Questions to Ministers
Crimes Amendment Bill (No 2)—Age-related Sexual Conduct
1. Hon TONY RYALL (National—Bay of Plenty) to the
Minister of Justice: Why did he include new section 134A in the Crimes Amendment Bill (No 2) and what process did he use to secure Cabinet or Cabinet committee approval for the introduction of the bill?
Hon PHIL GOFF (Minister of Justice)
: With the new, broader, and tougher law relating to under-age sex the existing statutory defences, such as the girl being older than the boy, are no longer relevant. The bill provides for an amended defence, which requires the defendant not only to have had reasonable grounds to believe that the other person was aged 16 or over but also to take reasonable steps to verify that. The other defence, similarity of age, which is used in jurisdictions overseas, such as Canada, will now not proceed but will be replaced by police using their discretion about whether to prosecute. Normal Cabinet processes were followed.
Hon Tony Ryall: Did the Minister advise his Cabinet colleagues that the bill effectively decriminalises some sexual conduct between persons aged 12 to 16 years; if so, why would they proceed with such a proposal?
Hon PHIL GOFF: I advised my colleagues that I believed firmly that the age of consent should stay at 16. But I also advised them that, given that the penalties are much tougher—for example, the maximum penalty will now be 10 years rather than 7 years; there is a series of tougher penalties—we needed to distinguish between predatory acts and exploitative acts. I therefore advised them that, where two teenagers of roughly the same age were indulging in what is often described as experimental teenage sex, having a similarity-of-age defence, which is used in jurisdictions overseas, such as Canada, would be an appropriate way to go.
Tim Barnett: What are the defences to a charge of consensual sex with someone aged 12 to 16 years, under the current Crimes Act?
Hon PHIL GOFF: Under the current legislation, a boy who is charged has a defence under section 134 if the girl is older than he is. A male also has a defence if he is under the age of 21, can prove consent, and had reasonable cause to believe that the girl was aged 16 years or over. The amendment to this defence will require any persons charged, regardless of age or gender, to show not only that they had reasonable grounds to believe that the other person was aged over 16 years but also that they had actively taken steps to verify that. At the moment women and girls cannot be charged at all. That gender discrepancy is unjustifiable and is removed.
Gerrard Eckhoff: Was the Crimes Amendment Bill (No 2) put in front of the whole Cabinet, the whole Labour caucus, and United Future, and was there no parent in those three groupings who pointed out the folly of this legislation?
Hon PHIL GOFF: Not only were the normal processes followed but in the first reading of this bill in the House it was pointed out to the whole House that the defence of relative age was proposed to the select committee. For 6 months there was no reaction from anyone in the House, notwithstanding the fact that it was explicitly spelt out by David Cunliffe, reading the speech on my behalf.
Murray Smith: Will the Minister accept that the main reason that his irresponsible plan to turn a blind eye to consensual sex between young teenage children is even an issue for Kiwi parents is because the approach to the sex education that his Government gives to primary school children is: “Here are the condoms and here’s how you do it.”; and, in the face of that message, is it any wonder that some of those children want to put the theory into practice and that we have such a high rate of teenage pregnancies?
Mr SPEAKER: I will allow the Minister to respond. Parts of that question were not strictly in order.
Hon PHIL GOFF: No, I do not accept the premise of anything the member just said in that question. What I do say is that every member in this House, I imagine, believes there should be an age of consent of 16—that that is appropriate. Equally, every member in this House is aware that there is a widespread discrepancy between the law and the practice. I imagine that very few members in this House believe that the answer to a problem of, for example, two 15-year-olds having sex is to put them before the court and to put them in jail.
Hon Tony Ryall: If the Minister is so convinced of his policy, why has he dropped it?
Hon PHIL GOFF: I guess I could pick up on a comment made by a very respected journalist in the gallery, Lindsay Perigo, who said that the reaction was an overreaction that was hugely hysterical. The result of that reaction is that the wrong message is portrayed. It is not my intent or the intent of the Government, or, I believe, of the House, to send the message that sex under 16 years is OK. The message we want to
send is that that is illegal, that we will deal harshly with those who indulge in exploitative or predatory actions, but that we will take a different approach to those young people of roughly the same age who are doing now what they have been doing for centuries.
Hon Tony Ryall: Noting the Minister’s admission that the wrong message was portrayed, was it his view that this clause should remain in the bill after those Cabinet discussions; or is it correct that he was required to leave it in by the Prime Minister, who said that these changes are worthy of debate?
Hon PHIL GOFF: As Minister, I of course take responsibility for anything that comes into this House, in a bill. However, I also note the assumption that every member of this House makes—that when a bill is introduced it goes to a select committee where it is examined in detail. I image that the member—although I cannot say because it is under privilege—must have raised this matter in the committee and asked questions about it. I am sure he did, and at length, in the hysterical way he has publicly.
CLAYTON COSGROVE (Labour—Waimakariri) to the
Minister of Finance: What are the major long-term pressures on Government spending?
Hon Dr MICHAEL CULLEN (Minister of Finance)
: The two major long-term pressures here, and in nearly every other developed country, are superannuation and health spending. The former is dealt with by the New Zealand Superannuation Fund, which has recently been praised in an IMF report. The latter remains a long-term issue, which is why continued attention to efficient delivery of services is crucial.
Clayton Cosgrove: Are there any other fiscal pressures in the health area?
Hon Dr MICHAEL CULLEN: Yes. Within the health area, particular pressure is always coming on the cost of pharmaceuticals. The current Pharmac system has saved New Zealand hundreds of millions of dollars. I have been surprised to see people talking about dismantling that system. The only beneficiaries would be the international pharmaceutical companies. The proponents of that change are the National Party’s science spokesperson and health spokesperson.
John Key: Does the Minister think the best way to alleviate pressures on future Government spending is by improving economic growth; if so, why is he delivering this Thursday what will forever be remembered as a welfare Budget, not a growth Budget?
Hon Dr MICHAEL CULLEN: Because that member will not get anything out of the Budget does not make it a welfare Budget; 99.9 percent of New Zealanders are less wealthy than he is.
Gerry Brownlee: I raise a point of order, Mr Speaker. I ask you to reflect on the answer given by the finance Minister. It was, to say the least, flippant. It had a number of aspects that were well outside the Standing Orders. Indeed, a personal jibe at the member who asked that question surely cannot be considered to be the end of an answer. I imagine if there had been a more pointed personal statement, you would have been down on the Minister like a tonne of bricks. One could hardly say that the comment he made was a debatable point. Surely, all members stand here quite equally, and they ask questions on behalf of their constituents. I say the finance Minister was out of order. It may be that he just cannot answer.
Hon Dr MICHAEL CULLEN: Firstly, I was not aware the National Party was ashamed of anybody being wealthy. This is a new perspective on those members’ view. [Interruption]
Mr SPEAKER: I told the member, and I protected the member. While points of order are being heard there will be silence, or else people will be leaving.
Hon Dr MICHAEL CULLEN: Secondly, Mr Speaker, you allowed a question that was itself out of order because it contained imputations, epithets, and other things that were not essential to the question. I assumed that because you had allowed the member some latitude with his question, with its reference to something called a welfare Budget, which does not exist, I was allowed some latitude on the answer.
Mr SPEAKER: Unfortunately, the Minister is wrong there; he should have raised the point about the question being out of order before he answered it. As far as I am concerned, I thought the Minister’s comment was flippant, and I did not actually think it discredited the member. If the Minister wants to add slightly to that answer, I will allow him to do so.
Hon Dr MICHAEL CULLEN: For some months, members opposite have been inviting me to spend some $6 billion or $7 billion of non-existent surplus. Now that they are faced with the prospect of my coming up with a Budget when in fact there is not that amount to spend, they are going to be faced with an answer where the vast bulk of the increased expenditure goes on working families in New Zealand. I invite them to vote against the Budget on Thursday and Friday.
Rt Hon Winston Peters: Why is the Minister taking great pleasure in the fact that many New Zealanders, particularly elderly people, are seriously ill and desirous of having First World drugs, but his Pharmac fails to provide them, as is evidenced by a very sound article on that matter in the
New Zealand Herald last week by a pharmacist?
Hon Dr MICHAEL CULLEN: There will always be arguments around the edges about which drug should be funded by Pharmac and which should not. But if members of this House are to give in to every pressure from every drug company and every group asking for every drug that it wants to be funded, then the health budget will blow out, and that party opposite can give up any thoughts of tax cuts for the indefinite future.
Rod Donald: What assessment, if any, has the Government made of the impacts of climate change—including increased frequency of extreme weather events and increased risk of diseases such as malaria, to name but two—on the Government’s fiscal position the day after tomorrow and in the long term?
Hon Dr MICHAEL CULLEN: We are not expecting any major impact from climate change on the growth of the economy the day after tomorrow. In the longer term there may well be such an impact, which is why it is very important for all members of this House to address the issue of climate change, and not to take their instructions from Washington about that matter.
Hon Richard Prebble: Can the Minister confirm that in the Budget this week the Government could, for just $4 billion, reduce the tax on every working person by $100 a fortnight; and that if Treasury’s estimate of the surplus as $6 billion is correct, there would still be a surplus left, with no change in any Government spending?
Hon Dr MICHAEL CULLEN: I admire the member’s cheek, but he knows very well that the available revenue for increased expenditure is nothing like $4 billion. Actually, the cash surplus for the current year will be very, very small indeed.
John Carter: I raise a point of order, Mr Speaker. I have waited until the end of this question to raise this point of order. During the course of the question a point of order was taken by Mr Brownlee and responded to by the Deputy Prime Minister. His response encouraged—I guess—a whole number of responses, but you have ruled, quite correctly, that there should be silence while points of order are being heard. Can you advise us how we are to respond without taking numerous points of order, when during discussion on a point of order a flippant imputation or remark is made, which is out of order in itself?
Mr SPEAKER: Well, occasionally I make mistakes, and occasionally—[Interruption] I hope that during points of order flippant comments are not made, and if they are, I hope I will jump on them—and perhaps I should have.
Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I was thinking of raising this point at the time, as well. I do not think it is within the Standing Orders or the precedents of this House to allege that some party or members of Parliament are taking their riding instructions from Washington. Of course, Dr Cullen may well have some evidence of that, but in its absence I think he should apologise. If he has evidence, then let us have it tabled.
Hon Dr MICHAEL CULLEN: In that regard, I am aware of a comment from spokespersons opposite that the National Party would not sign up to the Kyoto Protocol unless Australia and the United States did.
Crimes Amendment Bill (No 2)—Age-related Sexual Conduct
Hon TONY RYALL (National—Bay of Plenty) to the
Minister of Justice: Did he explain to his Cabinet or caucus colleagues the new provision in the Crimes Amendment Bill (No 2) that a person accused of sexual conduct with a child under 16 with consent can claim a defence by proving he or she took reasonable steps to find the age of the person concerned, and that he or she believed the child to be of, or over, the age of 16; if so, were any changes made as a result?
Hon PHIL GOFF (Minister of Justice)
: Yes. The existing defence that the defendant believed, on reasonable grounds, that the young person was 16 or over has now been tightened significantly, not only requiring the defendant to prove that there were reasonable grounds for believing it, but that the defendant also took reasonable steps to find out whether the other person was aged 16 or over. That, clearly, is a significantly tougher test. The arbitrary differentiation of people over or under the age of 21 was removed on the advice of Crown Law that it was contrary to the New Zealand Bill of Rights Act.
Hon Tony Ryall: Did he tell his Cabinet or caucus colleagues that this bill allows a middle-aged man to have sex with a 14-year-old, provided he saw her false ID and conveniently believed she was 16, and does he stand by this clause of his bill?
Hon PHIL GOFF: No, the bill does not do that, at all. The member will have many years to reflect on his allegation, because he will find no evidence in court cases over a long period of time that that happens. There is a twofold test. The person must, firstly, have reasonable grounds to believe that the other individual was 16 or over. Secondly, the defendant must now demonstrate that he or she took steps to verify that. Let me suggest to the member that the older the other party is, the greater the age differentiation and, clearly, the more sceptical the court will be of that person’s state of mind.
Larry Baldock: Does the same principle of defence apply in relation to the Prostitution Reform Act that was passed in 2003; if so, what reasonable steps does the Minister think that a client of a prostitute of approximately 18 years of age should take, and does he not think that it would have been a good idea to require prostitutes to carry proof of age, and for the police to be allowed to ask prostitutes for proof of age; if so, why—
Mr SPEAKER: The member has had three questions already, and that is enough. Two of them can be answered.
Hon PHIL GOFF: The Prostitution Reform Act sets a higher age of consent for anybody working as a prostitute, and it also criminalises the client in a way that was not done under the previous legislation. Both of those changes are important, and, again, I think the court can be relied upon to ensure that if a person tries to use as a defence that
he or she thought the person was over 18, that by itself will not cut it. The defendant will have to demonstrate clear grounds for reasonably believing that to be the case.
Hon Tony Ryall: What signal does the Minister think this Government has sent to young people, their families, and the wider community by introducing this legislation, which includes under-age sex provisions?
Hon PHIL GOFF: The signal that this legislation and companion legislation are sending is very clear indeed. The Crimes Amendment Bill (No 2) and the tougher penalties it brings in, including the removal of the defence that if one is a woman, one cannot be responsible for having sexual relations with an under-age boy, together with companion legislation that increases penalties for the crime of child pornography tenfold, and supervision of 10 years for any paedophile after that person has completed the sentence, gives this country the toughest legislation on predatory behaviour against young people anywhere in the world.
Russell Fairbrother: How does the proposed amendment toughen the law to prevent the defendant simply saying that he or she thought the other person was over 16?
Hon PHIL GOFF: Under the existing law, that provision required a reasonable belief, so it set a significant standard that the defendant had to prove. What the new legislation does is not only show reasonable cause to believe, but it also points out that the defendant has to show the steps he has taken—or she, for that matter—to verify the fact that the person was over 16. That will be quite a tough test to meet, and is why I say that this legislation is the toughest legislation this country has seen, and is as tough as anything in the Western World. [Interruption]
Mr SPEAKER: The member interjected the whole time that question was being answered. [Interruption] But they were not, and most of them were in the second person.
Heather Roy: Given that the Minister did not answer a previous supplementary question, I ask again: what sort of message has he already sent to young people about pre-adolescent and adolescent sex, and if on reflection he thinks he was wrong, what sort of message would he send if he took responsibility for his decision and resigned?
Hon PHIL GOFF: The message is very clear in this legislation. My worry was not the message that I was sending—it was the message that those deliberately misconstruing this legislation were sending. That is why it became necessary to make the change that I have recommended to the select committee. I think that as people look at this legislation, they will understand that it provides significantly greater protection for under-16-year-olds, as do the other two bills that are currently before a select committee.
Hon Tony Ryall: Who is right—the Minister or every newspaper editorial in the country today?
Hon PHIL GOFF: Some of the newspaper editorial comment is quite correct. I have quoted Lindsay Perigo already. I could also quote Russell Brown, who talked about the bill removing a shocking loophole whereby some offenders could escape prosecution if the age of the child could not be established, talked about removing an unjustifiable gender discrepancy, and talked about this whole affair being a beat-up by politicians and others with vested interests for their own political ends, rather than for the good of the country.
Quota Management System—Confidence
JEANETTE FITZSIMONS (Co-Leader—Green) to the
Minister of Fisheries: Does he have confidence in the quota management system to protect New Zealand’s fisheries from overfishing; if so, why?
Hon DAVID BENSON-POPE (Minister of Fisheries)
: Yes, and I can do no better than to agree with the member herself, when she said in November 2002 that the quota management system “has improved management of those stocks for which more reliable data exists. It is a good framework for safeguarding individual stocks provided we add other controls to it,”.
Jeanette Fitzsimons: Was data from the quota management system the information used by the Marine Stewardship Council in 2001 when it gave its sustainable management accreditation to the New Zealand hoki fishery; if so, how is it that 3 years later the western hoki stock is found to be 20 percent or less of its original biomass?
Hon DAVID BENSON-POPE: That ongoing stock assessment is partly through a public process, and in due course will inform the advice that I take from the ministry, which will lead to my assessment of further stock.
Janet Mackey: What evidence can the Minister give of the success of New Zealand’s fisheries management system?
Hon DAVID BENSON-POPE: New Zealand’s fisheries are profitable and efficient, do not receive Government subsidies, have a high degree of certainty about future supply—due to the establishment of property rights, which allows long-term planning—and are managed so that the needs of commercial, customary, and recreational users are all considered.
Phil Heatley: Why is the Minister looking to extend the quota management system outside New Zealand waters to cover tuna and other migratory fish, when his ministry is already struggling with hoki, snapper, scampi, aquaculture, endless court battles, and poachers inside New Zealand waters?
Hon DAVID BENSON-POPE: Members and most New Zealanders would agree on the desirability of extending the quota management system to as many species as possible, as soon as possible.
Rt Hon Winston Peters: Why is the Minister failing to acknowledge the importance of the kahawai fishery to the people of New Zealand; and is it not a fact that by allowing kahawai to be part of the quota management system he will fail to manage that fishery in the interests of all New Zealanders, and, in particular, of recreational fishers?
Hon DAVID BENSON-POPE: I suggest to the member that he await the decision on the kahawai quota and its introduction to the quota management system in about 6 weeks’ time.
Jeanette Fitzsimons: Is the western hoki fishery not following the same path as that of the orange roughy fishery—also under the quota management system—which was closed a few years ago because it had declined to 3 percent of its original biomass?
Hon DAVID BENSON-POPE: I can assure the member that the sustainability of the fishery will be my prime consideration in the allocation of quota.
Jeanette Fitzsimons: Has anything changed in the 5 years since the Auditor-General wrote in his report to Parliament: “We conclude, therefore, that the Ministry manages most fish stocks without being sure if this management is sustainable.”; if not, are not all the fish stocks the Minister is currently putting into the quota management system also at risk?
Hon DAVID BENSON-POPE: In answer to the first question, yes, the amount of data available is constantly increasing. In answer to the second question, no.
Jeanette Fitzsimons: What will he do to restore the reputation of New Zealand fish exports in Europe, which actively seeks sustainably managed fish and which will now be aware that the certified sustainable hoki fishery kills hundreds of fur seals and endangered albatrosses and petrels every year?
Hon DAVID BENSON-POPE: I am somewhat disappointed and surprised that the questioner is impugning New Zealand's reputation overseas, and I hope that her interest
in sustainable fishery will be evidenced by the Green Party supporting the introduction of scampi into the quota management system as soon as possible.
Community Education—Inquiry into Spending
Hon BILL ENGLISH (National—Clutha-Southland) to the
Associate Minister of Education (Tertiary Education): Would he regard evidence of conflicts of interest and potentially fraudulent enrolments as sufficient cause for an independent inquiry into the spending of $105 million on community education last year?
Hon STEVE MAHAREY (Associate Minister of Education (Tertiary Education))
: I would regard such evidence as a reason to investigate the practices of the provider at which they had occurred. For instance, in response to allegation about enrolment practices at the Eastern Institute of Technology, the Tertiary Education Commission investigated. It found no evidence of inappropriate enrolment practices. If the member has evidence of conflicts of interest and potentially fraudulent enrolments at any tertiary education provider, then the appropriate course of action would be for him to provide that either to me immediately or to the commission.
Hon Bill English: Has the Minister seen material from students who enrolled in
Tairāwhiti Polytechnic’s traditional
Māori healing technique course that states: “We were then asked to complete application forms for te reo
Māori. Those present were told that this helped with the funding. We were told it was up to us if we did the free te reo course or not. I received no further communication regarding the te reo
Māori course—no booklets or anything else.”, and the additional information from the same student stating that in her calculation, up to 60 people on the traditional
Māori healing technique course were enrolled in the te reo
Māori course but none of them did it?
Hon STEVE MAHAREY: As I say, I would regard any evidence of anything that was a conflict of interest or potentially fraudulent at any of our tertiary education providers as grounds for swift investigation. If the member wants to give me any additional information he has, we will certainly follow it up. [Interruption] The member intervenes yet again. He should keep his mouth shut. I say to the member opposite that he should give me the evidence.
Dr Ashraf Choudhary: How is the Government’s management of community education changing?
Hon STEVE MAHAREY: Community education, of course, has been around since the beginning of our education system, and it plays a very important role within the overall system. Enrolments in the area grew to a proportion last year that I felt deserved attention. Community education enrolments will now be capped. Next year’s funding will be based upon profiles, which will then allow us to ensure we are investing in a way that is both appropriate in size and in terms of the kinds of courses that are operated. The point I have made repeatedly is that these things are only possible under the more strategic approach taken by this Government. It would not have been appropriate—or have been able to be done—under the previous Government.
Jim Peters: Bearing in mind that community education should be learning opportunities available to all, why did the Minister in the past not expect to receive annual evaluation reports with cumulative data on specified standards for appropriate community education programmes?
Hon STEVE MAHAREY: The rules, or guidelines, as they are called, around community education were rewritten in 1999. They are being rewritten as we speak, because we want to have new guidelines in the profiles that will be filled out by all institutions for their funding in the coming year. But I say to the member that one of the things I would encourage people not to force on community educators, which always provide very short courses for people who are either topping up knowledge or beginning
their educational career, is the kinds of rules that we do in formal courses. The costs would rise, and the barriers to people doing these courses would rise. That would be inappropriate and would, of course, be a break with the kind of education that all members in this House have supported for a very long time.
Deborah Coddington: How can this House take his words seriously about getting tough on fraudulent enrolments, and conflict of interest, when his Government has been provided with evidence of bounty hunters getting $1,000 to enrol pre-schoolers at their own institutions, and falsely enrol them at things like
wāhine coffee mornings, when no early childhood students were in existence?
Hon STEVE MAHAREY: The question is to the Associate Minister of Education (Tertiary Education), which of course, is my particular role. I am sure, though, that the Minister of Education, who is responsible for pre-school education, would welcome any more evidence that that member might have, and will act on it immediately.
Bernie Ogilvy: Given the probable rort referred to, will he consider the reallocation of the tertiary vote into the capped private training establishments and/or student allowances, both of those examples being in desperate need of help and contributing greatly to our society?
Hon STEVE MAHAREY: The member will know that private training educators work within a capped fund. A proportion of that fund is what is called strategic priorities. That fund was not fully expended by private training establishments last year. They are not desperate for funding. They have more than they are using.
Hon Bill English: Is the Minister aware that his own rules for funding in section 188.8.131.52 of the
Interim Guide to Tertiary Funding states that no money will be used for enrolment inducements, despite the fact that Christchurch Polytechnic, on its own admission, spent $80,000 on enrolment inducements, including the case of one gentleman who said on radio yesterday that he enrolled 20 times and claimed $400 in book vouchers?
Hon STEVE MAHAREY: Yes, I am aware of the guidelines around enrolment inducements. The member will know that on a number of occasions, claims have been made that have been investigated, and proven, like at the Eastern Institute of Technology, to be false. However, where they are proven to be true, those guidelines will stand, and we will enforce them.
Rt Hon Winston Peters: In terms of complaint, why has the Minister not already taken those matters to the Serious Fraud Office, when they are at his door—because, seriously, a fraud has been committed, and the value is within the ambit of the Serious Fraud Office’s jurisdiction?
Hon STEVE MAHAREY: If a fraud were proven, or clearly one that needed to be prosecuted, we would do exactly that.
Rt Hon Winston Peters: When?
Hon STEVE MAHAREY: I would do it immediately if I had the evidence of fraud, I can guarantee the member that. On a number of occasions, questions have been raised, for example, about the Christchurch Polytechnic. The Tertiary Advisory Monitoring Unit is well familiar with what has been going on there. The Tertiary Education Commission is currently working with the Christchurch Polytechnic to go through not just these courses but every single course in that organisation to make sure that it fully understands, and applies, the rules.
Hon Bill English: Why is it that in the face of mounting evidence, so far from only two polytechnics, of conflict of interest, breaking of funding rules, and potentially fraudulent enrolments, the Minister insists on sending the culprits—that is, the Tertiary Education Commission—to investigate the problem, and why does he not get someone
independent to do that, who was not involved in making the payments, claims, and endorsing the conflicts of interest?
Hon STEVE MAHAREY: Unlike the member, whose job in Opposition is to try to create heat where it does not exist, I want evidence. I am not about to begin any kind of stupid witch-hunt on the basis of Mr English’s sayings here in the House. What I am guaranteeing is that, unlike the previous Government, we are controlling spending and putting funding into strategic areas. Unlike the previous Government, we have the ability to investigate those issues. The previous Government never could, because it followed a model that would not have allowed it to do so.
Telecommunications—Unbundling of Local Loop
Rt Hon WINSTON PETERS (Leader—NZ First) to the
Minister of Communications: Why is New Zealand the only OECD nation that has decided not to unbundle its local loop, given that Mexico, which was the second to last nation not to, has begun down this path?
Hon PAUL SWAIN (Minister of Communications)
: Because the Telecommunications Commissioner recommended bit stream unbundling, and not local loop unbundling.
Rt Hon Winston Peters: Did that commission’s recommendation and final decision come after the
Woosh Wireless organisation and Telecom met in July of last year; if that is the case, what is going on, and what is the result of such collusion?
Hon PAUL SWAIN: As the member knows—and I presume he has read the report—the report was presented in December 2003. I am not sure what the member is on about as far as the second part of his question is concerned.
Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am asking the Minister whether the commission’s recommendation and decision was arrived at after the meeting between
Woosh Wireless and Telecom last year, and well before the commission made its decision. If it was, then there is a matter of collusion.
Mr SPEAKER: That is another question that the member has asked. The member has used his question up, but the Minister can answer.
Hon PAUL SWAIN: I know that the commissioner’s report was tabled on 21 December 2003. I do not know about the meeting the member is referring to.
Darren Hughes: What options did the Minister have once he received the Telecommunications Commissioner’s report, and why did he choose to accept the commissioner’s recommendations in full?
Hon PAUL SWAIN: Under the Telecommunications Act there are only three options: to accept or reject the recommendations, or to request the commission to reconsider various aspects of its recommendations. I chose to accept the recommendations, because I considered that would be the quickest way to get an increase in the uptake of broadband in New Zealand. I consider that that is in the best interests of New Zealand consumers.
Sue Kedgley: Why is the Minister claiming that there will be improved access, and competition for wholesale broadband and the quickest way of getting uptake, etc. as a result of last week’s decision, when he is well aware that Telecom’s wholesale broadband services will only be available at such a low speed that it is not even fast enough for home businesses, so it is hardly broadband at all?
Hon PAUL SWAIN: The answer to the first part of the question is primarily because the commission spent well over 12 months looking at all those matters, and came back with its recommendations. The second part of the question, though, is a good one. It is what I consider to be a minimum speed. Telecom has already made some
announcements about improving that speed by March 2005, and we will hold Telecom to that.
Rt Hon Winston Peters: Can the Minister possibly explain to the country how a largely foreign-owned Telecom monopoly of the local loop network in any way enhances competition, delivers the lowest prices, and benefits consumers and business people—or is it simply a matter of political patronage—and what has Telecom done to deserve that monopoly being continued?
Hon PAUL SWAIN: The Telecommunications Commissioner, once again, looked at that quite considerably, and said that the best uptake to try to get broadband was to concentrate on the 21st century problem, which is bit stream unbundling, rather than on last century’s problem. The member will know that unbundling the local loop is no panacea or silver bullet, and has low take-up around the world. As far as the second part of the question is concerned, I think the answers are no and nothing.
Rt Hon Winston Peters: I seek leave to table the fact that the 1993 election is just one example of a situation where Telecom gave the National Party and the Labour Party free communications services.
Auckland Transport Package—Proposals
LYNNE PILLAY (Labour—Waitakere) to the
Minister of Transport: What reports, if any, has he received on proposals for Auckland transport?
Hon PETE HODGSON (Minister of Transport)
: I have received many reports on the Government’s commitment of an extra $1.6 billion for Auckland land transport, and some about the leader of the National Party promising to complete Auckland’s roading network within 10 years without any commitment to new funding, at all.
Lynne Pillay: What funding options are available for meeting Auckland’s transport needs?
Hon PETE HODGSON: According to some reports, petrol taxes are unnecessary but also essential, rates funding is awful but also necessary, road tolls will help pay for new roads but will not raise new money, and, incidentally, public transport is good but it would not do to fund it. These reports emanate from a speech made by the Leader of the Opposition and from his subsequent bewildered interviews on the matter.
Hon Maurice Williamson: Do any of the reports the Minster has received show that spending on new roads in Auckland, in real terms, has been less for every year of this Government than for the last year of the National Government, and do those reports also show that Transfund finished this year with a $250 million surplus, while six major projects are sitting dormant waiting to commence?
Hon PETE HODGSON: On the contrary, the advice I have in respect of local roads and State highway construction, or indeed for total expenditure in Auckland from the Government, would show that in the last 3 years of the National Government less than $200 million per annum was spent. In the last 3 years of this Government, more than $300 million was spent. So in the speech given on Friday morning, what we were dealing with was a bit of selective reporting of statistics. However, by the afternoon—remembering that on Friday morning the speech was given—the following statement was made, and I am quoting from Dr Brash on Newstalk ZB at 12.03 pm: “I’m talking of reducing property taxes and reducing excise taxes. I’m not talking to raise additional money from the tolls.” That is the quote. It sounds like “funny money” to me, and I would say that back in 1980 he got closer to Social Credit than we gave him credit for.
Rt Hon Winston Peters: Does the Minister remember from that speech the claim made by Dr Brash that it was the National Party in 1998 that brought about the 2.1c
consolidated account transfer—having, of course, abolished it in the 1999 Budget, which is all the evidence I need of that fact; and does he believe the promise to “sort out the Resource Management Act within 3 months”, or is that a bit like the “nuclear ships by lunchtime” comment?
Mr SPEAKER: The Minister has no responsibility for the National Party, in the first part of the question. He can answer the second part of the question.
Hon PETE HODGSON: I am advised that in the speech he said that in 1998 a National Government moved 2.1c. If the leader of New Zealand First is telling this House that that was as a result of New Zealand First’s influence, then I am obliged, of course, to believe him, and therefore the other fellow might be talking the porkies the member talked about in his press statement of that day.
Mr SPEAKER: The member knows he cannot say that. He will stand, withdraw, and apologise.
Hon PETE HODGSON: I withdraw and apologise. I seek leave to table a press statement dated 21 May, from Peter Brown, headed: “Brash telling porkies”.
Mr SPEAKER: No, the member cannot read that into the record. He can ask for a statement made by Peter Brown to be tabled, and that is it.
Hon PETE HODGSON: I am just trying to describe it.
Mr SPEAKER: No—please be seated.
Hon PETE HODGSON: I seek leave accordingly.
- Document, by leave, laid on the Table of the House.
John Carter: I seek leave for the Minister to come down later and correct the answers he has just given, because they are bound to be incorrect.
Mr SPEAKER: The member knows he cannot seek leave on behalf of anybody else, and he has been here a very long time.
Jeanette Fitzsimons: Does the Minister agree that the proposal to relieve Auckland’s transport congestion by building “only roads” is a bit like a proposal to cure obesity only by letting one’s belt out, and has he seen any reports regarding the Kyoto Protocol coming into force that suggests a sprawling car-dependent future for Auckland is a poor economic option?
Hon PETE HODGSON: In respect of the second part of the member’s question, the position held by the National Party on the Kyoto Protocol was the subject of some debate earlier in question time. In respect of the first part of the question, however, I can do no better than to quote from a journalist in yesterday’s
New Zealand Herald,who said: “Dr Brash is one of those relics from the last century who wants to tarmac the whole isthmus.”
Deborah Coddington: Is it not correct that the Labour Government is not at all concerned about fixing Auckland’s transport woes, demonstrated by the fact that the member from Dunedin has the transport portfolio, not a member from Auckland; if not, why not?
Hon PETE HODGSON: No.
Hon Maurice Williamson: I seek leave to table a chart of the spending on new roads in Auckland, showing that the spending in the last 4 years has been less than the last year of the National Government.
- Document, by leave, laid on the Table of the House.
Rt Hon Winston Peters: I seek leave to table the 1998 Budget, which shows the 2.1c in, and the 1999 Budget, which shows the 2.1c out, and we will see who is telling porkies around here.
Hon PETE HODGSON: I seek leave to table the national land transport programme expenditure in Auckland from years 1996 through 2004, which shows that the graph Mr Williamson tabled is an error.
- Document, by leave, laid on the Table of the House.
Hon Maurice Williamson: I raise a point of order, Mr Speaker. That cannot be allowed to stand. The graph uses the Minister’s own numbers. If he says it is an error, that is not acceptable in this House. That is a graph of his numbers from answers to questions for written answer. In that case, he has misled the House, if there is an error in those numbers.
Mr SPEAKER: I just leave the Minister and the member to reflect. Two documents have been tabled. If there is any mistake, then the appropriate action will have to be taken.
Larry Baldock: I seek leave to table the press release from United Future that shows that the entire funding for the Auckland roading package comes from a reduction in fuel excise diversion negotiated by United Future.
Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is.
RON MARK (NZ First) to the
Minister of Corrections: Is he satisfied with the outcome of New Zealand Parole Board decisions?
Hon PAUL SWAIN (Minister of Corrections)
: Generally, yes.
Ron Mark: How can the Minister be satisfied with the Parole Board’s decision to grant back-end home detention to Gregory Hunt, a violent offender convicted of assaulting two taxi drivers, one of whom still has fragments of a four-pronged fork embedded in his skull after being repeatedly stabbed by Mr Hunt, and what sort of a message is that Parole Board outcome sending to the community?
Hon PAUL SWAIN: The answer to the primary question, of course, was generally, yes. But as the member knows, the Parole Board is a statutory independent body, which has existed in some form or another for many, many years. It considers many thousands of applications for parole and home detention each year that cause very little or no public comment. However, there are times when the public finds it difficult to understand the reasons for the decisions, and this is one of those times. I can only presume that the Parole Board based its decision about Mr Hunt on information that neither that member nor I am privy to. I expect the board to be accountable for its decisions.
Martin Gallagher: What has the Minister done to ensure that the New Zealand Parole Board’s actions reflect the intent of the sentencing and parole legislation?
Hon PAUL SWAIN: At the New Zealand Parole Board conference in March, I stressed the importance of the paramount objective of public safety when considering applications under the Parole Act and emphasised the need for accountability and transparency of decisions. The Government has been very clear about its expectations in this regard.
Hon Tony Ryall: What is wrong with the system when a judge says that this man is too dangerous for bail, but, according to Government policy, he is not too dangerous for home detention?
Hon PAUL SWAIN: Government policy is quite clear that the safety of the public is paramount, and is the major thing the Parole Board has to decide. It is an independent body.
Marc Alexander: Does the Minister stand by his statement at this year’s Parole Board conference that for the sake of accountability the board needs to be more transparent in its decisions; if so, is not true accountability available only if Parole Board decisions can be appealed by the victims, and not only by the offenders?
Hon PAUL SWAIN: Yes and no.
Ron Mark: Does the Minister believe that a person who repeatedly stabbed a taxi driver in the head, shoulder, back, hand, and arm—a man who had to be restrained by no fewer than eight members of the public before police arrived at the scene of the crime—fits the description of a person of zero or low risk to public safety; if not, how can he have confidence in a Parole Board that is supposed to have public safety as its paramount concern when making decisions to allow violent offenders back into the community, but still chooses to do so?
Hon PAUL SWAIN: I can only assume that the Parole Board had evidence or information available to it that the member and I are not privy to, and that is why it made that decision.
Marc Alexander: Is the Minister satisfied with the outcome of Parole Board decisions, when a quarter of those on home detention as at 1 April were violent offenders convicted of crimes such as sexual assault with a minor, wounding with intent, and grievous bodily harm, and how does this square with its stated aim to ensure that those people no longer present a danger to the public?
Hon PAUL SWAIN: As I said at the start, generally yes. I can tell the member that the recidivism rate for those released on home detention at the back end of their sentence is much better than for those who serve the end of their time and are released straight into the community.
Ron Mark: Does the Minister recall this statement by his predecessor as Minister of Corrections, Matt Robson: “Let me make it clear that replacing prison terms for violent offenders with home detention is not on the agenda of this Alliance-Labour Government.”, and what was the reason for this policy now becoming part of the agenda during the Progressive Coalition - Labour - United Future Government?
Hon PAUL SWAIN: No, and he should take it up with the former Minister.
MARK PECK (Labour—Invercargill) to the
Minister of Statistics: What action is the Government taking to strengthen the system of official statistics?
Hon JOHN TAMIHERE (Minister of Statistics)
: Last week we announced a Budget 2004 investment of nearly $70 million over 4 years to strengthen New Zealand’s official statistics. This will lead to more accurate targeting of Government spending and better information for New Zealanders to plan their business decisions. Just to use two particular parts of the package by way of example, there is $14 million to strengthen the official statistical system by improving coordination, a data archive, and a search engine for easier access and use.
Simon Power: At least sound excited.
Hon JOHN TAMIHERE: Another one is $10.5 million—and this is very exciting for members opposite—to develop a linked Employer-Employee Data system to facilitate research into the dynamics of the labour market and, more particularly, influencing business dynamics and productivity.
Mark Peck: Why is it necessary to have high-quality data about the economy and society?
Hon JOHN TAMIHERE: One important role that official statistics play is providing the basis for robust international comparisons, such as that recently carried out by the International Monetary Fund. For those who are not familiar—particularly those opposite—with the
IMF’s report, it found that the New Zealand economy was growing strongly, the fiscal policy remains strong, the stance on fiscal policy is fundamentally sound, and that the Government’s efforts in welfare and education reform should contribute to enhancing the economy.
Rt Hon Winston Peters: Mr Speaker—
Mr SPEAKER: No, the member has used up his supplementary questions; New Zealand First has used up its supplementary questions.
Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I think I know how you arrived at that summation, but the fact is when the Minister said he did not understand what my question was, I asked whether I could repeat it. I think you have then counted it as two. I am sure my colleagues over here will say that. I am not challenging your—
Mr SPEAKER: No, it was another question slightly different from the first. I will take the leave of the House as to whether the member may have a supplementary question. Is there any objection? There is not.
Rt Hon Winston Peters: I thank the House for that generosity, and yourself too. I ask the Minister: how can we have any confidence in his Department of Statistics when, for example, in one area such as immigration, we have a 20,000 overstayer figure, which is purely a guesstimate, and which First World country would accept that sort of statistic being kept by a Government?
Hon JOHN TAMIHERE: The member will be pleased that a significant investment has been made, and work is under way to ensure the sanctity of the information provided.
Hon RICHARD PREBBLE (Leader—ACT) to the
Minister of Finance: Does he stand by his reported comments in the
Dominion Post on Friday, 21 May ruling out cuts to the top rate of personal tax rates;if so, why is he ignoring advice from the Treasury report,
New Zealand Economic Growth:An Analysis of Performance and Policy,
April 2004, that found “A foundational principle for a taxation system that seeks to support economic growth is that it should be ‘broad based - low rate’ ”?
Hon Dr MICHAEL CULLEN (Minister of Finance)
: Yes, New Zealand’s tax system is broad based—low rate by international comparison, as John
Shewan pointed out at the weekend. The Treasury report, in my view, is overly optimistic about the impact of tax rates on sustainable economic growth.
Hon Richard Prebble: How does the Minister square his claim that New Zealand already has a broad based - low rate with the same report’s statement on page 53 that “moving to a flat tax rate for both personal and corporate tax rates is likely to have the greatest impact on economic growth, as it conforms most closely to the BBLR principle.”?
Hon Dr MICHAEL CULLEN: I notice that even the Treasury report admitted there was little empirical evidence for this assertion; it was mainly based on theory. If one looks around the world, the United States, for example, has a much more steeply progressive tax rate system than New Zealand, and the tax rate on dividend payments is over 70 percent.
Clayton Cosgrove: Has he seen any recent comparisons of the tax burden in Australia and New Zealand?
Hon Dr MICHAEL CULLEN: Yes. The same newspaper article that quoted John
Shewan ran a table showing that a person on $80,000 a year in Australia is liable for $8,807 more in tax than someone on the same income in New Zealand. If he or she sold their house, they would incur stamp duty of $40,000, which does not exist in New Zealand. Nevertheless, Australia has generally had a higher growth rate than New Zealand over the last 10 years.
John Key: Why does the Minister rule out reductions in taxes on the basis of available cash, when he knows one of two things, or both things—firstly, that a huge amount of the surplus available cash is actually being used to fund capital items that will have a long-term benefit to all New Zealanders, and, secondly, the correct net worth of a country is far more accurately measured by the net debt to gross domestic product ratio, not an increase in nominal growth?
Hon Dr MICHAEL CULLEN: I am happy to get a briefing for the member as to why Treasury places greater stress on the gross debt figure as the anchor, rather than net debt. If the member is now saying that National would borrow all the money to pay for, for example, new equipment for the Army, Air Force, and Navy; every new bit of hospital building; every new school; every other bit of capital equipment; every advance to a Crown entity; every advance to a State-owned enterprise; plus the student loan transfers; plus the Superannuation Fund, then it has gone even
pottier than I thought it had gone over recent times.
Hon Richard Prebble: How can the Minister say to the House that there is no evidence that cutting the top personal rate of tax would help economic growth, when he has received that recommendation from his own tax review in 2001, when the OECD has made the same recommendation to him in 2002, and he has now had the same recommendation given to him by his own Treasury advisers in April 2004?
Hon Dr MICHAEL CULLEN: A number of the same people, certainly including the OECD, have recommended that a capital gains tax be introduced in New Zealand, including a tax on housing. I assume that is also part of the recommendations that Opposition parties would accept.
Hon Richard Prebble: Point of order, Mr Speaker.
Mr SPEAKER: I think the member could perhaps develop his answer.
Hon Dr MICHAEL CULLEN: I am pointing out that recommendations have been made. We do not have to accept those recommendations. It is a matter of blind faith for some that lowering the top tax rate will increase growth. In 1988 we lowered it from 45 to 33 percent, and the company tax rate from 48 to 33 percent. The promised nirvana did not arrive over the next 4 or 5 years. We had the lowest record of economic growth over a 5-year period that we had had since the early 1930s.
New Zealand Citizens—Foreign Governments
Hon PETER DUNNE (Leader—United Future) to the
Minister of Foreign Affairs and Trade: What is the attitude of the New Zealand Government to the harassment of its citizens by foreign Governments?
Hon PHIL GOFF (Minister of Foreign Affairs and Trade)
: Where an allegation is made of harassment of a New Zealand citizen by another Government or in another country, my ministry would investigate that. If found to have substance, a protest would be lodged, an explanation sought, and a request issued for the situation to be remedied.
Hon Peter Dunne: Does the Minister consider it acceptable that a Mr Zhang of the Chinese Embassy here in Wellington should have contacted my office angrily last week, abusing me, in my absence, for my attendance at the inauguration of President Chen of Taiwan; if he does not consider that acceptable, and in the light of his earlier answer, will he summon the Chinese Ambassador and tell him that such interventions in the
domestic affairs of New Zealanders and the rights of New Zealanders to travel are totally unacceptable in a free and democratic society—something that will be completely foreign to the ambassador?
Hon PHIL GOFF: If an incident of the nature outlined by the member took place, it would be out of order for the embassy of any other country to try to direct a member of this Parliament to do something other than what that member wanted to do.
Luamanuvao Winnie Laban: What action has the New Zealand Government taken in relation to the harassment of TV3 reporter Jeff Hampton, who was barred from entering Fiji on Sunday?
Hon PHIL GOFF: I have publicly indicated my concern that a New Zealand reporter should be blacklisted for simply doing his job. I have raised that personally with the Fijian High Commissioner to New Zealand. I have also asked for that matter to be taken up with the Government of Fiji, and have asked whether it can be reconsidered. We have also suggested to Mr Hampton that he might like to make another application, to see whether his visa would be issued on a subsequent occasion.
Rod Donald: What does the failure of the United States authorities to advise the New Zealand Government that they were holding and interrogating a New Zealand citizen for 3 months say about how the United States treats its “very, very good friends”—especially ones that are willing to lend it frigates, Orions, engineers, and the SAS?
Hon PHIL GOFF: At my request, the ministry over the last 3 months has been following up the matter of the disappearance of Andreas Schafer. Indeed, we have approached the foreign offices in London and Washington on no fewer than six occasions. Mr Schafer has now been released and, as I understand it, is in Amman, in Jordan. We are following up with Mr Schafer, to get more details of what his situation actually was, and we have asked Washington for an explanation of why he was detained, the circumstances that surrounded that detention, and why it was that although we made so many approaches he was not able to be located. I suspect that it reflects the chaos that exists, and the lack of rule of law, in Iraq at the present time, but I want to be certain that everything was done to locate one of our citizens who was missing, and I want to know the reason why those actions did not have a follow-up from the authorities in the United States.
Hon Peter Dunne: Does the Minister’s earlier answer to my supplementary question mean he will take up directly with the Chinese Ambassador the case I referred to, as I requested?
Hon PHIL GOFF: I am more than happy, on the member’s behalf, to suggest that it is quite inappropriate for any member of this House to be told what to do or how to do it. That is a decision for an elected representative of this House, not for the embassy of an overseas country.
Luamanuvao Winnie Laban: Besides making such approaches to foreign Governments, what can the Government do to intervene on behalf of New Zealand citizens who have been harassed or detained overseas?
Hon PHIL GOFF: In general terms, New Zealanders overseas are subject to the laws of the country they are travelling or residing in, and we cannot interfere with other countries’ processes of law. What we can do, however, is extend consular assistance by interceding to ensure that the treatment of a New Zealander is fair and equitable, given the nature of what a person resident in that country would expect from that Government.
Community Employment Group—Te
Kahui Family Reunion
KATHERINE RICH (National) to the
Minister for Social Development and Employment: Why was taxpayers’ money used to fund a project described by the
Community Employment Group as “Te
Kahui family reunion”, which the group’s New Plymouth fieldworker has described as “a real success”?
Hon STEVE MAHAREY (Minister for Social Development and Employment)
: The Te
Kahui Family Trust received a $2,000 grant in September last year towards the costs of bringing together a small community in rural Taranaki, including that
hapū, to discuss the community’s future economic sustainability. Community Employment Group projects funding is used for community-based employment development projects leading to the increased capacity and sustainability of organisations and communities to contribute to their own community enterprise, and to their own job development. Priority is given to communities that have experienced disadvantage in the labour market, and that have depressed labour market conditions—as is the case with this group.
Katherine Rich: How does the Minister reconcile that answer with that of the Community Employment Group worker interviewed about the project, who freely admitted that the grant was for a family reunion, which included a “capacity-building
wānanga”, and that the family reunion was a real success; who is correct: the Minister or the Community Employment Group worker?
Hon STEVE MAHAREY: I may have missed something on the way through that second question, because I could not quite see what the difference was. We are both quoting from the same fieldworker. There is one problem with this process, which I will share with the House because it is one that we are clearing up, and it is the reason that the member received wrong answers to her questions originally. The Community Employment Group had the unfortunate practice of answering questions, until recently, off summary forms, and then, when asked to look more deeply, of going back to—
Hon Bill English: Then tell the truth.
Hon STEVE MAHAREY: The member Mr English is saying that I am not telling the truth. Should he rise and apologise, Mr Speaker?
Mr SPEAKER: I am assuming that the member did not accuse the Minister of not telling the truth.
Hon STEVE MAHAREY: Oh, good. OK, so we are still telling the truth. That is good.
Hon Bill English: I raise a point of order, Mr Speaker. The only accusation I made was that the Community Employment Group had not been telling the truth. I would not want the Minister to take offence at that.
Mr SPEAKER: That is exactly why I took the matter no further. I accepted the word of the member.
Hon STEVE MAHAREY: I appreciate Mr English’s clarifying that. What I am saying is that the Community Employment Group’s working off the summary sheets is what caused the difference in its answers. When it is asked to go back to its base data, it gives the same answer all the time about this particular organisation and other ones it funds in the hopes of encouraging community-based economic development.
Helen Duncan: Can the Minister tell the House what positive reports he has seen about Community Employment Group work with communities?
Hon STEVE MAHAREY: There are a lot of examples. One of them, which all members will know, is the rebuilding of communities following the period of the floods in the central North Island, which the Community Employment Group was directly involved with. There is also an example I can use from the primary questioner’s region of Dunedin. Since 2000 the Community Employment Group has supported the Dunedin Methodist Mission’s community and economic development unit’s Smart Food School Lunches community enterprise. Smart Food School Lunches provides work experience and pre-employment training for job seekers, who make nutritious lunches at low-decile
primary schools in Dunedin. Feedback from the community, the schools, and the parents has been positive, the project is now attracting interest from schools outside Dunedin, and that enterprise has now become self-sufficient.
Katherine Rich: Referring to the Minister’s comments about the Community Employment Group’s use of summary sheets, can he explain why the Samoan advisory councils have received more than 10 grants for a wide range of projects with project titles such as “Softball”, “Rugby”, “Motivational Development”, “Capacity Building”, “Drivers Instruction”, “Fair Play”, “Catholic Capacity”, and “The Disciples Instructions”, and can he explain why those projects should be funded with taxpayers’ money?
Hon STEVE MAHAREY: That is an incredibly long list of applications that have been granted funding. I would obviously need to go through them one by one with the member. But the member’s general question asks whether we agree with the kind of funding that has been going on within the Community Employment Group. The member will know that I have frozen the funding, and that now only grants that are approved by James
Buwalda, the Chief Executive of the Department of Labour will be made. But I do want to say to the member that the Community Employment Group does things in the electorates of every single member in this House that we would all like to see continue. My aim is to ensure that some of what I have called lack of focus in that organisation is got rid of. We have stamped on its grants procedure, and we want to make sure that the organisation gets back to its proper focus and does the kind of job we all want to be done.
Debate on Crown Entities, Public Organisations, and State Enterprises
The CHAIRPERSON (Ann Hartley): The new Standing Orders provide for the debate on the performance of Crown entities, public organisations, and State enterprises to be a series of debates on individual financial reviews of Crown entities, public organisations, and State enterprises as reported by select committees. The debate on the individual financial reviews should be relevant to their performance in the 2002-03 financial year and their current operations. A member may have no more than two calls for each financial review. Three hours is allowed for the debate. At the conclusion of the 3 hours, the Chairperson will report to the House.
There is a list of the financial reviews available for debate on the Table. Only those financial reviews reported by select committees are available for debate. Two reviews are not yet reported. They are the financial reviews of Industry New Zealand and the New Zealand Teachers Council. I understand it is the wish of members to debate groups of financial reviews and that the first entity they wish to debate is Guardians of New Zealand Superannuation.
JOHN CARTER (Senior Whip—National)
: I raise a point of order, Madam Chairperson. Could you just clarify for me, please, the two areas not yet reported back. You said Industry New Zealand and—
The CHAIRPERSON (Ann Hartley): The New Zealand Teachers Council.
JOHN CARTER: It is just that they were on the schedule we had been given, so we had speakers ready to speak on them and had advised the whips of that. Will there be further debate on those in due course, or how do members go about debating those reports that are not prepared, as there is only a 3-hour debate set down?
The CHAIRPERSON (Ann Hartley): There is not now an opportunity for that debate.
JOHN CARTER: Obviously, I will have to take this up with the Speaker in due course. I will not call the Speaker back now, but perhaps we could discuss it at the Business Committee.
Hon Dr MICHAEL CULLEN (Leader of the House)
: I did not realise that we had this situation. I wonder whether we could recall the Speaker now, because I am advised we need to seek leave in the House for those reports to be debated. I am quite happy for leave to be taken, but we cannot take leave in the Committee. So we need to go back into the House, if that is possible.
John Carter: If the Speaker could be recalled now.
The CHAIRPERSON (Ann Hartley): We will recall Mr Speaker.
The CHAIRPERSON (Ann Hartley): The Committee of the whole House is seeking leave to debate two further reports—the financial reviews of Industry New Zealand and the New Zealand Teachers Council—at a future date. These reports have not yet been reported to the House by the select committees.
Mr SPEAKER: Perhaps the Leader of the House could ask for leave.
Hon Dr MICHAEL CULLEN (Leader of the House)
: I seek leave that the Committee debate the New Zealand Teachers Council and Industry New Zealand institutions, as part of this State-owned enterprises debate, even though reports have not yet been received by the House.
Mr SPEAKER: Is there any objection to that course being followed? Leave is granted.
Hon BILL ENGLISH (National—Clutha-Southland)
: I raise a point of order, Mr Speaker. I am afraid that that is not good enough. We may have been granted leave for the opportunity to debate the reports before they are reported back, but in my 14 years in the House this is without precedent.
We have come to this particular debate with select committees having not completed their work. If it were now to be a matter of course that we grant leave to debate reports that have not been reported back, then why would select committees bother to meet any kind of deadline? The Opposition cooperates with the Government in order to get to the deadline. If it is now to be the case that the deadline does not matter, then I for one, as a member of the Education and Science Committee, would like a great deal more time to do proper financial reviews of the entities that come before our committee.
I think that, in the first place, the House deserves an explanation, and it has to come from the Government. This is Government business. The Government ought to advise the House as to why it is managing its own business in a way that is unprecedented in the House.
Hon Dr MICHAEL CULLEN (Leader of the House)
: The Government is not in charge of select committees—select committees are. It is up to them. If select committees fail to report their matters, then that can be used as a device to avoid any debate on the performance of State-owned enterprises and Crown entities in the future. The member should always remember the rule of unintended consequences in these matters. I have seen Governments use precisely these kinds of rulings in the past to avoid debate. This Government is, in fact, making sure that there will be debate.
Mr SPEAKER: This matter is not entirely without precedent, but I agree with the member that it is unusual, and I thank him for his point of order. There is no delay in the reporting back. Select committees have 6 months to report back, and that deadline has not expired. All I can say is that leave was sought, no one objected, and leave has been granted. We cannot go back from there.
Hon BILL ENGLISH (National—Clutha-Southland)
: That then raises an issue that is Government business, which is why has it scheduled this debate before the select committees have completed their work, if the 6-months’ deadline has not expired?
Mr SPEAKER: That is a matter for the Government. It is not a matter for me to adjudicate. The Government put it on the Order Paper, and it is entitled to do so. Leave was sought and leave was granted. We cannot go back on that.
JOHN CARTER (Senior Whip—National)
: Mr English has made some very good points, and I suspect that we may have further discussion on this in the Business Committee. But further to that, it now leaves us with one other issue. We have now decided, by leave, that we can debate Industry New Zealand. I will breach the Standing Orders by saying that I do not see that the Minister is available here at the moment, for
us to debate that legislation with him. I am aware that other Ministers can fill in, but I thought the Minister might have been available to discuss his vote, given that we gave notice that we intended to debate it. We have now been given leave, and it would be unfortunate if he were not present to debate it.
Mr SPEAKER: The leave has been granted and I cannot go back on that. It is up to the Government as to which Ministers are present. The member knows that; it has been the case ever since I have been in the House.
Hon BILL ENGLISH (National—Clutha-Southland)
: I raise a point of order, Mr Speaker. I am not questioning any of your rulings, but I am looking for a full explanation of the circumstances the House finds itself in. I presume, as a member of the House, that the Business Committee had some discussion about the scheduling of this debate.
John Carter: Not to any large extent.
Hon BILL ENGLISH: Did it, or did it not? Not to any large extent. Someone, somewhere, decided to schedule this debate at a time that required the leave of the House to debate two reports that have not been completed. Mr Speaker, had I been aware of that when you put the leave, I would have refused it, because I believe that the House ought to stick to the process of debating reports when they are completed.
I would like an explanation as to why this debate was commenced before the select committees have finished their job. Mr Speaker, you have made it clear that it is not because of a deadline. The deadline of 6 months has not expired, so there must be some other reason. I would also like an explanation from you as to whether this will be regarded as a precedent—the precedent being that the Government, or the Business Committee, can choose a time to have this debate, regardless of whether select committees have finished their job. This puts the Opposition, in particular, in the position whereby it is reliant on the leave of the House to do a job that is absolutely at the heart of the function of Parliament. We should not be required to get the leave of the House to debate financial reports on Crown entities. There is no other job more important to this Parliament than that one. We need this process cleared up. We need to be sure that there will not be precedents set that limit the opportunity for the House to do the job that an Opposition, in particular, is meant to do.
Hon Dr MICHAEL CULLEN (Leader of the House)
: To be blunt, I do not feel any great need to respond because we are now nearly at the end of the 2003-04 financial year, and this debate is about performance during 2002-03. I have always felt that this debate is already somewhat of a mockery, because it takes place far too long after the events to which it refers. It seems to me that it is quite important to get on with the debate, rather than waiting the 6 months that have been mentioned, as that would really make the debate completely useless.
I will make two comments. Firstly, under Standing Order 334(1), the Government can select any day for this debate. Secondly, there will always be some reports outstanding whenever this debate is scheduled, because reporting is a continuous process.
JOHN CARTER (Senior Whip—National)
: I raise a point of order, Mr Speaker. This is just a machinery matter. Are we starting the 3 hours again, when we go back into Committee?
Mr SPEAKER: The debate has already started, but the time spent back in the House does not count.
The CHAIRPERSON (Ann Hartley): I understand it is the wish of the members to debate groups of financial reviews.
The Guardians of New Zealand Superannuation
Government Superannuation Fund Authority
Hon Dr MICHAEL CULLEN (Minister of Finance)
: I was rather hoping one member of the Opposition would want to debate this extraordinarily large element of the New Zealand Government’s expenditure and programme. As I outlined this afternoon in the House, the two largest long-term fiscal pressures facing any Western Government are provision for superannuation and provision for health care, partly because of the ageing of the population. But the Opposition is far more interested in debating the New Zealand Teachers Council than it is the New Zealand Superannuation Fund.
During 2002-03, the New Zealand Superannuation Fund had not gone to market. It was still being managed within the Debt Management Office in Treasury. Subsequently, arising out of that year, the fund has gone to market. Despite the claims made—for example, in the
Listener,in what I regard as National’s weekly column on politics—that the New Zealand Superannuation Fund has lost lots of money on the market, it has done absolutely no such thing. Since it went to market in October last year, it has outperformed its own targets. It has outperformed targets, such as the rate of return on New Zealand Government bonds. That can be compared, for example, with the Government Superannuation Fund, which, when the equity markets were bad, was losing money. Even so, since it went to market, it has averaged a post-tax return of 4.7 percent, which is above the bond rate return in terms of a post-tax rate of return. So it has done better than it would have done had it not gone to market in that period.
We have heard a great deal about the supposed losses that were made, all of which were unrealised losses on paper, but, suddenly, now that the funds are doing well, we hear a total silence from members opposite—except on the question that we want answered. We know about the National Party’s “by lunchtime” promise. It will reform the Resource Management Act within 3 months—so it says—and, of course, it promises that it will have nuclear ships back by lunchtime, given the opportunity. We want to know whether National, if it became the Government, would have the New Zealand Superannuation Fund gone by lunchtime. If the New Zealand Superannuation Fund is to go by lunchtime, what will replace it in terms of security for pensions for the baby-boom generation? There are tens of hundreds of thousands of people in that generation, born between 1946 and 1961 or so, who want to know where their pension is to come from. There is only one answer: a Labour-led Government. There is very little hope it will come from a National-led Government, because National says that the New Zealand Superannuation Fund is not important to the future of New Zealand's superannuation. Well, the latest figures show that, at peak, 36 percent of the funding of New Zealand superannuation will come from the Superannuation Fund. That is equivalent to $138 a week of the current married rate for superannuation. We should go out there now and ask superannuitants—those who are married couples—whether they would notice a cut in their superannuation of $138 a week. No doubt, to people like Mr Key, that is peanuts, but to the great majority of superannuitants, it is a great deal of money indeed.
I raise the point further, because what the Budget documentation will show is that the only real room available for tax cuts to the rich—so beloved of the National Party and the ACT party—will come about only if the Superannuation Fund is abolished. The only real big headroom for major fiscal initiatives over the next few years will occur only if the New Zealand Superannuation Fund is abolished by any future National Government. So the National Party will face some very hard choices and some very hard questions come Thursday afternoon in the House, and subsequently. It will face them particularly from people who are part of the baby-boom generation. Lynda Scott is
one of those people, although she does not look as if she is booming very much at the present time, because she is well looked after in other respects. Mr Carter claims to be a baby-boomer, although I think he may be flattering himself slightly in that regard. He is more a sort of pre-boomer, like I am.
We want to know whether superannuation, like all the other State-owned enterprises and State assets, will be gone by lunchtime if the people make a mistake and vote for a National Government. Or will the New Zealand Superannuation Fund remain in the long term as an important part of how to fund New Zealand superannuation so that ordinary New Zealanders can enjoy a decent pension in retirement? That is the question we need an answer to today. It is one of the many questions the Opposition National Party will have to face over the next 15 or 16 months as we run into the election, and it will get a surprise when it understands it has no answers.
CLAYTON COSGROVE (Labour—Waimakariri)
: I want to follow on from where Dr Cullen left off. Is it not ironic that, as Dr Cullen said, not one speaker from the other side of the Chamber wants to talk about the Superannuation Fund? All the members on that side, cowering behind their desks, like the pack of so-and-sos they are—and I do not think the term “so-and-sos” is unparliamentary—know exactly what they did to national superannuation when they were in office. What we know is that when we got into Government, we put some certainty back into the lives of pensioners. We said we would reverse the cuts that members opposite made. We said we would make the pension no less than 65 percent of the average wage, and we did. We inflation-indexed it and we set up the Superannuation Fund—a fund that Dr Brash and every party of the National Party has run around—
Rt Hon Winston Peters: Where is he?
CLAYTON COSGROVE: I cannot respond to that because, as the member knows, I would be breaching the Standing Orders. Those members do not want to debate the matter because, as Dr Cullen said, they want to abolish it. I look forward to going to Mr
Heatley’s and Mr Carter’s electorates, and to every electorate around this country, to tell Grey Power and the pensioners what they would get under a National Government. Let us add it up. If a party says it will make tax cuts, then that means less revenue. If a party—the National Party—says it will abolish the Superannuation Fund, then, as Dr Cullen pointed out, how will it guarantee, as the National Party now says it will, the current levels and the current age of eligibility—although on this it now says “maybe”? One of the ways to do that would be to sell public assets, and we know that that is about as popular as some members on that side, in their obscurity. We know that Landcorp, Kiwibank, and all the very profitable, good, going concerns and State-owned enterprises, such as New Zealand Post and others that people iconify and that this country wants to see maintained and held by the Crown, would, under that crew over there, be gone. They would be history—on the block.
If I were a pensioner, or even, maybe, as Dr Brash has pointed out, a person now in my 50s, I would be shaking in my boots, because under Dr Brash there would be no superannuation fund, although there would be a tax cut that would mean less revenue. But then the numbers and the mathematical rationale stop. No one knows how, under a National Government, the pension at the current levels and age of eligibility would be maintained, as we have promised it will be. What we do now know, of course, is that that will not happen under a National Government.
Dr Brash said this about people now aged 50: “I suspect that eventually—if not in five years then almost certainly in 10 or 15 years—we will have to have a look at the age of eligibility again,”. He said that in the
New Zealand Herald on 4 March 2004. Prior to making that statement he said—in places all around this country except in this Chamber—that the age of eligibility would have to be raised to age 70. Even Mr
Woolerton, in a couple of years, would have to wait. It speaks volumes that no member of the Opposition, after wanting to put the review of The Guardians of New Zealand Superannuation on the list, will get up to speak on it—just as no member on that side will get up to debate the economy, because it is growing; unemployment, because it is decreasing; or employment, because it is increasing. Opposition members cannot handle all that good news, but they go around the country and scratch every little itch that certain members of the community want scratched.
I say again, that if National has an alternative to the Superannuation Fund that will guarantee the age of eligibility and inflation-proof levels at not less than 65 percent of the average wage, then one of those geniuses on that side should get up and tell us. They have 18 months before the elections. Maybe Mr Heatley might get up, or Mr Carter, to explain to his constituents in the far north, what National’s policy is on guaranteeing the age of eligibility and the levels of entitlement. Every pensioner, including Mr Carter’s dear old mum, whom he talks about so often in this place—and I am sure she is a dear old lady who is proud of her son—is now asking how her son and the National Party will guarantee her pension and the age of eligibility. National does not have a policy on superannuation, and every New Zealander knows that.
Industry New Zealand
PHIL HEATLEY (National—Whangarei)
: I rise on behalf of the National Party to voice its displeasure in respect of Industry New Zealand. Members of Parliament will know that Industry New Zealand is the Government agency that businesses said they did not want and did not need but that Jim
Anderton’s photographers said they must have. The Committee will know that for some years now Jim Anderton has been touring the country with his little elves, like Clayton Cosgrove, throwing around $100 here, a $1,000 there, and $10,000 elsewhere. We as taxpayers know that it would have been cheaper to take out an advertisement to show Jim
Anderton’s smiley face, but, no, Industry New Zealand, Jim
Anderton’s promotional group, has done that work for him in the last few years.
I found it interesting when members of the Commerce Committee asked for the historical background—review, if one likes—on some of the cash Jim Anderton has been throwing around the country in the last few years. We asked what the criteria were for the assistance provided. In other words, when he threw taxpayer cash at those businesses, what criteria did he look for, and I have to say that officials struggled to give us that information. We asked what form the assistance took. Apparently, it did not take the form just of cash; it also took the form of assisting in the facilitation of relationships with local agencies. I can only assume that that was Jim Anderton taking people out to dinner on the numerous credit cards that the staff of Industry New Zealand have, and that he facilitated the relationship with local agencies. That is the form of assistance it took, as well as the cheques Jim Anderton willingly wrote out on behalf of the taxpayer.
We asked the agency what the projected outcomes were. The answer was that it did not have any. The committee asked whether each scheme met the projected outcomes. Of course, because Industry New Zealand did not have any projected outcomes in many cases, it did not meet them. We asked simple questions. We heard that Industry New Zealand was being touted as “Jim’s jobs machine”, so we asked how many jobs were created; also what the projected outcomes were and why they were not achieved. The number of jobs created ranged, in many cases, between 10 and 100. When we asked at the select committee what those jobs were specifically, we were told they were very hard to identify. It was difficult to say whether the jobs created would have been
created, anyway; whether a company would have shifted to New Zealand, anyway; and whether—regardless of whether Jim Anderton and his corporate welfare had given out $10,000 cheques—the jobs would have come, anyway.
Industry New Zealand, the Government agency that businesses said they did not want but Jim
Anderton’s photographers said they must have, could not at all justify or calculate the number of jobs it created. We asked what the overall value of those schemes to New Zealand was, but we could not get an answer. Were any lessons learnt? The only lesson we got was on The Warehouse fiasco. Members will recall that in May 2002, which falls within this financial review, The Warehouse got $70,000 from young Jim Anderton, and it was grateful for that. The Business Growth Service gave that money on behalf of Jim Anderton and the taxpayer to The Warehouse, and some lessons were learnt from that. Members will recall that the Audit Office reported back on the inquiry into why Jim Anderton was giving $75,000 to the struggling Warehouse—and it is certainly struggling in Whangarei. It does not have enough room. Although it is the biggest red barn in the country, it still cannot fit the people in.
Hon David Carter: The share price is struggling.
PHIL HEATLEY: Yes, the share price is struggling.
Housing New Zealand Corporation
Hon DAVID CARTER (National)
: My questions relate to Housing New Zealand and its recent financial review. I want the Minister to explain the rationale for the 12,635 people who are now waiting for a State house. I would like the Minister, Mr Maharey, to take the opportunity whilst he is in the chair, to acknowledge that his policy around income-related rents has been an unmitigated disaster.
Jill Pettis: Under a National Government there wouldn’t be any State houses.
Hon DAVID CARTER: Jill Pettis is interjecting, and it is the normal rubbish we get from her about the National Government selling State houses to people who have lived in them for a long, long time. I will take the opportunity to ask the Minister another question. Why does he not allow people who are living in a State house, who like their State house, and in some cases have an income of $140,000, to buy their State house? Why does he then not use that money to reinvest in houses that thousands of people are waiting for.
Little has been done for housing in New Zealand, as acknowledged by the only good work that Minister has done, and that is the release a fortnight ago of the housing strategy. Anybody who reads the housing strategy will acknowledge that the previous policies put in place by the National Government, which Jill Pettis bothers to object to, are reinforced by the housing strategy, and that is the policy of an accommodation supplement.
No Government will ever be in a position to buy the stock of housing required for low-income New Zealanders. There will always be a requirement for the State to provide some houses, and for the private sector to provide the majority of them. That will never change. If the Minister wants an equitable housing policy that will work and will not have 12,500 people waiting for a State house, then he must provide a system that is clear, concise, and equitable, between both the State sector and the private sector. The housing strategy recently released by the Minister states exactly that.
The housing strategy states that the policy must be delivered via the accommodation supplement. Mr Maharey, Graham Kelly, formerly a Labour Opposition spokesperson, and one Helen Clark, now Prime Minister, are repeatedly in the media, criticising the accommodation supplement throughout the 1990s, but now the Minister himself acknowledges that it is the only credible, logical way to deliver housing assistance.
I ask the Minister to explain why he has 12,500 people on a waiting list, and why nearly half of those people are in absolutely urgent situations. He should explain why he came to the House a fortnight ago and tried to tell members that Housing New Zealand is building 4,000 new houses, when any Minister who is on top of his or her own portfolio will know that the number of houses being built is in the hundreds, not the thousands. The Minister is actually doing long-term rental arrangements with the private sector, putting those houses into Housing New Zealand stock, and then claiming that he is building up the housing stock. That is not happening.
The Minister needs to provide housing in areas of high demand, such as Auckland. There is no demand in areas like Wanganui. Jill Pettis criticised the previous National Government for selling Housing New Zealand stock in areas like Wanganui. That was probably the best thing that was ever done because that money is now available, and has been available to Housing New Zealand to reinvest into housing stock in areas where it is demanded. Unless the Minister is prepared to acknowledge that he uses the accommodation supplement, he will not have a solution to the housing needs of New Zealand. The Minister also needs to look at ways of encouraging people who are living in a State house, on an income of $140,000 a year, to stop being dependent on the State.
Clayton Cosgrove: Name one!
Hon DAVID CARTER: I am not allowed to name one, because of the privacy laws. However, the Minister’s answers confirm that there is one such family on $140,000 a year.
Hon TAITO PHILLIP FIELD (Minister of State)
: That was an appalling speech. That member had the audacity to get up on his hind legs and talk about a housing shortage, when it was the National Government that sold off 12,000 houses during its tenure in office.
Rt Hon Winston Peters: How many?
Hon TAITO PHILLIP FIELD: Twelve thousand! It is interesting to note that the shortage of houses for those on the waiting list actually matches the 12,000 houses that the National Party sold off. Then that member had the cheek to respond to an interjection that asked how many houses the National Government had sold, by saying: “Not enough.” He wants to talk about the housing shortage and the long waiting list, and then says that the National Government had not sold off enough houses.
One of the major contributing factors to poverty in this country is the cost of housing. There is no question about that. I ask members Opposite to do their homework and to look up the facts about poverty in our communities. We also know that overcrowding is a significant factor contributing to infectious diseases. People in communities such as south Auckland contract meningitis and all sorts of infectious diseases because of overcrowding, and this Government is doing something about it. We are quite proud of our track record over the last 4 years. We are looking at building an extra 3,500 houses, and another 3,000 to 4,000 houses in the following 3 years. That will deal effectively with the giving of stability to low-income families. When families cannot afford to rent they have to move from house to house. That sort of mobility gives instability to children who need to go to from pre-school and kindergarten on to primary school. When they do not have that stability in their family life, their education suffers. So it is a question not only of health and education but also of the fundamental right of families and children to be able to access affordable, quality housing. That is what this Government is about.
I am very proud that we have significantly reduced the cost of housing by an average of $1,800 for low-income families. The disastrous effect that market rents—brought in by the previous National Government—had on those families is something that those members opposite need to be ashamed of. As we continue to talk about the poverty
within our communities, we have to remember that a lot of people, including many children, suffered under the National Government in the last decade not only because of its housing policies but also because of other aspects of its social policy, such as benefit cuts of 25 percent.
Labour has a proud record of rebuilding the stock numbers in State housing. We are looking at meeting the demands in Auckland. I am particularly concerned about the south Auckland area that I represent, which has the longest waiting list for State houses. At least we are moving towards ensuring that the stock numbers are built back up to the 72,000 that they used to be before the National Government sold off 12,000 of them.
We must also recognise the need to promote homeownership. There is a decline in homeownership, and I congratulate the Minister of Housing, Steve Maharey, on looking at initiatives that can promote low-income families into their own homes. The Kiwibank package has already been released. It helps families into homes without deposits, and it is also a way of getting them to understand how to repay their mortgage. That is very important in helping to increase, in percentage terms, the numbers of families into their own homes.
What we in this Government have achieved in the housing portfolio is very important. It is something we can be proud of. Housing is fundamental to the health and well-being of our communities, particularly for low-income people. This Government has a proud track record of achievement, and we look forward to the next phase in its housing policy, which is to improve the numbers I referred to and to get the stock level up to where it can meet the demand, particularly in areas like Auckland. There is no doubt that Auckland’s growth means that there is a need to plan properly to ensure that communities have the facilities planned around Housing New Zealand’s housing projects.
I am sure the Minister can expand on what is being looked at for the next 12 months, but, certainly, the emphasis of this Budget will be not only on housing and levels of incomes but also on supporting low and middle income families who need it.
JILL PETTIS (Labour—Whanganui)
: I did not intend to take a call in the housing debate, but after listening to David Carter, the National Party spokesperson on housing, talk about housing I felt absolutely compelled to. I have never heard such drivel in my life as I have just heard from Mr Carter. My colleague Phillip Field has just explained some of the very good, sensible, socially responsible things this Government is doing in housing. I remind Mr David Carter, National MP, that National members do not mind getting into State houses, as long as they are ministerial ones provided by the taxpayer. There is a degree of double standards coming from those members: they do not mind getting into a State house, but they do not seem to have any inclination towards letting poor people who need a helping hand up get into a secure house. I say to Mr Carter that that is absolutely speaking out of both sides of one’s mouth at the same time, and he should be ashamed of himself. Mr Carter seems to have already forgotten about the huge number of houses that National sold off. That was absolutely despicable, because it removed that valuable housing stock from people with the greatest housing need and placed them in far more severe financial situations than they were in previously.
Fortunately, this Labour-Progressive Government has invested millions of dollars in restoring the housing stock and helping people to get into a home that provides a secure roof over their head, which brings all sorts of other social advantages with it. I will refer to the food bank statistics. Anybody who bothered to look at those statistics would tell the National members that one of the biggest costs for people who require food bank assistance is housing. Those statistics are very revealing, and selling off the State houses shows that National Party MPs did not bother to go and read the statistics and look at the impact that housing costs, particularly under National’s iniquitous market rent
policy, had on people’s incomes and the quality of life they were enjoying—and “enjoying” is not the appropriate word, really. I remind the National Party members that housing is important not only for the fact that people need to have a secure roof over their heads but also for the improved health and increased educational opportunities that people are able to access when they have secure, safe, dry, well-provided housing. National members seem to have completely disregarded the impact that safe, secure, dry housing has on people’s health and their education chances.
It is very clear that National intends—if, God forbid, it ever gets back into power again—to sell even more houses, or to quit itself completely of responsibility for what we know in New Zealand as State housing. Tony Ryall is on record as saying that National does not have a desire to expand the level of housing in New Zealand. Housing is not an issue that is dear to National’s core constituency, so the National MPs have absolutely no interest in it, whatsoever. But I remind those members that a large number of people in New Zealand are fundamentally and philosophically in support of the provision of State housing. I meet people who would not necessarily strike one as being core Labour supporters, but who still firmly believe in the provision of State houses. Having a roof over one’s head is a fundamental part of the New Zealand way of life. Those National MPs have clearly forgotten the appalling overcrowding situations that occurred in some of our biggest cities, particularly in Auckland, when, as I said earlier, the iniquitous market rent housing policy applied. We saw people living in garages. We saw two to three families—and that is no exaggeration—living in the same house, and we saw all the health and social problems that accompanied that.
New Zealanders do not want to return to that situation. New Zealanders want people to be able to have a home of their own, and the vast majority of people who get a State house, as we commonly refer to it, move on. It is a first step towards people getting their own independence, and having a home of their own helps them to gain it.
Broadcasting Commission (New Zealand on Air)
Radio New Zealand Limited
Television New Zealand Limited
Rt Hon WINSTON PETERS (Leader—NZ First)
: We have in New Zealand a senseless TVNZ charter, which underpins the nonsense that is occurring at TVNZ. The charter, of course, is just an exercise in political correctness and cultural drivel, focused on ethnic programmes that are little more than social apartheid. It is part of this Government’s social engineering agenda, and we oppose it. The charter has also confused the commercial imperative outlined in the State-Owned Enterprises Act. The State-owned enterprise is to be either a public service broadcaster or it is to be, surely, a commercial entity. It needs to be one or the other, but it cannot be both. Nothing illustrates that point more than the debacle of Ross Armstrong—theformer National Party vice-president who was, of course, appointed by the National Party to most jobs, but who is also one of Helen Clark’s current followers—who got away with fraud, double-dipping, and the serious misuse of taxpayers’ money. He got off scot-free, and no one was held accountable. I find it very unusual that when
Māori people commit fraud, Don Brash, and National and ACT are down on them like a ton of bricks—but not in the case of Ross Armstrong! They would have given him a knighthood if they still had one.
I am really concerned that taxpayers’ dollars are being used to fly executives all over the world to stay in the best hotels, under the guise of dubious claims that by doing so they will somehow provide a better service. We say that taxpayers’ dollars would be better spent here in New Zealand, on promoting our already-proven film industry. What
is really of concern, of course, is that TVNZ is a very, very high-priced label, and it lives under the dark shadows of the National Party’s no doubt intended policy plank of selling it the moment that National ever gets back into power. Well, we all know that is not going to happen, but nevertheless it cannot be easy for a television service to operate, having a public mandate, when it is to be put under the threat of sale.
But the real issue today is this: why have the TVNZ executives not come along to the Commerce Committee and given us an explanation for the hundreds and hundreds of thousands of dollars of unlimited personal credit card spending on behalf of 11 of the executives, and for a half hour being taken at the start of the year in a prime programme called
Holmes to try to do in somebody’s political career?
I have news for those gentlemen, and it is all bad. We want them to come along and explain each credit card,detail by detail.
R Doug Woolerton: Oh, they won’t do that.
Rt Hon WINSTON PETERS: Well, they will have to, because in a fit of macho behaviour the man at the top promised that. He even asked me whether I wanted details of the make-up allowance account, too. I said yes, of course, if he wanted to give it to me, that would be fine.
I want to know what the clothing allowance of Paul Holmes is. I want to know what Susan Wood’s clothing allowance is. Is it $25,000, $35,000, or $55,000? Let us find that out. Those people made a big job of
Tuku’s underpants. Now they have put all the clothes on the other body, and I want to know what their clothing account is—or is it just limitless? Do they spend what they like? Is it true that at the end of the year they divvy all the clothes up, and have a little auction amongst themselves? [Interruption] Not on the market, no—a very limited market.
R Doug Woolerton: Who’d want a gift of Holmes’ clothes?
Rt Hon WINSTON PETERS: That is true. Maybe Mark Peck would pop along and get a decent suit. Anyway, to cut a long story short, we want to know when
TVNZ’s executives are going to turn up, and we want to be certain as a House that they do not treat Parliament and the Commerce Committee with contempt. In short, we want them to show us what has been going on. That must surely be in the interests of TVNZ, because we know what a huge believer it is in public accountability. It is the absolute paragon of virtue when it comes to public accountability, and we want to give it a chance to demonstrate just how much it means by that.
R Doug Woolerton: Is this a
Rt Hon WINSTON PETERS: Yeah, right. This is not another
Hon Member: Don’t be cynical.
Rt Hon WINSTON PETERS: I am not being cynical. I just want to make it very clear to TVNZ that if it thinks it is going to stitch up somebody’s career with a tissue of lies and get people to perjure themselves, in not one affidavit but three, then there are consequences.
I want TVNZ to know it has picked on the wrong person here.
SUE KEDGLEY (Green)
: I want to pick up on the issue of credit cards, but before I do so I would like to touch on two other issues relating to
TVNZ’s financial review. The first is that TVNZ assured us that the $10.7 million in taxpayer funding it received to implement the charter in 2002-03 was all spent on programmes that met the criteria spelt out by the charter. But when we actually looked at how it had spent the money, when it finally published that information retrospectively in its annual report, we discovered that it had spent more than a million dollars on buying in over 1,000 hours of BBC World Service programming and other foreign programming. I have no problem with TVNZ buying in BBC World Service programming, but I have to ask why it is spending taxpayers’ money—charter funding—on buying in thousands of hours of
foreign current affairs programming when, for example, we have only 24 percent local content on TV2. In fact, most of that programming—the 1,000 hours—screens between the hours of midnight and 6 a.m. How does that conform with the charter funding criteria, and why are we spending millions of dollars on that? The Minister said last week, in answer to a question in the House: “No charter funding is spent on any of the network’s major news and current affairs programmes.” Yet we learn from the annual report that more than 1,000 hours of charter funding was spent on buying those foreign current affairs programmes. Was the Minister misleading the House in his answer?
A second issue is this: how has current affairs been improved under the charter? We had a lot of rhetoric about what would happen, but what has been delivered? Firstly, 92 fewer hours of current affairs have been screened since the charter came in. Secondly, TVNZ has dropped the flagship current affairs programme
Assignment, has sacked 14 current affairs staff—allegedly to save $4 million in its news and current affairs budget—and now we learn it is paying twice the market rate to buy in yet more foreign current affairs and news programmes. What on earth is going on there? And what about TV2, the channel that our children and young people watch? TVNZ acknowledged during the review that it did have a legal obligation to deliver the charter on both channels. But then we learnt that TVNZ is screening less than half of the local content on TV2, the programme our young people watch, that it is on Television One. In fact, it is screening a pitiful 24 percent on TV2. How can it be implementing the charter equally on TV2, when it is showing a mere 24 percent of local programmes on that channel? That is simply not good enough. Where are the performance criteria that we have been waiting for?
On the question of credit cards, which Winston Peters has now raised, that was an issue I raised during the financial review. Mr Peters has focused on the 11 executives who have unlimited spending. But, in fact, when one looks at the report, one sees there were far more than that. An extraordinary 462 staff in TVNZ have company credit cards, of whom an astonishing 89 staff have unlimited spending on their credit cards, and a further 66 have spending limits of up to $15,000. Why would we have almost 500 staff with credit cards, many of which have unlimited spending, in an organisation with a public service culture? We were told that there is no explicit policy relating to the number of credit cards allocated to staff. TVNZ refused to tell us about credit card usage by its senior executives. It did acknowledge that 11 senior staff had spent $316,000 last year, but basically TVNZ would not tell us about the rest. We have had to ask the TVNZ executives to come back to the Commerce Committee to try to answer those questions. It is almost unheard of that we have had to recall them to the committee, yet again, in order to try to understand why such an extraordinarily large number of staff have credit cards, and how they can be made accountable for that expenditure.
MARK PECK (Labour—Invercargill)
: At the commencement of this debate two votes had not been reported back to the Committee, one of them being that for Industry New Zealand. The point made by the Hon Bill English was that that is the most important work that has to be done by the Committee. I have taken the opportunity to go back to my room and check my notes from the Commerce Committee meeting on Thursday last week, when the committee was to consider and deliberate on the Industry New Zealand report to Parliament. The National Party member requested that we did not deliberate in order that Mr Phil Heatley, the person who spoke on those particular estimates, had an opportunity—
The CHAIRPERSON (Ann Hartley): I need to interrupt the member. I believe that that is confidential information.
MARK PECK: Oh no, that is not confidential information. That was the proceedings of the committee.
The CHAIRPERSON (Ann Hartley): I am taking advice from the Clerk. The proceedings in a select committee, other than the hearing of evidence, are confidential until they have been reported back. So I cannot allow the member to go on with that point of order.
Hon STEVE MAHAREY (Minister of Broadcasting)
: It is no surprise that the Opposition has chosen to most spiritedly debate an area like Television New Zealand and not rise to debates on things like the guardianship fund, an overseas superannuation fund with a large fund of money, which we thought might have attracted the interest of people. But it has chosen to go for Television New Zealand. That has attracted the interest of Mr Peters, undoubtedly because a person scorned over dinner is someone that one should always expect to come back for dessert, and today he had a wee crack at them again. I am sure they are able to cope with that, so I will not dwell on him feeling bad about the dinner.
I want to say, though, that in terms of Mr Peters’ comments, I am in complete agreement on two points. One is that I agree with his drive for accountability. He spent most of his time talking about Ross Armstrong. I just want to remind Mr Peters that Ross Armstrong no longer is the chairperson of Television New Zealand. He did leave Television New Zealand because we asked him to. He agreed to do that. All of those things have been cleaned up, and there has been a long gap in between. But if Mr Peters has forgotten that, I thought I would just remind him that those things do matter to us, and we do act on them.
I also want to agree with him on the notion of public asset. He is right. If the National Party were to ever, under some kind of extraordinary circumstance, return to the Treasury benches, it would sell this asset. It would sell Television New Zealand. It would sell Radio New Zealand, as well. We know that because National members have said repeatedly that they can see no point in owning it. Now, whether one likes, or does not like, what goes on with the programming, Television New Zealand is part of the little left to us by the National Party of our nation’s infrastructure, and we will not be selling it. We will be hanging on to it. There is a clear point of difference between the National Party and ourselves.
Let me just talk quickly about credit cards. Can I tell members who do not seem to have read their notes very well that TVNZ confirms that all its credit cards now carry a credit limit, and that the number of credit cards on issue is strictly controlled, and has been reduced by 20 since January 2004. The use of credit cards enables low-value transactions to be processed efficiently while contributing to a rebate on expenditure for the credit card provider. So all the comments about limitless spending, everybody has one, and they have 12 in their back pockets are wrong— they do not, and under this Government they will not, because we ensure that people get the message that we want prudent spending.
Television New Zealand, of course, is now working under the charter towards New Zealand content being at least 50 percent of programmes shown. That will mean an enormous growth for independent producers of programmes. It will mean a real change on screen. The commitment to New Zealand programming is something that the Green Party may not have read either, but it is right there.
There was concern about current affairs on Television New Zealand. Yes, Television New Zealand has been reviewing news and current affairs, and yes, it has taken off some programmes and put others on. If members read their notes, once again they will find that more current affairs programmes are on now than there were last year. This year we are planning to increase current affairs and news. There are new kinds of
programmes on television, because we really like to see debate about the kinds of issues in our country. We are very pleased to see the charter being fulfilled in that way, so if members have any concerns about New Zealand content and current affairs, they should please go back to the notes. They will find that there are even more.
Sue Kedgley asked the question about overseas programming being a proper area of expenditure under the charter. Well, of course it is. A charter does not just mean that New Zealanders, who do happen to live in a global society, want to watch programmes made by New Zealanders about New Zealanders entirely. They also need to know what goes on elsewhere, and they need other points of view coming in. It is an appropriate thing for a public broadcaster to spend some of the money it gets under the charter on programmes it might not otherwise be able to afford to bring into the country. That is an appropriate use of the money.
Television New Zealand is going through a large number of changes—there is no doubt about that. But right now it is maintaining audience share, as the House would want. It is maintaining a very high level of profitability, and it has had a very good year in relation to advertising. At the same time TVNZ is slowly but surely working out what it means to be a chartered organisation that has to return a commercial return to the Government. It is one of only three public broadcasters in the world—the Canadians, the Irish, and ourselves—where a commercial return is required by the shareholder, the Government. It is required to provide a larger return. A larger profit has to be made by TVNZ, so this is a big learning curve, but I can say right now that we are seeing major changes, and we are reasonably happy with the state of
MARK PECK (Labour—Invercargill)
: I congratulate the Minister on his comments in the Chamber today. I join him in reminding those who are listening to the debate today that if National had the opportunity, it would sell off TVNZ, Radio New Zealand by lunchtime, and a heck of a lot more. National members do not believe in public assets. They think that the market delivers best. Indeed, Don Brash, even when talking about schools, said only a couple of years ago that for his part he did not care who owned the schools. He does not care who owns the Accident Compensation Corporation, or hospitals. He certainly does not care who owns broadcasting. He does not care whether Television New Zealand is in private ownership.
I just ask the people of New Zealand to think about that a little bit, because not everybody earns the same amount of money as Don Brash used to earn when he was on half a million bucks a year as the Governor of the Reserve Bank, and certainly not everybody has the same sort of assets that John Key has. Many people in New Zealand rely totally on the public broadcaster for their television news, information, and entertainment.
I just say to members opposite that if they want to sell Television New Zealand, bring it on! Let us take that particular debate into the election and have it. Let us put it on the table and have a debate about it, because I know that the Kiwi mums and dads around the country like their free-to-air television. I can say about the people whose houses I door knock on that not everybody has Sky, because they cannot afford the payments. In some parts of the country, not only do they not have Sky, they cannot get it unless they really go the whole hog and get the—
Hon Maurice Williamson: You can get Sky anywhere in New Zealand. It comes from a satellite.
MARK PECK: The member should try to get it in some places in Southland and see how he gets on.
Hon Maurice Williamson: Anywhere.
MARK PECK: Anywhere?
Hon Maurice Williamson: Done. There is the technology.
MARK PECK: A done deal. That is very good.
Darren Hughes: He’s got his salary back now.
MARK PECK: He has his salary back and his position back. It is good to see him back in that seat, as he has given a bit of punch to the Opposition, which they were lacking for some time when he was No. 27. He was a bit like a Telecom advertisement—“Go 27”—but, of course, he did not go, he came back, and someone else along the way did go—
Darren Hughes: He’s still going.
MARK PECK: That is true, he is still going, and we know about that. I congratulate Television New Zealand on the work it does. It does an extremely good job of providing the news service and current affairs programmes. It also provides very good children’s programmes. I remember, when I was bringing my children up, the importance of children’s programmes on a Saturday morning as people were waking up and getting into their day. These programmes are top notch.
Darren Hughes: Even 40 years ago?
MARK PECK: It is a little bit less than 40 years ago, but almost. I am delighted that very soon I will be a grandfather, and will be able to enjoy those Saturday morning programmes with my grandson or granddaughter—who knows, but it will certainly be one of the two—and I am certainly looking forward to that.
There were some issues that we discussed with TVNZ, and we will have it back for a briefing on some of the matters that have been referred to in this debate, but that is as it should be. One of the things about financial reviews is that they give the select committee an opportunity to get behind the numbers, and that is an important thing to do. But at the end of the day that is not a reason to give the likes of the Opposition an opportunity to say that they would like to flog it off.
I can understand that point of view coming from ACT. All that ACT has ever believed is that we should sell everything, but I would have thought that if the National Opposition was looking to build a solid social infrastructure in this nation, it would have said that broadcasting was part of that, but, no, they remain silent on the other side. It took Winston Peters and Sue Kedgley to raise the issues in this Chamber, but National members will not raise them, because they know that Television New Zealand is a very good State-owned enterprise.
As Opposition members consider their proposals for the next few years, I tell them this: the State-owned enterprises in this country, of which TVNZ is one, have on their balance sheets $11 billion worth of assets. If members opposite are talking about getting rid of that, it is probably just under 10 percent of New Zealand’s gross domestic product. It is a significant amount to be putting on the market, and I think Opposition members should stand up and be accountable for that. I wish one of them would make some comments.
Early Childhood Development Board
Learning Media Ltd
New Zealand Qualifications Authority
Tertiary Education Commission
New Zealand Teachers Council
Hon BILL ENGLISH (National—Clutha-Southland)
: So much rests on the broad shoulders of Dr Cullen this week because the rest of his front bench is crumbling, starting with the Prime Minister, who has had no response to the
Māori challenge, and
including Mr Goff, with his liberal views on under-age sex, and the Minister in the chair, Mr Maharey, with a failed tertiary policy.
I found a quote the other day that I thought I might share with members. It is about the work of the Tertiary Education Commission. “The work included the Tertiary Education Advisory Commission’s four reports, the industry training review, the training opportunities and youth training review, the work of the adult education and community learning working-party, and, most importantly, the passing of the Education (Tertiary Reform) Amendment Act, the development of the tertiary education strategy 2002-07, and the promulgation of the first statement of the tertiary education priority.” That is all its work in 5 years, and what is the result? The result is widespread mismanagement and potentially fraudulent behaviour among our polytechnics, which have unexpectedly blown the least strategic part of his Budget out by $80 million over the last couple of years, the worst year being 2003.
I ask the Minister when he will start taking this matter seriously. Let us take the example of
Brylton Software and its joint-venture deal with Christchurch Polytechnic. That polytechnic had 96,000 enrolments, which we are told is only about 20,000 or 30,000 people, and it earned $15 million in revenue from the Government. The head of development for Christchurch Polytechnic was Vicki Buck, who was also a director of
Brylton Software, which provided the course that involved students being given CD-ROMs. So $15 million flowed into Christchurch Polytechnic, and I want to know—and the students of the polytechnic want to know—where it went. How much did
Brylton Software get, with the director of development for Christchurch Polytechnic being a director?
I can recall much debate in this Parliament about Aotearoa Television and Tuku Morgan and his shopping habits. I remind the Minister that about $100,000 in director fees were in question in that case, and there was huge debate. I suggest to him that if the Tertiary Education Commission had been a
Māori organisation, he would have sent in an independent investigation months ago. He would have taken the view that the public would not tolerate Labour being soft on
Māoris. Well, it is not a
Māori organisation, but the extent of the mismanagement is enormous. It amounts to $15 million just in Christchurch—before we begin to talk about
Tairāwhiti Polytechnic, the Open Polytechnic, and The Tertiary Alliance, all of which have not merely dipped their toes in the water but been in it up to their necks.
Given the obvious potential conflict of interest, what did the Minister do? Well, he went and asked the people who were conflicted whether they had behaved themselves. They said that, yes, they had behaved themselves. But the answer to the parliamentary question does not say that. It says that at one stage the two people in the polytechnic who were conflicted advised of their conflict and withdrew from negotiations. So, in an answer to this Parliament, the Minister has confirmed that Vicki Buck and her offsider were involved in negotiations between Christchurch Polytechnic and
Brylton Software—a company of which they were shareholders, and she was a director—involving $15 million.
Then today I outlined to the House allegations from students at
Tairāwhiti Polytechnic that in enrolling for one course they were asked to enrol for another course in order to “help with funding”. When they enrolled they attracted hundreds of dollars of public money for their enrolment. Every person in Christchurch who enrolled because he or she got an inducement attracted $800 of public, taxpayers’ money. When will the Minister set up an independent investigation into these matters?
DEBORAH CODDINGTON (ACT)
: Once again we see why the Minister of Education, the Hon Trevor Mallard, is an absolute disgrace to education in this country.
We stand to debate the report on the Teachers Council, and because this Minister has repeatedly pushed unnecessary and superfluous legislation through the Education—
Hon Bill English: I raise a point of order, Mr Chairperson. I am sorry to interrupt my colleague, but I just want to clarify the process. I was asked whether we would agree to take the education reports that are relevant to the Minister in the chair now, and was told that Mr Mallard would be here later to debate the reports—
Darren Hughes: No, but—
Hon Bill English: If that is the case, then we were misled, and that is a serious problem. I was advised that Mr Mallard would be in the Chamber later to deal with—[Interruption] The whips had better clarify that, because that is the agreement I signed up to. If that had not been the case, I would not have agreed to it. We will have to change the course of this debate, so that we know what is happening and all opportunities are available.
The ASSISTANT SPEAKER (H V Ross Robertson): Can I suggest the two whips sort out the order of the debates. As Chairperson I cannot be expected to know that. If they could sort that out, I would appreciate it.
DEBORAH CODDINGTON: The Teachers Council is an absolute disgrace. It does not even report to the House—it is only by leave that we can even debate it. The Teachers Council has been in operation for 29 months, in some form or another. It was set up as a push from the teacher unions to take over from the Teacher Registration Board, because the teacher unions did not have representation. In those 29 months it has managed to breach the Public Finance Act; it has not issued a statement of intent, so we cannot even measure how well it has done; and it has managed to issue only a draft code of ethics. We heard in an open session at the Education and Science Committee that the excuse was that it was still having teething problems. It spat out its director, Margaret
Kouvelis, amid great secrecy. Then what did the Minister do? I think it is bizarre that he is not going to take a call to explain why every one of the entities in his portfolio—the Teachers Council, Learning Media, the New Zealand Qualifications Authority, Career Services—is in total disarray and disorder. The New Zealand Qualifications Authority is not doing what it is meant to do. Learning Media is pouring money down the drain. It was once a profitable company, but now is spending money hand over and fist.
So what did the Minister do? On 1 July 2003 he appointed Joanna Beresford as the chair of the Teachers Council. The council was set up to provide a leadership role in the teaching profession, and it has done nothing of the sort. How could the Minister of Education appoint as the chair of the council a person who had been working with the teacher unions since the 1980s, a person who actually said: “We must actively promote trade unions as at the very core of a democratic and participatory society.”? Well, someone tell the band to strike up the “Internationale”, because that is nothing to do with promoting leadership in the teaching profession.
It is a disgrace that we have spent hundreds of thousands of dollars of taxpayers’ money on this Teachers Council but we are in a worse state than we were before. What does the annual report state? Well, as I said earlier, one of the most important things it states is that the council had not complied with the Public Finance Act. It had breached that Act, in that the audited financial statements were not available within 120 days after 30 June 2003. We are now almost into June 2004 and it still has not even brought them back to the House. How are the taxpayers, the parents of children at schools around New Zealand, expected to have confidence in what their children are being taught, how they are being taught, and whom they are being taught by, when the Teachers Council—much-vaunted by the Hon Trevor Mallard when he was just in Opposition, and who, in an article I wrote for
North and South magazine, hailed his vision of the new Teachers Council as something that would replace the Teacher Registration Board,
do away with all the nonsense being taught in colleges of education, and make teacher registration compulsory—still does not even know, although it is compulsory for teachers to be registered, how many teachers are teaching in New Zealand? How can we know how many are not registered, if we do not even know how many are teaching?
What are we paying these people on the Teachers Council? We have four people who are paid over $100,000 a year. As I have said, it is a disgrace.
MOANA MACKEY (Labour)
: I want to talk about the Tertiary Education Commission and I want to congratulate my colleague the Hon Steve Maharey on the good work he has been doing in this area over the last 5 years. The member opposite, Bill English, asked what Mr Maharey had been doing for the last 5 years. I will tell him what Mr Maharey has been doing for 5 years. He has been reducing the cost of tertiary education for students. He has been making it easier to pay loans back and to reduce loan burdens. He has been reintroducing a Modern Apprenticeships scheme, which the National Government scrapped.
I cannot understand how one could find fault with an apprenticeship scheme that puts young people into work in industries where we absolutely need their skills, because otherwise we choke economic growth. The National Government just got rid of that. It did not see the point of it. Well, the Minister has been reintroducing it. We now have over 6,500 people on these schemes, and we are going to increase it to 8,000. We now have Modern Apprenticeships available in 28 sectors. We have nearly 1,500 Gateway placements, from 126 schools. We are targeting 4,000 Gateway placements. We now have 126,000 people in industry training in this country, and that is what the Hon Steve Maharey has been doing for 5 years. I congratulate him.
I started university in 1993, which was one year after Lockwood Smith introduced the student loan scheme.
Government Member: The bad old days.
MOANA MACKEY: In the bad old days. I remember, in 1990 when I was at high school—we were going through the election and discussing it at school—that the National Party said it would abolish the $1,300 tertiary tuition fee that the Labour Government had forced students to pay. Well, National did abolish it, but replaced it with a $3,000 tertiary tuition fee. Perhaps it could be said that that party was being honest, I do not know, but I think it was being a bit slippery. The fact is that my fees went up 14 percent per year under a National Government—
Steve Chadwick: How much?
MOANA MACKEY: On average, it was 14 percent per year. I did not know what I would be paying, from year to year, in my tertiary fees. When students are trying to get jobs over summer and pay fees for the next year, because they do not want to take out loans, it certainly helps if they have some vague idea of what their fees will be from year to year. Well, students have that now. The fee maxima system means students know that their fees will not increase by any more than 5 percent each year. That might not seem a big deal to people who did not pay for their education in the same way we did, but it certainly would have helped when I was a student. It certainly would have helped to know that the difference might be about $200 and not $1,500.
Another thing we have done in tertiary education is to remove the interest on student loans while students are studying. When I went to varsity I took out a student loan, but I did not take out the maximum I could have. I tried not to, because I knew I would have to pay it back. When I took that loan out I just was not aware of the huge amount of interest that was compiling while I was a student. When I finished my degree and received my final loan statement, I was shocked to find out that I was, in fact, thousands of dollars further in debt than I thought I actually was, just because of the interest I had accumulated while studying. That is hard. When people are young, they are just trying
to get through varsity—because their parents cannot afford to put them through—and they are having to work, so it comes as a bit of a shock when they suddenly realise they are many, many more thousands of dollars in debt.
Simon Power: Your parents were on $80,000 a year.
MOANA MACKEY: My mother was on the domestic purposes benefit when I started university. Mr Power might not have realised that. She supported me as much as she could, and I appreciated that help. When I finished varsity and started paying the loan off, I had gone to work as a laboratory analyst. Laboratory analysts earn a good wage. I was earning about $35,000. I was happy with that, but there was no way my student loan repayments were keeping pace with the interest. My loan was getting bigger and bigger, I was trying to pay it off, but I just could not keep up. That is fairly dispiriting. I started to think: “Well, what’s the point?”.
I remember reading the article by Lockwood Smith in which he gave out the fine words: “Just don’t bother trying to pay it back.” He asked why students were moaning and whingeing about the loans, and said they should just forget about them. That is easy to say for someone who does not have a student loan, and who does not know that when students try to get a mortgage for a house, the loan counts against them, that they are paying 10 percent more off their salaries, and that they are faced with doing that for the rest of their lives. Well, in 1999 changes were made and interest was taken off loans while students were studying. In addition, in my case on my salary no more than 50 percent of my loan repayments went to paying the interest.
BERNIE OGILVY (United Future)
: I want to take a few minutes to look at certain elements of these reports before us. In particular, I would like to start with Learning Media Ltd. This entity, as we all know, has had a major cloud over it in the last year or so, due to nothing more than the expense account of a former chair, a Mr Donald
Sollitt, whose expenses of over $200,000 were achieved on the back of credit cards. I believe that that was a very dark cloud that hung over Learning Media Ltd. When we asked in the select committee what had been done to recover that money, we found that $9,000 of that sum had been invoiced back to him. Yet, the expenses he had been living on as a spree were a sort of joke. He must have thought it was a bit of a joke, too, that he was asked to repay only $9,000. I think the reason, given to us sort of sideways, was simply that this same said gentleman had gone into bankruptcy and therefore the Governmentcould not gather any more money from him. I do not believe that that was a sufficiently good answer, on that occasion.
Even if we put aside the horror part of Learning Media’s history, there are still some very worthwhile matters I would like to bring to this House. The literacy and numeracy programmes that Learning Media has started are, and have been, very well recommended by both students and teachers around the country. I can see that as those develop and unfold, theywill advance New Zealand.
Another thing I noticed too, in Learning Media’s report to us for the last year, was that its overseas operations had increased some 30 percent. The revenue was mainly from the US, but it was also from Canada, and I think from Scandinavia and other countries, which indicates that as a Crown entity, Learning Media was starting to overcome the shadow placed upon it through its former chair. As select committee members when we reviewed and questioned the entity on that aspect, we felt that its progress was notable.
I would also like to take up one aspect of the New Zealand Qualifications Authority in its report to us. The committee, along with the public, remains somewhat concerned—some even sceptical—about the National Certificate of Educational Achievement (NCEA) and its processes of assessment in New Zealand. The public, the parents, and the children—the scholars and the students—do find it difficult to compare
their assessments with others within their own group and age level, and they also find it very difficult to find any useful understandings between schools as to what the system has actually achieved. As a result, I have noted that schools have then gone into, and are increasingly going into, alternative forms of assessments and examination procedures, because of the poor information being obtained from the NCEA programmes. More schools and principals this year have told me that they have certainly signalled to their parents the benefits of other examination systems, so that parents, children, and, of course, employers can get a grip on what is happening.
The International Baccalaureate, with its benefits, for instance, is one of those programmes that parents are turning to and asking their children to take on, more and more, in schools. The Cambridge examinations are flourishing around New Zealand, on the back of a misunderstanding—or a lack of understanding—of how to interpret the NCEA programme. I think that the New Zealand Qualifications Authority needs to wake up and listen to what parents and employers are really wanting. Standards-based achievements have limited features for parents, students’ learning, and employers. I also note that the Education Review Office has sent a real hurry-up message to the qualifications authority about the NCEA programme. So United Future, as a party, believes that the NCEA implementation was frustrated from day one through a lack of resourcing.
HELEN DUNCAN (Labour)
: This debate on the financial review of Crown entities, public organisations, and State enterprises certainly points out the differences there are in this Parliament on these matters. This Labour Government is committed to ensuring that Crown entities and State-owned enterprises are working together with communities for the benefit of all New Zealanders. We are committed, as a long-term shareholder, to the State-owned enterprise model, as opposed to the “hold for sales” stance of the previous Government. Shareholding Ministers seek to maximise the value of their companies for the benefit of all New Zealanders. National, in contrast, could not wait to fob off the family silverware. Just about everything of value to New Zealanders would have been gone by lunchtime under the National model.
This applies even to something as sacred to New Zealanders as our public school system. Our party is committed to a strong public education system that meets the needs of all New Zealanders. We believe that most New Zealanders would expect that this was true of all parties, but it is certainly not true. After all, when Don Brash was asked about it, what did he say? He said: “For my part, I don’t care who owns the schools.” Well, I have news for Don Brash. Most New Zealanders do care who owns the schools. They believe in a viable public education system—a strong, quality public education system paid for by the taxpayers, because that is what real choice is about. Real choice is about all New Zealanders being able to send their children to good quality schools. We want every school to be a good quality school, and every child to have the opportunity to attend a high-quality public education facility. We are not interested in the market model, which has been so disastrous in so many areas of New Zealand life.
In early childhood education, what this Government is about is improving both access and quality. We have provided a lot more places in early childhood education, and by ensuring that early childhood educators are better trained and qualified, we can ensure that the quality of the education that children get is better. We know that the key to quality education is quality teachers. There is plenty of research to prove that. We want to improve the standard of early childhood education, so we must improve the standard of the teachers in that area.
This has met with some opposition from those who espouse the market model and who think that early childhood education is actually about childcare and babysitting. It is not. It is about ensuring that every child in early childhood education is having
quality learning experiences that nurture the child and prepare the child for attending school. We are committed to having early childhood teachers who are better trained and qualified, and I know that this will ensure the future of New Zealand education and of our children, and that we will be thanked for it in time.
In the primary service, the emphasis has been on literacy and numeracy programmes based on strong research to show what is really good for our schools. There are some excellent research programmes, particularly at the education department of Waikato University, that show what can be done to improve the one area of the education system where there has been the greatest problem, and that is with the “tail”, as it is called. Eighty percent of pupils in New Zealand schools are doing really well, and our education system is providing a really excellent education for them. But everyone in the education system knows that there is a group of about 20 percent of pupils who are certainly not doing as well as we would wish them to. When one looks at the international comparisons, that tail in achievement is there. It is there for every other system in the world, but our Government is dedicated to getting rid of it.
Hon BILL ENGLISH (National—Clutha-Southland)
: I invite the Minister to take a call to explain the activities and the purpose of the Tertiary Education Commission. As this House has been made aware in the last couple of months, the tertiary education strategy itself has totally failed. We have ended up with by far the biggest growth in expenditure in the least strategic courses, and if there is any other way the Minister thinks the commission’s strategy should be measured, he can get up and tell members. But it would seem to me that if the lowest priority eats up the most new money, then there is something pretty wrong with the strategy, and he may have been better off without one.
That raises the question of what the commission actually does. One thing it does do is get offside with every other Government department. It has just published a document about the different roles that different institutions might take. The document looks like it has been written by probably a second-year policy analyst, who no doubt has sat at the Minister’s knee, listened to all the jargon, and gone off to put it in the word processor. It is full of all sorts of odd expressions, but that covers up a fundamental strategic contradiction within that document, and also within the commission.
In practice, no one in the tertiary sector takes much notice of the commission. The tertiary sector used to be hopeful that somehow this steering strategy would amount to something, but it has now become hopeless, because it found the commission is hopeless. The commission talks, and talks, and talks, and when it has finished talking, it reports, and reports, and reports. I think there have been 11 or 12 reports in the last 4 or 5 years.
I understand that what the commission is trying to do is decide what direction tertiary education should take. Government departments have some interesting comments on it. I want to quote Te
PuniKōkiri, which is not a department that everyone in Parliament takes a lot of notice of, but it made this comment: “It seems to us that when students are making decisions about what course of study to undertake, it is unlikely that aligning it with the tertiary education strategy will be uppermost in their mind.”
Well, I could not have put it better myself. The Minister is trying to devise a machine that I call “the revenge of the middle-management”. If people who have been in big organisations who then get into Parliament have been middle-management in those organisations, they believe that the boss always got it wrong. So they invent some machine that will make all the right decisions and prove that they were right. This is about tens of thousands of young New Zealanders making decisions, and they are not making decisions willy-nilly, but decisions for which they pay tens of thousands of dollars.
Why would the Tertiary Education Commission know better? The answer is that it does not. It does not matter how much data the commission collects, how detailed the profiles are, or how much it signals, facilitates, and relationship-builds—which I gather is its function; that is what one does when one has no authority and no control—it will never be able to get the right answer. That is because tertiary education these days is so dynamic, so changeable, and so much driven—as it should be—by generally young people’s choices, that by the time the commission catches up with what has happened, it is too late, because it cannot change it.
The community funding is exactly the best example of that. By the time the commission caught up, the $80 million blowout was out of the bag. It was too late. The fraudulent enrolments had already happened, the conflicts of interest had already conflicted, and the commission still cannot do much about it. What it does is ring up the culprits to ask whether they have done anything wrong, which is like asking burglars whether they have burgled a house and they say they have not. The commission rings up the culprits, who say that it is not right and that they did not do any of those nasty things, and the Minister goes away reassured.
So what is the strategy all about? Well, it has crumbled. It has lost credibility in the sector. The Minister has lost credibility, and I want to know what he will do about that. He has spent hundreds of millions of public dollars on this strategy over 5 years—for nothing. Was it for this document that has come out, which was meant to be the
Landscape document but is something else? It has been roundly criticised by every Government department, and we need some answers.
Hon STEVE MAHAREY (Associate Minister of Education (Tertiary Education))
: The debate around education, which seems to be coming to an end, has largely consisted of Bill English—who would know about crumbling—talking about crumbling, and Ms Coddington talking about the Teachers Council. There was a little bit of a discussion about Learning Media and other good things that are going on, and now members are back to the Tertiary Education Commission. So I guess I will spend most of my time on the Tertiary Education Commission, and take up the invitation of Bill English, who was desperately interested in this matter. He was so interested that I guess he will take another call straight after this so he can be part of it. I will invite him to take another call at the end of these 5 minutes to use up the rest of that time in the completion of his so-called demolition of the tertiary education strategy.
The basic proposition is this: if a nation is to move towards a more strategic approach to tertiary education, it has to have someone to do it. This is not Nigeria, so therefore we will not run it as a Government department. Therefore, there has to be an intermediate body. That is what the Welsh do, what the British do, and what California does—one could go on and on. Every country that has moved towards this kind of model has had to have an intermediate body that stands one step removed from the Government, so it can have the independence from Government policy it needs, and one step removed from the sector, so it can satisfy the need for the Government to know that there is a body out there that is scrutinising and doing its job properly.
I ask National members to get up and tell us whether they will run a strategic approach to tertiary education, rather than return to a market-based approach. Will Mr English tell us, when he takes his next call, whether he will take the Tertiary Education Commission and repeal the legislation that underlies it?
If we are to have a strategic approach, someone has to do it. We cannot go back to the market. I did not hear anything about that—all I heard from the National Party is that it wants to give more direction. It wants to tell universities what to teach. It wants to tell polytechnics what to do. These are autonomous organisations in a democratic society, and I will never put this Government in a situation whereby it will dictate what
those organisations do. We want them to be autonomous organisations. I ask Mr English, when he takes his next call, to take up that challenge.
What has the National Party done over the last little while? The Tertiary Education Commission has been in business for a little over a year. Mr English has not been the leader of the National Party for a little over a year, and I do not know whether he has done anything. I have not seen anything. Now and again he pops up in the Chamber. Now and again he does a speech somewhere, but I cannot remember him accomplishing one thing.
Unlike him, in a little over a year, the Tertiary Education Commission has completed its first round of charters—523 of them are approved. It has completed its interim profiles for last year for tertiary education institutions, industry training organisations, and the larger private trainers. It has just completed one of the most stunning examples of policy in the last 4 years under this Government—the Performance-based Research Fund. I know that we debate back and forwards now and again—and I am looking at Maurice Williamson. I know that for many years Maurice Williamson thought we had to have a strategic approach to tertiary education research. We now have it. It is a class act. Right across the world, I am told by Sir Howard Newby, the person who runs the Higher Education Funding Council for England, that this is a class piece of work. It is better than the research assessment exercise, which is about to go into the last thing again. Who did that? The Tertiary Education Commission did that huge piece of work.
The Private Training Establishments Strategic Priorities Fund has now been through two rounds of spending. That fund was capped by the work of the Tertiary Education Commission. We have had completed rounds for the Innovation and Development Fund, the E-Learning Collaborative Development Fund, and the Partnerships for Excellence. We have had the Growth and Innovation Pilot Initiatives round—the second one is underway—the Building Research Capability in the Social Sciences round has been completed, and the Pacific peoples strategy and the
Māori education strategy have now been put in place.
The Centres of Research Excellence programme is run by the Tertiary Education Commission, and we have had a 9.3 percent increase in industry trainees since it took over that strategy. We have the Modern Apprenticeships programme, the Gateway programme—which it administers across the country for us—and it runs the whole industry training strategy. I could go on and on through pages and pages of work.
The Tertiary Education Commission has been going for a little over a year. Am I happy with it? If its officials worked any harder, I am not sure they would go home, at all. All organisations as big as this will have teething problems as they work issues through with the sector. An issue like 5.1 worries this Government because we want to make sure we can get all of this under control.
New Zealand Trade Development Board
Abortion Supervisory Committee
MURRAY SMITH (United Future)
: The Abortion Supervisory Committee has been the subject of scathing criticism for many years—from the last term of Parliament, from the Audit Office, and from this term of Parliament. If it had been any other committee except this one, this Chamber would be in uproar and the members of that committee would have been called upon to resign long ago.
In the last term of Parliament, a unanimous comment of the Justice and Electoral Committee stated: “We are concerned that the annual report of the Abortion Supervisory Committee does not present information that would enable us to form a view of how, or how well, the Abortion Supervisory Committee’s functions are being discharged. The Abortion Supervisory Committee does not consider strategic planning documents necessary or appropriate to its task, though it does continue to review and update those tasks each year. The Audit Office last year told the Justice and Electoral Committee: ‘The Abortion Supervisory Committee annual report does not present information that would enable the committee to form a view on how, or how well, its functions are being discharged.’ Since it appears that the Abortion Supervisory Committee has determined that it will not collect such information, notwithstanding the committee’s expressed views on the matter, the committee appears to have little choice other than to question the Abortion Supervisory Committee in detail on what it actually does, and to form its own view about whether or not those procedures comply with the Act and constitute good performance.” What a scathing criticism of any committee endorsed by this Parliament!
In the last review, the Justice and Electoral Committee again unanimously concluded that the Abortion Supervisory Committee did not fulfil its statutory functions. The Abortion Supervisory Committee stated that it did not need to keep performance measures to evaluate how well it was carrying out its statutory functions. It claimed it had a Crown Law opinion that said it did not have to do anything other than meet minimum statutory requirements, and that that was what it had chosen to do.
The committee pointed out that the law did not prevent it from doing more than meeting minimum statutory requirements, but it appears that fell on deaf ears. The committee said: “It appears that the ASC will continue its practice of not collecting information that would enable us to form a clear view on how—or how well—its functions are being discharged.” Section 14(1)(h) of the Act requires the Abortion Supervisory Committee: “To keep under review the procedure … whereby it is to be determined in any case whether the performance of an abortion could be justified.”
The Abortion Supervisory Committee said it sent out information to consultants, but never sought information in return, let alone monitored, analysed, or collated the results. How can it possibly say that it is fulfilling its statutory functions when it does not even collect any information? Instead of the committee taking up the challenge that the 2001-02 financial review put to it, in this year’s review it criticised the fact that the Justice and Electoral Committee had challenged it. It referred back to a 1996 committee report that said that “the Abortion Supervisory Committee and its individual members were constantly criticised for alleged inadequacies in the performance of its functions. In particular, it is asserted that in carrying out its functions, the Abortion Supervisory Committee fails to have regard to ‘the rights of the unborn child’. This criticism ignores the fact that there is nothing in the Act spelling out what those rights are.”
The Abortion Supervisory Committee, and the committee, it appears, of the time referred, in evidence of that, to the case of
Wall v Livingstone, a 1982 Court of Appeal judgment in which, taken out of context, the court said “it was important not to lose sight of what must have been a deliberate parliamentary decision—the avoidance of any attempt to spell out what were to be regarded as the legal rights of an unborn child, with the consequential absence of any statutory means by which rights could be enforced.”
Now the implication that the committee took from that, which is quite clear in its report, was that because the rights of the unborn child were not defined by the Act, the requirement in the preamble to the Act that “the authorisation of abortions must have full regard to the rights of the unborn child” was meaningless.
But when one looks at the Court of Appeal judgment, one sees that it states nothing of the kind. It cites with approval the lower court decision by Justice Speight, who said, in describing the general effect of the legislation: “That Act and the Crimes Act consider not only the rights of the mother and the need to protect her even against herself, but also balance them against the ‘rights of the unborn child’ which in the course of nature must mean the right to be born.” The committee is certainly not considering anything of that nature, and I think it should be sacked.
Auckland District Health Board
Bay of Plenty District Health Board
Canterbury District Health Board
Capital and Coast District Health Board
Counties Manukau District Health Board
Hawke's Bay District Health Board
Hutt District Health Board
Lakes District Health Board
MidCentral District Health Board
Nelson Marlborough District Health Board
Northland District Health Board
Otago District Health Board
South Canterbury District Health Board
Southland District Health Board
Tairāwhiti District Health Board
Taranaki District Health Board
Waikato District Health Board
Wairarapa District Health Board
Waitematā District Health Board
West Coast District Health Board
Whanganui District Health Board
Health Research Council of New Zealand
Health Sponsorship Council
New Zealand Blood Service
Pharmaceutical Management Agency
Residual Health Management Unit
Dr LYNDA SCOTT (National—Kaikoura)
: The debate tonight is about the 2002-03 financial reviews and the performance of our district health boards. During that time, the district health boards had a large deficit. That deficit has improved, but one has to ask what has happened in our district health boards, where morale has never been lower than it is today. We see time and time again that our doctors and nurses feel that cuts are being made in all areas by a Government that said there would be no cuts, and that said it would reduce the waiting lists. Well, it did that! It did it by simply dumping everybody off the waiting lists. The
Health and Independence Report 2003—the Ministry of Health’s own report—showed clearly that we are doing fewer orthopaedic major joint replacements and less cataract surgery than in 1999, when National left Government.
Steve Chadwick: In hospitals.
Dr LYNDA SCOTT: Where else is a hip replacement done, if it is not done in a hospital? Quite frankly, we will not be setting up corner stalls to do hip replacements, I say to Steve Chadwick. We will not have people who are to have cataracts removed lined up on the footpath. Yes, we do those operations in hospitals, because that is where
they need to be done. But maybe that is this Government’s solution. Maybe that is what people will have to come to accept. When I went to the doctor the other day, someone bailed me up and asked me whether I knew someone actually had to be crippled and in a wheelchair, or so blind he or she could not get across the road, before that person could get a hip or cataract operation out of this Government—and that is not far from the truth.
The wife and the doctor of a 67-year-old farmer contacted me, because they were so concerned about his situation. That man, who had been a very active man, had pain in his right hip. So the doctor had an X-ray taken, and decided that the hip needed to be replaced. The man was put on the waiting list. He waited and waited, to the point where he was on morphine and his general practitioner was saying that the man was suicidal because he had not slept for months. What he needed was an operation, not continual trips to the doctor and to be put on morphine. It is no wonder that in the Budget we will see the Prime Minister dish out a bit of money for orthopaedic surgery, because there are people like that all over New Zealand. Not all of them go to their MP. That man suffered in silence until somebody said enough was enough.
We know that our hospitals’ productivity has reduced. Treasury’s own report showed immense concern that despite the fact that there has been a 6 percent increase in funding, the productivity in our hospital sector has reduced. The Government can say that it has put money into primary care, but—let us face it—those people who want operations do not want to know that less surgery is being done in our public hospitals than was being done in 1999, when National left Government. The fact is that a whole lot more private surgery was also being done in 1999, when National was in Government. The Capital and Coast District Health Board is a very good example of a board that has taken some bad decisions that have impacted both financially and on patients’ lives. It decided to pull Wakefield Hospital’s contract for cardiac surgery. The board said it could do it all in-house, in its own public hospital sector. The only problem was that the intensive care unit could not cope. Acute cases bumped elective cases off the surgery lists, and two patients who were twice cancelled for cardiac surgery died last year, one of them being the 42-year-old father of two children. If he had got his surgery, there is a very, very good chance he would be alive today. The Capital and Coast District Health Board saw it as an achievement to have brought all surgery in-house, but after careful consideration, 3 years down the track it admits that it cannot do it and is finally going to re-contract with a private hospital.
Our public hospitals do a very good job with regard to acute care, but let us hope that when this Government brings the money forward for more orthopaedic surgery—which it should have done 4 years ago—the private hospital sector will be contracted. I say that not because of ideology, but because of the fact that acute care does not take place in private hospitals, so when elective surgery is booked, it can be delivered on the day. People are not continually bumped off the surgery lists because acute cases take the surgeons, the theatre space, the intensive care space, or the bed space. That contracting of private hospitals needs to happen. The productivity of the hospitals has gone down, and it is no wonder as to why that has happened. There is nothing in the current system of 21 district health boards—
STEVE CHADWICK (Labour—Rotorua)
: I am delighted to follow the National spokesperson on health and to come out fighting, by saying that hospitals are all that that member mentioned. We already know that this Government has created a stable and an effective health service, something that we did not have in the 9 years Labour was in Opposition. We are putting resources, staff, funding, and infrastructure in place. We are building a public health system that people can trust, and that is transparent and has community involvement in the democracy of the district health boards. That health
service will be there for people, regardless of their ability to pay. We know that that member of the Opposition has already talked about what she would do if she were ever to become the Minister of Health. We should be afraid—be very, very afraid—because she says that National would discontinue the forced implementation of primary health organisations. Everything that this Government is focusing on will build a robust and healthy community based on health and wellness, which that spokesperson would scrap. She has also gone on to say that the whole primary health organisation system would go, and that we are forcing the model on communities. But it is interesting to see how communities are responding to us. That whole speech was about the morale of hospitals, productivity cuts in hospitals, and operations. This Government is focused on the community and on the primary health organisations.
But I want to look at the focus on district health boards, because—good news—in the first three-quarters of this year, they have reduced their deficits quite markedly. The deficits are 20 percent better than the boards had stated they would achieve. We have put 43 percent more funding into the health sector since 1999. We are spending more money on operations. Operations are not measured properly—the member knows that—and we are doing work to look at that. Does the member know about the innovation of the surgical bus? There are new technologies allowing surgery to be done out in the primary health sector. They are not even measured in the productivity of hospitals, let alone the outcome measures, in terms of health and wellness, that we are focusing on now. One of the most profound statements in our financial review of the Auckland district health boards came from the chair of the Waitemata District Health Board, who said, when the health boards got together: “We’re moving to survival of the patient, rather than survival of the organisation.” I was very proud to hear that statement.
When we did the financial review of the district health boards, we looked at innovation. District health boards talked about managing chronic disease outside the hospital setting, and they were looking at parish nursing ideas to manage obesity and diabetes in the church community in south Auckland. That type of innovation was never in the health sector before. District health boards are involving the non-governmental sector, and they are looking forward to managing devolution of the services for the elderly, which they have responsibility for now. Even with the difficulties, they say that they want to manage services for the elderly in their own communities. We heard all the Auckland district health boards talk about the population-based funding formula. They said we should not get rid of the formula, but that we needed to tidy it up a bit, and we should look at quaternary and tertiary services. They said that we needed to look at
interdistrict flows and patient movement, but they liked the formula and said we should not change it.
One of the formulas from Dr Brash that we need to be very afraid of is a comment from him that shielding people from the consequences of their actions has costs, and sometimes substantial costs. He suggested that a Government under his leadership would not provide free kidney dialysis to those who, over many years of overeating, had substantially increased their risk of type 2 diabetes. He said he would not provide hospital care for somebody who had a road accident while driving under the influence of alcohol. Those are appalling statements. People should be very, very afraid. National would continue to make cuts, based on a market model that the Leader of the Opposition feels he knows. He can only look at pricing economic value units in health care, while we get on with the innovation.
We saw some wonderful things happening in the South Island, when we looked at the Otago District Health Board. The chair of that district health board said that the boards talked to each other.
HEATHER ROY (ACT)
: I shall start where the National Party spokesperson on health left off and talk about productivity, which, of course, is down. When the Health Committee did the financial review of the Capital and Coast District Health Board—[Interruption]—perhaps the member would like to take a call, instead of shooting insults across the floor of the Chamber. When we did the financial review of the Capital and Coast District Health Board, I asked in detail about its mental health services. I was not trying to get at that board, because, in fact, mental health services across the country are a national disgrace. Ward 27 at Wellington Hospital has had its fair share of problems, although it does not experience those problems on its own. However, in recent times it had a patient who left the ward and climbed into the tigers’ cage at Wellington Zoo. Soon afterwards, that incident was followed by the Buckle suicide, which resulted in an inquiry. More recently, after leaving the ward a patient jumped off the sixth floor building at Wellington Hospital, and received serious head injuries.
Two weeks ago I highlighted the problems with regard to overcrowding at Wellington Hospital’s mental health unit, and I am at pains here to say that that is happening not only in Wellington but at many mental health units around the country. Overcrowding is a particular problem in Wellington, but the Minister of Health has done nothing about it. In fact, she said what a good thing it was that the extra mental health ward at Kenepuru Hospital closed in July 2002 without so much as a murmur, leaving the Wellington region to cater for a population of 250,000 patients with 30 mental health acute beds. Two weeks ago that ward was so full that it had 35 patients, and others queuing up to go in, so one patient was put to sleep for the night in the ward’s telephone booth—the room that is assigned for the telephone. The telephone was taken out, and the patient was put in. This is a Government that prides itself on reducing the stigma experienced by those with mental illness. In fact, it prides itself so much on that that it has spent just over $13 million to date on the Like Minds Like Mine campaign, with flash television advertising and various other components to it. I would like to know, and I would like the Minister in the chair, the Hon Ruth Dyson, to tell this House, how making a patient sleep in a telephone booth for the night tells that patient that he or she is a first-rate and well-respected New Zealand citizen. It does not. It tells people that mental health is the poor cousin in the New Zealand health system, and that they will be treated in that way.
Let us imagine the public outcry if a child was put to bed on a mattress on the floor of a children’s ward in any hospital in this country, or if someone with a broken leg was put, in similar circumstances, in a telephone booth for the night. There would be a public outcry about that. The relatives of the patient would go straight to the local newspaper. However, when that sort of situation happens to a mental health patient, there is not a murmur from this Government. The Minister of Health is well aware of those problems. In replying to question for written answer No. 5684 this year in relation to the Capital and Coast District Health Board, the Minister stated she had been advised that 35 patients were in the ward that night, and two beds were set up in a room usually designated for telephone use—one in the women’s lounge and one in a doctor’s interview room. Are we not treating mental health patients well in this country!
What has the Minister of Health done about the problem? She has thrown more money at it. That has not resulted in any more treatment. The Hon Ruth Dyson answered an oral question in the House last week by saying that since 1999 an extra $321 million has been allocated to mental health. This year about $800 million will be spent on mental health—almost 10 percent of the health budget. What are the mentally unwell getting for that? Three percent of the population suffers from a serious mental illness requiring treatment. How many are treated? The figure is 1.6 percent of the population, and that figure is down from 1.7 percent in the previous year. It is a disgrace
that 1.4 percent of the population of this country who suffer from a serious mental illness are not receiving any treatment, at all. What is the Government doing about it? It says that it is ring fencing that money. It is a disgrace!
Dr LYNDA SCOTT (National—Kaikoura)
: The Labour Party speaker said I had been concentrating only on hospitals. That was because this speech will be about primary care.
One thing we did hear from the Auckland district health boards that that member was so busy quoting was that they think it would be a really good idea if there were only one district health board for Auckland, because the cross-boundary flow issues are huge. Following patients from one side of Auckland to the other, moving money and patients around—if the patient moves, the money follows—is hugely time consuming and costly for the Auckland district health boards. I have to say that if we have one district health board for 1 million people, a quarter of New Zealand’s population—it is probably above that now; there are probably 1.3 million people in the Greater Auckland area—why have a whole lot more, 18 others, for the rest of the country? When we talked to the Otago District Health Board it also said it thought it would be a really good idea if there were one district health board for Otago and Southland. The district health boards are getting together on a lot of backroom functions. Having 21 boards causes a major increase in bureaucracy.
But let us talk about primary health organisations. The member opposite was correct: National will not force the implementation of primary health organisations. Their funding is based on race and location, and that has caused major implementation problems across New Zealand. I wonder whether Clayton Cosgrove would like to tell people in his electorate who happen to be poor and have high health needs why he backs a scheme that has people in Rotorua and Gisborne, regardless of their health need or whether they can afford to go to the doctor, paying $15, while his people are still paying $35 or $40. That is an unfair funding formula, and we do not agree with it.
I am absolutely astounded that the Minister of Health said that 3 million people are enrolled. For goodness’ sake! If you do not enrol you get no access to the new money. Does she not understand that financial incentives drive everyone?
The CHAIRPERSON (H V Ross Robertson): The member is bringing the Chair into the debate.
Dr LYNDA SCOTT: The Minister of Health should wake up and realise that if she puts a financial incentive there, of course people will join. Why would doctors not join, if joining meant that their patients would get access to the new money? No one disagrees with the new money being put into primary care, but it absolutely has to be based—
Clayton Cosgrove: What’s the member’s position on primary health organisations?
Dr LYNDA SCOTT: Instead of shouting and screaming across the House, as that member is so wont to do, he might like to get up and take a call—but he will not do that.
The primary health organisations funding is based on race. Those organisations are wasting dollars. They have a bureaucracy. There are 84 of them—another Government structure. When New Zealand was told it would have 21 district health boards that would look after hospital care and primary care, we were not told that this Government would set up yet another bureaucracy; that it would set up 84 primary health organisations, all with a community governance board—yet another set of committees. This Minister of Health is the “Minister of Committees”.
We have a major problem with the implementation of the primary health organisations. We have problems that the independent practitioners association system could have solved. If the Government had let the doctors get on with doing what they
know and what they are good at doing—that is, providing excellence in primary care in this country—if it had backed the doctors to do that, it would have had a much better outcome for the money it spent. Actually, it probably would not have needed to spend as much, because it has set up a whole new bureaucracy.
We heard about aged-care funding being devolved. Well, every district health board that I have spoken to is shivering in its boots about the funding of aged care, because those boards know that this Government has not put a penny into it for the 5 years it has been in Government. Why has it not done that? Because it is saving the money to fund its asset-testing promise—the asset-testing promise that it has not actually kept. So there are no new services whatsoever in aged care. We have not seen an expansion of care for Alzheimer’s patients. In fact, I have just got a letter on my desk from the Minister saying: “Sorry, we don’t have any psychogeriatric facilities in Wanganui.”
Dr PAUL HUTCHISON (National—Port Waikato)
: There is certainly a time in a Government’s term when it can no longer hide its failures. If ever there is an area where its failures are becoming more and more obvious, it is the district health boards and the health services they provide. One has only to go back to 1999, when Labour said on its pledge card: “We will deliver.”
Dr Lynda Scott: No surgery!
Dr PAUL HUTCHISON: It is not quite that bad, but there is certainly a hanguva lot less surgery. Back in 1999 Labour also said that it would focus on patients not on profit, and that waiting times for surgery would be cut. The system that the Government has created over its 4 years, the system of district health boards, which we are analysing tonight, is one of the most complex bureaucratic systems that New Zealand has ever seen, and probably one of the most complex, bureaucratic, and inefficient health systems in the world.
Back in 1999, when this Government was supposed to deliver on its so-called pledge card, who should come into Parliament looking somewhat arrogant but one Hon Dr Michael Cullen, who said: “We won. You lost. Eat that!”. In the next 24 months the Government proceeded to deliver this highly complex bureaucracy of 21 district health boards, and even the Government is now beginning to admit: “Gee, we’d better amalgamate all the district health boards in Auckland.” I remind the Committee once again that back in 1989 the then Minister of Health, Helen Clark—now the Prime Minister—fired her own Auckland health board, which included her own husband, because it had become so dysfunctional. Ten years later she had forgotten the mistakes of the past and set about recreating what had been a dismal failure back then. So we had Michael Cullen saying: “We won. You lost. Eat that!”, but if we look in last week’s
Dominion Post we see: “More money. Less surgery. What’s wrong?”.
What is wrong is the design of the health system that this failing Labour Government set up. As my colleague pointed out just recently, the number of publicly funded surgical inpatient discharges—acute and elective—has fallen significantly in the 4 years of the Labour Government. Back in 2000 there were 160,000 of them; this year the figure is down to 157,000. When Dr Cullen was asked in this House what was wrong, he said: “Look, they mustn’t have been counting things. We’ll start counting what is happening in the outpatients clinics, in the radiation clinics, and various other aspects.” Once this Labour Government starts to count and to try to defend its actions, we will find a network of deception—the very same network of deception that it created when it said it would cut waiting lists. What did this Labour Government really do? It set up what is called an active waiting list, and literally tens of thousands of ordinary New Zealanders who had expected to get surgery under this Labour Government were simply shifted into the community to wallow, to lie in pain, to wait for their cataracts or hip surgery to be done.
I would like to give the Committee an example that I have picked up over the last year, during the period for which the Counties Manukau District Health Board is being examined. I received a letter from an 86-year-old man who has failing eyesight. He wrote: “Please note an enclosed report from Dr Singh of Tuakau Surgery detailing the condition of my failing eyes. A peculiar turn is the fact that Dr Singh received a report from Manukau eye clinic stating that Mr
McPhail had been put on the list for cataract surgery, while at the same time I, Mr
McPhail, received one telling me my name had been removed.” That is the sort of shambles that this totally dysfunctional, bureaucratic district health board system that the Labour Party Government created is actually creating in the community. It has caused confusion for that sort of elderly man. The district health board wrote back to me: “We can appreciate that the decision to remove Mr
McPhail’s name from the rating list is upsetting and frustrating for him and must seem strange given that he had originally been on the waiting list for surgery. Clinically, Mr
McPhail would benefit from cataract surgery. Unfortunately, we can’t deliver it.”
That absolutely backs up the Treasury report that we addressed in December 2003, which showed that despite this Labour Government spending more money, it was delivering less. That has been backed up absolutely clearly in the areas of both major joint replacements and cataracts, over the 4 years of this Labour Government. It is extremely serious to note that in 1999 the number of major joint replacements done was 5,250, and that in 2002-03 this Labour Government delivered only 4,481 major joint replacements. I refer now to cataracts, which affect the elderly of this nation and which my constituent Mr
McPhail writes about. He writes about the failings of the district health boards under this Labour Government. What are the actual figures? Back in 1999, 7,831 cataract operations were carried out, and in 2002-03 that figure had gone down by over 400. What is the reply of the Labour Government to that? It is: “Oh, we’ll do some more analysis of what we are doing in the outpatient clinics, in the radiation clinics, and in the oncology clinics. We’ll fix some numbers that will befuddle the general public.”
It is absolutely clear what has happened under this Labour Government. It has put in more money but the number of cataract operations for the elderly has gone down over 4 years. The Government has said it will deliver—that it will cut waiting times. What has it done? It has created an active waiting-list whereby patients who have real illnesses, difficult conditions, and are in pain are put off the waiting list to await their fate. That is the effect of this Labour Government’s design of the health system for New Zealand, and it is a disgrace.
I have gone around each district health board, asking each of them two questions. One was whether there had been any shifting of resources from the secondary and tertiary areas into the primary area. That was one of the promises; that was one of the things Labour said would happen when it concentrated on primary care. Every one of them has said a resounding “No”. The other question I asked them was whether there had been any tangible improvement in health outcomes out in the community that they could measure. The answer has been a resounding “No”. This Labour Government, despite all its rhetoric, despite Labour’s pledge card, has delivered absolutely no improvement in heath outcomes out in the community.
The CHAIRPERSON (H V Ross Robertson): Honourable members, just before I put the vote, can I say that a cellphone was heard during the speech made by Dr Paul Hutchison. I remind members that it is my duty to keep the debate within the Standing Orders. After all, they are the rules that have been crafted by well over a century and a half of parliamentary practice in New Zealand, and it is my duty to ensure that they are upheld. So if members do have cellphones in the Chamber, would they please turn them off. I refer them to Speaker’s ruling 16/2.
Animal Control Products Ltd
R DOUG WOOLERTON (NZ First)
: I wish to speak about two State-owned enterprises. One is a shining example, in my view, and the other needs to learn—I say that advisedly—how democracy works and who it is accountable to. The first is Landcorp. In previous years Landcorp lived under a very, very—
The CHAIRPERSON (H V Ross Robertson): I just say to the member that this debate is about Animal Control Products Ltd.
R DOUG WOOLERTON: Mr Chairman, I thought we were taking a basket of things: State-owned enterprises—
The CHAIRPERSON (H V Ross Robertson): I understand that that has been agreed to. Thank you.
Jill Pettis: It’s a broad-ranging debate.
R DOUG WOOLERTON: I will stick pretty closely to the topic and not go off on to other things, but I want to mention these two different entities.
Under previous administrations Landcorp could not flourish as it should. It could not develop properties that were previously undeveloped under its care. It did not even know whether it could hold on to land that was in its care, because of something called the land bank, which was set aside for treaty settlements. So I am pleased to say that Land Corporation has certainty now. It has been told by the current administration that it is not for sale, and New Zealand First—which is against asset sales, especially sale of land to foreigners—can do nothing else but applaud that decision. We are worried that any change of administration may put Landcorp in danger again.
It is amazing what has happened to that organisation once certainty of ownership, or tenure, was established. Landcorp has flourished and is a huge success, showing the Government returns the likes of which, I understand, even Telecom could not match in its wildest dreams, and it is showing what in fact agriculture can do in this country. Not only is it doing that and returning money to the shareholder, the owner—which is the Government and the taxpayer of New Zealand—but it is also providing what I would call a Ruakura-like example of how farming can be in sometimes marginal situations. So, to a degree, it is acting like a research station. It is showing the way in many areas. Just for the benefit of my Green colleagues on my left, I point out that Landcorp is showing the way not only in areas of advancement, but also in developing what should be developed and putting aside what should not. That is the key to good farming. Landcorp is a prime example of what a good State-owned enterprise should be doing and is doing for the taxpayer, once it is given certainty of tenure.
The other thing I want to talk about is not so good, and that is AgriQuality New Zealand Ltd. We in New Zealand, especially in the farming sector, need good robust organisations that service the farming sector and, through the farming sector, the overseas markets we sell to. AgriQuality has a prime part to play in that, and I want to read to members—and it cannot be more eloquently put—from the report from the Primary Production Committee, of which I am a member.
I read from the report a couple of statements to show what we are talking about. The select committee stated: “We sought further information on how TB testing technical specifications or requirements have changed and a rationale for the restructuring, but were frustrated by the inferior quality of the written responses to our questions. It was only through subsequent questioning that we were able to find out that qualitatively, the Animal Health Board specifications have not changed dramatically”. I read now from the end of the report: “The company states, ‘While commercial activity may be an issue in some cases, these are in practice likely to be rare and such sensitivity would have to
be very clearly demonstrated.’ ” That relates to the hedging that these people undertook when they were before the select committee.
This is an organisation that put out a glossy brochure—I call it a brochure but it is actually, technically, an annual report—full of pretty pictures of the executives, etc., etc.
Hon DAMIEN O'CONNOR (Associate Minister of Agriculture)
: I would like to take the opportunity to respond to a couple of matters that Mr Woolerton has raised. I accept the points the Primary Production Committee made in its report on AgriQuality, and I am sure it will do its very best to improve its performance next year.
I would like to raise an issue around Landcorp. It is, as the member said, an outstanding organisation, which is very proudly owned by the Government. But I would like to note on the record that the National Party has indicated it will sell Landcorp, along with some other key strategic assets, if it ever becomes the Government. I think we can be grateful that it will not get there for a long time, but it is important. Landcorp is an outstanding organisation. It has $585 million worth of shareholder assets, and the National Party will sell it to pay for its low-tax promises.
Clayton Cosgrove: It will do what it did to kiwifruit!
Hon DAMIEN O'CONNOR: Absolutely. Landcorp, as I say, has $585 million of value.
R Doug Woolerton: What are they saying about Kiwibank?
Hon DAMIEN O'CONNOR: They will sell Kiwibank. They will sell every asset they can get their greedy hands on. Landcorp is a strategic asset for the rural industry and economy of this country. It is developing marginal land, and is doing so very successfully. When this Government came into power 4 years ago, Landcorp did not know where it was going because the previous National Government had said it would sell it, and Landcorp did not know what to do. We came into power, and we told Landcorp: “We will not sell you. Get on with the job of farming.” That is indeed what it has done. It has a 5-year strategic plan. It is 3 years through that plan and has outstanding results. It has returned to the shareholder year-on-year tens of millions of dollars.
Hon Pete Hodgson: With an excellent chief executive.
Hon DAMIEN O'CONNOR: Chris Kelly is outstanding. He has assisted Landcorp to develop the dairy industry side. It has a mixed portfolio of dairy, deer, and sheep farming operations on marginal land that is now high-quality, top producing land. Landcorp is also showing environmental leadership in the agricultural sector. It is setting aside land and protecting it—land that it considers is more valuable kept for biodiversity within its own farms. That is good leadership. In my own electorate of West Coast – Tasman, Landcorp is showing farmers the value in setting aside bush—as my own father does, and that will surprise some members—and it is showing that one can run a successful economic operation on marginal land and protect the environment. That is worthy of note.
Hon Pete Hodgson: What will Don Brash do with it?
Hon DAMIEN O'CONNOR: Don Brash will sell it. He will sell Landcorp, and knowing the National Party he will sell it for less than its $585 million. There are plenty of examples of where National fire-saled strategic assets.
Craig McNair: To his mates!
Hon DAMIEN O'CONNOR: Absolutely—to his mates, no doubt. Another key role that Landcorp plays in the agricultural sector is that of career opportunities. It is providing opportunities for young people to get into agriculture, work their way through the system, and become outstanding managers. That is something worthy of note. As the average age of farmers in this country increases, Landcorp provides an opportunity for keen, young people to come in, and we must praise them.
Just before I finish, I must point out that Landcorp has been farming Molesworth Station, the largest farm in this country, for many, many years, and doing so very successfully. There was some discussion and debate when we transferred that station back to the Department of Conservation. What will happen is that Landcorp will continue to manage that farm. It will have a management team—an oversight team—with the Department of Conservation to protect some of the marginal areas, the landscape areas of important protection. We had to do this because the risk of a National Party ever coming into Government again meant that it would sell Landcorp and Molesworth Station, as well. That is why we had to transfer it into well-protected public ownership, through the Department of Conservation—if we had not acted, the National Party would sell Landcorp andMolesworth Station.
Energy Efficiency and Conservation Authority
Genesis Power Ltd
Meridian Energy Ltd
JEANETTE FITZSIMONS (Co-Leader—Green)
: The year under review was the second full year of the operations of the Energy Efficiency and Conservation Authority since it was set up on a statutory basis as a result of my Energy Efficiency and Conservation Bill, which was passed in 2000. The year under review was also the first full year of the implementation of the National Energy Efficiency and Conservation Strategy. The Local Government and Environment Committee was pleased to learn that, to the extent that one can tell with only 1 year’s data, the Energy Efficiency and Conservation Authority is on track to meet its target for energy efficiency and renewable energy.
The authority has been laying the groundwork, across an extraordinarily wide range of activities, for a more energy-efficient future in all energy-using sectors. There are a bewildering range of activities, including minimum energy performance standards for appliances, grants for energy audits in industry, an electricity demand exchange to cope with dry winters, ethanol blends with petrol, bio-diesel, travel demand plans, home energy retrofits, and a great deal more. The authority has a mere $8.5 million for this work, and it is spread very thinly across a wide range of activities. Therefore progress in all those areas has been quite slow, because the authority has tried to work across a range of areas.
I want to talk about two areas where I believe the authority could go further, faster, and also where it needs more funding. Both concern domestic energy use, which is one-third of our electricity consumption. I believe if we are going to change the culture of our society towards a more energy-efficient culture, then we need to pay some attention to households, even though they are many and small, because households are where people’s attitudes can be changed and where people learn about the kind of society we need to build for the future.
The first area concerns the use of direct solar energy to replace electricity, and also to give us greater security of supply in dry winters, as well as build some capacity. It would be like a whole lot of little power stations on people’s roofs, all around the country. The Energy Efficiency and Conservation Authority is working towards a target of installing 10,000 solar water heaters each year, but that is less than half the number of new houses being built every year. So the authority is not even proposing to keep up with the rate of expansion of the housing stock. At present it gives a grantfor about 1 year’s worth of interest to a householder who has to borrow to install a solar water heater.
Hon Pete Hodgson: 2 years.
JEANETTE FITZSIMONS: The Minister says it is 2 years’ interest. Jolly good! But people who would like to put their savings into this technology, rather than in the money market, because the return is quite good, cannot get any help. The grant of 2 years’ worth of interest is not really enough to encourage a lot of people to want to take it up. Yet I get letters all the time from people who would like to adopt this technology but find it too expensive.
The one big obstacle standing in the way of widespread use of solar water-heating in New Zealand is the small-scale nature of the industry. There is a terrible lack of capacity—
- Sitting suspended from 6 p.m. to 7.30 p.m.
JEANETTE FITZSIMONS: I had been saying that the lack of capacity in the solar water-heating industry and the installing industry was an obstacle preventing this technology from making any really significant contribution to New Zealand’s electricity security and sustainability. That lack of capacity will not be solved by giving out a few quite small grants to individual householders so they can buy a solar water heater. What we need is a bold programme of Government leadership whereby all Government buildings are audited, then all buildings where solar water-heating would be cost-effective are put out to tender over 5 years for a programme to
solarise all suitable Government buildings.
Over that 5 years the industry would have a chance to gear up its manufacturing and its installation capacity. It would know it had an assured market. The price would come down through competitive tendering. At the end of that 5 years there would be a lot of operating experience, capacity would be built in the industry, and the price would be a lot lower for ordinary New Zealanders wanting to
solarise their homes. That is what I think the Government ought to be doing in the Budget on Thursday. That is the way to go if we want to get solar water-heating off the ground. I will keep on saying that, and I have been saying that for a few years now.
I want to make a brief mention of household energy retrofits. In the year under review 1,500 retrofits were done and there are 700,000 to 800,000 pre-1978 homes left to do. We need to speed this up.
GERRARD ECKHOFF (ACT)
: If I may I will preface my remarks with the observation that after sitting here for several hours I cannot help but note that many members, especially Government members but also the odd speaker from this side of the Chamber, seem to think that if the Government ran all the services in this country, everything would be sweet. The health service is in a mess. The education service is in a mess. The fact that the odd service does work well, like Landcorp for example, seems to imply that if the Government ran everything, everything in the country would be wonderful. However, nothing could be further from the truth, as is typified by the energy sector in this country.
The electricity sector, despite what some in this Chamber might say, is heading for a crisis. We are not in that situation yet, as I am sure the Minister would happily point out, but the general consensus seems to be that that is exactly where we are heading. The energy sector is absolutely vital in this country, and I want to include in my comments the role of Meridian Energy in that sector.
Essentially, all that this Government has generated in the electricity industry and the generation industry is uncertainty. Major upheavals occurred under Max Bradford. This Government has done nothing but add to the problem that was created when private property rights were taken from small generators—like the one I have some experience of, Pioneer Generation in Central Otago. It was a marvellous little company owned by the populace of that region until it was forcibly sold. We were very unhappy with that.
I now want to focus on the role of Meridian Energy, especially as an Otago MP. I look forward to hearing a speech from David Parker on the very subject of Meridian Energy. As he is the constituent MP, I am sure he will be taking a call on this most vital of industries, especially in the south. Meridian Energy is not what the Government seems to paint it to be. I see that the financial review of Meridian Energy states that the company suffered significant losses on hedge contracts as a result of increased spot prices, and is also experiencing increasing difficulty financing costs arising out of a $500 million bridging loan used for the acquisition of Southern Hydro—in Australia, not in New Zealand. It is as if New Zealand does not have energy problems or a need for energy capacity. Well, we all know that that is exactly what is needed in this country. We must have increased generation, and we need it rapidly.
Meridian Energy has stated that opportunities for company growth are limited within New Zealand and it has expanded into Australia. Who in his or her right mind would suggest that opportunities for growth in the energy industry are limited? Gracious me, we are heading for a major shortage! We really should identify the impediments to growth in the industry.
I suppose some might call the exercise that Meridian Energy went through over Project Aqua a futile exercise. However, it is an example of what we really should be focusing on and the problems that were faced. Almost $100 million was spent by Meridian Energy on Project Aqua. A large portion of that $100 million is now totally wasted money. About $45 million was spent on the Resource Management Act process, which is an outrageously large amount, despite the fact that it was a $1.2 to $1.3 billion project. To have to spend $45 million on that process is, in my view, excessive. Meridian Energy spent the balance of that $100 million on acquiring land. Meridian Energy has now spent $100 million that it has had no particular use from. No private company could have afforded to do anything along those lines. Meridian Energy said: “Well, look here, we are being supported by the Government, it doesn’t really matter.”
GORDON COPELAND (United Future)
: Perhaps the decision by Meridian Energy a couple of months ago to pull the plug on its proposed $1.2 billion Project Aqua will be seen as the biggest call made by any State-owned enterprise in 2004. We had foreseen Project Aqua making a huge contribution to the electricity supply shortage facing New Zealand from around 2007 onwards. So Meridian’s decision not to proceed sent all the other State-owned enterprises involved in the sector, such as Genesis, Mighty River, and Solid Energy, back to the drawing board for a major rethink of their future plans. Meridian itself, of course, is in the same situation, but in addition it has to grapple with the reality of a significant write-off in relation to the preliminary work undertaken on Project Aqua. Of the $95 million spent on the project, $50 million was spent on assets such as land, some of which will now be put back on the market. So the write-off will be at least $45 million, and I predict it will be somewhat more than that.
I recommend to the Government tonight that, in view of those circumstances, we collectively insist that a post-cancellation audit should be undertaken by the company in relation to both the costs arising and the procedures followed in relation to this abortive project. That would be in line with international best practice.
Unless a post-cancellation audit is undertaken, both the company and its shareholders—the taxpayers of New Zealand—are left with a whole range of unanswered questions. For example, should Meridian have been able to foresee earlier that the project was doomed, having regard to items such as the consents process under the Resource Management Act, the difficulties and costs associated with the acquisition of the land, the geological and technical issues arising from the design and scale of the project, the accuracy or otherwise of the announced $1.2 billion price tag, risk evaluations in relation to water consents, river flows, storage, and rates of return on
investment, etc.? I believe that both prudence and good management dictate the necessity to undertake this work. Are there lessons that the company could learn for the future? Are there lessons that the Government itself, on behalf of the people of New Zealand, can learn for the future, particularly in relation to matters such as water allocation and the Resource Management Act processes?
The other item that I wish to draw to the attention of members today concerns Genesis Power and the decision of the Environment Court, announced yesterday, to limit the diversion of Whanganui River water into the company’s Tongariro hydro scheme to only 10 years, instead of the 35 years sought by the State-owned enterprise to ensure ongoing security of supply. I urge the Government to consider, and consider very carefully, the ramifications of this important decision, both for Genesis itself and for the wider implications that arise in relation to other existing and potential future hydro schemes within New Zealand. I ask whether this case is some kind of precedent concerning the duration of water consents; if so, it is a serious matter.
It needs to be remembered that vast sums of money are required to build hydro dams, and if the cost outlay and an adequate return on investment are to be assured, then the owners of the project—in this case, again, the taxpayers of New Zealand—must be assured of long-term water consents. Clearly, a 10-year consent period would in most circumstances be totally inadequate, meaning that new dam projects will be rendered uneconomic. This is hugely important, given the nation’s looming electricity shortage.
A decision such as this could quickly scare off potential new investors, whether or not State-owned enterprises or privately owned, or New Zealand - based or overseas-based. Coupled with the cancellation of Project Aqua, which I mentioned earlier, on the face of it the Environment Court decision creates further uncertainty at a time when not only electricity generation investors, but also the commercial and domestic consumers of electricity, seek reassurance concerning both supply and price. In these circumstances, I believe that the Government must leave no stone unturned, including the possibility of new legislation, should it be required.
Foundation for Research, Science and Technology
Crown Research Institutes
RON MARK (NZ First)
: I note that the Education and Science Committee has been advised no matters were found that needed to be drawn to the attention of the House in respect of the Institute of Environmental Science and Research Ltd, but it is an area that I want to express a couple of concerns about and put some questions to the Minister. My questions are related to law and order.
The Committee cannot ignore the fact that the work the institute does is extremely important to citizens who are concerned about law and order and safety in their community. Science has moved on and so have the tools the police rely upon and lean on in order to prosecute and gain convictions. But I have to say that when I look back over the past year there are some anomalies in statements that have been made.
On 21 May 2003 the police, in a document provided to the Law and Order Committee,
Vote Police: Supplementary Questions, 21 May 2003, gave the committee an understanding of the types of problems the police were facing. They specifically pointed to a need to boost DNA capacity and research, and the ability to collect and collate data from DNA. They went on to talk about their need to get a greater handle on the methamphetamine industry. Both of these areas had great implications, I would have thought, for the Institute of Environmental Science and Research.
In talking about their desire to boost DNA capacity, the police went on to state, in the last sentence on page 4, that in addition to this requirement—whereby they were
seeking to generate a further 3,500 additional samples resulting in an additional 500 DNA hits, and with the increased capacity they wanted to put in place on the police side—there was “a need to provide some additional resource to fund ESR processing costs related to increased throughput”.
Going further into the police submission dealing with the clandestine laboratory responses, again they asked for a number of things. They did not ask for the three units that the Minister of Police gave them; they actually asked for four. They highlighted the booming methamphetamine industry and the ballooning numbers of clandestine laboratories they were uncovering, and they emphasised the need for the police to have increased resources to deal with the clean-up, but there was also a direct inference that the ability of the institute needed to be up-gunned and better resourced.
What was the result? The result was a series of headlines, and I can go back to 14 October 2003, for example, when already the Institute of Environmental Science and Research was admitting it was having problems. A scientist admitted that she gave the wrong drug-test evidence. There were many reasons; some would suggest that one of the reasons the institute was struggling was the heavy workload.
The institute came under huge pressure, as industry sought to deal with drug use in the workplace. I know that Air New Zealand is one such business that sought to implement drug-testing of employees. Again, where did that responsibility fall? It fell on the institute to pick up the tab. Private investigators were reported in the paper as saying there was an increasing need for industry to protect itself, and once again the workload would fall on the institute. There were more articles in October, and in December concerns were being expressed on the radio as to the institute’s ability to keep up with its workload. Then in January 2004, despite all the assurances about adequate resourcing, we again became aware of the issue. The Wellington Regional Chamber of Commerce Chief Executive, Philip
Lewin, said: “Industry is not able to keep tabs and to carry out the drug testing, because ESR cannot keep up.” School principals were talking about drug testing students, and the need for that; and again there were implications for the institute. I am not talking purely about funding but also staffing, which I guess is a funding issue.
Civil Aviation Authority
Land Transport Safety Authority of New Zealand
Maritime Safety Authority of New Zealand
Transfund New Zealand
Transit New Zealand
Transport Accident Investigation Commission
MIKE WARD (Green)
: The vision that drives New Zealand’s transport future is admirable. I rise to examine the preparedness of Transit and Transfund to realise that vision. I want to examine the issue by referring to a real transport issue from my own community. Several weeks back, the Environment Court handed down a decision that confirmed an earlier decision made by Nelson Council - appointed commissioners not to approve a third highway, the Southern Link, into Nelson City. It was a decision the Greens endorsed, and the kind of decision we would expect to see more of in future under the Land Transport Management Act. However, having said that, we have considerable sympathy for local authorities confronted by transport issues, where all the advice and the vast bulk of the funding have been devoted to roads.
While roading decisions have been arrived at with the help of all the expertise Transit has at its disposal, and are likely to be substantially, if not totally, funded by Transfund, there appears to be no equivalent authority to advise on public transport
initiatives and their implementation, on some of the more innovative and exciting cycling and pedestrian possibilities, or on planning mechanisms and land-use tools that might put at the community’s disposal a range of transport options or might persuade individuals and families to live closer to the places they live, work, shop, or go to school, and thus avoid the necessity of spending vast amounts of time getting to places they should have lived much closer to in the first place.
The Transport and Industrial Relations Committee noted that the ministry had adopted a sustainable transport vision, focusing on economic, social, and environmental sustainability, in line with the new Act. The committee was interested in how the ministry intended to achieve greater environmental sustainability and encourage people to move towards sustainable modes of transport. For instance, the report noted that approximately 30 percent of journeys were 2 kilometres or less. The committee noted that a key component of implementing change involved changing cultural attitudes. The report supported measures taken by the ministry to encourage people to move away from car travel towards alternative modes, such as walking, cycling, and the use of public transport. The culture will not change by itself. It requires commitment.
The Southern Link was more than an idea. It was a fully developed, if flawed, concept. Millions of dollars had gone into its planning, and millions more into pursuing it. Half a million dollars had been spent on air quality plans, so that the catchment through which the road was to run could accommodate the pollution generated by 30,000 cars a day. The road and the air quality plan demonstrated commitment. The Nelson City Council had budgeted $15,000 for a carpool hotline. Another $15,000 has been committed to extending the bus service. Millions of dollars in pursuing a road and half a million dollars for a clean air plan spells commitment, but $15,000 for a hotline or a bus service equates to lip service.
Traffic demand management will certainly be much less expensive, and, I suspect, more successful, than building roads, but traffic management is not free. Just as roads need planning and expertise, so do measures to persuade people out of their motorcars—at least, for some of their journeys. Traffic demand management will certainly be much less expensive and more successful than building roads, as I say, but traffic management is not free. Local authorities feel aggrieved when central government imposes its decisions on them without providing the wherewithal to carry them out. In that way, the Land Transport Management Act and the new land transport strategy, as admirable as they certainly are, must come with the necessary levels of expertise and funding that will enable councils to develop sustainable transport measures to meet New Zealand’s transport needs without the downsides of congestion and pollution, and the costs to health and quality of life that the roading approach has imposed on all New Zealanders for much too long.
We are concerned in the Green Party to ensure that councils are equipped to carry out the culture shift that the committee endorses in its report. Unless Transit New Zealand is matched by an equivalent authority to provide the expertise for non-roading transport initiatives, or is provided with a mandate and the personnel to help councils develop more imaginative transport solutions, then Transit itself may have outlived its usefulness.
The Greens have been pleased to work with the Government to provide leadership on transport issues. Transport and how we provide for it has implications for health, safety, air quality, and our exercise habits. It has implications for the economy. Auckland’s wish list has grown from $5 billion a year when we started the hearing into the Land Transport Management Act last year, to $8 billion at the end of last year, and to $10 billion at the beginning of this year. It is almost certainly a quality-of-life issue.
PETER BROWN (Deputy Leader—NZ First)
: I welcome following a speaker from the Greens, because if ever I heard a party talk about transport issues from the bottom up, it was that party. I am astounded by some of the things the Greens stand for when it comes to transport matters.
Transport in this country is in a mess. It is either just getting out of a mess or just coming into a mess—and we can look at every mode of transport. Let us look at our airline industry. A few years ago we sold it, because
marketeers were going to make it into the best airline in the world. But the Government had to rescue it—and it cost $800 million to rescue it. What about our railways? My leader only the other day, apparently, put some railway brakes on the table. I was not here; I missed that. The railways are in a mess, and there is a Railways Bill going through a select committee right at this moment to sort out the safety issue. Then there is the shipping industry. I know that the Minister has inherited a problem with that. The Government has sat on its hands and done nothing for 3 years, although it has had a shipping industry review since December 2000.
Every time I have an opportunity—and the member over there knows it full well—I ask a question about our shipping industry. I should give the Minister a piece of advice. In my view, he has two options: go with cabotage, which is what the seafarers want; or go with a favourable tax regime like a tonnage tax, which the British have. Cabotage will cost more. Undoubtedly, it will cost more for exporters and more for the users of ships. A tonnage tax like the one the British have adopted will encourage the development of shipping, and it will cost the users less. That is the way to put our shipping industry on par with international shipping. We owe it to the people of New Zealand, an island nation down in the bottom of the South Pacific and miles from anywhere, to have a reasonable, efficient shipping fleet. I have stood by that view as long as I have been in this Parliament, and I am hopeful that this new Minister of Transport will do something in the not too distant future.
Let us now look at roading. Roading has been so heavily influenced by the Green Party that we will go backwards. If the Greens had their way, they would tear up the roads. They are anti-roads, and anti-car.