GORDON COPELAND (United Future) : It is a lengthy, expensive, and time-consuming process for middle-sized, and even smaller, New Zealand businesses to develop overseas export markets. The Minister in charge of this vote, Trevor Mallard, will well remember a meeting that he and I attended earlier this year in Lower Hutt with a surprisingly large group of manufacturers who are really grappling with this very issue. They have a desire—and we as a nation need to back them strongly—to export more products into overseas markets. But they are faced with a huge marketing task that can take a long period of time—sometimes amounting to years—and most of them do not have the capacity to actually fund that sort of campaign in distant markets, such as Europe, Asia, and so on. At that meeting I strongly advised that the Government should do more to assist those kinds of businesses.

So I begin today by strongly endorsing the Government’s decision to invest more money into the area of market development assistance through the Market Development Assistance scheme. The increased investment amounts to an extra $19.8 million in the 2006-07 year and increases of $14.8 million for each of the following 3 years.

The development of new export markets for the New Zealand economy is now an urgent necessity. By comparison with other small nations of our kind, such as Ireland and Singapore, we are both a long, long way further from our markets and also, I think, significantly off the pace in terms of actual uptake in getting into new export markets, particularly in manufacturing, technology, and so on. It is more difficult for us because of our geographical isolation. In fact, New Zealand is the most physically distant developed country in the world, relative to major export markets in Europe, USA, and Asia.

The type of assistance offered through this vote is well designed, with a matching of the market development expenditure of companies or, indeed, a cluster of companies—something I specifically recommended to that group of manufacturers in Lower Hutt earlier this year—working through a joint export development project. The grant is for up to $100,000 per year for a minimum of 5 years on a matching basis. In other words, if the company or group of companies put up a hundred grand, that figure would be matched by the Government. I encourage New Zealand firms to avail themselves of the opportunity this new vote presents to them, and to get out and develop new international markets for New Zealand exports.

Our nation is running a large balance of payments deficit, and our trade and future economic success will continue to rely, as it has done in the past, on a vibrant, marketing-orientated export sector. I note that this theme has been taken up in recent days by the New Zealand Institute, which has come out with a new study, and also by the Canterbury Manufacturers Association, amongst others. The New Zealand Institute report is well worth reading. It is the first of what will be a group of five reports, with four still to come. I therefore call on the Minister and the Government to continue to give assistance and support to exporters through a consistent, well-thought-out plan as we move towards Export Year 2007.

In drawing attention to the fact that next year is Export Year for our country, I want to mention that there was a debate at the Commerce Committee on this vote about which is better: tax incentives for business to get into exports or Government grants. It was an inconclusive debate, although the Minister said we should be having it. Because I belong to a dynamic centre party I want to say that the answer, in my view, is a bit of both. A matching dollar for dollar grant system is a good idea, but there must also be a place for direct tax incentives. I am hopeful we may see some of those incentives in the business tax package that we have announced for the very near future, pursuant to the supply and confidence agreement between the Labour-led Government and United Future.

I hope we will continue to develop more innovative means of giving assistance to New Zealand companies that want to get involved in export markets, and I think that that matter should remain very near the top of the Government’s economic development transformation agenda for the foreseeable future. Thank you.

Hon PAUL SWAIN (Labour—Rimutaka) : I am pleased to rise in this debate. I thought we might have some discussion on the State-owned enterprises issue, because it is one of the matters that are the subject of this estimates debate.

I begin by saying that one of the issues, of course, when we are talking about the finance area, is that there are some very clear policy differences between the National Party and the Labour Party.

The CHAIRPERSON (H V Ross Robertson): I am sorry to interrupt the member, but this is not the actual State-owned enterprises debate. That is the next one.

• Vote agreed to.

KATHERINE RICH (National) : We have already had a taste of what Mr Swain is going to discuss, since he brought up his issues in the previous vote. It is interesting to see that the Minister, Trevor Mallard, is once again not able to take the chair, but I note that Minister Cunliffe will be all ears, listening to some of the issues the Opposition is going to bring up. In the area of State-owned enterprises, there has been a subject of great debate over the last few weeks, because, of course, the Minister announced a major change to State-owned enterprise policy. He asked State-owned enterprises to spread their wings and expand their operations. The Opposition was a little concerned by this, not least because we had a concern that there was an opportunity for crowding out private sector investment, but also we wondered about the expertise that some State-owned enterprises have. We raised some concerns, but that coincided with research released by Victoria University, which also stated that those board members surveyed had concerns about the skills they had around the board table, and also concerns about some of the appointments that had been made, more relating to political affiliation as opposed to skills.

So I would like to hear the Minister in the chair explain how this new regime will work, why he thinks the present board members around the table have the skills to take State-owned enterprises into this new realm, and also how it will make any difference. Because in the last couple of weeks we have had quite a high-ranking ex - Labour Cabinet Minister say publicly that he does not think it will make any difference to the way State-owned enterprises are doing their business at all. He pointed out that State-owned enterprises have always had some flexibility and some ability to make commercial decisions and get into other areas, without having this new announcement.

I would also like the Minister to explain why he thinks it is OK that New Zealanders should feel confident that State-owned enterprise decisions are going to be good ones, because Minister Mallard has said that he and Michael Cullen have the final sign-off. I would like to hear the Minister explain why he thinks those Ministers have the financial ability and business nous to make sometimes complex business decisions that traditionally have been made by those boards.

I would also like him to explain the theory behind this new change. Because in all the advice from officials, concerns have been expressed. The Ministry of Economic Development has expressed concerns. Treasury certainly did. The Crown Company Monitoring Advisory Unit expressed concerns about pushing State-owned enterprises into these new additional areas of commercialism.

I would also like the Minister to talk about why he thinks this will contribute to economic transformation. Because, when one ignores the big issues such as tax, accident compensation, the Resource Management Act, employment law, and trade policy, why does he think expanding the area of State-owned enterprise work is going to make any difference to kicking New Zealand’s economy along? Yes, there have been some successes, but also there have ultimately been some failures, or, as Treasury euphemistically put it, non-successes. I would like to hear about that theory underpinning this strategy, when all officials pointed to concerns and clearly were unsure about what the spill-over benefits would be.

I am concerned that State-owned enterprises are starting to be treated as extensions of the Government’s social agenda. Is that OK when one is talking about firms that basically look after over $2 billion worth of assets? If one has $2 billion worth of assets I do not think it is OK to use as one of the reasons for expanding State-owned enterprise areas that it is to make them more exciting and less boring places to work. When one is overseeing $2 billion worth of assets I do not think there is a business, or a businessman or businesswoman, in the country, who would see that as being a good excuse to expand State-owned enterprise risks and investments.

So in terms of the State-owned enterprises plan I hope the Minister will get on his feet and explain more about how this will contribute to the grand plan of economic transformation. Because it is not clear from what has been said—if anything, the more the Minister gets interviewed on this, the more murky the thinking appears to become. What kinds of projects are they going to get into? How will New Zealand’s economy fare better with expansion of projects from learning media, etc.? I would like to hear from the Minister on that.

Hon PAUL SWAIN (Labour—Rimutaka) : After a little bit of a false start I am very keen to take part in this debate. I have just changed my opening words, as I thought they could have been a little better. I thought it was very interesting that the National member Katherine Rich, who has just resumed her seat, talked about State-owned enterprises but actually left out the most critical issue for National, which is whether it will sell any. Of course, the big problem National members have is that deep, deep down they do want to flog off State assets but they cannot bring themselves to say it, because if they say it they will not be elected. That is the huge dilemma the National Party has. So National members went into the last election with a whole pile of waffle around this area. In fact, when they were pushed, they could never get anybody to identify which State-owned enterprises they were prepared to sell off.

In fact, the leader himself said: “Well, there are many State-owned enterprises we could privatise.”, but when we asked him which one, he said: “Well, not that particular one, maybe another one.” It goes back a couple of years, but he has made many, many statements on State-owned enterprises. For example, in 2004, when pushed, he said: “If it were up to me, I would sell Kiwibank.” Then as it got close to the election and people started to wonder whether Kiwibank would be sold—and a lot of the people who banked with Kiwibank wanted to know the answer to that question—we heard John Key say: “Well, in fact, we wouldn’t sell it within our first term.”

The CHAIRPERSON (H V Ross Robertson): 2006-07.

Hon PAUL SWAIN: Yes, Mr Chairperson. So the question is, as we look forward in terms of this debate, what is National’s policy on State-owned enterprises? For example, would there be any changes if the National Party were in power? Would we be having a different kind of estimates debate now? I think it was disappointing the previous speaker did not raise that issue at all.

Having had the pleasure of being a former Minister for State Owned Enterprises, I can say that our State-owned enterprises perform particularly well relative to the private sector, even when we take out the fact that there are some monopolies within them, such as Transpower. When we look into the future, this Government has clearly said that it will not have asset sales. We are opposed to asset sales, but the same old issues need to be addressed. For example, how much should the companies retain as retained earnings for their own future work—because State-owned enterprises need to keep moving forward—and how much should be given back to the shareholder, who ultimately is the taxpayer, by way of dividend? This age-old issue is always debated. We have been engaged in a long-term hold project whereby we have been working out how to try to mimic the private sector without, obviously, the discipline of the sharemarket. In all of these things State-owned enterprises are looking forward to the future.

Of course, they have always been able to expand their business. It is only when it comes down to major issues and major capital outlay that they need to come back for a decision from the shareholder, which is no different from the operations of any other major company. The board is responsible for the governance of the company and for making sure that the company is performing, but if any major issues need to be decided, or if any major investment is required, then back to the shareholders it goes. I think that the State-owned enterprises model is a good one.

It is clear that this Labour Government is committed to State-owned enterprises. We are opposed to asset sales. We are keen to ensure that in this financial year they continue to perform strongly and well, and that there is a balance between making sure there are sufficient earnings so they can expand and how much should be returned as a dividend. We know that State-owned enterprises must be able to continue to develop, because to stand still means to go backwards, in particular in areas where there is international competition, and in energy and other areas where our State-owned enterprises compete. The decision about how much there should be in terms of retained earnings and how much should be in dividend is a matter for the Government. I congratulate the State-owned enterprises, which have been good performers over the last little while and will continue to be over the next 12 months.

Hon DAVID CUNLIFFE (Minister of Immigration) : I wish to recognise the contribution of the former Minister for State Owned Enterprises, the Hon Paul Swain, for whom it was my distinct pleasure to serve as Associate Minister in times gone by. The Hon Paul Swain was a prudent, careful, but visionary Minister, who should take some considerable credit for the fact that under his stewardship the average rate of return amongst the State-owned enterprise portfolio was higher than the average rate of return for the NZX50. That tells us two things: not only is the governance model for the State-owned enterprise stable appropriate, but also the public has nothing to fear from those who think, as a matter of religious conviction, that anything owned by the State must, by definition, perform inadequately. Under Mr Swain’s tenure, quite the reverse of that was proven to be the case—and it still is the case.

The reality is that the State-owned enterprises matter. They have over $10 billion in assets. They are responsible for something like 16 percent of Crown revenue, and that amounts to billions of dollars per year. And, of course, they make a contribution to essential services and essential infrastructure that New Zealand needs, not only today but for the longer term.

I wish to address a couple of the points raised by the Opposition spokesperson in her remarks. The first is that notwithstanding the Government’s willingness to see State-owned enterprises play a more transformative role in the economy, we will continue with the regime of prudent monitoring, of tight performance expectations, augmented, as the Hon Paul Swain has noted, by the long-term hold owners’ review process.

The Opposition spokesperson indicated her concern that there may be a tendency for Ministers to take important commercial decisions. I think it is worth noting that it is certainly the view of the current shareholding Ministers that when they appoint a board, they back them or sack them. Board members are the people who have the expertise, and they are the people who must judge the commerciality of decisions, in the first instance. If Ministers are deeply unhappy, then they have remedies available to them under the State-Owned Enterprises Act.

Let us consider, however, the policy advantages that State-owned enterprises have, because the reality is that the Crown is the kind of shareholder that any company and any management team would want to have. Why? Because the Crown is not in it just for the quick buck; the Crown is in it as the custodian of the public interest for the long term. Because the Crown has an eye on long-term value creation, we can make investment decisions that take a while to pay off.

Let me conclude with, I think, the best example to show the difference between the two sides of the Chamber. When the present Opposition members were in Government—and I know it is a long time ago now—they issued a directive under the State-Owned Enterprises Act to prohibit State-owned enterprises from investing offshore. The National Government said: “Thou shalt not invest!”. We lifted that directive. Meridian Energy bought Southern Hydro in Australia. National opposed that. Meridian built it up and extracted portfolio synergies between wind energy and hydro generation. Meridian sold Southern Hydro for nearly a billion dollars of profit, much of which has contributed to the Government’s ability to upgrade the transport infrastructure around this country.

Let us reflect on that example. National opposed offshore investment; it used the most draconian provision of the State-Owned Enterprises Act to prevent it. Labour gave boards the right to make those decisions, and Meridian Energy did us proud. Meridian Energy returned the capital to the Crown, and it has been used for the good of the public of New Zealand. What we want is good, tight, prudent management that delivers sustainable returns for New Zealand and invests in this country’s transformation for the future. I believe that is what this policy will deliver.

Hon TONY RYALL (National—Bay of Plenty) : In Parliament’s voting of $10 billion to the Minister of Health for the administration and provision of our national health service, Parliament has to ask itself what progress this Government is making towards delivering a healthier nation and the improved welfare of our people. This is a Government that is asking Parliament to vote it over $10 billion, which is an increase of $4 billion since it came to office, but what has it got to show for it? There is all that extra money, and we have a sicker nation. There is all that extra money, but one has to be sicker today to get an operation in any public hospital than 5 years ago. There is an extra $4 billion, but there are fewer elective surgeries being performed in this country than 5 years ago. There is an extra $4 billion, but our public health initiatives are still not reaching the most at-risk groups in our community.

This Government has run out of ideas, it has run out of energy, and it has run out of commitment to provide the vision and leadership that we need in the health sector to provide this country with better health and welfare in terms of our natural beings. This is a Government that, this year, came to Parliament to ask for $10 billion, but we know that it is already planning on having $100 million worth of deficits in the accounts of the nation’s district health boards. That is how bad this Government’s management is of our public health system and the public purse, which is shown here in Vote Health. A $100 million deficit in district health board accounts is already being budgeted for in this year’s appropriation.

This is a Government that is having all its chickens coming home to roost. It has been able to cover up its poor performance in health through bluster and spin, but now the public is on to it. Everywhere one travels around the country one sees there is widespread dissatisfaction with the New Zealand public health system. Doctors in both our hospitals and our general practices are disenchanted with this Government’s management and the way in which the system is bogged down in bureaucracy.

We have fewer general practitioners in this country than we had 6 years ago. General practice has to be the cornerstone of our health service, and there are opportunities for general practice to have an even greater role in providing for the health and welfare of New Zealanders. But this Government is attacking general practice at every opportunity. There are fewer general practitioners in the country today, and there are many thousands of New Zealanders who cannot get registered with a general practitioner.

Earlier this week I was in the Horowhenua. In the Horowhenua they are flying down a general practitioner from Kerikeri 3 days a week, because of its shortage of doctors. On the Kapiti coast the person who runs the primary health organisation, a contracted provider, told me on Monday that 1,000 people on the Kapiti coast cannot get a doctor. We know that New Zealanders cannot get registered with a general practitioner in Timaru or Gisborne. That has been reported. We know that in Waimate almost 2,000 people cannot get on the books of a general practitioner. That is the state of the general practice workforce in New Zealand, which the Government continues to ignore.

The pressure on that workforce is becoming even worse as a result of this Government’s cynical plan to manipulate the nation’s public hospital waiting lists. That cynical plan is not about providing New Zealanders with treatment or care; that cynical plan is not about prioritising patients who need to get care; that cynical plan is all about chopping people off waiting lists, so that the Prime Minister can stand up in the Chamber and say that she has cleared those waiting lists. But New Zealanders are on to that. Every day hundreds of New Zealanders find out about their friends and neighbours getting a letter or a phone call from their district health board telling them they have been culled from a hospital waiting list.

There are two areas where people are being culled from their waiting list. The first concerns those people whose general practitioners say they need to see a specialist. Those people—over 120,000 at the last count about April—need to see a specialist. Their general practitioners say they need to see a specialist, but the Minister and the Government say that people who have been waiting more than 6 months, regardless of the urgency of their care, are to come off the waiting list. The cruellest cut of all, though, has come for those thousands of New Zealanders who were promised an operation. The Government never wanted to see that list revealed, but we got the information out. An estimated 10,000 New Zealanders, who were promised an operation, have been culled from hospital waiting lists—and the human cost is incredible.

New Zealanders heard about the young woman who had a breast mastectomy and was promised a breast reconstruction, but because of the severity of her disease she had to wait more than 6 months in order for things to settle down. What did this Government do? Did it honour the pledge to sufferers of breast cancer that they could have breast reconstructions? No, she was cut off the waiting list by Pete Hodgson. What about the young child who cannot smile? That child was chopped off the waiting list by the Government. What about the young woman who was turfed off a hospital waiting list and, as a consequence, was admitted to hospital as an acute patient and now has a colostomy bag? How happy are Labour members about that?

The Labour Party has just celebrated its 90th anniversary, but did Labour members really come to Parliament to dump from waiting lists old people, women who have lost their breasts, and children who cannot smile, and cut them out of the public health service? Did they really come to Parliament to provide fewer elective surgeries for New Zealanders who need them? Did they really come to Parliament to spend hundreds of millions of dollars on an extra 1,800 bureaucrats in the health system? Is that really what Labour is about?

Under this Labour Government, health dollars have gone further and further up the social strata. The Government is providing a political strategy rather than a health strategy. Its own people are the ones who are missing out. When Labour party people were celebrating in the electorate of the millionaire member from Ōtara, did they think for one moment about the tens of thousands of their supporters who have been culled from hospital waiting lists?

Dr Jonathan Coleman: Too busy with the chardonnay.

Hon TONY RYALL: Too busy with the chardonnay! Did they think what they were doing for the tens of thousands of their supporters—people who live on little more than national superannuation, a welfare benefit, or a low income? Did they think of the young woman with skin cancer eating away at her face, who has been culled from a hospital waiting list and who cannot get care? Is that the Labour vision of a public health system in New Zealand? Is it Labour’s vision that millionaires in Whakatāne pay $20 for a visit to the doctor, but beneficiaries in Tauranga pay $30? Is it Labour’s vision that for every two nurses who have been employed in the public health system in the last 5 years, there is another manager? Is that really what Labour came to office to have? Did Labour really come to office to have the aged-care workforce fade away through lack of support and training? Is that what Labour is really about?

This Budget is not honest to Labour’s roots, nor is it honest to the people of the public health system. This is a Budget that throws money everywhere but does not provide the care or attention needed to provide a decent health system in this country. Is this a Budget that says we have limits on our capacity in the public system so let us use the independent sector to provide more care in our hospitals and more care for New Zealanders?

Hon Members: No.

Hon TONY RYALL: No. Is this a Government that has decided that it wants to support the work of non-governmental organisations? No. Is this a Government that says it wants to keep pace with inflation and the cost of drugs, and put more money into Pharmac? No.

BARBARA STEWART (NZ First) : On behalf of New Zealand First, I am pleased to take a call on the Appropriation (2006/07 Estimates) Bill. This year, again, there have been some very positive developments in Vote Health. New Zealand First has long said that New Zealand needs a properly funded health system and that, as a start, we must move towards health expenditure of 10 percent of GDP, which many other countries around the world have. We believe this is totally achievable if we have an economic plan to improve our national income. So we definitely support the increased appropriation this year.

We must acknowledge too that there has been a considerable increase in health spending over the last 7 years, and that is to be commended. We now have over $10 billion, in total, for health, and that also must be commended.

The fact that the major priorities have been outlined for the 2006-07 year means there is no confusion about where the moneys will be spent, so the public of New Zealand can expect some positive outcomes in many areas—for example, the health of older people, children’s health, primary health, and obesity. All those areas need some dedicated moneys.

Unfortunately, there are no quick solutions to the many and varied challenges facing the health sector, and we are pleased to see that some of the challenges are at last being recognised and worked on. New Zealand First believes that one of the aims of the health service must be to provide New Zealanders with certainty about their health care, and to ensure timely access to quality services. This is, in part, largely successful, particularly when it comes to emergency admissions to our hospitals. The Minister has said, and the figures show, that 75 percent of all hospital admissions come in through the emergency department. It is only the remaining 25 percent of hospital admissions for elective surgery that we hear the most about. That is where the dissatisfaction comes about. The dissatisfaction comes from the mismatch of the public’s expectation and what the system can actually deliver in a timely manner. New Zealand First believes that that needs to be addressed relatively rapidly.

We applaud the announcement of the additional moneys for the oral health of New Zealand children. We know that the school dental service and the Adolescent Dental Benefits Scheme were both in dire straits—and perhaps, to some extent, still are—and that fewer than 40 percent of eligible preschoolers are enrolled in the school dental service. The Government has recognised that we no longer have the first-class service that existed in years gone by, and has moved to rectify the situation. This funding is a step in the right direction.

We will be very keen to see in action the process for allocating the funds. When we split the $40.8 million between 21 district health boards, it is fairly obvious that district health boards will not be able to make much of an impact on children’s oral health with that amount of money. We know that some district health boards have proposed projects of $10 million, and if we do the calculation we find that that is 25 percent of the total amount that one district health board wants to spend.

We have been reassured by the Minister of Health that those with business cases approved later on in the year will still have the funds available. We will be most interested to see how that will work. We know that oral health is important to a child’s health, or to a young person’s health, overall.

In the area of the elderly, we believe that the Minister of Health must honour his commitment to ensure that the money in this year’s Budget for elder care is passed on promptly and in full. The key to that is to ensure that the district health boards deal fairly with the providers in the sector. Allocating funds in the Budget will be absolutely pointless unless they get to their intended destination. We know that low pay rates and the lack of training that carers of the elderly receive is a situation that must be corrected if we are to see sustained improvements in this industry.

SUE KEDGLEY (Green) : I start by looking at one item in our financial review of the Ministry of Health—the proposed trans-Tasman joint therapeutics agency. In this year’s estimates $1 million is allocated for setting up a joint therapeutic agency with Australia, and that is on top of $5 million that has already been spent. In our report we questioned the ministry’s mandate to proceed with this project and to spend all this money. We pointed out that it is operating under an executive mandate, not a parliamentary mandate. We also pointed out that this huge expenditure of money—we are now up to $6 million—has never come before our Parliament. There is no parliamentary mandate for this project.

The other extraordinary thing about our hearing on this particular aspect of the estimates was that we asked the Minister of State Services, Annette King, to come down and brief us in our select committee about the agency, but she refused to do so. She refused to come to the select committee to brief us about it. We know she has been meeting with her Australian counterpart. I think they have had 15 meetings and they have made a series of decisions. We asked whether we could see the minutes of those political meetings, but she refused to provide them. The Minister Annette King has also, for 3 years, refused point-blank to address my Official Information Act requests.

What the Minister did tell us was extraordinary. In our estimates hearing, a two-page briefing was sent in place of the Minister coming. I am speaking specifically about what is in the estimates, if members want to read the report. She said she expected that legislation would come before Parliament in July. At a cross-party briefing outside this House the officials said the same thing. The officials said that legislation setting up the joint agency would be introduced in July.

In the House today the Minister admitted there would not be any legislation introduced in July, for the simple reason that the Minister does not have sufficient political support in this House to introduce the legislation. She also does not have support from the majority of those in the dietary supplements industry in New Zealand. They are implacably opposed to what she is doing.

So, basically, we are calling on the Minister to call it quits, acknowledge that she does not have the numbers, acknowledge that she does not have the support of the industry in New Zealand, and, instead, get a cross-party group together to work on a simple New Zealand alternative in place of the legislation.

The Minister said, with great glee, that it is terrible that some dietary supplements have been found to cause adverse reactions. That is what she said in the House today. It is good that she has found out about some of those supplements, and there should be constant monitoring of them. But what she did not mention was the information that I eventually managed to extract from her after numerous written questions, which was that, last year, more than 20,000 New Zealanders suffered adverse reactions to pharmaceuticals, almost 17,000 New Zealanders suffered adverse reactions to a medicine in a hospital, and a further 4,000 adverse reactions were reported in the primary health care sector. However, representatives of the centre for adverse reactions monitoring said that that was probably only a tiny fraction of the number of adverse reactions that occurred, because there is no mandatory requirement to report adverse reactions to medicines. The centre therefore knows that it receives reports of only a very few of those occurrences.

So here we have 20,000, or probably 40,000 or 100,000, New Zealanders becoming ill with an adverse reaction to their medicine. What are we doing about it? We are doing nothing.

TE URUROA FLAVELL (Māori Party—Waiariki) : Tēnā tātou katoa. In the last month a number of ground-breaking reports have been released that add to the depressing chronicle of evidence about the state of health in Aotearoa. The Māori Party welcomes these reports; however, they become drained of any moral value if we fail to act. The estimates debate is an opportunity for the Government to dare to act in the interests of the health of the nation.

So let us set the scene. The world’s leading independent general medical journal, The Lancet, surveyed over 10,000 New Zealanders, asking them about any incidents of discrimination when they approached a health professional. The study described the health system of this country as “racist and discriminating against Maori”. It claimed that 4.5 percent of Māori experienced unfair treatment by a health professional compared with just 1.5 percent of Pākehā. It stated: “The findings of this survey show that deprivation and experiences of perceived racial discrimination contribute to inequalities in health outcomes between Maori and Europeans. Indeed, the combination of deprivation and discrimination as measured seems to account for much of the disparity in the health outcomes assessed.”

The impact of multiple factors of disadvantage in limiting health outcomes has always been well understood by tangata whenua. Ngāti Hine leader Moe Milne, for example, described te oranga o tangata whenua as being influenced by factors other than purely the absence of disease. She stated: “I was told, ‘We lose our tangata whenua status when we don’t have whenua to stand on. We lose our whenua status when we don’t have tangata to stand on it.’ ” It is in this relationship of all the intersecting parts that the greatest damage lies.

Reference is often made in this Chamber to the most vulnerable of our communities—the so-called welfare cheats, the dole bludgers, the welfare dependants, and those who are said to be ripping off the system. But I have to ask who the greatest beneficiaries are. Who feels good about the theft of Māori resources—our waterways, the land confiscations, and the foreshore and seabed—and who feels bad?

The relationship between health, wealth, and well-being is absolutely linked. The determinants of health are overlapping and multiple. Poverty, intergenerational and lifestyle factors, ethnicity, racism, and ill health are factors that are all related, yet this Government persists in treating one factor in isolation. These are systemic issues. We are always told that people must take personal responsibility—and, yes, people must do that—but who in this Chamber will take personal responsibility for the creation and support of systems and policies that will guarantee disadvantage and that will not change the lives of the most disadvantaged? This Parliament is frequently swamped with accusation, denial, and decision makers who will not take responsibility for decisions they have made to create what to many of our people is an unjust system. If we are really to eliminate health disparities, we need to address the institutionalised racism that reveals itself in the link between racism, morbidity, and mortality. We need to treat the health of the whānau as being intricately associated with the health of the individual—we need to make the associations, and we need to act.

The National Party must also stand up and take responsibility for its role in planting the seeds of racism amongst the public mind. I wonder how many members in this Chamber have had calls from Māori who are sitting in their homes listening to National members talk about Māori in terms of privilege, and I wonder how that wounds the psyche of Māori people. The focus on so-called Māori and Pacific privilege is in itself creating disadvantage. That party is allowing people to talk about us in a negative way. That party is giving people permission to be racist, and that must stop.

Last week the Public Health Advisory Committee released its report called Health is Everyone’s Business. That report urged New Zealanders to rise to the challenge of reducing health disparities, particularly between Māori and non-Māori. The committee advised the Government of the widening social and economic inequalities that are resulting in whole population groups being left behind. It described how in New Zealand ethnicity presents an independent and significant effect. The committee concluded that being Māori or Pacific further increases the risk of death or ill health across all socio-economic categories. I repeat—being Māori or Pacific further increases the risk of death or ill health across all socio-economic categories. If we were to say that being Pākehā further increased the risk of death or ill health, would that be ignored? If we were to say that being an MP further increased the risk of death or ill health, would attention be taken? So why is it that the association of being Māori or Pasifika with the risk of ill health and death is so casually described—almost taken for granted—as a universal assumption of truth?

The Public Health Advisory Committee identified that there is no easy solution to health inequalities, no quick fix, no one-size-fits-all. Collaborative effort is required to address the social and economic determinants of health. Health cannot be treated in isolation. The final report, released just a week ago, proved that although poor health can be expected to lower living standards, there was also evidence that poor living standards increase the risk of poor health. And who are the New Zealanders most at risk of poor living standards? Forty percent of Māori and 58 percent of Pacific people experience some degree of hardship, compared with 19 percent of Europeans. That is not a gap; that is an ocean.

Disparities emerge and grow from the overlapping disadvantages of racism and poor health, and impoverished living standards and deprivation. If we add to those factors the variable of being Māori or Pacific, the result will be severe and significant hardship. Yet the appropriation has allocated a measly $3 million to policy advice on reducing disparities in health status for Māori. Worse still, there is no specific funding at all for Pasifika health. I, like many others, have heard all the excuses that the priority of better health for all perhaps means reducing inequalities for Māori, Pasifika, and those on low incomes, without actually having to spell it out. Well, I am a firm believer in spelling it out, telling the truth, and facing the facts.

The reports I have spoken of today are not Māori Party documents. They are not the reports of Māori researchers, academics, or wānanga graduates. They are not the reports of the United Nations special rapporteur. They are the reports of Professor Peter Davis of the University of Auckland, of the Public Health Advisory Committee, and of Ministry of Social Development. We must act decisively, with courage and information, to make the connections explicit and to treat the whole rather than the separate parts. Within Te Ao Māori, we know we live the reality of taking into account all aspects of our spiritual, physical, social, cultural, intellectual, and psychological selves when we consider the concept of health. Kāore te taha wairua i te tū i tōna kotahi; the spiritual side does not stand by itself. We cannot divorce the water from the lake and still call it a lake. So we understand only too well the impact of multiple disadvantage—that everything is connected, that nothing can be treated in isolation. Solutions must be all-embracing and inclusive. We must all take responsibility for being a part of that solution. I ask today: who in this Chamber will address the living conditions that create poverty, misery, and the underclass? Who in this Chamber is prepared to burst the septic boil of racism and stand up to protect the well-being of all? When will we invest in raising the standards of living? Only then will the state of health in Aotearoa be something we can all be proud of. Kia ora.

Dr JACKIE BLUE (National) : The Labour Government is failing ordinary New Zealanders. It has had 7 years to prove itself, and it is failing miserably. Under Labour, New Zealanders are getting sicker—yes, sicker. This month, Judith Collins, National’s welfare spokesperson, exposed figures showing that a staggering 122,000 New Zealanders were on the sickness and invalid benefits.

Lindsay Tisch: How many?

Dr JACKIE BLUE: It was 122,000. That is more than the population of Hamilton City or Dunedin City. Judith Collins showed that the numbers of people drawing those benefits had increased by 47 percent and 38 percent respectively under this Labour Government. That is an astonishing figure. The population has not increased by 40 or 50 percent, so what is going on with New Zealand’s health, we can ask. Why are New Zealanders getting sicker? I will tell colleagues what is happening, and it is not good.

They are not getting the operations or drugs they desperately need. Tens of thousands of New Zealanders are being dumped from waiting lists and not getting the procedures that specialists say they need. Why are they being dumped? They are being dumped because the hospitals do not have the resources to do the operations. That is despite the millions of extra funding that has gone into a bloated health bureaucracy. Half of all the district health boards are struggling to match last year’s numbers of operations. Compared with 5 years ago, fewer patients are getting elective surgery. Patients now have to be sicker to get an elective operation and because they have to wait longer the operations are more complex, more complicated, and bigger. It does not make sense. There is no logic in it. There is not a lot of sense in Labour’s failed policies.

Recently there was some publicity about medical adverse events that cost taxpayers a massive $850 million each year. That is serious money. The figure comes from a 2002 study. We would think that the Government would sit up and take notice of that report, and implement immediate and urgent steps to reduce medical adverse events—not only to reduce the pain and suffering of New Zealanders but also to save money. But has it? No, it certainly has not.

This Government is interested in spending money and not in saving money. This Government is more interested in wasting hard-working New Zealand taxpayers’ money than in relieving New Zealanders’ pain and suffering. The irony is that although this Government is happy to spend money as if there were no tomorrow, in pharmaceuticals it is the opposite case. That is an area where the Government needs actually to be spending money, but it is doing the exact opposite.

Darren Hughes: Who wrote this rubbish?

Dr Jonathan Coleman: Shut up, Darren. You might learn something.

Dr JACKIE BLUE: Yes, he might learn something! The per capita amount of pharmaceutical spending has been flat-lining and dropping over the last 5 years. Pharmac’s annual budget is not even keeping up with inflation or the consumer price index.

Darren Hughes: All these prepared speeches. It is a debating chamber.

Dr JACKIE BLUE: There has actually been a press release this afternoon from that member’s Government. It has announced an increase in Pharmac’s budget to $600 million, which is up from $582 million in last year’s budget. But when one works out the figures, one finds that that figure represents an increase of only 3 percent, which in no way will match the 11 percent predicted increase in prescription volumes. So it is pretty simple to work out that we are going backwards quite fast. This has done a disservice to New Zealanders. They are not getting the drugs they desperately need to keep them well and out of hospital.

A recent study shows that in the last 6 years Australians have had access to 58 more new emanated medicines than have New Zealanders. New Zealanders are missing out on medicines compared with their counterparts in Australia. This study also confirmed that the few drugs we have in common are more restricted and more difficult to access than in Australia. Pharmac tried to fudge the issue, and even the Minister was reported in the House for fudging it and saying that New Zealanders had access to more medicines than Australians. Government members were very, very quiet when the detail of it was worked out. It was pointed out that Pharmac included items such as condoms, peak flow metres, Janola, and calamine lotion. These are hardly lifesaving and innovative new drugs. It takes far too long to get drugs through Pharmac’s process.

Dr JONATHAN COLEMAN (National—Northcote) : We are talking about the estimates of appropriations, but, quite frankly, when it comes to health we might as well be talking about the estimates of misappropriations. This debate goes right to the heart of what is wrong with health under this Labour Government. The Government is now spending $10.5 billion a year on health. That is a 66 percent increase on what it was spending when it came to office. As everyone knows, and as the Labour members know, health is actually not improving in New Zealand. Those members have nothing to say about that. The marginal member for Otaki, Darren Hughes, was saying that this was a debate. Well, why do Labour members not get up, take a call, and actually debate some of these issues? Why do they not get up, put their money where their mouths are, and tell us what they will do?

Frankly, health has been an abysmal failure under Labour. The reality is that the more the Government spends on health, the worse it gets. For 6 years we had a Minister of Health who was a dental nurse. Now we are counting the problems in oral health. We all know that oral health is a problem in New Zealand. It has been going on for 6 years, and what is the Government doing? It is commissioning a report. It will have another committee, it will have a hui, but it will not have any answers. Goodness knows what we will have after 3 years of having a vet as Minister of Health. We may be counting the number of successful dog microchippings—it will be just as relevant to the health of New Zealanders as what we have had so far.

We can conclude that the more money Labour throws at the health problem, the worse it gets. Labour members are averting their eyes—they do not have the answer. They know that health is a minefield; it is a disgrace. The Minister of Health is a joke. He is an embarrassment to the Prime Minister, he is an embarrassment to the front bench, and he is not even here to take a call today. It will be very, very interesting to see what happens when the Associate Minister gets up and tries to justify the $10.5 billion of expenditure. We know that the system is in crisis. We know that one has to be sicker than ever to get an operation in New Zealand. One cannot fool the listeners at home. They know that that is absolutely correct. They would be absolutely appalled to know that one dollar in every five of Government expenditure is going into health, yet the kids are getting fatter, people are getting sicker, parents cannot get operations—

Hon Clayton Cosgrove: What would you do?

Dr JONATHAN COLEMAN: The member for Waimakariri asks a very good question. I will tell him. The one line that should be in these estimates of misappropriations is the big line called bureaucracy. I can tell the member that under this Government we now have 12,000 bureaucrats and 12,000 hospital beds. That is one bed for every bureaucrat. We have had an increase of 2,000 bureaucrats in health alone under this Government. I say to the listeners at home that Government members are not saying anything now, because they know it is true. They know that since this Government came to power 17 football fields are now needed to accommodate all the bureaucrats in Wellington, in terms of office space.

Darren Hughes: Ha, ha!

Dr JONATHAN COLEMAN: That is a joke. It is a disgrace. Darren does not have an answer to that—he knows it is true. We have fewer general practitioners, fewer people having operations—

Darren Hughes: Rubbish!

Dr JONATHAN COLEMAN: It is true. We have more bureaucracy. Labour thought health was in a safe pair of hands, but it has turned out to be the nightmare portfolio. Who on that front bench would want to have that portfolio now? The answer is no one. The fact is that health under Labour is in the cart, Mr Hodgson is in palliative care, and the people of New Zealand are waiting for a change of Government so we can start to get the services that the people of New Zealand deserve. They are not getting those services under Labour.

Last week we had the roll-out of primary care. What a dismal failure that will be. Three million dollars will go to the poorest people in New Zealand and $60 million will go to people who can already afford to go to the doctor. How is that targeting need? The reality is that Labour is letting down the people who voted for it—the poorest people in New Zealand, who have the highest health needs. The message is actually getting through, because those Labour voters know that this Government does not represent their interests.

This Government is more concerned with irrelevant, fringe, social issues, rather than with strengthening health, strengthening education, and strengthening the economy. That will come back and bite it in 2008, if not earlier. Government members are not saying anything now, because they know it is true.

Hon CLAYTON COSGROVE (Minister for Building Issues) : It is too difficult to resist having a crack at that member, who is allegedly a general practitioner. When we asked that member what his policy for health would be, all he talked about was bureaucrats. Has he forgotten the Health Funding Authority? Has he forgotten that when something went wrong in the health system before we had district health boards, we had bureaucrats? But no one would take any responsibility when things went wrong under the Health Funding Authority that Dr Jonathan Coleman’s crew in National set up, and that he, as a general practitioner, milked and got his income off. Now, at least we have district health boards with accountable people. If communities do not like what the health boards have done, they can get rid of them—they are accountable. That member, as a general practitioner, milked the system under the Health Funding Authority all right, and National created the bureaucrats in the system—a huge monolith of bureaucrats.

But here is the deal: Dr Coleman said we should get rid of the bureaucrats, but what does that mean? I will just talk about that. Here is an economic fact: the health sector requires money. Where do Governments get money from? They get money from taxation revenue. Is that not right? That member—a general practitioner—was elected on the basis of National’s policy of a $7 billion tax cut. I will explain to him what happens when revenue is reduced. The money has to be found from somewhere. When a $7 billion tax cut is given—[Interruption] The member did not do very well when he was on his feet; he is doing even less well now that he is squawking like a headless chook over there. Half of the $7 billion tax cut was to have been based on borrowing. Where would the other half have come from? The other half would have come from cuts in expenditure like that on health, or from asset sales. One could not sell enough assets to cover what National wanted to do.

I ask Dr Coleman to tell the truth. I ask him to get up again, take another call, and explain to the people he hoodwinked in the electorate he won that if he had his backside on the Government side of the Chamber, he would cut health expenditure in order to give away a $7 billion tax cut and then he would borrow the other half of the money needed for the tax cut. That does not mean getting rid of bureaucrats. If he got rid of every so-called bureaucrat and administrator in our health system, he still could not pay for the tax cuts that he wants to give people. What would Dr Coleman do? He would get rid of nurses, cut services, and put cash registers back into the hospitals, as National did in the 1990s—and that genius over there was a general practitioner in the 1990s. I ask him to go back and think about the legacy that the National Government put through. I ask him to look at the health figures that that Government left—at the cash registers in the hospitals. Under that Government, people were not bumped off a waiting list; they were bumped off permanently because they could not get into a hospital.

I challenge Dr Coleman to say whether he would get rid of the primary health organisations and the Public Health Care Strategy. There is silence. He is lost for words, and so is that other thing over there beside him. Would Dr Coleman get rid of the primary health organisation system? Would he get rid of the district health boards? We do not hear anything now. The reason is that this is not an election year. In election year, the only thing he came out with, of course, was a $7 billion bribe. I say to that member that he has no credibility. He may be a general practitioner—he may be a witch doctor, for all I know—but he has no understanding of economics. What is even worse is that he stands up in this Chamber and thinks everybody who listens to him is an idiot who does not see through that. Well, I say people are not idiots.

Darren Hughes: He is arrogant.

Hon CLAYTON COSGROVE: He is arrogant—absolutely arrogant.

Would National get rid of the primary health organisations? Would it do away with the free doctors’ visits for under-sixes? No, Dr Coleman will not say what National would do away with. He will not tell us how he would fund his health proposals, because he does not have any health proposals. That member over there has shown himself for what he is. He is a political fraud—an absolute political charlatan. He is a naive new member, who is up himself to the point where he goes out and tells people whatever they want to hear. I say to Dr Coleman that if he were in Government, Rangiora Hospital would be gone by lunchtime. If he were in Parliament on the Government side of the Chamber, Canterbury District Health Board would have its budget slashed under him. Why would that happen? Because we know he could not pay for tax cuts without doing that. We know—as John Key said—that National would borrow half of the $7 billion needed in order to give a tax cut. [Interruption] The member says that is right. That is the first truthful thing he has said in this contribution. John Key said that. I wonder whether the folks who are listening to this debate—the elderly who would have been turfed out of rest homes, or the people who would not have had cheaper prescriptions—heard that.

We know that when we got into Government, many people could not access the public health system, and if some of them had been able to access their doctor and their specialist for treatment of their injuries, they would not have needed to be put on a waiting list. If they had minor injuries, those could have been stitched and fixed up, and they would have gone away, back to their normal quality of life. This Government has put a heap of money in the pot in order to clear the existing waiting lists out—and we are doing that. Also, for anyone with a minor injury or illness, surely it makes sense to do what we are doing: providing those people with the drugs they need, and getting them in a measured and cheap way to their specialists and their primary health care providers, so they can be fixed up and stitched up without needing to be put on a waiting list—because, by God, they are healthy. That is our policy.

We did not hear anything from members on the Opposition side of the Chamber, except for a lot of voodoo economics. The National members are running like mad from their tax cut bribe.

Hon DAMIEN O'CONNOR (Associate Minister of Health) : I take the opportunity to close this debate. Never before has a Government invested so much money in the health status and care of its people. It has committed $10.5 billion. I am very proud, as Associate Minister of Health and as part of a Government that has committed so much to the future health and well-being of its people. I acknowledge New Zealand First for its wisdom in contributing to this debate and to this Government. Barbara Stewart, quite rightfully, points out the priority areas in health care that we have laid out in front of the public and are absolutely committed to. Those are the health of older people, the health of children, primary health care, and dealing with public health-care issues like obesity. We have invested a huge amount in primary health care, because prevention is better than cure. We know—as the public of this country knows—that money spent up front looking after people, preventing many of the ailments and many of the long-term problems, is money well invested.

Tony Ryall made a very good point. He said that general practitioners are very, very important people. Yes, they are. They are key components in the Primary Health Care Strategy. I am not sure whether Dr Coleman is a necessary general practitioner, given his ignorance and the ignorance he showed in the House just before. But general practitioners and other primary health care providers, and nurses—all those people—are essential elements of our Primary Health Care Strategy. Another very good point raised in this debate was the fact that 75 percent of people go into our hospitals through emergency care or acute incidents. Every one of those people, almost without exception, will say that the care he or she received was exceptional. It is absolutely amazing. Every day, up and down this country, we can meet people who will say, and know, that when they need health care they will get it, and it is our public health system that will deliver it to them.

The National Opposition focuses on the 25 percent of people who go into the hospital system—and members should remember that that is just one part of the health system—for elective surgery. That is always an area of difficulty, because with increasing technology, with increasing knowledge, and with more drugs, we are able to deal with more people. That is a fact, and, because the demands on the system will never ever be entirely satisfied, we have had to make some calls. We have said we will focus on public and primary health care areas where prevention will deliver for us as a nation long term. We have said we will target areas of need. As the Māori Party quite rightly pointed out, too many of those areas of need are, unfortunately, found within the Māori and Pacific Island populations, because disparities of wealth align with disparities of health care. There is no doubt about that.

That is why we have said all the way through our health strategy, and through the primary health strategy as well, that we will focus on areas of need. That means we will focus on the disparities in health for Māori and Pacific Island peoples, and we are proud of that. It is a health system based on need, not on ability to pay.

The other reality pointed out by my learned colleague the Hon Clayton Cosgrove is that if National were to offer $7 billion worth of tax cuts, as it did, it would have to slash funding.

Hon Clayton Cosgrove: Who to?

Hon DAMIEN O'CONNOR: They blame, as the member pointed out, the bureaucrats, the administrators, and the managers in the health system. Well, if funding in health care is increased by 66 percent, we need to know that it is being spent in the right areas. We need to know that that money is being well managed. That is why we have had an increase in administrators. We do our very best to minimise increases in that area, but we need to know that every dollar is being well spent.

The other reality, of course, of the National Party’s alternative policy is that one would not only have to slash funding to health but actually hand responsibility over to the private sector. The National Party ideologically believes that the private system can deliver more efficiently. Well, I struggle to understand that, because we have had some models that have attempted to do that—for example, when the National Government privatised the railways, although I am not sure that that is a wonderful example of large infrastructural private management. But we do need a nationwide system of health care, and that is what we are backing. The National Government’s experiment in railways did not work, and privatisation in other areas it reformed has not worked, either. Its reform of the electricity system, based ultimately on the ideal that privatisation would deliver to us, did not work. Those two simple examples of key infrastructure reforms—of key Government services, such as health—have failed under the private sector management models.

That is why we as a Government are absolutely committed to the provision of public health services throughout this country. We will take taxpayers’ dollars, spend them, and invest them wisely in health care, because that ultimately will determine the wealth of this country. One’s health is one’s wealth. There is absolutely no doubt about that—members should ask people who face acute and immediate health problems. They know where their priorities lie. So too does this Government. That is why I am proud to say that under the Minister Annette King and now under Minister Pete Hodgson we have invested 66 percent more money into health care since 1999.

Darren Hughes: That’s a pretty good record.

Hon DAMIEN O'CONNOR: It is a very good record. In spite of all the harping on by the National Party we will have increasing health status for New Zealanders, not only now but into the future. Oral health care, which was raised by members in the Committee, is a classic example. The National Government, through its 9 years of management of this country, chopped investment in training dental therapists. As a result, we have seen a decline in the standard of dental health of young New Zealanders. There has been a direct decline in oral health because of worthless management and a lack of investment. We have started now to invest. We have 100 dental therapists training at the moment. We are investing $100 million over 5 years into dental care. That is the kind of investment we have had to make to offset the dumbing down, the shrinkage, and the attempt at private provision by the last National Government. It is a big job. We are committed to doing it properly. I think we have done an exceptional job and we will continue to do so for a long time into the future as a Labour-led Government, with the assistance of our wise coalition colleagues.

PITA PARAONE (NZ First) : Tēnā koe. It is a privilege to speak to the Appropriation (2006/07 Estimates) Bill, particularly in terms of the bill asking that $156.990 million be appropriated for Vote Māori Affairs. I want to preface my contribution to this debate by making mention of former colleagues of mine in the Department of Māori Affairs, because this will provide the tenor of my contribution to this debate. In that regard I want to mention Jim Pou, Herepō Harawira, Oti Te Rangi, Hilda Busby, Hei Rogers, Taku Trotman, Barbara Devonshire, Matarēhua Wikiriwhi, John Dargaville, Moana Raureti, Boy Tōmoana, Anne Delamere, and Bill Herewini, all former Māori welfare officers who I believe would be turning over in their graves if they could see the plight of Māori in the year 2006.

A recent report entitled New Zealand Living Standards 2004, published by the centre for social research at the Ministry of Social Development, highlighted the plight of many New Zealanders, not least of all Māori. It makes for sobering reading, even though some in this Committee proffer the excuse that the report is somewhat dated, in that it covers only the period 2000-04. However, the events of recent weeks—in fact, recent years—with regard to the abuse and eventual death of young children suggest that the period of 2005 to the present is no better. Sadly, the situation is more pronounced among Māori. A cursory glance at the social indicator statistics confirms that Māori are still clustered at the bottom of the heap.

I would like to reflect today on the sad reality of 21st century New Zealand and suggest some ways that those statistics might be turned around. Māori social statistics are an embarrassment to New Zealand, and until they improve we cannot, in all honesty, say that we live in an egalitarian society. Overall, it is a pretty grim picture. The reasons for this are complex and cannot be separated from the wider context of economic and social conditions.

Employment tells a similar story. Recent employment figures show a disturbing disparity between ethnic groups. At the present time 2.5 percent are unemployed in the European-Pākehā group while the unemployment figure for Māori is 7.6 percent. That, of course, is 7.6 percent too much. I remember some of the employment programmes during the 1970s and 1980s under the responsibility of the then Department of Māori Affairs that were successful in training young unemployed people and many young Māori in skills that employers were looking for. Such programmes, I believe, offered the salvation from long-term unemployment, and all the negative consequences of that. We need more of them. It is not good enough that, in times of high employment, significant numbers of people are missing out. The unemployed need to be encouraged into the Modern Apprenticeships programme, and more programmes need to be implemented to ensure that none of our young are left behind.

There has been much ado about the Minister of Māori Affairs not seeking extra funding in this year’s Budget, and I ask myself why. For me, what was more important was the suggestion that this signals. Is it because his ministry underspent last year, or because there are no new programmes intended for this year, or is there a failure of the current projects that his ministry is responsible for? What happened to the programme Local Level Solutions? I understand that this is now being replaced with a new programme called Realising Māori Potential. What about those Local Level Solutions projects that were considered, commenced, and not yet completed?

What has become of the findings and recommendation from that much-touted gathering here in Wellington that was to provide economic policy for this Government in terms of Māori development? I believe the Hui Taumata itself was a good thing. But what has come of it? It was a good thing for Māori to be able to participate and to express their views. Unfortunately, the results have meant a request for extra funding of just over $2.5 million to allow a group to travel around the country reporting to Māori the outcomes of Hui Taumata. I tell the Minister that there are more important issues confronting Māori than having a small and well-paid group repeat what was said at that Hui Taumata. While it may have seemed laudable for Māori to have this Hui Taumata, the fact is that people were asked to pay to go to that hui to give their advice, and so many months down the track we have yet to see the fruits of that hui.

What needs to be considered is a return to the old programmes that were once the responsibility of the Department of Māori Affairs. Therein we had a programme called “community services” where experienced staff were allowed to go out amongst the community to make contact and deal with the issues that were confronting Māoridom at that time.

Hon Member: Back to the old ways.

PITA PARAONE: I heard the comment “the old ways.” Well, perhaps if we look at the old ways we will get the answers for the issues that are confronting Māori today. I want the Minister to seriously consider the programmes that once were the responsibility of the Department of Māori Affairs, to address the social and economic issues that are confronting our people today.

As has been said in this Committee earlier today, any criticism of the social indices that affect Māori not only bears some weight on members of the Government but all Māori members of this Parliament. I am sick and tired of being tarred by that brush when, in fact, I know that the solutions facing our people can be well dealt with in a way that was once a successful and very profitable programme for our people. Serious consideration needs to be given to revisiting those programmes, but I believe there has to be a political will, and I ask the Minister to consider those programmes seriously. I am glad that the Minister also now has an Associate Minister to help him with the problems that are confronting the Māori people. Kia ora.

SHANE JONES (Labour) : Tēnā koe, Mr Chairperson. Obviously I stand to speak in favour of the recommendation in the appropriations in respect of Vote Māori Affairs. It is good to see that the Ngāti Hine health budget is working, because although there was some physical distance between my whanaunga from Ngāpuhi, and the Minister and I talking very quietly up here while he was on his feet, he heard part of what we said. However, the part of the Ngāti Hine health budget that deals with his sight needs improving, because he mistakenly referred to our other Ngāpuhi whanaunga, Mr Simich, by the wrong gender term.

I follow on from Pita Paraone and his words about Te Puni Kōkiri and this particular vote. Firstly, let us bear in mind that the Māori population is, comparatively speaking, a youthful population. As we wander forward as a country, never quite knowing where we will end up on race relations, we are being dragged to the side and dragged backwards by the Opposition, which has no clear sense of where it is taking the country. Unfortunately a large number of confused voters belonging to the Brethren church and other such obscure sects fell for the rhetoric.

Dr Wayne Mapp: They didn’t vote.

SHANE JONES: They did not vote, but who did they fund? Did they waste their money funding a leader who today decided that because he cannot make any traction in here, he will go out and insult every democratically elected local government official? I will have more to say on that later. We have a very clear policy. The policy is in relation to the advancement of our people—Māori voters; iwi—who are going forward, economically speaking, and are major and welcome contributors in relation to identity. That is something we have never heard from Opposition members.

Where do they want Māori to fit, in relation to our overall identity? They want them in the outhouse. They do not want them to enjoy a position of pride or a position showing forward thinking—no, they want them to the side and forgotten about. Fortunately, a vast number of voters saw that this was a backward, divisive, stigmatising, negative way to think about the future, which is why those members are in Opposition, and long they will be there. They sought to demonise the most vulnerable members of our modern society, of our modern economy, and they were tossed out.

Opposition members have been unable to recover from that mortal blow. They have fallen upon themselves. Not only are they destroying the person who thought he could idly walk from the Reserve Bank into this House and claim the top prize, but also they have taken the toki to him. He is history, and now they have got the mere out—no, the mere is for the high chief, and there are no high chiefs over there. They have taken a bit of four-by-two—[Interruption] Yes, Pita Sharples gave them a mānuka stick, and our voters will have much to say about that in the future. They will regret the day they gave a sliver of support to Pita Sharples, who immediately raced over to that side of the House and signed an ill-fated document, of which we have a copy. They seek to deny it, but it will surface in good time.

But let us go back to why this is a reasonable programme. Although it is attacked by Tau Henare and others, it shows that the officials, and the Minister in particular, were willing to get a better return for the same amount of money. That is excellent thinking that is reflective of a very prudential approach to using the available amount of money.

While members opposite rail about wastefulness, the Minister has come with a programme that is a reprioritisation. The first one is rawa. Rawa means resources, but rāwa also means to choke, and Opposition members are choking on it. The second thing is whakamana, which means to uplift and to ensure that people enjoy self-esteem and are held in a position of esteem, which is something that members opposite have failed to advance. Fortunately the result of the election demonstrates that they have much more heartache to come.

Mātauranga is the name of our vessel. It is the third point. Mātauranga, knowledge, is the final reprioritisation. Who, with a sliver of intelligence, could argue against the Minister’s fine reprioritisation in giving knowledge and education top billing? Not only is it education that will enrich the whole country but we must focus on young people. By and large they will be a hugely more important proportion of New Zealand’s working population in the future. Knowledge will ensure that they are not trapped in the Kāhui end of town. Rather, they will enjoy the fruits of bilingualism, they will have enterprise and industriousness, and they will be supported. That is why the manaaki tauira reprioritisation was very clever thinking. Mr Ron Mark had a fantastic success for the Wairarapa landless natives, or whatever they are called in that part of the country. They have a fantastic scholarship scheme; they do not need to fall back on the taxpayers and get further money.

So the manaaki tauira was reprioritised to deal with the third-formers, the fourth-formers, the fifth-formers, and the sixth-formers, because unless we prevent them from slipping through the cracks, there is no point in just growing the number of university students.

So I say to all the people who unwisely, unfairly attacked the Minister over the reprioritisation of manaaki tauira that we are investing in the area of secondary school students, which is where, unfortunately, we have all inherited an enduring problem. Nigh on 30 percent of all Māori school leavers continue to leave without adequate qualifications. I say to our Māori and Pākehā colleagues on the other side of the Chamber that such a statistic must not be used, as it was in the recent election, as a device to divide people. We should all join in common purpose to ensure that young Pacific Islanders and, in particular, young Māori men are not only adequately skilled but are endowed with the right education so they do not represent a social problem of the future but are a key economic ingredient.

I think it is a very sad day whenever we proceed to talk about Māori affairs or race relations. The standard response from the Opposition is a very negative one. It is based on a rather devious and quite sinister agenda, which is to choose people who can be demonised and stigmatised, and make them, and the population, feel that they are responsible for a whole host of amorphous, ill-defined woes. I am happy to say that this approach—not only through Te Puni Kōkiri but at a wider level throughout the Government—is challenging that and is going to stand against that. It was a bleak day when our political opponents chose a type of politics—I understand that it is called wedge politics—to drive a wedge between good, keen, hardworking Kiwis and tried to convince everyone that Māori are the authors of their own problems, that Māori have nothing constructive to contribute, and that the sooner that both the Treaty and Māori are moved by them to the margin, the sooner the country will be enriched. That failed; it always will fail. The Minister has brought a very clever reprioritisation forward. Admittedly, the budget is not as large as the Māori Party would like, but there are significant resources available through other Government departments to deal with the enduring problem of Māori under-achievement. Kia ora tātou.

• Vote Māori Affairs agreed to.

Hon MARK BURTON (Minister of Local Government) : The current leader of the National Party went along to the Local Government New Zealand conference on Tuesday this week. He suggested that there was a crisis of confidence in local government. He is right, in one respect. Immediately after Dr Brash’s appalling performance, the description from one of the mayors present—and I can tell the member that mayor was previously a member of the National Party—was: “He treated us like a bunch of dicks. He told us we don’t know what we’re doing.” Frankly, if that is an example of the way the National Party believes it should engage with local government, then I think local government got the clear message as to where the future rests for it. I say to members that I am looking at sending my diary to Dr Brash, in order that he can attend every conference I am going to speak at and speak immediately before me, because anything will look good after Dr Brash’s performance.

In every respect, Dr Brash gave a disastrous performance. I can only conclude that, given the factual inaccuracy of his speech, its appallingly poor delivery, and its content absolutely missing the target audience, he must have been heavily assisted in preparing the content of that speech. The only question is whether it was Bill, Gerry, or John who helped him to write it.

Hon Clayton Cosgrove: My money’s on Gerry.

Hon MARK BURTON: I think the member may be right; Mr Brownlee has a particular turn of phrase. However, the speech lacked any of the energy, in terms of content, that I think we have all come to expect from the deputy leader wannabe. The myths that were peddled at that conference by Dr Brash fell on stony ground, and it was a stony reception. I have never seen a National Party leader so dealt with by an audience. There was polite applause at the end of the speech. The only thing missing at the end of the speech was a plank for Dr Brash to exit the stage. I tell members a plank should have been there. He did not need the stairs; he should have had a plank to exit the stage.

But, in order to put the record a little straight here, I tell members that one of the suggestions Dr Brash made was that central government has abandoned local government—left it with all the responsibility. The truth of the matter, of course, is that the level of direct support from central government to local government has gone up from about 8 percent to over 13 percent of total local government expenditure.

Dr Wayne Mapp: It’s roads.

Hon MARK BURTON: I am very pleased that Dr Mapp brings up the question of roads, because I say to him that in addition to that $650 million or so, which constitutes over 13 percent of local government expenditure, there is the $1.3 billion of additional funding for roads over the next 4 years. The 13.3 percent does not include the money for roads or the $150 million over the next 5 years that has been put into water schemes and a myriad other things. If we add those in, then, frankly, I say to Dr Mapp that central government support would be a great deal more than 13.3 percent.

By any measure, it may be seen that the relationship between central government and local government is on a footing it has never been on before: one of mutual respect, cooperation, and collaboration. The difference now is—[Interruption] Here we go! We have got a rise in rates of what percentage?

Dr Wayne Mapp: 10 percent.

Hon MARK BURTON: Let us look at that. One of the member’s own colleagues is a councillor with Environment Canterbury. I understand that councillor supported a 21 percent rates increase. I do not think that was bad. [Interruption] The member interjects about percentages. When one plays silly games with percentages, one loses track of the fact—

Dr Wayne Mapp: The Auckland Regional Council is getting it down to 5 percent.

Hon MARK BURTON: Does the member have any idea that that 21 percent represents $1.10 per week to an average ratepayer in that area?

Dr Wayne Mapp: The Auckland Regional Council has set its rates increase at 5 percent.

Hon MARK BURTON: Percentages mean nothing, unless one applies them to dollar terms. That increase represents $1.10 per week on average per ratepayer.

The fact is that there is a fundamental difference between Labour and National. I was very pleased to sit and listen to the appalling contribution made by the Leader of the Opposition at the Local Government New Zealand conference. During Dr Brash’s contribution the difference between Labour and National became very, very clear. This Government is committed to New Zealand’s transformation into an inclusive and a growing, developing nation, whereas if National were in Government it would slash and burn at every turn. What did Dr Brash have to offer? He attacked the sorts of subsidy schemes that the Labour Government supports.

Contrary to what the National Party seems to believe, New Zealanders will not tolerate Third World conditions. They expect First World water supplies. They expect First World general hygiene and food hygiene. They expect the quality of the services and facilities provided to them to be that of the First World. Of course, the sort of nonsense that we heard from Dr Brash is mirrored by the nonsensical member’s bill we have seen from Mr Hide. It may be populist policy to talk about putting an inflation cap on rates, but that denies the facts that the population is growing and New Zealanders aspire to have a higher quality of life, and of services and facilities. Those improvements require financial investment, and they require cooperation and collaboration between central government and local government.

One of the highest achievements for the local government sector over the last 6 years has been the central government - local government forum. It provides an environment in which central government and local government can work together. That stands in stark contrast to the absolute shambles that would be visited on the local government sector by Dr Brash in the unlikely event that he were ever to become the Prime Minister.

Hon Clayton Cosgrove: The sector knows that, too.

Hon MARK BURTON: Does it ever! It saw Dr Brash’s performance on Tuesday at the Local Government New Zealand conference.

There was one thing that Dr Brash got right in his speech to Local Government New Zealand when addressing the mayors and councillors of this country who, by and large, do an outstanding job for the communities they serve. He was right when he said there was a crisis in confidence. I tell him that the crisis in confidence is in his National caucus, and in the incompetence of National’s leader. The crisis in confidence among the good leaders of local government is in the National Party, which once had the pretence of supporting local government but now has abandoned even that.

Dr WAYNE MAPP (National—North Shore) : The core of the Government’s approach in this area is to boost New Zealand’s productivity. I guess we would all agree that that is a laudable goal. But the Government’s approach is to have working parties, conferences, meetings, innovation strategies, and much talk about the transformation of the economy.

Shane Jones: The OECD like it.

Dr WAYNE MAPP: Talk, talk, talk is what the Government is doing, and, indeed, we have just heard Mr Jones exhibiting exactly that characteristic.

I remind members opposite of this fundamental fact. Despite all their talk, New Zealand’s productivity is lower than that of every other OECD country that is better off than we are. We might say that is logical—if they are better off than we are, clearly they will have better productivity. But the real point is that we cannot progress New Zealand’s fortunes up the OECD if every country ahead of us has better productivity. The only way we can do that is to have higher productivity than at least some of the countries in front of us. I know that Mr Shane Jones, the chair of the Finance and Expenditure Committee, would agree with that logic. It is clearly logical that in order to grow we have to have a higher productivity gain than the countries ahead of us. It is simple mathematics. The problem—and the OECD has pointed this out—is that New Zealand is not willing to take the critical steps that would make a difference.

In the employment law area, the OECD said in 2004 and 2005 that the one critical missing element in New Zealand’s employment laws was the lack of a proper probationary period. Every other developed country has probationary periods as a normal part of its workplace law. Britain, for instance, has a 12-month probationary period. Australia has a 6-month period for larger companies and a longer period for smaller ones. In Canada it is 3 months. Throughout all of Europe it is 3 to 12 months.

I say to the Government that there is a clear lesson in all of that. If we want to have competitive laws, if we want to reduce compliance costs, if the Government wants to deal with the serious problem of youth unemployment—it is still at 12 percent—and Māori youth unemployment, which is at 18 percent and rising, then we have to give employers an incentive to make the employment decision. We are, after all, a nation of small businesses—perhaps more so than any other developed country. The strongest recommendation to the Government by its own Small Business Advisory Group is for a probationary period in employment law.

In another week or so the Transport and Industrial Relations Committee will start to hear submissions on the bill that I promoted, which provides for a 3-month—90-day—probationary period. It is a modest and reasonable measure. It is one-quarter of the length of the probationary period in Britain. The Government says there already is a probationary period under section 67 of the Employment Relations Act. But the problem is that in Britain, in Australia, in Canada, and in Europe that does not mean automatic recourse to the full personal grievance procedure. It means that employers can make a simple decision, in a costless way, as to whether a person is working out, and essentially say that the contract will terminate if the employment is not working out. In truth, of course, that does not normally happen. Employers want employees to succeed. They want to train them; they want to get a return on all that effort, and so does the person who has taken the job.

I tell the Government to stop listening to the rhetoric and the misinformation of its union mates, even though they provide nearly all of the Government’s funding for its election campaigns—that is, when it is not looting the public purse, as well. It is time for the Government to step back, act like a Government, and basically introduce laws that will make New Zealand competitive. That would be the most important thing Labour could do for the New Zealand economy.

JUDITH COLLINS (National—Clevedon) : Mr Chairman—

Hon Clayton Cosgrove: The cover girl!

JUDITH COLLINS: Thank you very much. At least I am not part of a “plug and grow” outfit like the member is. The other point, if the member opposite wishes to talk about my cover-girl day, is at least they did not have to airbrush me like they did a certain person from his party.

One of the points I want to make here today is that we have been waiting for the single core benefit from Labour since 1989—that is 17 years. After 17 years Labour, which has been so good at promoting a single core benefit, says it wants to introduce it. Who wants it? Anybody who wants to hide what is happening with the invalids and sickness benefits.

One of the problems of the single core benefit is that a couple of different MPs are on the record speaking about it. The Prime Minister, Helen Clark, has said there will be no losers under the single core benefit. She said that—she said there will be no losers. Then David Benson-Pope said earlier this year that he could not actually confirm whether anyone would be worse off, that some people might be but that was still to be decided. David Benson-Pope said further, again earlier this year, that the Government would have the legislation in by the end of the year—that is, the year 2006, for those who are interested. And, just recently, we have heard that maybe it will be introduced in another 18 months.

The fact is the Government is all in a pickle, and Steve Maharey has left David Benson-Pope trying to deal with the single core benefit. I would like to put on record that Steve Maharey is not all bad. Actually, he can be a bit of fun when it comes to stuff like this—putting in place a massive bureaucratic change for no particular reason other than that it is a better way to hide the facts. And we know that this Government has been very good at hiding the facts. One of the facts the Government does not like coming out is that we now have about 123,000 working-age adults who are too sick to work. The Ministry of Social Development and its Minister, David Benson-Pope, make interesting statements like “The number has always been going up and has never come down.” Well, it actually did. In the last couple of years of the National Government in the 1990s, the figures for sickness and invalids beneficiaries started to decrease, because a little bit of rigour was put around getting people on to those benefits.

One of the problems that Labour created when it came into Government in 1999 was that it instantly took off restrictions on the sickness and invalids benefit designations, which meant that numbers on those benefits suddenly went through the roof. Strangely—lo and behold—the unemployment numbers came down, and the number of sickness and invalids beneficiaries went up. Today someone is three times more likely to be on a sickness or invalids benefit than on an unemployment benefit. So, after all the money that, as we have heard this afternoon, has been poured into the so-called health budget—the one that now has one bed per bureaucrat in the health system in this country—people are now about three times more likely to be on a sickness or invalids benefit than on an unemployment benefit, and that is something the Minister has been a total failure at dealing with.

We have been told by the Minister that the growth percentage is not as high as it was last year. Well, what does that mean? Does it mean it has gone up slightly less? No, it does not mean that. It actually means that the core figure is now so high that only a couple of percent means a huge increase—and every year it keeps going up under this Government.

Labour has yet another new scheme to deal with it and, of course, like its other schemes, it is voluntary. So it will not be much use. We are told by the Minister that it is a new scheme that has never been used anywhere else in the world—oh, except for the United Kingdom; oh, except for most countries, which have had something similar, but some of them have had a little bit of courage and done something and made the schemes compulsory. The Government was able to put the Working for Families project through the Ministry of Social Development, and it is quite right that the package should be in the area of social development or, in other words, social welfare. The reason for that is it is welfare; it is middle-class welfare. There are now families in this country earning $130,000, $140,000, or $150,000 a year who are beneficiaries of the taxpayers.

Hon Member: What?

JUDITH COLLINS: Yes, they are. Those people are supposed to line up with their little hands out, asking for a teeny-weeny little bit of their money back for being good people and voting Labour. Well, that is not going to work. One of the interesting facts we do not hear too much crowing about is the number of people taking up that brilliant opportunity to go and stand in line and ask for a little bit of their money back. The reason we do not hear about that is, basically, people who are earning reasonably good money want to get ahead. They do not want to be classed as beneficiaries, because being a beneficiary is a pretty tough time for many people. They do not want it said that they are part of the 300,000 working-age adults in this country who are on full-time benefits, which is the number we have at the moment.

Over the last few years some good things have happened in New Zealand. One of those things has been that we have had very good export prices for our exports. There has been a commodity shortage of the things we sell, and that has been fabulous, but it is not something we can simply rely on year in, year out. We are now seeing oil prices going up and petrol prices getting higher. Those of us who do our own grocery shopping for our own families—and I am very proud to say I am one of those people—know that the price of fruit and vegetables has gone up hugely.

Hon Clayton Cosgrove: What a humanitarian contribution! You go to the grocer’s yourself—what a saint!

JUDITH COLLINS: I know that that is something the member for Waimakariri may not know much about. He knows about “plug and grow”, but he does not know much about fruit and vegies. We know the price has gone up very high, and that has made it very difficult for families to cope. Those families who have trouble coping do not want to have to turn up to the Working for Families people of the Inland Revenue Department and say: “Give me some money back.”, because it is actually tough out there. It is all very well for a party like Labour, which does not have a family-friendly focus as we do in the National Party—we understand what it takes to look after children—

Georgina Beyer: Get up, the families!

JUDITH COLLINS: It is no good Georgina Beyer calling out about this matter. It is just no good at all, because, frankly, it does not help families to be told to go and line up like everyone else and ask for money back. This country needs more people working better, but, at the same time, it also needs to have people earning decent wages and keeping enough of their money so that they do not have to go, cap in hand, asking for a benefit. That is what this country needs. Why has that side of the Chamber suddenly gone so quiet? Well, those members have gone so quiet because they know that that is a bit of common sense, which is something they are not very good at connecting with.

We are told by the Minister that we will have some new approaches. Well, we will have some new approaches, all right—once National gets into power, which hopefully will not be too far away. We will certainly have some new approaches. The Minister has told us, for instance, that Pacific people have been doing really well. We have been told that there is a strong focus on reducing the number of Māori and Pacific people who are unemployed. That is just great! They happen to be on the sickness benefit instead. We also happen to know that real poverty in this country has increased under the Labour Government, particularly amongst Pacific New Zealanders and Māori New Zealanders. We know that because the ministry’s own hardship survey showed exactly that. The Labour Government’s answer to that problem was the Working for Families package. Well, I am sorry, but the Working for Families package does nothing to get people into work, it does nothing to help the poorest people cope, it does nothing to help them learn to budget, and it does nothing to help the children of those people.

Shane Jones: The member is looking backwards.

JUDITH COLLINS: I know that it is all very well for those millionaire types over in the Labour Party, who are brought in to try to show that the party has a business background. Oh, Shane Jones is very keen on doing that, and, of course, so are the other millionaires in the Labour Party. They may not know about this but, unfortunately, it is—

Shane Jones: There’ll be two sides to that sort of story.

JUDITH COLLINS: I raise a point of order, Mr Chairperson. I thought people were not supposed to be able to move from the back bench up to the front, as Mr Jones has, so they can shout out better. Is that not against the Standing Orders?

The CHAIRPERSON (Hon Clem Simich): No. I am certain he has not moved for that purpose, at all.

JUDITH COLLINS: Has he not? All right. Thank you, Mr Chairperson.

Hon DAVID BENSON-POPE (Minister for Social Development and Employment) : Thank you for the opportunity to really paint a little of the wider picture of social change in New Zealand between 1995-97 and the current period. I am really pleased to say, as I did in the House 2 days ago, that the overwhelming improvement in the social indicators in this country should be something that all New Zealanders are only too happy about. I will deal with those in general terms, and then come back to the specifics, if I may, in a moment.

First of all, over that 10-year period there has been a marked improvement in the affordability of housing. That should be a great concern to all of us, of course, and it is still an issue for us in Government. One of the reasons for that issue, of course, was that our predecessors in Government sold in excess of 13,000 State houses, so we should not—

Hon Clayton Cosgrove: What did they do with the money?

Hon DAVID BENSON-POPE: They mostly gave it to their mates, or privatised for their mates—just as they do with so many things, unfortunately. So we should not be surprised, as a community, that there are still issues around the affordability of housing in this country. But that is just one indicator.

The second of the half dozen I will read out concerns a massive reduction in the share of households with low incomes. That is really good news for all New Zealanders—

Judith Collins: Let’s talk about the vote.

Hon DAVID BENSON-POPE:—and I can come back to the specifics of the unemployment shift by ethnicity, if the member is really interested in the facts.

There has also been a most significant improvement in market income per person, with an increase in real gross national disposable income per capita from around $23,000 in the mid-1990s to around $29,000 in 2005. So that is a significant movement. It is rather ironic that as I came into the House today I heard, after the demonstration at lunchtime, of course, Dr Wayne Mapp giving, as his answer for the real issues we have about productivity in this community, a further attempt to force down the wages of New Zealanders. Like most New Zealanders, and certainly like members of the Government and its support parties, I am concerned it has taken as long as it has for the increases in real wages for people to flow through into our economy. It is so ironic that that is happening just as the Australians are finding that the kinds of policies that that degenerate party, National, applied in the 1990s are starting to bite, the Australian workforce is facing exactly the same quite corrosive policies that the National Party has historically introduced, and is trying again to introduce.

Judith Collins: What’s this got to do with the vote?

Hon DAVID BENSON-POPE: I am not going to take a point of order, but I say to the member that it would be better if she articulated better. I do not mind her trying to interject, because she just makes a rather sad fool of herself. I say further that that sort of behaviour will never get that member any respect with her constituents, or her photo on the front page of the New Zealand Woman’s Weekly, or even of .

The other indicator, among many that have improved, is an extraordinary improvement in employment participation. That has increased by over 5 percentage points to 68.5 percent in March this year, which for New Zealand is an all-time high. Let me dwell for a moment or two on the reduction in unemployment. Unemployment was over 6 percent in 1995, it rose to 7 percent in 1998, and now it is 3.9 percent—the second lowest in the OECD after Korea, whom we were ahead of last time. The reality of unemployment—all working-age unemployment—is a nearly 30 percent reduction since the last time National was in power. So Mrs Collins can play whatever games she likes with her interpretation of the facts, but the reality of the figures is that if we take all working-age benefits, there has been a startling reduction in unemployment in this country.

I also say to the members of this Chamber that very few people—only one in 11, I believe, is the figure—move off the unemployment benefit and on to the sickness benefit. I also say, before I come back to the raw unemployment figures, that I do not apologise for being part of a Government that provides a benefit for people who get sick. One of the realities of the world that so few National members opposite realise is that sometimes people actually get sick and sometimes people are invalided. There are plenty of sick people—for different reasons—sitting on those benches. I am really proud to be part of a Government that makes no apologies and no bones about supporting people who need that support.

Having said that, the fact is that when this Government took power in 1999 there were 161,000 people on the unemployment benefit. That figure is now, for the first time in 24 years, less than 40,000. That is a remarkable achievement. The sorts of policies that this Government is espousing and driving will make sure that that sort of support for working New Zealanders will continue.

There has also been a really welcome improvement in tertiary education. Around 11 percent of the population aged 15 years or over enrolled in tertiary education in 2005, compared with only 8 percent in the mid-1990s. There has been an increase in the share of school-leavers with higher qualifications, with over 70 percent of school-leavers having greater than level 1 National Certificate of Educational Achievement in 2004, compared with around 65 percent in 1996. Most important, if we are genuinely interested in the future of our country, we should be delighted at the huge increase in expenditure on early childhood education—from 91 percent in 2000 to 94 percent in 2005.

The prime focus of this Government has been twofold. It has been, firstly on getting people into work, and doing things like expanding youth transitions services, and so on—I have talked about those numbers—and, secondly, on supporting people in work and incentivising work. I want to talk in some detail about the Working for Families tax relief extension. Because we are so committed to ensuring that families have every opportunity to give their children the best start they deserve, we are continuing to roll out the Working for Families package. That package is delivering $1.6 billion of targeted tax relief and social assistance through Working for Families. Eighty-five thousand more families get additional tax relief through family assistance. By 2007-08, 350,000 families will be getting support from the Working for Families package.

The Working for Families OECD data confirms that for a single-earner family with two children on average earnings, Working for Families tax credits have taken New Zealand from having the eighth-lowest tax take to having the fifth-lowest tax take in the OECD. Under Working for Families, a family with two children on an average income gets a further $90 a week—further to the original instalments they received—which makes them, in total, roughly $116 a week better off since 1 April 2005. The new in-work payment is worth up to $60 a week for families with up to three children, plus an additional $15 for each subsequent child. Under the Working for Families package, paid work offers families the greatest opportunities to improve their financial circumstances.

I say to colleagues that one of the somewhat unexpected but welcome facets of the Working for Families introduction has been the choices that people are making. This Government has been criticised, unfairly and inappropriately, for forcing people into work. The reality is quite the opposite. The childcare assistance and the support for working mums and dads who want to do that have been extended enormously. Fascinatingly, since the last instalment of the Working for Families package, a number people have written to us saying that this is a fantastic social initiative, that they can now make do on one salary, and that they can look after their children.

So the support that this Government is putting into the community is the sort of support that empowers people, empowers families and communities, and assists them in making the best choices for them and their conditions.

JUDY TURNER (Deputy Leader—United Future) : I rise to speak to Vote Social Development. This is the vote that represents 27 percent of total appropriations across all votes and has enjoyed a 5.8 percent increase in this financial year. It lists four key priorities. It refers to the work of Work and Income and Child, Youth and Family Services, and to work around aging issues. What really interests me, and what I have a bit of a question mark over, is the fact that one of the four priorities for this immense vote is “strengthening social development leadership”. I find that a bit nebulous, and I would like the Minister, David Benson-Pope, to refer to what that is all about. Eighty percent of proposed departmental expenditure is dedicated, however, to two major areas. One is the benefit area, and the second is divided between students and seniors.

One of the things that concerns me—and I have not heard anybody mention it so far—is the merging of the two entities of the Ministry of Social Development and the Department of Child, Youth and Family Services. This is something that happened for reasons that none of us have ever had clearly explained to us. In fact, when we talked to the Ministers about this, they said it was done “because the stars were in alignment”. They then referred to the competency and skills of the chief executive of the Ministry of Social Development, Peter Hughes, which I accept. He is a very competent person, and nobody is doubting that.

But I think we have to be honest about the fact that this has all come about because of the departure of Paula Tyler back to Canada. This was a huge disappointment to myself. She was employed because she had previous experience in the differential intake that Child, Youth and Family Services were implementing. That idea was shared with the Minister by United Future in the last Parliament, and we were pleased to see some uptake on it. We are a little concerned. We were assured that it has not stalled, but to my understanding there are currently two pilots running.

I want to talk about this, because this differential intake is the opportunity for the very, very competent non-governmental organisation sector to contract to the Government to do the medium to low risk cases that Child, Youth and Family Services is drowning under. Notifications to that department go up 15 percent a year. They went up 30 percent after the death of Coral Burrows. A great way to relieve the pressure on the department and to allow it to focus on the very good statutory empowerment work that needs to be done in the high-risk cases, would be to give the medium to low risk work to the competent agencies in the community.

If we read some of the comments made by COmVOices which is an organisation comprising groups such Philanthropy New Zealand and Volunteering New Zealand, we will see its calculation that for every dollar value of social services those organisations provide in the community, it would cost the Government between $3 and $5 to replicate that work. We have a huge capacity of social services in the community right now that United Future would like to see the Ministry of Social Development take a much stronger interest in.

One of the problems community groups have is that when they take on Government contracts they sometimes feel that the obligations that come with the contracts kind of rip the soul out of their organisations. We are not against the ministry requiring accountability from those organisations for how they spend the money, for the services they deliver, and for the outcomes they get—of course they must be accountable for those—but sometimes the ways and means the organisations have of being effective can become undermined when they have to take on a Government contract. So I encourage the Government to consider seriously, firstly, looking at better utilising those groups in the community and voluntary sector that are already delivering cost-effective and fantastic services. If they were allowed to build capacity and get some good Government contracts, then they could deliver even more substantial outcomes to New Zealand society than they are currently. Secondly, I would like to think that the Government would consider looking very carefully at the kinds of demands it puts on those contracts—demands that could actually destroy the ethos and effectiveness of the organisations that are getting them.

An example I had recently was of a provider in Christchurch that provides employment and accommodation for people coming out of prison. That provider has a phenomenal success rate, but it is scared to take on a Government contract because it knows that the Government would then require it to take on anybody the Government asked it to.

• Progress reported.
• Report adopted.