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House of Representatives
28 April 2015

Draft transcript - Tuesday, 28 April 2015


Nepal— Earthquake

Hon BILL ENGLISH (Acting Prime Minister): I seek leave to move a motion without notice in relation to the earthquake in Nepal.

Mr SPEAKER: Is there any objection to that course of action being followed? There is none.

Hon BILL ENGLISH: I move, That this House express its support and condolences to the people and Government of Nepal, following the devastating earthquake that struck there on 25 April 2015. On Anzac Day a 7.8 magnitude earthquake struck the South Asia region, centred north-west of Kathmandu. The full extent of the tragedy is now becoming clear with more than 4,000 people killed and over 7,000 injured in Nepal, India, China, Pakistan, and Bangladesh. The scale of the destruction in Nepal is devastating, and the images we are seeing from out of the affected areas are upsetting. The damage to infrastructure and the economy has been immense. We know from recent experience the suffering that an earthquake of this magnitude can bring, and how difficult the response and the recovery can be. We know also how important it is to work with authorities to coordinate a response to ensure that it is beneficial. We also learnt from the Christchurch earthquakes that no country has to face this alone. The international community stands ready to help. In New Zealand’s case there is immense goodwill between New Zealand and Nepal, based on our links through Sir Edmund Hillary and the ongoing work of the Sir Edmund Hillary Trust . In recognition of this special relationship and in response to the scale of the tragedy, we have announced an initial contribution of $1 million to the immediate relief effort, and we will continue to assess how we can further assist both in the short term and in the coming years, because as we know from our own experience, recovery takes a long time. This funding will be delivered to agencies that are active on the ground and have the capability to provide immediate assistance. We have also deployed three consular staff to Kathmandu to support our honorary consul, and to provide assistance to New Zealanders in response to the earthquake. We have confirmed the well-being of 236 New Zealanders in Nepal. Given the scale of this disaster, and the fact that communications remain intermittent, it may take time to account for all the New Zealanders in the affected areas. Again, on behalf of this House and all New Zealanders, I extend our condolences to the Prime Minister of Nepal, Sushil Koirala , and the Nepalese people during this difficult time. We also offer our condolences to all of those who have been affected by this tragedy in Bangladesh, China, India, and Pakistan.

[Continuation line: Hon Annette King]


Speech - Hon ANNETTE KING (Deputy Leader—Labour)

Hon ANNETTE KING (Deputy Leader—Labour): The Labour Party joins the Acting Prime Minister in expressing our sympathy to the people of Nepal, following a horrendous 7.8 magnitude earthquake. Our thoughts go out to the thousands of Nepalese people who have lost family and friends, and who have suffered injury. Over 4,000 have died and the numbers are still growing. Over 7,000 have been injured and 100,000 are homeless. We would also want the families of the New Zealanders who are still missing to know that we are thinking of them at this time. The Himalayas front can produce some very powerful earthquakes. In 1934 there was an 8.2 magnitude earthquake, which hit Nepal. The difference this time is that on Saturday this earthquake was relatively shallow, intensifying the surface shaking, and the epicentre was closer to Kathmandu. It is being reported that the earthquake ruptured under the city, creating the worst-case scenario. A massive block of the earth’s crust, roughly 120 kilometres long and 60 kilometres wide, lurched 3 metres to the south, according to a world-renown expert on Himalayan earthquakes. The result has been catastrophic for Nepal, but the effects and the loss of life have also extended, as the Acting Prime Minister said, to China, Pakistan, Bangladesh, and India. We send our condolences to the families of those countries as well.

[Continuation line: We think particularly of the five Nepalese employees]


We think particularly of the five Nepalese employees of the Wānaka mountain guiding company, Adventure Consultants, who were killed on Saturday, and we are thankful that five New Zealanders on an Everest expedition with the company were unharmed. Sir Edmund Hillary said before he died that he wanted New Zealand to look after the Himalayan people—people whom he had devoted his life to and a country that, through him, we feel close to. His daughter Sarah said on Sunday that Sir Ed would be horrified and saddened by the devastating earthquake. She said, however, that his first concern would be for the people. I urge our Government to redouble its efforts to help the Nepalese people. Sometimes, as happened in Christchurch, friends do not wait to be asked to help; they just go. It is not a time to think about what might be done that could be helpful; it is a time for action and to repay the generosity shown to New Zealand and to reinforce our reputation as a good international citizen. I do believe that there is more that we could and should do and I look forward to hearing what further contribution the Government will make. But I also urge New Zealanders to dig deep and to donate whatever they can. I know that Oxfam and UNICEF are collecting now. Every bit will help.

[Continuation line: Russel Norman]


Speech - Dr RUSSEL NORMAN (Co-Leader—Green)

Dr RUSSEL NORMAN (Co-Leader—Green): The Green Party extends its condolences and sympathies to the people of Nepal and to those in the region who have been affected by this quake. Our thoughts are with the Nepalese community in New Zealand and, in particular, those who have lost friends and family. Our thoughts are also with New Zealand families who are waiting to hear about people who are still missing. We hope that good news of your loved ones reaches you soon. The Green Party acknowledges the contribution of the Government so far and we hope that the Government can commit further, in the fullness of time, to support the Nepalese recovery and rebuild. New Zealanders know firsthand about the damage caused by earthquakes, and it is not just about bricks and mortar. The confirmed death toll is now over 4,000, and the number of people who have lost their homes is already estimated to be in the hundreds of thousands. Those who lived in the oldest and most unstable buildings will have lost the most. People in Kathmandu were camping in public spaces because they did not feel safe going back into their homes or because their homes have been destroyed. There is a race against the clock to clean up, with the monsoon season beginning in just a few weeks. Many people will no longer have a roof over the heads to keep them dry. Slips in the countryside are a real danger, on hills and in valleys that have been destabilised by the earthquake and its aftershocks. Reports from rural hospitals have highlighted the lack of diesel to keep their generators going. They are relying on electricity generated by solar panels, but they do not have enough panels to light both the operating theatres and the general wards at the same time. This is a reminder that self-sufficient energy sources can be invaluable at times of crisis, when normal fuel supplies are not available. It is important that New Zealand helps out as best we can. At this point that may be by simply sending money to the aid agencies on the ground that know what is needed most, and we encourage the Government to help. But we also encourage New Zealanders to help. It seems like Nepal may not need our urban search and rescue team, but there may be other opportunities for New Zealand to support the people of Nepal in their recovery. The average income in Nepal is less than $500 a year. A lesson from the 2010 Haiti earthquakes is that recovery is even more complex in poorer countries. Even 5 years after the quakes there is still much work to be done in Haiti. Other members have mentioned that there is a rich history between New Zealand and Nepal, centred on the work of Sir Ed and Lady June Hillary with the Himalayan Trust. New Zealand will feature in Nepal’s long-term rebuild through the work of the Himalayan Trust. There are encouraging reports that signs of normality are returning in Nepal. Markets are selling food and traffic is slowly returning to the streets of Kathmandu. But we know from our experiences in Canterbury that the human cost—the damage to people’s lives—is not easily repaired. It takes time. New Zealanders know the ongoing dread of aftershocks, the anxiety that keeps you awake at night, and the unease brought on by the smallest shake. But we also know that over time things get better. We hope that people in Nepal find support and strength in their families and communities at home and abroad as they rebuild their homes and their lives. We send our aroha and best wishes to them.

[Continuation line: Tracey Martin]


Speech - TRACEY MARTIN (Deputy Leader—NZ First)

TRACEY MARTIN (Deputy Leader—NZ First): Kia ora, Mr Speaker. There is a long-standing and special bond between Nepal and New Zealand. The brigade of Gurkhas, only last Friday, marched with their pipes and drums alongside our own in the Anzac Day parades here in Wellington. The brigade of Gurkhas then stood alongside our own dignitaries, military personnel, and tens of thousands at the Pukeahu National War Memorial to commemorate Anzac Day. We hope that they have arrived home safely. We hope that they have arrived home and found their families safe, because this bond was enhanced and strengthened through the work of Sir Ed and his family in honour of his good friendship with Sherpa Tenzing. So New Zealand First stands to join with the other members of political parties in this House to add our condolences, to add our best wishes. We also add our voice to the calls for more from the Government, for speedy responses. I take on board the comments of the Green Party member that this will go on for some time, so it is not only to be quick in the first moment but we need to be there for the long haul for our friends. So New Zealand First will participate in any way that we can to join with the rest of Parliament to support our friends and our neighbours in this time of their need. Kia ora.

[continuation line: Te Ururoa Flavell]


Speech - Hon TE URUROA FLAVELL (Co-Leader—Māori Party)

Hon TE URUROA FLAVELL (Co-Leader - Māori Party):

[Continuation line: Hon Peter Dunne]


Speech - Hon PETER DUNNE (Leader—United Future)

Hon PETER DUNNE (Leader—United Future): On behalf of United Future I want to join with other members in supporting the resolution moved by the Deputy Prime Minister in respect of the horrific earthquake that devastated Nepal and other countries in the region at the weekend. As the television photos have come through and we have seen the signs of the rubble, and we saw the dramatic pictures last night of the avalanche on the lower slopes of Everest and the buildings collapsing in and around Kathmandu, the enormity of that event has started to sink in very deeply. At first it was just a trickle of deaths and casualties, but now it is up over 4,000, with 100,000 homeless, many more unaccounted for, and even a casualty in respect of a New Zealander confirmed as having died, although from a related condition, as part of the earthquake drama. I suspect that a few years ago we would have let events like this simply wash over us to some extent—they happened in other places; they were horrific and tragic—but ever since the events in Christchurch they have taken on a new significance for New Zealanders because we know, maybe on a smaller scale, what the devastation can be, what the uprooting of societies is as a consequence, and consequently what the need for reconstruction and assistance at times of trouble can be as well. I support the initiative taken so far by the Government in terms of financial assistance. I agree that it probably will not be where the issue ends. There will be more calls made on our assistance in the future and

[Continuation line: we should be prepared, unstintingly, to provide that]


We should be prepared unstintingly to provide that. In that context I acknowledge the readiness and preparedness of our urban search and rescue unit, which was to have deployed to Tibet last night but is not required at this time. Those people gave up their weekend at short notice to be ready to go, and that is what we would expect of them. I acknowledge their preparedness and their contribution. All of us would share a sense of deep horror at the unfolding events. We wish—I was going to say speedy; that is probably inappropriate—a clear and quick return to a sense of normalcy in Tibet. We hope that the deprivation that has been evident in recent days can be placed under some control and we look forward to working with the international community to restore the tradition of that proud country and to strengthen further the links between our two nations as we help them recover from this tragedy.

[Continuation line: Points of order—Annette King]

Points of Order

Rt Hon Mike Moore— Recovery

Hon ANNETTE KING (Deputy Leader—Labour): I raise a point of order, Mr Speaker. I believe the House would want to join with the Labour Party in wishing Mike Moore, former Prime Minister and our ambassador to the United States, a speedy recovery following a stroke he suffered several days ago. We need him back at work, and there is still much work to be done, Mike.

Points of Order

Rt Hon Mike Moore— Recovery

Hon SIMON BRIDGES (Minister of Energy and Resources): I raise a point of order, Mr Speaker.

Mr SPEAKER: It is unusual to do it that way, but I call the Hon Simon Bridges.

Hon SIMON BRIDGES: I just want to join with the member opposite and also from this side of the House wish Mr Moore a swift and a fulsome recovery.

Points of Order

Rt Hon Mike Moore— Recovery

Mr SPEAKER: I thank the House.

[Continuation line: QOA Q1]

Annual Review Debate

In Committee

The CHAIRPERSON (Hon Chester Borrows): This debate is the Committee stage of the Appropriation (2013/13 Confirmation and Validation) Bill. The time allocated for this debate is 9 hours and comprises two distinct elements in accordance with determinations of the Business Committee. The first is the debate on the annual financial statements of the Government, as reported by the Finance and Expenditure Committee. The time allocated by the Business Committee for this debate is 2 hours. The second is the debate on the annual reviews of departments, Officers of Parliament, Crown entities, public organisations, and State enterprises, as reported on by select committees. The time allocated by the Business Committee for this debate is 7 hours. We turn first to the 2-hour debate on the Government’s 2013-14 financial statements and the report of the Finance and Expenditure Committee. The Business Committee has determined that the first call will go to the chairperson of the Finance and Expenditure Committee and that the total number of calls will be as follows: the New Zealand National Party, 12 5-minute calls; the New Zealand Labour Party, seven 5-minute calls; the Green Party of Aotearoa New Zealand, three 5-minute calls; the New Zealand First Party, two 5-minute calls; and the—[Interruption] The Chairman is on his feet. Will the member keep his mouth shut? The Māori Party—[Interruption] Order! [Interruption] No, I am on my feet. The member will be seated. [Interruption] I am on my feet. The point is, for the members who are present, that the Business Committee has agreed to a motion—particularly from the Opposition parties—so that this debate will have more meaning than they have deemed it to have in the past. It is a new process, and I am endeavouring to lay that out to the Committee of the whole House as we are now. I would appreciate the ability to continue so that members are fully aware and not ignorant due to their adherence to the ways that have happened in the past. The Māori Party, ACT New Zealand, and United Future New Zealand may negotiate with the New Zealand National Party for calls during the debate.

Annual Review Debate

In Committee

Rt Hon WINSTON PETERS (Leader—NZ First): I raise a point of order, Mr Chairperson. You may say that this committee outside this House decided this and it decided that, but the fact of the matter is that this House is the master of its own destiny and we will not be ruled out because of some arrangement made outside with House with which we do not agree. If you could tell me how 14 members gets 15 minutes and 12 members gets 10 minutes and that is fair, then I would like you to explain it to me mathematically, but it is not. [Interruption] I beg your pardon? Have you got a problem with actually working out the mathematics on that? If 14 members—

The CHAIRPERSON (Hon Chester Borrows): The member should make his point of order or complete it.

Rt Hon WINSTON PETERS: My point of order is simply that that ratio cannot be fair, that 14 members—sit down. Fourteen members getting 15 minutes would surely mean that 12 members are entitled to more than 10 minutes. It is just actually mathematic. So there, for a start, I do not think it is reasonable—

Annual Review Debate

In Committee

The CHAIRPERSON (Hon Chester Borrows): I do not need any further help from the member on this matter. Sit down. [Interruption] Take your seat. The point is that the protocols for this debate have been determined by the Business Committee. If the member wishes to seek leave to change that, he can.

Annual Review Debate

In Committee

Rt Hon WINSTON PETERS (Leader—NZ First): I seek leave for New Zealand First to have, for a start, a fairer ratio of speaking time than that laid out by you in your little preamble.

Annual Review Debate

In Committee

The CHAIRPERSON (Hon Chester Borrows): Leave is sought for that purpose. Is there any objection? The motion is lost.

[Continuation line: David Bennett]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - DAVID BENNETT (Chairperson of the Finance and Expenditure Committee)

DAVID BENNETT (Chairperson of the Finance and Expenditure Committee): This is a good time to be a New Zealander. This is a good time to support the New Zealand economy. [Interruption]

The CHAIRPERSON (Hon Chester Borrows): Order! Please take your seat. As I indicated earlier, the reason the new process was put before the Business Committee was to try to raise the level of debate. Let us see if members of the Committee can do that.

DAVID BENNETT: This is a good time to be a New Zealander. This is a good time to reflect on our economic achievements. Under this Government we have managed to manage the New Zealand economy in a prudent way that has delivered the right economic benefits for New Zealanders going forward. In the most difficult of economic conditions, in times when we could have gone into a worldwide depression, this country has not. What we have delivered is a strong economic base for this country to go forward. We have low interest rates.

Ron Mark: I raise a point of order, Mr Chairperson. Sorry to the member for interrupting his speech, but you did make a statement there that has got me totally confused. When has there ever been a question about the level of debate in this Committee, and who does it involve?

The CHAIRPERSON (Hon Chester Borrows): That is not a point of order.

Ron Mark: Well, you have made a statement and it should be clarified.

The CHAIRPERSON (Hon Chester Borrows): Do not challenge the ruling I have already given.

[Continuation line: David Bennett]

DAVID BENNETT: As I was saying before, this is a country that has low interest rates—some of the lowest in the developed history of this country. It is also a time when this country has strong economic growth, at 3.5 percent. That is higher than for most other Western countries. This is a good economic environment. Unemployment rates are reducing. We are going below 6 percent, with a rate under 5 percent in a few years’ time. These are good times for New Zealanders, and they reflect a country that has been well managed in the most difficult of times. It is not an easy economic environment out there. It is not an environment that is easy for any country, especially a commodity-producing country. But we are still delivering that economic base to grow our country going forward, and it comes from stable Government that has good economic management. That is the strong growth prospects that we will have going forward. Last week I was in Australia. In Australia they are facing high unemployment. It is facing high Government deficits. It is facing lower growth than us, and it has higher unemployment than us. The people are coming back to New Zealand because they know that this country has delivered the right things going forward. They know, also, that they do not want a Labour - Green - New Zealand First Government. They do not want the Labour Party that delivered a recession before the rest of the world. They do not want a Labour Party that was going to put New Zealand into a lifetime of debt, at 60 percent of GDP and not reducing. They know that they want a country that can be economically managed, and done in a very good way. They do not want a Green Party that is going to sing “Kumbaya” on the beaches and think that everything is just going to come their way. They do not want a New Zealand First Party that is led by some cult figurehead who requires all male members to wear handkerchiefs in the top pockets of their suits. No, New Zealand First is not the party for that party’s members there. New Zealand has an economic base that is very strong. We need to celebrate that economic base. We need to understand that we have the economic strength to go forward and deliver the policies that New Zealanders will want. This is not a time when we need radical change. This is a time when we work on the base that has been presented, and we do the things that New Zealanders want in a constructive, fair, and prudent manner. It is a time when we can look forward and make those investments in our communities, in our social infrastructure, and in our physical infrastructure. We can deliver the things that New Zealanders want. It is not a time for the radical economic change that would come from the Opposition parties. It is not a time when we would throw the baby out with the bathwater, where we would throw away the economic potential that we have as a country. We are growing. That is something to celebrate, and we should be supportive of that. Those low inflation rates deliver low interest rates for New Zealanders, so that they can go out there and buy their first home. We are delivering jobs to New Zealanders, so that they can have the work to enable them to do that. These are good economic times. These are the best economic times for a Western country. That is something that all New Zealanders understand, and they are proud of it. We in this Parliament should be proud of that and we should be working to make the most of it. We should not be trying to denigrate our country. We should not be trying to bring in silly policies that will take us back to the 1950s, to the control-based economies that the Opposition wants. We need an open, free country, an open economy that delivers, that has free-trade agreements, that enables our New Zealand businesses to invest, that enables the infrastructure that is there for all New Zealand companies to grow and succeed, that enables those educational opportunities that are there, that rebuilds our second-biggest city, and that delivers an economic return going forward. Thank you.

[Continuation line: ROBERTSON]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - GRANT ROBERTSON (Labour—Wellington Central)

GRANT ROBERTSON (Labour—Wellington Central): If ever the National Party wanted to signal to New Zealanders that it was out of touch and out of ideas, it would put up David Bennett as the first speaker in a debate. David Bennett stood up in this House and said that it has never been easier for New Zealanders to buy their first home. Well, tell that to the people who live in Auckland, Mr Bennett. Tell that to the people in Auckland who see a house on the North Shore costing more money than most people who go to work each day earn in a year in Auckland, because that is what we are seeing in Auckland today. In these financial statements what we see is a Government that is out of touch, out of ideas, arrogant in its third term, breaking promises, and lowering the standards that we would expect from a Government. We heard from the Prime Minister this week that he is the most casual Prime Minister in New Zealand’s history. I will tell you what. He is pretty casual about wages, and the fact that they are not keeping up. He is pretty casual about the fact that unemployment is still higher than it was when the global financial crisis started. He is pretty casual about the fact that housing affordability is the worst that it has been in 60 years. And he is very casual indeed about the impact on the regions of the neglect of this Government. If this Government wanted a sign of that, it came in the Northland by-election. The signal to this Government that the regions of New Zealand are feeling neglected and forgotten goes all the way from roads to broadband, to the investment that we would expect in the economy. It is not happening from this Government. Ed Miliband in the UK said something interesting the other day, when talking about the Conservative Government there. He said that people tell them there is prosperity, but most working people feel that that prosperity is happening to someone else, somewhere else. That is what the people of Northland have been telling the New Zealand Government, and that is what the people of the regions are telling us as we travel around. It is all very well to celebrate an economy built on the recovery from natural disaster and one commodity price, but that is not good enough for the New Zealand economy. It is not good enough, after 7 years, for Bill English to stand up in this House and make excuse after excuse for why he will break his promise to New Zealanders to deliver a surplus, and why he will break his promise to New Zealanders to reduce the level of borrowing. The debt today is $85 billion. Bill English has borrowed more money than Rob Muldoon. Rob Muldoon is John Key’s political hero. I do not think he is Bill English’s political hero. Bill English has borrowed more money than him. We are not in a surplus, and we will not be in a surplus despite what we have been told. It is a broken promise from this Government. It was Bill English himself who said that getting into surplus was one of the most important things a Government could do in order to safeguard the economy.

[Continuation line: He said that in this House, in fact.]


He said that in this Chamber, in fact—he said that. And today in Parliament he said he recalled saying that, but suddenly he has adopted the Prime Minister’s view that getting a surplus is an artificial target, that it is like trying to land a 747 on the head of a pin. Well, I tell you what. Michael Cullen must have been a really good pilot because he managed to land that 747 on it nine times in a row. In this Budget we will have seven deficits for seven Budgets from Bill English. I challenge the Minister to stand up in this Chamber and explain to New Zealanders why while they have gone through the last 7 years tightening their belts, doing what has been asked of them, being told election after election that the surplus would come, that the paying down of debt would happen when that occurred, yet again the Government fails. Yet again the Government fails to deliver to hard-working New Zealanders who, rightly, will be looking ahead to this Budget and saying: after 7 years what do we get? Well, what they are going to get from this Government, if we look at these financial statements, is more debt, lack of growth in the economy in terms of diversifying it, lack of growth in the housing supply, not managing demand in terms of housing, and neglecting the regions. That is what they will get, and after 7 years that is absolutely appalling. Let us look at the promises that the Government has made. It has made the promise that New Zealanders’ average wages will go up to $62,000—that was in an open letter that John Key sent to New Zealanders in the election time—by September 2017. Well, at the moment, Bill English is spending all his time talking down wage increases. He is saying New Zealanders should not expect more than 1.5 percent in terms of wage increases. We are talking here about teachers and nurses and people who serve New Zealanders every day, who have sat by knowing that the economy was under strain, but then Bill English and John Key declare the global financial crisis is over. Where is the dividend for those people? So if we look at the promise to get to $62,000 average wage by September 2017, it requires a 3 percent, year on year, wage increase. Bill English is saying only 1.5 percent this year. This is broken promise No. 1. Then the National Government tells us that wear are going to see unemployment go down and go down to around where the OECD averages are. Well, what we know is that in the last cycle unemployment went up. It went up to 5.7 percent. The only reason it even looks partly good is the Christchurch rebuild. We are not seeing the sustained investment in the New Zealand economy to diversify. If we look at a region like—shall we pick Wanganui? It is a great region of New Zealand neglected by this Government that now sees the highest unemployment rate in the country. It is higher than Northland, higher than the East Coast. It is places like Gisborne, Wanganui, Northland that are saying: where is this Government? Where is the investment in the economy beyond commodity prices, because we are seeing dairy prices slip further and further? That is what this economy has relied on under National—commodity prices; riding the wave of commodity prices. We are now looking at a $7 billion hole in the New Zealand economy because dairy prices have come off so far. And that does not affect just the famers who wear that; it affects every rural and provincial community in New Zealand because they will see the impact of the loss of that money. So there is a broken promise around employment, fuelled by this Government not being prepared to invest. But then when we look at the regions seriously and look at issues like investment in transport, investment in broadband, activity in rural broadband is happening only because communities are doing it ahead of the Government. This is a Government that has forgotten where it has come from. It is interesting to stand up on this side of the Chamber and realise that this Government is now so out of touch with its own voters in the regions that it neglects them in an attempt to try to milk the rest of the Christchurch rebuild in order to show that it has got some kind of vision for the economy. What we now have is a Government that has been reliant for so long on commodity prices, that has relied now for several years on the rebuild of Christchurch but still tries to use it as an excuse, and that is out of ideas. For Bill English to stand up in the election campaign when he was asked what new idea he had to grow the economy—he could not come up with one. Now he says there are no new ideas for housing either. The Government is out of touch, out of ideas, an arrogant Government in its third term. Once upon a time the slogan was “ambitious for New Zealand”. Now it should be “embarrassed for New Zealand”, because that is what we are getting from this Government: an embarrassing lack of investment in the economy, a Prime Minister who goes around embarrassing the whole country, and a Government that does not have any ideas to grow the economy long term and in a sustainable way. These financial statements speak of a Government that has lost touch with where ordinary New Zealanders are. The questions we get asked when we are out in the community are: where are the new jobs coming from, where is the investment in new industries, in adding value, in information and communications technology, in high value manufacturing? New Zealanders have the ideas, they have got the interest, but they do not have a Government that will back them. They have got a Government that is complacent. It is sitting there waiting for those commodity prices to rise again. The message for this Government is that it is not going to happen. Over the next 5 to 10 years there is a glut in global milk supply. We have got to do something different. Do you know what the Government’s response is? It is to change the targets for exports. When National came into Government, it said 40 percent of GDP for exports. And what does it do now? Well, 30 percent was what National had when it came in. It fiddled around a little bit with the way it worked it out, but it is below 30 percent. It is dropping. It is 28 percent. We will not thrive as a country if we do not build our export base. This Government is out of ideas. It is out of touch with New Zealanders and it has completely failed to invest in the regions. It has failed on housing in a way that no Government before it has done. It has completely failed to build houses, and it has completely failed to manage demand. And now we have the Governor of the Reserve Bank telling the National Government that it has failed on housing. No building, no increase in supply, and now the Reserve Bank is saying no control of demand. This is a Government with its head in the sand. John Key tells us there is no crisis in housing; there is a crisis.

[Continuation line: Dr Russel Norman]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - Dr RUSSEL NORMAN (Co-Leader—Green)

Dr RUSSEL NORMAN (Co-Leader—Green): I rise to speak on behalf of the Green Party on the debate on the Government’s financial statements. The National Party told us to judge its economic performance on whether it achieved a surplus or deficit—repeatedly, over and over. Over the last 6 years this is something we have been told. And as it approaches a record equalling seven deficits in a row—of course, its previous record was set by the Holyoake Government, seven Budget deficits in a row—we can only say to the Government that on its own terms it failed to meet what it said was its objective, which was to actually produce a Budget surplus. Surely, what that says to the Government is that it is time to reconsider the big tax cuts that it gave to the wealthiest people in the country, which drove the Budget further into deficit. It is worth remembering that prior to this Government we had Michael Cullen and nine Budget surpluses in a row. Each time one of those surpluses came around, the National Party said to us that we should not pay down debt; we should give the surpluses away in the form of tax cuts to the wealthy. At the time the Labour-led Government, with the support of the Greens and others, said: “No, we should use the surpluses to pay down debt.” Fortunately, that is exactly what Cullen did. He paid down debt. So when this Government came in and faced a series of genuine challenges—the global financial crisis, the earthquakes—there was a lot of leeway in order to borrow, which this Government has done over and over and over. But, unfortunately, part of the borrowing is to pay for tax cuts for the wealthy, and I would say to the Minister of Finance: surely, even you, looking back at that, must recognise that was a mistake. But the thing is that Budget deficits are not really the best measure for whether a Government is performing well. I mean, the National Government has told us we should judge it by Budget deficits, but the truth is that actually it is one measure. It is an important measure, but actually there are a lot of other indicators we should look at. For example, we should look at the current account deficit. The current account deficit is currently rising. It is $7.8 billion in the year to December 2014. Perhaps we should look at the growing net international investment liability, which has now gone up to $154 billion. It is certainly true that there were some reductions in both of those numbers around the global financial crisis, but what we are seeing again is that the New Zealand economy is running big deficits. The truth is that New Zealand cannot borrow its way to prosperity. That is something that the Minister of Finance himself acknowledged, when he first took the role. But, as he has been unable to crack that problem and it is coming back once again—it is only going to get worse, according to the Reserve Bank projections. That is a problem that is going to be passed on to the next Government to try to deal with. We simply cannot borrow our way to prosperity. Linked to that is the research and development deficit. New Zealand has one of the lowest levels of investment in research and development in the OECD, and this Government is, unfortunately, cutting investment in research and development—the funding to businesses that want to invest in research and development.

[Continuation line: Even the most recent announcement that]


Even the most recent announcement that the Government made, which was a small nominal increase, when you look at in real terms is a decrease in research and development investment once you take into account inflation over the years ahead looking at the Government’s draft investment plan for science. There are, in fact, great businesses in New Zealand that want to invest in research and development and want to embrace the opportunities of smart Green economics, but it is very difficult when you have a Government that subsidises the primary sector commodities, subsidises milk production, and subsidises oil exploration but strangles high-tech industries and strangles smart Green innovation. In every other country those industries get a lot of support on research and development from their Government because that is an essential part of the package. Under this Government we have very low levels of investment in research and development. What about the housing deficit? It is simply a fact now that for many Aucklanders their houses earn more in a year than they do. The median house price has gone up by over $250,000 in Auckland since this Government came into office. That is terrible economics and it is terrible social policy at the same time. The Reserve Bank is really worried about the Auckland housing bubble and has called for a capital gains tax on investment properties, as have the Greens, to dampen the housing bubble. The National Party, unfortunately, opposes that measure to close that loophole, and Labour—well, I am not quite sure what Labour’s current position on capital gains tax is. We also know that offshore demand for housing is virtually unlimited and so we need some constraints on offshore demand for housing in Auckland, as many other countries have, but so far we do not have that. We also know that in terms of the supply side, increasing high-quality housing density around improved public transport routes is actually the only solution on the supply side that works. Auckland needs to go up not out. That is just a basic reality. This Government, unfortunately, has been backing sprawl and it has been backing motorways rather than compact urban form and rail. It is going in exactly the wrong direction in terms of dealing with the housing affordability and liveability crisis that Aucklanders are facing. Instead of supporting compact urban form and rail, which we know is the way to actually reduce house prices in Auckland in terms of the supply side, the Government is backing sprawl, which makes Auckland more and more unliveable. What about the climate deficit? When it first came in the Government gutted the emissions trading scheme, it subsidised road transport and hence fossil fuel use in roads, it subsidised dairy expansion, and it subsidised oil exploration. Unsurprisingly, New Zealand’s net greenhouse gas emissions are surging. The Minister for Climate Change Issues—I use the term advisedly—Tim Groser has tried to hide the massive net deforestation that is under way right now in New Zealand. He put out a press release saying that afforestation is ahead of deforestation in New Zealand, but it is not. So Mr Groser had to issue a new press release, a correction to his press release, where he had to acknowledge that, in fact, deforestation is happening at about twice the rate—so twice the number of hectares—than afforestation is currently in New Zealand according to the Government’s own figures that it released a couple of weeks ago. Of course, the impact of that is that New Zealand’s net greenhouse gas emissions are increasing, and our intensity—the amount of net greenhouse gas emissions per unit of GDP—continues to increase. So we are going in exactly the wrong direction in terms of climate change. The cost to the taxpayer is enormous. Treasury is trying to estimate what the cost to the taxpayer of this big surge in New Zealand’s net greenhouse gas emissions will be. It estimates it will probably be up to $52 billion in order to buy carbon credits to meet our climate change targets. So the taxpayer—the Crown—will have to buy an enormous quantity of carbon credits on the international market to try to meet our international commitments to marginally reduce our net greenhouse gas emissions. That, of course, is not free; the taxpayer has to pay for that. Depending on the price for carbon credits internationally, that will mean that the taxpayer has to pay up to $52 billion in order to buy those carbon credits internationally, according to the New Zealand Treasury. I think this really demonstrates the way that this Government is passing these deficits on to future generations and future Governments. It introduced a whole series of policies that resulted in a big increase in net greenhouse gas emissions—the climate deficit, if you like. The impact of that on future Governments is they are going to have to buy carbon credits internationally to try to meet our targets. There will be a huge fiscal burden on the taxpayer as a result of that. We still, of course, have no official emission reduction targets to present to the World Gas Conference in Paris coming up at the end of the year. I think the tragedy, really, in all of this from the point of “New Zealand Inc.” is that it is really an enormous missed opportunity. New Zealand already has a great reputation— “100% Pure New Zealand” and so forth—and it is a great opportunity for New Zealand to grab the opportunity of smart Green innovation, which is just taking off internationally. Unfortunately, New Zealand is locked into a 1950s mentality—or the current Government is, unfortunately. There are a lot of New Zealand businesses that are trying to break out of that. But the Government is locked into the mentality that says: “This climate change stuff doesn’t really matter and all that innovation stuff—we’re going to do milk powder and we’re going to do oil.” But that really is locking us into a very unproductive future and is missing one of the great economic opportunities of the 21st century, which is sustainability. Purpose-driven capitalism, if you like—capitalism of abundance and sustainability—is going to be the marker of this century and New Zealand is completely missing out on this opportunity because we have a Government that cannot see it and that looks backward as it travels into the future. Finally, there is the biodiversity deficit. New Zealand is in the middle of a great biodiversity crisis. We are really losing magical things that are hard to put a number on. This debate is about the financial statements of the Government, but as we lose the amazing biodiversity that we inherited from those who came before us it is hard to put a number on the enormous loss that our children will experience by not being able to see the amazing plants and animals that once lived in this amazing country, these islands, and this kingdom of the birds. As we lose biodiversity because we really—as a Government and as a country—have not put the effort and the financing of the need into the Department of Conservation and elsewhere to protect that biodiversity we are losing something that cannot really have numbers put on it. I think that is, perhaps, one of the irreparable damages that Governments can leave.

[Continuation line: Bill English]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - Hon BILL ENGLISH (Minister of Finance)

Hon BILL ENGLISH (Minister of Finance): It is good to hear a coherent explanation about the economy from the former Greens spokesman on finance. Actually, he will be a loss to the Opposition because there is no one to take his place, whether it is Greens or Labour. I do not agree with his apocalyptic description of either the New Zealand environment or the New Zealand economy, but he does focus on the real issues. He does have a different point of view, but you can follow it and occasionally be influenced by it, which puts him in a vastly different class than Grant Robertson, that is for sure. Grant Robertson is the man who is now campaigning for surpluses in between turning up at protest marches outside Government departments protesting against constraint. Out on the street he is against constraint and when he comes in here he is lecturing the National Government about how we have not shown enough constraint.

[Continuation line: So I look forward to hearing from the Opposition parties about]


So I look forward to hearing from the Opposition parties about which programmes they think should be cut to generate a larger surplus number. That is the bit I want to hear. I suspect I might not. But we have heard a couple of versions of what is going on in the economy that amount to the economy that Labour and the Greens wish they were criticising. There are two features of the current growth rates that stand out. One is the breadth of the base of growth. In fact, when members talk about commodity prices, what they should be referring to is the way in which the New Zealand economy is showing broad and sustainable growth at a time when the dairy prices are low. That is actually the interesting issue. The question people should be asking themselves is if dairy was so dominant, why is it that we are looking at growth of 2.5 to 3 percent over the next 3 to 4 years while dairy prices are low? Well, the reason is that a lot of other industries are doing well—even export industries. One should just look at the trade-weighted index, which is a measure of the sales of our exports in the currencies that are relevant to those sales. What is rather surprising in the light of the drop in dairy prices is that that trade-weighted index has stayed relatively strong. That is in a context where we have a number of features of the economy that indicate the kind of sustainable growth that will deliver moderate but consistent wage increases to our households.

[Continuation line: New Zealand households, I think, with the experience of the last few years have learnt that simple solutions]


New Zealand households, I think, with the experience of the last few years have learnt that simple solutions to the challenge of rising living standards probably are not viable. The most simplistic is the one that the Labour Party suggests is the answer to every single problem, and that is tax deductibility of research and development. That is the answer to everything. Well, it is not the answer to everything. As the Government has set out in its Business Growth Agenda there are about 300 answers to the question of what needs to be done to support investment by businesses that enables them to employ another person and to grow their business, because that is what growth is. It is all set out in the Business Growth Agenda. This debate is actually about the fiscal results to the 30 June 2014. That year, which now seems somewhat distant prior to the election, showed significant advance in the Government’s books where the deficit peaked at about $18 billion, and I think that for the year ended 30 June 2014 the deficit was around $2.5 billion. I will simply reiterate what was said earlier in question time: the Government’s approach to fiscal management is pretty straightforward. What works for the community works for the Government’s books. When we solve a problem in our community and in our families we reduce pressure on the Government budget. I know it is an approach that confuses the Opposition parties; to some extent it confuses the media who think that any Government gets fiscal control by cutting everything. Well, actually, the key to smaller government is better government. When we do a better job—as these accounts indicate we are and certainly the Budget will indicate a further intensive focus by the Government on doing a better job—that is how we get back to surpluses and get debt repaid.

[Continuation line: King]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - Hon ANNETTE KING (Deputy Leader—Labour)

Hon ANNETTE KING (Deputy Leader—Labour): As members opposite know, this bill is called the Appropriation (2013/14 Confirmation and Validation) Bill. I have to say to the Minister of Finance, who has just returned to his seat after trying to do a valiant job of defending the Government’s record by splashing as much animal manure around as possible, that the only thing that this bill does is to confirm and validate that the National Government is arrogant, that it is out of touch, and that it has lost its way. It has lost its way by doing one of the most fundamental things that you should not do in politics, that is by breaking its promises—the solemn promises National members made to New Zealand about the economy of this country. We have also had the Prime Minister, who has said that he was going to set these high standards and, of course, with high standards comes telling the truth and not breaking your promise. But, unfortunately for New Zealand, over the last fortnight we have become the laughing stock of the world. We have the international media not commenting on our rock star economy or how great our exports are; no, what they are commenting on—

Hon Bill English: Like they were doing the other week.

Hon ANNETTE KING: —Acting Prime Minister, is the Prime Minister’s weird behaviour. If you just go and look at the Guardian it has put up a whole article on the 10 weird behaviours of the Prime Minister. It goes from pulling the hair of a young person working as a waitress right through to joking about a paedophile. So, rather than it concentrating on the good things of New Zealand is doing, we have this problem—a credibility problem—out there in the international community and we are a country that must value its international reputation. It is very, very important to this country. You know, a small exporting country like ours needs to retain our reputation. We have been seen for many years as the honest broker in the international community, and, if you think about it, we have got ourselves on the United Nations Security Council because we said we would be the honest broker, particularly to small communities. But rather than being the honest broker we are the joker of the international community and what does that do to those who are working hard, trying to get ahead, when the leader of our country is seen to be a joke. Well, I think that the Government is taking us backwards. It is taking us backwards. I think that John Armstrong got it right when he wrote this week in the New Zealand Herald. He said that our rock star economy is on the rocks and the Government uses smoke and mirrors to cover up the real position in New Zealand, the creative use of figures. It is very interesting to listen to answers from Ministers. They are in favour of some of the figures when they are in their favour and they are opposed to them when they are not. So you cannot tell whether they support Treasury figures or Statistics New Zealand figures because they change their views depending on what their narrative is. So there is the creative use of figures. We have got the selective use of data. We are given some information but not all information and we have got the downright technological inexactitudes about how New Zealand is faring. Let us take just one measure of our economy, which the Minister talked a bit about—our trade, us as a trading nation. Let us talk about our trade deficit. I agree with Rod Oram who wrote in the Sunday Star-Times this week and said that we are suffering from two trade deficits—two trade deficits. One of them is a physical trade deficit and the other is a political trade deficit. He said that the physical trade deficit has widened to $2.2 billion in the year ended February, and that our exports have weakened, mainly reflecting lower dairy prices, while our imports rose. Our trade deficit has grown and the more it grows the more the Government ramps up its rhetoric. There is a political deficit between trade talk and performance and the Prime Minister who is a very casual chap and who is a very friendly chap has a tendency to overegg most things that he does. In fact, he spoke to the New Zealand Institute of Economic Research in March saying our service exports were one of the most exciting areas of trade growth. But the truth is the opposite. Have a look at the data from 2009 to 2014. Our exports fell from research, development, architectural, engineering, technical, legal, accounting services. This is the area where the Prime Minister said that service exports were the most exciting part of our export growth. Then we had the Minister of Trade, Tim Groser. He spoke to a primary industry summit last year and he said that New Zealand was on track to meet the goal of lifting exports from 30 percent to 40 percent of GDP by 2025. But what does Statistics New Zealand—you know, that organisation that is independent of any Government, whose job is to collect statistics and report them fairly and honestly—say? What does it say? What does the Treasury forecast say? They say we are falling well short of the between 5.5 and 7.5 percent a year needed to double exports and reach the Government’s targets. But so desperate is the Government to cover up its poor performance in trade it has even decided to change the method of measurement, and this is where we get to the smoke and mirrors of this Government. It has changed the method of measurement. How deceitful is that? It was not publicised and, in fact, nobody knew it had changed its method of reporting until it turned up as a footnote in the Ministry of Foreign Affairs and Trade annual report 2013-14. It is that sort of approach to the economy that means that New Zealanders cannot trust what Government members are saying. As Rod Oram said, we can build exports if reality overcomes rhetoric—and what we are faced with from this Government is a daily dose of rhetoric, overegging the situation, and not facing up to some of the real difficulties we have in this country. Another example I have to say of rhetoric replacing reality is the promise to return a surplus in this Budget. Mr English, I do not care what you say in answers to this House, I have sat here long enough and listened to you as the Minister of Finance telling us how important it is to get the Government back into surplus and how it would be achieved—how it would be achieved by this Budget. This Government went to the country on a solemn promise to New Zealanders that it would return this country to surplus. It is not about what we want to cut, Mr English, it is about the solemn promises you took to the country and asked them to vote for National.

[Continuation line: You asked them to vote for National because you were the best]


You asked them to vote for National because you were the best at balancing and managing the books. Well, I remember, Mr English, what you said in December 2008, even if this member does not remember what he said.

Hon Bill English: I raise a point of order, Mr Chairperson. The experienced member will know that she should not be referring to you quite as often as she is. She should address the member correctly.

The CHAIRPERSON (Hon Trevor Mallard): Well, I was listening carefully, and she did say “you, Mr English” or “you, Bill English”, so I think she did make herself pretty clear. And I think a member breaking up a member’s speech like that is not desirable.

Hon ANNETTE KING: Thank you, Mr Chairperson. And I can say that this speech is getting to the Minister of Finance , because the Minister of Finance knows that he made those promises to New Zealand. He made those promises to get votes before the election. It is not about what Labour wants to cut. It is about being honest to the people of New Zealand. We are not the Government. And when we get to the election of 2017 you will know what our Budget will be, and we will do what we did in Government, and that is to keep the promises we made before the election. That is something that the National Party has not done. It promised that the Budget surplus would be the centrepiece of this Government’s measure of success. Well, I have to say, it has failed. It has failed because this mantra about getting a surplus has just turned into a 7-year exercise. It is not going to be achieved. Now watch the members of the Government as they wriggle and squirm; they are full of blatherskite and animal manure about what is going on. Let us have some honesty from this Government about the real state of the financial situation in this country, because we are not getting it. We had the Prime Minister saying: “No, no, it was just an artificial target. We did not really care about the surplus.” He said it is like landing a 747 on the head of a pin. Well, that was not said before the election. We were told that there was going to be something like a half a billion in surplus by the time we got to this election. I remember the Minister of Finance saying, in December 2008, that the previous Labour Government had set aside enough for the rainy day. And so when he talks about the Labour Party’s record, I remind him of that—and he needs to be reminded on a regular occasion.

[Continuation line: Chris Bishop]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - CHRIS BISHOP (National)

CHRIS BISHOP (National): Thank you very much, Mr Chairperson. It is a pleasure to take a call on the Government’s 2013-14 financial statements. It is a pleasure to take a call because this is a Government that is moving New Zealand in the right direction. And we are actually in a rather unique situation for New Zealand, because New Zealand is growing at about 3 percent a year, and we have inflation at about zero. That is actually extraordinary within past New Zealand history: to grow at a high rate without incurring inflation. What that means is that jobs are being created and New Zealand is getting ahead. And, more importantly, New Zealanders are getting ahead, because wages are rising faster than inflation. So it is a pleasure to take a call on this. I want to deal with two issues that have been raised by the Opposition in the debate so far. The first is about debt and the surplus; the second is about research and development. So, firstly, talking about Government debt—because we heard from members opposite, particularly Annette King, about how the National Government is a woeful fiscal manager, and Labour was amazing and it ran surpluses for 9 years, etc. And there is a complaint about the surplus. And we heard the same thing from Russel Norman. There are three things to say in response to that. The first is that the premise that the Labour Government was a wonderful fiscal manager is wrong, because it was the Labour Party and the Labour Government that left New Zealand with never-ending Budget deficits in 2008, when the National Government came to office. Never-ending fiscal deficits—and they often say: “Oh, we ran nine surpluses”. Wrong: the 2008-09 Budget forecast a deficit of $3.9 billion. So it is just wrong for Labour to continually assert that it ran 9 years of surpluses. Between 2005 and 2008 Government spending increased 50 percent in 5 years—2003 to 2008, sorry—50 percent in 5 years. Interestingly, the Salvation Army in 2008 said that there had been a lamentable lack of social progress, despite the increase in Government spending. And we have actually got that under control. Net debt was forecast to increase to 60 percent of GDP by the 2020s; we have got that down. The first thing to say is that the premise that the Labour Government was a great fiscal manager is wrong. Secondly, over the last 7 years the Labour Party and members opposite have continually opposed every piece of fiscal restraint that this Government has implemented. As the Minister of Finance , Mr English, rightly pointed out, Grant Robertson stands outside buildings protesting about things. Only a year ago Sue Moroney was going on about how it was a shocker that the Government cut Moroccan cooking-course subsidies in her neck of the woods. Even Government cuts to Moroccan cooking—which I think all of us can agree should be paid for by people with their own money, rather than the Government—they were even opposed to those sorts of things. And the third thing is—listen up, Annette, listen up—that the Labour Party actually encouraged more spending over the last 6 and 7 years, particularly at the height of the global financial crisis. And it was David Cunliffe, who was the Opposition finance spokesperson at that time, who was going on about Keynesian deficit spending. We really had to, you know, throw everything we could at the global financial crisis and really ramp up Government spending! And now members of the Opposition have the temerity to come down to the Chamber and complain about debt. Well, we have got debt under control. Net debt is forecast to peak at half the level it was going to peak at under the Labour Government, and we are moving in a strong direction back to surplus. The second thing I want to point out is about research and development, because we heard from Russel Norman an actually quite considered speech—an actually quite considered speech, to be fair. But he made a wrong assertion. The assertion was that the National Party has cut research and development spending and cut innovation funding. That is not true, and I want to put on the record for the Committee that this Government has increased spending on research and development and innovation by a massive 70 percent in the last 7 years.

Tim Macindoe: How much?

CHRIS BISHOP: Seventy percent. Forecast, it will hit $1.5 billion by the 2015-16 year. In fact, business expenditure on research and development is rising. It rose between 2010 and 2012. Do we want it to go up more? Of course we do. Do we want to see more businesses investing in research and development and innovation? Of course we do, but we are definitely heading in the right direction. That is very important. I want to close by talking about our growth prospects, because it is only economic growth that will lead to better lives for New Zealanders, and, particularly, it is only economic growth that will help us deal with the most vulnerable in our communities. Treasury , the Reserve Bank, and other commentators are now saying that the speed limit of the New Zealand economy—the limit at which the economy can grow without incurring inflationary pressures—is actually a lot more than what we thought it was before. That is a testament to the hard work that we have done over the last 7 years.

[Continuation line: Fletcher Tabuteau]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014


FLETCHER TABUTEAU (NZ First): Thank you very much, Mr Chairperson, for this opportunity to speak to the Committee today. I would like to commend the Minister for speaking up earlier to defend the National Government’s opening speech. It was, unfortunately, a reflection of this Government’s inadequate thinking and arrogance as to the economy. The opening speech was an attack and a focus back on the past that was inaccurate and inappropriate for this debate. I want to address a couple of statements from the Minister himself, if I could. The Minister spoke of the breadth, of the base, of growth in New Zealand, and he justified that by saying: “Well, actually, we are still growing, despite the fall in milk-solid prices in New Zealand.” But the Minister will be the first to admit that those falls in milk-solid prices have not actually transferred to the farm gates yet. The farmers themselves are not getting those lower payouts yet. The auction prices are not yet reflected in our farmers’ pockets. To say otherwise is deceptive, and in only 6 months’ to a year’s time we will see the fallout of those decreases in international market prices. And this Government is in denial already, and obviously has no plan to move forward. The Minister spoke about this wonderful trade-weighted index average. What a wonderful statistic that is, to highlight how wonderful the New Zealand economy is! Our unrealistically-high exchange rate has come about because of our unrealistically-high interest rates, which the New Zealand banks are having to run at the behest of this New Zealand Government. We are talking about interest rates compared to the rest of the world that, actually, you cannot compare to the rest of the world, because in some of the European economies, for example, they are literally paying a negative interest rate to borrow money.

[Continuation line: Yes, that literally means they will borrow]


Yes, that literally means they will borrow $100 and be paid back $110 in the future. That is what our New Zealand businesses are having to compete against. And the fact that the Minister is claiming our trade-weighted index as a wonderful measure of how this economy is performing is either deceptive or naïve. It is wrong. It is our exchange rate and it is our interest rates that are doing that. What it is also doing, actually, is punishing New Zealanders. It is actually punishing New Zealand exporters. That high exchange rate is making it incredibly hard for our exporters to compete in the international market. Picture a large multinational in China or in the US, where money is so cheap and they are borrowing that money. Back here in New Zealand our businesses are borrowing at 6, 7, 8, or 9 percent. There is no competition there. We will be dominated, and the fact that we are opening up our markets through Government procurement, for example, to these kinds of businesses with access to this kind of money is an unfortunate state of affairs that will see most New Zealand businesses not able to even compete or to provide core services for the New Zealand Government or local council. The Minister also spoke about Governments from the past. Can I suggest that the Government stop using Governments of the past as an excuse for things not happening now. He talked about not cutting everything. Actually, what this National Government is doing is exactly that. The Government is now looking, from the reports we have received, to cut back expenditure to contain it within 30 percent of GDP—almost as much as 5 percent lower than it has been in the past. It is a blatant attempt to cut back expenditure. On the other hand, it says it wants to decrease the tax take. It just does not make any sense at the moment. I think that most members of this House, including those on the other side, would agree that trickle-down economics does not work and that we need a smarter and more focused plan. I had the privilege of travelling to Ireland and Poland over the break. What we saw there were those two respective Governments investing literally billions of euros into their agricultural markets.

[continuation line: Jami-Lee Ross]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - JAMI-LEE ROSS (National—Botany)

JAMI-LEE ROSS (National—Botany): I am pleased to go after Fletcher Tabuteau. He is actually a very good member of the Foreign Affairs, Defence and Trade Committee, very constructive. Then he walks into the House, having listened to what Winston has told him to say, and it all turns to custard.

The CHAIRPERSON (Hon Trevor Mallard): Order! The member will refer to the right honourable gentleman in the proper terms.

JAMI-LEE ROSS: I apologise to the right honourable gentleman. I am pleased to speak on the financial report that has come from the Finance and Expenditure Committee. I am pleased to report on it because we have in this economy in this country a finance Minister who is envied around the world by other finance Ministers because of the decisions that this Government has taken and that have helped this economy to get to the position we are now in. We are living in a country with one of the fastest-growing economies in the world. We are living in a country where 80,000 people gained a job in the last year. We are living in a country where we have high growth rates and relatively low inflation rates, which are leading to our country improving year after year. We are proud to speak on this side of the House about the growing economy and about the success of Bill English, and this whole House should be celebrating that. One of the measures of whether the New Zealand public and those investing in this country feel confident about the direction the country is heading in is whether or not they are willing to commit their cold, hard cash and front up and invest in the economy. Last week the Hon Bill English was in my electorate to visit several important developments. I want to mention those today because they are evidence that New Zealanders are feeling happier. They are feeling as though the economy is going in the right direction. They feel as though this country is worth backing. The construction launch of the Ormiston town centre, which the Hon Bill English launched last year, is a half-a-billion-dollar investment by Todd Corporation . That has got 700 houses in it and 30,000 square metres of retail. Forty thousand people will be serviced by that retail development. That is evidence that in my own electorate New Zealanders are happier to invest because of the economic settings that we have put in place. After visiting the Ormiston town centre construction, he then visited the Highbrook development, which has got 500,000 square metres of commercial space. It will employ 15,000 people in that development, and there is 107 hectares of development. That, again, is evidence that the economic settings put in place by this Government are leading to more investment in our economy. Investment in our economy flows only if you have the right economic settings. The fact that we are cleaning up the mess left by the Labour Government, which would have seen net debt as a percentage of GDP reach 60 percent, the fact that we are cleaning that up, turning it round, and getting ourselves back into a position where New Zealanders are happy to invest in this country, is a positive thing. The fact also that New Zealanders are voting with their feet and are coming home and are no longer leaving our country to go offshore is another positive indicator that we should be proud of. When we came into office, about 30,000 New Zealanders a year were leaving this country to go offshore. We are now seeing New Zealanders choosing to come home and live in New Zealand. It does not happen overnight. It does not happen by pure chance. It happens because the Government puts in place settings that lead to greater investment, that lead to greater job growth, that lead to higher wages, and that lead to New Zealand becoming a more desirable place for people to live in. When we talk in this House about what the Labour Party likes to call doom and gloom, and we talk about the fact that it is actually improving and we talk about the economic settings in this House, the very important indicator we must always watch is whether New Zealanders are voting with their feet. They vote with their feet, they vote with their pockets, and they vote at the ballot box, as well. The New Zealand public have endorsed once again the economic progress this country is making. I wish to challenge the member opposite who was talking just a few minutes ago about interest rates, because that is a very interesting question that we often debate in this House. Let us not forget that in 2008, when the Labour - New Zealand First coalition left office, interest rates were about double what they are now. Mr Tabuteau, please do not come into this Chamber and lecture about interest rates when the very party he is part of was part of a Government that had an economy with interest rates double what they are today. [Bell rung] Mr Chair—

The CHAIRPERSON (Hon Trevor Mallard): Jami-Lee Ross.

JAMI-LEE ROSS: No, sorry.

[continuation line: Stuart Nash]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - STUART NASH (Labour—Napier)

STUART NASH (Labour—Napier): You know that a Government member is in real trouble when he gets a call to speak for another 5 minutes and he sits down because he has just got nothing to say. There is nothing to stay. He has run out steam, like the Government over there. He was in full flight and then suddenly “Pfft!” and he is down. Well, Jami-Lee Ross, that is what the people of New Zealand are seeing at the moment. Let me just correct you on a couple of points, Mr Ross. First and foremost, the member talked about the debt. Let me just inform you that the last Labour Government got gross debt down from 40 percent of GDP to 18 percent of GDP. I am sure the member knows how much the net debt was when the last Labour Government left office. Let me inform him. It was down to zero. Net debt at the moment is $56 billion and gross debt is $80 billion. That is 40 percent of GDP. When banks go out and talk to households about economic wealth, and when you read books about how to grow rich and all this sort of stuff, they say “Get your debt down.” What this Government has done is blown debt out, and what it is going to take, yet again, is another Labour Government coming in and managing the economy in a way that gets the debt down—yet again, like we did last time. It is always the way. But the one thing I would like to say is that the major difference I see between the National Government and a Labour Government is that National believes that if you leave it to the market, it will have the solutions—the Government has no role to play; leave it to the market. When the Government has left it to the market, what have we seen? We have seen since 2007, according to the Reserve Bank, Auckland house prices increase by 60 percent—by 60 percent.

[continuation line: In fact, the growth in GDP per capita]


In fact, the growth in GDP per capita is below the national average. So if that member believes that this economy, this country, is doing well because house prices have just got out of control in one city, and wages have been kept down, then his definition of success is completely different to our definition of success, and it is completely different, I think, to the vast majority of New Zealanders’ definition of success. We cannot have an economy that relies on booming house prices. In fact, when the Governor of the Reserve Bank spoke to us at the Finance and Expenditure Committee , he actually said that this is a two-speed economy. It is a two-speed economy. You have got Auckland and you have got the rest of New Zealand, and that is simply not healthy for the rest of this country. As a provincial MP I see it. When I hear a member stand up and talk about our rock-star economy, I see the people of Hawke’s Bay, the people of Napier, for example, who bought tickets to this not feeling the love. Auckland is doing well; the rest of New Zealand is not doing well. I am sure the members on that side know that by what happened in Northland. Winston Peter’s message was to send the Government a message, and it did. The thing that surprises me—the thing that really surprises me—is it was sent a message. I was quite interested to see how it reacted to that message, and whether it was going to be: “Well, goodness me, we have neglected the regions. Let’s change the rhetoric and let’s get out there and let’s start empowering those in the provinces.” But it has not changed. It just has not changed. The Government believes it has got it right—let the market control the variables, and everything will be OK. Well, Labour does not believe that. Labour believes that the Government has a role to play in driving economic growth. That is why the people of New Zealand are going to see some very innovative policies come out for the 2017 election, which are going to make sure that every single New Zealander shares in the economic success of our country, because you cannot have an economy that is simply based on Auckland house prices. The last member also spoke about interest rates. He talked about it as good news. The problem we have got, and I think it is acknowledged by a lot of people, is that we are not that productive in this country. Part of the problem we have got is that the cost of capital in New Zealand is significantly higher than a lot of our global competitors. So in order for our companies to invest in plant machinery that is going to improve productivity that allows them to take their products to the world, they have got to borrow at 6 or 8 or 9 percent, whereas our global competitors can borrow at 1 or 2 percent. That is putting us at an immediate disadvantage. We have got to do something about this if we really want to take on the world in a global way and be competitive.

Hon Paul Goldsmith: What do you suggest?

STUART NASH: Just employing a whole lot more people might have good short-term labour market outcomes, but it does not have great long-term productivity outcomes. We have got to get the cost of money down, and the easiest way to do it—the Minister in the chair says: “What do you suggest?”.

[Continuation line: Hon Paul Goldsmith]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs)

Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs): I am pleased to take a call on behalf of the Government because I am proud of this Government’s economic management—proud that as a result of the effort, ingenuity, and skill of New Zealanders, helped along by the confidence given to them by a strong and stable economy, this economy has grown at 3.5 percent in 2014, one of the fastest in the developed world, and it is expected to continue to average around 3 percent over the next few years. We heard from Annette King, I think it was—that face of the modern Labour Party, elected in 1984—who told us that this was a Government that has poor performance. I find it hard to understand how you would regard 3.5 percent economic growth over the last year as poor performance. Average wages have been increasing by 15 percent over the past 5 years, faster than the cost of living. How can you regard that as poor performance? What about the jobs boom that we have had in this country over the last year—80,000 more people employed in New Zealand than last year, and 217,000 more people employed than over 5 years before. That is a jobs boom in this country. I would like to hear whether the people, the young men and women who have got jobs—who have been able to go out early in the morning, work hard all day, come back with some money and earnings to support their family—think that is a result of poor performance. Eighty thousand new jobs in this economy in the past year are a great performance and one that I am proud of. Cost of living increases are low in New Zealand. Inflation is virtually zero, well below the average weekly wage increase of 2.5 percent. The balance of payments deficit, which has long dogged this country over many decades, is running at 3.3 percent of GDP, a lot lower than it has been in previous years. We have overseen a very significant turn-round in the books, approaching surplus. Another thing is that we have seen more Kiwis voting with their feet and staying in New Zealand. When I first stood for Parliament in 2005, I remember everybody being very deeply concerned about Kiwis leaving for Australia. We were losing 30,000 or 40,000 a week. It was being compared every year to the Wellington rugby stadium going out of the country, and it is very gratifying to see that number now reduced virtually to zero. It is a measure of success for this economy—holding families together and giving people an opportunity to see that their hopes and dreams can be realised in this country. We do have considerable challenges in New Zealand, and they are mainly challenges of growth; challenges around housing in Auckland, where I am certainly keenly aware of the issues in Epsom where I am based in Auckland; challenges around transport infrastructure, particularly in fast-growing Auckland; and challenges around the skills shortage, as so many people are looking to employ new people and bring them into the workforce. They are good challenges to have and ones that I believe this Government is absolutely well equipped to deal with. We will continue to work constructively with the Auckland Council , for example, on the housing situation. In the areas that I am responsible for, in commerce, I think we are making very good progress when we move our question to how we get growth in this economy. One of the most important areas, of course, is to have access to capital. Businesses need capital to grow. So the whole point of the Financial Markets Conduct Act , which was the biggest change in financial markets regulations last year, is to try to build confidence in New Zealanders in the financial markets, so that they do not feel that investing in real estate is the only option, but, actually, that you can invest in the financial markets. That is what the whole point of that very sweeping piece of legislation was about. We will be working very hard this year to make sure that that very large change in legislation is bedding in well. We are also going to be looking at a review of the financial advisers legislation to make sure that New Zealanders have access to good financial advice, and that they can have confidence in the governance or financial products and in the advice that they are getting. I am also responsible for competition policy. When we talk about rising living standards in New Zealand, growing the economy is important, but making sure that the domestic economy is competitive is also an important way that we keep control of cost and make sure that every dollar that New Zealanders earn goes further. So we have got a lot of work in the competition area—the Commerce (Cartels and Other Matters) Amendment Bill , which is progressing through the House, and a review of section 36, which is the misuse of market power clause in the legislation. We are looking forward, over the next few months, to asking whether we have got that right in New Zealand. I am convinced that New Zealand is in very good shape.

[Continuation line: Julie-Anne Genter]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - JULIE ANNE GENTER (Green)

JULIE ANNE GENTER (Green): Tēnā koe , Mr Chair. Tēnā koutou e te Whare . I rise to speak about the Government’s financial statements for the previous year. Budgets are all about priorities. We have a choice of what we spend our money on, and where we spend our money speaks volumes about what is really important to us. This National Government I think is clearly quite out of touch with what is really important to New Zealanders. The Government Ministers and members have been speaking about the economic growth rate being slightly over 3 percent. Economic growth is not an end in and of itself. The economy is there to serve us. It is there to ensure that people are able to live better lives, and the entire economy, of course, takes place within the confines of the natural environment. So National’s economic growth, unfortunately, is not all based on us being better off. A significant portion of the economic growth we are seeing this year, and that is forecast for the next few years, is entirely related to the Christchurch rebuild. We are not better off because we had an earthquake and a lot of buildings had to be rebuilt, but that is what it looks like for the next few years. It looks like there is high economic growth. We are not better off because there is an out-of-control situation in Auckland with house prices. Yet, it does look that way on the surface. I think many New Zealanders will realise that we are not better off in an economy that is becoming more and more divided between those who have and those who have not.

[Continuation line: National’s economic strategy is based on increasing pollution and]


National’s economic strategy is based on increasing pollution and increasing inequality. It is a woefully 20th century approach. We know more and more from the research that is coming out around the world that there are opportunities to have a far more sustainable economy. The great economic opportunity of the 21st century is responding to climate change and to global inequality. By responding to those we could have a sustainable economy that actually leaves New Zealand better off. New Zealanders love their natural environment and they want to live in a country where we all have a fair go and where not just a smaller and smaller portion of people increasingly hold the majority of the wealth. Of course, National started with tax cuts for the wealthy, which continues to cost us about a billion dollars a year. That was a choice that this National Government made to prioritise tax cuts for those who already have a lot of money, rather than using that money on programmes that would actually address the problem of growing poverty amongst children in this country. So, rather than spending the money on the quarter of a million children in New Zealand who do not have enough to eat, who go to school hungry, and who are not able to learn, it chose to prioritise tax cuts for the wealthy. Then it claimed that, despite having a billion dollars a year to spend on tax cuts for wealthy, we did not have enough money, so we had to sell our State-owned energy companies, which were turning a nice profit for the taxpayer. So, in order to raise about the same amount of money that we lost through tax cuts for wealthy in the first 4 to 5 years of this National Government, we sold our profitable State-owned energy companies. Of course, the privatisation of those shares went to just a small portion of New Zealanders—just several thousand New Zealanders; those who had enough money in their pockets, and a few thousand spare dollars in cash to pick up those shares, and who are now benefiting from that investment. National said that it would spend the proceeds of these asset sales wisely on productive infrastructure. That was the term used by the finance Minister, who is also the Minister for infrastructure. But in fact, what we have seen the money spent on is a bunch of election bribes. So, rather than prioritising infrastructure projects on the basis of a rational assessment of what is going to be best for the New Zealand economy, we have seen bridges and roads randomly chosen from around the country, where Steven Joyce, the campaign manager for the National Party, thinks they are going to yield the most votes for the National Party, and the best way to win electorate seats. They are also poor investments not just because they have been cherry-picked from where National thinks they are going to get the greatest priority but because they do nothing to reduce our reliance on carbon pollution and imported oil. One would think, given it is 2015—it is the 21st century—that we would be investing in infrastructure that actually reduces pollution and responds to climate change. This National Government is so arrogant that it refuses to take the advice of the OECD, the IMF, the UN, and the thousands of scientists working for the UN who have told us that we need to take urgent action to respond to climate change. We need to reduce climate pollution, and all new investments in infrastructure should take us in that direction of reducing rather than increasing pollution.

[Continuation line: Marama Fox]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - MARAMA FOX (Co-Leader—Māori Party)

MARAMA FOX (Co-Leader—Māori Party): Kia ora, Mr Chair. I am not an economist. When you become a member of a party of two you quickly learn that you have to talk on all sorts of things. So today I am going to talk about what I know, and what I know is that the minimum wage in this country is forcing people into poverty. In fact, the minimum wage is set at the level of poverty. We are paying people to be impoverished. We need to ensure that there is a greater distribution of wealth in this country, where we reduce the profit margins that are paid out to the wealthiest, and ensure that the people who work very hard to create those profit margins are paid what they are due and are paid a living wage. Often I come into this Chamber and we talk about determining what poverty is and ask how we do that. People argue whether it should be 60 percent of the median wage, should it be 65 percent of the median wage, or should it be 50 percent of the median wage. Well, we will continue to have that debate as long as we are unwilling to address it. What we need to be addressing are the hardship factors that impact on our people across this country. In fact, if we do not act now to address poverty then it will be out of our reach to reverse. We have the ability right now in this country to address poverty and reverse those factors that put our people into hardship. Hardship factors are those such as whether a person had a protein portion with their dinner. Do they have a winter jacket? Do they have to go without a major meal once a day? Do they stay home from school because they do not have food with which to provide themselves lunch? Do they sleep in their car on the beach or under a bridge or in a shack beside the river? I drive around this country quite a bit in executing my duties and I pick up hitchhikers because I think that I might as well get some benefit out of having a car that is paid for by the Government. So I pick up hitchhikers and I take them wherever they need to go. I picked up an elderly man who was clean and did not smell—a wonderful guy. He was hitchhiking to a rest stop because 50 metres from that rest stop down by the river there was a shack that he had found in which he could sleep and that has been there for the last 4 years.

The CHAIRPERSON (Hon Trevor Mallard): Order!

MARAMA FOX: Yes, it is coming around to the economy.

The CHAIRPERSON (Hon Trevor Mallard): I think the member will take a seat when I stand up. Thank you. I am pleased that she has indicated that she is going to come to the economy, and especially the decisions that the Government made in the year that ended on 30 June last year. If she would just make even a passing reference to that, that would make her within the rules.

MARAMA FOX: Thank you. Hopefully that will not detract from the time that I have been given, but thank you for the instruction.

The CHAIRPERSON (Hon Trevor Mallard): No, it does not—we are trying to make up time, actually.

MARAMA FOX: Yes. The decision is that we increase our minimum wage by a paltry 50c on 1 January every year. That has brought our minimum wage to $14.75. Again, if I can make the point, that is actually paying our people to be impoverished. It is about 65 percent of the median wage of this country, and that means that if you add accommodation and hardship factors on top of that, we are paying people to be impoverished and to live in hardship. So what do we do? I think there has been some grace given in the speeches I have heard so far about what we might be able to do in the coming year to address that. What we need to do is raise the minimum wage and support the people who are suffering in hardship in this country so that we do not have to pay for food in their schools because they can afford to buy it themselves, and so that we do not have to have charities that provide jackets and shoes for children because they can afford to buy them themselves. What we need to do is halt the march on poverty. We need to address it immediately and that way we can support the people of this country in an economy that is thriving, so that not just the very richest are able to benefit from that thriving economy, but so that there is greater distribution of wealth across all the sectors of our society. So we must halt the march of poverty before it is out of our reach to do so. The system intervention that requires us to do that actually just requires a bit of willingness, and that willingness is about improving the minimum wage to a living wage. That is what I have decided to speak about because—

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - MARAMA FOX (Co-Leader—Māori Party)

The CHAIRPERSON (Hon Trevor Mallard): Order! I did invite the member to give a passing reference in order to bring herself within the rules, and she declined to do that.

[Continuation line: Barbara Kuriger]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - BARBARA KURIGER (National—Taranaki - King Country)

BARBARA KURIGER (National—Taranaki - King Country): I am pleased to take a call this afternoon in this conversation because I am really proud to be part of a Government that has produced 3.5 percent growth in the economy in the last year. We are growing and we have one of the best results in the current Western World, globally. I just want to bring a little bit of reality to the Committee this afternoon because we do hear a lot about falling dairy prices and where they are taking us economically as a country. Well, let me tell you that I have been involved in dairy for a very long time and we do live in a volatile world. Prices do go up and they do go down, but we are in a country where we have a strong focus on dairy, and it does take us through. It got us through the global financial crisis a few years ago. At the moment it is just having a down period. It is in the process of producing the finest protein in the world and its price will go up again. So it is just in a bit of a glitch at the moment. Let me tell you, as someone who has just spent the last 3 weeks of the adjournment out in my electorate of Taranaki – King Country that things are happening in the regions. Taranaki is an end of my electorate. At the southern end of the electorate oil and gas permits are still being reissued. Let me tell you that that has done a huge favour to the people of Taranaki and New Zealand not only in the last 12 months—

[Continuation line: Mallard: Order! I invite the member to sit down]

The CHAIRPERSON (Hon Trevor Mallard): Order! I invite the member to sit down for a second. I have just terminated a member’s speech because she did not make any reference to the required debate. All the member has to do is refer to some decisions of the Government in the year ending 30 June last year or to the report of the committee that we are talking about. It is not too hard and it only has to be a passing reference, but the member has to do it.

BARBARA KURIGER: Thank you, Mr Chair. One of the things I did refer to was oil and gas permits having been issued to help the economy build. I also want to note in there that money has been spent on infrastructure. There are roads that happen to be going on in my electorate. There is a fantastic roundabout going on in Waitomo at the moment that is actually allowing the traffic—

Stuart Nash: Mr Chair, she has no idea what the Government did last year.


Stuart Nash: Tell us about it then. A roundabout in your electorate? Tell us what you’re doing for the regions.

BARBARA KURIGER: I am telling you that there is actually—

Stuart Nash: Tell us how they’re growing the economy.

BARBARA KURIGER: We are talking about some of the 350 initiatives that are in the Business Growth Agenda , and one of those is infrastructure. OK, infrastructure—roading. So we have currently got a whole lot of roading things going on on State Highway 3 that are a result of Government decisions. It is a road that is actually important to the infrastructure and the economy of this country because we have got products and services that are going to the ports and that are having to go up and down that road. The Government has also been negotiating trade and export agreements that actually help us to take our product to the world—free trade.

Stuart Nash: But where? Which one? This isn’t what the governor reported to the select committee.

BARBARA KURIGER: Yes, look, and I will tell you what: it is currently still negotiating. I will tell you something else that the Government has actually done, and the news is out today. This is something that is going to be really, really pleasing to the people on the other side of the House. There has just been an announcement today that some of the Government research and development funding that has just gone in over recent years has found some research that has led to a breakthrough in methane production. And so this just goes to show me that this is about the economy, this is about finance, and this is about investing in research and development, which in the long term will actually help us to get that economic, sustainable New Zealand that we have desired for so long.

Stuart Nash: Yeah, but what are they telling you in your electorate about milk prices?

BARBARA KURIGER: What are they telling me about milk prices in my electorate? People in my electorate know that milk prices come and go. So, you know, to me there are some wonderful innovations that have happened through Government research and development and the funding that has gone into research and development in our financial accounts. I just recently—a few months ago—opened a mānuka health factory. That mānuka health factory is not only about the economy of picking up honey; it is about the economy of taking the UMF honey and putting it into bandages and health products that are actually going into hospitals in health services around the world. So I see all of those things happening and we are on the right track. We are actually making progress. We have actually got a lot of things happening out in our regions. Broadband is another one that the Government has invested in and put money into in the last Budget. I can actually see that the infrastructure of broadband is spreading all the way through our towns and we are getting people more connected so that we have got some wonderful technology businesses out in our region.

Stuart Nash: Like what?

BARBARA KURIGER: Like what? We have got people actually in Raglan in our electorate who are making drones.

Continuation line: Fletcher Tabuteau

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014


FLETCHER TABUTEAU (NZ First): Listening to the debate in this House this afternoon has kind of consolidated a lot of my thoughts on this particular Government, and I hope I have coined a phrase here: this Government strikes me as the media masters of circumstance. Ms Kuriger, Mr Goldsmith, and Mr English tell us these wonderful stories. Mr Bishop, for example, claims that, somehow, essentially zero percent inflation is the Government’s doing and it highlights excellent Government management. This is either naive or deliberately misleading, and Mr Bishop is not naive. Falling international—

The CHAIRPERSON (Hon Trevor Mallard): Order! The member might have attempted to use a device, but he did breach the Standing Orders then. He will withdraw the comment. Just stand up and say: “I withdraw”.

FLETCHER TABUTEAU: Certainly, Mr Chair. I do withdraw that comment and I apologise. Falling international commodity prices—including, but especially, falling oil prices—is the reason for inflation being so low in this country. This is thanks to, for example, structural changes in China, which means that it is not spending as much as it once was on large infrastructure. The war in Russia and the Ukraine and the political uncertainty there is certainly something I would suggest this Government not claim as being beneficial to New Zealand. The Minister himself described the poor and unfortunate circumstances in Australia, and several of the members claimed that New Zealanders coming home—people voting with their feet—is an indication of the excellent management of the New Zealand economy.

Continuation line: I would suggest to you


I would suggest to you that the unfortunate circumstances in the Australian economy mean that New Zealanders are simply returning home because that once-golden light, that once-golden economy, that was in Australia is not there any more and it is an opportunity to return home. But the Government is claiming that this is, again, somehow National’s doing. New Zealanders—Northlanders, in particular—certainly were not voting for this Government in the Northland by-election, and I would have thought that that painted a very clear picture for this Government to stand up and listen. National continues to sell stories that are edited. In fact, take the dairy industry. The Government is relying on hard-working dairy farmers, who have had such a wonderful run of it and who are hard-working, innovative, and competing in an international framework. This Government claims their success as its own and implies that it is its doing. This Government needs to take account of the true economic position that it has taken this country into. We have got a $7.4 billion current account trade deficit. We have, interestingly, 2,645 entities that generated $89.4 billion in revenue, but then they spent $92.2 billion, leaving a large gap of $2.9 billion in return. This is not only over 40 percent of gross domestic product but it is decidedly a lot more than what the Government beats its chest over. When it was quoted that the strategy for returning to surplus is based on expenditure restraint—something that another Government was criticised for earlier—this means that spending will fall below 30 percent of GDP during the coming 4 years, down from a peak of, essentially, 35 percent. Only in March did the Minister of Finance say that, but any homeowner or business owner can tell you what this means in the long term, which is that it is actually a recipe for disaster. You cannot simply cut expenditure and hope that it will solve all your problems. Balancing a Budget, which Government has not actually been able to do in its time here, and creating a surplus by cutting expenditure is not a solution to New Zealand’s problems. Although the Government may have $256.1 billion worth of assets, for example, it has $175.3 billion worth of liabilities, and, just as an aside, New Zealanders still wonder why some of those higher-spending assets in terms of profits generated were sold off. It just makes no sense. If we view the Crown as a company, that kind of gearing ratio of more than 50 percent would be considered high. This Government, in the widest sense, sits at 61 percent, and I am worried—as every New Zealand should be—because that raises a big question over the financial management that this Government claims to be expert at.

[Continuation line: Jonathan Young]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - JONATHAN YOUNG (National—New Plymouth)

JONATHAN YOUNG (National—New Plymouth): Thank you very much for the opportunity to speak in this debate. It is good to see that one of the decisions that the Government has made in the last financial year was to establish WorkSafe and also to bring some real attention to this whole area of health and safety reform. We know that out of the Pike River tragedy the royal commission came up with a number of recommendations that the Government has instituted through a number of different means—some of them through legislation, particularly around the Crown minerals permitting bill and around that sort of work.

[Continuation line: But one of the decisions that the Government made]


But one of the decisions that the Government made was to set up an independent task force that would go through our industries in our country and look at our record and look where improvements can be made. One of the goals that the Government decided was that we want to see a 25 percent reduction in fatalities and serious injuries in the workplace. It is very important that here in this country in what we say is a very developed and advanced economy that men and women who go to work can get home at night safe and sound and able to earn a good wage or good income as they do that. So the independent task force went through our country. There was a very intensive number of visits and submissions, and it was open to hear the views of New Zealanders. It came up with a set of recommendations that became the basis of the Health and Safety Reform Bill, which is currently before the Transport and Industrial Relations Committee. It is due to report back here later next month. So out of those decisions this bill will include some of the most significant changes in this whole area of health and safety that we will have seen in the last two decades. That bodes well for New Zealand and for the workplace being a safe place where people can, as I said before, not only go to work but come home safe at night. Some of the concerns out there in the community and, potentially, in workplaces are around what it is going to take and whether we are going to be able to do this. No doubt as this bill comes back to the House and gets debated in this House we will see the outcome of some of those decisions and discussions and hopefully elevate the concerns. All of this is because not only do we want to have a safe workplace but we want to have a productive workplace. We know that the cost to the economy of workplace injuries and death is huge. It is in the billions of dollars. If we can make the workplace safe—not only for individuals but for families—it also bodes well for our economy as well. We know that the New Zealand economy is doing better than most economies around the world. That is good to see. It is good to see that that is generating confidence for capital investment to come into our economy, and 80,000 jobs were added to the economy just last year. That has got to bring real confidence to our country, particularly to those who are going through the education system, whether they are at secondary or tertiary level or university, and preparing themselves for the workforce. It is incredibly important, as you will know, that New Zealand remains competitive and effective in the workplace in order for us to compete internationally. Out there in the international arena there are always demands upon, I guess, the quality of goods and the cost of goods. Although we want to have quality goods that earn a premium, we are always competing against other nations around the world. We live so far, far away from the markets that we sell to that we have to add in huge freight costs, and therefore we must be more efficient. Part of the efficiency, of course, is making sure that our workplaces are safe and that people can contribute, work hard, be productive, and also have the confidence that they are going to get home safely. So we are pleased that this Health and Safety Reform Bill has come through a process of Government decisions over not just the last year but years before as well and is going to come back into this House this current financial year and be in place in due course. There have been 80,000 jobs created in the past year. That is the accumulation of decisions made not just in the last financial year but over a number of years. The Business Growth Agenda is a piece of work under the Ministry of Business, Innovation and Employment that has—

[Continuation line: David Parker]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - Hon DAVID PARKER (Labour)

Hon DAVID PARKER (Labour): I have to start by responding to one of the comments made by the speaker before last from the National Party, the member for Taranaki – King Country, Barbara Kuriger, who said as part of her contribution that the economic development of the country was made better by the manufacture of drones out of Taranaki – King Country. A crueller member than myself would say they elect them, except I would have the gender wrong, so I will not say that. This third-term Government, when it is in trouble, resorts to spin. The Finance and Expenditure Committee reported back to Parliament that during the term of this Government net debt has gone from zero to $60 billion. I did not hear that referred to by any members of the National Party who sat on the Finance and Expenditure Committee. That same Finance and Expenditure Committee reported back accounts that showed that exports as a percentage of GDP are decreasing, not increasing—that the Government is failing in its own target. This has become such a problem in New Zealand that we see symptoms of it erupting everywhere. We have just come from a briefing from the Reserve Bank, which has no doubt been given to members of other parties in this House and also to the Finance and Expenditure Committee. The Reserve Bank gave us a presentation that included the startling fact that despite this enormous rise in Auckland house prices, per capita GDP—that is the output in Auckland per person—is increasing at a substantially lower rate than the rest of the country. So you would think that if the Government thought that it should be encouraging through its economic signals this ridiculous outcome in terms of Auckland house prices, we would at least be getting better off as a country. But the truth of it is that we are not. Why did the National Party lose Northland? Because the people in the provinces know it. They know that under the current settings of the current Government the vortex that is Auckland sucks all of this money, sucks all of the immigration into Auckland, and makes the economic problems in Auckland worse, as evidenced by the fact that the average house price has gone up by $300,000 since National was elected. What is the other side of that effect? What is the other effect of that misallocation of investment of money? It is that not enough money is being invested in our productive export sector. The Finance and Expenditure Committee reported that back to this Parliament as well. Indeed, it is so clear that we are getting commentators in the likes of the Sunday Star-Times lamenting the fact that in the—[Interruption] Sorry, what was that?

Chris Bishop: Rod Oram?

Hon DAVID PARKER: Yes, Rod Oram can count. He can count. He reports, quite accurately, that exports that the Government said it was were going to increase from 30 percent to 40 percent of GDP have already—on the figures that Rod Oram reports but the member opposite seems to deny, despite the fact that they are also in the Finance and Expenditure Committee report back to this House—have now dropped as a percentage of GDP to under 30 percent of GDP. What was that man’s former boss’s response to it? Change the way you measure the target. So Mr Joyce came along and he fiddled the measure. He fiddled the measure. Initially, that benefited him because it appeared as though there was an increase in exports from 30 percent to 33 percent of GDP. But then, actually, on his volumetric basis that he swivelled it to, it turned against him and sent it backwards, even under that measure. The truth of this is that the measure was intended to measure the value of New Zealand’s exports as a percentage of our economy. That was going to go, according to National, from 30 percent to 40 percent of GDP. It has gone backwards. It is now under 30 percent of GDP. Our trade with the rest of the world in goods and services is dropping as a proportion of the economy. The target that the Government still says is now just an aspirational target of 40 percent is never going to be met by this Government—never as long as this Government is in because it has got the economic signals wrong, which is why house prices in Auckland are going crazy and there is under-investment in the provinces. What is happening in terms of those subsets of exports? Well, we all know that the dairy price has gone down. Everyone concedes that. That is one of the reasons that the nominal value of exports has dropped recently. But of greater concern is that more—

[Continuation line: Meka Whaitiri]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti)

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe, Mr Chair. Tēnā tātou katoa. I am pleased to take part in this debate on the Government’s economic performance for the 2013-14 year. As I listened to the debates in the Chamber today, I was thinking there was going to be some sparkles or some great trumpets playing from that side of the Chamber to celebrate what a rock star economy this is. But alas, I heard nothing. In fact, I wonder whether members on that side of the Chamber are actually doing our job for us, by underselling their own economic performance. For two elections now National has promised a surplus in its financial year. National has made it a centrepiece of its bid for re-election, and it is set to break that promise yet again. It is not good enough for the Prime Minister, John Key, to claim that a surplus is an artificial target. Today in this Chamber I heard the Hon Bill English, in response to a question from our finance spokesperson, create a new way of saying that we cannot predict, and that figures are just artificial targets. They are not something that we should actually achieve. It is interesting to note that the Government was predicting a half a billion dollar surplus, which is now a half a billion dollar deficit. The current projections for 2015-16 are also for a half a billion dollar surplus. The question I pose is whether we can believe that that will actually be reached. The numbers around National’s debt are extraordinary. It has borrowed a million dollars an hour, in gross terms, since coming into office. The debt has grown so much that this year the Government is spending over $10 million a day on interest payments. Remember that when we tried to pass the “feed the poor kids” bill, the Government’s response was that it was unaffordable. This Government has run up more gross debt, as a percentage of the economy, than any other New Zealand Government since the Forbes Government in the 1930s. Much of the debt that National took on was unavoidable. We do not begrudge it having to pay for the recession and the Canterbury earthquakes. But the Government has wasted billions—it has wasted billions. The tax cuts to the top 10 percent have cost about $5 billion. The asset sales cost, which increases with every dividend, is nearing a billion dollars. The corporate bailouts and handouts to South Canterbury Finance, AMI, Rio Tinto, Skycity, Oracle, etc., run into billions of dollars. But what has National achieved with all this borrowing? There has been 1 year of decent growth—we will give it that—which is quickly coming off the boil. Unemployment is still hovering near 6 percent. Wages are stagnant. Regions are going backwards, and I will touch on that shortly. Families are in poverty, and there is a shortage of decent housing for families in need. There are not enough houses for families to buy at a price that ordinary people can afford. National has borrowed more than any Government in 80 years. It has imposed a huge interest burden on future Governments, and has nothing to show for it except a trail of broken promises. National’s economic plan is quite a basic plan. It is to make more milk, it is to export logs, and it is to find oil. That plan is seriously under threat. The Government is not delivering the economic benefits out to the regions. I come from a region of the East Coast. I travelled around the East Coast, like many did, during the adjournment. We met colleagues in Gisborne. I met some colleagues of mine in Gisborne, and we met with the Gisborne District Council. One of the biggest issues for them is roading. There is a huge gap in investment from this Government into roading in the regions. The regions, for instance, are having to bridge that gap. If the economy is doing as well as we hear from that side of the Chamber, then why are we not investing—

[Continuation line: KAYE]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - Hon NIKKI KAYE (Minister for ACC)

Hon NIKKI KAYE (Minister for ACC): I am very pleased to speak in this debate. I want to do three things. The first is to talk just a little bit of context, because we cannot be talking in this debate if we do not actually understand what has been happening in the last couple of years, from a fiscal perspective. We were left never-ending deficits. We were left a situation where we were looking at significant debt—I think the figure was 60 percent—and we have halved that. For anyone listening to this debate, you need to stand here and understand that both with the Canterbury earthquakes and the projections that were given to us as a Government, we have halved that debt. But what we also need to do in this debate is talk about some of the decisions that the Government has made that have meant that the economy is heading in the right direction. We have just heard from the previous speaker that it is all about milk and it is all about mineral exploration. We know that is what they do. They go around the country saying that. What about the $326 million, much of which was in train in the last financial year, spent on national science challenges? That is about investing in the future of our nation. I have got a Bachelor of Science in genetics, and I can say that science is going to do more for the future of this country and more for the future of businesses in New Zealand than anything. That is one of the key decisions that the Government has made, which is about future growth and innovation. Secondly, I want to talk on my portfolio of ACC. We were handed a $4.8 billion hole by the last Labour Government, and we have to talk about some of the decisions that have been made in the last couple of years around that, up until 30 June. But we get lectures from this side of the Chamber around ACC levies, when actually we have delivered—and these decisions were in train to 30 June—$1.5 billion of levy reductions, after we had a $4.8 billion hole. Some of that is around the work account but it is also around the motor vehicle account. What that means is small businesses are better off under National. We had a horrific situation under the last Government, but now there are significant levy reductions. The other thing I want to comment on in terms of good fiscal management is ACC generally. If you look at the investments team of ACC what we know is that there have been some very, very significant results. We know that for 19 consecutive years they have outperformed benchmarks. They did that again over the last couple of years. We need to acknowledge that team of people. We also need to understand that this is a Government that in the last couple of years has invested significantly in infrastructure, and that is really important if we want to support those regions and support those small businesses. In fact, the figure I have in front of me is that there has been over $16 billion of infrastructure investment. Some of that includes significant transport projects. I know that in Auckland alone, and obviously via the Minister of Transport, and some of the Budget figures will show this, we have seen projects that have been in train, including projects like the Victoria Park Tunnel and the Waterview Connection. All of these projects are incredibly important for a city like Auckland and they are important for growth. This is a very busy Government that has done almost the impossible and taken a country that was staring down the barrel of a decade of deficits. It has halved what the projections were around debt. We are one of the fastest-growing economies in the developed world, at 3.5 percent. So when we hear the doom and gloom from the other side of the Chamber, we need to put it in perspective and we need to understand that this is a Government that has invested in science and innovation. This is a Government that has invested in infrastructure. This is a Government that is reducing levies. This is a Government that is focused on employment law reform. This is a Government that has raised the minimum wage while we have been doing all of those things. We are heading in the right direction. I hope all of those people who are watching the House today can see that there are a number of initiatives that have happened in the last year that are absolutely focused on building a stronger nation and a stronger economy. Small businesses and the many workers of New Zealand will be far better off as a result.

[Continuation line: BAYLY]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - ANDREW BAYLY (National—Hunua)

ANDREW BAYLY (National—Hunua): At the recent briefing by the Reserve Bank Governor at the Finance and Expenditure Committee, I asked him how often he got the opportunity to stand and talk about what a wonderful set of economic parameters that he had to talk to us about. So I find it funny that some of the Opposition members are talking about all these figures, which makes me realise that maybe they did not understand what he was actually saying. If you sit and listen to him, GDP is at 3.3 percent. We are one of the strongest-growing economies in the OECD, and that rate is actually the highest since 2007. Our net debt is at 27 percent of GDP and is forecast to go to 20 percent by 2021.

[Continuation line: Our unemployment rate 5.7 percent again decreasing]


Our unemployment rate at 5.7 percent, again, is decreasing and projected to decrease over time. We have got a current account deficit at just over 3 percent—again, very reasonable when you consider us and compare us with other international economies. This is an economy that is recognised as one of the fastest growing in the developed world, and the success of this has been borne out in the exchange rate for the New Zealand dollar. We are now seeing the dollar touching parity with the Australian dollar. This is the first time we have got to that point in nearly 40 years. Although having that high dollar is hard for our exporters, it is, quite simply, a mark of success. Our policies are also leading to fewer New Zealanders leaving our shores and to a lot of our expats returning to New Zealand, bringing valuable experience and expertise. Net outflow 2 years ago was 36,700 people. Just in the year to March this year it had dropped to 2,300. Do you remember when the Prime Minister made that bold statement about turning it round and all the naysayers were saying “Oh, it won’t happen.”, many of them across on the other side of the Chamber? Well, actually, he has achieved a lot of what he has said. And we are seeing consumer confidence rising, up 9 percent between March and April this year. Twelve percent of people feel better than they were feeling 12 months ago, and 31 percent expect to be in a better position in 1 year’s time. New Zealanders are optimistic about the future. This Government is showing financial restraint and that is keeping interest rates lower, which is good for mortgage holders and also for businesses that want to borrow money to invest in their businesses. We have seen all the impact of this in employment. As I said before, we have a low unemployment rate of 5.7 compared with 10 percent when we came into Government all those years ago. There are 217,000 more people employed than 5 years ago. This is a Government working to put people back and into paid employment. This is why we have also increased the adult minimum wage, as we have done every year. So, again, we put the rate up by 50 percent to $14.75. That injected $60 million into this economy over this year and will favourably help 115,000 New Zealanders currently in employment. We are seeing our average wage rate improve with an inflation rate at 0.3 percent, and we are seeing average wage rates of 1 percent going up. That means a net increase, and there has been a net increase of 15 percent over the last few years. Recently I was maligned in the National Business Review for asking the Minister of Finance about what this Government is doing for New Zealand families. Mr Hooton thought it was strange that someone with my financial background should be asking the Minister such a question. He thought I should be skulking around the back and not trying to ask that question. He is wrong. Looking after our families is not only fair and just but it is also good business. As a society we need to have an equitable society, and having strong families with people in meaningful jobs is a crucial part of that equation. I am proud of the recent policy announcements that this Government has made.

[Continuation line: Hon Todd McClay]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - Hon TODD McCLAY (Minister of Revenue)

Hon TODD McCLAY (Minister of Revenue): It is a pleasure to take a call in this very important debate. Can I say to the last speaker in this debate, Andrew Bayley, that I particularly enjoyed his speech—I have not had an opportunity to hear him for a little while—in particular, the parts that I think were most relevant were those statistics, because it is hard to argue with the cold hard facts. Our economy grew by 3.5 percent in the calendar year 2014. It is the best performance in the economy since September 2007, and we expect average growth rates of about 3 percent over the next 5 years. When one compares that with many other countries in the world that we have a close relationship with and countries that we trade with—indeed, countries that New Zealanders were going to in significant numbers in 2007, 2008 but we now find them returning home—we are doing extremely well. So better growth rates are projected than for the euro area, the US, the UK, Japan, Canada, and, of course, Australia. Annual core Government spending has increased by just 14 percent now compared with when we can into office 6 years ago. Indeed, over the 9 years of the previous Labour Government the increase in spending was around 50 percent. So that means hard-working New Zealanders are getting out of bed every day, going out to work, going to their jobs, paying their taxes, not spending anywhere near as much on their own households on their families, on their children, on the things that we want them to do, but the Labour Government was ramping up expenditure—a 50 percent increase. Well, the Prime Minister and Bill English have very, very clearly focused on this and a 14 percent increase—

Stuart Nash: What was the net debt?

Hon TODD McCLAY: —I am coming to that in a moment—under extremely difficult financial circumstances, when one considers the global financial crisis and the many other challenges that not only the world’s economy but New Zealand’s economy face, I think is a testament to the focus. We are approaching a surplus with net core debt to peak at 27 percent of GDP. A member opposite asked earlier what the debt back then was. Well, it is actually about the state that the books were left in when we came to Government and the great challenge that went on around the world. Treasury came out and Treasury said to us that if we kept on the reckless spending direction of the previous Labour Government, something that the members opposite sound very proud of—you know, ramp up spending, let the economy get carried away with itself, do not worry too much about many of the macroeconomic indicators—by 2020 debt would be at 60 percent of GDP. It would be a whopping 60 percent of GDP. Through the focus and hard work of the Government over the last 6 years in making sure that we are spending money only where we are able to and by focusing on public services and a better delivery of public services, not only have we been able to get back on the track to a surplus, restrict debt to GDP to only 27 percent but at the same time we have been able to spend more money in the areas that are important for all New Zealanders in health, in education, and certainly in a very big investment in the social sector, particularly around social development—helping New Zealanders to help themselves much more than was the case previously and would be the case today if there had been a change of Government at the last election. Very interesting and important—80,000 jobs were created last year, 217,000 more people employed than was the case 5 years ago, even though we have gone through very challenging and difficult circumstances. The unemployment rate today is 5.7 percent. It is still too high—5.7 percent—but when one compares that with what is happening in other countries and with our very close neighbours—and our economies are fairly closely interlinked—well, Australia is moving in the other direction at 6.1 percent unemployment. The most interesting thing here is that the labour force participation rate has gone up to a record of 69.4 percent. When we came to Government 6 short years ago—

Sue Moroney: Six long years.

Hon TODD McCLAY: —New Zealanders were voting with their feet. Ms Moroney knows this because she stood in the seat of Hamilton and most of her supporters deserted and went all the way off to Australia. Do you remember the photographs of football fields, stadiums, full of New Zealanders going to Australia? Well, they are coming back in great numbers. Net migration is up now, and those New Zealanders are coming back to work because unemployment is holding its own and going down and the participation rate in employment is on its way up.

[Continuation line: Hon Michael Woodhouse]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - Hon MICHAEL WOODHOUSE (Minister of Immigration)

Hon MICHAEL WOODHOUSE (Minister of Immigration): As we round off this debate on the Finance and Expenditure Committee’s report—it has been 2 hours of “My statistic’s bigger than your statistic.” I just want to follow up on a couple of those statistics that Mr Parker raised, because they were indeed quite right. He did say that net debt when this Government came to office was zero. Well, that is not quite right. It was $10 billion, but it would be churlish of me, in the context of that, to say that that was a significant error. It was 5 percent of GDP. It was certainly much lower than when the Labour Government first assumed office, although the point around gross debt is misunderstood. Gross sovereign debt actually went up under the previous Labour Government, not down.

Stuart Nash: No, it did not.

Hon MICHAEL WOODHOUSE: Yes, it did. It went from $34.4 billion to $34.7 billion.

[Continuation line: Net debt certainly went]


Net debt certainly went down. Here is something Mr Parker also said. He said that that debt has now ballooned out to $60 billion. Mr Parker is right. What he did not say was that had this Government continued the trajectory left by the previous Labour Government it would have been much more than $60 billion, as Mr McClay pointed out. Net debt was going to go to 60 percent of GDP unless—

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - Hon MICHAEL WOODHOUSE (Minister of Immigration)

The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the honourable member. The time for this debate has expired.

Report noted.

[Continuation line: Lindsay Tisch]

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2014

Speech - The CHAIRPERSON (Lindsay Tisch)

The CHAIRPERSON (Lindsay Tisch): We now turn to the second part of the debate. This is a debate on the annual reviews of departments, officers of Parliament, Crown entities, public organisations, and State enterprises, as reported on by select committees. The time allocated by the Business Committee for this debate is 7 hours. I remind members that this debate now includes the reviews of performance of Crown entities as well as departments. The Business Committee has determined that this part of the debate be structured as seven themed debates. A list of the entities covered by each theme is available on the Table. Each debate will be led by a call from the chairperson of the select committee that has been nominated by the Government as the major committee reporting on the theme. The Labour Party will have two calls. The Green Party will have one call. New Zealand First will have one call. The Minister in the chair will have three calls in response. All calls are 5 minutes in length. In addition, there are 28 5-minute supplementary calls that may be taken by parties as they see fit during the seven themed debates. At the end of the each debate the question will be put that the committee reports relevant to the theme be noted. The time taken on each question is in the hands of members depending on parties’ use of their allocation of supplementary calls. However, this part of the debate expires after 7 hours. At the conclusion of the debate a single question is put on the provisions of the bill. There is no amendment or debate on this question. When the chairperson reports the bill to the House it is set down for third reading forthwith. There is no debate on the third reading. The question is that the reports of committees relevant to services for business: accident compensation, commerce and consumer affairs, customs, economic development, foreign affairs and trade, immigration, labour, science and innovation, and tourism be noted.

[Continuation line: David Bennett]

Services for business

Speech - DAVID BENNETT (National—Hamilton East)

DAVID BENNETT (National—Hamilton East): I would like to just congratulate everybody for the way that they are going to engage in these debates. I think that they will actually give an opportunity for a bit of wide-ranging debate rather than the traditional way that we have approached these issues. When we look at this debate here there are seven issues there, or a number of issues anyway, that are quite broad and cover a range of issues. I would want to just first of all cap off that previous debate as the chair of the Finance and Expenditure Committee. When we look at economic development and some of those issues that are listed here in the services for business debate it is very important that you have that economic environment in place. That is what this Government has been doing through working towards Budget surplus, through getting unemployment down, through keeping interest rates low, through keeping inflation low, and through seeing strong economic growth. All those things are important for business because the environment that we as Government deliver for business is the most important thing that we can do. It is much more important than any one-off decision that we may have around what we prefer as the business of the day that we should be supporting or the nature of any changes to the way that those businesses direct their affairs. There is one issue in there that is quite an interesting one in our list, which is immigration. It is not necessarily something that the Finance and Expenditure Committee deals with. I dealt with it previously on the Transport and Industrial Relations Committee, and I notice the chair here, Mr Jonathan Young—a very good chair he is as well. I just wanted to possibly have a little bit of a talk about immigration. I think that in this House we have a very restrictive approach to immigration in New Zealand and we should be looking at a broader way that we as a country could develop and take more migrants in to enable this country to develop. The changing face of New Zealand that would be the result of that would be something that, I think, would add value and diversity to our country going forward. We are providing an economic environment that people will want to be part of. That human pool of talent that is out there and that talent of young people around the world who are looking for an opportunity and a future will see New Zealand as a place to come. They see us as somewhere that is free and open, that has a strong economic environment, that allows them the ability to prosper, and that allows their families to grow up with the opportunities that they might not have had in their home country. And yet, we deny so many people that opportunity and as a country we deny ourselves the ability to have the strength that they would bring to this economy and this country going forward. Over time that will change. In 50 years’ time we will not have these kinds of debates. As you have seen a globalised world evolve you will see a globalised capital world of talent evolve. There will be no limits between countries around human capital; it will be something that will travel freely between countries as they all strive to get the best people to come to their country. For New Zealand it is also important that we actually take part in that process. Imagine the city of Auckland at 4 million to 5 million people being competitive with Sydney and Melbourne. Imagine the cities of Hamilton and Tauranga at 500,000 or 600,000 people. Imagine if we built a city in between Hamilton and Auckland. Imagine those kinds of changes that would arise if we had a greater immigration policy. That is the future of building economic growth in this country, through having a more modern and progressive approach to our Government, to our planning, and to our development of our people. Those people will come with energy, passion, and desire. They will come with the ability to work hard. They will come with a desire for education. They will come with a desire to make their children have the best opportunities. That is the future of New Zealand. That is an opportunity where we can leapfrog our neighbours as well. Many countries will fail to take advantage of that opportunity. They will have situations where they are very restrictive in their approach to their country’s population growth.

[Continuation line: That will limit their ability to grow as an economic base.]


That will limit their ability to grow as an economic base. It would be sad if any party in this House were to take that approach because that would be to deny New Zealand our future and would be contrary to any good economic judgment. That party will not be here in 50 years’ time. That is why we will not have to worry about that.

[Continuation line: David Clark]

Services for business

Speech - Dr DAVID CLARK (Labour—Dunedin North)

Dr DAVID CLARK (Labour—Dunedin North): This is the Government of gerrymandering, “johnmandering”, and “joycemandering”. It is a Government that is failing to achieve its own export goals as it meddles in the economy, looks after its mates, and fails to produce a vision for New Zealand’s future that can take the country forward. We have seen Rod Oram’s column on the weekend drawing attention to the Government’s failure to achieve its own target of having 40 percent of our GDP being exports. The Government started at 30 percent and it is going backwards rapidly. It wanted to achieve 40 percent by 2025. Now having admitted failure on its path to that target, it is talking about revising the target downward. That is how desperate this Government gets. When it fails to achieve targets, it starts wanting to revise them downwards. It is a Government that is out of touch and out of ideas. The dairy price drop has hit it hard, and it will hit the dairy industry hard, but this Government has got to stop blaming the dairy farmers every time the economy gets tough. That is what they do over there in the Government benches. The members blame the dairy farmers every time the going gets tough for them. Well, it is not the dairy farmers’ fault. The dairy farmers take on the risk every day, and they do it because they have got skin in the game and because they believe in their businesses.

[Continuation line: But this Government has failed to diversify the economy, so we lurch]


But this Government has failed to diversify the economy so we lurch from one commodity price boom to the next. The dairy price has dropped an astonishing 51 percent since February last year and that leaves our economy vulnerable because this Government has failed to diversify. It is shifting our product mix from value to volume. By its own admission it has changed the statistics that it uses to measure our export success away from the value of the products we are selling to the sheer volume. Probably it was doing that in an attempt to make itself look good but it has got egg on its face now. Of course, the challenge for this Government is that it is not going to achieve that target and now that it tries to dress it up and the public knows that it is trying to dress it up it has got to try to introduce another spin doctoring effort. Of course, it has the ministry for it. The Ministry for Business, Innovation, and Employment is struggling to battle Team Joyce in the office of the Minister who so often meddles with its business and its best advice. The ministry has 50 spin doctors sitting there across the road; $5 million worth of salaries sitting with the spin doctors across the road. And they probably need it, to be honest, because this Government has meddled so much in its affairs it is very difficult for the ministry to achieve the targets the Government has set—that 40 percent of GDP. Asked whether it was achievable, the chief executive said it was an aspirational and ambitious target that is useful to aim for. But he could not say that the ministry has full confidence it can be achieved as so many factors are beyond the Government’s control. This is a Government that has cheapened the word “aspiration”. In this Government’s eyes it now means unachievable and that is a Government that is out of ideas. It is thick on spin and low on solutions. In fact, Steven Joyce used to be considered the Minister for Everything and now we see that he has the reverse Midas touch. He used to be the man with the pitch. He used to be the pitch-hitter, he used to be the man with the pitch. Now, everything he touches turns to shemozzle. That is a man who has got no ideas and sees our economy going down the gurgler.

The CHAIRPERSON (Lindsay Tisch): Order! Come back.

Dr DAVID CLARK: I come back to many of the examples of this behaviour in respect of the Ministry for Business, Innovation, and Employment and in respect of economic development, Skycity being the most infamous of them all. It is where the Minister met behind closed doors with one of the bidders for the convention centre—

The CHAIRPERSON (Lindsay Tisch): Order!

Dr DAVID CLARK: This was covered in the financial review, as you will understand questions were certainly raised about the probity of that and the words of the Auditor-General around the deal being neither transparent nor even-handed. It was certainly something that came up in the financial review and that is an indictment on the National Government that particular dirty deal, the Skycity deal for the convention centre, which is supposed to produce, by an independent report, 18 net jobs for the economy. That was when it was still an international convention centre. Of course, it has been scaled back. It may no longer produce 18 net jobs for the economy. The Government needs to front up and tell us how that has changed with time. Of course, it is the Government that brought us Oravida. It is the Government of disgraced MPs, teapot tapes, and the Government Communications Security Bureau. It is a Government that is failing to meet the promise it set itself of higher standards.

[Continuation line: Kaye]

Services for business

Speech - Hon NIKKI KAYE (Minister for ACC)

Hon NIKKI KAYE (Minister for ACC): I am very pleased to take a call in this new debate around services for business, because what we know on this side of the Chamber is that in order to have decent services for businesses and for many Government departments to be delivering initiatives that create wealth in New Zealand we need a good business environment. That means Resource Management Act reform, that means labour reform, and that means projects like the international convention centre—all of which members on the Opposition side of the Chamber opposed. So for them to stand up and lecture us on services for business when they have opposed Resource Management Act reform, argued for massive increases in the minimum wage, opposed the international convention centre, opposed major infrastructure projects, and advocated for increasing a whole lot of taxes is actually not fair. We know on this side of the Chamber that we have got a range of initiatives, which have been set out in a number of these reports by these ministries, that we are doing. They include, as I have already mentioned, $326 million around National Science Challenges. They include major infrastructure investment. But the one that I want to deal with was just dealt with by the previous speaker, David Clark, and that is exports. So again we are getting a lecture from the Opposition around trade and exports. Well, let us actually look at the facts. If we look at the facts in terms of increasing exports our exports increased by 16.73 percent in 2008. Also, we have engaged in several major initiatives. We have got the Chinese Taipei agreement, which came into force on 1 December 2013. That has seen New Zealand exports grow by 17.9 percent. Then we had a lecture around diversification of exports. Well, actually—and I know that Mr Joyce has been saying this in the House a number of times—although primary products have been a major factor in this increase we have seen growth in other sectors. For instance, in the information technology sector we saw a 9.4 percent growth in the 10 years to reach $723 million. That is a significant growth in that area and part of that is actually a range of initiatives that we have been involved in. We have been involved in investing a whole lot of money not only around the skills and training in some of these sectors. That has been not only in our tertiary sector the investment we have seen there; we have also seen other initiatives in New Zealand around things like the Wynyard Quarter Innovation Precinct, and all of that is about supporting that information and communications technology sector to ensure that we have that diversification. But we also need free trade deals and no one has a better record than this Government. Whether it is Taipei or whether it is Korea, those are things that have been initiated by our Government, but we have also seen coming into force the Chinese free-trade agreement. And just to give you some figures on that, under our Government in terms of merchandise exports to China they have almost quadrupled from $2.5 billion in 2008 to $9.9 billion in 2014. Again, I was with the Prime Minister in China. He has been incredibly active in that relationship and part of trade is actually about building those relationships. So you have on that side the members of the party that says no to everything. They say no to Resource Management Act reform, they say no to international convention centre, they say yes to more taxes, they say yes to more regulation, and we are the party of getting things done like the international convention centre, like pushing investment and innovation and science funding, like more free trade deals. We are the party that is sending the country in the right direction. They are in the party that advocates the opposite.

[Continuation line: Graham]

Services for business

Speech - Dr KENNEDY GRAHAM (Green)

Dr KENNEDY GRAHAM (Green): The Foreign Affairs, Defence and Trade Committee’s annual review of the Ministry of Foreign Affairs and Trade’s performance and operations for the year ending March 2014 is before us today. The role of the ministry, as stated in the Committee’s report is “to promote and protect New Zealand’s interests overseas. The ministry provides advice on international relations. It works to advance and protect New Zealand’s security and trade interests. It administers New Zealand’s overseas aid programme.” So says the report, but this leaves much unexplored. It does not make clear the extent to which New Zealand in the 21st century regards the promotion and protection of our interests as dependent on global competition or global cooperation—“punching above our weight”, to quote various Cabinet Ministers triumphantly returning home. It implies that the Government regards the international community as a potentially threatening environment. The report addressed five major areas: the security situation in Iraq, our work on the Security Council, Syrian refugees, trade negotiations, and diplomatic immunity. These are all important issues but the annual review is selective and therefore significant for what is omitted. If this is the legislature’s annual review of the executive’s conduct of our international relations, we have a long way to go before we have a comprehensive world view. Where, for example, is the acknowledgement that the world is now in a global ecological crisis? Where is the recognition that the global population will have increased sevenfold in 2 centuries after 100 centuries of stable numbers? Where is the recognition of the pressure this is placing on the planetary resources, the scientific work on the planetary boundaries beyond which we cannot proceed if we are to pass on a sustainable world to the next generation having breached four of the nine such boundaries already? Where is the recognition of the latest finding by scientists that there is now a 10 percent chance of the global temperature increase exceeding 6 degrees Celsius, which would simply make the planet uninhabitable for human and most forms of advanced life—a 10 percent chance? If these issues seem too huge and too abstract for the Foreign Affairs, Defence and Trade Committee of the New Zealand Parliament to address, then the question has to be asked: who will address them? Who in New Zealand will address the future of the planet and the fate of New Zealand as a result?

[Continuation line: who is responsible for New Zealand’s role in the collective task]


Who is responsible for New Zealand’s role in the collective task of global policy making? If it is not our foreign affairs parliamentary committee, who is it? I have just returned from Europe, as part of the Speaker’s tour: France, Ireland, Northern Ireland, Poland, and Germany. It was a useful visit, and the delegation learned a great deal. One of the main lessons was the sophistication with which European parliaments address foreign policy. They deal with global and regional issues with serious intent: climate change, Security Council reform, Ukraine, the Islamic State of Iraq and the Levant , Iran, refugee migration. They are all dealt with, in each parliament’s committees, in greater depth than we do it here. And how is the global climate change dealt with here in New Zealand? In the Local Government and Environment Committee . A related issue is the debating style of the parliaments over there. The very physical nature of their debating chambers facilitates consensus, through their hemispherical nature and the central podium in the front, from which MPs address all colleagues, including their own. This compares favourably with our own adversarial structure, with two main front benches directly facing each other in trench-warfare style, which gives rise to some fairly puerile behaviour, from time to time, and dysfunctional decision making. So democracy would, I suggest, be enhanced by the simple expedient of a bit of carpentry here in the House. Just as we jettisoned the British electoral system in favour of the German model, so we should change the British carpentry for the European model. So I suggest three improvements for our democracy: change the physical nature of our debating chamber into a hemispherical shape; hold an open debate on foreign affairs once every quarter; and ensure that the Foreign Affairs, Defence and Trade Committee is responsible for specified global issues, including the global commons, such as climate change, planetary boundaries, weapons of mass destruction, and others. Thank you.

[Continuation line: David Shearer]

Services for business

Speech - DAVID SHEARER (Labour—Mt Albert)

DAVID SHEARER (Labour—Mt Albert): Keeping on with the topic of foreign affairs: the Government has lost its way in this particular area. I look at the comments that were made by John Key just a few weeks ago, about a deployment to Iraq. He mentioned human rights, and I was surprised, because I had never heard him mention human rights before. So I went to the Parliamentary Library , and I asked: “How often has John Key mentioned human rights in the course of his time in Parliament?” The answer is once—once, other than questions—just the once, when he moved against Zimbabwe back in 2007. It was a big call, a very big call, but not really keeping up with what he was claiming, and accusing, about going into Iraq. And yet here we are, with him about to go into Saudi Arabia, where human rights are called “discrepancies”—discrepancies. I am in favour of a free trade agreement with Saudi Arabia and the Gulf States , but it is our duty and our obligation, with the treaties and the various agreements that we have signed up to under international law, to make sure that we mention and take that to the table as well. The people of New Zealand are certainly not convinced that we are going into Iraq because of human rights; 50 percent of them believe we are going there simply because our mates have asked us to, and John Key cannot say no—like a lot of other things that he does not oblige to say no to, either. Mr McCully , who was asked yesterday about Indonesia and the executions—do we support executions? No, of course we do not, here in New Zealand. But here is what he had to say about executions. He said it is a very concerning situation and we will have something formal to say about it. When will he say that? When the two people accused are dead? When they have been executed? Probably. Of Nepal he said, with regard to our group going off to help—our urban search and rescuers going off to help—that New Zealand stands ready. That is great, except that everybody else left and went there, and we were still standing ready. Unfortunately for the good people, and the experience that they hold from dealing with Christchurch, they did not get to go to Nepal. I believe that as a result of that we were not able to share our expertise, and why? It is because we have sat there and dithered. In Vanuatu , Cyclone Pam hit on 13 March. On 23 March, 10 days later, we sent our ship. Australia had already sent a ship. Australia had got its flights in to Vanuatu before us. We know that every year cyclones and earthquakes are some things that are likely to occur somewhere throughout the world, and yet we do not have the ability to operate as quickly as other countries in the world. It is not about a race. It is about getting our act together so that we are able to be down there, on the ground, doing the job that we know we are good at. And as a result the people who are in harm’s way will be able to benefit. We need to pre-position. We need to act. We need to stop dithering. We need to take a firm stance on the issues that this Government is not taking a firm stance on. Human rights is one of those issues. John Key needs to mention human rights more than just when he is about to send troops off to Iraq on an unpopular deployment because he is trying to please his mates. And when it comes to the Trans-Pacific Partnership , we have the prince of arrogance himself, Mr Tim Groser, swanning around, saying: “I do not need to talk to the country. I do not need to discuss this with anybody else, because I know everything there is to know about trade and I can make that decision on everybody’s behalf.” Wrong, Mr Groser; you do have an obligation. You do have an obligation to talk to the rest of the country. You do have an obligation to sit down with civil society and actually explain what it is that we are getting ourselves into. New Zealand used to stand for something, and now it stands for arrogance and dithering.

[Continuation line: Todd McClay]

Services for business

Speech - Hon TODD McCLAY (Minister of Revenue)

Hon TODD McCLAY (Minister of Revenue): It gives me pleasure to take a call in this part of the debate, to talk about foreign affairs and trade, two issues that are very important to New Zealand and, indeed, this House. I will just thank the last speaker for his support of Murray McCully and his sterling work, almost single-handedly—although Mr McCully is very modest, he would share the credit with others—to get so many countries of the world to recognise the importance of New Zealand, what a fair-minded country we are, how we do go out and, at an appropriate time, in the best way possible, speak up for others who are less fortunate than ourselves. For Mr McCully to get all of those votes so that we could become a member of the Security Council of the United Nations for the next 2-year period—that is where many of these discussions will take place, and need to take place, as well. We got so many more votes than so many other countries in that first ballot because of what New Zealand is thought of. It is because the country as a whole is not like some parties in this Parliament. It is not about lecturing other people about just the rights and the wrongs, or telling them that they are always wrong and that we as a country are always right. That may be the case in this Parliament sometimes, I guess, when you feel must oppose absolutely everything. But I would say to Mr Kennedy Graham —and I do have a lot of respect for him on many of these issues—that I do not think changing the woodwork in this place is actually going to deliver the level of utopia that he hopes for the world, and New Zealand’s place in it, unfortunately. This is a place for robust debate; it does not matter which direction you are focused on. I advise him to be as critical of his colleagues as he is of the Government, because that does not happen very often, yet he suggests that in parliaments in Europe that is the case. The Government will do a very good job on behalf of New Zealand, representing all of New Zealand on the Security Council. I do note that Mr Shearer travelled with Mr McCully to the United Nations in New York , where the final vote took place. The votes were hardly counted before he put out a press release saying how wonderful it was to be there, and claiming a bit of the credit. But we do not mind sharing it, and, as I said, Mr McCully too would share the credit where it is deserved. That press release told us who the Labour Party thought deserved it. When it comes to trade, we are a trading nation. We will not raise incomes, we will not have more for the Government to be able to provide to New Zealanders by way of services—the things New Zealanders demand and deserve—by merely trading with ourselves. Indeed, if we look at many of the products that we produce in New Zealand, we produce too many of them to be able to consume ourselves. Just take dairy, for a moment. I know that the Green Party is not a big fan of the dairy industry, but if we had to consume all of the dairy produced in New Zealand, we would be bigger people.

[Continuation line: We will only increase and promote a better standard of living]


We will increase and promote a better standard of living and quality of life in New Zealand only by trading with others. We are extremely fortunate to sit on the rim of what at least I think will in my lifetime be one of the largest growths of disposable income in the world—that is, the wider continent of Asia—a billion people in China and a billion people in India whose incomes every day are rising. We face some choices, as with everything, but we are a trading nation and we need high-quality agreements to make sure we have good access to these markets so that our producers in New Zealand and, more than that, the people who work for these companies in New Zealand can benefit from preferential access, in many cases, to a very large group of people who want to consume, as their incomes increase, the things we are so very good at producing. The only way we get that is with high-quality trade agreements, and there have been a number of them. In fact, I would recognise the work of the previous Labour Government when it came to starting, moving through, and concluding a negotiation with China. In fact, it was Mr Goff as the trade Minister who did most of that work at that time. I actually feel for Mr Goff at this moment because he knows the importance of trade to New Zealand. He supports good, high-quality trade agreements. He knows that you cannot talk about all of the issues around a negotiation at every point in time, but he also knows that there is a process for this Parliament to follow when an agreement is negotiated and concluded. The reason I feel for him so much, actually having a lot of respect for him and his lifetime of work around trade, is that he now finds that he is in a party that is turning its back on those New Zealand companies and turning its back on the importance of trade negotiation. The Government has been—

Sue Moroney: Rubbish.

Hon TODD McCLAY: The member says “Rubbish.”, but, actually, go and look at what your leader says and stand up behind him.

[continuation line: Lees-Galloway]

Services for business

Speech - IAIN LEES-GALLOWAY (Labour—Palmerston North)

IAIN LEES-GALLOWAY (Labour—Palmerston North): Today is Workers’ Memorial Day. It is the day when working people and business leaders and others come together across the country to mourn and commemorate those who have been lost at work, those people who went to work and never came back home again, as well as those who have been injured at work, and also to re-energise and re-invigorate the fight to ensure that the living get to work in safer workplaces. Last year 47 people were killed at work. So far this year 10 people have been killed whilst at work. Although I acknowledge that this Government has taken health and safety more seriously in the wake of the Pike River disaster, and there is health and safety reform legislation going through the House right now, we have to maintain a laser-like focus on accountability for health and safety and encouraging workers to participate in health and safety and to have their voices heard in the workplace. It is also incumbent on all of us not just to rely on legislation but to carry out safe working practices and to encourage better health and safety practices so that we will see fewer people killed and injured in our workplaces. We have a workforce in New Zealand of around 2,375,000 people. The Ministry of Business, Innovation and Employment is responsible now for the labour inspectorate, which is responsible for ensuring that that workforce gets access to the minimum standards and requirements that it is entitled to under legislation. The International Labour Organization has a guideline for how many labour inspectors we should have. As a developed industrialised nation, the International Labour Organization recommends that we have one labour inspector for every 10,000 workers. With our current workforce, that would amount to 237 labour inspectors. At the time of the period that this review considers we had just 35 labour inspectors. I acknowledge that it has now increased to 41. That is less than one-fifth, less than 20 percent, the number of labour inspectors that the International Labour Organization recommends that we have. Even the New Zealand Council of Trade Unions has not recommended that we seek to hit that mark of one to 10,000. It recommended 2 years ago that we double the number at the time of 35 to 70 and that we double again so that by now the number of labour inspectors we would have would be around 140. That would be one labour inspector for every 1,600 workers. This Government has not made any effort at all to get anywhere near that number. So what we see every day in our workplaces across New Zealand are minimum standards, rules around the minimum wage, the expectation that workers have a written employment agreement, rules around the fact that you are not supposed to dock a worker’s pay if theft occurs, such as people driving away from petrol stations—those sorts of things happen every day because we do not have a ministry or a labour inspectorate that is sufficiently resourced to enforce the legislation that is in place. So although I am happy that the Ministry of Business, Innovation and Employment is working on issues to do with zero-hour contracts and that the Minister has indicated that he plans to change the law to somehow deal with the issue of people having their pay docked when theft occurs—although it is illegal now; I do not know why the law needs to be changed—and all those law changes are welcome, as are greater penalties for employers who breach those minimum standards, my question to the Government is how it actually plans to enforce those law changes when it cannot even enforce the laws that are in place today because it refuses to resource our labour inspectorate and the ministry responsible for it to a sufficient enough extent that workers can get the minimum rights they are entitled to. I was talking to a worker just the other day who has no written employment agreement and gets paid for probably 4 out of the 5 days a week they work. Yet they are scared to take that to the labour inspectorate because they are fearful that they will lose their job, and they cannot—

[continuation line: Chris Bishop]

Services for business

Speech - CHRIS BISHOP (National)

CHRIS BISHOP (National): I want to focus my remarks on two particular aspects of the debate so far, and that is, firstly, on science and innovation and, secondly, on internationalisation. It relates to the foreign affairs component of the debate we are having today and the Government’s financial statements. The story of the New Zealand economy, and of successive New Zealand Governments, really, over the last 30 years, is of the internationalisation of the New Zealand economy, an increasing recognition, firstly, to be fair to Labour, by the fourth Labour Government and then by Governments from that point that New Zealand cannot sit down at the bottom of the world and insulate itself from global economic trends and from a market economy and cannot put up barriers behind which the New Zealand economy should stand. The future of the New Zealand economy is one that is globally competitive, that is based on price competition, where we try and produce goods and services that the rest of the world wants, and where we try and be open and accessible to the rest of the world, not only in terms of people moving to New Zealand but also in terms of capital that they bring with them. This Government has been very focused on continuing along that path that successive New Zealand Governments have gone on, because the future for New Zealand is one where we are increasingly internationalised. That is why this Government is so focused on things like free-trade agreements. We have signed a closer economic partnership with Taiwan. It is why we are so focused, including in the Budget statements that we are talking about and no doubt in the Budget coming up, on concluding the Trans-Pacific Partnership deal. It is a real shame in some ways that, really, the only party that has a wholehearted and fully fledged commitment to free trade in this Parliament these days is the National Party and the National-led Government. A Trans-Pacific Partnership deal where we can sell more of our goods and services to some of those countries on the Pacific Rim with us, like the United States and like some of the countries in Asia, would absolutely be in our national interest, and I believe that we need to continue down that path. We need to continue to open up markets overseas like where the Prime Minister is at the moment with the Gulf Cooperation Council. Another important thing that the Budget in 2013-14 gave effect to was an increased drive by this Government for international education, so bringing more international students to New Zealand but also New Zealand universities doing more offshore to earn revenue for New Zealand. For me it is not so much about the revenue that international education brings in to our universities, although no doubt this is important, and we do have a drive as a Government to get that revenue up, to double it by 2025; actually, it is more important than that. It is about the people to people links that New Zealand students create when they go offshore. It is about sending New Zealand students into China, into Viet Nam, into those ASEAN countries, to learn more about those countries, and it is about bringing those students from Saudi Arabia and from Viet Nam and from—

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

CHRIS BISHOP: I am delighted to take this 1 minute and 53 seconds. When I was speaking before the dinner break I was talking about the importance to New Zealand of international education and making the point that it is not just about the revenue that New Zealand universities and the New Zealand economy gets from international students coming to New Zealand, but it is about the building of those people-to-people links that New Zealand gets. Ultimately, I think in the longer term that will be the best effect of this Government’s very focused drive to increase international education. It is a good thing that we have Indian students coming to New Zealand, it is a good thing that we have Chinese students coming, and it is a good thing that we have students from Chile, which Minister Joyce just announced the other day, coming to study in New Zealand secondary schools and universities because ultimately New Zealand’s future is of one that is internationally connected and a globally connected economy. I also flagged at the start that I wanted to talk about science and innovation. That is something that I, as a resident of the Hutt Valley and a list MP based in that area, feel very strongly about because the Hutt Valley is really making a name for itself as a place and a destination built on science, innovation, maths, engineering, and manufacturing. In fact, in just a couple of months we have the very first inaugural Hutt Valley science, technology, engineering, maths, and manufacturing festival. I am really looking forward to that and the first inaugural technology valley awards. This Government has placed a real emphasis on science and innovation. We have Callaghan Innovation based right in the Hutt Valley. We have also placed an emphasis on things like information and communications graduate schools. We heard talk earlier from a Green Party member about how the Government is not investing in things like information and communications and fast-growing sectors of the New Zealand economy. Nothing could be further from the truth. The Government’s $28.6 million investment in Budget 2013 and Budget 2014 in information and communications graduate schools is a testament to that commitment that we have to growing the high-tech sector of the New Zealand economy. I could go on. I could talk about things like our proposal to allow start-up firms to cash out their tax losses.

[Continuation line: Sue Moroney]

Services for business

Speech - SUE MORONEY (Labour)

SUE MORONEY (Labour): An excellent choice it is too because I want to speak about ACC in this debate on the annual reviews. I want to start off by saying something that I never thought I would say in this Chamber and that is that I agree with John Key, because John Key has claimed that the surplus is now an artificial target. Well, boy oh boy is it ever artificial. It is so artificial that they are using smoke and mirrors to try and obtain a surplus and they are still probably going to miss it. The smoke and mirrors that they are mainly using is the overcharging of ACC levies to every worker and every company in New Zealand, and the Government knows it. The Government, by its own admission—by its own admission—ignored the recommendation made by ACC itself to drop the ACC levies. It ignored that recommendation because it wanted to, in Judith Collins’ words, “get to surplus”. So let us just investigate what that means because that is what the select committee did when the ACC board came before it for its annual review. We asked the ACC board what the impact was of the Government’s overcharging of levies, and this is what it had to say. I am actually quoting from the financial condition report 2014 of ACC. It said: “The higher than recommended Work and Earners’ Account levies mean that these Accounts will, all other things being equal, accumulate further funds in excess of the Board’s funding target.” What that means is that the Government is putting its sticky fingers into the pockets of workers and companies to the tune of $350 million a year—

Dr David Clark: How much?

SUE MORONEY: It is $350 million. They do not need to cover accidents and injuries because they are using this technique to try and make it look as though the Crown’s books are in surplus. So I agree with John Key; it is completely artificial, because, of course, as we all know, the money that is sitting there—the riches that are embarrassing the ACC board, that are sitting in these funds untouched—cannot be used on anything else. They cannot be used on anything else in the Crown accounts. They are simply fat sitting in the ACC’s accounts, against its wishes by the way. The ACC board recommended substantial cuts to ACC levies, but that Government ignored it because it has failed—it has failed—to get to surplus by growing the economy. That would be the traditional way to get the Government’s books into surplus. That is what every New Zealander would want in terms of getting to surplus. New Zealanders want to get to surplus because they want to see a growing economy that delivers that. They do not want to see businesses and workers ripped off to the extent of the $350 million that they are being overcharged in ACC levies in order to try and get to surplus. Yet it looks as though even though they are using this false method to get there, the Government is still going to fail to get to surplus, so badly has its fiscal credibility plummeted. A lot of credibility has plummeted over the course of the last few weeks. John Key’s credibility, I think, lies in tatters, but so does the National Government’s financial credibility. There is no doubt about that. In those burgeoning accounts, in the work account—that is the account that all businesses pay into—there is 140 percent of what is needed to pay for accidents and injuries sitting in that account. In the earners’ account, the one that workers pay into, 130 percent of what is needed is in there. After the gradual-process injuries are taken into account, there is still more than is needed sitting in those accounts. Who is out of pocket? Well, it is the companies and the workers. Here is the bizarre thing about it: if those companies and those workers had their money back in their pockets rather than being overcharged in ACC levies, that would drive economic growth because they would be out spending that money. Companies have said, they have told me, that they would be using that money for research and development, for giving their workers a wage increase, and for employing more workers. An independent report said that they would be using it for up to 700 more workers in the economy. That is the bizarre thing about what the Government is doing. Then there are the motor vehicle levies.

[Continuation line: James Shaw]

Services for business

Speech - JAMES SHAW (Green)

JAMES SHAW (Green): Tēnā koe. The 2013/14 annual review for the Ministry of Business, Innovation and Employment outlines activities that the ministry has undertaken supporting the Government’s economic development strategy of increasing deep-sea oil exploration, fracking for gas, and coal extraction. This particular plank of the Government’s economic strategy has a number of consequences. First of all, it increases our dependence on oil imports, which is currently costing the country about $5.3 billion a year, contributing to our balance of payments deficit. Secondly, it decreases our resilience to global shocks such as fluctuations in the price of oil and the risk of stranded assets. Thirdly, and most importantly, it adds to New Zealand’s contribution to greenhouse gas emissions globally, which are of course in turn increasing climate change. Climate change is a significant drag on the New Zealand economy. New Zealand’s worst storm in 60 years in 2013 left 30,000 Wellington homes without power, some for up to a week, and set the city back $4 million in direct clean-up costs. Around the country it resulted in over $31 million of insurance claims. But that pales in comparison to the hit that we took as a result of our worst drought in 70 years. Scientists from the National Institute of Water and Atmospheric Research Ltd (NIWA) and Victoria University of Wellington found in a peer-reviewed study that the severity of the drought was due to climate change.

[Continuation line: This drought cost the New Zealand economy over $1.5 billion.]


This drought cost the New Zealand economy over $1.5 billion. Jobs are being lost in the tourism sector as glacier melt melts not just the glaciers but also eradicates the businesses that are guiding tourists up to them. An industry that is close to my heart, personally, the snow sports industry, is under threat as snow cover retreats up the mountains and the seasons are getting shorter, and this will worsen over the coming two decades. I note that the Minister of Tourism is completely silent about these job losses in his sector and the challenge facing this important part of New Zealand’s tourism sector. We are already paying the price of climate change. Farmers are already paying the price of climate change. Our tourism operators are already paying the price of climate change. Top Kiwi scientists are telling us that we will be experiencing these worst ever – type of events every single year—longer, deeper droughts, extreme rain and floods, incredibly powerful winds. The thing is that while we are investing in sunset industries that expose New Zealand to ever-increasing risk, we are missing the economic opportunity of a lifetime—an economic opportunity that is taking the rest of the world by storm, so to speak. The global renewable energy market is estimated to be worth about $20 billion by 2020. Why is exporting our already extreme competence in this area not a core part of the Government’s economic development strategy? The global industry for converting waste into value is estimated to be worth about $200 billion, and New Zealand is nowhere to be seen in that. Upgrading every New Zealand home to be thermally efficient would save us around $800 million a year in unnecessary energy costs and would increase our resilience to extreme weather events. Investing in distributed energy via a world-class smart grid would save us about $3.6 billion by 2030 and would turn people who currently consume and spend into people who produce and earn. This is just a sample of the opportunities that we could be taking up and participating in. If we did we would be more resilient, more self-sufficient, and have a better balance of payments. But most important, when it comes to climate change, we would be part of the solution and not part of the problem.

[Continuation line: Paul Goldsmith]

Services for business

Speech - Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs)

Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs): Thank you for the opportunity to speak. Over the dinner break I have been catching upon the National Business Review and I came across an interesting article here in relation to the latest IMF World Economic Outlook, which estimates that advanced economies are expected to average 1.5 percent annual GDP growth over the next 5 years from 2015 to 2020—1.5 percent. New Zealand, a developed country, is expecting to grow, on average, 3 percent over the next 3 years, so at double the rate that the IMF is expecting the rest of the OECD countries to be growing. That, to me, exemplifies why I am so proud to be part of this Government—its economic record is second to none, and doing very well. The question is why growth is so weak in so many countries around the world. The answer is that investment is sluggish, and that is because businesses around particularly Europe and many other parts of the world at the moment lack the confidence to invest. That is a puzzle because when you look around you see almost negative interest rates in some parts of the world. Money is cheap and yet businesses are still not investing significantly to grow their economy. The puzzle is why that is, and it is because there is a lack of confidence. To me, the best thing that a Government can do anywhere around the world is provide stable, predictable Government, and that leads to confidence, and that is why you get businesses growing and investing, and it is investing that leads to jobs. When we look back over the last year, where 80,000 jobs have been created in New Zealand, we are in the middle of a jobs boom in this country, and every family around—

Dr David Clark: Why is unemployment higher than it was during the recession?

Hon PAUL GOLDSMITH: Well, 80,000 jobs were developed in the last year, and 217,000 jobs were created in this economy in the last 5 years, and it is those jobs that are enabling young men and women in this country to be able to get up in the morning and go to work and come back with some money, in contrast with so many other young people around the world at the moment who are facing high levels of unemployment. That is something that I am proud of. I wanted to focus on the services to business area, which we are supposed to be focusing on in this period, and the areas that I am responsible for, particularly in the financial markets, where we are working hard, particularly with the significant changes in the Financial Markets Conduct Act in the last year, which we are bedding in this year. The most important thing that businesses need is access to capital to grow. We are hoping to build confidence in capital markets in New Zealand by improving the quality of disclosure in investments and creating a regime that can build confidence in investment, to strengthen the governance of financial products—and we have done that in many detailed ways—and thirdly, to enable more innovative and flexible methods of capital raising. We have seen some real progress being made in the crowd funding area over the last few months, which is opening up a new avenue for smaller, fast-growing countries to access capital to grow. We are expecting the next market to develop in the stock exchange, which will provide a new opportunity for middle-sized businesses, and so on, and the programme develops so that those businesses have more access to capital to grow their business. We want financial markets to be supported by clear, predictable rules that enable investors to make confident judgments about the risks and returns that they have. Related to that is the review of financial advisers that we have got underway at the moment. We have had the terms of reference out for the last few months, and I expect to be bringing some suggestions over the next few months in the area of financial advisers, which is again, a very important area, when New Zealanders have been in the habit of investing most of their money in residential property. That is a good thing for many households but we want to enable New Zealanders to feel more confident to invest in financial products, and so the financial advisers’ regime is an important element in that. I do just want to touch again briefly on competition law, because if we are trying to raise living standards in this country we can grow the economy but we can also make each dollar that people have go further, by having a competitive domestic market in all sorts of industries across the economy. That requires good competition law, which roots out cartel behaviour, and which deals effectively with misuse of market power, and that is why we are at the moment bringing through our cartels legislation and we are also going to be reviewing section 36 of the Commerce Act.

[Continuation line: David Clark]

Services for business

Speech - Dr DAVID CLARK (Labour—Dunedin North)

Dr DAVID CLARK (Labour—Dunedin North): Well, we have heard another speech from a tired, arrogant, out-of-touch Government. The Government members have the rhetoric but they do not have the ideas any more. We hear about capital markets reform and we are seeing that it is not happening the way it should be. This Government is a Government that reads the National Business Review in the dinner break rather than talking to ordinary New Zealanders who know that this country is struggling to get ahead and that the ordinary people who are working hard are being left behind. When we do see some signs of economic growth—some tentative shoots—it is the people in the middle who are missing out. It is a tired, out-of-touch, and arrogant Government that is failing to achieve its own targets. I talked in my earlier contribution about the failure to achieve growth in exports as a proportion of GDP. That was discussed extensively in the financial review that I was a part of. This Government set itself the goal of shifting from 30 percent of exports to 40 percent of exports as a proportion of GDP, and that number is something that it is now in fact trying to retreat from because it cannot achieve its own targets. It has also talked about achieving surplus for a couple of elections now. It is about to have its seventh Budget and to fail to reach surplus yet again. It is failing to achieve its own targets yet again. New Zealanders are losing trust in the promises of a Government that always promises jam tomorrow and that has failed to deliver. I want to talk about regional development, which was another thing that came up in the “MBIE” financial review—

Sue Moroney: “Mobie”.

Dr DAVID CLARK: “Mobie”—my colleague corrects me; the great white whale. We know that regional development should be a focus for this country, and yet people in the regions are feeling neglected, and they are being neglected. We see a tale of a two-speed economy emerging as the Government neglects growth in the regions, and we cannot afford it. Everyone in Auckland agrees as well that we cannot afford the regions to be left behind. The OECD says that the way to build economic growth in developed nations is to lift the skills of the lowest-skilled workers in the regions. It is the most cost-effective way of achieving economic growth.

[Continuation line: We have seen a Government without a plan]


We have seen a Government without a plan, happy to let a two-speed economy emerge as it takes its hands off the wheel of the economy. I want to talk a little bit about the way in which those statistics play out. In Northland recently, we had an election and the Minister for Economic Development said that there was a unique set of circumstances there that caused the thumping defeat of the National Party in Northland, having previously held a huge surplus of votes. The people in the regions are saying that they are not happy with what is happening. They have voted out the National Party in Northland. But it is not a unique set of circumstances—and this is the point I want to make—because in Northland people are struggling and it is tough there. Unemployment is around 8 percent. But in the Manawatū and Whanganui regions it used to be around 3 percent, and it is now 9 percent—higher than in Northland. That is hardly a unique set of circumstances. In the Waikato they used to have a 10 percent premium in real median weekly wages over Northland. They used to get paid more in the Waikato than they do in Northland, in real weekly wage terms. They do not any more—they do not any more. Northland has caught up. It is getting worse in the Waikato because the commodity price bubble is hurting. We also see that in the Hawke’s Bay and Gisborne, it is actually worse again. They used to have a higher real median weekly wage in Hawke’s Bay and Gisborne than in Northland and now they have a lower real median weekly wage than they do in Northland. Again, it is hardly a unique set of circumstances. Talk about the West Coast and Tasman—unemployment and weekly wages are hurting there too. The people in the middle are struggling in New Zealand and this Government has no answers. It is out of touch, it is leaving them behind. It is happy to get on with its meddling, its tutu-ing around—adjusting the settings here and there but sailing on while Rome burns. We have seen this with, of course, the “Gerry-mandering”, the “John-mandering”, and the “Joyce-mandering” that I have talked of earlier. The Skycity deal—what we see going on there. It is what the Auditor-General has described as neither transparent nor even-handed. It is a deal done behind closed doors that the Treasury was suspicious of and that looks set to introduce very little, if any, economic growth for New Zealand—and that is its big flagship economic growth project. This is a Government that is out of ideas. It talks about unique sets of circumstances. It has every excuse in the book, but, actually, it is out of touch and New Zealanders are losing faith in this Government. It is about photo opportunities. We have heard the pre-announcement for the Budget of $20 million a year in extra research and development spending. That is a drop in the bucket in research and development terms. It will buy the Minister a few more photo opportunities with his hand-picked favourite companies, but it will not boost research and development in this country, which is well below the OECD average.

[Continuation line: Denise Roche]

Services for business

Speech - DENISE ROCHE (Green)

DENISE ROCHE (Green): I rise to take a call in this debate on services for business, and I am going to direct my remarks to WorkSafe New Zealand. Today is Workers’ Memorial Day, so it is a good time to reflect and assess whether our industrial relations framework and the mechanisms that the Government has to support healthy and safe workplaces are fit for purpose. Over the last 5 years, 287 workers went to work and did not come home. Last year in New Zealand, 47 people died at work, and that was down from 2013, when 57 were killed. It is a terrible reminder of what can happen when people go to work and they do not come back. In the last year we have already had 10 workplace fatalities. These figures are provided by WorkSafe New Zealand. It says that the actual death toll could be higher because workers who are killed on the road, in aviation accidents, or on the sea are investigated by the police, the Civil Aviation Authority, and Maritime New Zealand respectively. Each death is a personal tragedy. Today I went to Canterbury to the commemoration of Workers’ Memorial Day there, which was a very heartfelt and sad occasion. It was today that we remembered the death of Lyttelton Port worker Brad Fletcher and the deaths of the two Work and Income workers Peggy Noble and Susan Cleveland. These are the people behind the statistics. The grief that their families and friends feel is raw and it is real. As well as the social costs, there is the economic cost. WorkSafe New Zealand suggests that the cost of the death rate is a conservative $3.5 billion each year. Over the last 5 years there were nearly 28,000 serious harm incidents reported—that is, people who have been hurt seriously at work—and it estimates that that is about just under 6,000 people per year. On top of that, it says that there are between 600 and 900 people who die every year from diseases that were caused by long-term exposure to harmful influences. Our health and safety record is nothing to be proud of. A New Zealand worker is twice as likely to be killed on the job as an Australian worker and four times as likely to be killed on the job as a worker from the UK. This is not because the work is different. The work is the same. It is just that the culture is different and the laws are different and, I have to say, the industrial relations framework is also different.

Continuation line: I acknowledge that there is legislation in front of the House.


I acknowledge that there is legislation in front of the House at the moment that reforms the health and safety laws, and I am hopeful that that law will introduce more emphasis on employers, on corporate bodies, and on owners to take responsibility for safety on the job. However, I remain convinced that little will change unless workers themselves are empowered to be safe at work and to be able to speak up about potential risks and hazards. Workers who work in a place with higher workplace democracy have better health and safety records there because they are not afraid to speak up about the hazards or the risks that are present on the job. But, sadly, this Government undermines health and safety practice that is good by creating an industrial relations environment that pits worker against worker and creates a workplace climate of fear, and it has done that through the introduction of youth rates, through the 90-day fire-at-will legislation, and through the changes to the Employment Relations Act that make it harder for workers to join a union or to negotiate collectively. A poor health and safety culture thrives when workers are insecure about their jobs and when precarious work and zero-hour contracts mean that they are not going to kick up a fuss about what is going on in the job in case they do not get rostered back on again. We know, and we have seen it time and time again, that workplaces with high union membership and good workplace democracy are safer workplaces, and we just have to compare Huntly mine with Pike River mine and what happened there. I do want to acknowledge the sterling job that WorkSafe New Zealand is doing.

[Continuation line: Mark Mitchell]

Services for business

Speech - MARK MITCHELL (National—Rodney)

MARK MITCHELL (National—Rodney): I would just like to open by saying that I would challenge the Labour Party and the members opposite—the next caller—to get up and, instead of what we continue to hear tonight, which is negativity and attack, to actually articulate what the plan is.

Hon Ruth Dyson: What are you hearing? Tired old Government—out of touch and arrogant?

MARK MITCHELL: The Hon Ruth Dyson just played right in to the point that I wanted to make, which is the fact that when we come to this Chamber, we should come here with aspiration. We should be talking with aspiration and we should have aspiration for our country and for our nation. This is the type of language that I hear throughout the night from the Labour Party, from the Opposition benches: “tired”, “left behind”, “arrogant”, and “failure”. I hear it time and time again. That is not the language of aspiration. That is not the type of language, actually, that this country needs. I want to come back to something that my colleague the Hon Paul Goldsmith said and the point that he made earlier tonight, and that is the fact that he said that when we went into the global financial crisis and we went into it in a world recession, what we really needed was strong leadership. We needed leadership that knew what had to be done to get us through that and to protect and help those who were most vulnerable. I am very proud of this Government and what it has achieved. But to achieve stability, it actually helps if you have one leader, and I am very proud of the fact that we have had one of the best world leaders that any country could have asked for through a global financial crisis and through a world recession—that is, the Rt Hon John Key.

[Continuation line: If we look across at Labour]


If we look across at Labour, if we look across at the Opposition benches, look at the leadership that they have provided over the last 6 years. Let us look at the churn rate. We have had the Hon Phil Goff—gone. We then had David Shearer come in. David Shearer, whom I worked with on the Foreign Affairs, Defence and Trade Committee, is a quality man who has got a very good track record and a proud record. What happened to him? What did you do to him? Gone.

The CHAIRPERSON (Lindsay Tisch): Order! Come back on to the debate.

MARK MITCHELL: Cunliffe and Little, that is right, a constant churn—but you are right, Mr Chairperson. I will come back to the bill. I want to speak about the Ministry of Foreign Affairs and Trade. I want to acknowledge all the staff and all our people employed around the world working in New Zealand’s interests—especially, I want to comment and thank and acknowledge the ministry staff who have been dealing with the recent tragedy and earthquake in Nepal. I spoke with a father who has a 19-year old son over there at the moment, and he said that they have been nothing but fantastic. The communication has been very good. They have located him, they have reassured him that he is OK and that he is safe. That seems to be a constant theme in terms of what they are doing and how they are performing. I want to acknowledge them. I want to acknowledge Minister McCully again and the team at the Ministry of Foreign Affairs and Trade and the likes of David Shearer who work very hard for a huge achievement for us in terms of credibility and presence on the world stage and being successful with achieving a seat on the United Nations Security Council. I want to acknowledge the people who work in the trade sector along with our Minister, and the free-trade agreements that have been very, very successfully negotiated over the term of this Government. We are a small country. We are a small trading nation down the bottom of the world. The future of our country relies heavily on how well we continue to trade with the rest of the world. That is why these free-trade agreements are so critically important to us. I do want to acknowledge Phil Goff and the Labour Party for the work that they did on the free-trade agreement with China and the way that we picked that up when we came into Government. It has been very successful and it continues to be very successful for the GDP growth of our country. I want to just quickly refer back to something that the Deputy Prime Minister and Minister of Finance highlighted. I think it is something really worth noting. That is the fact that even though the milk powder price has dropped off—and, unfortunately, that is something that we cannot control—our GDP is still very strong and continues to grow. What that would show is that actually there is a lot more diversity inside our economy than what we actually realise, so I just wanted to acknowledge that point also. I just wanted to very quickly touch on the deployment to Iraq. I know that that is close to all our hearts as our servicemen and women from the Defence Force arrive in Iraq.

[Continuation line: Annette King]

Services for business

Speech - Hon ANNETTE KING (Deputy Leader—Labour)

Hon ANNETTE KING (Deputy Leader—Labour): The member who has just resumed his seat, Mark Mitchell, was disappointed because we have not spoken in the language of aspiration. This side of the Committee has been pointing out that we believe that the Government has become arrogant and out of touch; that it has lost its way and been breaking promises. We do not resile from that, Mr Mitchell. That is our job—to point out the failures of this Government. It gets plenty of sycophantic endorsements from its own members of Parliament, who can find absolutely nothing wrong in what it does. I just have to remind Mr Mitchell about when he said about what we have had in leadership over here. Well, let me just say: Jim Bolger, Jenny Shipley, Bill English, Don Brash, John Key. I can say that there were five leaders of the National Party before you got this Prime Minister. So when you quote history, you need to just look a little bit further back, because you will find it might come to bite you in the bottom. I would say to the member thank you for recognising some of the work that a Labour Government did, including free-trade deals, but I would have also appreciated if the Government opposite could one day acknowledge the work that the Labour Party did through Michael Cullen in terms of the management of this economy, the very man you have made chair of New Zealand Post—because he was so terrible as Minister of Finance, you wanted him for New Zealand Post. Of course we know the reason why he was made the chair of New Zealand Post is that he was such a good manager of the economy. I want to point out to the members opposite where I think there is a real problem in this annual review, and that is in the area of health. I am very concerned about what is happening in health. I have sat through the annual reviews—

The CHAIRPERSON (Lindsay Tisch): Order! That is the next debate. Health does not come under this one.

Hon ANNETTE KING: This is the general debate on—

The CHAIRPERSON (Lindsay Tisch): No, no—health comes next in theme No. 2.

Hon ANNETTE KING: I thought we could do any theme under the one heading.

The CHAIRPERSON (Lindsay Tisch): No, I have already indicated what the Committee—health does not come under this one. It is on the next one.

Hon ANNETTE KING: In that case, Mr Chairperson—[Interruption] I beg your pardon? Sorry, Mr Chairman, I never heard your ruling. The understanding we had was that under the themes that we are doing—

The CHAIRPERSON (Lindsay Tisch): No, no—[Interruption] Order! When we started this debate at 20 past 5 I indicated clearly the seven themes. There are going to be seven themes. We are on theme No. 1. When we started after dinner at 7.30 I actually read out once again what those themes were. Just to make note of this, we are talking about the relevant services for business: accident compensation, commerce and consumer affairs, customs, economic development, foreign affairs and trade, immigration, labour, science and innovation, and tourism. Those are the themes that we are on. Health comes into the next debate.

Hon ANNETTE KING: Unfortunately, not everybody sits listening to every word that is said in the Chamber at 5.30 and at 7.20—some of us actually were at other functions. So I apologise to the Committee for not speaking on the right area, but I would like to speak about labour, and that is under this area, I am told. We know that when we left Government we had one of the lowest unemployment rates in the world. We did that through sheer hard work and good management of the economy. We acknowledge the Government went through a global financial crisis, but we are now talking about our seventh year on. This Government cannot continue to blame the global financial crisis for everything that is wrong in New Zealand. Whenever it goes wrong, it says there was a global financial crisis. Remember the Prime Minister told us 5 years the global financial crisis was over—that it was finished. But John Key has not delivered on his promise for jobs in this country. He has not delivered. What worries us is that when you look at those unemployment figures and you look in the regions of New Zealand, you have to be concerned about those who are not getting jobs, particularly our young people. You need only to see some of the figures, the numbers of young people who are missing out because this Government will not focus on the fact that the concentration should be on getting our young people into work. The Government talks about what it has done but I have to say it has been abysmal, particularly for Māori and Pasifika youth in this country. We ought to worry about that. That is a generation that is going to miss out unless there is a greater focus put on it. We also know that under the labour portfolio this Government has been very miserly when it comes to the minimum wage. When we promoted a minimum wage that was close to the living wage this Government had plenty of excuses why people should not be paid enough to live on. I would say to those members to go and spend a day with home-care workers in this country who are paid the minimum wage, looking after our old folk, doing work that is difficult.

[Continuation line: Services for citizens]

Services for citizens

Speech - The CHAIRPERSON (Lindsay Tisch)

The CHAIRPERSON (Lindsay Tisch): The question is that the reports of committees relevant to services for citizens—education, health, housing, senior citizens, and social development—be noted. We need a—[Interruption] We cannot move if we do not have a Minister in the chair.

Services for citizens

Speech - The CHAIRPERSON (Lindsay Tisch)

ALFRED NGARO (National): I rise to take a call on the services for citizens. The focus of the appropriation debate for this year has been to try to sort of ensure that we increase the ability to have debate that focuses on the issues that are very important.

[Continuation line: I just want to make mention]


I just want to make mention of the comments made by the Hon Annette King, who talked about Māori and Pasifika in particular—a generation that she has commented on and that she feels we are locking out. I want to hold the previous Government to account for those very words, because when you talk about that—let us talk about Māori, for instance. When it comes to Treaty claims, if they do not like this, because it came after a whole lot of issues around the foreshore and seabed, they are all silent. They are very quiet because they will know that when they talked about issues for Māori they did not deliver. Issues that were delivered on health, education, and welfare—you do not want to go there because you know that is a fact. The truth is this. The rest of New Zealand will hear this microphone, not those voices over there, so I will just keep talking because that is the truth of what is happening here. The second thing I want to put out—let us talk about issues for Māori. Let us talk about Treaty claims. How many Treaty claims came from the Labour Government that would benefit health, education, and welfare? The focus for the debate—

Hon Annette King: I raise a point of order, Mr Chairperson. Are Treaty claims a part of this debate?

The CHAIRPERSON (Lindsay Tisch): I am just dealing with this. I am asking the Clerk specifically whether it comes into here, because Māori Affairs is covered later on. I have asked specifically whether Treaty claims come under this. I am just seeking some advice. Let me just answer. Before I answer the question about Treaty claims, the Business Committee has changed the format for this debate. It has come up with a format as to how we are going to have seven themes. The seven themes are identified, and that is what we are actually speaking about today, for 7 hours. That is what we are doing. In answer to the point of order about whether Treaty claims are part of this, they are not, unless you can relate Māori aspirations or Māori involvement back, under the headings that I mentioned before—education, health, housing, and social development. If you do that, that is fine. You cannot specifically talk about the Treaty claims settlement process.

ALFRED NGARO: As I was alluding to in my speech, I talked about the impact of those claims—not particularly to the claims themselves, but to the impact that they have on Māori education, health, and welfare. Again, I see under this Government what we have done. That is right. There have been over 42 Treaty claims that benefit health, education, and welfare. That is what this Government has done. So I hold to account the words that have been spoken over there. Let us talk about Pasifika, because I love this. Those members want to stand up and speak about this, about Pasifika. Let us talk about the whole aspect of education and the achievements. What have been the achievement rates for education in particular? I will tell you what. They are the education rates that a Labour Government would be ashamed of. Under a National Government we have increased early childhood education participation. We have increased the retention rates, and the completion rates at university. That is what we have done. [Interruption] Again I remind Opposition members that the only microphone that is being heard by the public is this one, not their one. This is what we are doing as a Government. These are the things, absolutely. This is what we are achieving. The reality is that it is the facts that speak the loudest. These are the things that we have done that are important to welfare, for our communities, and they are truly making a difference. Vulnerable children services are absolutely critical. Under Budget 2014, $16.4 million went around child protection services, and the Social Workers in Schools programme is now available to 142,000 children. Child abuse statistics—and this has got to be critically important. You have used statistics of children who are in our community who are vulnerable. We know that in June 2014 the numbers fell by 12 percent. Let us give that a number—2,306. Why? Because those are the statistics. That is what is proving different. I want to announce to the public who may be listening to this that this appropriation debate is about what this Government has done previously in the Budget to make a difference. These are the facts that we are talking about. Let us talk about welfare reform, because this really hits at the heart. The old adage that keeps coming out of the previous Labour Government is the same old thing—paying out, tax, and spend. Under this Government 1,600 people are moving off welfare and into work each week—1,600 off welfare and into work each week. That has got to make a difference. Why? Because the fact is that we are creating more opportunities. Let us talk about the facts again. March 2015 recorded the lowest benefit numbers of any quarter in 6 years. [Interruption] That is right. You can yell and you can shout. But here are the facts, just to remind you: a 3.7 percent—or let us give it a number: 11,060—decrease from March 2014. That is making a difference. Welfare reforms have reduced the expected future time on main benefits by an average of 1.2 years for sole parents and 2.8 years for youth beneficiaries. I just want to be able to clearly say that what this Government is actually about is showing that it cares, through its welfare reforms. It is giving opportunities to get out of dependency and into the work opportunities that are out there. Over the past 3 years the number of young people on the youth payment at age 17 and expected to still be on a benefit at age 19 has dropped by 19 percent. These are the things that are really important out there—19 percent. So you can talk, and you can bandy it all around. But here is the thing that really hurts the most. For all the condemnation, for all that, 2 weeks ago what did the polls say? They said that 49.1 percent of New Zealanders still have confidence in this Government. That has got to really hurt the Opposition. For all that it has tried, and all of the effort and all the fighting and all the banter, 49.1 percent still say that they have confidence in this Government to deliver, whether it be in welfare, education, or health. We believe that that is making a difference. Thank you.

[Continuation line: TWYFORD]

Services for citizens

Speech - PHIL TWYFORD (Labour—Te Atatū)

PHIL TWYFORD (Labour—Te Atatū): The National Party used to talk a lot about being ambitious for New Zealand. But you do not really hear that very much these days. It used to be so ambitious for New Zealand, and nothing illustrates better a tired, run-down Government that is out of ideas than Bill English’s comments only a few days ago, when he said that there was nothing left undone by the Government in relation to the Auckland housing crisis—there was nothing left undone; there was nothing more to do. But I guess Bill English was kind of right, if you ignore cracking down on speculators. He probably forgot banning offshore speculators from buying New Zealand houses. He forgot about building new houses that people could actually live in. He did not mention reforming the planning rules to build more houses, and more affordable houses. He must have forgotten to mention the fact that loan-to-value ratios should be changed so they do not needlessly punish the regions and first-home buyers. But that is only six policies. Other than that, I guess Bill English was right and there is nothing more to be done about the Auckland housing crisis. You see, this Government on housing is looking increasingly isolated and beleaguered. You saw it in question time today, on Bill English’s face. He was tired, worn down, beaten, and embarrassed that this party that once claimed to be so ambitious for New Zealand is so patently completely out of ideas and flailing around. You know, in the last couple of weeks the Reserve Bank Deputy Governor called on the Government to take action to address imbalances in the housing market. The Reserve Bank called on the Government to crack down on speculators. Who would have believed it—that this Government would be so isolated and so embarrassed on housing policy that the Reserve Bank Governor is advocating a crackdown on speculators. According to Quotable Value, 40 percent of all property transactions involve speculators. To rub salt into the wounds of tens of thousands of young Kiwi first-home buyers who are shut out of the market by this National Government that has presided over the worst rates of homeownership in 60 years, what did we hear last week? We heard a New Zealand company running ads on the radio in Singapore and Malaysia, saying: “Come and invest in New Zealand property because New Zealanders will give you half their weekly earnings.”

[Continuation line: They said New Zealanders will give you half their weekly]


They said New Zealanders will give you half their weekly earnings and there is no stamp duty, there is no capital gains tax, there are no restrictions on foreign speculators bidding up the price of New Zealand houses. So this Government instead of being ambitious for New Zealand is out there on the world stage prostituting our real estate market for all comers. It is saying: “Come on, the property speculators of the world. Come to New Zealand and you can buy and sell New Zealand houses for capital gain, and these New Zealanders will give you half their weekly earnings.” That is what has happened under this National Government, which used to be so ambitious for New Zealand. What did John Key say when he was asked about the comments of the Deputy Governor of the Reserve Bank? He said that Auckland price houses, which have increased by $300,000 under this Government are not overvalued because there has not been a market correction in 45 years. John Key said: “That’s just the market working. That’s how markets work.” You see, this is the currency trader trying to get his head around a failed housing market that has destroyed the dreams of a generation of young New Zealanders, and Government members do not care about it because they all own multiple properties themselves. John Key, who says there is no housing crisis, is completely oblivious to the fact that homeownership rates are the lowest in 60 years. In Auckland it now takes 50 years to pay off the average house—50 years under this National Government—and that is something that Jami-Lee Ross is proud of, that people are living in garages and cars and caravans and that foreign speculators are making a killing off New Zealand homes. Government members are out of touch, they are arrogant, and they do not care that the next generation after Generation X and Generation Y under this National Government is “Generation Rent”. The Government’s biggest housing policy has been to blame everybody else. Last week the Prime Minister announced that the Government was going to send letters to property developers, complaining that they were not building houses on the so-called special housing areas. So developers are now the problem! The Government has spent the last year blaming the councils because apparently it is all the councils’ fault. It has also said that first-home buyers are the problem. Nick Smith said last week “People need to be realistic. It’s your first home. It’s not going to be in the leafy suburbs of Remuera, close to the central city.” So now we have got developers are the problem, councils are the problem, unrealistic first-home buyers are the problem, and, of course, the Resource Management Act is the problem, in spite of the fact that under Labour we built 40 percent more houses when we were in Government than this Government is currently building under the very same Resource Management Act. The National Party has been talking a big game on Resource Management Act reform since it was in Opposition. Back in 2006 Bill English and Nick Smith were blaming the Resource Management Act for unaffordable houses. What have they done in 7 years in Government? Nothing. The Government has done nothing about reforming the planning rules to make housing more affordable. It has done nothing about urban growth boundaries that drive up the price of land. It has done nothing about the rules that stop developers building affordable flats and apartments in the leafy suburbs of Auckland. It has done nothing about it. Government members keep on talking about it. It is a joke. They should put up or shut up. The other great fiasco of National’s housing policy is the State house sell-off. John Key announced in January that he wanted to sell 8,000 houses in this 3-year term. Bill English thinks it is a lazy use of capital for the Government to own houses, even though there are people all over this country desperately in need. There are people living in garages and caravans and paying exorbitant rents for cold, damp, and unhealthy homes in the private rental market. But this Government thinks that the solution is to sell off State houses to property developers. For the best part of 6 months after the last election, it tried to dress up that policy and deceive New Zealanders by saying it was going to sell these houses to the Salvation Army. Well, our most respect social agency did due diligence on that policy and told the public that that policy would not improve the lives of the tenants of social housing, that it would not have a bar of it, and the fig leaf of respectability was stripped away from that policy. And now the Government has been forced to admit that if it wants to sell those houses, they are going to have to be sold off to property developers and private landlords. What an absolute disgrace. Too often people think that the housing crisis is simply an Auckland problem. Well, it is not. It is an Auckland problem when houses go up by $300,000 in 1 year. That is a problem and it is a problem for the generation of hard-working young families who only want what their parents and their grandparents had in this country, and that was the opportunity to buy and own their own home. That is a broken dream under this National Government, but it is also a problem in other parts of the country. Because of this Government’s complete and utter failure to do anything meaningful about the Auckland housing crisis, the rest of the country, the two-thirds of the people in this country who do not live in Auckland, are having to pay 20 percent minimum deposits because the Reserve Bank was backed into a corner by this Government’s failure to do anything about the Auckland housing crisis. Loan-to-value ratios have whacked first-home buyers, driven them out of the market, and this Government has damaged the lives and the economic prospects of regional New Zealand, but it does not care about regional New Zealand. That is far from its concern.

[continuation line: Mojo Mathers]

Services for citizens

Speech - MOJO MATHERS (Green)

MOJO MATHERS (Green): I wish to address my comments to the Ministry for Social Development. So, apparently, supporting vulnerable children is one of this Government’s priority areas. Who could disagree with that? But I find it difficult to reconcile the aim of caring for vulnerable children with the fact that over the last 5 years more than 11,000 disabled children have lost access to the child disability allowance—11,000 children. I want to ask how slashing access to this vital supplementary benefit helps disabled students. The answer is that it does not. It is penny-pinching on the meanest level. The child disability allowance recognises that there is significant time, care, and effort involved in raising a child with a disability. It is well established that for many disabled children significant parental time and energy are needed in their earliest years to help to develop, amongst other things, speech, language, motor coordination, and all these other skills, and that there are numerous associated extra costs relating to caring for a disabled child such as the extra costs of transport to doctors, specialists, therapy, child care, as well as the extra time. We also know that more disabled children than those in the general population live in poverty, and in part this is because parenting a disabled child often means that a parent cannot obtain full-time work. So for these families the child disability allowance is doubly important. Yet despite all of these facts about the need and the benefits of ensuring that these children are adequately supported, the Government is so obsessed with pinching pennies that it is scrimping in supporting our most vulnerable children and families. I have just this week heard from a parent whose disabled preschool child has been declined the child disability allowance despite the fact that expert medical opinion clearly states that the child needs access to significant therapy and early intervention before entering school, all of which will involve significant time and effort by the family.

[Continuation line: It is just one example of many that have]


It is just one example of many that have come through my office. It is wrong that parents and families are going through so much stress just to access a simple benefit for disabled children. It is clear that the bar has been shifted for accessing the child disability allowance and that that bar has now been set too high. Children with very profound disabilities are no longer able to access this benefit. The Government needs to recognise that it has gone too far and that it needs to fully reinstate the child disability allowance back to how it was so that families with disabled children are not put under more pressure than they already are. The other area where I believe the Government is really getting it wrong is with the welfare reforms. The needs of disabled children need to prevail ahead of parent job seeking and work preparation obligations, especially in sole-parent households. The obsession with the welfare reform programme is ignoring the inconvenient truth around the care for disabled children. Many early childhood education centres are simply not set up to provide for the needs of disabled children leaving many parents in an impossible situation where they cannot get their child into an early childhood education centre, or their child will have substandard care, or they risk losing the sole parent benefit. That is an impossible situation that far too many families are finding themselves in.

[Continuation line: Hekia Parata]

Services for citizens

Speech - Hon HEKIA PARATA (Minister of Education)

Hon HEKIA PARATA (Minister of Education): Tēnā koe, Mr Chair. Otirā, tēnā tātou katoa i roto i te Whare i tēnei pō. I am delighted to stand and make a contribution in this annual review debate under the theme of services to citizens and in so doing assure the anxious Opposition that we remain both ambitious and accountable. We have a set of 10 Better Public Services targets that are well known to the public, that hold us accountable every 6 months to what this Government is doing across a range of public services, and that are all about the quality of citizenship that New Zealanders can enjoy under this Government. Predictably and appropriately, I am going to speak in particular about education and the very significant contribution that all of us know education makes to the quality of life that we lead as individuals and therefore our families, communities, and ultimately our country—this great nation of Aotearoa New Zealand—can lead. The story in education is a very good one. Kids are starting earlier, staying longer, and leaving better qualified. That is in every ethnicity. I will be very pleased to talk about the particular achievements that are occurring in and by both the Pasifika and Māori communities, as well as, of course, Pākehā, Asian—all of those who make New Zealand their home and participate in our education system. That is as much because our Government has invested the most ever into education, demonstrating that we put money where our mouths are, and in this case, in education. In the past year over $10 billion has gone into both early childhood and secondary schooling. When we came into Government—just to remind us of the stark contrast between the Opposition when it left Government and where we are now—$800 million was what the Labour Government was—[Interruption]

Sue Moroney: You should be choking on it too.

Hon HEKIA PARATA: How ungracious the member of Parliament Sue Moroney is. I am not choking on it. I am not choking on it. What was happening under her Government was that early childhood education was $800 million. Under ours it is forecast to be just under $1.6 billion, just nearly doubling that investment, as well as the tending to quality. Let me just tell the member, if she was of a mind to actually listen, that of the 1,500 reviews undertaken by the Education Review Office into the quality of early childhood education provision between 2013 and this year only 12 providers were found to be failing—less than 1 percent. So jumping on this ridiculous bandwagon and saying that we have sacrificed quality for participation is not supported by the evidence, but I accept that the Opposition is not in a very close relationship with evidence. We have also increased spending on special education. Again, when we came into Government in 2007/8 the spending was $414 million. It is now $530 million and that is supporting 80,000 to 100,000 young New Zealanders who have special education needs. Kids are starting earlier and that is because we are really focused on how young people get the best start in education. We know if they start behind too often they stay behind so we have been focused throughout the system. There is a great story to tell in early education and it is a pity that the Opposition does not have the grace to celebrate that strong start for our youngest learners. Kids are staying longer and leaving better qualified. Here is a statistic for the Opposition. When we came into Government in 2008, Māori students were leaving with the minimum qualification of the National Certificate of Educational Achievement (NCEA) level 2 at a rate of 44 percent. That is what the Opposition hang its hats on as being the quality of commitment it made to education. Less than half of all Māori students were leaving with our minimum qualification. Pasifika students were doing slightly better at 51 percent. How the Opposition can sit there and say what a proud record it has in education is again disputed by the facts. Under this Government we have had, on average, a 20 percent lift by both those populations. That is great credit to those students; to their families, whānau, and aiga; to the New Zealand education system; and to the relentlessness of this Government, which understands that a quality education just gives young people more choices than they would otherwise have. So we now have Māori achievement at over 63 percent. That is much better but not good enough and we are focused on lifting it even further. That is ambition. Pasifika have responded extremely well to the initiatives that we have embraced together with churches, with community groups, and with sports clubs. It is now up at 72 percent and climbing under this Government. And so the Opposition does need to take note that this is occurring throughout the system and that means that more young people are able to get into trades through the vocational education pathways that we have made available, through working with industries, through working with industry training organisations, and through working with business and employers to understand what skills they want from kids and then delivering those through the education system.

[Continuation line: Again, we are seeing significant uptake]


Again, we are seeing significant uptake by Māori and Pasifika and all New Zealand kids, and that is why we are seeing the lift in the National Certificate of Educational Achievement (NCEA) too. We are seeing them staying at school longer. In fact, 82 percent of our 17-year-olds have stayed at school in 2014. That is great, because we know from the evidence that the longer kids stay at school, the more likely they are able to leave with a great education. We have got higher confidence in education than we have ever had. UMR Research in its Mood of the Nation report, as one indicator, said that since it began this series, education is at the highest it has ever been. That is because we are a transparent Government and we are reporting to it at primary schools through national standards every 6 months, and we have developed a public achievement framework that lets parents know exactly what is happening with their children every year in every school, because the more informed parents are, the more they can demand of us. The more they demand of us, the more we lift our performance, because that is the kind of Government we are. In Rotorua on Wednesday, I was pleased to announce, as I indicated in the Chamber this afternoon, that we now have a further 18 communities of schools, bringing it to a total of 29, which is 85,000 students now involved in these communities, which is where we are investing to lift the quality of teaching and of leadership. We passed legislation this year to establish the Education Council of Aotearoa New Zealand (EDUCANZ), a professional body that will be focused on meeting the needs of the profession and, again, on joining us in this crusade to raise the quality of teaching and leadership. That will, in turn, raise the prospects of a great education for each and every one of our young people. We have invested in a teacher-led innovation fund of $10 million, which was significantly well subscribed, because we do understand that by working together teachers know best what will make a difference. Again, we put our money where our mouths are and supported that.

[Continuation line: We are building a nimble, responsive, and modern 21st century education]


We are building a nimble and responsive and modern 21st century education system. Not only are we investing in better property but we are, as I have indicated, investing in better initiatives that support learning. We are in danger of seeing an even greater outbreak of achievement and is that not great for New Zealand, for our country, for families, and for our participation on the global stage. I want to take the opportunity of acknowledging at this time, having done so, not only the schools, their governors, their boards, the parents, and the kids themselves, who are absolutely at the core of our education system and we completely understand that, but I also want to acknowledge how well agencies within Government are working together. The Ministry of Education, the Education Review Office, the New Zealand Qualifications Authority, the Tertiary Education Commission—all of them understand that there is a pathway from 0 through to university and postgraduate studies where in every year a difference has to be made in order for our young people to attain the kinds of qualifications they are looking for so that they can contribute to a more meaningful life for themselves and for their families. Those agencies understand that they are here to serve the education sector. They are here to ensure that the Better Public Services targets that our Government has committed to can be delivered. It is all about the quality of citizenship. We have just spent the weekend in commemorative services for Anzac. Anzac is a significant, symbolic event commemorating the contribution and sacrifice that citizens have made on behalf of our country. There is no bigger sacrifice than the sacrifice of one’s life and our defence forces have fought in wars and managed peace and conflict all around the world and they have done so from a small nation here in the heart of the Pacific. They have done so because they have understood what the quality of citizenship means at one end of the spectrum. Education is at the other end as well as the housing, social development, health and other issues that will be covered in tonight’s debate.

[Contribution: Ball]

Services for citizens

Speech - DARROCH BALL (NZ First)

DARROCH BALL (NZ First): I am pleased to rise on behalf of New Zealand First to take this 5-minute call on the service to citizens theme. I think that the title “services to citizens” is quite apt, and let us not forget that those who are the most vulnerable citizens in our society and who need the most help and the most service in their lives are our vulnerable children. So I would like to talk about the social development area if I may, but before I do I think timing is everything and just today the Productivity Commission released a draft report on the social services. There is an article on the TV3 news website and the title is “Government social services lacking”. What the article says is that changes are needed to improve the way Government provides social services to the most in need New Zealanders. The chairman, Murray Sherwin, says: “Our current system … is not … designed to deal with the complex problems facing many vulnerable New Zealanders. Services are designed and commissioned in administrative silos, without the full picture of what an individual might need.” What that is saying is that the Government, the way that it deals with social services and the whole process is out of touch. Government members are making their laws and creating policy and legislation in this Chamber and in their caucus but what is not happening is the interaction with the most vulnerable people and how it affects the most vulnerable in our society. That is what the Productivity Commissioner is saying. The commission drafts recommendations and one of the recommendations is to make better use of the data. What we just heard the Minister of Education talking about was Better Public Services targets. Well, I would put the question to the Minister: when was the last time those Better Public Services targets were reviewed. When where they independently audited? I can give you the answer. The answer is never. They have never been audited or independently reviewed so how can the public of New Zealand have any faith or confidence in this Government or its social services when the very targets that the Government creates for its ministries and its services to accomplish are never independently audited. What the Minister also said was that that Government is putting the money where its mouth is in regards to accountability. Well, I challenge the Minister and I challenge the Government to get all of their Better Public Services standards independently audited and give the public of New Zealand the confidence in their statistics. I would like to focus on the social development area, like I said, and, in particular, the Children’s Commissioner and its report, as well as the Social Workers Registration Board report. There are a couple of questions that fall out in regards to the commitment this Government has towards our most vulnerable children. The first one is what its priority is. What priority does it give to the vulnerable children and what priority does it give to the Children’s Commissioner to be able to do his job adequately and properly? The second is whether this Government values the role of the Children’s Commissioner. There are a few things that you can do just off the top of your head to answer that question quite aptly. We have had a few members bills that have come through that have not been passed because of that Government. The first was the food in schools bill and that directly affects our vulnerable children. The second is the paid parental leave bill, which directly affects our vulnerable children. Instead, we have got millions of dollars being spent on a flag referendum. Where are the priorities that this Government is setting for our most vulnerable in our society? New Zealand First, of course, values our Children’s Commissioner but at the moment the office has got limited resources, it has got limited staff, and it has got limited funding. This is all coming out of the annual report from the Children’s Commissioner. But the question is what the expectation is to fulfil one of the most important roles in our society. We have got on the one hand this great expectation from the Government to the Children’s Commissioner to fulfil one of the most important roles in our society but it does not give the resources, the funding, or the staff to be able to do so. All of the available savings that the commissioner can make have been implemented. There is a pattern of deficit and overspending under significant financial restraints, and then you start talking about the cutbacks that the Office of the Children’s Commissioner has had to make. What is its current role? What is the current role of the Office of the Children’s Commissioner? It is to provide a social security blanket.

[Continuation line: Hipkins]

Services for citizens

Speech - CHRIS HIPKINS (Labour—Rimutaka)

CHRIS HIPKINS (Labour—Rimutaka): There was a time when the National Government promised New Zealanders that it was ambitious for New Zealand. Not only have Government members not delivered on their ambition for New Zealand they have made every other New Zealander embarrassed for New Zealand in recent times—embarrassed for New Zealand. There was a time when John Key promised to raise the standards of government, raise the standards of ministerial behaviour. How can he promise that for other Ministers when he cannot even deliver on that himself? There was, of course, a time when the National members promised to get the books back in order. In fact, they declared victory at the last election when they said the books were back in surplus and yet here we are—the seventh Budget in a row and the seventh deficit in a row, another broken promise for this National Government. Not only have they failed to deliver one single surplus, in fact they have clocked up the largest Government debt in New Zealand’s history. Let me repeat that. This Government has clocked up the largest Government debt in New Zealand’s history. So what has that to do with social services? It massively constrains what the Government can do in the social service area when it is making such a shambles of its management of the overall economy. Let us look at some of the promises that National members have made in the social services area. They promised free doctors’ visits for the under-13s. Have they delivered that? No, they have not. They promised better teacher-child ratios in early childhood education for the under-2s. Have they delivered that? No, they have not delivered on that. They promised New Zealanders higher wages at the last election. Have they delivered on that? No, they have not. No, they have not delivered on that promise. In fact, you do not have to look very closely at the National Party manifesto from the 2008 election, the 2011 election, or the 2014 election to find a broken promise. They have literally littered the country with them like confetti because this is a party that says that whatever it thinks it needs to say to get elected with no intention whatsoever of delivering on those promises after the election. National members have become so arrogant that they simply believe that they are born to rule, that they are the natural party of government, and they do not have to earn the trust of New Zealanders. Well, actually they do need to earn the trust of New Zealanders and they are certainly not doing a very good job of that at the moment.

[Continuation line: New Zealanders have had enough of being embarrassed around the world]


New Zealanders have had enough of being embarrassed around the world by this Government, and they have had enough of having broken promises shoved down their throats, and they have had enough of a Government that tells them what they want to hear and then fails to deliver on those things. The Steven Joyce school of politics: ask the voters what they want; give them what they want, or maybe not; and tell them you have given them what they want even if you have not actually given them what they want. He misses out the middle bit. He basically asks them what they want and then tries to tell them that they have already got it. Actually, New Zealanders deserve better from their Government. New Zealanders are willing to work hard to get ahead, and they want a Government that is going to back them, and they do not have that in the current National Government. New Zealand parents want a better future for their kids, and they are willing to work for that, and they are willing to do their part to make sure their kids get the best start in life. And they want a Government that is going to do the same. I listened very carefully to Hekia Parata’s contribution on this debate, when she was talking about education, and I recalled the fact that Hekia Parata’s one big idea, her first big idea and her one big idea, the boldest, most audacious idea that Hekia Parata had to improve educational outcomes for Kiwi kids, was bigger class sizes. That was her first major promise to New Zealand parents and New Zealand kids: more kids in every class in front of every teacher. That was Hekia Parata’s first major promise, and she had to back down because there was such an outcry from parents. Her second major commitment to the educational community was that she was not necessarily going to pay teachers, because she implemented the Novopay payroll system, which meant that some teachers waited for weeks and months to simply get paid what they had earned. Forget about pay rises and raising wages; the teachers around the country, for months and months, just wanted to be paid—because of Hekia Parata’s absolute incompetence. And what was Hekia Parata’s promise to the people of Christchurch? That the Government would stand with them during the tough times. Hekia Parata and John Key’s National Government stood with the people of Christchurch by closing down a big chunk of their schools, at a time when the people of Christchurch had already been clobbered by the Christchurch earthquakes. That is how this Government views education. And, of course, when it comes to education we know that the most significant thing a Government can do is back the teaching profession. Because all of the words of Hekia Parata in this House mean nothing—mean nothing—if she is not out there backing teachers. Because it is not all Hekia Parata’s own work in lifting student achievement; it all comes down to teachers and parents. And what have we seen from this Government? An absolute war on teachers around the country, a Government that tells parents they cannot trust teachers, and a Government that tells the public they cannot trust teachers, so much so that they take complete control of the body that regulates the teaching profession. It would not do it to lawyers. It would not do it to doctors. It would not do it to any other major profession. In fact, the National Party filibustered in Parliament when the Labour Government tried to regulate the real estate profession more heavily, saying that the Government should not do that. It is willing to do that for all those other professions, but when it comes to teachers—oh, no, no, Hekia Parata knows best. She is going to hand-pick the people who are going to regulate the teaching profession, without any democratic input from the profession itself, and that says everything about this Government’s attitude when it comes to education. Because, on the one hand, while it says it wants to raise the standard of teaching, of course we know how hollow that is; because when it comes to charter schools, they do not even have to have registered teachers at all. So much for raising the standards of teaching in New Zealand, as charter schools do not even need to employ registered teachers at all. Of course, the Government is willing to pump millions of dollars more into a handful of charter schools than it would put into any public school in New Zealand, so desperate is it to make its charter school experiment work, when actually any State school in the country could do amazing things with that money if it was given the opportunity to do so. I want to acknowledge the hard work and dedication of the many, many people who make up our education system: the teachers, the support staff, the principals, the boards of trustees, the parents. They are working hard to achieve great things for kids, and they are doing it in spite of a Government that does not back them in doing so. Hekia Parata talked about increases in Māori and Pasifika achievement. So here is a simple question for Hekia Parata: if things are getting so much better for Māori and Pasifika young people, why is it that they are still the most likely to be represented in unemployment statistics? Why is it that, in record levels, they are leaving the education system with whatever level of qualification they have and going on to do nothing? No job, no further training—they are leaving and doing nothing. Why is that? If the Government’s education platform has been so successful, why do we have record levels of people leaving the school system to do absolutely nothing? Because if we are going to judge the success of the Government’s education policy, then surely the outcome that matters is what happens to the kids when they leave. Is that not the point of the education system, to prepare people for the world that they will enter? And yet we have got record levels of kids leaving and going on to do absolutely nothing, because we have got a Government that has failed to create the right environment for jobs, and that has absolutely failed to make sure that there is opportunity for those kids when they leave school. We have had 7 years of National Government, and there is still no light at the end of the tunnel when it comes to those big, important issues, like what kids are doing when they leave school. Because this Government is simply beset by scandal—beset by scandal. It has completely lost track of the things that matter. But I tell you what, I said that there was no light at the end of the tunnel—there is. Because there is an election in 2017, and the Labour Party will be ready. It will be a very clear contest. It will be a very clear contest between a leader in Andrew Little—whose work can be trusted; who New Zealanders know that, if he says he is going to do something about early childhood education, like John Key did, he will actually deliver on it; that if he promises better and better outcomes in education, he will deliver on it—and a leader over there who tells New Zealanders whatever they want with absolutely no intention of delivering on it, who embarrasses New Zealand regularly on the world stage, and who has got more publicity for New Zealand by embarrassing us than he ever got in his role as Minister of Tourism . New Zealanders will know in 2017 that when it comes to making the choice between a Government on this side that will deliver, and a Government on that side that is full of promises with no real delivery—they know exactly what side they will be better off under. Education is so important to New Zealand’s future. Early childhood education, increasing participation, is a great thing. That is very good. But increases in quality participation are important. So why is the Government lowering the standard at the same time as participation is increasing?

[Continuation line: Sam Lotu-Iiga]

Services for citizens

Speech - Hon Peseta SAM LOTU-IIGA (Minister of Corrections)

Hon Peseta SAM LOTU-IIGA (Minister of Corrections): Thank you, Mr Chairperson, and thank you for the opportunity to take this call in these annual review debates. Tonight I am just going to touch on the health portfolio , for which I am the Associate Minister of Health . In the 2013-14 year this Government spent $14.9 billion on health. That is the most of any other time in our history, more than when David Cunliffe was the Minister of Health and more than when Annette King was the Minister of Health . But it is not just about spending money. It is not about spending money, because that side of the House thinks that it is just about spending more and more of taxpayers’ money on Government services. No, this is about results for patients. It is about quality spending. It is about the well-being of New Zealanders, in order to live a better quality of life.

Clare Curran: What? Where? Where?

Hon Peseta SAM LOTU-IIGA: And I am going to get to that, Ms Curran. I will get to it. And it is about some of the promises that we made when we became Government in 2008. What did we say?

Hon Simon Bridges: Tell us.

Hon Peseta SAM LOTU-IIGA: What did we say, Mr Bridges , do you remember? We said more front-line police. We said more nurses on the front line. We said more doctors. We said more front-line services, and that is what we did. So in health, in 2014, we know that there were 1,000 fewer managers than when we took over the Treasury benches. We know that there were over 1,000 more doctors. And we also know that there were 3,000 extra nurses when we took over. You see, it is also about meeting health targets. It is about outcomes. It is not about activity, it is about outcomes. And in terms of immunisation in the 2014 financial year the target for 8-month and year-old children was 90 percent—90 percent for immunisation. And what did we achieve during that financial year—92 percent. We met the targets. On our promises that we made to the people of New Zealand: we achieved those targets. And the Hon Tony Ryall also set a target for an increase in elective surgeries of 4,000 patients per annum—4,000 patients per annum. And what have we achieved in 2014?

Alfred Ngaro: Tell us.

Hon Peseta SAM LOTU-IIGA: I will tell you, Mr Ngaro.

[Continuation line: It is 7,300 in terms of]


It is 7,300 in terms of extra elective surgeries in 2014. What else is it about? It is about bringing our services closer to home—services closer to home. When I was at Counties Manukau District Health Board last week—and I encourage members across the aisle to go and visit the clinics, go and visit the health boards—it had a quit bus. The quit bus is about taking services on smoking cessation out to our communities where they live, where they congregate, and where they work. That is what this Government stands for: services closer to home. It is also about strengthening our health workforce. As the Minister for Pacific Peoples, I am proud of the fact that we have implemented a scholarship scheme, the Aniva Scholarships—over $1 million—in order to promote Pacific people into the health workforce so that they can meaningfully contribute to health services in this country. I am proud of that and I know that the National Party is proud of that. In terms of Pacific health—Ms King is here and she asked about what we were doing for Pacific and Māori health. In terms of rheumatic fever, we know that rheumatic fever has been a problem over the years and it largely affects Māori and Pacific. We have invested $65 million over 6 years to combat rheumatic fever. Guess how much money Ms King put in as the health Minister on this particular issue. Guess how much. A big fat doughnut—a big fat doughnut. She made no spending in this area. Guess what happened. Here are the outcomes. Here are the results. Here are the results. In 2013 there were 194 cases of rheumatic fever. One year later, after applying resources, there were 153 cases that were reported. So that is a drop of 25 percent. That is what a Government that is committed to health services, quality health services, can achieve. It is also about the work of cross agencies. Mr Twyford was there, talking about housing. Guess what. This Government has insulated 300,000 houses and spent $2 billion on accommodation support. That is what makes a difference. So I say to those Labour members “Stand up and stand on your record. Stand on your record.” This Government has done more for Pacifica, more for people in the health services, than any other Government in history.

[continuation line: Kevin Hague]

Services for citizens

Speech - KEVIN HAGUE (Green)

KEVIN HAGUE (Green): It is a shame that this new style of this debate does not permit me to go across multiple portfolios, because I would love to talk about the comments that the Minister in the chair, the Minister for Pacific Peoples, has just made about health. Instead, tonight I am going to talk about housing and pick up the comment made by the Hon Hekia Parata that this debate is about the quality of citizenship New Zealanders can expect under this Government. There is a human right to good housing—a human right. It is a basic human need, and yet across the broad spectrum of housing issues, this Government is failing again and again. Let us see what some of those issues are. Affordability of housing is certainly one of those, particularly in Auckland and Christchurch but not isolated to those communities; rental affordability and also security; and the quality of housing that we have in this country—those are three big issues and I will touch on all three of those. First of all, on affordability, last week we had the Reserve Bank Deputy Governor, Grant Spencer , talking in quite extraordinary language about the need for central government to step up to the plate, saying that the Reserve Bank simply did not have the tools to do the job itself and that only central government could do the necessary things to solve the affordability crisis, particularly in Auckland. He recommended a comprehensive range of measures, with the centrepiece, in fact, being addressing the unequal tax treatment of income that we earn from our jobs compared with the income derived from capital gains. He was advocating a capital gains tax amongst a suite of other measures. What we saw from the Government in response to this extraordinary demand side picture painted by the Reserve Bank was a silver bullet solution that was about supply and how it is going to change the Resource Management Act to make supply a bit easier. That is what the Government had to respond to the Reserve Bank with. The median house price in Auckland is now $720,000—$720,000. The median household income for New Zealanders in Auckland under the age of 35 is under $50,000. Housing for that generation in Auckland will never be affordable, with all of the consequences that that has for retirement savings. It is a fundamental failure of Government policy to ensure housing supply for those New Zealanders. When we come to rentals, I pick up on some of the comments that lead out the select committee’s report on Housing New Zealand’s annual review: “Housing New Zealand Corporation aims for New Zealanders in high need to have access to a Housing New Zealand property for as long as that need continues.” Well, in fact, that is a fundamental shift of policy. The point of State housing in the first place was to ensure that everybody was housed, not just those in high need. That was what Housing New Zealand set out to do. Housing New Zealand did not use to say “When that need is finished, then we no longer provide service to you.” The reality is that Housing New Zealand and the Government used to understand that settling someone’s housing situation might well provide the platform that enabled them to actually take further steps up the ladder, further steps in reducing the chaos in their lives. What happens now is that as soon as that person finds a job, tenancy review comes in and says “Out you go.” They are plunged back into the chaos of homelessness. It is an incoherent policy that maybe has short-term gains for Housing New Zealand but long-term costs to this country. I just want to mention too the shameful use, which is not picked up in the select committee’s review, of 90-day notices by Housing New Zealand. Housing New Zealand decides that it wants to get rid of some tenants. It takes them to the tribunal and loses, and then it responds by—

Hon Anne Tolley: Mr Chair—

The CHAIRPERSON (Hon Chester Borrows): I am sorry; the Ministers’ calls have been used in respect of this. [Interruption] I am sorry. I stand corrected.

[continuation line: Anne Tolley]

Services for citizens

Speech - Hon ANNE TOLLEY (Minister for Social Development)

Hon ANNE TOLLEY (Minister for Social Development): Before I go on to talk about social development, I just want to make the point that I think that although we all agree that there are huge issues in the Auckland housing market, actually, the average house price in Kawerau is $53,000. And the—

Kevin Hague: How many jobs?

Hon ANNE TOLLEY: Well, there we are, you see. I encourage young people to come and move to the Eastern Bay of Plenty or to the East Coast, because housing is great, the weather is great, and life is pretty good. And there are jobs, particularly at this time of the year—seasonal harvest jobs and, of course, the pack houses of the Eastern Bay of Plenty are going full tilt with our very valuable kiwifruit crop. I am very proud to stand here tonight as a Minister in a National Government that has focused on supporting vulnerable New Zealanders through some of the toughest times that this country has ever seen. This Government has made no apologies for the fact that we have not brought in any austerity measures. We have supported vulnerable New Zealanders, vulnerable families, and, in particular, vulnerable children throughout those very difficult times. Even in the last year, the Budget year we are talking about, this Government has made significant moves to make sure that some of the most vulnerable children in our community are supported, such as the passing of the Vulnerable Children Act and the Children’s Action Plan, which listed out a whole raft of initiatives, to be completed by both Government and the NGO sector, focused on making sure that children have the right—and we are talking about human rights—to grow in a home safe from abuse, a home that is warm and well insulated. This Government has a good record on that. As I say, I am very proud to be part of that Government.

[continuation line: In addition to that]


In addition to that we are very focused on breaking that cycle of welfare. We are working extremely hard both with sole parents as a group and with people who are able to and ready to go back into the workforce to make sure that we support them into work in order to break that cycle of dependency. The statistics are really good: about 1,600 are going off welfare and into work. That is a tremendous outcome not only for the Government and the taxpayers of New Zealand but for those families who are able then to stand on their own two feet and be independent. We know that work is important. It is important to people’s health, both physical and mental. It is important to the social fabric of our communities that we have those people working. It is always sad when the Opposition do not support us in the efforts that this Government has made to get families back into work. I think one of the areas that we are most proud of is our work with youth. Over the last 12 months in this Budget year the youth service has seen four out of five young people who have been enrolled in that youth service—that is those youth who are living away from their families and also the ones who we talk about as not in education and training who the youth service picks up—reengaged in some form of education, training, or in-work training. I think that is an outstanding result for young New Zealanders. In fact, that resulted in this financial year we are discussing here an 8 percent drop in the number of those 15-year-olds and 16-year-olds enrolled in youth services who went on to a youth benefit into a full benefit at age 18. If we can stop them going on to a benefit at age 18, we have a very good chance of helping them live, full, successful, and independent lives, raising their families, and becoming full and participating members of our communities. The reason that that is so important is because we have good data now, good data that tells us that a child born into a family that is reliant on a benefit, that cycle of dependency that we talk about, has a 25 percent chance of receiving a Child, Youth and Family notification and a 24 percent chance of substantiated abuse, against the rest of the population who do not rely on a benefit of a 2 percent chance of receiving a notification to Child, Youth and Family.

[Continuation line: Carmel Sepuloni]

Services for citizens

Speech - CARMEL SEPULONI (Labour—Kelston)

CARMEL SEPULONI (Labour—Kelston): The theme of this part of the debate is “services to citizens”, but I think when looking at social development we really need to rename it as “disservice to New Zealand citizens” because that is what this National Government has been doing. I want to start by saying that we agree fundamentally on some things with the National Government. Yes, where possible we think it is good to get people off benefits and into work, but what we have seen from the National Government is this perceived drop-off in benefit numbers. But so many of our social services out there are saying that this is not a drop off, this is a cut off. What is happening is that they are getting denied support at Work and Income and other Government agencies, and then they are getting referred by those Government agencies on to our church-based organisations and our NGOs. Those same church-based organisations and NGOs have not had any increase in funding under that National Government for over 6 years. They are under-resourced and the demand on their services, because that National Government is not helping the most vulnerable people, has skyrocketed through the roof. I just want to say that that Government is responsible for running some of our most charitable people into the ground, taking advantage of some of the goodwill that these people have, the goodwill of these very good organisations that the Government is responsible for taking advantage of. They are working off the smell of an oily rag. They are talking about the fact that they have people coming to them who are being denied Government support and who are on the verge of suicide. I am not making that up. They are telling us, because we have been all around the country, that they have people going to them with high mental health needs who are being denied financial support by the Government and the last ports of call for these people are these church-based organisations and NGOs that do not have the funding to support them. What they do have is the goodwill to do the best that they can. I think that this theme of this part of the debate should be called “National’s disservice to New Zealand citizens” as opposed to “service to citizens”, because that Government is doing nothing. What I am really concerned about are the long-term repercussions of the decisions that that Government is making. They are saying that it is all about getting people out into work. No one will deny that getting people out into work is very important, but what are we risking here? We have got mothers who are being pushed out into work way earlier than what they would like to with kids who actually need their support, with mothers who would like to be able to stay at home with them. But that Government says: “Nah, you had that baby, you get out and work. We do not care who looks after it. We do not care about the quality of early childhood education that they are going to be exposed to. We do not care about the childcare arrangement. We do not care about the danger that that child might be in. You go out, you work that minimum-wage job, you work your butt off, and let us not worry about the safety of you and your family or the long-term well-being of you and your family.” That is the real concern that we have on this side of the Chamber. We are concerned that it is just all a numbers game to the National Government, that it thinks by reducing the number of people accessing welfare that it is winning. But that does not necessarily equate to more people going into work. That does not necessarily equate to a healthier society. We are not seeing a healthier society. If you live in Auckland or even any of the other major cities around New Zealand, you only need to walk out to your nearest shopping centre to see that the levels of homelessness, the levels of people begging on our streets, has increased dramatically under that Government. That is a sign. That is a sign and they shut their eyes at those things because they refuse to admit that they are responsible for the increasing social problems that we are facing as a country. As I said, this whole debate should be themed “the National Government’s disservice to New Zealand citizens”. Recently what infuriates me even more is that that Government, through social development, is dealing with the most cash-strapped New Zealanders who exist and yet we saw when we went through the annual review that in particular areas funding had increased significantly. Yet when asked the ministry could not say where that money had gone to and instead said it was a drop in the bucket. That Minister said that that is a minute amount of money. The $6.9 million that I pointed out, that I was asking questions about, that I was concerned about in terms of increase in funding and spending, was almost the equivalent to the $7.2 million that that Government had to shave off and defer in terms of funding programmes.

[Continuation line: Barbara Stewart]

Services for citizens


BARBARA STEWART (NZ First): I would like to take a brief call on health. New Zealand First has always said that health is a really critical investment and if we ignore it, we ignore it at our peril. We really know that some of the problems that we have got are becoming totally overwhelming and unmanageable. What we are seeing from the Government is an attempt to manage the Budget around the areas that are easy with little regard for some of those areas. We are really concerned at the number of people who are now becoming obese in New Zealand. When we went through the annual reviews, not many district health boards had thought about nor was there any money from the Government for programmes to address obesity. Ignoring the problem is not going to assist it; it is just going to make it bigger and bigger. At this point in time we have got 1.2 million New Zealanders who are classified as obese. That is a significant number. The cost to our health system has increased to $686 million per year every year. Really, if we are going to spend that amount of money, we would believe that it was a health crisis. We know that the Government has decided to adopt an Australian programme to try to tackle the problem of obesity, and invest $1 million per year in 10 communities around the country.

[Continuation line: It is ironic that this Government chose to look overseas]


It is ironic that this Government chose to look overseas for programmes to address obesity when we have got some really good programmes here in New Zealand that have addressed the problem. I must talk about Project Energise, which is in the Waikato. What did it do? It got children out and about exercising, reducing weight, and improved health was a result. Why on earth we would choose to go with a programme where the evidence—and I will quote from Professor Boyd Swinburn from the University of Auckland—“ … seems to show that it will be effective in European kids. But … it needs to work for Māori and Pacific kids … ” Well, guess what? New Zealand is a multiracial society and obesity is an issue that affects everybody, not just Europeans and not just the residents of the 10 lucky areas that have actually been chosen. If nothing is done, this will only continue to increase the problem and the demand for services. We need to look at action and prevention right now and take some really practical steps to ensure that New Zealand families can address the problem themselves. Another absolutely disgraceful case of cost cutting demonstrated by the Government is the under-spend of over $20 million on family-funded care schemes last year. The scheme was originally set up so that family members of disabled people could be compensated for the time and the effort that they put into caring for their loved ones. I can assure you that this is not a little job; it is a very difficult job, and there is little appreciation of it. Basically, that scheme was meant to ease the financial burden that families were facing. They already face a huge financial burden and they are really in need of support. When the scheme was first rolled out we were told here in this Chamber that it would benefit 1,600 New Zealand families, that $23 million would be spent, and that the disabled and care communities had actually been consulted to produce the scheme. When we look at the reality, out of the projected 1,600 families only 187 families have been allowed or are able to take up the opportunity, and just over $2 million has been spent. Here we have a disabled and carers’ community who believe that the scheme is the most flawed. A review is absolutely essential. The money has been put aside; we need to ensure that it gets to the most vulnerable, and these people are. My last area—another area that has been totally overlooked—is that of asthma and respiratory disease. We know that there are over half a million Kiwis suffering from asthma and the costs are estimated to be in the vicinity of $800 million a year.

[Continuation line: Adrian Rurawhe]

Services for citizens

Speech - ADRIAN RURAWHE (Labour—Te Tai Hauāuru)

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Tēnā koe o te Whare o te rā. Tēnā koutou katoa. I get really worried when I hear the Minister for Social Development talking about the house prices in Kawerau, even at $53,000, and seasonal workers. I get worried because since when can a seasonal worker go to Kawerau and earn enough money to get a deposit on a house, even at $53,000? It does not happen. There is a reason why the houses are $53,000 and it is because no one is buying. That is the reason why. That is an example of arrogance. I am hearing in my mind: “Let them eat cake.” That is what I heard when the Minister said that—let them eat cake. That is like saying that you can attain something that is really unattainable. So it is rather annoying that that kind of arrogance is blatantly displayed in this Committee. I will give you another example. Last year in June we were told that the Māori housing fund announced by the Government would be given to Te Pou Matakana because they were working at the grassroots and they are the kind of organisation that can deliver on the Government’s housing policy. So why was it that in December of last year, after the election, and after the Māori Party and the Government went to the electorate and told it that this was how the Government was going to deliver its Māori housing policy to Māori, it all changed. Why? What happened? What happened in December? Well, I will tell you what happened. All those statements around Māori housing were made by the Hon—now Dame—Tariana Turia. If you do not believe me, go and read her statements to the whole world in December last year. She was annoyed with her own party. She told them that they had got it wrong. I am standing up here to say that this is an example of how the Government can change its policy, say one thing in June of last year, and then in December of last year, completely change it. Why is that? Well, I think, No. 1, you no longer have a Minister such as Minister Turia fighting for that policy. But I can tell you also that that policy is, to me, in danger of not being delivered. How many houses have actually been built since then? What has happened since June of last year until now around Māori housing? What has changed? To me, what I can see is that nothing has changed. I look forward to seeing some changes. We need changes. We are talking about the most vulnerable whānau in our community. For the Minister to be standing here saying “Well, you could get a job in Kawerau and that might solve your housing problem.”—well, sorry, but you have lost your way. The Government has lost its way. Not only has the Government lost its way but its support parties have lost their way as well. Last year at the general election I think that the Māori electorates saw the Māori Party had lost its way. That is why Te Tai Tokerau, Tāmaki-Makaurau, Hauraki-Waikato, Te Tai Hauāuru, Ikaroa-Rāwhiti, and Te Tai Tonga got it right. Waiariki sort of got it right in a way too, because if you have a look at the numbers that voted against the incumbent, you will see that they understood that as well. I stand here before you in this Committee saying that we need in 2017 a new Government. We need a good Minister of Housing, who we would have with Phil Twyford. I think that is really important. I want to talk also about this artificial target with regard to housing and all the other policy areas. If you look it up in the dictionary, I will tell you what the synonyms for “artificial” are: manufactured, fabricated, insincere, false, exaggerated, and overdone. That is the Government.

[Continuation line: Simon O’Connor]

Services for citizens

Speech - SIMON O'CONNOR (National—Tāmaki)

SIMON O'CONNOR (National—Tāmaki): What an excellent word the member opposite finished on—“overdone”. I think that fully expresses what we have heard from the Opposition tonight. I want to primarily talk about health, but one thing I want to note, from an earlier tirade against Work and Income, and as someone who worked in the Ministry of Social Development for many years prior in the community, is that I want to say thank you to those people, particularly within the Ministry of Social Development who, day after day, tirelessly go out and serve their people and community. I heard that from the Minister Anne Tolley, but I just wanted to add my own voice to that. So thank you for all that you do to serve other Kiwis in this country. I want to turn to health, though. I think we have some very good news stories there. Although it is not news coming out of the Government, I noticed as I was coming down to the Chamber that there was a breakthrough by the Malaghan Institute, which I think is symbolic of the great work that our Kiwi health providers and scientists are doing. They have actually worked out a way to deal with something like hookworm. I know it is not the most exciting topic but it is something that affects a billion of the poorest people. Here in New Zealand, based out of Wellington, the Malaghan Institute has worked out a way to create an immune response to hookworm. Again, it is a small thing in and of itself, but this has been led by Kiwi scientists and Kiwi medical people, and I think it just provides a good context of how New Zealand leads the way not only in immunological research but also in health.

[Continuation line: We heard from Minister Lotu-Iiga earlier some very good statistics]


We heard from the Minister Lotu-Iiga earlier some very good statistics that have come out of the Ministry of Health in general, and I think that is pretty fantastic. You know, a health budget of $15.6 billion—huge. We now know that 94 percent of 8-month-olds are fully immunised. We are going to reach the target of 95 percent by the end of this year. Just a comparison: when we took over Government in 2007, shamefully, only 67 percent of young people were immunised. But if I can just step away from the broad, big numbers, I just want to reflect some of the good news stories we heard out of the district health boards, in particular, that came before our select committee. Obviously, there are too many district health boards to review every year, so we take a sample, but the Health Committee has been very hard at work and some of the themes within health that came to me were, first and foremost, around financial improvement. No one shies away from the fact that times are always tough and every group wants more money from the Government, but we saw in the district health boards financial improvement. A quick and good example is the likes of the Nelson - Marlborough District Health Board, which has actually moved from a deficit of about $2.9 million 2 years ago to, now, a surplus of $4.4 million—I think a really good example. We had the Northland District Health Board come before us and I think that its good news story, amongst others, was just how it is investing in new infrastructure. And although I am proudly the MP for Tāmaki, I am originally a Whangarei boy. I know the hospital well. The investment it is making there, particularly in maternity wards and services, is really impressive. Turning back to Auckland, although it is not my district health board—I am going to talk about Waitematā—we are hearing about life expectancy. A number of district health boards touched on this and it came up in the reviews—it is increasing for New Zealanders. In Waitematā, as one example, life expectancy is now is 85.1 years. So it is 3 years higher than in most of the rest of the country. In fact, it is even higher for Māori in Waitematā in terms of their growth as well—they are 4 years above the national average. Again, good news. We heard a lot about mental health services. That was a question that was raised quite often. I turn, therefore, to the Capital and Coast District Health Board. We heard from it and from the Hutt Valley and the Wairarapa District Health Boards, all three together. And I note my colleague here, Alistair Scott from that electorate. He would know this, but the district health boards there have launched a new, integrated mental health system. Its message is “New service, no boundaries”, and it is I think a marvellous example of how three district health boards work together. Other things came through around oral health—and I think it is particularly actually through Barbara Stewart from New Zealand First, to give her credit. District health boards, one after the other, know the importance of fluoride. I occasionally get in my electorate people who ignore the science, but the science is clear and the district health boards are clear: fluoride in water makes a difference. It is the same around immunisation: immunise your children. That is a simple key message; there are no excuses or YouTube videos that can impress upon me any difference. And, therefore, to move on to that, look at the Southern District Health Board, whose immunisation rates exceed the national target, and I think that is a wonderful result for Southern District Health Board.

[Continuation line: Reports noted]

[Continuation line: Infrastructure, Mr Chairperson]


Speech - The CHAIRPERSON (Hon Chester Borrows)

The CHAIRPERSON (Hon Chester Borrows): Members, the question now is, That the reports of the committees relevant to infrastructure—Canterbury earthquake recovery, communications, energy, and transport—be noted.


Speech - The CHAIRPERSON (Hon Chester Borrows)

JONATHAN YOUNG (National—New Plymouth): I am very pleased to stand and talk upon such an important series of subjects to the life and the economy of New Zealand as infrastructure. Infrastructure is like the skeletal system. It is like the nervous system. It is like all of the things that enable our country to function and succeed. I want to just talk about ultra-fast broadband to start off with and talk about just how important that is, and certainly how well I think that we have seen progress take place in this area. The OECD said that New Zealand is No. 1—No. 1.

Hon Damien O'Connor: Come down our way and have a look. Open your eyes.

JONATHAN YOUNG: You need a better MP over in your area. That is the problem over there. Figures for fibre growth connections in the OECD released earlier this year show that New Zealand is No. 1, with a connection growth rate of 272 percent, and the average of the 34 developed OECD countries is just 12.4 percent. So the momentum is growing and the fibre is being rolled and we are seeing this affect the way that New Zealanders do education, do health, and do communications. It is incredibly important. We have provided fibre-ready service to over 2,200 schools, including almost 1,000 rural schools, and to 36 hospitals and integrated health services around the country. We have rolled out ultra-fast broadband to more than 570,000 locations nationwide. We have ensured that over 231,000 households and businesses now have access to faster broadband under the Government’s Rural Broadband Initiative —the RVI. All of these things are important. Look, we are in the middle of a technological revolution, not just here but around the world. Ultra-fast broadband is absolutely essential for this nation to be able to go forward. You know, we have seen revolutions happen around the world—the agrarian one, the Industrial Revolution, and we have seen the digital revolution over these last number of decades—change the way that people do business. Every single one of these revolutions of business and of function has this effect of actually taking people out of the rural areas into city areas, and all of that creates, I guess, better mechanisation, better manufacturing, and clearer, more detailed, more high-quality manufacturing. All of these things also come with the social challenges that all of that provides. So it is important for us, alongside rolling out these infrastructures, to ensure that we as an economy and as people who go through our educational system can engage with these sorts of technological advancements. We are making sure that 97.7 percent—that is a high figure—of schools can connect to broadband, which means that nearly 100 percent of students can connect to broadband.

[Continuation line: So they can learn in a modern environment]


So they can learn in a modern environment, they can access information, they can access tuition, they can access all sorts of ways in which they can learn about this world in their home schools and towns. We are providing fibre access to rural public hospitals and integrated family health centres by June next year. We also announced last year that we are investing $100 million to expand the rural broadband programme and added to that $50 million to improve mobile coverage in black spot areas along main highways and popular tourist destinations. That is going to work well when it comes to State Highway 3. I know that you, Mr Chair, and other members who come from the central North Island understand that State Highway 3 has a real necessity for these many black spots in an area of roading that is actually very challenging and has had a number of accidents in it. So all of this is not only just creating better communication but it creates the flow of information and makes travelling our roads safer and enables us to be able to ensure that tourists who come this way can have the adequate communication that they need as well. More towns have been fibred: Whangarei, Te Awamutu, Cambridge, Tokoroa, Hāwera in South Taranaki are fully fibred. In the South Island we have Ōamaru, Blenheim, and Ashburton—thanks to the Government’s ultra-fast broadband network they are fully fibred as well. It is important to understand that this is more than just downloading a movie so people can enjoy that sort of entertainment.

[Continuation line: Ruth Dyson]


Speech - Hon RUTH DYSON (Labour—Port Hills)

Hon RUTH DYSON (Labour—Port Hills): I am sorry that I interrupted the member Jonathan Young in his flow. It was quite an interesting speech, but the bell had rung, so if I wanted to get a call, I had to stand up and take it. I am pleased to be contributing in the debate related to the Canterbury earthquake recovery. I just want to note that a number of my colleagues have been talking about the “third-term-itis” of this Government and about how arrogant it has become, how out of touch it is, and how it is ignoring the big issues for New Zealand. I do not think anybody personifies that more than the Minister for Canterbury Earthquake Recovery. It is a bit of a steep competition in Cabinet, I know, but Minister Brownlee has generated so much spin in Canterbury about the pace of the recovery and the vision for the future that actually people are dizzy. Nobody can see anything happening that is his responsibility—it has all been good private sector investment and risk, but he takes the credit for it. Somebody said the other day that John Key comes down to open an envelope, and somebody else said yes, but he closes the post office on the way out, which is exactly how it feels to us. You cannot, of course, ignore the fact that we had a series of horrific earthquakes and they caused massive amounts of damage, but insurance money and taxpayers’ and ratepayers’ investment into the rebuild does not make an economic recovery. But that is what John Key and the National Party promised the people of New Zealand. They promised an economic recovery. They promised a Budget surplus—not just in passing but throughout the entire 2011 election campaign and then again throughout the entire 2014 election campaign—and that this year, 2015, would be the year of the Budget surplus. That is called another broken promise. Add it to the big long list, actually—a big long list of broken promises. Now the Prime Minister says that is just an artificial target. Well, actually, during the 2011 campaign and the 2014 campaign when some members opposite stood on platforms promising to deliver this, he said it was going to be a Budget surplus, not an artificial target. This time last year this surplus was going to be half a billion dollars—this year’s surplus in the Budget next month. Now it is going to be a half-billion-dollar deficit. Where do those members stand? Where are their integrity, their personal credibility, and their basic honesty with their constituents? How are they going to front up to those people whom they said one thing to and now are delivering another? I guess there will be another round of spin and excuses, but people will see through it. They are not as stupid as John Key and the National Party want to make out. National has borrowed $1 million an hour since it became the Government—$1 million an hour. It is spending $10 million a day in interest payments on its borrowing. How is this good financial management? We have more gross debt as a percentage of the economy than any New Zealand Government since the 1930s. “Bill the borrower” is exactly the hashtag that he deserves. Yes, we have had a recession, yes, we have had a global financial crisis, and yes, we have had a series of earthquakes, but we have also had some disgraceful wastes of taxpayers’ money. It is not Government money. It is not the Government’s generosity that allows it to spend on things that it determines. It is taxpayers’ money. It is our money that we contribute for the public good. The Government gave $5 billion worth of tax cuts to the wealthiest 10 percent of New Zealanders—sorry, not the wealthiest; the highest income earners who declared that for the purposes of paying tax, because that is different from the wealthiest. The top 10 percent of income earners in New Zealand got $5 billion worth of tax cuts in the same Budget that Bill English cut home support for older New Zealanders. What are the priorities of this Government? Through its asset sales programme we have lost nearly $1 billion already in lost dividends, and that loss is rising more every day. We have had corporate bailouts and handouts— Rio Tinto, with no guarantee that it will stay going and, most recently, Skycity. Those corporate bailouts and handouts run into billions of dollars. They have borrowed more—

[Continuation line: Stuart Nash]


Speech - STUART NASH (Labour—Napier)

STUART NASH (Labour—Napier): I must admit it was very rude of me to interrupt the Hon Ruth Dyson because she has a lot to say on this very, very important issue that affects all New Zealanders. But as she did not seek a further call I decided I had better stand up and make one. I would not mind talking for 5 minutes about the electricity sector. We had Transpower come and talk to the Finance and Expenditure Committee. They talked about how its revenues grew by over 9 percent, to a billion dollars, but its profits declined by 18 percent. So it delivered a dividend to the Government of about $151 million. As the Hon Ruth Dyson outlined, just as an aside it is quite interesting to note that due to the sale of State assets over half a billion dollars in dividends that would have come into the Government have actually gone out to the private sector. It would have been nice to have that at a time of fiscal restraint. But anyway, that is where we are at. The other thing that is worth noting is the North Island grid upgrade project that actually exceeded the maximum allowable cost approved by the Electricity Commission by over $17 million. Again, that seems like a bit of a theme. If it is not a database or if it is not a system, then it is an upgrade. There is just so much under-budgeting and cost overruns going on here that it is of great concern. But having said that, I am sure it is of great concern as well to the Minister of Finance. One of the things I would like to talk about, which I know is dear to the Minister’s heart, is that the World Energy Council does something called the Energy Trilemma Index and New Zealand came out at 10th. It sounds pretty good—10th in the world out of over 100 countries. But if you dig a little deeper into these figures what we will see is that the energy equity in our country dropped from 18th to 28th. Energy equity relates to the accessibility and the affordability of the energy supplied for the total population, and this feeds into what is a growing problem in this country and that is fuel poverty. The definition of fuel poverty is the inability to afford to heat your home in the middle of winter. It is a real issue affecting New Zealand at the moment, as poverty rates grow. As Mr Twyford well knows, as our housing spokesperson, and he has told everyone who will listen—and those will not listen, as well; he has still told them—the state of our housing stock at the moment is at a deplorable rate. We need to do something about this, and we really need to address this issue of fuel poverty. Mr Twyford and I, as the housing and energy spokespeople, have been working very closely to come up with solutions to this. But the thing that concerns me Mr Bridges is that you do not seem to care about this. You think it is all OK. We are 10th in the world. But who cares about the general population? You know, if we have slipped to 26th in terms of energy equity, it does not really matter. Well, in fact it really does matter. This cuts to the heart of what we expect of a country. We do not like to think of citizens sitting in cold houses, wrapping themselves up in blankets because they cannot afford power. There is a high degree of fuel poverty in this country. The other thing that happened in that World Energy Council’s Energy Trilemma Index is that our environmental sustainability dropped from 36th to 42nd position. This is of equal concern because we go out to the global market with a brand that is clean, green, and 100 percent pure. But the real concern I have is we are not living this brand. I do not think we have got very long to rectify the situation, until that brand is eroded to such an extent we become just another small economy selling commodities to an overcrowded global market. If we lose that clean, green, 100 percent brand we are in real trouble. An organisation tried to quantify this about 10 years ago. They reckoned it was worth about $30 billion a year to our global economy, and it is being eroded. Megan Woods and I, along with others on our environmental team, are working on solutions that will allow us to live this brand. If we do not live it, if we do not walk the walk, then we are in real trouble as a country. The erosion of our global brand, I think, is a major issue and something that this Government is just absolutely ignoring. We cannot continue to do that, Mr Bridges. Even you, Mr Bridges, must admit that environmental sustainability from 36th down to 42nd is a real concern. The electricity generation sector has a pretty good story to tell. We are at around about 80 percent renewables at the moment, and we are looking to go towards 90 percent. We both agree on that target. It is a very good target. But what we have also got to do is make sure that good, hard-working Kiwis can afford to heat their homes and that we are living the clean, green brand. Thank you very much.

[Continuation line: WAGNER]


Speech - Hon NICKY WAGNER (Minister of Customs)

Hon NICKY WAGNER (Minister of Customs): I am delighted to take this opportunity to have a call on infrastructure, because it is efficient and effective infrastructure that underpins both economic development and the quality of life for all New Zealanders. The Canterbury earthquakes have taught us just how miserable life can be if you have got broken roads, you do not have a reliable power service, the water system is patchy, and you do not have a functioning toilet. The National Government has invested heavily into infrastructure, into the roads of national significance, the roll-out of ultra-fast broadband, new social housing, fabulous new schools, and health facilities, and in Christchurch we have got all this and more. In fact, our city is getting the biggest infrastructure investment New Zealand has ever seen. I want to talk in terms of horizontal infrastructure, as if we knew that term before the earthquake. The Stronger Christchurch Infrastructure Rebuild Team is delivering its rebuild on time, on budget, and to specification. The Christchurch roading and the three water systems, the three waters network—that is, waste water, storm water, and potable water—when complete will be far more resilient and much more cost effective than ever before. Right now at 31 March 2015 across Christchurch 66 percent of the roading and the three waters network is complete, 91 percent of all the work in the central city is complete, and overall 70 percent of the whole Stronger Christchurch Infrastructure repair and rebuild is done. Every Cantabrian will be thrilled when we get that finished, although I think we will feel a bit bereft when we lose all those road cones. The public transport infrastructure will get a boost when the new bus interchange is completed next month. Although the bus network has been running pretty successfully, the new interchange will be more than just a building because it signals a new start to the way that we deliver public transport in our city. It is intricately connected with the accessible city plan, and that is providing a safer, more concise central roading system and better public transport. This is infrastructure for all. The needs of pedestrians, the needs of cyclists, the needs of the fully abled, as well as those who are not, are all accounted for in this plan. The justice and the emergency services precinct in Christchurch is growing by the day, and when it is complete it will have 19 courts, accommodation for police and corrections, and an emergency services hub. That hub is a new way of delivering emergency services. It will include the fire brigade, St John Ambulance, and a combined emergency call centre. It will be state of the art. It is infrastructure that will support not only Christchurch but Canterbury and the rest of the South Island during emergency conditions. Christchurch is already benefiting from its hospital rebuild. Both Burwood and Christchurch hospitals are being rebuilt and that is over $600 million worth of work. It is well under way and it is the biggest hospital project in our country’s history. I went to the opening of the new Child Haematology Oncology Centre, which is fondly known as “CHOC”. It is an absolutely magnificent facility, which will provide a really good homely environment and real support for young people and their families, and it truly will make a difference during these difficult times in their lives. While I am talking about that, I would like to acknowledge the work of the Canterbury District Health Board and everyone who works in those hospitals. The logistics of running a hospital during a rebuild are enormously challenging and they affect everyone who works on the site. I know life is difficult for them, but they are getting through it because they are looking forward to the real benefits of a new modern hospital. Finally, in terms of the central city, 65,000 square metres of new office space has been completed in the central business district and every day new businesses are moving into the centre city. The retail sector is also booming with retail sales 30 percent higher than pre-earthquake and the infrastructure for nightlife—the bars, the restaurants, and the cafes are back. They are back to about 95 percent of pre-earthquake levels. The National Government understands that resilient and modern infrastructure—


Speech - Hon NICKY WAGNER (Minister of Customs)

The CHAIRPERSON (Hon Chester Borrows): I am sorry, members, but the time has come for me to report progress to the House.

Progress reported.

Report adopted.

The House adjourned at 9.56 p.m.