Hansard (debates)

Daily debates

Content provider
House of Representatives
Information
Date:
9 August 2011
Downloads
Note: The above document(s) are provided as an Adobe PDF (PortableDocument Format) file. you can download a free viewer for PDF files from Adobe's web site.
Related documents

Volume 674, Week 81 - Tuesday, 9 August 2011

[Volume:674;Page:20379]

Tuesday, 9 August 2011

Mr Speaker took the Chair at 2 p.m.

Prayers.

Questions to Ministers

Credit Rating Downgrade, United States—Effect on New Zealand Economy

1. JONATHAN YOUNG (National—New Plymouth) to the Minister of Finance: What implication does the United States’ credit rating downgrade have for the New Zealand economy?

Hon BILL ENGLISH (Minister of Finance) : The downgrade and subsequent financial market volatility confirm that we live in risky and uncertain times. Finance markets are sending a clear message to New Zealand and to any Government that they have no appetite for Governments that cannot get on top of their fiscal or debt problems, or for policies that require more debt and borrowing. The Government has focused on getting its own books in order, returning to Budget surplus by 2014-15, at which point debt will peak and we will be able to reduce debt as a proportion of GDP.

Jonathan Young: How is New Zealand placed to deal with the global uncertainty compared with other countries?

Hon BILL ENGLISH: Global uncertainty will affect our economy one way or another, but we are relatively better placed than other developed countries. We will be one of the few countries that kept net Government debt below 30 percent of GDP, and one of the few that will be looking at Budget surpluses within a few years, but just as important is that we have worked to stabilise our financial system and get our economy in shape to be more competitive to support our export efforts. Also, New Zealand households have got the message and started saving.

Jonathan Young: How do the current threats from global market uncertainty compare with those from the global financial crisis in 2008?

Hon BILL ENGLISH: I would hope that the threats from the current uncertainty will not reach the scale of the threats of the financial crisis in 2008. Whatever happens, we are better placed to withstand these challenges than 3 years ago. One of the reasons is that the Government’s books are now in better shape. Our largest trading partners, Australia and China, are two of the world’s better-performing economies, and the Reserve Bank and the Government learnt a lot from the last crisis about how to handle any similar crisis in the future.

Jonathan Young: What policies would put New Zealand’s relatively strong economic and fiscal position at risk?

Hon BILL ENGLISH: Any policy that requires the Government to borrow more than is currently projected on volatile world financial markets, and any policies that make it harder rather than easier for our exporters to earn a living from the rest of the world. For instance, a wide range of complicated tax system changes or reducing returns to KiwiSavers would send New Zealand backwards.

Hon John Boscawen: Does he agree that if the changes he made in this year’s Budget had been made in each of his two earlier Budgets, New Zealand would be much better placed to weather the global financial uncertainty created by this downgrade; if not, why not?

Hon BILL ENGLISH: In its first two Budgets the Government did make significant changes because the fiscal mess left behind by the previous Government was not widely understood, but because the Government took careful and considered decisions we were able to prevent a situation where Government spending was going through the roof. It looked like our debt would continue rising with no end, and sensible decisions over those three Budgets have corrected that situation, so we are much less vulnerable now. One could argue that we should have done more, sooner, but at the bottom of the New Zealand recession we believed that would be harmful to the New Zealand economy.

State-owned Assets, Sales—Timing

2. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Will he suspend or change his timetable for the proposed selldown of State-owned assets in light of the current economic circumstances; if not, why not?

Rt Hon JOHN KEY (Prime Minister) : There is no timetable for extending the mixed-ownership model. The Government has always said it will take this policy to the electorate in November, and we are not making plans before that time.

Hon Phil Goff: I seek the leave of the House to table the Finance and Expenditure Committee’s response to estimates review questions, which points out the timetable for the sale of State-owned assets.

Mr SPEAKER: Is this a document that the Parliament has?

Hon Phil Goff: I would have thought so, but the Prime Minister—

Mr SPEAKER: We don’t table those documents.

Hon Phil Goff: As he has already booked the sale of shares in State-owned enterprises in this year’s Budget, is he still prepared to sell those shares even if it means lower prices in a depressed market?

Rt Hon JOHN KEY: Firstly, it is very important that we correct the error from the Leader of the Opposition, because he is prone to having quite a few of them, on the basis of his transcript from this morning—

Hon Phil Goff: I raise a point of order, Mr Speaker. I think you understand what the point of order is. That is not an appropriate way to begin an answer to a question.

Mr SPEAKER: I think the point is well made. There is no need for that kind of comment. There is no problem with disputing information contained in a question, but making a derogatory comment about a questioner is not on.

Rt Hon JOHN KEY: There is not a timetable. There is a zero capital budget in Budgets 2012-16. In fact, any of the dividend streams and the income that would be reflected from a sale of shares through the mixed-ownership model are not in Budgets 2012-16. As I said yesterday, of course the Government, if we are the Government post November 26, would take into account the financial conditions at the time, but the reality is that if there is any timing difference it is likely to be months, and certainly not one that would affect the overall thing.

Hon Member: So there is a timetable, or there’s not?

Rt Hon JOHN KEY: “If” there was one, I said.

Hon Phil Goff: Is the Budget 2011 estimate accurate that even after the sale of State-owned enterprise shares Government debt will double in the next 5 years; if so, what guarantee is there that a future National Government would not use that as a pretext to sell down even further shares than he has already announced?

Rt Hon JOHN KEY: No, that is not correct, and that was the very basis on which I made the statement earlier that the member often gets his figures wrong. In fact, gross debt in New Zealand this year is $78 billion. In 5 years it will be $86 billion. A doubling of $78 billion would be $156 billion. It is very similar to the way in which the member said this morning that the Government’s bond programme would be $16.7 billion—

Mr SPEAKER: I do not think that is quite necessary in order to answer the question.

Hon Phil Goff: I wonder whether I could seek leave to table the Budget document that shows that gross—

Mr SPEAKER: I just stopped the Prime Minister on the one hand, and the Leader of the Opposition is now misusing a point of order. He knows that we do not seek leave to table Budget documents.

Hon Phil Goff: How does having the one-off sale of shares in State-owned enterprises and annual tax cuts of nearly $2.5 billion for the top 10 percent of earners while the Government is borrowing over $16 billion this year protect New Zealand in an uncertain global economy?

Rt Hon JOHN KEY: The Government is not borrowing $16.7 billion this year. The Government is borrowing $5.1 billion, and the tax cuts the member refers to were fiscally neutral. If the member wants to go back to the policy he adopted when he thought he was a bus driver, which, frankly, he was better at than at being the Leader of the Opposition, then he is welcome to reverse the policy.

Hon Phil Goff: Why is the Prime Minister not following the advice of the Chief Executive Officer of the Bank of New Zealand, Andrew Thorburn, who said on the weekend that what this country needs in the face of global uncertainty is a change of tax regime, such as a capital gains tax, to disincentivise investment in housing and to encourage investment in the productive sector?

Rt Hon JOHN KEY: I think that Mr Thorburn is wrong. If one looks at the changes the Government made in Budget 2010, one sees that we took $1 billion out of the property market, in terms of changes to depreciation and the like. In my view, if one puts a capital gains tax on a company that would otherwise be employing people on its activities, one will actually dampen investment.

Hon Phil Goff: If the chief executive of BNZ, Andrew Thorburn, is wrong, was the chief economist of Westpac, Dominick Stephens, also wrong when he said “New Zealanders are incentivised to borrow money to buy land rather than invest in productive assets.”, and that a capital gains tax is necessary to reduce those sorts of distortions? Are they all wrong?

Rt Hon JOHN KEY: In my opinion, yes.

Hon Phil Goff: Are the former Secretary to the Treasury, John Whitehead, and the Reserve Bank also wrong when they say a capital gains tax would remove significant distortions in the tax system and would support and strengthen the productive sector, which is exactly what this country needs in the face of a global recession?

Rt Hon JOHN KEY: What John Whitehead was referring to was an extension of the capital gains tax that is already currently in place to include the family home. What I think we are hearing from the Leader of the Opposition—and I think New Zealanders should listen carefully—is that by stealth, if given the chance, Labour would bring in a capital—

Mr SPEAKER: Ministers should not speculate on—[Interruption] I am on my feet.

Hon Phil Goff: I seek leave to table this quote from the former Secretary to the Treasury, John Whitehead—

Mr SPEAKER: Before we have the quote, what is the source of the document?

Hon Phil Goff: The source of the document is www.knowledgebasket.co.nz, and it is from November of last year.

Mr SPEAKER: The member may indicate now what the document said.

Hon Phil Goff: The document says that Treasury had explored the introduction of a capital gains tax as a means of removing significant distortions from the tax system.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Hon John Boscawen: Does he not believe that the real issue facing the country is reducing Government expenditure, rather than trying to find and invent new ways to raise it, such as a capital gains tax?

Rt Hon JOHN KEY: I think the member has a point, and that was why we ran a zero Budget going into Budget 2011, despite the fact that the country was facing the crisis that presented itself as a result of the Christchurch earthquakes. I think this Government has been very fiscally responsible, and it has got to a point where it will be back in surplus within a few years. We will not be running the debt levels that a Labour Government would run if it was elected post 26 November. New Zealand simply cannot afford the policies that Labour is promoting.

Future Focus—Implementation

3. TIM MACINDOE (National—Hamilton West) to the Minister for Social Development and Employment: What progress has been made on the implementation of Future Focus?

Hon PAULA BENNETT (Minister for Social Development and Employment) : When we announced Future Focus, there were 345,000 beneficiaries; now there are 328,000. So, despite a recession, we now have 17,000 fewer people on benefits. Prior to Future Focus, 75 percent of beneficiaries had no work-test obligations. Now, because of these changes, that figure is 63 percent. Future Focus is responsible for much of this success because we have had a greater focus on work, on more childcare support, and on clear obligations. Seeing those on the unemployment benefit having to reapply has made a significant difference in this area, as well.

Tim Macindoe: How many people have asked for extra help since the Future Focus changes came in?

Hon PAULA BENNETT: As I have said in this House many times, help is there for those who need it. There is certainly help through special-needs grants and advances on benefits. But 54 percent of beneficiaries have not required a single hardship grant during this 9-month period, and 15 percent of beneficiaries have asked for just one hardship grant. That suggests the majority of people on a benefit are managing their finances reasonably well—and there is help for those who need it. Another interesting fact is that 97 percent of those over 65 have not asked for a single special hardship grant.

Hon Annette King: Were the 7,400 people who she said came off the unemployment benefit under Future Focus all under the age of 25 years, single, and receiving no other taxpayer support; if not, how did she calculate the $6 million savings?

Hon PAULA BENNETT: No, they were all people who were on the unemployment benefit, so they were not necessarily aged under 25; they were within the age for the unemployment benefit. The Ministry of Social Development calculated that of those who were on it, they were most likely to come off over a period of time and it did the calculation that way. That is how it came up with that figure.

Hon Annette King: Why, if Future Focus has been such a success at getting people off the domestic purposes benefit, have the numbers of people receiving this benefit reached a 10-year high, with the cost to taxpayers having increased by nearly $200 million since she became the Minister?

Hon PAULA BENNETT: Because there has been a thing called the global recession. It has actually had an effect on jobs, which the member may not have noticed. Things have been a little bit tough in the last 3 years. So, yes, we have seen, as the household labour force survey says quite regularly, a reduction in part-time employment opportunities for those on the domestic purposes benefit. That makes the changes since September last year all the more remarkable. The fact that in these times, as we come out of recession, we have managed to find work for more people who were on the domestic purposes benefit than before is remarkable and a sign of these changes.

Milk Pricing Inquiry—Government Support

4. Hon ANNETTE KING (Deputy Leader—Labour) to the Prime Minister: Does he stand by his statement with regard to milk prices that “they are” getting a fair price and that “the work we’ve done so far would indicate they are”, and if not, what has changed his mind?

Rt Hon JOHN KEY (Prime Minister) : Yes, I stand by my full statement. I think it is an interesting observation that when I read out my full statement, sometimes members opposite try to give one impression by, at the least, truncating the quotes I make. The full statement was that “The work we’ve done so far would indicate that they are but sometimes daylight is the best disinfectant.” As I said yesterday, it looks like a competitive market, but it is important that consumers feel a degree of confidence. That is why National has decided to support a select committee inquiry.

Hon Annette King: Why did he not believe consumers who told him and his Government as far back as February last year that the price of milk was too high, having gone up by over 9 percent, by his own Minister of Agriculture’s calculations?

Rt Hon JOHN KEY: Firstly, because the food price index shows that the price of fresh milk has gone up 1.7 percent over the last 6 months, no doubt helped by Fonterra’s supermarket price freeze; and, secondly, for the very same reason that I assume Labour did not rush in when it went up 23 percent in the last 2 years under its watch.

Hon Annette King: Supplementary question—[Interruption] Just wait your hurry.

Mr SPEAKER: We will not have that kind of interjection.

Hon Annette King: Well, we will not have that sort of interjection, Mr Speaker.

Mr SPEAKER: I think we have had enough. The Hon Annette King will ask her question without further comment.

Hon Annette King: Thank you, Mr Speaker. Does he recall saying in 2008 in Opposition that the then Government should do something to reduce the cost of milk, because families were rationing it to their children; if so, why has it taken an Opposition push for a select committee inquiry before he will acknowledge that something needs to be done about the price of milk now he is in Government?

Rt Hon JOHN KEY: Yes, because milk prices rose 23 percent under Labour in its last 2 years. The Government has been doing things. The Commerce Commission was looking to see whether it could undertake an inquiry. As all members know, it is independent and is governed by the Commerce Act, so the Government wanted to wait and see whether it would respond. The Government has also had interdepartmental inquires taking place, and it has been doing quite a bit of work.

Hon Annette King: Does he stand by his answer to an oral question on 11 February 2010 that milk would become much more affordable when the tax cuts came in in October; if so, how many more families now can afford milk than then?

Rt Hon JOHN KEY: Yes. By definition, it does, because milk has gone up 1.7 percent over the last 6 months, helped by Fonterra’s price freeze, and New Zealanders across the board got a net positive tax cut that was distributionally even over the course of the last Budget.

Te Ururoa Flavell: Nā te kaha hāngai o Fonterra ki te utu o te miraka, ka whai atu te Pirimia i tā Te Pāti Māori i whakarewa i ngā marama e whā ki muri, kia whakawhānuitia te arotakenga o te utu o te miraka ki te tūtohu Trading Among Farmers a Fonterra?

[Given the strong focus that Fonterra has on the price of milk, will the Prime Minister follow the suggestion made by the Māori Party some 4 months ago to extend the inquiry into the price of milk to Trading Among Farmersproposed by Fonterra?]

Rt Hon JOHN KEY: It is a matter for the select committee—governed, obviously, by the Commerce Committee to determine the terms of reference.

Health Sector Graduates—Voluntary Bonding Scheme

5. JACQUI DEAN (National—Waitaki) to the Minister of Health: What progress has the Government made on the Voluntary Bonding Scheme?

Hon TONY RYALL (Minister of Health) : The Voluntary Bonding Scheme is designed to encourage graduate doctors, nurses, and midwives to stay in New Zealand, by writing off their student loan if they work in a hard-to-staff area. For the third year in a row the scheme has been hugely popular with young doctors, nurses, and midwives. This year 429 more graduates have enrolled, bringing the number of health professionals on the scheme to more that 1,800. These graduates are keeping their skills at home and helping patients in hard-to-staff specialities and areas.

Jacqui Dean: How many doctors, nurses, and midwives are enrolled in the Voluntary Bonding Scheme?

Hon TONY RYALL: I am advised by the Ministry of Health that there are 1,424 nurses, 220 doctors, and 179 midwives currently enrolled in the scheme. They are signed up to work in remote communities, including the East Coast, and in specialities including general practice, rural hospital medicine, intensive care nursing, and aged-care nursing—areas that have struggled to get the staff that they need. Just last week, Marilyn Head of the New Zealand Nurses Organisation said the scheme “helps to develop critical leadership and a homegrown workforce.”

Crown Debt as Percentage of GDP—Current and Past Levels

6. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: What was net core Crown debt as a percentage of GDP and in dollar terms in November 1999 and November 2008, and what is it currently?

Hon BILL ENGLISH (Minister of Finance) : The percentages were 24 percent, 6 percent, and 21 percent as at May this year.

Hon David Cunliffe: How many Budget fiscal surpluses has he achieved, and how does that compare with the record of the previous Labour-led Government?

Hon BILL ENGLISH: Well, the answer to that is no fiscal surpluses, and the reason is that when we became the Government we were presented with forecasts that showed that on the basis of the damaging policies of the previous Labour Government, there would be deficits for 10 years and ever-rising debt that would have reached the same levels as some of the distressed countries that are being buffeted by financial markets now. We have done a good job of getting that under control.

Hon David Cunliffe: I raise a point of order, Mr Speaker. Regretfully, the Minister has not addressed the question, which was to seek a comparison between whether his Government has achieved fiscal surpluses and the record of the previous Labour Government—not whatever projections he might think he has about the future. There was no comparison with the unending run of surpluses achieved under the previous Government.

Mr SPEAKER: I think the member has now achieved the point he wanted to make.

Hon David Cunliffe: I seek leave to table the time series of fiscal and economic indicators from the year 1999—

Mr SPEAKER: The source of the document?

Hon David Cunliffe: From the Budget documents. They show the fiscal surpluses—

Mr SPEAKER: Oh no, we do not table Budget documents. Does the member have a supplementary question?

Hon David Cunliffe: Given that the Minister’s Government has increased debt by a record amount since entering office, and by its own admission has borrowed $17 billion in the last year alone, was it fiscally responsible to pass $23 billion worth of tax cuts—the lion’s share of which went to the already well-off?

Hon BILL ENGLISH: Yes. The Government, at the same time as dealing with the recession, has focused on long-term structural reform in the economy. In 2010 we implemented a unique tax switch where we cut taxes on incomes and savings across the board and increased tax on consumption and the effective tax rate on property. That was a fiscally neutral package, and it will be very good for this economy in the long run because it promotes higher incomes and higher growth.

Hon David Cunliffe: In light of that answer, would it not now be more fiscally responsible to partially unwind those large and partially unfunded tax cuts to the wealthy by reintroducing the former 39 percent tax rate at a higher threshold of, say, $150,000 a year?

Hon BILL ENGLISH: Well, the member is about 3 years late. Actually, in Budget 2009 we did unwind significant tax cuts for the upper end of the income range. In fact, we cancelled them. But if the member thinks that more spending, funded by higher taxes and more borrowing, is what the world is going to pay for in New Zealand, then he is wrong.

Hon David Cunliffe: Will he now support a capital gains tax to remove tax distortions that favour property speculation and make the debt problem worse, and offer all Kiwis a fair tax cut in these tough times?

Hon BILL ENGLISH: No. I see that that proposal is part of a package of tax and spend that will leave New Zealand having to borrow an extra $18 billion in international markets at exactly the time when those international markets are deeply concerned about any Government that is trying to borrow more money.

Roading, Auckland—Western Ring Route and Hobsonville Deviation Progress

7. Hon TAU HENARE (National) to the Minister of Transport: What progress has been made on the Hobsonville Deviation and the Western Ring Route Road of National Significance?

Hon STEVEN JOYCE (Minister of Transport) : Good news. On Saturday I joined the Prime Minister in opening the new Hobsonville deviation in Auckland, 6 months ahead of schedule. I am very pleased that the benefits of this project will be felt in time for the Rugby World Cup. The Hobsonville motorway is just one of three major Auckland motorway projects opening ahead of schedule. In July of last year the Manukau Harbour Crossing opened 7 months ahead of schedule and the Victoria Park tunnel will open to two lanes of traffic in November, 3 months earlier than anticipated. These projects are crucial in helping New Zealand to grow more strongly out of the global financial crisis.

Hon Tau Henare: What benefits will the Hobsonville project deliver to Auckland residents?

Hon STEVEN JOYCE: The new deviation at Hobsonville completes the Upper Harbour Highway section of the western ring route, which of course is a 48-kilometre alternative to State Highway 1, running from Manukau to Albany. The $220 million Hobsonville project will significantly reduce congestion in north-west Auckland and improve journey times from the west to the North Shore. This will boost economic growth and productivity in Auckland through more efficient movement of freight and people to the western parts of the city, and support planned residential expansion and commercial expansion in this area. The new motorway will also improve safety greatly by taking a lot of through traffic off local roads.

Phil Twyford: Does he accept that the cost-benefit of motorway ramps for the new Westgate Town Centre would be vastly better than the cost-benefit for his “Holiday Highway”?

Hon STEVEN JOYCE: The member opposite and his compatriots do need to give up this constant disparaging of the Pūhoi to Wellsford road, but I would point out that there is ongoing discussion between the developers—who of course want access on that motorway—the New Zealand Transport Agency, and the council, and I understand that good progress is being made.

Current Account Deficit—Projections

8. Hon DAVID PARKER (Labour) to the Minister of Finance: What is the projected current account deficit as a percentage of GDP and in dollar terms for the forecast years in Budget 2011?

Hon BILL ENGLISH (Minister of Finance) : For the 3 years from 2012 the forecasts are 4.1 percent, 5.2 percent, and 6.8 percent. This is after the current account deficit averaged more than 8 percent of GDP each year between 2004 and 2008. In 2010 it fell to 3 percent of GDP.

Hon David Parker: I raise a point of order, Mr Speaker. That was a question on notice, and it asked for the current account deficits in dollar terms as well. That part of the question has not been answered.

Mr SPEAKER: That is a fair point.

Hon BILL ENGLISH: They are 8.4, 11.5, and 15.6.

Hon David Parker: I raise a point of order, Mr Speaker. Is that billions or hundreds?

Mr SPEAKER: The Minister should clarify.

Hon BILL ENGLISH: He knows it is billions. Of course he knows that.

Mr SPEAKER: I have asked the Minister to make it clear.

Hon BILL ENGLISH: Billions.

Hon David Parker: Is the Minister of Finance aware that under current policy settings that current account deficit he projects means that New Zealand’s indebtedness to the rest of the world is projected to grow by $52 billion by 2015?

Hon BILL ENGLISH: Yes, I am aware of the projections. Again, because of the very large current account deficits run by the previous Government in what were ideal economic conditions, this Government has had to try to hold back the massively negative momentum, and we have partially succeeded so far, with a lot more to do.

Hon David Parker: Does that Budget not forecast show to him that his policies are not working, because after 6 years, if National is re-elected, New Zealand every year gets poorer by billions and billions of dollars?

Hon BILL ENGLISH: No, because if the Government had not taken the considered and consistent decisions it has, we would be in a much worse situation. We are not likely to take much notice of that member, because his Government promised to halve the current account—

Mr SPEAKER: The member asked a question. He did not ask whether anyone should take any notice of him. He is entitled to ask a question. The Minister should not make any disparaging comments about the questioner.

Hon BILL ENGLISH: I raise a point of order, Mr Speaker. The standard that you usually apply is that if a question is asked in a political way, it invites a political response. The member referred to Government policy failure, so a political response is to refer to the failure of the previous Government, which made this job so hard.

Mr SPEAKER: I hear the point the member makes. [Interruption] I am considering a point of order. I accept the point being made, which is that members should be a little more careful in asking questions, too.

Hon David Parker: Given his disagreement with me, why does he also disagree with the legion of economists, the IMF, the OECD, and Treasury, which state that to overcome the structural problems the New Zealand economy has, we need a structural solution like a capital gains tax?

Hon BILL ENGLISH: As I pointed out, the tax the member refers to is part of a tax package that means bigger Government spending financed by higher taxes and more debt. That will be bad for the New Zealand economy. I accept some of the criticism that the previous Government led a consumption boom, fuelled by excessive debt. We have grappled with that over the last couple of years. We have not yet succeeded in turning it round, but we are determined to do so.

Hon David Parker: Given that a very high proportion of New Zealand’s international debt has been borrowed to fund mortgages for property speculation, would it not be sensible to close the capital gains loophole that distorts investment towards property, to the detriment of the export sector, so that we can start getting that current account deficit under control?

Hon BILL ENGLISH: Two points: if the member really believed that, he would have done it when he was in Government. He had 9 years and he did not do it. Secondly, the measures the Government has taken to increase the effective tax on property are collecting somewhere between $800 million and a billion dollars this year. That is about 6 or 7 years ahead of when any kind of capital gains tax would collect that sort of revenue from the property sector. So the measures the Government has taken are much more effective than what the member proposes.

Question No. 7 to Minister

PHIL TWYFORD (Labour) : I seek leave to table this photograph, which shows the Hon Annette King—

Mr SPEAKER: What is the source of this document?

PHIL TWYFORD: It is a photograph of Annette King turning the first sod on the Hobsonville motorway in 2008. It raises the concern that the pipeline of Labour-initiated transport projects is running out.

Mr SPEAKER: The member has made his point. Leave is sought to table that document. Is there any objection? There is objection.

Neighbourhood Policing Teams—Reports

9. PESETA SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Police: Can she provide an update on the Police’s Neighbourhood Policing Team initiative that is focused on reducing crime, crashes, and disorder in priority neighbourhoods?

Hon JUDITH COLLINS (Minister of Police) : Yes. I am pleased to report that following the successful deployment of neighbourhood policing teams in Counties-Manukau, a further 18 teams are being trained for a nationwide roll-out of the initiative. Neighbourhood policing teams work in priority communities for 3 to 5 years alongside other Government agencies and partners to solve the problems of that neighbourhood. By the end of the year 30 teams will be working across priority communities in New Zealand to reduce crime, road accidents, and disorder by proactively focusing on prevention and demand reduction.

Peseta Sam Lotu-Iiga: Why have police adopted this new approach and what has been the community’s reaction to the teams in Counties-Manukau?

Hon JUDITH COLLINS: The neighbourhood policing initiative is one of a range of common-sense initiatives that form the Policing Excellence programme. This programme aims to put resources where they are most needed, respond better to victims, and increase the focus on preventing crime and road accidents. Six neighbourhood policing teams were first deployed in Counties-Manukau in August last year. There are now 12 teams working across the district. The local reaction has been very positive. The communities have welcomed the opportunity to work with police to take ownership of the issues on their own patch.

Earthquakes, Royal Commission—Legal Representation for Victims’ Families

10. Hon CLAYTON COSGROVE (Labour—Waimakariri) to the Attorney-General: Does he stand by his statement in response to Oral Question No. 8 last Wednesday regarding legal representation for earthquake victims’ families that “the better analogy here is not with Pike River; it is with the Victorian royal commission, in which counsel assisting the commission liaised with families in order to assist those families through that particular process”?

Hon CHRISTOPHER FINLAYSON (Attorney-General) : Yes.

Hon Clayton Cosgrove: How is the Victorian royal commission a better analogy, when a state-backed organisation called Bushfire Legal Help was set up to, among other things, “promote direct participation of people affected by the bushfires in the 2009 Victorian Bushfires Royal Commission”?

Hon CHRISTOPHER FINLAYSON: Bushfire Legal Help was a consortium of lawyers. It was formed a couple of days after the disaster in Victoria, and its aim was to provide a wide range of free legal services to bushfire victims in their communities. Those involved in this organisation were Victoria Legal Aid, the Public Interest Law Clearing House, the Victorian Bar—

Hon Clayton Cosgrove: State-funded.

Hon CHRISTOPHER FINLAYSON: —the Victorian Bar is not state-funded, at all—the Victoria Law Foundation, the Law Institute of Victoria, and the Federation of Community Legal Centres. It was a largely unfunded partnership that was primarily resourced by its members. I think what the member is referring to is the assistance provided to the community law centres by the federal Attorney-General’s office. It was a limited sum. It was provided shortly after, or in the very initial stages of, the Bushfire Legal Help’s work.

Hon Clayton Cosgrove: Before refusing to provide independent legal assistance to victims’ families, was he aware that the Prime Minister had personally assured quake families, in the days after the February earthquake, that the Government would do everything it could to assist those families; and upon the families’ first request would he acknowledge that the Government refused any support?

Hon CHRISTOPHER FINLAYSON: I am certainly aware of what the Prime Minister said, and I think it is unfair to say that there is a refusal. The royal commission has itself met with these families, as I told the member last week. There is a families’ liaison person, and counsel assisting is providing very useful help to these families in their plight.

Hon Clayton Cosgrove: When his Cabinet colleague the Hon Gerry Brownlee provided information to Cabinet—of which this Minister is a member—regarding the necessity of paying, among others, Jenny Shipley more than double the standard rate to sit on the Canterbury Earthquake Recovery Authority review panel, does he regard that information that he received as entirely accurate, and does he consider that this reflects badly on the Government, which at the same time is refusing to provide independent legal representation, requested by victims’ families, to those victims’ families?

Hon CHRISTOPHER FINLAYSON: Yes, I am aware of that information. I have no reason to doubt the accuracy of that statement, but I do emphasise to the honourable member that very substantial assistance is being provided to the families. This Government is determined to help these people, and through the royal commission very good assistance is being provided. I would hope he would not unduly politicise this very important issue.

Transport Funding, Auckland—Role of Public and Council in Decision Making

11. GARETH HUGHES (Green) to the Minister of Transport: Does he stand by his statement that “the public will have a say on transport matters” and will he allow the Auckland Council to make its own transport funding decisions?

Hon STEVEN JOYCE (Minister of Transport) : In answer to the first part, yes, and in answer to the second part, yes, to the extent that they involve council funding streams paid for by ratepayers. There is, of course, an enduring notion that central government is responsible for taxation and taxpayer assets, and that local government is responsible for rates income and ratepayer assets. Therefore, it is understandable that central government might have a view, especially when the proposition is to add new taxes that could be a significant drag on economic growth.

Gareth Hughes: Given that the Government has insufficient funding for projects like the central business district rail loop under the Government’s own public transport infrastructure activity class under its Government policy statement, does he support the Auckland Council investigating alternative funding arrangements for transport projects?

Hon STEVEN JOYCE: I disagree with the first part of the premise of that member’s question. The reality is that the Government has taken a decision that if there are rail infrastructure projects to be funded—and we are, of course, currently funding very, very significant rail infrastructure projects; the greatest investment since about the mid-1970s—then we will make the decision to do those directly from the consolidated account. We, of course, do support the Auckland Council looking for funding streams, but, again, I think we have to look at that in the context of my primary answer, which was about the distinction between central government taxation and local government rates-generating powers.

Gareth Hughes: Given that the Minister has already ruled out a regional fuel tax, does he agree with Government papers released under the Official Information Act that state it would make sense for the Auckland Council to consider new and innovative approaches to funding and financing infrastructure, including congestion charges?

Hon STEVEN JOYCE: I think the member will find that that was actually released on a website, rather than under the Official Information Act. There are a number of ways that local government could, for example, consider ways of raising revenue if it did so. There are of course rates, targeted rates, income from its various assets, balance sheet development contributions, borrowing, public-private partnerships, and parking charges. All of those things are within the purview of a local council.

Gareth Hughes: Is it smart to be spending $19.3 billion on State highways when we know that traffic on our roads is falling, petrol over the long term is going up, and rail patronage in Auckland has grown by more than 20 percent in the last year?

Hon STEVEN JOYCE: I think that the member probably inadvertently provided some of the perils of working in percentages, because even though the rail patronage is growing, it is off a very, very low base, as the member knows. About 1.5 percent of travel in Auckland is by rail, so, yes, a 20 percent increase would take it, by my calculations, to maybe 1.8 percent, versus about 80 or 90 percent currently on the roads. So I think he has to be very careful with percentages, and I suggest he might take that approach.

Hon Shane Jones: How does the Minister think that remedying transport woes in Auckland will be advanced by him antagonising and seeking to publicly daily humiliate the Mayor of Auckland, Len Brown?

Hon STEVEN JOYCE: I think it is a bit rich coming from the member, but I am certainly not in the process of seeking to humiliate the Mayor of Auckland. Can I point out again that it is important we approach all of these projects with a certain amount of logic and detachment, because the project that both members are talking about currently has a benefit-cost ratio of about 0.3. That is the problem with the issue, which they should take to addressing before they address the funding options. In terms of the Pūhoi to Wellsford road, seeing that a member asked, it currently has a benefit-cost ratio of about 1 to 1.3.

Gareth Hughes: Why does he continue to act as if he knows what is best for Auckland, given that yet another New Zealand Herald DigiPoll out last month found that the central business district rail link had more support than his “Holiday Highway”, from both Aucklanders and non-Aucklanders?

Hon STEVEN JOYCE: I would not, of course, presume to act on behalf of all Aucklanders, because I think that is quite difficult to do, but being an Aucklander myself, I am a little bit aware of some of the issues and challenges faced there. But, again, I think it is important that the member focus on actually establishing which projects will achieve real economic gains in Auckland. The best and the most independent analysis currently of the central business district rail loop suggests that it would take only about 1,500 to 2,000 cars off the road a day. I think that would be a very small return for about $2.3 billion investment. That is probably the sort of work that the member needs to address if he seeks to promote this project.

Gareth Hughes: Why does the Minister continue to show this Parliament only one side of the story, and deny the findings of the actually independent review commissioned by Auckland Council, which was reviewed by PricewaterhouseCoopers, Parsons Brinckerhoff, John Bolland Consulting, M.E Market Economics, Beca Group, GHD, Ascari, AECOM, and the University of California Transportation Center, at Berkeley, and how many international reviewers reviewed the Government’s central business district rail link report?

Hon STEVEN JOYCE: Well, some of those consultants are, of course, known public transport advocates, and others are not.

Hon Member: Beca!

Hon STEVEN JOYCE: By the way, Beca’s stuff was actually a policy case as to how it could possibly improve the business case for that project. I think the member, unless he is suggesting something else, would recognise that both the Ministry of Transport and Treasury are reasonably dispassionate observers of this stuff. If members are saying that the Public Service is biased, then they should probably get up and say so.

Gareth Hughes: I raise a point of order Mr Speaker. I acknowledge that it was a very long question, but the rub of the question was whether anyone reviewed the Government’s report.

Mr SPEAKER: Well, if he had just asked that question, he might have been able to get the answer to that, but, as the member acknowledges, there was a lot more stuff in the question.

Gareth Hughes: Why does the Minister continue to be the roadblock to Auckland’s smart-transport aspirations, and when will he heed the advice of the New Zealand Herald editorial to “Mind your own business on rail loop, Mr Joyce”?

Hon STEVEN JOYCE: Well, I respectfully observe that the Minister of Transport probably does have an interest in Auckland transport—that is a weird concept but possibly it is true. Can I also say that it is very, very important that when one uses the term “smart transport”, I say to Mr Hughes, one must come up with a better answer than a 30c in the dollar return on a project. That is not smart transport; that is pouring money down a hole.

Early Childhood Education—Playcentre Funding

12. SUE MORONEY (Labour) to the Prime Minister: What changed between Wednesday last week when his Minister of Education refused to rule out funding cuts to Playcentre and the next day when he did rule out cuts?

Rt Hon JOHN KEY (Prime Minister) : I do not agree with the member’s assertion. Last week the Minister of Education reiterated that this Government values parent-led services like Playcentre. The Government has put $1.4 billion into early childhood education, which is the most any Government has ever spent on early childhood education. It has expanded the 20 free hours policy to include Playcentre. It has made sure that the regulations that guide early childhood services are amended, and playcentres are getting over $14 million in funding this year.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a very direct question—and had been properly authenticated with you, Mr Speaker, through your office—as to whether the Minister had to refuse to rule out cuts. My question to you is whether the Prime Minister should answer the question about what had changed between when that happened in the House on Wednesday, and Thursday when he did rule out cuts.

Mr SPEAKER: I think the member made the pertinent point at the last moment—that is, the question asked what changed between Wednesday last week, etc. The Prime Minister said that nothing changed. That is his answer to that question. He then went on to explain why he has that view, but that was an answer. The question asked what changed and the Prime Minister said that nothing changed.

Sue Moroney: I raise a point of order, Mr Speaker. During the question that was asked in the House on Wednesday last week, I sought your interpretation of the Minister’s answer, and your interpretation was that she was, in fact, refusing to rule out funding cuts to Playcentre.

Mr SPEAKER: The relevant issue, though, is that the question asked what changed. That is what the question actually asked. The rest of the question identifies what that change is in relation to, and the Prime Minister in his wisdom has argued that nothing changed. I cannot dispute the Prime Minister’s answer in that regard.

Sue Moroney: Why did it take him so long to rule out proposed funding cuts for Playcentre, given that the Labour leader, Phil Goff, called on the Government to rule them out as early as 19 July?

Rt Hon JOHN KEY: This will come as a shock to the member, but I do not take my riding instructions from Phil Goff. Secondly, the member asked an interesting question: “What changed between Wednesday and Thursday?”. I take just a moment to read out what the Minister said on Wednesday: “while the taskforce recommended a change in the funding system, we have no intention of doing anything that will disadvantage the parent-led sector.” That was said on Wednesday last week.

Sue Moroney: Will he now rule out funding cuts proposed by the task force to the 20 free hours policy for early childhood education, which will cost thousands of families an extra $50 per child per week if implemented? Will he rule that out?

Rt Hon JOHN KEY: The Government’s position is that it will be maintaining the 20 free hours policy.

Sue Moroney: I raise a point of order, Mr Speaker. The question that I asked was specific: whether he will rule out funding cuts proposed by the task force to the 20 free hours policy for early childhood education. I did not hear an answer as to whether he was ruling out the funding cuts proposed by the task force to the 20 free hours policy for early childhood education.

Mr SPEAKER: The Prime Minister’s answer was that the Government would be maintaining the 20 hours. The member does have a further supplementary question to pursue that particular issue.

Sue Moroney: Does he stand by the answer that he gave to the last question, that he is committing to keeping the same subsidies for 20 free hours’ early childhood education and the same fee controls in place for 20 free hours’ early childhood education?

Rt Hon JOHN KEY: No to the last bit.

Estimates Debate

In Committee

  • Debate resumed from 4 August on the Appropriation (2011/12 Estimates) Bill.

Vote Environment (continued)

LOUISE UPSTON (National—Taupō) : The environment estimates include two key projects, the first of which is the Government’s Resource Management Act reform, and the second is the creation of the Environmental Protection Authority. Both enhance geothermal developments, which of course benefit the Taupō region.

One of the initiatives that has been opened this year by the Acting Minister of Energy and Resources, Hekia Parata, is the Clean Energy Centre, which has been established to accelerate the adoption of clean-energy solutions by industry, communities, businesses, and households in New Zealand. The Clean Energy Centre is a model of energy efficiency and green architecture. The Clean Energy Centre is the perfect example of using environmental opportunities, where we are enhancing—

The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the member. I ask members to give consideration to the speaker. It is very unsettling when there is so much background noise. If one wants to speak, that is what the lobbies are for.

LOUISE UPSTON: The Clean Energy Centre is the opportunity to balance environmental protection and the growth of the economy.

If we look at geothermal energy in the Bay of Plenty and the wider Waikato region, we see that geothermal energy is one of our main job opportunities and growth opportunities. With last year’s opening of Ngā Awa Purua, New Zealand’s largest geothermal power station, approximately 14 percent of New Zealand’s electricity supply is now coming from geothermal sources, and this is yet another example of initiatives that have come out of the estimates for Vote Environment.

Another initiative that has had a significant impact in the Taupō electorate is, of course, the Fresh Start for Fresh Water Clean-up Fund. This is a significant investment of $264.8 million in the clean-up of waterways across our country. This is a significant issue, and if I look at the recent survey of constituents in my electorate, I see that the environmental issue that concerns them the most is water quality. So this is yet another example of the work done by Minister Nick Smith in putting our money where our mouth is in terms of the significant issues that affect our environment.

The Fresh Start for Fresh Water Clean-up Fund was one of the initiatives that came out of the recent Report of the Land and Water Forum: A Fresh Start for Freshwater, on which there were 58 representatives of water stakeholders. This really was a first move in collaboration. A significant effort was made by the many stakeholder organisations, with a significant number of public meetings up and down the country—18, in fact—endorsing the work that the Land and Water Forum did.

We recognise that if New Zealand is to go forward, both in terms of our economy and in terms of growing our visitor industry, one of the key things that must attract visitors is our clean water. That is why it is important that this Government continues to invest in significant clean-up projects of lakes such as Lake Taupō, and of the Waikato River.

Hon Dr NICK SMITH (Minister for the Environment) : I am pleased to speak on Vote Environment. I find it somewhat extraordinary that the only members taking calls are Government members, which I think is a real endorsement of how good a shape environmental policy is progressing in. Let me take a couple of areas where this Government is making real inroads.

The first of those is in respect of fresh water. I think it is broadly acknowledged that New Zealand needs to take a significant step up in the way in which we manage New Zealand’s freshwater resource, a resource with which New Zealand is very richly blessed. We are doing three particular things in the area of freshwater management. The first is that we are implementing the new National Policy Statement on Freshwater Management that came into effect on 1 July. It is the third national policy statement under the Resource Management Act that we have done in the last year, and I remind members of the history, which is that only two national policy statements were done under the Resource Management Act in the previous 19 years. We have done three in the last year; previously, two were done in 19 years.

The fact is that we need to make an investment in freshwater bodies around New Zealand in order to clean them up. We have very important work occurring with regard to the Rotorua lakes, Taupō, and the Waikato, and there are other freshwater bodies on which we need to take an initiative. This Budget provides for an additional $15 million, bringing the Government’s total investment in freshwater clean-ups to $265 million. To put it very squarely in terms of the level of importance that this Government gives to fresh water, we are spending five times as much on freshwater clean-up programmes as the previous Government did—five times as much.

Then we have the very important collaborative work occurring with the Land and Water Forum. The Government needs to do a big piece of policy work over the next 12 months to make sure that we have the full framework that is needed to ensure we better manage our fresh water.

I will also talk about clean air, which also goes to the core of New Zealand’s “clean, green” brand. Last week I was delighted to release the results showing that New Zealand’s air, in terms of particulate pollution, is at its cleanest since records began. For the last 10 years we have been monitoring the level of particulate pollution, and it is at its best level ever with the new national environmental standards that we have to meet by 2016 and 2020. The very important issue in that regard is that we must invest in the practical measures that will clean up our air. This Budget provides funding so that over the 3 years of this term in office, we will have spent $26 million on the practical work needed to convert households to cleaner heating. That is 12 times as much as was spent in the previous term of Parliament. This is why we are doing it and why it is important: the health advice is that 1,100 New Zealanders die prematurely each year as a consequence of air pollution. We need to get the pollution level down. The combination of the practical programme to convert houses to clean heating, toughening the standards on vehicles, and improving fuel standards is making a material difference.

I am confident that with the measures in this Budget and the announcements that I made last week about reducing the compliance costs of running two different programmes in Vote Energy and Vote Environment, we will be able to convert another 1,250 homes over and above those I have already spoken of to clean heating. Again, that will help to make sure we get that progress in meeting those standards by 2016 and 2020.

Important initiatives on waste and contaminated sites are in this vote. The policy work associated with the Environmental Protection Authority and with getting proper environmental regulation in the exclusive economic zone is all work that we are doing with the Ministry for the Environment to really make sure that New Zealand lives up to the “clean, green” brand with the sort of practical environmental approach that we are taking with our blue-green agenda, which is being consistently advanced on clean water, clean air, contaminated sites, waste, and the like.

  • Vote agreed to.

Vote Corrections

JACQUI DEAN (National—Waitaki) : It is a pleasure to rise to speak about Vote Corrections in this debate, because this Government, under the stewardship of the Minister of Corrections, has made some giant leaps, if you will, in the corrections area. I will talk about a few of those areas.

The first one I will touch on is that the Minister of Corrections, Judith Collins, has made it very plain that, as the Minister, she backs Department of Corrections personnel. When one talks to Department of Corrections officers, one finds that they understand that. They understand it. They work in a particularly difficult employment situation, and to know that Minister Judith Collins has their back means an awful lot to them.

This Government has backed up that approach by overseeing the passage of the Sentencing (Aggravating Factors) Amendment Bill, which is now an Act of Parliament. That legislation has given the Department of Corrections—and the police, but I am talking about Department of Corrections officers now—comfort, if you will, in their difficult employment situation. If they have been assaulted—and they do get assaulted on an unfortunately regular basis, although it is decreasing, I might say—they now have the comfort of knowing that when it comes time for the perpetrator who has been accused of that assault to be sentenced, that aggravating factor will be taken into account by the court. That is the strongest signal possible by this Government and this Minister that this Government backs Department of Corrections officers.

It is interesting to note that there is increased public confidence in the Department of Corrections, is it not? No doubt that increased public confidence is because the Government has shown confidence in the corrections sector. Sixty-one percent of people now think that the department is doing a good job. What do we compare that figure with? We compare it with only 40 percent in June 2008. So in the term of this Government, 61 percent of people now think that the department is doing a good job. By the way, the department is doing a good job.

The Minister has introduced a number of things into our prison system that are having some beneficial results. We are told that drug and alcohol treatment is the single most effective programme that the Department of Corrections is running, and that there are early signs of decreased recidivism by those who have taken part. As well as that, a number of good things are happening. All prisoners, regardless of the length of their sentences, now have access to literacy training and are being given opportunities for trades training and work experience inside prisons. That is proving to be hugely beneficial for our prison population.

I think I need to talk about what is probably one of the single most significant aspects in this debate as far as the Department of Corrections is concerned, and that is that from 1 July this year all New Zealand prisons have been made smoke-free. What are the benefits of that change? Clearly, the benefit to prisoners is that they get the opportunity to break what is perhaps the habit of a lifetime. It is a habit that we all know is bad for health, is dirty, and is expensive. They have been given the opportunity to break that habit, and, more important, prisoners are being given the support they need to break the smoking habit.

Most important—and the Minister of Corrections, Judith Collins, has said this time and time again—making prisoners smoke-free provides protection for Department of Corrections officers. Previously, those officers had to breathe in second-hand smoke, which we know is even more dangerous than smoking directly. They no longer have to tolerate second-hand smoke. It is also known that at least twice a week in a New Zealand prison fires were being lit, putting officers and the prisoners themselves at risk from fire and smoke inhalation. It was a major problem for New Zealand prisons and for Department of Corrections officers, and Minister Judith Collins has dealt with it. Have there been any complaints? No, there have not been. In fact, I think that—

The CHAIRPERSON (Lindsay Tisch): The member’s time has expired.

DAVID CLENDON (Green) : If one was to assign a theme to this Budget, it would be about austerity and about getting the best out of every dollar spent. It would be about cutting Government spending to the greatest extent possible. That makes it all the more extraordinary that this Government is proposing to spend over $1 billion—in fact, over $1.1 billion—on what is effectively a failed model for corrections. A decade ago the Government’s vote on corrections was to the tune of $430 million. It has gone up some 250 percent in one decade, and that sort of increase in what is a flawed, failed mechanism is simply unsustainable. One wonders why we are perpetuating a completely failed mechanism. We are looking at something like $250,000 of capital expenditure for every bed we provide in prisons. We are spending something like $93,000 per year per head on each inmate in our prisons. This is a tragic waste of money and of human potential. It is a failed social experiment.

That, to his great credit, has been recognised by none other than the Minister of Finance, who is on record as calling prisons moral and fiscal failures, and how very right he is. He is rightly concerned not only about the waste of money but also, certainly, about the moral issue of locking up people. There is an absolute commitment to a punitive approach to imprisonment. We are determined, it seems, to punish people—and more of them—by locking them away for longer periods. That is a moral failure, as the Minister of Finance has quite rightly pointed out. The—shall we say—champion of this punitive approach, Mr McVicar of the organisation that I refuse to dignify with the descriptor “sensible”, referred to the Minister of Finance as having capitulated and waved the white flag. In fact, that reference to a moral and fiscal failure was the first show of good common sense that we have seen from the Government. We hope that the Minister of Finance will assert his influence within the Government to get a changed approach.

There have been minor changes. There have been some shifts, but they are very minor. I think some of the improvements are in things like drug and alcohol treatment and literacy programmes. We can probably sheet that home to the co-leader of the Māori Party Pita Sharples, who understands very well that the current “lock more of ’em up for longer” model is a failed mechanism. It is to his credit that he has achieved some small steps. But what is required is an absolute paradigm shift. Of that $1.1 billion, something like $850 million will be spent on simply locking up people in concrete boxes. That is a primitive approach to corrections. It is unacceptable, and we ought to move away from it.

The Wiri Prison, on which construction will begin once the tenders are signed, will have $370 million spent on storing up more trouble for us further down the track. Over 1,000 men will be accommodated in there. We will be putting in people largely for short sentences. They will come out no better off than they were when they went in. There will be no contribution to public safety, or to the well-being of either inmates or society, against which those people have offended. That $370 million represents something like 11 years of current expenditure on drug and alcohol rehabilitation, and it is simply ludicrous to waste that sort of capital on mechanisms that we know will simply fail, at a time when the country and the Government are capital-constrained.

The Department of Corrections itself tells us that something like 83 percent of inmates have some sort of drug and alcohol problem. We know that some 80 percent of offending is in some way linked to alcohol, drug, or substance abuse, and occurs when the offender is under the influence or comes from that sort of a background. Yet something like only 5 percent of sentenced prisoners are obliged to go through drug and alcohol abuse programmes. I do not criticise the judges for that; the programmes are simply not made available. We know that community-based programmes for alcohol and drug abuse treatment are significantly more successful and remarkably less expensive than prison-based activities, yet we continue to spend and to waste money by putting it into corrections centres simply to hold people in cells, rather than seeking to deal with the root problems.

Hon JUDITH COLLINS (Minister of Corrections) : Thank you for the opportunity to speak in this debate in relation to Vote Corrections. I take the opportunity to thank the Law and Order Committee, and the chair, for the courtesy that was displayed to the Department of Corrections in the very long time it had with the committee—as I recall, an hour and a half. It was interesting to hear the speaker who has just resumed his seat, David Clendon, make his comments about the Department of Corrections. I did not notice one question from his party in the transcript of the Law and Committee hearing in relation to the department—not one question to the department from that party. One has to wonder: if the Green members are suddenly so worried about the department and the imprisoning of people who are criminals, then, perhaps, they should have asked at least a question.

Can I also say that I would like to thank the staff of the Department of Corrections for the fantastic work they have done over the last 3 years—in particular, their embracing of what I required from them, which is excellence, accountability, and professionalism. They have come an awfully long way in a very short period of time. The first speaker on this vote, Mrs Dean, referred to the fact that, for instance, we now have no smoking in our prisons, from 1 July. That is a testament to the work of the Department of Corrections staff; a year-long programme of getting people in the prisons to understand that it was simply not acceptable for our staff to have to put up with air conditions that were 12 times worse than those in a normal home of a smoker, because of the fact that they were in a prison. They were the only people in New Zealand who were required to work in a smoke-filled environment, not a smoke-free environment. I would like to thank the people who did give support to the department at that time. They did not do it all alone; they had tremendous support from the Ministry of Health and Quitline. Over 6,000 prisoners are now using nicotine replacement therapy either by way of patches or lozenges, and I would like to thank the partners that the Department of Corrections has worked with in this area.

First off, it is most important that I say that it is the staff who have made the big difference. They needed leadership and they needed to know we had confidence in them, and they have repaid the people of New Zealand in spades. The public confidence in the Department of Corrections has gone up to 63 percent. The best it ever was under the previous Government was 40 percent. It has done a tremendous job. We have removed, for instance, things like razor blades from being stored in the cells of high-security prisoners. I listened to the previous speaker’s comments about the fact that prisons are terrible and they do not make people any better. What is the alternative—to leave them out there? Would people really like recidivist murderers, whom we do have in our high security prisons, left out in the community on home detention?

David Clendon: I raise a point of order, Mr Chairperson. It concerns the previous speaker from the Government, Jacqui Dean, and now the Minister of Corrections. You will correct me if I am wrong, but I understand we are debating Vote Corrections. We are talking about the appropriation for this current financial year. What we are hearing is a great deal of history, what has been done, and some self-congratulatory statements—

The CHAIRPERSON (Lindsay Tisch): I thank the member for his comments. When we are on the estimates, the member is correct. However, members also have some licence to expand. Chairpersons, over the period of the last few hours, have allowed that to take place, and I am continuing in that vein. I know the Minister will come back to the estimates, and she has mentioned what was in the report. She mentioned that at the beginning, and I am sure she will finish her last few minutes on that, as well.

Hon JUDITH COLLINS: Thank you, Mr Chairperson. Obviously, those members do not like to get some answers back, having asked all the questions. But, of course, the questions were asked today, not at the time when they could have got answers directly from the Department of Corrections. I say to that member, who obviously objects, that 1 July is actually part of this financial year, and if he has not worked that one out, then I think he should go back to school or get into one of the numeracy programmes we have at the Department of Corrections.

One of things that is really important in respect of the Department of Corrections is the case management model that it is introducing, which is actually quite different from what was trialled in previous years, which was to have Department of Corrections officers being case managers. The model is trying to address the issues we have of prisoners coming into the prisons and going through all sorts of programmes, with their main concern being what programmes are available to them and not necessarily having a planned approach about what the best route through prison is for them in order to get them into a situation where they come out better than when they came into the corrections system. The new model will be very much based around having trained case managers working with prisoners as they come in, looking to see what prisoners’ issues are. Do they have drug and alcohol addiction problems? Many will have. Can they read and write? After many years in the education system, can they read and write? If not, what can we do about it?

I think it is also important to triage in terms of whether these people are willing to change. I do not believe we should go around with rose-coloured spectacles thinking that every prisoner is simply waiting for someone to love them, care for them, and hug them. Frankly, I think that is a stupid view. It might be true for some, but it is not true for recidivist, violent offenders. However, I think we can change people’s lives, if they want to change, and I am very pleased with the Department of Corrections for the work it has been doing.

A party vote was called for on the question, That Vote Corrections be agreed to.

Ayes 67 New Zealand National 57; ACT New Zealand 5; Māori Party 4; United Future 1.
Noes 53 New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C.
Vote Corrections agreed to.

The CHAIRPERSON (Lindsay Tisch): I remind members that when they are casting votes they cannot be wandering around; they must be behind their desks. I just bring that to the attention of members.

Vote Police

Hon JUDITH COLLINS (Minister of Police) : Thank you for the opportunity, first off, to thank the Law and Order Committee for its courtesy and attendance on the day of the hearing for police. I also take the opportunity to thank the New Zealand Police, both sworn and employee staff, for all of the work they have done over the last year, and that they will do in the next year. I thank them very much for the fact that every day they put their lives on the line for the rest of us, and that every day they take options that many other people would choose not to have to take. I acknowledge very much that they do not have the luxury of being able to stand by and let something happen that might be a crime or somebody being injured; they have to get in and do the right thing. I thank them for it, and I am sure that everybody in this Chamber would join me in that, as well.

The police are rolling out nationwide the Policing Excellence programme, which is focusing very much on crime prevention and neighbourhood policing. It is really important that we make use of these highly trained professionals in the New Zealand Police to, wherever possible, prevent crime rather than be only reactive to it. Of course, we do want them to catch the criminals as well after the event, but best of all, if we can prevent crime, that is really what we are after. We now have more than 300 extra police in the Counties-Manukau Police District, we have another 100 extra police around the rest of the country, and another 200 are to be out on the beat by the end of this year. So that will be fulfilling an election promise of 600 more police across the country by the end of this year. With my colleagues, we have been able to pass laws to give the police greater powers, particularly around gang assets, and to place the onus on offenders to prove where they got their ill-gotten gains. This has been a huge boost to the police, particularly to their morale and confidence, and we have seen them take to the legislation with great vigour. We have also seen great work, between the police and the Customs Service in particular, in relation to methamphetamine busts, and we have seen a lot of that end up with some offenders being in prison for quite a long time—as they should be.

We have also seen—despite all the naysayers when we said we would put extra police out on the streets—an actual reduction in crime. In the last calendar year we have seen a reduction in crime of about 6.7 percent across the country. In some parts of New Zealand we have seen some quite spectacular reductions in crime, and every district in the country has had a reduction when it comes to a per capita basis, although some are much smaller than others. I believe that that is a fantastic result, particularly when so many people have said “Well, there’s been a tough time in the economy. There’s been a recession. Won’t crime go up?” I have always said that it should not, because people do not commit crimes in this country because they do not have money; they commit crimes because they are criminals. It has nothing to do with someone’s poverty status, and if anyone disputes that they should just have a look at some of those failed finance companies, and at some of the things that were going on there. That was not about poverty; that was about greed—and it always is. But we have seen, too, the police working much better with their communities, and that is where the neighbourhood policing teams, which I talked about today in the House in question time, are really coming into their own. We have had six teams in Counties-Manukau, which has made a huge difference, and teams are being rolled out around the country. They will not be in every community; they will be in the target communities with the greatest needs. I think that that is smart policing. We are seeing some really great confidence in the police.

I will also take the opportunity to welcome the new Commissioner of Police, Peter Marshall, who came on board on 3 April this year, and also Deputy Commissioner of Police Mike Bush. They have joined Deputy Commissioner of Police Viv Rickard. They are a really great team who are putting their troops first, who are expecting their troops to really come forward and think about what they are doing, and who are expecting to get the very best out of them. They are also people who will stand up for their troops, and I think that that is important. One of the things that we as a Parliament can do is to support the police in what they do. I think that many of us who talk to the victims of crime, and who understand what it is like to be on the receiving end of burglaries, of car thefts, or of assaults, understand what it is like for people who are victims of crime. I believe that the police’s new focus on victims will pay dividends, as well.

I have a lot of comments coming into my office about the New Zealand Police, and the vast majority of them are fantastic. I am very proud of the police, and I congratulate them on what they are about to do for the next year.

Dr CAM CALDER (National) : It is a very great pleasure to take a call on the appropriations for Vote Police. In 2008 I was campaigning in the vibrant and diverse area of Manurewa, and it was very clear to me, in a space of a few minutes, that some people living in that community were living in a state of insecurity. I could tell that by the fact they had three locks on the door, and on the screen door in front of that there were another couple of locks.

This Government has listened. We believe that the fundamental duty we owe as a Government to our people is to allow them to live in a state of safety. Our thrust is making our community safe, and I congratulate the Minister on doing it so ably. It has certainly worked in Manurewa-Manukau, where I have the privilege of being based and of having my office. We have seen a national reduction in crime, as the Minister has alluded to, but in Counties-Manukau it is even greater. It is over 10 percent. There is an over-10-percent reduction in crime, in an area where at the time when I was walking the streets, knocking on doors, and campaigning, sadly and tragically five people lost their lives through crime. Fortuitously, fortunately, and because of the good work that has been done, that is no longer the case.

We are addressing the drivers of crime with a range of cross-agency initiatives addressing behavioural issues in young people, providing educational pathways from school into work, and looking to do work on reducing alcohol-related crime, which has certainly been a problem across our country. But we also have to give credit for the excellent work that the police are doing, and they are doing it knowing they have the full support of this Government. That is something that has come out to me time and time again. We have a very close relationship with the police in Manurewa. I see them on a regular basis, and they tell me that they feel 100 percent supported by the Minister of Police and by this Government.

What are some of the things that we have been doing and the police have been doing? I want to add to the Minister’s congratulations to Peter Marshall. Peter Marshall did a wonderful job as leader of RAMSI, the Regional Assistance Mission Solomon Islands. The leader of the Solomon Islands told me, when I was up there visiting as part of the Pacific Mission, that they would not have had an election without bloodshed had it not been for the good work of the Regional Assistance Mission to the Solomon Islands and Peter Marshall’s leadership.

We are very, very fortunate to have Deputy Commissioner of Police Mike Bush at Police National Headquarters now, because Mike has done some superb work in the Counties-Manukau area. A lot of his work, of course, will be rolled out nationally.

I took the opportunity to go out in an incident car quite recently. I was impressed by the professionalism, the empathy, and the effectiveness of the team. The police have a flexible rostering system. They are working more smartly. They have a flexible rostering system so that they can deploy more police at times when there is greater demand. Of course I chose a Friday night, which is regarded as quite a good time to be out, and sure enough I saw the police doing a wonderful job.

One of the first things I saw the police do was deploy that wonderful new tool, which has been deployed over 4,100 times, the police safety order. We were called to a domestic residence. There was a gentleman in a stuporous sleep in a car on the front lawn. There was a concerned wife and child inside, and some family members. I was very impressed with the professional way that the constables dealt with the issue. They issued a police safety order so that the gentleman was taken away. At a stroke the family was protected from any possible intimidation, violence, or harassment, and that will last for the length of time the police wrote on the police safety order. It ensures safety for that period of time, which will allow time for things to calm down. That action will not result in a conviction, but the police safety order is a very clever and elegant tool to address a situation that could have been fraught and dangerous at the time.

The other thing I would like to tease out a little bit is the neighbourhood policing teams. I concur with the Minister of Police that it is a superb intervention, and we have benefited hugely in Manurewa and Manukau from the deployment of six teams. There are another six teams coming, so we will have 12 teams in total, as well as the 18 further teams rolled out across the country, so that is 30 teams in all. I went out with one in my community.

  • Vote agreed to.

Vote Serious Fraud agreed to.

Vote Veterans’ Affairs—Defence Force agreed to.

Vote Veterans’ Affairs—Social Development agreed to.

Vote Education

SUE MORONEY (Labour) : What a difference a day makes when it comes to Vote Education.

Hon Member: There’s a song in there.

SUE MORONEY: There is a song in that, I think, but I will not sing. Instead what I am going to do is recite exactly what happened last week in this House when the Minister of Education refused, after I had put the question to her on two occasions, to rule out funding cuts to Playcentre that were being proposed by the task force she appointed. That was on Wednesday of last week. By Thursday she was issuing a press statement ruling out those funding cuts. I am delighted with that result, because playcentre parents up and down the land were horrified that the Government was even prepared to contemplate the prospect of funding cuts of up to 70 percent for playcentre children. It was the pressure put on by those playcentre families, and also by Phil Goff, the Labour leader, and by me during question time that turned the Government round on that one and had it backing down within a matter of 24 hours. What that means is that question time does work. Question time does work to hold the Government to account in this House, and it can make a difference. I was very, very pleased indeed to see that.

But, sadly, that is not the end of the story. The Government-appointed Taskforce on Early Childhood Education is proposing further funding cuts to New Zealand families. Today I sought to get the Prime Minister to rule out those funding cuts, and he would not do that. The funding cuts proposed, I say to those interested and listening to this debate, are the cuts to 20 hours’ early childhood education. Funding cuts are being proposed by that early childhood education task force to the subsidy for that. If those funding cuts were to be implemented, that would cost New Zealand families $50 more per child per week. We already know that this Government has caused fees to be increased in the early childhood education sector, with its funding cuts from last year’s Budget. Although the Government has tried really hard to make it look like it has restored those funding cuts, in fact it clearly has not. What we were able to ascertain through the estimates process was these facts: the centres that lost funding in 2010 lost 13 percent of their funding when the Government cut funding for 100 percent - qualified staff to the sector. They lost 13 percent in funding in the previous round. In the current Budget round, what did they get back? Their funding rate increased by, wait for it, 1.1 percent. They lost 13 percent and the Government has returned 1.1 percent to them, and they are supposed to feel grateful. They are supposed to be fooled into thinking that the Government has closed the funding gap it created in the previous Budget, and that is absolutely not correct.

Not only has the Government not closed the funding gap, but it has not even given centres enough to break even. We all know that in the last year CPI costs went up by 5.3 percent—5.3 percent. Here is the Minister of Education thinking that the early childhood education sector and the families served by that sector should feel grateful because a 1.1 percent increase is going into those funding rates. Well, it will not make ends meet. Even by the Minister’s own reckoning, by her own argument at the estimates hearing before the Education and Science Committee, she said that inflation would be going up 2.92 percent. So inflation is going up 2.92 percent for all of those early childhood education services, yet there is a funding rate increase of just 1.1 percent. That is without even adding more children into the mix. It is not hard to see that the funding cuts have not been fixed up for early childhood education. The funding cuts have not been fixed up. Early childhood education services are going to struggle to make ends meet. When that happens we know that families end up paying more. Families end up paying more, just like they have over the last 12 months. Statistics New Zealand told us that the costs for early childhood education have already gone up by 12 percent. They have already gone up by 12 percent in the last 12 months. This Government is underfunding early childhood education. We have established that there is not enough funding going into early childhood education even just to make ends meet. The Minister came to that conclusion herself during the estimates hearing. But that is not the end of the story. We know that further funding cuts are being proposed by the early childhood education task force. We are yet to hear a commitment from that Government that it will rule out those huge funding cuts—apart from those for playcentres.

I want people to understand the numbers we are talking about. The number of people who use centre-based early childhood education is 140,000 children and their families. That is the number of people to whom the Prime Minister refused today to give any comfort about what their costs might look like for 20 hours’ early childhood education in the future. In fact, I think he was so flustered as he tried to shimmy his way out of the question that he reverted to calling it “20 hours free”. [Interruption] He did. He reverted to calling it “20 hours free”, even though that phrase—the “free” part—has been banned by the Minister. Yet here was the Prime Minister standing up today, using the word “free”, which was banned by the Minister, because he got so flustered as he tried to shimmy his way through giving no commitment to New Zealand families about what their costs for early childhood education will be in the future.

I also want to talk about the compulsory sector in education, because it is also facing a funding squeeze as a result of this Government’s underfunding of Vote Education in this year’s Budget. Although the primary sector has a forecasted roll growth of 5 percent, there is just a 4.2 percent funding increase for it. The funding that has gone into the sector does not meet even the predicted roll growth, let alone, on top of the roll growth, the inflation rate, which the Minister herself accepts is true. She talked about an inflation rate of 2.92 percent. That is what she said, but she did not give enough money to the sector to pay for that inflation and to pay for the roll growth that her own ministry predicts for that sector. So, again, we know where that is going to fall. When schools’ budgets get squeezed, then they will look to the parents to try to make up for that shortfall.

Moana Mackey: I bet she called it an increase, though.

SUE MORONEY: Well, she did actually call it an increase. But, look, the smoke and mirrors are not working any more, because what New Zealand parents know is that costs in education are going up and up for them, and they want to know the reason why. I can tell them the reason why: it is because the Government’s contribution to education is reducing. The contribution is not keeping up with inflation, it is not keeping up with roll growth, and that is why it is costing New Zealand families more and more just to send their children to our “free” education system in primary and secondary schools.

Another area where money is being spent in Vote Education this year is to implement the shambles that is national standards—$30 million just this year alone and $66 million over the next 4 years is being put into the shambles that is national standards. We know that national standards are not national, because about 400 schools have refused, despite the Minister’s bullying, to implement them. So they are not nationwide. The Minister also told us that, at best, 80 percent of assessments will be similar to each other, so they are not standard. So if they are not national and they are not standard, what is the point? None the less, $66 million is going down the tubes in a system that the educators—the people who know about this—do not believe in. We have about 400 schools refusing to implement national standards. They know that one-size-fits-all education does not work. How do we know this? We can look overseas and see the failure of education systems that have used exactly this approach. We know we outperform them already, so why would we take up that failed approach? Labour certainly understands that every child is unique and every child has their own ways of learning. Putting them into little boxes called national standards, a policy that was developed by a Minister who I do not think has spent a day in a classroom, is not the way to have our children educated.

ALLAN PEACHEY (National—Tāmaki) : Goodness gracious me, education is one of the keystone policies of this Government, and that was the best that Labour could offer in return! If ever a speech in this Chamber shattered forever the self-delusion that Labour members operate under that, somehow, it is the party of education, that speech from Sue Moroney did it. That speech, combined with the estimates, the Budget of 2011, put together with the Budgets of 2010 and 2009, should end once and for all the self-delusion of members opposite that, somehow, Labour is the party of education. It is not.

There is one figure in this Budget that must not be overlooked—$12.2 billion. That is a record. It is a massive $4.4 billion increase in investment since the Government took office. I will repeat those figures—

Sue Moroney: Is it going to cover inflation and is it going to cover roll growth?

ALLAN PEACHEY: I tell Ms Moroney to repeat after me: $12.2 billion. That is an increase of $4.4 billion.

Let us take a moment to examine to its logical conclusion what the Opposition spokesperson on education said about early childhood education. What, in effect, the member said—speaking directly to what Labour would claim to be its natural constituency, such as the people who live in the Glen Innes suburb of the Tāmaki electorate, which I represent in this Chamber—was that Labour is opposed to the efforts this Government is making to extend the early childhood education provision into those communities. Yet that is a priority of this Government. Why Labour and its spokesperson have not been able to get their heads around the logical extension of what they are saying is beyond me.

I invite Miss Moroney, when the Labour Party finally finds a candidate for Tāmaki, to go out with that person, knock on a few doors around Glen Innes, and explain to the good people there why Labour does not support the actions of this Government in this Budget and these estimates to extend the early childhood education provision into that community. The natural consequence of the arguments that the spokesperson opposite is putting up is to deny that expansion. I invite that member to go out with whoever the Labour Party candidate is, knock on those doors, and counter what I have been telling them about the expansion of early childhood education in their community.

I will now take a few moments to refer to the schooling sector and, in particular, to some of the innovations and the expansion of programmes that are occurring. An extra $621 million is being invested over the next 4 years. There is $118.1 million for school operational funding and $77.9 million for roll growth—and remember that this is at a time of fiscal constraint. Such is the importance that this Government places on education that spending not only is being maintained but is being increased. This includes $66.5 million over 4 years for Youth Guarantee and five new trades academies, in addition to the eight existing ones, with a further four academies to open next year, and 4,000 places by 2014.

One might be forgiven for reflecting on the neglect of trade education when Labour was in Government.

CATHERINE DELAHUNTY (Green) : Tēnā koutou e te Wharenui. We face an extraordinary spectacle in terms of education at the moment. It is depressing to have looked at the Budget estimates and heard the speeches saying that the Government absolutely prioritises education, when, in fact, the Government has declared war on the education sector.

There is a whakataukī that is commonly used, and it has been used in an education document that I have here: “Nāu te rourou, nāku te rourou ka ora ai te manuwhiri.”—“With your basket and my food basket the well-being of the people is assured.” If we take that and think about our children, we see that there is no well-being in introducing a system of measurement into the compulsory sector and funding it through Vote Education to the tune of $66 million over 3 years when the sector has asked the Government to trial it, when parents are signing petitions against it, and when schools—20 percent of boards of trustees—have not been prepared to put it into their charters.

The Minister, instead of having a debate over the merits of learning, is attacking a sector and declaring war on those academics, boards, teachers, and parents. It is not a positive move for the children of this country to see this waste of resources in this Budget. Will more money be spent in pursuing these people? Will more money be spent on sacking boards and appointing commissioners—400 of them, if we look at the schools that are not prepared to introduce national standards?

It is really important to go back to look at what we are expecting from schools over the next couple of years. What we really need in the education sector is some collaboration, some solidarity, and some respect from the Government. It is not a political game, when we start to label children as “losers” by age 6. That is what is implied by the model that is being resourced. When one talks to teachers, as I do, and parents who have received reports they have been really distressed by, we hear of reports that have labelled their child as a loser. That is not an appropriate way to treat children.

The Green Party has 10 major concerns about national standards, and one of them is about the way in which children are being labelled. Many teachers are lifting children’s achievement—for example, if English is a second language—and although those children may not reach the national standard, they have actually been lifted in their literacy and numeracy.

There is also a complete failure to understand how learning works, because we have cut professional development to the arts, to science, and to anything except the narrow, mechanistic definitions of “literacy” and “numeracy”. We have cut the funding for drama and science teachers, but for many students those areas are the pathway into literacy and numeracy. If we recognised child-centred learning as the fundamental basis of the education system, why would we do that—unless we wanted to create league tables?

That is the failure that has happened in other countries. What we have had in the United States and in the UK is a privatisation of a quality public education system. That is where we will go, if we create league tables. The media would really enjoy that, but it will not help.

One of the concerns is that national standards do not support the diversity of our children, because, guess what, they do not all learn through just one definition of learning. They learn at different rates: some 6-year-olds are ready to read, and some 6-year-olds are not ready to read and are learning in other ways. They are all valuable ways. We know that, because asTTle and the progressive achievement test identified that issue. The tests that exist already are absolutely fine. [Interruption]

I have struck a nerve, because people know that the implementation of national standards, without the support of the education sector, is causing mayhem out there in the sector. This will require a serious attempt by the Government to whitewash the issue in order to get those 400 schools to put it in their charters—and the schools do not want to. A lot of other schools have put it in their charters, but with the most minimal references, because it does not work.

We know that assessing and reporting tools already exist. We know that refusing a trial is always an indication of ideology.

Hon Sir ROGER DOUGLAS (ACT) : My question this afternoon to the Minister of Education is when we are actually going to start tackling the causes of our educational problems that we have in this country and not the symptoms. The fact is that schools fail the bottom 20 percent of pupils. The fact also is that 40 percent of Māori leave school without basic qualifications. The fact also is that we currently spend 50 percent more educating a secondary schoolchild than we did in 2000, yet over the same period more Māori failed National Certificate of Educational Achievement level 3 than they did previously. The result of our educational failure is that New Zealand faces a crisis. The fact is that we have 330,000 New Zealanders on one form of benefit or another—unemployment, sickness, or domestic purposes. The one fundamental characteristic of those 330,000 people who are on a benefit is that they failed, or, to put it better, the education system failed them. So 90 percent of people who end up unemployed or on low wages have that one uniting factor.

Yet that does not need to be the case. We have some exceptional schools in New Zealand where young people achieve, but there are many others where young people do not succeed. I could take members to a large number of them. There are four or five characteristics of those schools that achieve. The first characteristic of schools that achieve, and the most fundamental, is that they have an outstanding principal. If we want New Zealand schools to achieve, then that is where we need to start. If we have to have more immigration to achieve it, we should. The reason that those schools achieve is that that principal will demand, and get, the best out of the teachers. But, more particularly, it is an expectation. There is an expectation that the children will achieve—and they do. Another characteristic of those schools is that when the kids fall behind, the school brings them up to date. I recently visited a Māori total immersion school in Ruatōria, which has 132 pupils, and the expectation of that school was that every child who went through that school would go on to tertiary education—and they do. I tell members they were the smartest-looking kids I have seen around. I started looking at my shirt and wondered whether it came anywhere as close as those ones. We see there are schools where these children can achieve.

A study was done in an Australian school, but it applies here in New Zealand; it is the same sort of thing. In that school 87 percent of its pupils came from homes of beneficiaries, solo mothers, and the like. It was so bad that the equivalent of the education department put in a new headmaster, and basically said it would leave it to him. In 5 years that principal took that school from scoring 20 percent below the average in Australia to scoring 20 percent above. The point there was that that principal ensured that he got the most out of the teachers, and there was an overall expectation that the children at that school would succeed. They went from 20 percent below the average level of scoring, which they do in Australia, to 20 percent above. That school was well ahead of many private schools, and the fundamental reason was about expectation, and about ensuring that when a child actually fell behind, they were brought up to date.

We know what to do, and it is a disgrace that we allow in this country a situation where 20 percent of young people come out of our school bound for the scrap heap. Over 20 percent of youth are unemployed. Then probably another 20 percent barely make it, and are likely to work on the minimum wage. We can do something about that, because we know what to do. It starts by having an exceptional principal, and that is where we have to go. When I visited schools recently, what were the requests that principals made to me? The first was that they would like to train their own teachers. They would like to be able to employ and train their own teachers on the job, and then send them off for the theoretical work they might require. I think this country simply cannot afford to continue with a situation where 20 percent of kids come out of school unable to read or do simple maths. We know that these kids can learn, and it is a tragedy that we do not do something about it. There is clear evidence of a number of New Zealand decile 1 and 2 schools in which the kids are achieving, yet at others they are not. It seems to me that we know what to do; let us get on with the job and do it.

RAHUI KATENE (Māori Party—Te Tai Tonga) : I am really pleased to be able to stand here on behalf of the Māori Party today to address the estimates for Vote Education, and, in particular, to address the section from the report of the Education and Science Committee regarding charters. That report advises that about two-thirds of primary and intermediate schools have submitted valid charters, and that the Secretary for Education has written to schools that have not submitted charters, requiring the information that must be legally provided under section 144A of the Education Act 1989.

At the risk of reverting to legalese, I highlight the significance of charters for every school and, indeed, every community, and our nation as a whole. The charter is the legal instrument between a board and the Minister that outlines how that school will give effect to the National Education Guidelines, and all that falls within them.

This includes the New Zealand curriculum, which is what I will refer to in my kōrero today. The charter is a key report for every community, which outlines the directions schools want to take and the plans they have to get there. It is critical for lifting performance, and provides a plan that enables each student to achieve.

Well, actually, that is how it is meant to work in theory, but in practice what happens makes for very depressing reading. I am particularly saddened by a recent Education Review Office report, which tells us that the performance of far too many schools across key principles of the curriculum is less than it could be. That report, Directions for Learning: The New Zealand Curriculum Principles, and Teaching as Inquiry, reveals that the least-evident principles were the Treaty of Waitangi, cultural diversity, coherence, and future focus.

I will read two key lines from that report. “It would be useful for schools to gain a more comprehensive view of the implications of the Treaty of Waitangi for school policy and practice. It would also be useful for schools to develop their understanding about the nature of the Treaty of Waitangi and cultural diversity principles,”.

Last Tuesday I released a member’s bill to ensure that any person signing up to any oath set out in statute may elect to state that they will uphold the Treaty of Waitangi. The rationale behind the bill is to recognise that the Treaty of Waitangi is New Zealand’s founding document, and that the Government is committed to fulfil its obligations as a Treaty partner. Every school has an opportunity to lift up to the promise of the Treaty, to make Treaty understanding and cultural awareness come alive in their classrooms.

I highlight the significance, also, of the relationship to cultural competency. Learning to understand and value one’s own culture base is an important step towards being able to respect and value other people’s. That is why the Māori Party has been promoting, in every sector we can, the importance of cultural diversity, associated with factors of quality and excellence.

The Education Review Office report tells us that “Where there was evidence that schools were thinking about and incorporating the principle of cultural diversity into their curriculum, students had opportunities to celebrate some of their cultural practices and to share knowledge of these with other students. By contrast, where this principle was not highly evident, there was little acknowledgement of students’ cultural heritage in school programmes and in the [school] environment.” Perhaps the most sobering statement in the whole report is that “A more inclusive approach to curriculum management would make learning more relevant for students from diverse cultural backgrounds.”

This is exactly why we need to keep a vigilant overview on schools submitting charters, so that we can see exactly how much progress is being achieved towards making learning relevant and meaningful to all students. Because Pākehā culture is so strong and secure, it can sometimes be taken for granted. One might ask whether a fish can describe the sea in which it swims. Cultural competency recognises that there are many seas feeding into our global oceans. We must respect the unique cultural framework that each of us brings to the mix, and there is no better place to do that than in our schools. Nō reira, tēnā koutou katoa.

Hon ANNE TOLLEY (Minister of Education) : Budget 2011 was good news for the 750,000 New Zealand school children, and excellent news for all of those thousands of children in early childhood education. I was interested to hear the Green member say that this Government had declared war on education. Well, I stand here as a Minister of Education who is part of a John Key - led Government elected at the end of 2008, and we did declare war. We declared war on poor results for kids in our schools. We said we were fed up with 10 years of standing back and watching while 20 percent of kids failed in our schools. In fact, those kids were failed by our schools. So we have put an extra $4.4 billion into education since this Government was elected. We are spending this year more than any Government has ever spent—$12.2 billion—on education. It is a major plank for this Government.

What does that money actually provide? Well, it was interesting to hear the poor maths from the Opposition over there. They obviously cannot read Budget documents, because we have provided a cost of living increase on top of roll growth. We had that in the estimates. I tried again and again to explain to Opposition members that they were two separate figures. Those figures did not coincide. They were not in the one. But we still have difficulty and we get it here in the House today.

We are putting an extra $550 million into early childhood education. We have increased the spend on early childhood education by 38 percent since we became the Government.

Hon David Carter: That’s an increase.

Hon ANNE TOLLEY: That is an increase. There have not been cuts to early childhood education funding. We have increased the funding. More important, we have increased the number of places. We have targeted 3,500 more places for Māori, Pasifika, and children from poorer backgrounds to get access into early childhood education. They are the ones we want to make sure get those good services. And we have said that 80 percent of teachers must be qualified in our teacher-led services. We have said that we want everyone to have 80 percent, not just a few over here having 100 percent. We want everyone to have 80 percent of teachers qualified in teacher-led services. But at the same time we value our parent-led services. This Government has shown, in contrast to the previous Government, that we value parent-led services.

So what else have we done to try to effect better education results for young people? There has been $51.5 million allocated in this Budget for the network upgrades. That is upgrading schools’ infrastructure so that as the broadband fibre is rolled out past their gate, they are capable of connecting into that and using that modern technology, which youngsters are so used to using, and which we need in order to keep up with the 21st century type of learning. The $66 million that was bandied around about national standards is actually for the Youth Guarantee. Opposition members cannot even read the Budget. Whoops!

This Budget had $7 million in it for national standards, and, despite what Opposition members might say, 400 schools have not refused to submit their charters. In fact, we are probably down to a couple of hundred out of 2,000. That shows how many Labour-led schools there are that are promoting the view that they are not going to comply with the law. But the rest of them are getting on with it and doing very well. No more do we have parents getting reports saying that their child is a delight to have in the classroom. Actually, it is not labelling a child if we say that the child is strong in one area but a bit more work is needed in another area, and parents can help by doing some things and the school will do other things. That is what national standards are about. It is about making sure that children progress as they need to, so that when they reach high school they can read and write and take part in that wonderful national curriculum. We put $7 million into the national standards to support those wonderful leaders out there in the education sector who have picked up national standards and are running with them, and we want to spread that good practice. I want to make special mention of my two Associate Ministers. Before I do that, I will say that alternative education languished under Labour for 9 years. For the second year running we have increased the funding for alternative education.

  • Vote agreed to.

Vote Education Review Office agreed to.

Vote Arts, Culture and Heritage agreed to.

Vote Attorney-General

Hon CLAYTON COSGROVE (Labour—Waimakariri) : I am sure that the Attorney-General will take seriously what I have to say, despite his accusations during question time of politicisation. I refer firstly to the disaster response in the estimates report on Vote Attorney-General, where he makes reference to Pike River and the Christchurch earthquakes. I want to raise these issues in a serious way with the Attorney-General, because there is a serious issue going forward in terms of the expenditure of public funds. The Attorney-General will be aware that Christchurch quake families have applied to him on two occasions to receive independent legal support for the upcoming Royal Commission of Inquiry into Building Failure Caused by the Canterbury Earthquakes.

The Attorney-General will also be aware that his Prime Minister had a meeting. I say that this is future expenditure of money referred to in this vote, and I can quote from it, so it is within Standing Orders, in case the Attorney-General does not want this debate to happen. If he does not want this debate to happen, that will be a telling comment on him and his Government. He may laugh and he may accuse me of politicisation, but I say to him that I do not really care what he says in that respect, and neither do the quake families. He can abuse members and accuse them of politicisation, but those families and members on this side of the Chamber care about trying to convince him, Mr Brownlee, and the Prime Minister to provide legal support.

At the Aurora Centre in Christchurch the Prime Minister gave a personal commitment, noted to him in a letter from the quake families’ lawyers on 23 July, to doing everything that he could to assist. I will quote from that letter: “The primary expression of concern and support upon which they”—that is, the quake families—“rely was made by the Prime Minister in his first meeting with the families at the Aurora Centre here in Christchurch. On that occasion he made it very clear that the Government believed that the families’ interests were paramount and that the Government would assist them in any way it reasonably could.” Therefore, the quake families relied on that expectation of support, I say to the Attorney-General.

One issue here is that application was made to the Attorney-General for future expenditure of public funds, given that those families are relying on the Prime Minister’s advice that he would do anything to support them as he did, and as the Attorney-General did, in making the right decision—and I applaud it and support it—in respect of Pike River. But on the two occasions that the quake families actually asked the Government to help them, they were turned down. I quote again from the letter: “That being the case, this Government’s second rejection of the quake families’ reasonable request is proving very difficult for them to comprehend. As one elderly member of the quake families group recently put it, ‘Are John Key’s assurances worth nothing? The very first time we seek assistance we are rejected out of hand’.”

I put this to the Attorney-General: I have heard various explanations, and I accept that I am not a lawyer and do not have the qualifications to be an expert in this field, but I scratch my head, as others do, when I look at the precedent of Pike River, when I look at the precedent of Cave Creek, and when the Attorney-General makes reference in a strange way to the Victorian bushfires—all in a vain attempt to justify his position that he should not provide independent legal counsel for these families. I say to the Attorney-General that I mean no malice, and I assume no malice is intended by his stance. I will do him that honour. But no one, including the families, can ascertain what the problem is and why the Government constantly refuses to apply the same benchmark as it did in the case of Pike River to assist these families.

The only excuses that have been put up are that there is counsel assisting the commission, and there is a liaison officer that will talk with the families. Well, I know that the Attorney-General has made arguments in a court, whereas I have only observed arguments in a court, but I put this to him: in a practical sense how on earth can counsel assisting the commissioner both do their job—even with the assistance of a liaison officer—of assisting the commission and give justice to those families in covering all the issues that they want covered?

I will give the Attorney-General a practical example. On the morning of the commission a series of witnesses may be called. I am sure that the Attorney-General is listening and taking this matter seriously. The families will have a series of questions that they wish to be asked. But they do not know what they do not know. As the commission progresses through the day, will they have to pass notes across to the counsel assisting the commission? Will they be in a position where they will use up all the time of the counsel assisting the commission trying to get their questions across? That is just a practical difficulty that the lawyers have explained to me.

The real issue, regardless of the relevance of the Victorian bushfires or anything else, is whether the process put in place satisfies the families. Regardless of any examples the Attorney-General might raise and analogies he may draw, the real issue is whether the proposed scheme of arrangement and the process has any chance of satisfying the families’ need to be involved in the commission.

I bring a warning to the Attorney-General: it would be another tragedy—apart from the 181 people who perished—if, because the Attorney-General has stuck to his staunch position, which is going back on the commitment that the Prime Minister made, the commission progressed and those families either lost confidence in the commission or distrusted the commission because they felt they did not have an independent voice making sure no stone was unturned, and that every question, relevant or irrelevant, those families chose to put forward was put. They mean no malice; they simply ask for representation. There is a danger. The Attorney-General may want to throw up international example after international example to try to justify his position, but the guts of this issue is whether this process will satisfy the needs of those families.

I say again to him that I applaud his position in respect of Pike River—I think all New Zealanders applaud that—but I ask the Attorney-General to put aside the legalese and tell us what mischief would be created. It cannot be an issue of money. If the Attorney-General acquiesced to those families and provided them with independent legal counsel, where is the mischief in doing that? It is not good enough for the Attorney-General to say he knows best for those families, and that what he has provided—counsel assistance for the commission and a liaison officer—is what they need. It is not for the Attorney-General to determine what those families, who both are survivors and have lost loved ones, need. It is for those families to determine that. They are now being supported by Mr Bernie Monk and the Pike River families. The media and most of the other commentators that I have read believe that they deserve that independent counsel. It would be a safeguard for the commission, because the excuse could never be put forward that every resource was not put in place to assist those families.

I ask the Attorney-General to address this: where is the mischief or the problem in providing for those families, even if he disagrees that it is necessary? He says it is unnecessary, of course. Where is the mischief created? It is not a matter of dollars. Mr Brownlee has appropriated $5.5 billion. Mr Brownlee has seen fit to double the fee to $1,000 a day for members of the Canterbury Earthquake Recovery Review Panel so that the Government can get legal advice, even though that is not justified. Yet Mr Brownlee, Mr Finlayson, the Government, and the Prime Minister do not feel it is justified for these families to have independent legal advice.

Presumably the Attorney-General stands by his Prime Minister and he stands by the personal and verbal commitments that he made to those families, which now the Prime Minister, for some bizarre reason, will not affirm or comment on. The families are quite happy to have those comments confirmed publicly, but for some reason the Prime Minister is not. He loves to say what people want to hear but when it comes to the crunch he has not delivered. He said he would support the families 100 percent, and they have asked for independent legal support. No lawyer I have talked to can tell me what mischief would be created if the Attorney-General granted them legal support, putting aside all the legalese and analogies the member likes to put forward in this Committee. For Pike River he did the right thing. There was independent legal support at Cave Creek. The only difference I can see between the Pike River and this tragedy—yes, one was an natural disaster—is that 181 people died, a larger quantum. Not that that should make any difference, and not that I mean any disrespect to the Pike River families.

I ask the Attorney-General to go on the record and explain in detail where the mischief would lie if he acquiesced, buried his pride, honoured the Prime Minister’s commitment, and allowed these families to have independent counsel. What problem would be created? I cannot see one, apart from allowing these families to leave no stone unturned and honour those that were lost, and to sleep at night knowing that no stone was left unturned and they had represented their loved ones. I ask the Attorney-General to address those points.

The CHAIRPERSON (Eric Roy): The question is that Vote Attorney-General stand part of the schedules. Those who are of that opinion will say Aye—

Hon CLAYTON COSGROVE (Labour—Waimakariri) : I raise a point of order, Mr Chairperson. I know this is exceptionally unusual, but through you I make a plea to the Attorney-General. Families, I am told, are watching these proceedings now, and I make a plea to him—

The CHAIRPERSON (Eric Roy): That is not—

Hon CLAYTON COSGROVE: —to at least do the courtesy—

The CHAIRPERSON (Eric Roy): The member will sit down, please. That is not a point of order.

  • Vote agreed to.

Vote Parliamentary Counsel agreed to.

Vote Treaty Negotiations

Hon TAU HENARE (National) : I say how wonderful it is to get up in the Chamber and look at the statistics for Vote Treaty Negotiations, because for a long time things had slowed down considerably. So my hat is off. I doff my cap to the Minister for Treaty of Waitangi Negotiations. I also doff my cap to those who have seen fit to get out there and hustle for an agreement, and hustle for the right of a people to get to the end of a process whereby they can look forward to, one, telling their story, and, two, receiving a settlement—even if it is not a settlement, it is a signature between the Crown and iwi to show that they are on their way and that they can look forward instead of always having to look back and negotiate. I congratulate the Minister on a job well done: 15 mandates, four agreements in principle, 10 deeds of settlement, and two bills passed in only 3 years. We are not even at the end of 3 years. As I mentioned before, what is interesting is that we are not even through the 3 years yet, and the 9 years before that showed very little inspiration for either colleagues in the Chamber or iwi Māori who wanted to have their story told, have their story acknowledged, and move into a settlement process and then on to that post-settlement period, where they could enjoy the fruits of their negotiation skills and also the good graces of our Government.

I do not want to take up too much of the Committee’s time, other than to say congratulations to the Minister. He has done a great job, a fast job, and I think that the process we went through over the last 3 years—and especially this last year—will make those settlements endure for quite some time. Iwi Māori will be able to get on the road, and get on that new path of developing policies and issues, and doing things for the betterment of their people. Thanks very much.

Hon CHRISTOPHER FINLAYSON (Minister for Treaty of Waitangi Negotiations) : I begin by thanking Mr Henare for his outstanding chairing of the Māori Affairs Committee. Business is always conducted very efficiently through that committee and it reports back to the House as quickly as possible, and I acknowledge his leadership in that regard.

Hon David Parker: Like the foreshore and seabed!

Hon CHRISTOPHER FINLAYSON: Well, the Marine and Coastal Area (Takutai Moana) Bill—which is actually part of the Vote Attorney-General, which Mr Parker did not bother to speak on—was an outstanding bill. It was a tribute to Mrs Turia more than anyone else, because it removed a great injustice that had been perpetrated in 2003 by Helen Clark, who then trotted off to the United Nations and now pontificates about human rights.

Let us come back to the record of this Government in the last 12 months. As Mr Henare said, it includes 15 mandates, five terms of negotiations, four agreements in principle, a record 10 deeds of settlements, six settlement bills that have been referred to that excellent member’s select committee, and two bills passed. It is hard to know where to begin with the highlights, because every signing of a deed of settlement is a highlight.

But in Te Tau Ihu, as the member for Te Tai Tonga would know, three deeds of settlement were signed in late 2010, and I thank her for her excellent contribution towards making that happen. On the East Coast we signed deeds of settlement with Ngāi Tamanuhiri, Ngāti Porou—the great Ngāti Porou; Mr Horomia has made a wonderful contribution in terms of turning up, at least, to signings—and Ngāti Pāhauwera.

In Tāmaki, a vexed area that, between them, Margaret Wilson and Mark Burton had completely messed up, we signed deeds of settlement with Ngāti Manuhiri on 21 May. We have initialled a deed of settlement with Ngāti Whātua o Kaipara, and others are to follow.

In the central North Island we have signed with Ngāti Mākino, and agreements in principle have been signed with Ngāti Rangiwewehi and Tāpuika. Again, I acknowledge the wonderful help of the member for Waiariki, Mr Flavell. Ngāti Rangiwewehi is, of course, his iwi.

Other highlights include the introduction of legislation completing the Waikato River and Waipā River co-governance arrangements, and recognitions of deeds of mandate with those wonderful people in the Taranaki, the Taranaki iwi Te Ātiawa, Taranaki, and Ngā Ruahine.

So much work—such enjoyable work—and, I would like to think, bipartisan work. I acknowledge Mr Shane Jones, because that honourable member has provided some considerable assistance in matters in the far north and with Ngāpuhi. I have to say that I am hardly the fountain of all knowledge on these matters. Neither is he, but I—

Hon Shane Jones: And my teina—my younger brother—as well.

Hon CHRISTOPHER FINLAYSON: His younger brother has made a great contribution, as well, through Te Aupōuri. I do acknowledge the help that I have had from time to time from Kelvin Davis and Shane Jones. I appreciate it.

There are challenges, and one of them is this vexed issue of overlapping claims. Nowhere is this more apparent than in the Te Tau Ihu area. Another big challenge that this Government faces is the issue of land bank assets, because places like Tokanui Hospital and the property in Pētone are decaying before our eyes. Something needs to be done to ensure that these properties are either chosen by the settling iwi at an early stage or put into a position where they can be put on the open market, because it really is unsatisfactory, as that television programme indicated last year, that places like Tokanui Hospital are left in that state.

In fact, when one visits Tokanui Hospital and places like it, it is like a Marie Céleste experience. One walks in and finds that even the beds and chairs have been left behind. It is most unfortunate that iwi have to take over properties in that state. Kimberley Hospital, in the area of Mrs Turia, is another example of where the property has been basically land banked for some time. Something needs to be done there in order to determine its future.

There are challenges in this area, but it is a bipartisan area. I am grateful to all members on both sides of the Chamber for their considerable assistance as we have worked through these issues. It is wonderful work and it is a real privilege to be the Minister with responsibility in this area. The challenges are before us, but I think we are making good progress.

  • Vote agreed to.

Vote Agriculture and Forestry

SUE KEDGLEY (Green) : One would think that the primary role of the Ministry of Agriculture and Forestry would be to support and protect our agricultural industries, but we have this peculiar situation where two key farming industries are virtually at war with the Ministry of Agriculture and Forestry. We have the pig industry spending about $800,000 over the last few years on a court case against the ministry because the ministry is proposing to lower biosecurity standards to the point where a devastating pig disease could enter New Zealand, which would devastate the pig industry. Secondly, we have the bee industry, where bee-keepers have been fighting the ministry for years now because the ministry is proposing to bring in imports of Australian honey, which again could harbour devastating diseases that could devastate the bee industry, which has already been weakened by the varroa mite.

If certain diseases that we do not have here, but which Australia has, were to come into New Zealand via honey, we would then have to treat bees in New Zealand not just with miticides and pesticides but also with antibiotics. We are one of the only countries that does not have to treat bees with antibiotics. That gives us a unique position in the world when we sell our honey exports, but we are prepared to put this at risk in order to bring in Australian honey when we are overflowing with honey. New Zealand is genuinely a land of milk and honey. We are overflowing with milk and we are overflowing with honey, yet this Government and the Ministry of Agriculture and Forestry are proposing to bring in honey from Australia, even if that honey could cause devastating consequences for our bee industry. The pig industry is in a similar situation.

I think the reason for this extraordinary situation, where significant farming industries are at war with the ministry and the Government on these issues, is that there is a conflict of interest at the heart of the ministry. On the one hand we have biosecurity staff running around trying to keep out pests and diseases, even though about 80 biosecurity staff have been slashed, and on the other hand we have these trade officials running around the world and New Zealand pushing their free-trade agenda and saying that we have to open all of our borders to Australian honey and pig meat—never mind that they might bring in devastating diseases—and, unfortunately, the trade officials seem to be winning hands down. I believe we have to look seriously at separating out biosecurity from the Ministry of Agriculture and Forestry, so that we do not have this conflict of interest at the heart of the ministry and so that the trade officials who are running around trying to open up our industries are completely separate from the people working in biosecurity who are trying to protect these industries.

The other issue I will just briefly touch on is the issue of antibiotic resistance in farm animals. The ministry undertook a 1-year survey on antibiotic resistance in food-producing animals. It concluded that the results were pleasing. It said that farmers were using antibiotics responsibly and there were no problems for human health. One would think: “How fantastic! No problem at all.” But if we take the time to read the actual 1-year survey, we discover that 55 percent of poultry and 35 percent of pigs had antibiotic-resistant E. coli. Then we discover that 48 percent of samples of calves contained E. coli bacteria that were resistant to three different types of antibiotics. Yet we have the ministry telling us that the survey results are pleasing, even though more than half of the samples of calves contained E. coli bacteria. These calves were so young that they could not possibly have been fed antibiotics, so what is going on? It is interesting that I have had a number of people contact me in recent times who are concerned about the amount of antibiotics being fed to animals not just in the poultry industry but also in the dairy industry.

  • Vote agreed to.

Vote Biosecurity agreed to.

Vote Economic Development

Hon DAVID PARKER (Labour) : I would like the Minister in the chair, the Acting Minister for Economic Development, the Hon David Carter, to respond to the reality that the Government’s own Budget shows that the underlying structural problems in the New Zealand economy remain unresolved. This is shown by the projections on page 70 of the Minister’s executive summary—the Minister may want to look at the documents while he takes the time to respond—that show that New Zealand’s current account deficit gets worse every year from now.

We have just been through a recession in New Zealand, as have other parts of the world, and that is not all the Government’s fault. But during that period of recession, New Zealand’s current account deficit did reduce. That is because economic activity went down. People were buying fewer consumption goods and fewer purchases were made. As a consequence, there were fewer imports. Therefore, the current account deficit went down. This year, the current account deficit has been recalculated recently by Statistics New Zealand. At one stage it had wrongly included the reinsurance proceeds from Christchurch as being a current account payment rather than a capital payment, but, stripped out, the current account deficit is now on the rise again. The projections in the Budget showed that the current account deficit next year goes to 4.1 percent negative of GDP, then 5.2 percent of GDP in 2013, then 6.8 percent of GDP in 2014, then negative 6.9 percent of GDP in 2015. So by then the current account deficit as a percentage of GDP will have gone up every year for the 5 years to 2015 if this Government is re-elected. In other words, during that period more than $10 billion per annum extra in the current account deficit is added.

Hon Steve Chadwick: How much?

Hon DAVID PARKER: Stevie Chadwick asks “How much?”. The amount is over $52 billion extra that effectively has to be funded by New Zealand borrowing money overseas. So New Zealand’s net investment position in the world over that period goes backwards every year. Under the Government’s prescription, if it is re-elected, according to its own projections come 2015 New Zealand gets poorer—and that is after the previous year where it has got poorer and the year before that where it has got poorer.

According to the Government’s prescription, after 6 years New Zealand will be poorer every year—every year. That is why Treasury has said to the Government that New Zealand has structural economic problems, and that is one of the reasons why New Zealand needs structural change in our economy caused by the Government pulling the levers it can pull to change the direction of our economy. What are those levers? Well, the problem for the National Government is it has ruled out virtually all of them. It has reduced savings to KiwiSaver through its constant tinkering with it and through changing the generosity of the scheme, so it will not get a marked improvement in New Zealand’s savings as a consequence of that particular change. It has ruled out a land tax to try to change investment patterns in New Zealand. Now it has ruled out a capital gains tax as being appropriate.

So this situation starts to look a bit like the Rudd Government in Australia that was so rudderless it was eventually penalised at the last election and only just squeaked in for a second term. It looks a bit like the Americans who cannot do what is so obviously necessary in America, which is to change its tax system to cure some of its problems. Members do not have to take my word on this. I want to quote a couple of the third party economists. The BNZ has said recently that New Zealand has an investment problem, as the investment signal is wrong because of the tax bias in favour of speculative investment. Westpac’s chief economist, Dominick Stephens, said: “New Zealanders are incentivised to borrow money to buy land rather than invest in productive assets. If we introduced a capital gains tax that incentive would be diminished and there would be a greater incentive for people to save via bank deposits or productive business ownership,”.

What Westpac’s economist is noting is that if we get the investment signal right, then some of that money that is currently over-invested in the speculative sector would go into the productive sector, and that would grow well-paid jobs for New Zealand. It would create more jobs for New Zealand and New Zealand would begin to turn round the ship. This is a problem that has gone on for two decades in New Zealand. Our current mix of savings, tax, and monetary policy has seen New Zealand get poorer, essentially continuously, for more than 20 years now. Unless there is structural change, that pattern will continue, as the Government’s own Budget projections show. It is not just Westpac’s economist who is saying that.

Gareth Morgan has said that the current exclusion of capital gains taxes is “the biggest tax rort in the country, and one that has cost us dearly in terms of efficient allocation of capital, economic growth and employment.” Again, there is another reputable economist saying that the current settings that the Government refuses to change that have led to this blowing out of the current account deficit going forward costs us dearly in terms of the allocation of capital, which suppresses economic growth and means that we have higher unemployment and worse-paying jobs than we would otherwise have.

It is not just the economists; virtually all of the commentators in the media are saying the same thing. The Dominion Post said: “There is a gaping hole in the tax system. Different sources of income are taxed differently. Earn $50,000 by working 40 hours a week and you will be taxed at the going rate for income. Make a $50,000 profit on the sale of a rental property and you will not be taxed at all,”. Mike Hosking said: “we’ve for years in this country placed an absurd advantage on owning property. And given it’s free of tax, you wonder why we’ve become so reliant on housing and why the economy has been so tipped towards real estate.” That is the question posed. It is a rhetorical question; we already know the answer. Anthony Hubbard said: “Capital gains taxes are perfectly ordinary taxes used by most developed countries. They are not recipes for instant economic ruin - otherwise these wealthy countries would be poor. A capital gains tax does not mean everyday Kiwis would be crushed. Capital gains taxes should not lead to panic in an election year: there is nothing in them to panic about.”

Well, National is, of course, panicking about this, because it knows it is on the wrong side of this debate. We have bad news internationally at the moment. The Government will be saying “Oh, poor they are! Oh, woe we are, because we’re having to deal with these circumstances.” The reality is that New Zealand’s circumstances are parlous, because our net investment position in the world gets worse every year. Yes, the Government deficit is a problem. It is made worse by the Government’s unaffordable tax cuts, which are so weighted towards the highest income earners.

But the greater problem is our current account deficit, which is growing ever larger and is leading to New Zealanders getting poorer every year. It is the lack of a plan from the Government to address that which stands out. New Zealanders and commentators are increasingly saying this. The Government has not pulled any of the structural levers at its disposal. Last week it said that our monetary policy is perfect and we do not need to change it. It says it has it right on savings, despite the fact that it ignored the Savings Working Group recommendations. The rate of increase of savings through KiwiSaver will be lower than it would otherwise be. Also, the Government will not pull any of the tax levers. So it will not touch monetary policy, it will not touch savings, and it will not touch the tax mix. It calls our tax switch “tax and spend”. For the Government, a tax switch is just a tax switch, but for us somehow changing taxes to have a capital gains tax to fund a tax-free zone, GST off fresh fruit and vegetables, and a research and development tax credit is not a switch; it is tax and spend.

This Government has no credibility on these issues. That message is getting through. It said our policy would put a dagger through the heart of the economy. It has been shown to be wrong. It thought this would be a suicide pill for the Labour Party, but that has not proved to be the case. It has not proved to be the case because we, under Phil Goff, are brave enough to take these important decisions that need to be taken for our country.

The Government’s own figures show that its plan for the economy, scant though it is, is not working. Structural tax changes are needed in order to make structural changes to the economy to grow our export base. I know the Minister in the chair thinks that agriculture is virtually the only game in town, but we are not going to get richer as a country by relying on agriculture alone. That is why the Manufacturers and Exporters Association and the Productive Economy Council are both in support of the tax changes we have proposed, because they know that that is right to get the investment signal and to get some of that money that is currently going to the wrong place into productive enterprise.

Hon SHANE JONES (Labour) : I follow Mr Parker, as the Minister in the chair, the Acting Minister of Economic Development, the Hon David Carter, has just woken up and realised that he should have exercised the opportunity to address the challenges laid down by Mr Parker. That inattention, that sort of soporific pose he ordinarily strikes, is reflective of his stewardship in this portfolio. Gerry Brownlee, to his credit, did not do a great deal other than try to mine Great Barrier Island and try to mine the Coromandel. On top of that, he ensured that New Zealand’s tourism industry would definitely fail after he decided to try to mine Tongariro, Ngāuruhoe, Ruapehu, and the national parks. But that man was inordinately more active than this character who sits here, who has distinguished himself by promoting water schemes that lead to endless questions in the House as to whether he should have anything to do with them. This is the most derelict Minister we have had in such a key portfolio.

Where are the jobs that this Minister is able to produce? Where are the thousands and thousands of jobs that young Kiwi families need for their sons and daughters? That is a reasonable question to ask of an Acting Minister of Economic Development. What does he tell us? He tells us that the Chinese should make and engineer the railway wagons for KiwiRail. What we will see as a result of that is such a level of hostility by patriotic Kiwis employed in that industry. I cannot imagine that they will be motivated to look after those wagons knowing that the wagons represent the blinkered view of this Minister, who wants to deprive Kiwis of the chance to manufacture, develop skills, and create things. What society can create wealth if the people’s skills are not being used or exploited? Not one idea has come from this man.

In addition to that, regional development is in a state of decay. There is not a regional council, and there is not a local council, that has any confidence that this Government has generated a policy or a programme designed to stimulate activity amongst small to medium sized firms in the provinces. All the Government believes is that by building larger roads, as the “Minister of Warkworth”, Steven Joyce, continues to do, and backing uncritically the intensification of agriculture—ignorant of the effects it has in terms of the worsening of the host environment—somehow that will generate the hundreds of thousands of jobs New Zealand families are looking for over the next decade. I realise that the Government treats the Australasian labour market as its primary focus of attention, but I never thought for a moment that the key element of its agenda was to drive people away from South Auckland and other areas into Australia, rather than to invest back in our own country.

What is the Government doing in relation to investment so we generate more jobs and exports? I accept that it does not believe that that is its job. Government members are of that discredited Milton Friedmanite approach to the economy—“Close your eyes, take your hands off the wheel, leave it on autopilot, etc., and Kiwis, through some Darwinistic process, will take care of themselves.” Well, Kiwis are getting poorer. More kids are going to school suffering as a consequence of malnutrition and are not able to learn properly. Why is that? Because there is no recipe to address the fundamental things people are looking for: a growing economy, I say to the Minister; jobs, I say to the Minister; and, most important, a living wage, which is something one would imagine would lie at the pith of an economic development strategy. But, as I said, those members do not believe in any of this; they believe that by doing very little, and by privatising the jewels in our crown, our State-owned assets, somehow a massive dynamic of creativity, imagination, and job creation will be unleashed by the Australians and the foreigners who own our assets. That reflects an incredible level of naivety as to how the international economy really works. We, under this Minister, are pursuing a foolish level of purity, while the people we trade with and deal with are far more pragmatic. We watch the Minister navigating us on to the rocks—rocks not so much of treachery, as the Government’s treachery is to the young people it has sold out, but rather those of the consequence of our being left behind while the rest of the world marches on, with no jobs and no innovation.

Hon DAVID CARTER (Acting Minister for Economic Development) : It is always a pleasure to follow the Hon Shane Jones, because although he speaks with passion and panache, one can certainly be sure, when one analyses the substance of his contribution, that there is very, very, little in it.

I take particular delight in having following Labour’s spokesperson on economic development, the Hon David Parker—the great Labour Party strategist who appears to have taken them from a solid base of around 30 percent in the polls to about 25 percent, and still declining. It is interesting to note that even though he is the spokesman on economic development, he did not actually speak to Vote Economic Development; he spoke entirely to Vote Finance, a debate we had last week.

I am very proud of the role the Ministry of Economic Development is playing in this economy. When we became the Government in 2008, the Ministry of Economic Development was described to me as an ATM; it simply doled out money all over the show, with no focus on the delivery of results. What we have done over the last 2½ years is very much to focus this agency on developing economic growth. We have a very simple agenda. There are six drivers that are important for the economic growth agenda. We have to support better science and innovation, and there is a huge story to tell there about what we have achieved.

Hon Steve Chadwick: You’ve cut the research and development funding.

Hon DAVID CARTER: The member yells out that we have cut research and development funding. Again, Steve Chadwick is wrong—again, she is wrong. In respect of Vote Science and Innovation, in the last Budget, $170 million was made available to knowledge-intensive companies to grab a grant from the Ministry of Economic Development so that they can undertake research. What about the primary sector? That member said we have cut research, but $477 million has been spent on primary sector research and development today. What did Labour do? It talked about a $1 billion project. Do members know how successful it was? Not one company applied to take it up, because they had no faith in that Government. So Steve Chadwick is not right: this Government has not cut investment into research and development; we have increased it, and increased it substantially. We know the importance of spending money on science and research to get this economy moving.

The other thing that needs to be remembered in this debate is the mess that the previous Labour Government left at the end of 2008: a legacy of 10 years of deficits, which had to be addressed. The only way we can address this is to get the tradable sector of the economy—the export sector—trading properly. What had happened is that that Government had completely unbalanced the economy. It actually had the tradable sector of the economy—

Hon Shane Jones: How?

Hon DAVID CARTER: Mr Jones ought to know: he sat around the Cabinet table. He had the tradable sector of the economy in recession from late 2004—late 2004. So he can stand here and blame the global financial crisis—no one had heard of it in 2004—yet New Zealand had its tradable sector in recession, masked by a massive increase in Government spending, which was completely unsustainable. I think that member knows it well.

When we examined Vote Economic Development in the Commerce Committee, I was pleased with the acknowledgment from that select committee that we were addressing the issues of the Christchurch earthquake. I get annoyed every day when we have the likes of Clayton Cosgrove coming into the House day after day trying to play politics with the situation that people are in down in Christchurch. What we need is this Parliament to work together to face the biggest economic challenge we face, and that is getting our second-largest city rebuilt. It is not helped by the Hon Clayton Cosgrove taking every opportunity to play cheap politics with this issue.

The final issue I want to mention is, of course, the fact that there are 32 days until the Rugby World Cup. This has been a real focus for Vote Economic Development.

Hon Shane Jones: Helen Clark got the cup over here in Aotearoa.

Hon DAVID CARTER: Well, Helen Clark got the cup here; that is true. I am interested to see whether she bothers to come back and watch a single game; I bet she does not do so. I just take the opportunity to say to all New Zealanders to make the most of the Rugby World Cup.

DAVID SHEARER (Labour—Mt Albert) : In following the previous speaker, the Hon David Carter, I say that there was so much inaccuracy there. I will make a couple of points to start with. First of all, in relation to the 10 years of deficits, I do not remember 10 years of deficits. I do remember that this Government inherited a surplus, and now, less than 3 years later, we are $16.7 billion in deficit—$16.7 billion in deficit. I also point out to the Minister in the chair, the Acting Minister for Economic Development, the Hon David Carter—because he really does need to go back and consult his officials—that his research and development policy is worth less than half of what was already in place when National came into office. The tax credits that the Labour Government had put in in 2008 were worth double the amount of the vouchers and various grants this Government has decided to hand out. Fast Forward was worth $700 million, which is exactly double what the Minister just crowed on about that his Government has put into place. So when it comes to economic development, this Minister really does not know what he is talking about.

The Minister of Science and Innovation, Dr Wayne Mapp, often stands up and talks about Denmark and Israel as being the shining examples of what New Zealand could become. It is great that Dr Mapp is walking into the Chamber right now, almost on cue. Denmark has been held up as the shining light of what New Zealand could aspire to. We have an agricultural economy that is about the same as that of Denmark, but our manufacturing and high-tech sectors are minute when compared with Denmark’s. That is the reason why Denmark is in the top group of the OECD countries, and we are down the bottom—and dropping. Mr John Key talks about the Industrial Technology Research Institute, the technology and research park in Taiwan, which is obviously a place he has visited. Again, he holds up this place as being something we should aspire to. Yet when we actually look at what this Government has put in place to enable us to get there, we see that what he says the Government aspires to bears absolutely no resemblance.

The last Budget, in 2010, came out with that wonderful step change, the big policy talk about what the Government would be doing in science, research, and innovation. We had actually been waiting for that for more than 2 years. Finally the funding came out, and, as I said before, it was worth exactly half of what the National Government had taken away—exactly half of what it had taken away. This year, what has happened? There is $12 million less than what we had in 2010. Despite all the big talk and all the big noting about how this vote would drive the economy, and despite the speeches from Dr Wayne Mapp and the Prime Minister about Taiwan and the Industrial Technology Research Institute and all those things we should aspire to, we have actually ended up with a whole lot less than what we started with when this Government came into being. It is a whole lot less than what this Government started with—had in its hands—when it came into power. We have simply gone backwards. We have gone backwards.

We need a tax credit policy that rewards all companies, not just the favoured few that happen to apply for the grant and have some bureaucrat smile benignly on them, congratulate them on putting in such a good application, and give them the money. I was at a company last week, a high-tech company with fantastic growth potential, which had put in an application but had had it turned down. Under Labour’s tax credit, that company would have been rewarded for its effort.

This Government talks about trying to grow the innovation sector and it talks about research and development. But, as I said, what it has put in is worth only half of what we put in in the form of a tax credit and the Fast Forward fund of $700 million. That was transferred and taken away by Bill English, and it was replaced by this rather paltry, anaemic Primary Growth Partnership. This Government has not delivered on its promise to deliver high-quality research, science, and innovation.

PESETA SAM LOTU-IIGA (National—Maungakiekie) : It is a pleasure to speak on this, the economic development estimates, at the Committee stage. To listen to Labour members on the other side babble on about their record in power is almost laughable. It is laughable because for 5 consecutive years the volume of exports contracted under the Labour Government, and the biggest show in town was Government spending. The biggest show in town was Government departments, which were leasing some of the most-expensive real estate in this city of Wellington. That was the biggest show in town, but that game is over. That game is over because the National Government is now in power, and the National Government has brought a plan to this country in order to promote economic development—to promote economic growth and jobs in this country.

Hon Member: Jobs?

PESETA SAM LOTU-IIGA: My counterparts opposite have asked where the jobs are, yet not one of them has talked about talking to businesses. You see, in my electorate of Maungakiekie we have numerous businesses that are thriving, that are actually growing, and that are doing things to promote this economy. I was at the opening of the premises of New Zealand Gold Merchants in Penrose, in my own electorate. That company is refining gold and silver metals. It has international strategic relationships. Tony Coleman and the team are working to promote jobs and opportunities for those in my community, and I salute them. I can talk about other companies. I could go on about Rakon; I could go on about Sanitarium and Coca-Cola—those types of businesses that promote jobs in our communities. But there are also high-tech companies. One that started in Maungakiekie is Trifecta Global Infrastructure Solutions, which is led by Mr Steve Burnie. That company now exports its products to Ireland and the USA, and it has world-class, web-based—

Hon Shane Jones: Yes. Fair enough.

PESETA SAM LOTU-IIGA: —and Mr Jones knows it—geospatial asset-management software. That is a success story in Maungakiekie that I am proud of.

I do not know whether Labour members have actually seen what has gone on in global financial markets in the last 2 weeks, but the clear message from ratings agencies and the clear message from financial institutions is that the debt must stop. The debt, the borrowing, the taxing, and the spending that Labour is promoting as the solution to economic development, must stop. This National Government now has a plan to keep the amount of debt to under 30 percent of GDP, and we are doing that through the infrastructure spend and through savings in Government departments—through savings where Labour is promoting spending. We are doing it through upskilling our people in an education system that is robust and an education system that promotes standards—it actually has standards. It is positive about our children, and aspirational for our children to develop and grow. But those Labour members are all about negative, destructive behaviour. We see it in their blogs, we see it in their press statements, and we see it at every question time when Phil Goff stands up with very little in the way of questions—in the sort of hypocritical way those members go about their work—

The CHAIRPERSON (Lindsay Tisch): The member will withdraw that comment.

PESETA SAM LOTU-IIGA: I withdraw. But this is really about the aspirational—

Hon Steve Chadwick: I raise a point of order, Mr Chairperson. I think the member should withdraw and apologise. I take offence at that comment.

PESETA SAM LOTU-IIGA: Speaking—

The CHAIRPERSON (Lindsay Tisch): No. The member has withdrawn on my instruction. However, a member has taken offence. I will ask him also to apologise. I ask the member to apologise.

PESETA SAM LOTU-IIGA: Sorry, Mr Chair—you asked me to withdraw the comment and I did.

The CHAIRPERSON (Lindsay Tisch): I did, but a member has since taken offence, so I now ask the member to also apologise.

PESETA SAM LOTU-IIGA: I withdraw and apologise.

But this Government is standing up for New Zealanders. We are standing up for New Zealanders who are aspirational, and who are not destructive, negative, and nasty. New Zealanders want jobs, and this Government is putting in place a plan that will promote jobs, promote opportunities, and promote economic growth. We will see that in the decision that New Zealanders will make on 26 November—whether they want a positive, affirmative, encouraging Government, or they want a negative, nasty Opposition.

  • Vote agreed to.

Vote Foreign Affairs and Trade

KEITH LOCKE (Green) : Last week I moved a motion: “That this House condemn the shooting of peaceful demonstrators in Hama and other Syrian cities and call upon the Syrian Government to enter into a serious national dialogue to chart a transition to democratic government.” I thank the House for passing my motion, because it is so important that people and parliaments around the world support the Syrian people in their hour of need. The people of Syria are so brave, going out on to the streets, week after week, when they know the regime is likely to fire on them.

A victory for the Syrian people, coming on top of the successes in Egypt and Tunisia, would give considerable impetus to democratic struggles across the world. I appreciate that our foreign Minister did give support for the Arab Spring, in a speech last Tuesday. He had been under some criticism previously. One of the placards at the Syrian protest in Auckland that I attended, the Saturday before his speech, read: “NZ Government, your silence is deadly.” Unfortunately in his speech last Tuesday Mr McCully was less optimistic than the Greens about the Arab Spring, talking about the “risks” and possible “dangerous implications for regional security.”, which I think was an allusion by him to unresolved Israel-Palestine issues.

If more and more Arab Governments become democratic—and they will inevitably be more actively pro-Palestinian—this will help to resolve the Arab-Israeli dispute. We will need much more international pressure on Israel for a resolution involving the creation of an independent Palestinian State within the pre-1967 borders. That is a Palestinian State that includes much of the West Bank land currently occupied by Israeli settlers. Mr McCully worries that the probable vote in the UN General Assembly next month, to recognise an independent Palestinian State, may “isolate Israel” and risks making negotiations more difficult.

The Greens say it is not a matter of isolating Israel so much as pushing Israel into serious negotiations with the Palestinians. However, I do commend Mr McCully for not ruling out New Zealand voting for the UN General Assembly resolution for an independent Palestine when it comes up next month. We have to be consistent in our support for democracy in the Middle East, and I am not sure our foreign Minister demonstrates that. He said in his speech that “To Egypt’s east, Shi’a/Sunni tensions were exacerbated, to the point that troops from other GCC”—that is, Gulf Cooperation Council—“countries were sent into Bahrain,”. In fact, what was happening in Bahrain was a huge democratic struggle against a reactionary monarch who might well have been toppled if Saudi troops had not invaded. The Saudi King ordered the invasion because he did not want a democracy on his doorstep. Perhaps the trade opportunities in the Gulf cause our foreign Minister to view the Saudi invasion through rose-tinted spectacles.

On Libya, the Minister also got it wrong. He has supported the NATO assault on Libya, which has only increased political support in Libya for the dictator Gaddafi. Now the rebels seem to be fighting amongst themselves and competing for recognition by NATO. Gaddafi will be deposed eventually, but the NATO assault has only prolonged his departure and increased killing on both sides. The NATO bombing campaign is illegal, in contravention to the UN charter that puts priority on conflict resolution instead of war. The decision to bomb Libya was based on a series of lies: firstly, that a big massacre of civilians was about to take place; secondly, that the Arab League supported the military intervention, whereas in fact in the Arab League only six Gulf dictatorships actually voted for the resolution; and, thirdly, that what was being created was a no-fly zone, when in fact it was all about regime change, which has included attempts to assassinate Gaddafi and his close colleagues and the targeting of a range of civilian Government facilities, including the bombing of the Government’s TV station by NATO. New Zealand should not have supported NATO responding to Gaddafi’s extreme crimes with war crimes of its own.

DAVID SHEARER (Labour—Mt Albert) : I stand to speak on Vote Defence. I will start by saying that I think the Minister of Defence, who is retiring at the end of this Parliament, has put an enormous amount of passion and energy into the defence portfolio. It is obviously something that is close to his heart.

Hon Steve Chadwick: I raise a point of order, Mr Chairperson. Just a point of clarification. The member is speaking on defence, but you have not yet called the defence vote.

The CHAIRPERSON (Lindsay Tisch): I was just picking that up. I do not know whether the member was being complimentary to the Minister in the chair as Minister of Defence, and then was going on to foreign affairs and trade.

DAVID SHEARER: No, I was not; I am sorry.

The CHAIRPERSON (Lindsay Tisch): That is OK. I call David Shearer, speaking on foreign affairs and trade.

DAVID SHEARER: No, defence actually.

The CHAIRPERSON (Lindsay Tisch): The member does not want to speak on that. All right. We will move to the vote.

  • Vote agreed to.

Vote Official Development Assistance agreed to.

Vote Sport and Recreation agreed to.

Vote Defence

DAVID SHEARER (Labour—Mt Albert) : I was thinking the previous vote was vote foreign affairs and defence; I beg your pardon. The Minister sitting in the chair, the Minister of Defence, put me off. I reiterate what I said previously, that I do think the Minister of Defence has brought a lot of energy and passion into the defence role and he should be applauded for that. However, there are a couple of areas that I want to highlight in my speech. The Minister has been put into an invidious and a difficult situation around the signing-off of aircraft for the use of various Ministers to joyride both around New Zealand and overseas. I want to touch on this—and we have brought it up in the past—because it is an area where I have asked repeatedly for answers to questions and have not yet received them. That makes me rather suspicious that there is a lot more there than we are led to believe. In fact, we hear there is a lot more there than we are led to believe. If there was nothing to worry about or there was no issue, why have we not seen the papers, after several months of asking for them?

Let me go through what that means. I have asked, for example, for all the papers pertaining to Murray McCully’s flight to Vanuatu on 13 February. I have asked for those papers and was told they would be coming. They did not arrive. I went to the Ombudsman. The Ombudsman said they had been in contact with the office. The papers did not arrive. I went to the Ombudsman again. They wrote back to me and said that yes, the papers would be coming, but they did not arrive. I then wrote again to the Ombudsman and said: “Why aren’t these papers coming, when you have already asked for them to come?”. The Ombudsman said: “I have formed the opinion that there has been a failure to meet the requirements imposed by the OIA.” They went on to say: “I understand that a response is imminent. If you have any concerns about the substantive response to your request, please feel free to contact me again.” That was in June. We still have not had any reply to that Official Information Act request. I have written to Murray McCully, who sends back notes that say “I refuse to answer that member’s request.” Murray McCully, of course, does not have to be accountable to Parliament on how he spends money.

Jo Goodhew: I raise a point of order, Mr Chairperson. I believe we are on the estimates debate. I am not sure about the relevance of this particular discussion in terms of the estimates debate.

The CHAIRPERSON (Lindsay Tisch): This debate has been quite wide-ranging during the course of this afternoon. The point has come up before, and I know that the member will get back to the estimates. He is talking about the Minister and we are on defence matters now. I know that the member will be concentrating on defence, as in the estimates.

DAVID SHEARER: Thank you, Mr Chair. That was exactly where I was getting to. I was providing the context to July, when we had the Minister of Defence in front of the Foreign Affairs, Defence and Trade Committee to respond to the estimates questions. We had put a number of standard estimates questions to the Minister and, in addition to that, there were 140 other questions to the Minister, all of which came in very, very late. They came in the day we were sitting in the select committee, so we had really no time to go through them. I argue that that was an abuse of the process. Of those 140 questions, guess what? Eleven were not answered. What did those 11 pertain to? The 11 pertained to VIP transport and aircraft that the Minister is responsible for signing off. That was in July. Those were estimates questions put before the Minister in good time to be answered, yet the Minister did not sign them off.

The reason I bring this up is that I am not getting an answer. Somehow, there is an expectation that if we stop asking, then the matter will simply go away and we will drift through to the election without getting an answer. That is not good enough. I say to the Minister that if he thinks this will go away, it will not. That is why I am raising it today. Those estimates questions, like the Official Information Act requests and like the written questions, have absolutely got a blank.

Here is what I think may have happened on this occasion. Mr McCully decided to fly to Vanuatu and he told, asked, or bullied the Minister of Defence to allow him to take a 757 up there. The 757 was scheduled along with the other 757 to fly down to Antarctica and take the relatives of the Erebus crash with them, as well. I believe that Dr Mapp—I think he is an honourable person and I believe he was supporting the Ministry of Defence—tried to persuade Mr McCully not to do that, but Mr McCully was pretty insistent. We understand that he was insistent because there was no business-class flight to Vanuatu around that time, so he decided he would have the VIP seats put into the 757, and the 757 flew off to Vanuatu.

A matter of hours after it left the ground, the other 757 on the ground in Christchurch needed unscheduled maintenance—it was somehow not foreseen before that. When the 757 arrived and deposited Mr McCully in Vanuatu it had to fly straight back again, and they had to send an Orion to pick up Mr McCully the following day. The whole trip cost $70,000-$75,000 all up. The key issue is that Mr McCully could have flown up there on a commercial flight for about $4,000. It costs about $4,000 to fly up there. If he had been able to schedule it around a direct flight, it would have cost even less than that. So, $4,500 would be the absolute tops to fly up there. Instead he chose to spend $70,000-$75,000 to do that.

The reason I bring that up is that as we go into the next year we come back to those estimates questions, for which we still do not have answers—we still do not have answers about how much an aircraft costs to fly, how much an aircraft costs to run, and how often Ministers will be using those aircraft. What are the criteria that those Ministers follow to use those aircraft? Is it that when their own personal travel bills get too high they then go to the air force and ask it to subsidise their flights? I do not know. There might be a perfectly good, logical reason for why a Minister needs to have an air force aircraft to fly him up to Vanuatu to attend a meeting, rather than going by a commercial flight. There might be a very, very logical reason.

But what makes me very suspicious is that after all this time, after the Official Information Act requests, the appeals to the Ombudsman, and the estimates questions we have lodged, we still do not have the real reason. Yet just last week when a National Party blogger put through an Official Information Act request to our Security Intelligence Service he got it within 3 days. He got it within 3 days. So why is it that we started this process in March and here we are in August, and Dr Mapp’s office has yet to give the answers we require? The answer to that is that there is something there that Mr McCully does not want us to see. There is probably something there that will embarrass Dr Mapp, as well. But, definitely, Mr McCully had been badgering, bullying, cajoling, threatening—whatever—Dr Mapp to sign off an aircraft to fly up to Vanuatu.

I am sure we will probably see that pattern in the future, because this is the beginning of the arrogance—well, not just the beginning of the arrogance—of power, that somehow a Minister is able to use our military aircraft and our service people, who are out there doing a good job for New Zealand, to fly around for his or her own benefit. Whether it be to Vanuatu or to use helicopters to fly down to see the V8s, a Christian fair, the rowing champs, or whatever, our air force and our air assets are not for that sort of purpose.

I am perfectly able to see the case for using a 757 to go around the Pacific with a group of defence, political, or non-governmental organisation people—that is a legitimate use. I also want to see us flying our veterans across to a Second World War commemoration. I can understand that. What I do not understand is why the Minister of Foreign Affairs is able to twist the arm of the Minister of Defence to enable him to fly in a 757 with its VIP seating at the enormous cost of $75,000 up to Vanuatu because this man is unable to get a business-class flight on a commercial airline.

  • Vote agreed to.

Vote Defence Force agreed to

Vote Science and Innovation

Hon Dr WAYNE MAPP (Minister of Science and Innovation) : Thank you for the opportunity to speak on this issue. I say also that the Education and Science Committee has dealt with this issue very well. It noted the various initiatives that have been undertaken over the last 2 years. It is such a contrast, is it not? We listen to Mr Shearer recycle failed policies of the past. Labour will go into this election with its big commitment on science and innovation being a failed policy on a tax credit. Anyone can get it. It is a great time for lawyers and accountants, but it probably will not do much for science and innovation.

Do members know how Labour will pay for this policy? It will sock one of New Zealand’s most productive sectors, the primary sector, by bringing it into the emissions trading scheme 2 years early—2 years earlier than 2015. We would be the only country on the planet that would kneecap our most productive sector in this way. That is Labour’s approach. That is another failed policy of the past—Labour committed to do it in 2008. One would hope that after 3 years in Opposition it could spend a little bit more time thinking of future policy, rather than just resurrecting past policies. The Government put some common sense into that issue, and said it would be 2015.

I will speak briefly about what we have actually done, and the springboard that it provides for the future. There have been a variety of things, and I will focus on three in particular: first, the Crown Research Institute Taskforce; secondly, the establishment of the Ministry of Science and Innovation; and, thirdly, business support. When I became the Minister some 2½ years ago it was obvious that Crown research institutes were in difficulty. There was a continuous complaint, if you will, from the sector that the institutes were simply buried in compliance costs, having to take a huge amount of time to complete applications and so forth.

The OECD had also seen this, and made a clear recommendation of sustainable, long-term funding that would provide a strategic focus. The Government put together the Crown Research Institute Taskforce, which was one of the OECD’s primary recommendations. We have now implemented the Crown Research Institute Taskforce and largely picked up on the OECD recommendations, which were ignored by the previous Government. We have put the Crown research institutes on a fundamentally better footing to build capability.

Secondly, we pulled together the governance system into the Ministry of Science and Innovation. Primarily, that was about changing the culture of the organisation and providing a more strategic approach. I note that the Education and Science Committee was unanimous in this instance about that and saw it as an important shift in emphasis. I heard Mr Shearer himself state that this was an important initiative. The significance of the strategic approach should not be underestimated. I inherited a system that was highly fractionated and highly disorganised. Now we have one that is fundamentally more integrated, and one that connects science more effectively to business.

That leads me to the third point, and that is the Government’s programme to back New Zealand businesses. Over 4 years we will put over $200 million into that programme; by next year, in fact, it will be $80 million. It does require a ranking, if you will, of the most capable businesses in New Zealand. The grant is made as a percentage—20 percent—of the company’s research and development spending. Pretty low compliance costs ensure that the money goes to the companies that have the deepest and most effective capability, and, indeed, the best record in exports.

I would have thought the Opposition would applaud that programme, because it is forward-looking, not backward-looking. That is, I guess, one of the fundamental differences between the National Government and the previous Government. We are concentrating continuously on doing the things that will drive our economy up. We have seen science expenditure go up, but the other side is backward-looking and we see failed solutions from the past.

  • Vote agreed to.

Vote Communications

Hon STEVEN JOYCE (Minister for Communications and Information Technology) : I am very keen to take a call briefly to talk about how the Government has been progressing with its policies on communications, information technology, and broadband, in particular. In the last 2½ years we have tackled one of the most ambitious communications projects that has been seen not only in this country but also throughout the OECD. We are delivering ultra-fast fibre-to-the-home broadband to 75 percent of homes and businesses around this country, while, at the same time, also vastly improving broadband infrastructure and connection speeds in rural areas.

We have set up this company called Crown Fibre Holdings, which has now itself set up four large public-private partnerships for the ultra-fast broadband initiative. We have also set up another one for the rural broadband initiative. These competitively tendered arrangements have ensured a very cost-effective build price for taxpayers, and, most important, very competitive wholesale prices for consumers while using the expertise of established companies in the sector.

We have also further developed the regulatory model for the sector to encourage more competition. One of the outcomes of the ultra-fast broadband initiative is that Telecom is to split itself into two separate companies, and of those two companies one will own the monopoly infrastructure and one will own the retail business. This will create a much more level playing field for all telecommunications retailers, and encourage further innovation and price competition. It is a step beyond the previous model for the industry.

We have also set up a new telecommunications development levy, which I think is very important as that will fund rural broadband. It will also fund emergency services legislation going forward, and other telecommunications service obligations. So the results have been pretty good actually, and we have now set up the framework. The roll-out plans are being finalised, deployment has started in different locations around the country, and attention is turning to maximising the uptake and taking advantage of all the benefits that ultra-fast connectivity will bring.

We are working very hard with a five-point action plan to realise the economic, social, and productivity benefits of much faster broadband. They have five focuses. E-education is very important, making sure we get the benefits of the education sector. We will have 99.7 percent of New Zealand students linked together with fibre connectivity at school, so making sure that the school sector is in a good position to take advantage of that is very important indeed.

The e-health initiatives are very important, and they are becoming more exciting rather than less over time as the sector starts to think about the potential in the health area. I am talking about things like remote diagnostics, particularly remote monitoring of chronic patients, and the ability for specialists to view remotely quite detailed data such as scans—I think this has huge potential—as well as the general shifting of information around between the different elements of the health sector. The more we can do in people’s communities, particularly in the rural communities, then the less travel they have to do, which also helps with their health outcomes.

E-government is very important, and we are making very strong initiatives there right across the Government sector. There is all sorts of work under way to ensure we get a better relationship and, I think, better customer services from the Government for the citizens who use those services. In one of my own areas, in transport, a lot of work is being done to see how we can best take advantage of the opportunities there.

E-business will, I believe, be one of the more immediate outcomes of the improvements in broadband infrastructure, with the business sector already saying that it will take up the opportunities very quickly. Of course, the early focus is rolling out broadband through those business sectors.

Finally, there is what we call e-development, which is as much also an e-regional - development story. We have Ngā Pū Waea, of course, involved to ensure the iwi and Māori development goes ahead well, and we have also lots of involvement with local councils as they seek to gain, if you like, leverage and opportunity for their citizens.

On top of that, we are taking advantage of the switch-over from analogue to digital television, and the Government is looking forward to the potential there with the fourth-generation digital spectrum. We also have announced this year the National Cyber Security Centre, as well, which is an important part of making sure we get all the benefits of this technology going forward.

  • Vote agreed to.

Vote Tertiary Education

JO GOODHEW (National—Rangitata) : I look forward to pointing out the main points in the tertiary education portfolio, and also speaking very briefly on student loans, which are something that a number of my constituents have given me their views on.

It is really important that in tertiary education, including student loans, our plan for the future is a sustainable one, but we also recognise that now is the time when we need to have more students in tertiary education places. We have put in more than 3,000 extra university places over 2 years. There are now 186,000 core places at universities and polytechnics in 2011, despite the rhetoric from the left. There are now 11,600 more core places at those institutions—universities and polytechnics—than in 2000. But it is also very, very important that the Government gets value for money, that it looks hard at the tertiary education spend and makes sure that it is outcomes-focused, and that we do not have institutions or organisations claiming funding for educating people who are in fact dead, which I understand has been happening. So my constituents are relieved to hear that we are not willy-nilly handing out their taxpayer funding without asking for the details of exactly how it is being used.

When it comes to student loans, there is a belief amongst many New Zealanders that it is a privilege. I certainly believe that, too. It is a privilege for students to receive taxpayers’ money to help them through their education. Students will be the better for it, and I believe they understand that. Right now we are spending $1.58 billion on student loans in 2010-11. We have had to borrow that money. We need students to understand that their responsibility is to use it wisely, study their course, qualify, get a job, and then repay that money to the people who loaned it to them—that is, the taxpayers.

Some of my constituents have been telling me that they believe that students should not be able to go overseas, at all, until their loan is all paid back. I have said I think that is a bit tough, but nevertheless I think it is really important that we have shortened the repayment holiday for overseas borrowers to 1 year. We have also restricted borrowing for those who have had a repayment of $500-plus overdue for more than a year. We are, however, keeping interest-free student loans, and we intend to make sure that we write off a whole lot less than the 47c in the dollar - plus that it was in 2009. It is now down to 45c in the dollar; it is improving, but we still have a long way to go. It is largely the overseas borrowers—55 percent of the overdue debt is owed by 15 percent of the borrowers, and they are overseas. It is a really generous scheme, but it is a scheme whereby there is an obligation on students to pay back the money that will ultimately have made their lives better by improving their educational standard.

We also require that students pass their courses; this seems like a bit of a no-brainer, really, does it not? Over a period of 2 years students must have passed half of their courses. We have also said that there must be a limit on how many years they can continue to receive student loans. I heard a story last night from a constituent about someone who went back for a third degree, and then said they were intending to do a fourth. I think that person might be in for a bit of a shock, because simply being a perpetual student and having the taxpayers funding that particular lifestyle is not what the scheme was intended for.

The student loan scheme is a really important scheme. We have made changes that will make the student loan scheme much more sustainable, thereby reducing the need for more Government borrowing to fund it. Those students who are overseas will find that we are entering into arrangements with countries to help us track them down so that they can repay their loans. There should not be arrogance amongst students who have borrowed that money, or a belief that they can keep the money and not repay the loan. The taxpayers in New Zealand have loaned it.

Hon STEVEN JOYCE (Minister for Tertiary Education) : I would like to have the opportunity to take this call to follow on from my colleague Jo Goodhew, who spoke very well, and to talk a little about some of the other initiatives that the Government is taking to improve the skills in the economy and improve the outcomes of tertiary education. A lot of them involved moving from an inputs focus, if you like, or a “how much money can we spend” focus, to a “what can we get for the money that we spend, and what sorts of results can we achieve” focus. We have increased the numbers of places, as Jo mentioned. We now have, for example, at universities and polytechnics 11,600 more full-time funded places than in 2008, which I think is a pretty impressive result.

We can look around the rest of the world to see some of the challenges that the higher education sector is facing. I met the vice-chancellor of Oxford University last week, and he updated me on what is going on in the UK. It is certainly a very different situation from the one in this country, as we have sought to maintain and indeed grow our investment in the number of places in institutions. This year in the Budget we have funded up to 750 additional places in high performing private training establishments as well, and that is the first significant increase in the number of funded places in that part of the tertiary sector for some time. But we are also making requirements in terms of performance-linked funding, to make sure that it is not just about enrolments but also about achieving results. We are also getting the publication of performance information across the tertiary sector to encourage that focus, as well. I record for this Committee’s information that the tertiary sector is responding very, very well to the incentives that we are setting.

There was quite a bit of discussion at the Education and Science Committee about the area of industry training. I think it is very important, because we are doing a lot of work there at the moment. We had an issue of very significant numbers of trainees being listed as being involved in industry training but not achieving any credits. In fact, something like 53 percent of trainees who were enrolled to train in 2008 did not achieve any credits in that year, and there was a very similar percentage in 2009. In fact, 44,000 people were enrolled in both years. Money was paid in terms of a subsidy in both years for their training, but they achieved no credits, at all. So in the industry training space we have also moved to a model in which we are looking to see better outcomes, and actually get credits awarded appropriately to trainees who are operating in that space. Again, I have to say the industry training sector has responded well. This year, despite the fact that quite naturally we would see a decline in the number of trainees in training, we have actually had an increase in the number of credits earned, and an increase in the number of qualifications earned. Ultimately, that is the important thing: how many people are being upskilled in industry training.

Right across the vocational sector a number of changes will have a very positive impact, and I would like to refer briefly to them for the Committee’s information. The first one is the whole tidying-up and simplifying of the qualifications system, particularly in the vocational educational training area. From the 4,500-odd qualifications that we currently have listed at levels 1 to 6, we will be down by about a third of that at the end of this year. That process is ongoing. We are working hard with the New Zealand Qualifications Authority to achieve a further reduction, because it will have the effect of simplifying the whole vocational pathway system.

On top of that, we are putting a lot of effort into getting more and better literacy and numeracy, in levels 1 and 2 particularly. I think that is hugely important. If we are to have second-chance learning at levels 1 and 2—and that is very important—I think making sure that we have literacy and numeracy embedded in it is crucial. We know we have a challenge with some older New Zealanders who do not have the required literacy and numeracy skills to be successful in the modern world. With the approach that we have taken, we have seen in a couple of years a quadrupling in the number of embedded literacy and numeracy courses available. Again, I take my hat off to that sector for responding very well to the challenges that the Government has placed in front of it. There is some very good early success, but it is only early success; there is a lot more to do in this space, and we are very determined to do it.

The other thing I just mention in passing is international education. We are doing a major reorganisation in this area and will have legislation back before the House shortly. This is important too for New Zealand’s educational future—to take advantage of the great skills we have in our education sector. Thank you.

  • Vote agreed to.

Vote Transport

GARETH HUGHES (Green) : Kia ora, Mr Chairperson Tisch. Ngā mihi nui ki a koutou. Kia ora. On Saturday night some 18,000 Aucklanders boarded a train to Eden Park to enjoy a good game of rugby. It was good to see Dan Carter practising that drop goal, which might come in handy in the Rugby World Cup. It was good to see the rail network coping with such a huge number of people. But we saw delays of 30 minutes, sometimes longer, because the bottleneck in Auckland is the Britomart Transport Centre. Of course, we can get only 12,000 people through the Britomart Transport Centre; the capacity problem is that it is a dead-end station. The massive missed opportunity of the 1920s, 1950s, 1970s, and 2000s was not to construct the central business district rail link but to double the capacity of the station, which would have transformed downtown Auckland and transformed the rail network. The context, of course, is that we have the Rugby World Cup, which is a fantastic opportunity. But people will be disappointed when they see our dinky little diesel trains, no railway to the airport, and no plan to progress Auckland’s major asset.

Faced with an economic and ecological crisis, this Government, however, has gone down a road to nowhere, borrowing billions of dollars for its expensive motorways and acting as a roadblock to the smart transport alternatives that we need. In fact, the Government’s plans are failing to deliver economic development or sustainability. What we need is a smart transport policy that delivers jobs and clean, green economic development. The Minister of Transport asked me today what a smart transport policy is, and I say it is a balanced budget that looks across all the transport modes, it is resilient, it is future-proofed, and, lastly, it gives people options. When we face high oil prices, this Government says we should buy a hybrid or an electric car. Not many Kiwis I know can go out and do that. So I asked the Minister why he is acting as such a roadblock to Auckland’s aspirations to develop its transport network.

Of course, the problem stems from the fact that this Government refuses to fund Auckland’s ambitions. The pantry is bare, because the Government has spent all the money on State highways. It refuses to fund regional fuel taxes, which is Auckland’s own revenue stream, and it is leaving it up to rates or, potentially, asset sales in the future. Of course, on top of this we have a significant funding shortfall recently uncovered for Auckland transport. We have seen this Government ramp up the rail access charges. We have seen it pile on the interest for the electric multiple units, and we constantly hear in this House that the Government is spending $1.6 billion on rail. Yet at the same time we have also seen massive patronage growth of 21 percent in the last year.

The big picture coming from the Government in the last few months has been the Government policy statement for transport funding planned for the next 10 years. Again, what we are seeing is considerably unbalanced. For every dollar that this Government is spending on all the walking and cycling projects and on all the buses and trains, it is borrowing $6 and pouring it into State highways. If we look across the OECD, we see that we are spending 82 percent of our transport budget on roads. In the UK that figure is only 55 percent. In Sweden, which actually has an oil reduction strategy, it is down to 45 percent. We are seeing the Government spending an average of only $372 million on public transport infrastructure over those 10 years, yet we are seeing a total spend of $19.3 billion for State highways. That is absolutely unbalanced. We are seeing cuts to some activity classes, road safety, and planning, and something that I cannot quite fathom: we will see better data recording coming from the Government policy statement by having only one activity class in the future.

The context, of course, is that we have falling road traffic across the country. We are seeing oil prices increase. We see that being the major driver of inflation, which is now at the highest rate that we have had in 20 years. We have also seen new research findings come out in only the last month that 700 Aucklanders are dying prematurely as a result of the air pollution stemming from cars. The report from Auckland Council’s Kristen Webster, the principal specialist air-quality expert, found that we are seeing 700 premature deaths and 1.16 million days being lost due to poor health. We should be focusing on those issues in our transport plan. Instead we are seeing a not smart transport plan from this Government to borrow billions of dollars to pour into expensive motorways, when we are seeing traffic falling, we are seeing the price of petrol increasing, and we are seeing patronage on public transport increasing by more than 20 percent. We are seeing a monument in tar and asphalt to 1950s transport speaking—a colossus of roads.

Lastly, the solutions we need are transport choice and an inspiring vision for our future. The Green Party view is that we are wasting billions of dollars on expensive motorways, locking us into a car and oil - dependent future. We need to set a moratorium on motorways. We need to redirect the transport budget into a balanced transport system that takes into account all the transport modes, including buses, walking, cycling, and sea freight. That is the answer.

Hon STEVEN JOYCE (Minister of Transport) : We heard an interesting contribution from the previous speaker, Gareth Hughes, although I have to say that I have heard it all before. Of course, he is from the party that has not seen a road it likes—ever—and it is unlikely to, so we should probably just cope with that. He also has not seen a tax he does not like, and, in fact, neither has anybody on that side of the Chamber. They love a new tax. It is not a good week until a new tax has been introduced, according to that side of the Chamber. If it moves, tax it.

Of course, the latest solution from the Greens is to add another tax in Auckland to go with all the other taxes that they want to add. Just think—if we actually had all the taxes that the left has advocated for over the last few months, we would absolutely have a New Zealand that would look very, very down in the mouth at this point, instead of coming out of the recession, which is what is happening right now.

The other thing I should mention in response to the member is the great fiction that we are not investing in the railway business, because of course we are, and very, very significantly. Again, the member has not seen a train track he does not like, in the same way that he has not seen a road he does like. But we are spending very significant sums not only in metro rail but also in seeking to turn round KiwiRail, which, as we know, is a very, very big challenge. The second quarter of a billion dollars of seed capital has gone into KiwiRail as a result of this Budget, and there is a third one to come. It is a very, very challenging turn-round; it was in very, very poor shape, and it will not be easy to do, but, effectively, we are investing $4.6 billion over 10 years to turn round that organisation.

Also, the Government is investing very significant sums of money into Auckland metro commuter rail. Again, it does not suit the member’s story, but, nevertheless, it is occurring.

Hon Shane Jones: Labour policy.

Hon STEVEN JOYCE: No, no. That is actually completely wrong, I say to Shane Jones. The member needs to get that checked out. The reality is that Labour wanted to have a 10c a litre regional fuel tax in Auckland. That was Labour’s policy. We cancelled that tax and we put the money directly into the electrification. This Government has paid for the electrification that is currently being built in Auckland. That is slightly unpalatable for Labour; it would have rather had its 10c a litre regional fuel tax. I invite Labour members to campaign on that at the upcoming election, because that would be very popular alongside the congestion tax that it is also promoting at the upcoming election! Motorists in Auckland will not be able to move, because every 10 seconds there will be “ker-ching, ker-ching” for Labour and the Greens. We cannot have that.

We are making a very big investment and are working to invest in the electric trains alongside Auckland, as well. And, of course, we are prepared to evaluate further projects, including the central business district rail link, but, as the member will know if he takes off his rose-tinted glasses, there is a lot of work to do in that area before that is ready to go. As for that fabled 20 percent increase in patronage—well, if we take 20 percent of 1.5 percent, then yes we are making good progress! But I do think it is great that all these people used the train on Saturday night. I think that is fantastic. Of course, the price was pretty good, but, nevertheless, they did and it is progress. We do need the train system to work well, as we need the roads to work well. That is why one cannot take a blinkered approach to transport.

That is also why the Government is investing very significant sums right across the transport system, with the investments in the western ring route and the Hobsonville deviation, which was opened this weekend. We have heard that the Victoria Park tunnel is ahead of plan, and there are a number of other projects that are proceeding around the country.

I would like to mention before I sit down the road safety policy, because I think that is very important as well. Again, it is about achieving outcomes. One interesting thing that people always say is that we should spend more on something. Actually, we are spending better on road safety and we are getting better accountability. I do not know the reason exactly why we are at the lowest 12-month rolling road toll that New Zealand has ever had at this point. Certainly I do not think it is right as a Government to claim credit for that, because a range of things have occurred. But it does include things like the price of fuel. It does include things like better enforcement initiatives.

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

Vote Courts agreed to.

Vote Pacific Island Affairs agreed to.

Vote Employment

Hon PAULA BENNETT (Minister for Social Development and Employment) : Thank you, Mr Chairman, for allowing me to take the call. I am not overly surprised that there is not a call from the Opposition on this, as we have had no hearing requested in the estimates on Vote Employment for the last 2 years. Opposition members did not ask the Minister to come before the Social Services Committee this year; they did not ask the Minister to come before the select committee last year. On something as important as Vote Employment, I think it is quite surprising, to say the least. It is quite surprising that Opposition members are pretty much hands-off on issues around employment, and there are no real questions from them.

So instead of calling the Minister to account, as it could have done—that is the parliamentary process, after all—instead of asking the Minister to front up to Vote Employment in front of the select committee and answer some questions on employment, the Opposition has been very silent and there has really been no call from Opposition members to see this as an area of importance. That has been very evident in their actions. It is not just all talk, it is very clear in their actions, and, of course, there are no calls tonight, as I can see so far, on this. I hope Opposition members do have something to say on employment, and might stand up and ask some questions, because I am looking forward to that.

Employment, of course, is crucial, and there is absolutely no doubt that we have seen some very tough times in the last 3 to 3½ years. As we came out of the global recession, we saw the unemployment rate rise and we saw more people unemployed. We saw both employment go down and unemployment increase. We saw fewer people in the market place and in the labour market. We also saw hours reducing, which was quite interesting. When we looked at how businesses and corporates and those sorts of jobs responded to the recession, we saw a great reduction in hours worked. We saw people being reduced down to a lot more part-time work, which was tough on people, particularly those who were struggling anyway, and on the minimum wage or close to it. To then have their hours reduced was really tough on them.

We introduced, in those early days, the 4-day week, so people could go to the 8-day fortnight and reduce their hours, and there was support for them from the Government. What we heard and what we saw was that that was greatly received by businesses, because it gave them options and let them see what could be done. They did not need the Government to tell them to do it. They were responsive enough and had great enough relationships with their employees that they could get together and make arrangements amongst themselves to try to keep people in work wherever possible. That is certainly what this Government thought would happen and how we thought it would go.

As far as Vote Employment is concerned, we saw the unemployment rate top out there. We did not see it get as high as in some other countries, but then again we did not hold ourselves exactly against the comparison with Australia, either. We saw the United States at 10.1 percent, and Ireland going into double figures and higher; it got be to really, really tough.

Hon Pete Hodgson: What have we done to deserve this high-paid commentary on the lives and times of our society?

Hon PAULA BENNETT: We have a bit of chipping in from the Opposition right now. Anyone who is unfortunate enough to have to watch Parliament will not be surprised that we are getting a little bit of chipping in from Opposition members, but we do not actually get them asking the Minister to go in front of the select committee. We do not hear them taking a call on Vote Employment, so, as per usual, it is hot air blowing across the Chamber, but no real action, no real accountability, and no real holding to account either, from Labour, and that is a fact.

We now have 2.2 million New Zealanders in work—61,000 jobs have been created since 2009. We are seeing more full-time jobs now than we did, more women in work, increasing wages, and more hours for those workers who are in jobs. What has happened is the labour market has responded. Businesses tightened up when they had to, they went through some tough times, but now they are actually increasing hours. We see it through the household labour force survey. We see them taking on more women—which I am always pleased to see.

The number of young people in work has been concerning not just to Parliament but to New Zealand overall. We certainly have had some concerns around the 16 and 17-year-olds, and their rate has certainly increased. But we have seen an increase of more than 5,400 young people in work over the last year to June, and we have also seen the number of them not in employment, education, or training go down.

TODD McCLAY (National—Rotorua) : I thank the Minister in the chair, the Minister for Social Development and Employment, for a very good speech, but, more than that, I thank her for her commitment over the last almost 3 years of looking at employment issues. In particular I thank her for the work this Government has done for young people who are not employed, for finding ways to help them back towards the workforce, and for helping them find the courage to put their heads up, to go out and look at what is happening in the world, and to seek skills so they can join the workforce.

I will talk a lot more about what the Government has done over the last 3 years, but also about our plans under this Budget and where we think we need to head with young people. Before I do that, I must say I think it is a very concerning thing for all New Zealanders that the Opposition will not take a call on this issue. Opposition members will not take a call, it seems, on employment in New Zealand, or on youth unemployment. I think they will be taking calls on many other things that are important to them, but I do not think it is wise for us to guess what they are.

Employment is a very important thing to all people in this Parliament. Youth unemployment is of particular importance to the Government and, I know, to the Minister. I challenge members of the Opposition to stand up, take a call on this part of our debate, and tell us about some of their policies, moving forward, to get young people into work. I guess if they do not take that call the public will decide that either it is not of importance to them or they do not have policies in those areas.

Darien Fenton: What about your policies? What’s that party doing? It’s your responsibility at the moment—not for long.

TODD McCLAY: The member opposite has asked me to talk about some of our policies. I have only 5 minutes, and a huge amount of work has been done over the last 3 years, as Minister Bennett has had a very focused approach to what we must do with young people in New Zealand.

One of the reasons that we have had increased unemployment levels for young people in New Zealand is the recession. But rather than using that as an excuse, as other parties would in this Parliament, we have merely said that this is an opportunity for us to focus more on young people, to bring greater skills to them, and to look at some of the reasons why in many parts of New Zealand youth unemployment has been much higher than it should be.

Certainly in the Bay of Plenty youth unemployment has been higher than any of us would want for very many years under a number of Governments. Why would this be? It would be in part because of a lack of education and a lack of direction, and because the previous Government, over 9 years, said it was all right for young people to sit on an unemployment benefit. They put some fuzzy things around them, and said it was OK to leave them there for a period of time.

In my electorate of Rotorua last year I had the opportunity to welcome back the first group of young people who went on the Limited Service Volunteers scheme. I invited them to my electorate office and we had a small morning tea. I wanted to hear from them about whether they thought it was a good programme. What I saw, and what I learnt, was quite remarkable. Young people who had not done well at school, who did not have a lot of confidence, who probably would not look somebody in the eye, who were not well placed to get out into the workforce, and who would have otherwise languished on a benefit for far too long went off and spent 6 or 8 weeks away on the Limited Service Volunteers scheme. They came back with a positive attitude and with a plan. I met a young man—

Hon Steve Chadwick: A total failure.

TODD McCLAY: The member opposite says “a total failure”. A total failure, I say to the member opposite, is leaving young people to languish on the unemployment benefit and saying that that is good enough for them.

I met a young man who did not have much going for him. When he came back to Rotorua he stood up straight and told me that he actually wants a job now. He enjoyed it. He enjoyed the time that he had spent there. I saw him a few months later, and he was out in the workforce. It was not full-time work, but that young man would not have had the confidence to find work otherwise. I congratulate the Minister in the chair, the Minister for Social Development and Employment, not only on what we have done over the last year but also on the extra money and extra places for 1,500 young people a year to go on the Limited Service Volunteers scheme.

Kawerau is a great example of a place that we have heard a lot about on the TV screens of late. Can I say to the people of Kawerau that I know they are very proud of their town. I met another young man who went out on the Limited Service Volunteers scheme. That town had to work quite hard to get that person on that scheme, and his life has, in part, turned round. But it is not enough for us to just let young people go through a scheme, say that that is good, and then put them back where they were. This Government has a lot more support around that.

Hon JOHN BOSCAWEN (Leader—ACT) : It is a privilege and a great opportunity to take a call in this debate on the estimates for Vote Employment—or unemployment. We have just heard both the Minister in the chair, the Minister for Social Development and Employment, and the member for Rotorua castigating Opposition members because they were not prepared to stand up and take a call in this debate. They said that the Opposition was not prepared to put its policies forward. The ACT Party is very proud to support the National Government. We are a confidence and supply partner with the Government, and most of the legislation that passes through this House passes with the support of the ACT Party. But I have to say that when it comes to youth unemployment, we take on the role of the Opposition. If the Labour Party is not prepared to stand up and talk about what is required to address youth unemployment, then the ACT Party certainly is.

Youth unemployment is one of the greatest tragedies of our time, because it is largely preventable, and the Minister and Mr McClay know that well. New Zealand has a disastrously high rate of youth unemployment. Last week Statistics New Zealand released figures showing that the rate of youth unemployment has risen to 27.6 percent. Think of that: more than one in four young people is unemployed. What is worse, more than one in three young Māori people is unemployed.

Although the ACT Party is a confidence and supply partner of the National Government, it does not believe that the Government is taking this issue seriously. Although it may have implemented multimillion-dollar schemes to effectively bribe employers to take on young people, it has not been prepared to acknowledge that that simply has not worked. The Minister of Finance can stand up at question time and defend the Government’s record on spending, but tens of millions of dollars have been put into schemes to employ young people, and there is a much simpler solution.

The numbers are truly staggering. Some 41,000 young people are out of work. That is enough young people to fill the nearby Westpac Stadium and to then spill out on to the pitch. Youth unemployment is at the highest level it has ever been, even after taking into account the effects of the recession, and the biggest tragedy is that it is entirely preventable. An estimated 12,000 young people are unemployed as a direct consequence of the abolition of the youth minimum wage. Let me repeat that: 12,000 young people are unemployed as a direct consequence of the abolition of the youth minimum wage. While unemployed young people are scraping by on the dole, there is a solution that is not being taken advantage of. They are missing out on vital work experience.

Unemployment robs young people of their sense of self-respect and their self-sufficiency. There is no dignity in sitting around waiting for a weekly welfare cheque, and that is exactly what the scrapping of the youth minimum wage has done. I hear people ask why abolishing the youth minimum wage pushed so many people out of work. Supporters of abolishing the youth wage argued that doing so would give youth a livable wage, but it did not. When given the choice between employing an older and more experienced worker and taking a punt on a young person lacking in maturity, lacking in experience, and fresh from school—and having to pay that person exactly the same as what that older, more experienced person would be paid—it is no surprise that an employer will choose the older person virtually every time. One has only to talk to employers in New Zealand to know that that is true, and I cannot believe that the Minister for Social Development and Employment, who is sitting in the chair right now, has not spoken to employers and does not know that to be a fact. I think that is a tragedy, because there is an opportunity to do something and it is not being taken up.

In abolishing the youth wage, the Government forced young people to compete with experienced workers, which placed young people at a serious disadvantage. I ask members in the supposed Opposition why employers would employ a 16-year-old or 17-year-old fresh out of school who is without experience when they can employ someone with more experience and more maturity. Why would they do it? The answer is that they are not doing it, and that is reflected in the statistics. It is reflected in the over 12,000 extra young people who are denied that opportunity. If Labour members opposite do not see that, it shows us how completely out of touch with reality they are.

An entire generation of young people has grown up without the work experience that generations before them have benefited from. The 16 and 17-year-olds who are unemployed today will continue without that experience as 19, 21, and 22-year-olds, never having had a job. That cycle has to stop.

The ACT Party fought tooth and nail for the youth rate to be reinstated. We submitted a member’s bill in 2010 that would have effected change and curbed youth unemployment. National, Labour, the Greens, and the Māori Party voted against that bill. Since then youth unemployment has continued to skyrocket. It was the ACT Party, and only the ACT Party, that showed it really cared about youth unemployment. The tragedy is that the Minister in the chair knows that and the members on the National benches know that.

There are 12,000 young people sitting at home, unemployed, without the benefit of the experience that getting on the first rung of the ladder would give them. The key to getting a pay rise is work experience. It is the experience that comes from having that first opportunity. One of the great myths created by those who oppose having a youth wage is that reinstating it would simply shuffle jobs from the old to the young. Nothing could be further from the truth. Reinstating the youth minimum wage would create new jobs. Employers who currently cannot afford to take on an extra staff member because they have to pay that person $13 an hour may be prepared to give a young person—an apprentice or a person in training—that opportunity at $9 an hour. The tragedy is that this Parliament passed a law that makes it illegal for the employer to do that. Let me repeat that: this Parliament—first Labour supported it, then it was supported by National—passed a law that makes it illegal for an employer to offer a young person, straight from school and without experience, a job at $9 an hour. Instead, this Parliament has decided to send those people to the scrap heap and has sent them to register for the unemployment benefit at $4.50 an hour.

Mr McClay talked about young people languishing on the unemployment benefit. Well, I say to Mr McClay and I say to National members that if they want to address this issue, they should actually have youth rates. They should have the courage of their convictions. National members know that when this proposal was put up by the previous Labour Government, they rallied against it. They spoke against it and they campaigned against it, yet when they had the chance to actually do something about it, they refused. They voted against Sir Roger Douglas’ member’s bill to reinstitute youth wages.

The tragedy is that the members of the National Party actually know it. The members of the National Party are more likely to have had employment experience, to have been in business, and to have actually employed people. They—those business people and those employers—know more than anyone in this Chamber how to employ people, and about the economics of employing staff. If an employer has an opportunity to employ someone who is mature, who is older, and who has experience, and would have to pay exactly the same to a young, inexperienced, immature youth, the employer will go for the more experienced person virtually every time.

We sit here and talk about employment. The Minister stands up and says that the Opposition is not prepared to debate this issue or to put up policies. The ACT Party has put up a policy, and it certainly is one we intend to campaign on. If we can come back into this Parliament after the election, we certainly hope to get it through and hope to get some spine and backbone into the National Government following the election. Thank you.

Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) : I could not let the comments of the Minister for Social Development and Employment on this particular issue, Vote Employment, and how it affects a lot of young people in New Zealand, go unnoticed. Labour believes that the escalating level of youth unemployment is unacceptable in a country like New Zealand, where we pride ourselves on being the best place to bring up our kids. Labour believes that youth rates are no response to tackling the real and serious issue of ensuring that our kids have a great future. Youth rates just will not cut it. We have to invest in lifting kids’ skills while they are at school, ensure that our kids stay at school longer, invest in their training opportunities, and, if we need to, pathway them earlier towards their career choice. That is why programmes like Gateway and the Secondary Tertiary Alignment Resource—and many schools throughout the country will tell us this—provided real opportunities to get a job. Youth rates are not the answer.

In fact, employers currently have the ability to introduce a training wage, but they must be committed to contributing to the training of that young employee. That starting rate is $10.40 an hour, but employers must continue to invest in training opportunities for young people on that rate. Labour says we should lift the minimum wage to $15, yet the Minister is doing nothing about it. She says it is OK for young people not to have their skills invested in, and to be shipped off to the Limited Service Volunteers programme. Well, we have actually had feedback in our communities that that is not all it is cracked up to be. Yes, although some young people who are disenfranchised from their communities or have been disengaged from education have got on to the programme and had some positive gains, long term in terms of employment opportunities the Limited Service Volunteers programme frankly does not cut it. It does not secure those young people a commitment from the Defence Force that they will get a placement.

In fact, I visited a military training entity, and it had about five kids at the time who were all doing their test to get into the Navy. Some of them had fallen out of school early. Some were absolutely committed to a future in the Defence Force. Do members know what I heard? A couple of them had done their test, but they were at the lower level of the achievement standards for the Defence Force and they just had to wait until a space was available. They were being told that actually the Defence Force is taking higher - skilled and qualified young people into the defence forces. These young kids that we are talking about—the ones who have been disengaged from school and are trying to make a start for themselves—are left languishing. I suspect that the Minister has no sense at all about what is happening with regard to this group of young people.

If members visit private training establishments, they will hear real concerns being expressed about the changes afoot in funding for 18 to 24-year-olds to secure their places on level 1 and 2 National Certificate of Educational Achievement courses that are being introduced by the Tertiary Education Commission. That will do nothing to build and invest in the skills of those young people, so that they can have at least the foundation skills to scaffold on to a career pathway. What is the Government doing about that? Real solutions to youth unemployment have to ensure that we invest in young people’s skills, that we invest in real opportunities for apprenticeships—and there is nothing about that; the Government is being very silent about the issue of apprenticeships—and that there are jobs out there.

The Government is also being very silent about the Mayors Taskforce for Jobs, which was absolutely committed to ensuring that youth unemployment would be tackled and reduced, community by community by community. It took the leadership of local mayors for us to see youth unemployment in communities like Te Kūiti brought down to the level of single figures. That was incredible, because it was a stakeholder commitment to say: “This is a challenge for all of us, but we will commit to it as long as the Government can partner it. And the business community has to partner it, as well.” It was a whole response. Government members are very quiet about the Mayors Taskforce for Jobs and its achievements. Instead, we are hearing that the Limited Service Volunteers programme is the solution to youth unemployment. Well, I think not. Far too many Māori and Pacific young people are suffering at the hands of the extensive changes in the education sector and in the investment in skills sector by this Government, and that has meant that youth unemployment continues to increase. That is unacceptable—and the Minister sits there, silent.

  • Vote agreed to.

Vote Social Development

Hon PAULA BENNETT (Minister for Social Development and Employment) : Yes, I will stand up and take a call. I will stand up and take a call particularly on Child, Youth and Family within Vote Social Development, and particularly on vulnerable children. We have been hearing a bit more about vulnerable children of late, which I personally think is a very good thing. I may not agree with everything that the Greens propose, but I actually celebrate those members being part of putting children on the agenda for this campaign period when perhaps people’s interest is heightened and they want to take an interest in children, where we are heading, and what we are doing.

I think any members of Parliament in this House being interested in what direction we take and what we do is really important. I will comment on the record so far in relation to what I have tried to tackle in terms of those who are abused, neglected, sexually abused, and physically abused, in terms of the increasing number of children suffering emotional abuse, and in terms of managing how Child, Youth and Family deals with them in the first instance.

I had concerns about social work practice when National became the Government. At some levels I felt that we have such awesome social workers throughout this country, but could the same high quality of service standard be guaranteed across the country in every office one goes to? I could not put my hand on my heart and say that it could be guaranteed. So it was really important to me that we looked at our own service. It was important in those links between police, health, non-governmental organisations, and Child, Youth and Family that when we found those children who had been hurt and neglected, we made sure we had the right response, that it was quick, and that it incorporated not only families but also extended families and caregivers who were involved.

When I first came into Government I was appalled at the re-abuse of children. We knew their names, we knew where they lived, and we knew who they were. As a New Zealander, when I say “we”, we had tried to care for them, yet somehow they had been hurt again. I found that absolutely sickening and absolutely appalling. We did some stuff to really tighten up that, with a multidisciplinary approach for any child that was hospitalised because of serious abuse. So we are not having just one person decide what happens to that child when he or she leaves hospital; there is a multidisciplinary approach combining police, paediatricians, Child, Youth and Family, some non-governmental organisations, and everything else around the table, and that has made a difference. So there are a number of things around that.

I then wanted to look at teen houses and how we supported them better. Where do those teens who are really struggling and on the verge of losing their children go for parenting support, and to have a roof over their heads? I am about to open the last of those supported teen houses next week, I believe, in Gisborne. I am absolutely thrilled by them. Teens can live there for 3 months, 6 months, and up to a year in some circumstances for some of them. I met a young woman the other day who had had her second baby. The first had been removed, and we were very close to removing the second child, to be quite honest, through Child, Youth and Family. But with her living there for a good 8 to 10 months, there is a really good chance she will bond differently and actually keep that baby, and I think that is kind of fantastic.

I wish we could have more supported housing for teens; that is a goal of mine. I am not sure whether this is a time when Ministers should stand up and state their goals, but I do have a goal that we see more supported housing for teens throughout New Zealand, and that we support people quite differently. The ones I have seen have been run by Māori providers, and others, but I would like to see how we could perhaps do it differently, in real partnership with iwi, and help them—because supported housing is not cheap.

I could list a whole long list of things that we did around vulnerable children and trying to get that practice to be better. Then it came to the next stage. The next stage is gnarly, to be honest. The next stage affects middle New Zealand. The next stage has the potential to affect people who do not abuse and neglect their children, because it could take funding away from them. It could mean that when we share information, we share information about their children. It is one thing to say we want information shared on abused, neglected, and vulnerable children, but it is quite another thing to say we might share information about people who would not normally come to the attention of any services.

I want to talk about mandatory reporting. What does that mean? We saw some evidence of it overseas where there was a particularly heightened awareness of it in some offices, and their reporting thresholds were a lot lower, so they had to do much more reporting. Does that work, and how do we cope with that as a workforce? Is it the right thing to do? Should we be taking resources away from other age groups and putting them into those who are really young? These are really complicated issues, and New Zealand needs to debate them openly and in a way that involves people having their say in what the next big, vital step is. I am proud of the green paper on children.

METIRIA TUREI (Co-Leader—Green) : Kia ora. I first acknowledge the reference made by the Minister in the chair, the Minister for Social Development and Employment, to the work of the Green Party. It is certainly true that the Green Party has put the issues of income inequality—the widening gap between rich and poor in this country—on the political agenda, and we are very proud to have led that work in Parliament and in the community.

I will address some of the solutions to child poverty that are available to us as parliamentarians and as a community, and talk about the solutions that the Greens have for dealing with the child poverty issues that the Minister has touched on this evening. Last week the Green Party launched its solutions to bring 100,000 children out of poverty in just 3 years—by 2014. I acknowledge those who supported that work: the various non-governmental organisations around the country, and Nicole Whippy, Cindy Kiro, and Courteney Moloney. Courteney Moloney is a young woman who was studying at law school while on the domestic purposes benefit and while taking care of her baby. She was prepared to talk about her story and the difficulty that she has in terms of having sufficient resources to take that next step for her into better education and caring for her child.

There are 270,000 children who live in poverty in this country. That is one in every four—a quarter of all of our children. These are not nameless or faceless kids; these are kids that we know. They are our friends’ children, they are our neighbours’ children, they are the children of our colleagues and our acquaintances, they are our nieces and our nephews, and they are our mokopuna. They are our children and they deserve better than that. They deserve the best possible start in life, and they deserve to be guaranteed the essentials, because when we guarantee our kids the essentials, we guarantee them the opportunities for the best possible life.

We need to take action to bring these children out of poverty for their sake and for our collective future. International research, particularly in the UK recently, has shown that the cost of not addressing child poverty is around 3 percent of GDP—3 percent of GDP. In this country, that means some $6 billion lost in health, justice, education, and welfare spending that could be saved if we chose to do something—if we chose to take action and invest a little bit now in these kids so we do not have to spend that later. Bringing children out of poverty does not just make humanitarian sense; it makes economic sense, as well.

We have developed four costed solutions that will bring 100,000 children out of poverty, and they address a number of the inequities first put in place, I have to say, by the Labour Government under Working for Families, and exacerbated by the decisions of the National Government, particularly around welfare spending and the training incentive allowance. Our solutions are achievable and they are affordable. They will work to bring those kids out of poverty, and that is what we need to do.

We have four solutions. The first is to make Working for Families fair for every family. Children have the same needs whether their parents are in paid work or not. Working for Families helps low-income families to make ends meet, but parts of it do not apply to those families who are reliant on a benefit. We would incorporate what is now called the in-work tax credit into the family tax credit, and extend it to 140,000 of the poorest households in this country. That means an extra $60 a week for those 140,000 New Zealand families.

That alone would bring at least 100,000 children above the poverty line. That poverty line is at around $14,000 a year, so it is a very miserable income that those families have to live on, and that those kids have to live on. For those families, every week it is the difference between paying the power bill and having enough food. These choices are real for our families, and they need to be made real for the politicians and for the Government, which makes the decisions about whether those kids get the money they need to have just a decent life.

Our second solution is to provide better study support for sole parents and for sickness beneficiaries. We know that kids do better when their parents are better educated. The training incentive allowance is designed to help sole parents on the domestic purposes benefit to upskill and retrain.

TIM MACINDOE (National—Hamilton West) : I am very pleased to speak in this debate. I am a bit surprised to hear how few members opposite are interested in doing so; I think it is probably because we actually have a very good track record to talk about in this area. I do not think that any member of this House fails to care about these issues or is lacking in real passion about youth development matters, but I pay tribute to our current Minister for Social Development and Employment, Paula Bennett, because she rolls up her sleeves, gets stuck in, and just does the job. As I listened to what Metiria Turei was saying, I thought that a lot of the principles she was talking about were the right ones. It is about talking about what works and what will make a difference—and we are doing that. I am very pleased to have this opportunity to tell Metiria Turei exactly what we are doing.

We have heard some bizarre contributions. I was very disappointed with John Boscawen’s contribution earlier, as he talked all around the issue but did not actually get stuck into what we are doing. I remind Mr Boscawen that he is a member of the Government; he is not a member of the Opposition. One would have thought he was having a bob each way. Mr Boscawen and Ms Turei both need to be reminded that young New Zealanders in particular have been really hard hit by this recession. There is no question of that. They are the ones who will find it hardest to get jobs, and they are the ones who most need the support of the Government to get training, to get an education, and to get a head start. Getting the first step on the ladder is often the hardest thing to do. That is why we have put in place opportunities like Job Ops, like Community Max, and like the Limited Service Volunteers scheme. It was very disappointing that Mr Boscawen did not talk about any of these things, because, in fact, they have made a huge difference, and I am happy to give him some of the figures on that.

The Limited Service Volunteers scheme is a $55.2 million package, and it is a really important part of our work to build skills and knowledge and build the stronger economy that we all want. That stronger economy will come when young people are engaged, focused, and motivated, and have a sense that they can get ahead in the modern economy and have an opportunity to become self-reliant and build a better future for themselves.

The Skills for Growth package provides a $5,000 subsidy for employers to employ and train young people in high-demand industries. That is what we need. Last Friday I was in my electorate in Hamilton and was able to acknowledge some young people—and some not so young, I have to say—and present them with certificates. As part of an industry training organisation scheme they have had the courage to go back after, in some cases, years out of education and get some training. In this case it was training with regard to double-dipped galvanised products. They got themselves some qualifications, and what a fantastic thing it was to see those people realising they could lift their qualifications, become a bit more adventurous in what they are doing, become infinitely more employable, add value to their company, and also have the opportunity to make some decisions for themselves. These things are good, and about a thousand young people a year will benefit from the good job and industry-specific qualifications that this Government, of which Mr Boscawen is a part, is offering. They will cost $7.2 million over 4 years.

The Job Ops programme, I think, is one of the most fantastic things that this Government has offered. It incorporates a flexible $5,000 subsidy, as has been said, that can be used for both wages and training. That flexibility is really important. The programme costs $13 million—or it will do over the next financial year.

Hon Steve Chadwick: Yeah—really works in Murupara.

TIM MACINDOE: From August 2009, I say to Mrs Chadwick, through to the month ended 31 March 2011, over 10,000 young people were placed in employment through Job Ops. Is that not worth celebrating? I can see how excited Mrs Chadwick is—over 10,000 young people had an opportunity through Job Ops. Well done, Minister! Well done, the National Government—what a fantastic record that is.

As I said, the Limited Service Volunteers scheme—and there is Mrs Chadwick, shaking her head—gives an opportunity to provide some of our most challenging young people with a really life-changing experience. I am so passionate about the Limited Service Volunteers scheme that I want it to be in every town and city in the country. I certainly want it to be in my electorate, because—let us be honest—the young people who are being catered for by the Limited Service Volunteers scheme are pretty challenging. They are not exactly the people who are starting ahead of the pack. They need all the help that we can give them, and they need to have some life-changing experiences. The Limited Service Volunteers scheme is a fantastic programme for doing just that, and I say the Minister should go for it and keep delivering it. We know that it will make a long-term impact, and I will back it all the way. I think it is fantastic.

I tell Mrs Chadwick that the number of young people in work has risen by more than 5,400 over the last year to June, and the percentage of young people not in education, employment, or a training scheme has fallen steadily from 10.7 percent to 9.8 percent. Throughout the whole of this debate we have not heard much about the statistics; it is worth hearing them now.

Hon PAULA BENNETT (Minister for Social Development and Employment) : I am sorry for my delay. I was expecting a call from the Opposition on Vote Social Development, since the Government will spend $22 billion in this round, which will affect about 1.6 million New Zealanders—981,000 at any one time—who are on either superannuation or benefits. I quite wrongly, obviously, thought that maybe it would be a priority for the Opposition to stand up and speak about Vote Social Development and how $22 billion worth of taxpayers’ money is spent.

Just to give the Committee a bit of an idea, there are 300 sites around New Zealand within Child, Youth and Family, Work and Income, Community Link, and other offices like that. As I said, there are about 981,000 clients at any one time, and of that number about 580,000 are superannuitants. The Ministry of Social Development takes about 13.3 million phone calls a year, which is 255,000 calls a week. There are 2 million applications for assistance in a year, and about 140,000 student allowance applications and other applications in relation to that, as well. As members know, Child, Youth and Family receives about 125,000 notifications in a year, which is about 12,000 a month. So that is pretty massive, and I do not know but I would have thought it was a priority and that maybe the Opposition would think about standing up and taking a call.

We saw the unemployment rate peak in, I think, January 2010, and just over 63,000 people were on the unemployment benefit; now we are at about 57,000 people. For the month of June, we saw nearly 800 people net come off that benefit, which was pretty exciting. It was the first month of June in more than 4 years when we had actually seen a drop in the number on the unemployment benefit, which was pretty exciting. Last month we saw the number go up again slightly, which was not so exciting, but it was nowhere near what we normally see. As I say, the increase was not nearly what we would see in normal seasonal employment. In fact, we cannot recall a time when a July total has not gone up slightly, even in the best of times, if you like, which were squandered in that 2005, 2006, and 2007 period, when nothing was done. We are already starting to see that sort of seasonal employment bounce-around again. It has started going down, and we had a week most recently where it went down again. So it just says to us that these are really interesting times as far as employment goes—people taking people on. What I loved about June was the fact that out of the about 784 people who came off benefits, 91 percent of them were young people—91 percent were young. I reckon that is pretty amazing.

We have heard a lot over the last couple of days about the Future Focus changes that the Government has made. We are obviously quite thrilled with some of the results of that. I will say that the results for the unemployment benefit have been better than I expected. I was certainly told by others that I did not need to do a reapplication process—you know, the work test was such that we would not need to do it. But it proved to us that when people come to sign a form, they might at times think differently about how they reapply for a benefit and what they do. Before we had Future Focus, 75 percent of those on any benefit in the system were not work tested, so there were no work obligations. They were not expected to be getting work-ready. They did not have to have a CV. Even after Future Focus we still have, unfortunately, 63 percent of people who go on to a benefit with no expectations of them. Currently, we have about 327,000 people on main benefits in New Zealand, and for 63 percent of them there are no expectations, whatsoever.

In fact, in most cases we put them on a benefit and leave them to sit there, with no intervention, with no support, with no help, and without looking at how we might support them to get off the benefit. I actually think it is a tragedy of our system, and it was something that was identified by the Welfare Working Group. I think it is pretty appalling to see people sitting on benefits year after year. I am not particularly proud of the fact that we have intergenerational welfare dependence and that we meet children who have not known an adult in their house to work. They think that that is the norm. So I must admit I am pretty focused on finding out how we can do better by them, how we can look at the support we give to people who need it the most, and how we can perhaps front-load some of that support. I am interested in knowing how we can look at what people can do instead of the pretty appalling focus centred only on what they cannot do. Someone’s eligibility for the system is based on what they cannot do, and I want to focus it on to what they can do.

  • Vote agreed to.

Vote Youth Development agreed to.

Vote Fisheries agreed to.

Vote Housing

TE URUROA FLAVELL (Māori Party—Waiariki) : Tēnā koe, Mr Chair. Tēnā koe e te Minita e whakakī i te tūru o te Minita i tēnei pō. Ka nui te mihi ki a koe. I tēnei tau tonu nei i te marama o Maehe i puta tētahi kōrero i a Iris Pāhau mai i te Coalition to End Homelessness. I roto i tērā pūrongo, i mea mai, e 80 paihēneti o te hunga noho kore whare nō ngāi Māori—80 paihēneti nō ngāi Māori. I te kōrero ia i tētahi hui ā-tau, hui ā-motu ki te whakakore i tēnei mea, te kore kāinga, ka mutu i puta, me kī, te uauatanga o tēnei momo āhuatanga ki runga i ngā mea o Aotearoa nei. I puta te kōrero, arā nō ngā rau tāngata e noho nei, e ai ki ngā kōrero rough sleepers, ko te hunga noho kore whare nei, kore wāhi nei; i roto o Tāmaki-makau-rau. Ka tāpirihia atu, ko ngā mano tāngata e noho nei i roto i ngā boarding houses, motor camps, me kī, i raro i te parirau o te mea temporary accommodation. Tāpirihia atu ko te 4,722 tāngata o roto i te tatauranga ā-motu e noho nei i roto i ngā whare 2,295 o ngā whare karukaru nei me te 43,000 whare e noho kōpā nei, kātahi ka mōhio tonu ki te āhuatanga o tēnei mea ki runga i te motu whānui tonu me te Ao Māori.

I tēnei tau tonu nei i roto o Ōtautahi, kai te mōhio tonu tātau i pāngia katoatia a Ōtautahi nā runga i te āhuatanga o te rū o te whenua, ka mutu, ko te wāhanga o ngā whare, he wāhanga i tino rongo nei i te ngau o ngā uauatanga o te rū, ngā mahi a Rūaumoko. Kai te tino whakaae atu au, ka mutu, e tika ana te aronga o te Social Services Committee me tā rātou titiro ki te wāhanga whare me te mea anō hoki, me titiro hōhonu nei ki te āhuatanga o te rū o te whenua ki runga o Ōtautahi. Me pēnei rawa te kōrero, kai te tino mihi te Pāti Māori ki te Minita mō ngā Whare, mō tāna whakarongo mai ki wā mātou kōrero ki a ia, me tāna tautoko mai, ko tā mātou e whakatakoto mai ki mua i a ia, me te hunga e noho mai rā i roto o Ōtautahi ki Te Tai Tonga. I puta te kōrero i taku hoa i a Rahui Katene mō te hunga, me kī, i nuku nā te rū o te whenua, ka whai wāhi rātau hei wāhi noho ā te wā. Nā runga i te aha? Nā runga i te whakatau o te Minita. Ā, kai te mōhio tonu tātau pea, i puta noa atu ētahi o roto o Ōtautahi ki wāhi kē. I pērā anō hoki ki a au. I haere ētahi ki roto i a au o te Waiariki. Ko ētahi o wā rātau tamariki e haere nei ki roto i ngā kura kaupapa Māori, arā, nei, i roto i a au o te Waiariki. Nō reira, kai te mōhio tonu tātau, he wā uaua tēnei mō te hunga e noho nei i roto o Ōtautahi.

Kāti, me hoki mai au ki te pūtake o tēnei mea o te kore kāinga. Ko tētahi o ngā kōrero i puta i tērā o ngā hui, nā te Iris Pāhau nei tēnei kōrero, kia kaua tātau e titiro noa iho, me kī, ki te emergency housing me te iti o te utu mō te whare. Ko tāna kē, me titiro ki te pikitia nui, arā, te whakahoki i ngā mea kore whare nei ki roto i te whānau, ki te hapū. Me hono anō rātau ki ō rātau ake hapū, ki o rātau whānau. Nō reira, me kī, whai muri i tērā, me titiro tātau ki tēnei mea, te social housing. I roto i te komiti whāiti, arā, te select committee, ko tā rātau e kī nei e 24 miriona taara kua whakatahangia mō te social housing ēngari, 1 hau 8 kua whakatahangia mō te iwi Māori. E āhua pāpōuri au ki tērā momo kōrero.

Ēngari, ko te tētahi mea pai kua kite atu, me kī, ko ētahi rōpū Māori o roto i te takiwā e hiahia ana ki te whakahaere i ngā whare o roto ake rohe. Nā, me kōrero au mō roto o te Waiariki, arā, mō te rōpū e kīa ana ko te Ngāti Awa Group Holdings. Kai te mōhio te Minita ki tēnei momo kamupene, ka mutu, ko tā rātau hiahia ki te hoko mai i ngā whare o te Housing New Zealand Corporation mō te rohe rā. Ka mutu, i kōrero au mō te Ngāti Awa Group Holdings, arā anō a Mangatawa Papamoa Block Inc. Ko taua āhua anō tae atu ki te Rūnanaga o Ngāti Awa, rātau katoa, me kī, ngā rōpū Māori, ko tā rātau hiahia kia hoko i ētahi o ngā whare, o te wāhanga whare o te takiwā o Whakatāne, kia taea e rātau te whakahaere i ngā whare e pā ana ki a rātau ake, arā, ko ngā Māori e noho mai ki reira. Nō reira, he pai tērā ki a au kia riro mā te Māori anō a Māori e whakarite, i ngā whare tonu, kia ngāwari mai ai te noho i te takiwā.

Ko tā mātau ko te tautoko i te kōrero a ngā tāngata pēnei i a Mark Solomon me tana kī atu, ko wai atu i te Māori kia noho hai hoa haere mō te Kāwanatanga i roto i ngā mahi hokohoko? Ko wai atu i te Māori? I tēnei rā, me kī, ko te International Day of the World’s Indigenous People ki taku mōhio, he rā pai tēnei hei whakanui i tērā āhuatanga. Kia taea ai e te Ao Māori te noho hai hoa haere mō te Kāwanatanga, ka tahi, ki te hoko i ngā whare, ka rua, ki te whakahaere i ngā whare ka whiwhi i a rātau. Nō reira, me pēnā rawa pea tērā whakaaro, whakatakotohia ki mua i te aroaro o te Minita, māna tēnā e wānanga hei te wā. Nō reira koia tērā.

Ki taku mōhio i tēnei wā, rahi ake i te 300 kāinga, whare rānei e pērā anō te āhua. He aha te hē o te noho ā-hoa haere o te Māori me te Kāwanatanga. Nō reira, kāti ake, ka waiho tērā kōrero ki te Minita hei wetewete i te mea, ā, kei te mōhio tonu ia ki te āhuatanga o te whakahaere o Te Rūnanaga o Ngāti Awa, nā runga i tana hoa tata nei, ka mutu, ko te Ngāti Awa Group Holdings, pērā rawa te āhua. Nō reira, kāore he hē o te kōrero i ēnei take ā te wā. Ka waiho tērā kōrero ki reira, ā, e te Whare, kia ora tātau katoa.

[Thank you, Mr Chair. Greetings to you, the Minister in the chair, who is filling in for the Minister tonight. Much regards to you. In March this year Iris Pāhau from the Coalition to End Homelessness stated that 80 percent of those without homes were Māori—80 percent were Māori. She was speaking at a national annual conference to end homelessness, where the difficulty of this kind of situation for those here in New Zealand became a reality. It was reported that a few hundred so-called rough sleepers were those who were homeless and of no fixed abode—particularly in Auckland—as well as the several thousands of people living in boarding houses and motor camps under the wing of this thing called temporary accommodation. In addition, 4,722 people were recorded in the last census as living in some 2,295 run-down dwellings, plus more than 43,000 overcrowded households, making us aware of the sheer enormity of this thing upon the country at large and, in particular, upon Māoridom.

Christchurch and the housing sector this year really felt the full impact and difficulties created by earthquakes, by the work of the earthquake god. At the end of it all, I agree totally that the key focus for the Social Services Committee in examining Vote Housing should be to consider the effects of earthquakes on Canterbury in general. I want to say how much the Māori Party appreciates the way the Minister of Housing listened to what we had to say and put before him about the situation in respect of our people housed in Christchurch and the South Island. My colleague Rahui Katene referred to those who relocated because of earthquakes and who eventually found accommodation elsewhere. What brought this about? The Minister made it happen. It was like that for me as well. Some came to live within my Waiariki electorate, and some of their Māori-medium schoolchildren attended our Māori-medium schools in my electorate. So we are very much aware that this is a difficult time for those residents in Christchurch.

Let me go back to the cause of this thing: homelessness. One of the statements made by Iris Pāhau that emerged from that conference was that we should not restrict ourselves to just emergency housing as being the affordable option. She insisted that we should be looking at the bigger picture and getting Māori without homes to go back to family and subtribal roots. They must reconnect with their very own family and subtribe. It is only when that option has been fully explored that we look at this thing called social housing. The select committee reported that $24 million had been set aside for social housing, but of that amount, only one-eighth was set aside for Māori people. I was somewhat disappointed with that.

But a positive thing I see is that there are Māori organisations of influence about the region wanting to manage State housing in their own area. I will talk about the ones in Waiariki, about the organisation called Ngāti Awa Group Holdings. The Minister is aware of this type of company, which furthermore wants to purchase Housing New Zealand Corporation houses for that region in particular. I talked about Ngāti Awa Group Holdings, but there is the Mangatawa Papamoa Block Inc. as well. It wants to do the same thing, including the Rūnanga of Ngāti Awa. All of them, all Māori organisations, want to purchase Housing New Zealand Corporation stock in the Whakatāne District so that they can administer houses that belong to them and Māori people living there. That appeals to me. Māori can make decisions for Māori in relation to houses and live comfortably there in the district.

Our part is to endorse the statement made by people like Mark Solomon, who asked who else other than Māori should partner the Government in terms of commercial ventures. Who else but Māori? To me, with this day being the International Day of the World’s Indigenous People, it is a great day to celebrate that partnership. Māoridom will be able to work in tandem with the Government, which is one; purchase houses, which is two; and administer what they obtain. That is how that concept should be dealt to. Put it before the Minister for him to address in time. That is that.

At this very moment, I understand there are over 300 suitable properties or houses available. So what is wrong with Māori working alongside the Government as partners? Enough said; I will leave that for the Minister to mull over. Besides, he is aware just how capable Te Rūnanga o Ngāti Awa is, because of his close colleague here. Furthermore, the case for Ngāti Awa Group Holdings is the same. So there is not a problem when it comes to the time when these matters are discussed in future. I leave that talk there and extend greetings to us all, the House. ]

  • Vote agreed to.

Vote Immigration agreed to.

Vote Conservation agreed to.

Vote Food Safety agreed to.

Vote Labour

DARIEN FENTON (Labour) : It is a pleasure to take a call in the estimates debate on Vote Labour. I will start my contribution tonight by acknowledging the staff of the Department of Labour for their hard work and contribution, particularly in Christchurch and the tragedy at Pike River. That has been very challenging for those staff and I just want to put on record my appreciation. That is despite the endless restructuring and the low morale that has come about since this Government came into office and the Minister took charge of the Department of Labour.

This debate is an opportunity to have a look at the record of the Minister of Labour, Kate Wilkinson. It is fair to say that her record as Minister of Labour is less than distinguished. In her time as Minister we cannot see anything that she has done to show leadership in this very important area of labour. Earlier on Minister Paula Bennett talked about employment. If I may say, Vote Employment is a very, very small part of the Department of Labour, so I think she overstated that issue. This debate was a chance for the Minister of Labour to talk about her achievements, but I have seen nothing from this Minister, in her 2½ years in the role, to motivate or encourage better employment relationships, higher skills development, productivity improvements, and higher wages. That is one of the critical roles of the Department of Labour. However, unfortunately the Minister’s approach has been one of a race to the bottom, as fast as John Key’s Government has let her. She has made working people the target of change, and it is unproductive change. It is backwards-looking change.

Sadly, when we look over the tenure of this Minister, in what we know will be her last term as the Minister of Labour—thank goodness—and her last term in charge of the appropriations of the Department of Labour, and we look ahead, we see nothing but deficits. I am not talking financial deficits; I am talking a deficit of imagination. We heard it earlier in the debate from the ACT Party member, who talked about youth rates. That is a deficit of imagination—

Hon Steve Chadwick: From ACT.

DARIEN FENTON: —from ACT—but we get it from National as well. The truth is that John Key’s National Government has given up on trying to improve Kiwi wages. He is now trying to attract investment to New Zealand by saying that having wages that are 30 percent cheaper than Australia is a competitive advantage. That is what Bill English said, and that is what he told the Australia New Zealand Leadership Forum earlier in the year.

What we have seen, under the tenure of this Minister of Labour, is a pretty disgraceful record. Not only has she done nothing to try to improve critical areas like productivity and skills but she has done a whole lot of other things. She sold out a whole lot of New Zealand workers. That started with low-paid workers, but last year we had the disgraceful exhibition of her Government being subjected to Warner Bros control. That multinational company came to New Zealand to take away the rights of New Zealand workers. If we look at the statement of intent for this year’s estimates, we will see that one of the jobs that the Department of Labour is doing is having a look at other groups of workers who are called contractors, and providing clarification. What I read into that is that their rights will be on the chopping-block, as well.

Next on the wonderful record of this esteemed Minister: from 1 April every New Zealand worker lost their rights to justice if they get the sack, the right to be able to challenge an employer—a fundamental right—when a worker loses their livelihood because an employer made a decision. The Government made it easier for workers to be fired for no reason and without recourse to justice. It did that on the basis of arguing that this would create jobs. I will get on to that in a minute, and then I will talk about the miserly minimum wage increase.

When I talk about financial deficits, I talk about a particular worker called Sam. I will talk about Sam in relation to the minimum wage. Sam is an invention of the National Government. He is an invention that is still on the website. Sam works as a store-hand at a supermarket, earning the minimum wage. He is 19. He flats with friends, and blah-blah-blah. He gets a tax cut of $13.82 a week and pays an extra $7.46 in GST. Overall, he is $6.36 a week, or $330 a year, better off, in theory. What we know is that, actually, since Sam was invented by the National Government the value of the minimum wage has gone backwards. Sam is now actually worse off by $16.80 a week. He is worse off because of the rising cost of living, the cost of accident compensation increases, the cost of GST and other things, and also because of this Government’s miserly—miserly—25c an hour increase in the minimum wage earlier this year.

What we know about this Minister is that she had advice from the Department of Labour, from her own department, and it went to Cabinet. It said that she could have given a bigger increase to workers on the minimum wage. She could have put up the minimum wage to $13.50 an hour from 1 April this year and that would have had almost no impact on employment. She decided that that would not happen. Of course, what happened to Sam—and not only Sam but also a whole lot of other workers; people and families who rely on the minimum wage—is that he is $16.80 a week worse off. The extra 25c an hour that those people got on 1 April this year was wiped out in the first 3 months of this year. But those members do not care.

Hon Nathan Guy: The same as your $5,000 tax cut.

DARIEN FENTON: No, it has been wiped out. That member should have a look at his own figures. Then we saw the sad spectre of this Government, of John Key, raising the issue of labour market reforms yet again. We have had some of that in their term of Government. The Minister would like to claim that it has created jobs. The 90-day trial period for employers with fewer than 20 workers apparently created 13,000 jobs. That is such poor research that the Minister keeps relying on. There is no evidence that that will make any change. Now we hear from the Prime Minister that his response to the global market downturn is: “Here we go again. Let’s have a go at the workers. Let’s cut some more things. Let’s go back.” This is an ideological burp. It reminds me of Bill Birch and Ministers even before him. Here we go again. When a Government has no answers to the economic situation, what does it do? It goes after workers’ rights. It goes after those, and it means cut, cut, cut. This Prime Minister has made it very clear that the Minister of Labour has no influence on him, so he will just do what he wants.

The funny thing is that when we start to look at what modern economies are doing and what the IMF and the OECD—never particular friends of the Labour Party—are saying, we see that they are looking back at history. They say that one of the things that really made a difference to the global economic downturn was the collapse in collective bargaining. When workers cannot get their fair share, they cannot pay their bills. That means they cannot pay their mortgages. That means banks go broke. So now we have the interesting situation where we see the IMF and the OECD saying that collective bargaining needs to be strengthened. This Government is planning to weaken it—it is planning to weaken it.

Phil O’Reilly was on Radio New Zealand this morning. It was so depressing and we have heard it all before. He said something like “We’ve got to end the union monopoly on collective bargaining.” For goodness’ sake! I think the Minister and the Government do not understand that the workers of New Zealand have done their bit. They have pulled in their belts, they have coped with the increases to the cost of living, and they have accepted poor pay increases.

Hon DAMIEN O’CONNOR (Labour) : The Department of Labour is responsible for workplace safety in New Zealand. I could have a speech of my own, but all I need to do is read from the very sad and very long transcripts of the royal commission inquiry on Pike River in Greymouth. I will quote from them, because some of the statements are quite profound, and they affect the Department of Labour—what it should be doing, what it could be doing, and what it is not doing.

The head of workplace health and safety policy management, Mr James Murphy, admitted in two statements that insufficient funding is going from this mean Government—the same Government that gave away $14 billion in tax cuts—to a department that is responsible for workplace health and safety not only in mining but across every industry. Mr Murphy admitted that inspectors were “coming up short for lack of resources and lack of training”. He also told the hearing that mines inspectors’ inspections would require resources to be taken from another area of the Department of Labour if they were going to up their ante. Well, that is very sad, as I said. On page 641 of the transcript, one of the inspectors said that there is, effectively, a lack of audits of mines. At another place on page 641, he said there is no structured professional development in place. On page 645 he said there is no plan for the training of inspectors, and no unannounced mine visits—presumably because of a lack of resources.

There are 29 dead men still in a mine; there is no recovery operation, because the Government refuses to provide funding for that recovery. There is a seal on the mine now. Families are waiting—waiting for action. When the Government came down, it made a song and dance. It promised everything to everyone, but it has now walked away from the Pike River mine.

Chris Tremain: Oh, that is rubbish.

Hon DAMIEN O’CONNOR: No, that is not rubbish. There are no resources. There has been no commitment from the National Government—no commitment—to provide the funds to continue with the recovery of those bodies. I say that the front—

Hon Christopher Finlayson: You’re a disgrace to the name O’Connor.

Hon DAMIEN O’CONNOR: Well, that Minister says that; I would not like to get into some of the “h” words that I could apply to him. When he can front up with the right money, not for his mates in tax cuts but for the Department of Labour to run a proper mines inspectorate, then I will judge his true commitment to humanity. That is right, I say to the Minister. I say “Put the money where your mouth is.”

There have been comments from a person in New Zealand who provides advice to the Chinese mining industry, and he is horrified that the Department of Labour, this under-resourced department, has been telling its dwindling bunch of mines inspectors—in fact, there is only one now—that they should not give any advice to mining companies in case they incur legal liability for the department as a result. What sort of under-resourced, stingy mines inspectorate does the Department of Labour support? Well, I think that the next two phases of the royal commission hearings will expose that even further.

I have to say that it is a sad state when in this First World country our mines inspectorate is inferior, has no legal obligation, and in fact has been advised by senior people in the department not to go out and help to raise the level of safety in mines. That person also said that nowhere else in the developed world would the mines inspectorate give such nonsensical advice. Although I do not expect the Minister in the chair, the Acting Minister of Energy and Resources, probably to answer these things, it is imperative that she passes on to her Minister the fact that the mines inspectorate at the moment is totally and inadequately resourced and unskilled to carry out the role of the inspection of mines and the upholding of safety in underground mines in New Zealand, as of this day. The Minister of Labour refuses to resource the mines inspectorate, to increase the number of inspectors, or to do anything about safety standards in underground coalmining.

It is bordering on immoral that the Minister and the department will sit on their hands until the end of the royal commission hearings. I accepted the need for us to give the commission clear space, and it has all the information before it now. But it would be immoral of me to sit on my hands, having heard the information and the evidence at the first round of the royal commission, and not to push the Government to increase, upgrade, and properly resource the mines inspectorate in this country. I ask the Minister in the chair, because she is a very reasonable person, whether she thinks—not needing any knowledge of mining—that the current Minister should refuse to do something that is so glaringly obvious. The senior policy person from the Department of Labour has admitted that the department—

Hon Maurice Williamson: Labour had 9 long years.

Hon Christopher Finlayson: 9 years.

Hon DAMIEN O’CONNOR: —and the Ministers opposite know this—did take a more hands-off approach, and that the department is now thinking that actually it was too hands-off. But in the same submission it admits that if any resources are to be put into the mines inspectorate to upgrade it, then the resources will have to be taken from somewhere else in the Department of Labour.

Well, we are debating the estimates, so I ask where the money is. Where are the resources both to uphold standards across other industries and to boost the mines inspectorate when there is a desperate need as of today? Tomorrow men will go underground, and incidents are happening. A report, a late report, has been done on one of the major underground mines, which shows that the department is full of holes, and which clearly indicates that a lot of work still needs to be done and a lot of guidance needs to be given by experts in the mines inspectorate.

Hon Christopher Finlayson: What was done over 9 years?

Hon DAMIEN O’CONNOR: This is about today, I tell the Minister. This is about the estimates, moving forward. What is that Minister’s Government going to do to try to prevent deaths in underground mining tomorrow? What will he do today to prevent the accidents of tomorrow?

The reports, the information, the submissions, and the hearings at the royal commission all point to inadequacies, a totally under-resourced mines inspectorate, and people in the job who do not have the skills to know whether they are Arthur or Martha when it comes to some of the gaseous, high-risk underground mines. So that Cabinet Minister and his friend there should get off their butts too, and encourage their colleague the Minister of Labour, whose colleague is in the chair today, to explain why she will not properly resource the mines inspectorate to move forward from tomorrow. If the Ministers want any reason to support that, they should just go and read the transcripts—just go and read about the gaping holes in a department that not only fails to uphold the wages and conditions of a huge number of New Zealanders and allows slavery on foreign fishing boats in our waters but also allows underground miners to work in an unsafe environment, because the department refuses to properly resource a mines inspectorate or to uphold the standards that people warned about right back in 1994. I can say—because it is about the estimates, moving forward, and about how much resource the department has—that inadequate resources have been given to the Department of Labour, and it cannot uphold mines safety.

KELVIN DAVIS (Labour) : Tēnā koe. Everyone knows that the Labour Party was born in the coalmines of the West Coast, so it is only appropriate and understandable that we have a Labour member of Parliament from the West Coast, the Hon Damien O’Connor, speaking with some passion about the events that occurred at Pike River.

I know that the whole country and the whole House are upset about what happened at Pike River. It is imperative that this Government creates the conditions that prevent that sort of tragedy from happening again. Whether workers are working in a mine or in a McDonald’s they know that the Labour Party is their party, and that we are here to stand up for their rights and their conditions. Contrast that with the Government opposite, which is there for the employers and not the employees. We know that the Government’s prevailing belief is that employers are the benefactors and employees are the beneficiaries, and that workers, the employees, are the people who should just do the work and be grateful; they should be grateful that they have been given an opportunity to earn a bit of money. The benefactors and the party that supports them tend to forget that businesses thrive and make money because of the work of the employees, the people who are there doing the hard work.

One of the worst pieces of legislation to be passed by the House as a result of the National Government is the 90-day trial period legislation, which my colleague Darien Fenton touched on. One of our concerns about the 90-day trial period for businesses with fewer than 20 employees was that the 90-day trial period would then be changed so that it affected all employees of all businesses, and that was exactly what came to pass. Now our fear is that the 90 days will soon be extended out to 180 days, and after that 180 days it will be extended out to 365 days, and before we know it all employees at any time will be able to be sacked for no reason whatsoever, without any recourse available to them at all.

Trial periods are meant to be voluntary, and employers can make an offer of employment that includes a trial period of up to 90 days. Trial periods are voluntary and must be agreed to in writing and negotiated in good faith as part of the employment agreement. That smacks of—what is it? It implies that there is some sort of even power between the employer and the employee, that there is a relationship based on equality. The reality, we know, is that when somebody walks into a job—and in the situation the country faces at the moment, there are not too many jobs, so people are desperate—they will go in and they will be too scared to negotiate anything. They will just take what the employer says and live with it. We know that that Government over there likes that.

Remember that that is the Government with a Prime Minister who was caught by a reporter before the 2008 election up in Kerikeri when he was addressing a business function. He said that he would love to see wages drop. Then the reporter, by the name of Greg Robertson, who works for the Bay Chronicle in Kerikeri, had pressure put on him to retract that statement. This is the Government that would love to see wages drop. This is the Government that says that our wages being 30 percent less than Australia’s is a competitive advantage. That is a disgrace. That is saying the Government over there is happy for our people to earn less in order to make it feel good.

Carol Beaumont: What does it mean? They all go to Australia.

KELVIN DAVIS: That is exactly the problem—that is exactly the problem. It is why towns such as Kaitāia and towns such as Whangarei are emptying out of employees. They are all heading across the Tasman. There is a rugby club up near Whangarei called Hikurangi that could form two rugby teams in Perth more easily than it can form one rugby team up in the north, because all of the players over the last 2 or 3 years have moved over to Perth. They are getting jobs there, because the employment and the labour laws over there are a lot friendlier to workers. I have spoken to the freezing workers up north. I have spoken to them, and I have heard how experienced workers of 12, 15, and 20 years are being laid off.

  • Vote agreed to.

Vote Energy

Dr KENNEDY GRAHAM (Green) : The energy estimates in front of us reflect, I believe, a particular mindset on the part of this Government. The highest-stated priority of the Government is to build a stronger economy, which will provide jobs, higher incomes, and improved living standards. The Budget vote identifies two Government priorities, wittily cited as the Key Government policy drivers. The first is removing red tape and unnecessary regulation. The intended outcome is ease of doing business. The second priority is investing significantly in productive infrastructure. The intended outcome is efficient, reliable, and responsive services. So this is the best the Government can do—the highest priorities it can think of in energy.

One of the flagship projects that the Government is encouraging towards this enlightened outcome is the lignite project in Southland. This erstwhile contributor to the betterment of humankind will emit some 15 million tonnes of carbon each year. That is some 25 percent extra on our total net emissions. Where is the sense in that? Where is the sense of global responsibility that we in New Zealand love to believe comes naturally to us?

The focus of our Energy Strategy is the extraction of fossil fuels to maximise our financial wealth. Some $166 billion is voted to this. The Government regards the environmental consequences of this manic policy as no more than an irritant, something to be minimised or paid for in clean-up mode as we move purposefully towards financial nirvana.

We can compare this fossil Energy Strategy with the latest work to come out of Denmark. Over the past year, while we have been planning a massive open-cast lignite mine, Denmark has set up a national commission on climate change policy. The Danish commission has undertaken far-reaching modelling and planning. The objective is not to lust for open-cast lignite extraction and offshore deep-water drilling, but to identify ways of removing fossil fuels entirely from its national energy system.

The Danish Commission on Climate Change Policy is developing a scenario in which it will have, by 2050, a fossil-free energy system, including transport. What is more, this national goal will be achieved without reliance on nuclear energy, and it will be achieved without reliance on carbon capture and storage. What do we do, in contrast? Here in fantasyland we seek to justify our absurd plan to produce lignite by a postulated reliance on future carbon capture and storage. This technology is not proven. To the extent that it has been tried, it has proven to be dangerous. But, never mind, it allows us to rationalise the absurd.

Complete removal of fossil fuels from the energy system, the Danish commission says, would result in an 80 percent cut in greenhouse gas emissions by 2050. Emissions from agriculture would dominate the remaining profile. Clearly, New Zealand would be left with a still-significant emissions profile with agriculture, but I tell members to imagine New Zealand having a 50 percent cut in emissions by 2050—a fossil-free energy system.

Wind and biomass are likely to be the likely contributors to the Danish energy system in 2050. What do we do here? We ignore our local wind manufacturer and we buy Danish. Whereas the current energy system is controlled only on the supply side, the future system, the Danish commission reports, must also include control on the demand side. This will include smart grids and intelligent energy use.

The Government down here in Earth’s last islands will respond with the benighted claim that such a goal will ruin our national economy. So let us look at what the Danes have to say. Their commission has calculated that phasing out fossil fuels would entail an additional cost of some 0.5 percent of GDP in 2050, and it will save the planet. Surely we can do better than we currently are down here. This is not simply a moral concern for posterity; it is a medium-term economic security and geopolitical policy transformation.

The Danes have said that although their report is specific to the current Danish situation, the analytical approach they used is generic and can be of use to other nations. Let us send a team of officials to Copenhagen for discussions right now.

Hon HEKIA PARATA (Acting Minister of Energy and Resources) : Ā, tēnā koe e te Heamana. Huri noa i tō tātou Whare, tēnā koutou katoa. Aotearoa New Zealand is blessed with abundant natural resources, and, together with smart New Zealanders, we are able to come up with a portfolio of energy options that meets the needs of New Zealanders today and into the future. This Government is focused on striking a balance between our concern for ensuring sound environmental management and exploring the economic opportunities open to us. We are a Government that is focused on “and, and, and”—not either one thing or the other but what balance in a mixed portfolio we can bring to bear for New Zealanders now and into the future.

We are absolutely committed to energy and resources as a cornerstone of our growth agenda, of our economy, and of our long-term sustainable commitment to our environment for ourselves and for future generations. We have, on the one hand, renewables. We have a goal in this country of achieving 90 percent renewable energy sources as the basis of our electricity generation. I am pleased to say that in 2010 we achieved 74 percent of that target, and in the March quarter of this year we achieved 79 percent.

Hon Shane Jones: Labour policy.

Hon HEKIA PARATA: In 2005, 9 percent of our renewable energy was made up from geothermal and wind, of which we seem to be getting a significant amount on my left. Today, in 2011, we are at 17 percent. This Government remains committed to achieving that target, so not only have we achieved the highest-ever deliverables in this regard—at 79 percent—but also we have had the largest consented amount of renewable energy.

We have an emissions trading scheme, which puts a price on carbon, and we are already seeing behaviour changing in that regard. We have a national policy statement that will inform decision makers under the Resource Management Act about the commitment of this Government to see more renewables. New Zealand joined the International Renewable Energy Agency for the first time this year. The report by the International Renewable Energy Agency commented positively on New Zealand’s balanced approach to using its resources in a sustainable way. It commended New Zealand for its target on renewables while also identifying that the world, of which New Zealand is a part, is on a journey to a low-carbon future, but it will take some transitioning.

So as part of this Government’s balanced commitment to taking advantage of all of our abundant resources, in 2009 we announced a commitment to our petroleum action plan. In partnering with the science institutes of New Zealand, we have identified significant potential in oil and gas and minerals here in Aotearoa New Zealand. The member who recently left the Chamber bemoaned the fact that two football teams of people have left the north to go and seek jobs in Perth. Guess what jobs those people have secured? They have secured jobs in the mining industry in Perth. Many of the 77,000 Māori who have gone overseas—[Interruption]—many of whom are related to the Hon Shane Jones and Kelvin Davis, who applaud their aspirations to be involved in employment—would prefer the opportunity for higher jobs and better incomes right here in New Zealand.

This Government does not resile from its commitment to explore the oil and gas and mineral potential that has been identified here in New Zealand. We have established New Zealand Petroleum and Minerals within the Ministry of Economic Development, which is very focused on how we can ensure that the permitting processes we have in place are sound and inclusive of those who have interests around the country, such as iwi, regional and local government, and regional development agencies. The focus is on ensuring that we bring in the best possible price for New Zealand in the oil and petroleum area.

I want to tell the Chamber tonight that petroleum is New Zealand’s fourth-largest export earner. In the 2009-10 financial year, exports totalled $2.1 billion. In the 5 years between 2004 and 2009, the New Zealand Government earned approximately $1.4 billion in tax and $1.1 billion in royalties. Where does that money go? It goes to fund our schools, it goes to fund our hospitals, and it goes to fund our roads and our police force. All of that money supports all the aspirations of New Zealanders who are committed to being participants in a First World economy.

But I have more good news to share in the energy and resources area. In respect of the electricity reforms that this Government instituted upon coming into Government, we have brought about significant changes. The sector is able to operate more efficiently and more effectively than it ever has done before. We have as a cornerstone of those reforms the establishment of the Electricity Authority, which has a significant work agenda set out in legislation. It is on target to achieve its targets, notwithstanding the fact that it came into force only on 1 November last year. We expect that it will be able to deliver on that work agenda by 1 November this year.

But one of the significant reforms that I want to talk about, which the Electricity Authority has overseen, reflects this Government’s commitment to ensuring that competition exists not only on the supply side but also on the demand side. On the supply side, for instance, this Government has ensured that there is better competition in the South Island by transferring Tekapō A and Tekapō B from Meridian to Genesis Energy. On the demand side, many members will have observed and, I hope, participated in the What’s My Number campaign, which requires just a short trip onto the internet to www.whatsmynumber.org.nz.

Aaron Gilmore: Say it again.

Hon HEKIA PARATA: I repeat it for the member. It is www.whatsmynumber.org.nz. I share this with members because 448,952 New Zealanders have visited that website and they have accrued estimated savings of $55 million to $56 million. The average time spent on that website—time more productively spent than on other websites that may be mentioned tonight—is 2 minutes and 43 seconds.

The point of that website is that we as a Government are very conscious of cost of living issues. Electricity, power consumption, in homes is a significant part of that, and this website and the opportunity to switch power companies puts power in the hands of consumers to decide whether they are getting the best deal from their retailer. If not, they can switch. Unlike members on the Opposition benches, we actually trust that if consumers are given information and tools, they will make powerful choices for themselves. Some 349,477 unique visitors to this website are making those choices, and 29,453 have initiated a switch. That switch means that they will accrue savings, but, more than that, it will continue to drive down prices by increasing the competition between retailers. I am sure that that gladdens the heart and warms the homes of many New Zealanders. I would like to happily segue in the minute I have left into the Warm Up New Zealand: Heat Smart campaign being run—

Hon Simon Power: Segue; nice word.

Hon HEKIA PARATA: Thank you very much. The campaign is being run by the Energy Efficiency and Conservation Authority. This Government has invested in 188,500 homes by installing insulation that will warm the homes. In addition we are installing efficient heating to reduce people’s power bills and improve their health, and that means better sleep for students so that they can go to school the next day sharp and ready to be taught by teachers who have been able to identify through national standards which students at an early age need assistance.

The Warm Up New Zealand: Heat Smart campaign has been extremely effective around the country. We have passed the milestone of insulating 100,000 homes, and we look forward to working with more and more local councils with targeted rates schemes to make that available to more New Zealanders. Thank you.

CHRIS TREMAIN (National—Napier) : I will take a brief call on Vote Energy to respond to the Greens, particularly Kennedy Graham, who had a bit of a love-in with Denmark and the goals that Denmark has going forward to 2050. The reason I want to respond to him is that he fails to mention that New Zealand right now is actually ahead of Denmark in terms of the percentage of energy created by renewable sources. In fact, New Zealand sits at No. 2 in the world—not No. 3 or No. 4—in terms of the proportion of energy that is created from renewable sources. Iceland is No.1 because of its huge resource of geothermal energy. So for Mr Graham to stand in the Chamber and wax lyrical about Denmark and the goals that it has and not mention that New Zealand already sits ahead of Denmark in terms of renewable energy production is somewhat remiss, I think.

The other point that is worth mentioning—and it occurred while the Green Party was in bed with Labour over the last 9 years—relates to the increase in renewable energy. Over the 9 years of the Labour Government it consented on average 200 megawatts per annum of renewable energy. The peak was 300 megawatts per annum in new renewable energy consents. National was fortunate enough to win the last election. One of the key changes we made was to the Resource Management Act, which allowed renewable energy projects that had national significance to be taken directly to the Environment Court. There has been a significant result from that change. In fact, this year alone—the 2010-11 year—we have consented 1,500 megawatts of renewable energy. In one year alone we have consented 1,500 megawatts of renewable energy, yet Mr Graham stands on the other side of the Chamber and says we should all be looking at Denmark. I suggest to Mr Graham that Denmark should probably be having a look at New Zealand, and it should be sending its MPs to New Zealand to see what we are doing in the renewable energy space.

We are in great shape in this space. I acknowledge the Acting Minister of Energy and Resources for the excellent work that she is doing. In terms of renewable energy, we are at the top of the world—No. 2. I think if we continue the way we are going, with the goals we have—to have, by 2040, 90 percent of energy produced through renewables—we could well be No. 1. I rest my case.

  • Vote agreed to.

Vote Women’s Affairs agreed to.

Vote Customs

The CHAIRPERSON (Lindsay Tisch): The question now is that Vote Customs stand part of the schedule. Those of that opinion will say Aye, to the contrary, No—[Interruption] Well, if the member does not take a call, he will miss out.

JOHN HAYES (National—Wairarapa) : My apologies, Mr Chairperson. I thought the call was going to be taken by the Minister, not by me.

Hon Maurice Williamson: I wasn’t in the Chair.

JOHN HAYES: No, I noticed that. I preface my comments by recalling to the Committee a very successful Comptroller of Customs, in the form of Martyn Dunne, who recently disappeared off to Canberra to be our high commissioner. I have to say, as a member of the Foreign Affairs and Trade Committee for the last 5 years, the Customs Service was outstanding in its presentations to that committee. I congratulate Martyn on that.

I think it is important to point out at the beginning of my comments that the National-led Government has a plan to take New Zealand forward by reducing our debt, getting back to surplus within 3 years, and building a faster-growing economy, because we want to take the country forward. So we are getting on top of our Government debt by keeping it below 30 percent of GDP. That means, by my calculation, we will be back in surplus by 2013, and certainly by 2014-15 at the very latest. Since National became the Government we have taken responsible decisions to restrict the build-up in Government debt and to get the Government’s spending and finances under control. In particular, we have turned back the 2008 forecast we inherited of never-ending deficits and soaring debt, by setting a path back to surplus. We have introduced the biggest reform of the tax system for 25 years, which rewards work and saving, discourages borrowing and consumption, and significantly tightens tax rules on property speculation without having a capital gains tax.

It is really important during these difficult economic times to take a stable, conservative approach to managing the economy, and, above all, to get us on a path to long-term, sustained growth. I make those points because this is where the very, very important impact of the Customs Service and its Minister, Maurice Williamson, performs three broad functions that will enhance New Zealand’s prosperity and security. First of all, the Customs Service protects our border. Second, it facilitates legitimate trade and travel. Third, it collects Crown revenue. The Customs Service is also responsible for trade and tourism support and community protection, such as by detecting and preventing the importation of illicit drugs, illegal weapons, and objectionable material.

Minister Williamson and his department have done an absolutely outstanding and vitally important job. The Customs Service collects 15 percent of the Government’s total revenue, and in 2009-10 collected $8.78 billion in customs revenue. I think people do not really understand the importance of this agency to the Government’s cash flow and to this economy. In my experience over the last 5 or 6 years, the Customs Service has consistently met its target to collect at least $15 million of additional revenue that traders perhaps under-declare. I noticed that a recent audit of the Customs Service and its revenue collection showed that in 2009-10 the department collected around $30 million above its target. That is an additional $65 million that it has contributed to our economy.

I reiterate my comments and say what a fine job this department does. It is critically important to our economy, and I congratulate the Minister on his leadership. Thank you.

Hon MAURICE WILLIAMSON (Minister of Customs) : I thank the member John Hayes, the previous speaker, for those comments. As Minister, I would like to make a few comments about Vote Customs in the estimates debate and talk about what I think are the three key priorities the Customs Service has set itself, or that I as Minister have set for it, and that it has delivered with fantastic results.

The first of the three priorities we set the Customs Service when we came into Government was to improve competitiveness, security, and productivity at the border. I guess, in a nutshell, it was to make sure that those goods we are trying to export can go out as freely and as quickly as we can get them out, and anything coming into New Zealand as an import can cross our border quickly, be processed, and get into the hands of those it is bound for. With regard to that, in the latest Budget there is the allocation of very large sums of money for what we call JBMS, the Joint Border Management System computer. The Customs Service has been running on a very, very old-fashioned computer system call CusMod for a long time, and the Joint Border Management System will make a huge difference to it. Part of the Joint Border Management System project is a thing called the Trade Single Window. I cannot emphasise more to members of this Committee how important the Trade Single Window module within the Joint Border Management System is. It will mean that all our exporting companies that are trading with the rest of the world will file their electronic papers once and only once. All of the necessary border agencies—the Food Safety Authority, the Ministry of Agriculture and Forestry, the Customs Service, maybe the Immigration Service, and a whole range of others—will have their databases populated automatically, and the productivity improvements that will come from that are huge.

For me, the second big issue for the Customs Service—and I promise that for me this is a passion—is the increased disruption of supply chains for illicit drugs entering New Zealand, particularly methamphetamine and its precursors, through targeted operational activities. I am happy to go on record as saying there is no more ghastly drug on this planet than P. The reason for that is it takes away from anybody who is using it the ability to think rationally and behave sensibly. I need only reference to this Committee people like Graeme Burton, who killed Karl Kuchenbecker, or William Bell at the Panmure RSA.

From my electorate, I want to give what I think is one of the most telling stories ever. A man walked into a Pakuranga pizza parlour, pointed a gun to the head of a young man called Marcus Doig, who was working through his university studies, and said “Give us the money.” Marcus Doig did what he should have. He cooperated fully and he handed over everything that was in the till to this P-crazed individual. Then, having cooperated fully, the man made Marcus Doig turn round and kneel down, and he shot him through the back of the head. Only 2 days later that same individual went out to the ASB in Māngere, pointed a gun at a man called John Vaughan, who again was doing his job at the counter like any normal human being would be doing in a day, and when he said “Give us the money.”, John Vaughan cooperated fully. I emphasise to this Committee again that because the individual was brain-crazed on P, he had no idea of the difference between right and wrong, and after John Vaughan had cooperated fully, he then shot him—a family man. That is a tragedy.

I make no apology to this Committee for giving the Customs Service an absolute directive about this stuff and about its precursors, ephedrine and pseudoephedrine. To my great delight, I am happy to report to this Committee that the interventions have been spectacular, and they have grown in numbers to the point where last year we reported that over a tonne of this stuff was intercepted at the border.

When I went to China in October I was able to meet with the Chinese customs Minister and persuade him that China was the main source of ephedrine and pseudoephedrine. This is an interesting story to share with the Committee, as well. I gained the impression after talking to the Chinese customs Minister for a while that he really did not quite get it, because it would be like another country’s Minister coming to New Zealand and saying to a Minister here “We want you to ban Vicks VapoRub.” I realised that because in China ephedrine and pseudoephedrine are perfectly legal and one can buy them in the street, he was looking at me with a sort of quizzical view as if to ask why we were so concerned about this product, which was legal. So I told him the stories about Karl Kuchenbecker and Graeme Burton, William Bell and the Panmure RSA, and Marcus Doig, and as I went through those stories, I could see he was visibly moved. He was quite taken by just how ghastly the products that ephedrine and pseudoephedrine were turned into here were, and he made a commitment, which the next day we signed as a memorandum of understanding between ourselves and the Chinese Government. We have a high level of cooperation now with the Chinese customs agency, including the training of dogs to be able to sniff stuff that they had never thought of before because it was not a problem. I will leave this Parliament one day very proud of the fact that our Customs Service has done the most amazing job of its interception of that product, which is the most evil product going.

The other item in Vote Customs, and there are many that I could spend a lot of time on in telling members how proud I am—the whip would not like it, but I will—is the movement of technology into the whole platform of the Customs Service. When I became the Minister of Customs, 75 percent of all of Vote Customs was personnel costs. I made it clear to the Customs Service that the world was changing and that technology was now coming, and coming at such a speed that we needed to gear up for it. One of those steps that I want to bring to members’ attention in the Chamber tonight is SmartGate. Over 50 percent of all New Zealand and Australian passport holders are now using SmartGate to enter our country. It means they walk up, they place their passport on a glass screen, they look at a camera, the camera says “Yes, that is you.”, and away they go. So far, from all our trials, we have never been able to get SmartGate to give a false positive. It has given some false negatives. It says “We do not think this is you.”, and after a bit of checking we found that the person had lost weight, or had a change of glasses maybe, or whatever. Every now and then we have even tried to fool it with identical twins who have swapped their passports, and it has never yet given a false positive. That is fantastic news for us.

It means that customs officers can be freed up to get on with the real hard yards of dealing with the nasties and the bad ones as they enter our border, and it lets the family who have been off to Movie World, or the businessman who has been across the Tasman for the day to do some work, just go through the gates, be processed, and come out the other side. It can be done just like that.

Hon Christopher Finlayson: Even I can use it.

Hon MAURICE WILLIAMSON: Even a member like Chris Finlayson, who does have some dodgy photos, can get through—I agree with that. I am proud of that. Over 50 percent of passport holders now use it, and, like Schumpeter’s S-curve always does, it is just heading to the sky.

As I said, when I first became the Minister 75 percent of Customs Service expenditure was on personnel costs—on staff. It is down to about two-thirds, and we expect that by the end of this first term, when SmartGate is rolled out for both departures and arrivals, our personnel costs will be just under 50 percent of the total budget. We already have departure gates at Auckland and we are rolling them out across Wellington and Christchurch, but here is the biggest, biggest leap forward: we are currently trialling a city pairing of Auckland with the Gold Coast. That means that, firstly, as people check out through Auckland, put their passport on to the plinth, and get their photo done, they get a card that clears them immediately for entry into Australia. Secondly, people can do the same from the Gold Coast. That is a city-pairing trial in which we are ironing out some bugs, and it is my goal by the end of this year to have both arrivals and departures linked in both directions and for us to get it as near domestic experience as we can.

Finally, one of the other big achievements: by using our secure export system that we have with companies like Fonterra, we have been able to persuade the Americans to give us special treatment in the United States. Our exports to the United States get special privileges and treatment, and we are the only country in the world to have such treatment.

  • Vote agreed to.

Vote Lands agreed to.

Vote Statistics agreed to.

Vote Internal Affairs

TE URUROA FLAVELL (Māori Party—Waiariki) : Kia ora anō tātou. Kia ora e te Whare. I will take a call in respect of the estimates debate on Vote Internal Affairs. The Māori Party’s interest in this vote relates specifically to the Gambling Act 2003. It has been reported that Māori people spend almost twice as much on gambling as non-Māori do. They each spend approximately $686 per year, compared with $376 per year for non-Māori. This is a highly significant figure, as the Māori median income is half that of non-Māori. I raise this issue on the International Day of the World’s Indigenous People because, essentially, it is about the health and well-being of tangata whenua. It is about whānau ora.

Although all eyes in Aotearoa this year will be on the Rugby World Cup, I also highlight an important item on the international radar next year. The fourth International Gambling Conference is being held in Auckland on 22 to 24 February 2012, hosted by Hāpai Te Hauora Tāpui, the gambling and addictions research centre at Auckland University of Technology, and the Problem Gambling Foundation of New Zealand. The theme is te ao hurihuri me te petipeti—the world of gambling today. It reflects the fact that across the world gambling industries are changing and evolving, expanding into new markets, and reaching new demographics.

I look at the harm minimisation section of the estimates report and, in particular, at the introduction of the integrated gambling platform. Basically, this allows jackpots to be automatically downloaded, letting jackpot winners continue to gamble without a break. The Māori Party shares the concern of the Government Administration Committee that this would be contrary to the principles of harm minimisation.

One of the statistics, that most Māori youth—that is, 20 percent of the Māori population—are six times more likely to develop gambling problems than non-Māori youth, is one of the things that really scares us. We have to care, and we have to do something about that sort of statistic. From the estimates alone it would not appear that the social hazard of gambling harm has been really seriously thought about. Just 2 months ago the Government was proud of its breaking news about the building of a convention centre in the heart of Auckland. Despite the concerns raised by the Māori Party and other groups such as the Problem Gambling Foundation, the Government appeared not to give the issue much of a second thought. Well, I can say that the Māori Party does care. We are concerned about the social impact of increasing numbers of pokie machines and gambling tables at the Skycity Casino, not to mention other high-risk casino gambling around the country.

We have campaigned on the challenge “People Before Pokies” to focus on the people and communities this money is coming from. Pokie machines are concentrated in our most vulnerable communities and 40 percent of the revenue from pokie machines comes from problem gamblers. That is basically why I developed the Gambling (Gambling Harm Reduction) Amendment Bill, a member’s bill to give real power to local authorities to keep the number of pokies down or, even better, eliminate them completely. The bill also puts the onus on venue operators to keep track of each gambler’s overall losses and time spent gambling using a player tracking system, if you like. This is particularly relevant given the flow-on effects of the integrated gambling platform.

It will be a sad day when profits from pokies are more important than people, and I can say that the Māori Party is here to ensure that that day never comes. Kia ora tātou.

  • Vote agreed to.

Vote National Archives agreed to.

Vote National Library agreed to.

Vote Emergency Management

Hon CRAIG FOSS (Minister of Civil Defence) : This is an absolute pleasure. It is actually the first time I have spoken in this Chamber as the new Minister of Civil Defence, so I thought I had better get that in. Let me first acknowledge my predecessor, the Hon John Carter, for the work he did in this portfolio during what I think all members in the Committee would appreciate were very testing, trying, and tragic times in our history. I also need to thank Mr John Hamilton, of course, and the wider civil defence emergency management sector at all levels of Government—central, local, regional, and group—for their efforts over the past year, particularly around 22 February in the Christchurch earthquake.

Our national approach, as I am sure members are aware, is to achieve resilience through the initiatives of the four Rs: risk reduction, readiness, response, and recovery. The responses to the earthquakes show that we actually do have the right approach to civil defence emergency management. I am sure there are lessons to be learnt, and, as I will note later on, reviews are under way and will be happening. But what we had in place already served us very, very well. Those four Rs cover all aspects of emergency management, helping to ensure we do not ignore critical areas, from central government down to those in local government plans. The value of the four Rs was seen during the earthquake, from risk reduction measures such as building codes to aspects of the recovery framework that is now being used by the Christchurch Earthquake Recovery Authority, or CERA. Although there are lessons to be learnt in all areas, as I noted earlier, those four Rs—our preparedness—have served us well.

Our priorities for 2010-11 are to continue to look at and strengthen the statutory framework for recovery after a major event, to review and look at the Civil Defence Emergency Management Act to see whether there are changes to be made in that legislation, and to review the National Civil Defence and Emergency Management Plan. Of course, when that plan and the Act were written, no one contemplated something as large as this, or that an organisation such as the Christchurch Earthquake Recovery Authority would need to be created to help in the recovery of an emergency. We will be enhancing the capabilities for the national management of civil defence events. The emergency management information system is under trial right now and is very close to being turned on. That will assist all of Government to be aware of all information across the country in the event of some emergency. We will continue to develop community resilience through the public education programme, the Get Ready Get Thru programme, by taking advantage of post-Christchurch heightened awareness. We released findings today from a survey of New Zealand’s preparedness, and awareness of the need to be organised and prepared in the case of an emergency.

I also take this moment to note the work of a former civil defence Minister, the Hon Rick Barker, and I compliment him. At a recent event, the Australian guests at the event were talking about What’s the Plan Stan?. Their words were “You Kiwis are absolutely streets ahead of us and we enjoy ongoing contact, and can we learn more from that?”, so that is a credit to that former Minister, the Hon Rick Barker.

We are supporting the development of the capability across the sector. There are issues, and inevitably issues will arise from the various reviews. I can see there will be some interesting discussions on those. I will make just a couple of points. The 22 February earthquake in Christchurch was a unique event, both in New Zealand’s history and in the response to it. It is the first time a state of national emergency has been declared in New Zealand. Of course, I cannot use my time here without acknowledging the 181 tragic deaths and the various injuries across people of many nations, and without acknowledging not only New Zealand’s disasters and tragedies but the disasters and tragedies across the Pacific and around the globe.

We will continue to promote the public education awareness campaigns of Get Ready Get Thru and What’s the Plan Stan?, as I have previously alluded to. One point I will make is that some people are trying to use the benefit of hindsight, I guess, to ask why we did not do more to predict the earthquake in Christchurch. But we did not even know there was a fault line such as that under Christchurch. Research is crucial, but the existing modelling and knowledge was all about the alpine fault, which we presumed would be an issue, not about the fault that we have now discovered under Christchurch.

  • Vote agreed to.

Vote Racing agreed to.

Vote Senior Citizens agreed to.

Vote Local Government agreed to.

Vote Māori Affairs

Hon PAREKURA HOROMIA (Labour—Ikaroa-Rāwhiti) : Kia ora, Mr Chair. E mihi kau ana ki a tātou katoa, ki te Minita ka nui te mihi.

[Thank you, Mr Chair. I greet us all and you in particular, Minister. Huge greetings to you.]

Since the Government came to power another 16,500 Māori have become unemployed. The unemployment rate has nearly doubled, to a disgraceful 14.6 percent. The last time it was as high as this was when we took over from the previous National Government after it had done 9 years, and unemployment was running at 21 percent. One of the shocking things at the moment—and I can understand how the Minister of Māori Affairs has to struggle, because everybody ignores him—is that there has been no addition to the budget of the Minister of Māori Affairs. There is a mythical $600 million drifting around somewhere, but all that it is is a budget that is embedded in every other budget. What the Minister has done well is to follow on from us. He has had follow-on policies and follow-on expenditure, and he has done very, very, well.

But there are some things that really make one wonder what this Government has been doing. You know, between 29 and 33 percent of Māori aged 15 to 24 are unemployed—that is one in three. That is a disgrace, and it is the most shocking situation that our people have been in for generations. We know that from about 1945—the Minister was around then—though to 1950, 1960, 1970, and 1980 most Māoris worked from the age of 16. They paid their taxes, and they made sure that they contributed to the growth of this country. What have we seen just recently? Instead of the Government supporting the budget of the Minister of Māori Affairs, a whole lot of rich people collected $16.7 billion, and that was offset against making life better for the working class. A lot of that working class is Māori. Mr Flavell understands that—a lot of that working class is Māori. He knows where they are in Te Arawa, he knows where they are in Whakatāne, and he knows where they are in Maraenui, I say to that gentleman over there. They have been done out of their work.

There are now 20,000 more Māori on benefits than when Labour was in power—20,000. For the first time since the previous National Government, there are 100,000 Māori on benefits. That is nothing to be proud of, and I do feel for the Minister in the chair, Dr Pita Sharples. He is being ignored as the Government’s supposed partner. His budget is not attributed to any of that progress. The people have been put asunder, all through this Government’s thing. [Interruption] No, the issue is not about the wages, because the Māori Party supported policies like the 90-day fire-at-will bill and the new sick leave policy. Nobody is trusted any more; they have to put a docket in. Where is the fairness between employer and employee?

The point I am making is that Māori suffer. The Government is preparing to launch new attacks on beneficiaries, and all sorts of things. We heard the Prime Minister today, when he was asked in relation to early childhood education whether he would continue the support for 20 hours’ free early childhood education, and he said yes. Then, when he was asked a second question about it, he said no.

One of the issues here is that there are great movements in this country—and I am pleased that the Minister continues to support them—like the Māori Wardens Association, like the Māori Women’s Welfare League—

Hon Shane Jones: Not the kōhanga!

Hon PAREKURA HOROMIA:—but not the kōhanga reo—and like early childhood education. The Māori Party supported the differences in early childhood education; it did that. Shame on it—shame on it for doing that! The Minister of Education has flip-flopped twice in the last 48 hours, promising to amend the issues relevant to Playcentre.

Do members know that the kōhanga reo movement is one of the most solid, developed, historical organisations in this country, driven by the whānau and driven by the community? I would stand with the Minister to ensure that kōhanga reo are looked after, and that the whānau-led nuances are categorised and understood. They are no different from the 80 percent of teacher-led numbers that the Minister of Education was huffing and puffing about.

Why did I say that kōhanga reo are doing so well? I watched the Parliamentary Rugby Team practising outside there—there is a bit of hope for them. The only thing that Māori contributed to the “Māori World Cup” was that “Tupperwaka” up there. I will not say too much about that; Mr Jones made comments about that, and I will not. But I do want to say that the kōhanga reo needs a good flick. And Piri Weepu—who knows Piri Weepu? He is a great man. He was a kōhanga reo baby, Piri Weepu—he was a kōhanga reo baby. That is why the ball goes straight; that is why he shows ingenuity in putting the team together. He is well organised, he knows how to plan, and he knows how to ensure his team wins. Why? Because it was imbued in him in the kōhanga reo. Piri Weepu is no different from Desmond Allen, who is a famous architect now. He is very good at it. He is no different from Taika Waititi, and he is no different from all the other people who came through kōhanga reo. And what is happening?

I tell the Minister not to let the kōhanga reo be hung out and strung out. Everybody will want to claim Piri Weepu when the Rugby World Cup is won by the All Blacks—touch wood—but remember that he is a kōhanga reo baby. He has shown spirit, and we are treating the kōhanga reo at the moment as a second-rate organisation. The kōhanga reo is a great organisation—

The CHAIRPERSON (Lindsay Tisch): I have no doubt it is, but the time has expired. Members, the time for this debate has expired.

  • Vote Māori Affairs, Vote Community and Voluntary Sector, Vote Revenue, the preamble, clauses 1 to 12, and schedules 1 to 7 agreed to.

CHRIS TREMAIN (Senior Whip—National) : I raise a point of order, Mr Chairperson. I note, just for a point of clarification, that Vote Audit was part of that, and I note that you did not mention it. I wonder whether we need to include it in the vote. [Interruption]

The CHAIRPERSON (Lindsay Tisch): We are dealing with a point of order. I just say to the member that Vote Audit was handled. It was the first vote that we did, so Vote Audit has been done. [Interruption] I say to members that we are doing votes. There is silence when we are doing votes.

  • Bill to be reported without amendment presently.

Electoral (Administration) Amendment Bill (No 2)

In Committee

Part 1 Amendments to principal Act

Hon LIANNE DALZIEL (Labour—Christchurch East) : I will take a very brief call in order to get on the record of the Committee the understanding that we on this side of the Chamber have in respect of Supplementary Order Paper 262, which will be moved by the Minister in the chair, the Minister of Justice. It inserts new clause 5A, amending, as it does, section 22 of the Electoral Act. I put on record our thanks to the Minister for having a very open and consultative approach on this legislation. It is important, when it comes to electoral administration, to get these technical matters correct, just as it is for the more substantive issues in relation to electoral law reform.

But when I looked at the departmental report about the provisions on the Supplementary Order Paper, which are to change the definition of an “adjoining district” for the purposes of the appointment of registrars of electors, I saw that the departmental report states “We note that the EEC has already carried out a restructuring exercise aimed at moving to a regionalised structure. This has seen the effective disestablishment of a number Registrar of Electors positions. The restructuring has been challenged by the Engineering, Printing and Manufacturing Union in an application for judicial review. We understand that the application, which is currently before the courts, alleges that the restructuring contravenes the existing requirements of section 22 of the Act. … Amending the Act before the court case is concluded has a number of implications that require careful consideration. One possible effect would be to limit the remedies the court could offer if the application for review is successful. The existence of the ‘live’ legal proceedings supports our earlier conclusion that consideration of the structural change proposed by the EEC should be deferred until a more appropriate time.” Then there is further discussion about the various approaches that the Electoral Commission has adopted on that.

I would like the Minister to take the opportunity that this debate allows to confirm on the record of the House that this technical amendment is supported by the Engineering, Printing and Manufacturing Union and will not prejudice its case.

Hon SIMON POWER (Minister of Justice) : In respect of this particular bill, the Electoral (Administration) Amendment Bill (No 2), Supplementary Order Paper 262, as the member suggests, was introduced to respond to an issue about the physical location of registrars of electors. The Act does not, on its face, seem to support the flexibility needed in the delivery of those services, and, quite frankly, had they been located in other places this issue of having them adjoining the right electorates would have been fine. We have introduced the Supplementary Order Paper to address this matter. It amends section 22 of the Electoral Act to define “adjoining” in relation to electorates. It essentially reflects the status quo, and it has the support of all affected parties.

I will not give a legal opinion about the case itself, but I know that the advice I have is that the Engineering, Printing and Manufacturing Union supports the amendment before the Committee. How that will affect other matters I will not be drawn on, but that is certainly the advice I have received.

  • The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Simon Power be agreed to.
  • Amendments agreed to.
  • Part 1 as amended agreed to.

Part 2 agreed to.

Schedule agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Clause 3 agreed to.

  • Bill to be reported with amendment presently.
  • House resumed.
  • The Chairperson reported the Appropriation (2011/12 Estimates) Bill without amendment and the Electoral (Administration) Amendment Bill (No 2) with amendment.
  • Report adopted.

Sittings of the House

CHRIS TREMAIN (Senior Whip—National) : I seek leave for the House to rise now and to return next sitting day.

The ASSISTANT SPEAKER (Eric Roy): Leave is sought for that purpose. Is there anyone opposed to that course of action? There appears not. Leave is granted.

  • The House adjourned at 9.52 p.m.