to the Budget. If it really is about securing the future of Lulu and her sisters Brodie and Ashley, her cousins Laura and Jessie Rose, and all our children, and about reducing the amount of stuff we throw away, it is just the beginning of the kinds of initiatives we must pursue.

DARREN HUGHES (Labour—Otaki) : Fair, inclusive, and forward-looking would be the only three words—or four words, as it happens—that one could use to describe Dr Michael Cullen’s sixth Budget to this Chamber. I say that because this Budget actually continues to deliver everything that the Labour-led Government has done since the year 2000. A number of people are making one key mistake in politics at the moment—especially on the other side of the House—by acting as though the 2005 Budget was the only thing the Helen Clark Government has done in 6 years, and that we are asking to be judged only on one afternoon’s work, on one Budget. That is the fundamental mistake the National Party is making, because this year’s Budget builds on the 2004 Budget, and on the 2003, 2002, 2001, and 2000 Budgets, which have delivered real and meaningful change right across this country. One can pick up any portfolio area, or any vote that the Government has put forward in the Budget process this year; if one follows it through the preceding years, one sees that this is a Government on a journey for the country.

This is not a Government trying to steal headlines in just one year; it is not a Government that sleeps for 2½ years and wakes up for 6 months, as some political parties do. This is a Government that is turning up for work every single day, trying to make this country a better place to live in—not just for some people, not just for the few, but for absolutely everybody across all walks of life in our community. Not for us are the politics of division and exclusion; for us are the politics of inclusion and of making sure we get a fair deal across the economic and social sectors and in terms of New Zealand’s place in the world in terms of foreign policy. So the most important thing to note about this Budget is that it continues Labour’s and the Progressives’ work in Government, with the support of United Future and from time to time, on legislation, the Green Party. The Budget is a continuation of a process, rather than a one-off event on which we submit ourselves for judgment.

But even if we did say that this Budget alone was the thing that, after 6 years, we wanted to be judged on, I stand by what we did in this House on 19 May. On that date, we invested in what Labour Governments ought to invest in. There was more money put into the health sector, into the education sector, and into things like public housing. Those are the very reasons we have a Labour Party on this side of politics in this country, and we have been able to deliver on all those things.

I point members to one or two things that can make a difference for ordinary people. I point out the funding for cataract operations that exists in this year’s Budget, as part of our public health budget delivered by the Hon Annette King. We will make a huge difference for people by doubling the number of cataract operations over the next 3 years. We can radically change the lives of those people who are hard of vision, by investing in public services. If the choice is between doing that for somebody on the Kapiti coast who is in retirement, or cutting taxes for people who already earn quite a significant amount of money, then I will go for the cataract operation time and time again. Just as in last year’s Budget, when we doubled the number of hip and knee operations, we have practical things that change people’s lives when we have a Government committed to the core public sectors. [Interruption]

I hear the ACT party’s spokesperson interjecting about health. The ACT party takes the extraordinary view of saying that when it comes to economics it wants the lowest tax rate in the world, but when it comes to any area of social spending it wants to spend the most amount of money on health. The National Party has a big problem at the moment: none of it adds up. But the soon-to-be-departed ACT party has it even worse when it comes to problems around the abacus and the places it would like to put that. The National Party, of course, has that problem in droves, as well.

There are other things in this Budget that have not received a lot of attention, and that have very low-spending plans. I point to the rates rebate scheme—

Dr Richard Worth: Thank goodness for that!

DARREN HUGHES: I hear the member for Epsom interject. The amount of rates rebate he would have would not worry him too much. In fact, if we were to do a proportional rebate the rates that one paid in Remuera would be far more than the rates that any of my constituents pay in the Otaki electorate. So it is no surprise to me, at all, that the National Party is not interested in the rates rebate scheme. But if one is a constituency member of Parliament, one knows that people on low and fixed incomes often struggle to pay their rates. So we have moved the rates rebate scheme up for the first time in 30 years, and for the first time in 30 years we will help more people on low, fixed, and modest incomes to pay their rates. How much will that cost? It will be $50 million—not a very expensive Government programme, but the kind of programme that only a Labour-led Government can deliver, because only a Labour-led Government will be attuned to the kinds of needs that exist in our communities. Those are the sorts of things that will make a difference.

In a few days, on 1 July, the beginning of the removal of asset testing will come in. That is another very important policy for older New Zealanders. We will now move the threshold up to $150,000, and we do that because of our commitment to older New Zealanders.

Across the superannuation area, of course, we have introduced the KiwiSaver scheme. Why is that important? Because it focuses on the future, and I return to that theme I mentioned about the Budget being inclusive, fair, and forward-looking.

Dr Richard Worth: Speak faster.

DARREN HUGHES: The member for Epsom will be here for such a short time more that he needs me to speak fast so he can hear about some decent policies. Of course, it is always interesting to hear from Mr Worth in the evening.

I also say, when it comes to the issue of KiwiSaver, that we are putting the needs of the country first for the long term. One thousand dollars will go into the account of every person who starts work, and then 4 or 8 percent of his or her income so that we can lift the savings rate of this country, and assist people into their first home with their first deposit—which we know is a struggle for a lot of people out there—and also get them thinking about their retirement when they hit the age of 65. That is the kind of forward-looking and responsible policy that this country needs.

What we do not need is the sort of stuff that has been offered to us by the National Party. We have sat through almost 14 hours of Budget debate, and despite all the opportunities available to National, which in a few weeks is offering itself to our country as an alternative Government, we heard not one policy at all from that lot over there. We heard that they wanted to have tax cuts but they would not front up to the country and tell us how much those tax cuts would be. In fairness to the outgoing ACT party, it has named its proposed tax cuts, but National has steadfastly refused the entire way through this 14-hour Budget debate to tell us what its tax rates would be. We heard from Dr Hutchison, who said: “Why will the Government not spend more on health?”. Well, we will tell him why. We cannot spend more on health because we are putting out, in terms of a Budget table, exactly how much we want to spend.

Jill Pettis: $9 billion.

DARREN HUGHES: The member for Whanganui says $9 billion. The National Party members will not tell us how much they want to spend, and at the same time they are saying: “We ought to cut taxes.”

We actually know that its current leader, Dr Don Brash, has a number of views about Government spending. When he became Leader of the Opposition, of course, he stopped talking about what he believed in. He had a little book published about himself, which was particularly unhelpful for his cause. So bad was that book that the poor guy who wrote it was ranked No. 64 on the National Party list, which is about where the book came in. It came in, I think, in the top 70 books in the country at about No. 64. But I tell members that before Don Brash became the leader of the National Party he had well-stated views.

The 2001 Catching the Knowledge Wave conference was where he put a lot of his views out, and he said that minor changes at the margins will not do the trick. That man stands for wholesale cuts in public spending. He stands for big tax cuts that this country cannot afford. The onus was on the National members in this debate, which is a few weeks out from a general election. They had a wonderful opportunity to get on their pins and tell us exactly how much they were going to charge New Zealanders in tax, and what core public services the public could expect for that tax rate. But not a thing did we hear.

What we do know, though—there is one little thing that we know—is that they are prepared to borrow money. I want to say that when one side of politics—that is, Labour—is saving by way of the New Zealand Superannuation Fund for the Government contribution, and introducing the KiwiSaver account for individuals to save for their futures, it is irresponsible of National to say “We are going to borrow and hope our way to the future.” Have we come through all the reforms of the 1980s only to go back to borrow-and-hope policies? I certainly hope we are not, because that will not help New Zealand one iota. As soon as a Government comes in and says: “We’ll borrow every time things get tough.”, it will come under pressure from all the little interest groups up and down the country. One can see what is happening with roads. National is promising to build roads everywhere, having done nothing in the 1990s—nothing at all. It wants to borrow and borrow, and this country cannot afford it. It will put us back into debt. It is the kind of Muldoonist problem that led to high interest rates in our country, which Don Brash did nothing about.

We cannot go backwards in this election campaign. We must go forward, we must be inclusive, we must be fair, and we must design policies that take our country forward. We have to make sure that we do not give in. Having come so far to get our country’s figures back in the black in the Budget, we cannot afford to give in to bribes like the National Party offers every 15 years—1975, 1990, 2005. Those members will bribe their way into office, and the Labour Party is here to make sure they do not get a chance. I support Dr Cullen’s Budget.

HEATHER ROY (ACT) : The member who has just sat down is participating heavily in Dianne Yates’ world of fantasy that she was describing before, and I can see why two of the Labour Party members would want to move across to this side of the House: they do not want to be part of that fantasy. In fact, Mr Hughes had to speak very fast, purely so people would not understand what he was saying—and the fantasy caught out.

This Budget is going to go down in history as being the “Great New Zealand Disappointment of 2005”. The deep, dark secret that the Labour Party president kept telling New Zealanders about did not eventuate. There were no tax cuts in this Budget, despite the fact that the Minister of Finance announced a $7.4 billion surplus. The Budget contained no surprises in health, either. There were very few surprises, because everything had been pre-announced in the election bribes. The election-year bribing began very early. In the area of health, the Government announced funding of $17 million for cataract surgery, which was a bribe to the elderly so that Labour’s vote would be shored up in a few weeks’ time. A couple of months ago the $40 million Cancer Control Strategy was announced, then re-announced in the Budget. Despite $40 million being announced, only $5 million will go towards the very necessary area of treatment. In fact, it was much more about being a good photo opportunity for the Prime Minister and her Minister of Health—looking very much like the wicked stepmother from Snow White and the Seven Dwarfs—when they handed apples out to school children.

Most things were announced some time ago. I had been predicting for a couple of months that Vote Health would see an extra $1 billion being poured in—and I was right, by the way. Adding that extra $1 billion to Vote Health in election year is totally unprecedented. At no time in New Zealand’s history has this amount of money been poured into one particular area in one go. That money is unsustainable. The explosion to the $1 billion is to be spent in the following way. The sum of $550 million, the annual increase already announced, is just to tread water. Then there was Labour’s 2005 election bribe. Actually, the bribe happened in 1999 but did not eventuate until this year. It will come into being on 1 July. An extra $110 million a year for asset testing was the biggest bribe, but that will cover only an extra 333 patients in rest homes. It is nowhere near enough to cover the $150,000 threshold. There was an extra $145 million for the nurses’ pay jolt, an extra $61 million a year just to cover the Labour Government’s legislation, the Holidays Act, an additional $50 million for aged care services, and an extra $50 million for demographics and numerous other announcements.

The tragedy about this extra $1 billion in health funding is that the health gain is near non-existent. So, as Radio New Zealand reported this morning, it is an extra $1 billion with no extra services—and the Minister of Health was not even proud enough of her Budget announcements to be present in the country when they were announced this year. That was on Radio New Zealand this morning.

So what will this Budget mean for New Zealanders? Will waiting lists drop? I doubt it. They have done nothing but rise since 2001. At the moment we have 120,000 New Zealanders waiting to see a specialist for the first time. That number is rising rapidly. Sixty-one thousand patients have seen a specialist and have been told they need further treatment. That number is rising. Of those, 30,000 patients are parked on the Government’s hidden waiting list—the waiting list to get on the waiting list, that of active review. Of those, 2,138 people have been waiting for their surgery for over 2 years. The Government has said that no one will wait longer than 6 months, but 2,138 people have been waiting for over 2 years. Of those, 90 have been waiting for surgery for over 4 years, and 15 have been waiting for surgery for over 5 years. One person has been waiting for surgery for over 8 years, and that is a disgrace. So $1 billion has been poured into health, but that person is still not going to get an operation.

Let us look at operations. The Minister of Health’s own answers to questions showed that in the 2000-01 financial year there were 269,000 surgical case-weighted discharges. That figure rose over 3 years to 272,000—a measly increase of 1.3 percent in operations. The population grew 4.3 percent in that same time, but the number of case-weighted discharges over those 3 years actually dropped. It is another disgrace. Members of this Government stand up day after day in this House and tell us what a great job they are doing in health and how many more operations are being performed. But, when one considers population growth, the number has actually decreased.

The Minister of Health might not be very worried about hospital deficits, but the Minister of Finance is extremely worried about them—so much so, that in the specific fiscal risks in the back of the Budget booklet, he said under the heading “District Health Board Deficits”: “Initial draft District Annual Plans from District Health Boards for 2005/06 indicate deficits in the order of $100 million”—this, after the Minister announced in 2002 a 3-year funding pathway of an extra $400 million injected into health every single year, and deficits down to zero in 3 years. The Minister of Health said not to worry, just to wait 3 years and everything would come right by itself. Now, in the 2005-06 year, deficits of $100 million have been indicated—and guess what? In the year 2006-07 another $100 million deficit is projected. Again, it is another disgrace.

Health in this country is in a very, very sorry state, and no one is in a better position to tell us just how sorry it is than Treasury. The Treasury Report: Budget Bilateral 2005 Health went on to the website on Thursday last week after I sent in an Official Information Act request. It states: The Health Allocation in Budget 2005 represents approximately a 10% increase in the size of Vote Health.” That would be all well and good if there were any more health services but, of course, Treasury has told us in the last 2 years that there is no improvement, and that this growth pattern is unsustainable. It has asked the Minister of Finance to request that the Minister of Health stay within her funding allocation. In fact, its specific recommendation was to “request the Minister to re-submit her Budget 2005 to include … a re-prioritisation of her current proposals so that total expenditure comes within the Allocation; and … a demonstration of how she will manage known risks so that expenditure remains within the agreed funding track …”. Well, that is not about to happen, because the Minister of Health has absolutely no control over the spending in this vote.

Treasury also notes the risks around district health board deficits, particularly Auckland, which we know is in terrible financial strife. It has asked that the Ministry of Health agree to target key district health boards and reduce the deficits there. Treasury recommendations were to “defer discussion on the roll-out of the Health Funding Package until work on sustainability of funding is completed”. It also noted that it “has not had any input into the $750 million roll-out figure proposed by the Ministry”. So here we have a Minister of Health and a Ministry of Health merrily giving out money, and Treasury has not even been consulted.

Treasury also noted that the health allocation represents approximately 40 percent of additional Government spending for Budget 2005—a huge amount of money—as well as an extra $167 million for pressures in the current year. It goes on to state that in out-years the money will be poured in, and it raises grave concerns about the sustainability of health funding. That is from Treasury, which actually can do its sums. “The Allocation”, it stated, “was intended to be all-inclusive allowing the Minister of Health to prioritise within the funding available.” But it does not think that is about to happen, either.

So what responsibility will Annette King take for the 61,000 people waiting for surgery, and the 120,000 people waiting to see a specialist for the first time? The answer is none; she thinks it is not her job to take responsibility. What responsibility does she take for the 7 percent increase in hospital funding, but only a 1.5 percent increase in outputs? None. The health system is heading for a crisis as soon as the economy softens. Annette King should resign. This is a sign of Labour’s failed ideology. The answer is to introduce the private sector to reduce hospital waiting lists.

The ASSISTANT SPEAKER (Hon Clem Simich): The next two speakers will have 5 minutes each, with a bell at 4 minutes.

Hon BRIAN DONNELLY (NZ First) : We have all heard of Arnold Nordmeyer’s “black” Budget. I certainly cannot forget it—Darren Hughes might have forgotten it. My father used to go on incessantly about that—expletive—wowser, and he did not often swear. Well, now we have Michael Cullen’s “blew it” Budget, because he blew it, and in the process he blew what should have been an unassailable position, coming into the next election. On the back of a good economy this Government has gone unchallenged, except for a blip following a speech in Ōrewa that was nothing more than a Winston Peters speech without the finesse, and following a bit of “here’s mud in your eye” outside the Te Tii marae from what could have been a National Party supporter. Apart from that period, Labour has ridden high in the polls.

The question has to be: how could Michael Cullen—“Mr Dependable”; the Prime Minister’s safe pair of hands; the unerring, gaffe-free Michael Cullen—have mucked up so badly? A hospital pass from Mike Williams certainly did not help, by setting up expectations that were inevitably dashed. But that does not explain the political ineptitude displayed in this Budget, and one cannot accuse this Government of being politically inept. The roots of this disaster—and it can only be called a disaster for the Government—lie in the very modus operandi of this administration since its inception, and are best reflected in the comments of a strongly Labour-supporting friend of mine who said, a couple of years ago now: “I cannot believe how unprincipled this Government is. I cannot believe the degree to which it is driven by opinion polls and focus groups.” That is exactly what this Budget represents. It is underpinned by no principle, but is driven solely by the self-interest of the Labour Government and its intention to stay in power.

Unfortunately, the result is the opposite of the intention. The problem with responding to every group that clamours loudly is that in election year everyone starts to clamour. Suddenly, focus groups were overwhelming the Government with evidence of political hot spots. For example, focus groups have been telling Labour that there is a clamour for taxation relief. So Michael Cullen said: “Let’s do that. But how do we do that and satisfy the other clamourings? Obviously it has got to be a pretty small tax cut, and not right away.” So we have ended up with half a packet of chewing gum per week in 3 years’ time. As one commentator said: “This a chutty gum Budget.”

Nowhere is this more of a chutty gum Budget than in education. First and foremost, most of the expenditure is simply to fund what has already been agreed to in collective and other agreements. Primary education has an increase of $100 million—5.34 percent. That certainly sounds impressive. However, $74 million of that is for higher salaries resulting from collective agreements. Those decisions have already been made. There is a need to ensure that salaries and conditions of service attract quality and quantity in our teaching force. New Zealand First has no quibble with those increases. We were the party that ensured the biggest-ever proportional increase in primary teachers’ salaries. The point is that it is not new policy, and that the money was committed long before this Budget was ever drawn up. Out of the $91 million extra for secondary education, $63.4 million is for salary increases and $14.2 million for roll increases—factors already in existence before the Budget.

There is also $19 million in primary schools, and $12 million in secondary schools, for increases in operational funding. That is an increase of 2.4 percent, when inflation is expected to run at 2.8 percent. How do we know that it is running at 2.8 percent? It is because elsewhere in the Government’s documentation on early childhood education funding increases, it states that parent-led services are to receive an inflation increase to their rates of 2.8 percent. Instead of addressing the very real shortfall in operational funding that schools are facing, the Budget is providing less than inflation—and it is crowing! New Zealand First says that it is time to do a detailed analysis of the real cost to school boards of meeting expectations—an exercise that was probably last carried out in 1988.

Elsewhere, we have situations like some tinkering with the funding for tertiary students, when that needs a major overhaul. There is some tinkering with special-education funding, when in fact we need to increase the cap of 1 percent and also the special-education grant funding. There has been some playing around with the Best Evidence Synthesis programme. It will receive $3.4 million over 4 years, whereas Singapore is giving $47 million.

All in all, this is a chutty gum Budget. It lacks in vision and lacks in boldness. It reminds me of what RichieBenaud said of fast bowler Bob Cunis: “Cunis, Cunis, what sort of a name is that, neither one thing or the other.” This is a chutty gum Budget.

JIM PETERS (NZ First) : I began to wonder throughout the course of my colleague’s speech why there was a Budget lock-up. For what conceivable purpose was the time-honoured lock-up in place? Virtually all of the Budget was preordained and pre-announced. I sat there listening to the Minister of Finance outlining the major points in the Budget, and waited, because of my interest in education, to see whether there was any concept in this Government’s mind of the real issues facing education at this point. Apart from a wee increase, as the Hon Brian Donnelly has said, with regards to operations funding, there was no understanding of the needs of schools today in respect of the operations annual funding base. That is not just for primary schools but especially so for secondary schools. In other words, in 1988 and 1989 the formula was put together that was developed for Tomorrow’s Schools. Although we have had some additional moneys at times, and there was more money added this year in terms of the supposed inflation rate, not $1 has been added in real terms to meet the modern needs and challenges of schools today.

I think of that because just before the Budget, and as the Budget was coming through, the Hon David Cunliffe proudly announced a new information technology strategy. As he announced this new strategy, and the funding that in some way was there in the Budget, I recalled the last information technology strategy of 2 years ago. What happened there? Not one objective or target was met, particularly in regard to Project Probe. Probe must be the most long-lasting and ineffective programme that the Ministry of Education has yet developed. I say that because three times over 3 years the Minister has announced funding of $48 million. This year, just to complicate it, he added a further $1.6 million to Probe.

What is Probe about? It is meant to be about the roll-out of broadband to secondary schools throughout New Zealand. When I made inquiries of the Minister earlier this year as to what the roll-out meant—in other words, what it meant in terms of the day to day effectiveness of teaching in secondary schools—the answer was that some schools have access to broadband, but many regions are without it. After 3 years, it is a pitiful non-performance. The $1.6 million in the Budget will not add one whit to the fact that, despite the Government’s supposed intentions, our students of today have been deprived of the real ability of information technology. When I compare that with Singapore or Western Australia, I see we are woefully behind. Nothing in this Budget will catch up the gaps that are there at present.

But far bigger than that is the issue of the National Certificate of Educational Achievement (NCEA). I particularly looked for some strength and energy in the Budget on this issue and it was not there. I want to take a few minutes to relate very quickly the heartfelt expression of a Wanganui City College girl, who said: “All we wanted from NCEA was reassurance.” She said she came to the Youth Parliament last year and was completely confounded by the fact that as the members of the Youth Parliament questioned more closely the Ministry of Education officials and the New Zealand Qualifications Authority, they became very, very aware that the NCEA system did not work. Furthermore, they were amazed to find, when asking the officials who were here at the time last year how long it would take to work and when it would be reviewed, that it would take 8 to 10 years. What an indictment on the present Government! It will take 8 to 10 years gambling with people’s lives—gambling with the right that students have to a creditable qualification. What will happen when they finally realise it does not work? That question was left unanswered.

Furthermore, students out there were told this afternoon that officials did not know what they were going to do for scholarship, but that they did know there was a curriculum. I ask members to listen to this: last year those officials said that scholarship was not very important. It is no wonder they have not got it right. It is no wonder the scholarship exam this year is still not going to be right. It is no wonder that I can guarantee, almost without fear of any contradiction in this House or from the Minister of Education, that those students sitting scholarship this year will sit an inferior examination.

Why do we know that? Because the New Zealand Qualifications Authority is still, for some unusual, incomprehensible reason, looking at standards-based assessment. It will not work. The authority was told by experienced principals, by experienced teachers, and by groups of teachers associations that it will not work, but this year the authority is insisting that it will work. My guarantee to those students, unfortunately, is that it will not work and they are going to be disappointed again in 2005.

SANDRA GOUDIE (National—Coromandel) : This is a Government shrouded in a spin machine, trying to sell a car without a motor. That is what this Budget is. It is a car with no motor, no tread on the tyres, the headlights blown, and a number plate that reads “Going Nowhere”. There is no destination, no strategy, and no vision to take this country forward. The only way New Zealanders will be able to enjoy the rewards of their hard work is for there to be a sound economic vision for New Zealand. National, led by Don Brash, is the only party with the fiscal capability to deliver that vision. The New Zealand public are realising that. They know it. The tread has gone from the tyres and the spin machine has been given the pink sticker, telling the Government that it is time to get off the road.

The Government has been told to shape up, with one of New Zealand’s largest forestry companies, right on the eve of the Budget, taking the Government to task over its attitude. What was the headline? It was: “Labour ticked off for forestry stance”. Forestry, like a number of other sectors, wants a better response from the Government on trade, energy, and greenhouse gas policy.

Then we got the Budget and the mindless creation of the carbon tax. All New Zealanders will be affected by the carbon tax, which has been described as a tax similar to GST in administration. One thing is certain: the carbon tax will add 4c a litre to the price of petrol, 46c to the cost of 9 kilograms of liquid petroleum gas, and 68c to the cost of a 20 kilogram bag of coal, and that is merely a conservative estimate. The impact on a typical Kiwi household will be a minimum of $4 a week, for electricity, petrol, and other fuels. It is worth remembering here that, for anything we consume that has a transport component, the cost of any increase in petrol prices has to be recovered somehow. That “somehow” is usually through charging New Zealanders, the consumers, more.

Accounting firm KPMG said that the carbon charge is likely to create an inflationary spike not seen since the introduction of GST, and that this “will no doubt impact on money supply in New Zealand, and ultimately lead the Reserve Bank to increase interest rates, to stem the effects of inflation”. I would just like to bring that to Mr Hughes’ attention. Not only will New Zealand taxpayers feel the carbon tax increase indirectly, through an increase in the cost of goods and services; we must remember that we will all be paying GST on the carbon tax content of goods and services. It is likely we will also feel the effects through an increase in interest rates. Deloitte tax expert Thomas Pippos reckons that the carbon tax will cost each household up to $250 a year, or more.

Southlanders will not appreciate the impacts of the carbon tax, on top of their outrage over the petrol tax. The petrol tax was described as a con by an Invercargill city councillor, and as a charade by the mayor. They, along with the rest of New Zealand, will hardly be impressed with more cons and charades, courtesy of the carbon tax and the Labour Government.

One commentator warned: “Don’t forget the stealth taxes”. She was referring to GST duties and excise taxes that attach to goods such as alcohol, cigarettes, and petrol. People will need to go through their spending with a fine-tooth comb to see all the increases.

One of the best descriptions of the Budget release that I have read was in Jonathan Milne’s article entitled “Budget offers mere crumbs”. He described the Minister of Finance as having “brought Dancing with the Stars to Parliament: a stylish Budget quick-step whose rapid action disguises the fact that he leads his partner nowhere fast.” He reiterated the fact that the changes to tax thresholds are worth 67c a week to low-income New Zealanders, and are equivalent to half a packet of chewing gum. He also pointed out—[Interruption] Ms Dalziel should pay attention; she might learn something. He also pointed out that the housing subsidy will be of little assistance to aspiring home buyers in the pricey Auckland and Wellington markets, and that Dr Cullen appears to have lost his stomach for the initial contribution, which was halved by Thursday. If a 10 percent deposit is $30,000, then $5,000 will not go far.

So what about tax cuts? With around 22 or more tax impositions—robbery by this Government—over the last couple of years, where are the tax cuts? New Zealand’s hard-working men and women can look forward to maybe $6 in 3 years’ time, but that will barely cover the cost of tax increases. No wonder people are heading offshore in droves! In March alone, New Zealand had a net outflow of 2,100 Kiwis to Australia. Why would anyone want to wait around until 2008 to get some measly crumb dished out by this Government? By 2008, with a net outflow of 2,100, another 70,000 workers will have headed over the ditch to Australia. The farming sector is also disappointed by the lack of tax cuts.

Dr Cullen’s continued bleating that tax cuts would inevitably lead to cuts to the likes of education, health, and welfare is a vain attempt to spin a line to the public. There would certainly not be such cuts to services—not with the current ineffective and inefficient use of the amounts of money being spent in those areas. [Interruption] Am I loud enough for those members? Bureaucracy has increased by the thousands. The Minister may trumpet about extra spending in areas such as education, but where is the money really going? Why, into the ministry, of course, supporting the alarming growth of bureaucracy, as identified in the Treasury report.

The Treasury report comes as no surprise to National, of course, as we have observed an explosion of Government spending on employees. An article states: “An embarrassing, secret and heavily censored Treasury report confirms a blowout in the state services sector wages bill over the past five years without any improvement in productivity.” It cautions that the full extent of the Treasury report and the criticisms may never be known, due to the report being so heavily censored—and that is typical of this Government. With large parts of the report excluded, how is anybody able to scrutinise it effectively? That National Business Review article continues: “Unchecked, the sheer size of the increase is jeopardising future government spending, as the growing costs will constrain ‘the ability of ministers to progress new policies’. ” As someone said, every dollar spent on pen-pushers, number crunchers, bean counters, and paper shufflers is money not spent at the coalface where it is needed.

And speaking of paper shufflers, here is an example: $4 million a year to supervise—to supervise—the building industry, to avoid any more leaky homes. The Budget provides $658,000 for expanding building regulations and control. More pen-pushing. There is an extra $187,000 for licensing builders and other construction professionals. More pen-pushing. And there is $1.6 million for regulatory policy. More pen-pushing. And there is $1.6 million for a new, mobile, residential tenancy service. Pen-pushers on wheels! New Zealanders want more out of Government than pen-pushers. They want recognition for their hard work, and the ability to enjoy the fruits of their hard work. New Zealanders want sound economics for their future. Labour cannot deliver. National can.

JILL PETTIS (Labour—Whanganui) : I am always pleased to follow Sandra Goudie and Judith Collins, because all those years of elocution lessons I had show that they were worth every cent my mother paid.

We have most certainly had some very good debate tonight on this side of the House. We have pointed out the very positive things in this year’s Budget—in fact, the very positive things in every Budget that a Labour Government has delivered.

I want to remind some people of things that happened not so very long ago. Some people might have very short memories but there are others on this side of the House who have very long memories. This will be a bit like radio with pictures, because I am going to take members down a short trail of political cartoon history in New Zealand. Many of them are the fabulous cartoons drawn by Garrick Tremain.

The first one is of people lining up at the food bank. There is not a single item of food on the shelves, and the volunteer at the food bank is saying: “Honestly luv, we are skint. That there on that shelf is my lunch.” We have forgotten that every small town, hamlet, and city in this country was full of food banks under the wonderful financial management of the last National Government.

The next cartoon is a picture of the welfare State. It is a beautiful old building, typical of New Zealand architecture, but behind it is a bulldozer smashing it down, which is precisely what happened under the previous National Government. The welfare State was smashed day by day.

The other interesting cartoon is like a mirage in the desert, with these poor, thirsty people crawling towards: “Tax cuts”. The caption underneath is: “I’ve seen that one before, mate. When you actually get up to the jolly thing, it turns into a polling booth.” That is indicative of what the National Party over there is all about at the moment.

Hon Member: Vacuous.

JILL PETTIS: Vacuous—they look very vacuous tonight. They will say anything to get elected, but they will most certainly never deliver what they are saying today.

The other cartoon that strikes a particular chord with members on this side of the House is the poor old man sitting in front of his doctor’s desk, and the doctor is saying: “I’m afraid it’s $50 a night in all hospitals except prison hospitals, Mr Blinkhorn. Do you still feel well enough to rob a bank?”. We on this side of the House have not forgotten that Bill Birch was going to bring in hospital charges of $50 a night.

Then, of course, there was the poor, old, sad John Luxton. I actually got on quite well with John Luxton on a collegial basis, but he made Genghis Khan look like a raging socialist. John Luxton was Minister of Housing, and he could not understand that the law of supply and demand does not work in public housing. National brought in market rents, which forced the poorest people in New Zealand from their homes and, tragically, led to an increase in a whole lot of negative social statistics. So the law of supply and demand did not work under the Tories before and it will not work under the Tories again.

I want to remind members on the other side of the House of the voodoo economics and the magic tricks that Bill Birch tried to conjure up and use to fool the people of New Zealand. I am talking about lifting the cups on the magician’s table. One says: “Tax cuts sometime.”, and one says: “Tax cuts never.” Which one will it be? Already there is division in the National Party ranks at the moment between Mr Key and Mr—

Hon Members: Brash.

JILL PETTIS: —Brash. I actually genuinely forgot his name! I was going to call him Birch. [Interruption] Well, it is one and the same. There is huge disagreement in the National Party over when these mythical, mirage-like tax cuts may ever appear. Mr Brash got all carried away and promised them by Christmas, but John Key is a bit realistic. He said: “Nine long years.”

LINDSAY TISCH (Junior Whip—National) : I raise a point of order, Mr Speaker. The Māori Party did not take a call, so there should be another spot left, which I am claiming.

The ASSISTANT SPEAKER (Hon Clem Simich): I thank the member for raising that. Jill Pettis took up the slack, as it were.

LINDSAY TISCH: On the number of speaking spots that were presented to us by the Labour whips’ office this morning, I point out that there is still one spot available.

Hon Dr MICHAEL CULLEN (Minister of Finance) : It is a time-limited debate, and 10 minutes before the end of the Budget debate the Minister of Finance is called in reply, regardless of whoever is actually speaking at that point.

The ASSISTANT SPEAKER (Hon Clem Simich): That is correct.

Hon Dr MICHAEL CULLEN: Tonight I address my remarks particularly to the full quivering ranks of the National Party opposite—a group of people whose heads are so empty that even if they rattled, one would not hear a sound coming forth from them. Of course, National has put up those wonderful billboards that extend the entire vocabulary of Sandra Goudie. In other words, they are limited to two words per billboard. One of those billboards has it right on the money. It is absolutely correct. It is exactly the Labour message, in response to National. It is tax, or it is a cut. It is tax, or it is a cut in health. It is tax, or it is a cut in education. It is tax, or it is a cut in superannuation. It is tax, or it is a cut in law and order. It is tax, or it is a cut in defence. We want to know what cuts the National Party is planning. National has said that if it is elected it would have a mini-Budget before Christmas. Of course, Sandra Goudie was still doing strippergrams the last time the National Party had a mini-Budget before Christmas. I want to tell her what happened in that mini-Budget.

Sandra Goudie: I raise a point of order, Mr Speaker. I take exception to a comment made by the Minister, and I would like him to withdraw and apologise.

Hon Dr MICHAEL CULLEN: I withdraw and apologise, and I shall now sleep a great deal easier at night, not having to think about that.

The first thing that happened in that mini-Budget, introduced before Christmas in 1990, was that a widow, in order to qualify for the widows benefit, had to apply for it on the day her husband died. That was the start of 9 long years of a National Government, of cuts, and of ideological insanity, as my colleague has just been through. What has National told us? It has told us that it can do this because the Government has grown so much. I tell Mrs Goudie that when National left office, core Government spending was 33 percent of GDP. Where is it now? It is now 30 percent of GDP. Where is it forecast to go to? To 32 percent of GDP, with Working for Families and with the tax measures in this year’s Budget.

When National was in Government, Government spending was higher than the OECD average. Now it is lower than the OECD average. So much for the record on those matters! Or, of course, as National says in one of these things, it is going to get rid of the pen-pushers, whoever they are. Only the National Party has not realised that in the public service they use computers these days. But never, never mind.

What is public service employment in terms of the core State sector public service, the administrators? It has gone from 2.18 percent of total employment, to 2.34 percent. What it is actually talking about is the teachers, the social workers, the staff of what used to be the Special Education Service; all of those people. Those are the people whom Mr Key is going to cut, and as he told us on a Sunday night programme, he has sacked people before and did not shed a tear, because he is a man who never cries and does not know how to.

We spend only $1.9 billion on that core public service administration. That is an interesting figure. I said that the National Party has to cough up at least $2 billion a year for tax cuts, and Mr Key said that it would not be anything like that much. What does $1.9 billion buy? If we just cut the 21 cent rate, and nothing else, it can be cut by getting on for 6 cents. We can actually give a massive $30 a week at $35,000 a year, and a maximum of $33 a week. That is $1.9 billion. All those people on $100,000 that the National Party keeps talking about will not be happy with only a $33 a week tax cut, and all those on $30,000, getting $23 a week, will want to know what will pay for the $1.9 billion. What will go? Will it be my local police officer, my school, my teachers, or my nurses? Who will go, to pay for those tax cuts? The National Party will not tell us. It will not tell us what its tax cuts will be. National wants to keep that secret for as long as possible, because it knows that the numbers will not add up.

National has people expecting large tax cuts, which it cannot deliver, except at the expense of core social services—superannuation, health, education, and law and order—and we should not be surprised. Dr Brash is on record as to what he believes about all these matters. He has given many, many speeches over the years. He has said what his views are. He said that the Employment Contracts Act did not go far enough on labour deregulation, and it should be taken further. He said that he wanted schools privatised; that he saw no reason for the State to own schools or hospitals. He said that he wanted to raise the age of eligibility for superannuation, and indeed, even now at his age, he is still comfortable about raising the age of eligibility. All he says now is: “Well, it won’t be for those over 50.”, which is a pretty strong signal that it will be for those under 50, under a National Government. One would have to be pretty hardy at 49 to change all one’s patterns of retirement behaviour, to take account of the fact that the goalposts will move again if a National Government were elected. He wants a capital gains tax on housing. He wants to cut the rates of able-bodied benefits. He wants to use prices to limit health-care demands. Therefore, people get in on the basis of whether they can pay, not on whether they need an operation or need assistance from the health-care system. Don Brash wants to scrap the minimum wage. A man who used to earn nearly half a million dollars a year as Governor of the Reserve Bank would deny people a miserable $9.50 a week; $9.50 a week is too much for Dr Brash. Dr Brash tells us that those kinds of wages are too much for some New Zealanders.

So is it tax, or is it cuts? We are taxed significantly less than the OECD average. An average worker on a full-time wage is taxed less than in Australia, as a proportion of wages. Employers do not pay payroll taxes, as they do in Australia. So what is going to give? If it is not cuts in expenditure, then it is looser fiscal policy, and it is higher interest rates. I invite the National Party to go to the people, promising higher interest rates so that they can pay for their own tax cuts. How does that work out for most people? It is tax that pays for health, education, superannuation, and law and order. Of course, on Budget night half a dozen of National’s spokespeople immediately said that we were not spending enough. They said we needed more for the police, more for defence, more for justice, more for health, more for this, more for that, more for the other, less revenue, no blow out in spending, no increase in the fiscal deficit, and no interest rate rises.

Dr Brash used to give speeches about that kind of nonsense when he was Governor of the Reserve Bank, but now it is becoming official National Party policy. So it is clear who the winners would be under a National Government. It would be those on the highest incomes. It is clear who the losers would be. It would be the great majority of the rest of the population. I invite the National Party, over the next few weeks, to tell us which part of the health spending it objected to. Was it the increase in pay for nurses? Was it the faster roll-out of primary health organisations? Was it the cancer control strategy? Was it the cataract operations? Was it the increase in mental health funding? Which part of that spending goes, under a National Government.

Then I want to know from National which part of the spending goes from education, in terms of increased numbers of teachers, changes to student allowances, and so on. What goes from the pensioners? Is it the new rates rebate scheme? Would that go under a National Government? I want to know National’s position on savings. Would it abolish the KiwiSaver scheme? National has said it would do that for the superannuation fund. Dr Brash can save for himself. He does not understand why somebody who is on that extraordinary, generous minimum wage of $9.50 an hour cannot save for his or her retirement as well. What would give under a National Government when the National Government gives itself a tax cut, if National ever gets into power? It does not add up, and National knows it.

The ASSISTANT SPEAKER (Hon Clem Simich): The question is that the amendment to the amendment to the amendment be agreed to. This is the Rodney Hide amendment.