The CHAIRPERSON (H V Ross Robertson): Good afternoon, honourable members. Kia ora tātou, nō reira e te Whare, e ngā iwi, e ngā reo, e ngā hau e whā. Tēnā koutou, tēnā koutou, tēnā koutou katoa. Honourable members—and my good friend the honourable member Trevor Mallard; thank you for the comments about my wonderful tie—the House is in Committee on the Appropriation (2012/13 Estimates) Bill. The Standing Orders provide for 8 hours of debate on the estimates. Each member may have no more than two speeches of 5 minutes on each vote. The estimates debate should be relevant to the Government’s current spending plans as contained in the Estimates of Appropriations. All votes are available for debate and will be called in order of seniority of Ministers, commencing with the Speaker’s votes. A compendium of the reports of select committees on the votes is available on the Table.

STEFFAN BROWNING (Green) : The Greens are very, very concerned that the SIS, effectively, and also, for that matter, the Government Communications Security Bureau both go without decent surveillance themselves. They have got, in combination, fluctuating budgets and we have no idea what that fluctuation represents.

I will start with, for example, 2007 and 2008—there was expenditure of $73 million between those two agencies. The next year it was $80 million, the next year it was $97 million, and from 2010 to 2011 it was $110 million. Last year it was $98.5 million, and in this one we have got $100 million—the highest ever. You have to wonder why that is being spent. Is that being spent to beef up Mr Key’s security or something? They then assume in 2013-14 they can go down to $94 million, and then $72 million respectively. But we have no idea what that is actually being spent on. Anything else that comes through this Committee we can pull apart—there may be some small amounts that we cannot actually get to grips with—but with these two agencies we have, effectively, nothing. So I do wonder what Mr Key and his spy friends, his close friends, his schoolmate friends who are now heading the spy agencies are doing with their extra millions. It would be really good if the Prime Minister could come here and actually explain a little bit of what he is doing with his millions.

How many millions are actually coming from the US or the UK towards their agencies that we spy so much for? I am thinking, in particular, of Waihopai, with the Echelon system that connects in with the spying agencies of New Zealand. How much is the New Zealand taxpayer the sole contributor, instead of the USA and UK communication dredge? How much is spent on domestic surveillance with the SIS? I would think, in case others in the Chamber do not realise, that the Government Communications Security Bureau and the SIS are very closely linked, and so any discussion that verges back from one agency to the other is totally on board.

How much is spent on international surveillance? How much is spent when they are repairing the domes? How much is spent, as I said before, on the Prime Minister’s surveillance, on his bodyguards, or this, that, and the other? There is a lot of crossover of agencies here, but we cannot get down to it. How much is on capital expenditure, and how much is on those people who are actually dedicated to peace and justice in New Zealand? How much is being spent on surveilling them? How much was spent by the SIS working with the police on the Urewera raid material?

Hon Member: This year?

STEFFAN BROWNING: This year? How much in any year—that is the relevant part of this. We cannot drill down in this, because it is woefully inadequate, and it should not be presented in such a woefully inadequate way. I wonder, with the Government Communications Security Bureau bit, how much was covered by insurance when the dome got ruptured by those who were dedicated to peace and justice. How much is spent on staff; how much on capital expenditure?

Regardless of barracking in this Chamber by those who seem to find it quite acceptable that people, including past members of Parliament, have been spied on by our agencies, when do we actually get to find out what spies are carrying in their bags—whether it is a Playboy and a pie, or something of that nature? We are getting nothing that shows what they actually do in substance for our taxpayers.

Hon JOHN BANKS (Leader—ACT) : I have listened to the diatribe from the Green member of Parliament Steffan Browning. I thought it was important that I take a call at this juncture to say to the Minister in charge of the NZ Security Intelligence Service over these matters that I support the activities of the intelligence agencies of this country. I want to put upon record the fact that I am a member of the Cabinet committee on intelligence and security, so we will not be discussing those matters.

What I will say is that the intelligence agencies of this country do a very good job in the interests of this nation’s intelligence security. I want to place that on record today on behalf of the ACT Party, and I want to say to the Minister in charge of the intelligence agencies, both security and intelligence, that the workers and the people inside those agencies work hard in the best interests of the economic security of this country and security for citizens of this country. They work tirelessly in the pursuit of delivering for this nation economic sovereignty, and you cannot have economic sovereignty if you have foreign agencies spying on this country without counter-intelligence agencies like the ones that we are talking about today.

I want you to know that the ACT Party and people on this side of the Chamber believe in strong, robust security agencies in the best interests of this country, and we support them totally and denounce the myopic, backward-looking views of the Green Party around security and intelligence. If matters of security and intelligence were left to the Green Party, then we would be taken advantage of by many, many nations that would use the barriers and infiltrate us in terms of economic security in particular. So I want to say to the security agencies, which work tirelessly on behalf of this country, that we appreciate you, we thank you, we applaud you, and we support you.

Hon TREVOR MALLARD (Labour—Hutt South) : That was John Banks talking on security and intelligence. I am tempted to take the Maggie Barry approach to this one and say: “What right does that member have to speak about intelligence?”. I want to say to that member, as he scuttles around the Chamber—scuttles like a cockroach towards the door, scuttles like a chicken across the Chamber—that John Banks is the person who wanted to keep the tea tapes secret. He thought that was a matter of national security. He called in the police against the poor cameraman, and, complaining, whinging, and crying, he went to the police—crying, he went to the police—and he said: “Please, please get the SIS involved to protect me from what I said to the Prime Minister. Please get the SIS involved to protect me.”

Hon John Banks: I raise a point of order, Mr Chairperson. I have been here a long time, and I clearly understand the Standing Orders, as you do, Mr Chairperson. This is very, very wide, and it is stretching the parameters of Vote Security Intelligence and the debate in the Committee stage. I ask the member to start focusing on the issues that we are discussing, which have got nothing to do with tea tapes.

The CHAIRPERSON (H V Ross Robertson): Thank you. The member had just started to talk about this being involved with the SIS.

Hon TREVOR MALLARD: It is pretty easy to talk about. What I want to talk about is Kim Dotcom. We know that the SIS was involved. The SIS was involved with the FBI, but what I want to know is whether it also got the record of all the money that John Banks was given by Kim Dotcom. Was the SIS involved in that? Did it look inside the secret envelopes? Did the SIS look inside the secret envelopes? Is it the intention of the SIS to give evidence in the case of Kim Dotcom as to the money that John Banks got inside the paper bag and then pretended that he did not get?

Chris Hipkins: Would it have been on the hard drives?

Hon TREVOR MALLARD: Well, it might have been on the hard drives that were exported to the United States. I want to know in this current year whether the SIS is going to give any evidence to any court in the country about the money that went to John Banks from Kim Dotcom. We know that Kim Dotcom has been quite open about it, but John Banks has said something else. Outside the House John Banks said something else, and I—

Hon John Banks: I raise a point of order, Mr Chairperson. I seek leave to get some guidance from you. This is far too wide. This is an appropriation debate, and it has got nothing to do with the SIS listening to someone called Mr Kim Dotcom. I ask the member to get back to the debate, under the Standing Orders, because he has been here long enough to know that it is a little bit like discussing fighting in this Parliament—

The CHAIRPERSON (H V Ross Robertson): Order! I am on my feet. What I can advise the member is that the debate should be limited to the operating and investing activities of the New Zealand Security Intelligence Service. The member links to the Security Intelligence Service. He is being very inventive, but he has not strayed too far yet.

Hon TREVOR MALLARD: I raise a point of order, Mr Chairperson. I take great offence at your suggestion that I have been inventive. It is a matter of record that Kim Dotcom is before the New Zealand courts. It is a matter of record that the SIS has been involved, as well as the FBI. It is a matter of fact that this case is ongoing. It is absolutely within these estimates and there is nothing inventive about that whatsoever.

The CHAIRPERSON (H V Ross Robertson): What the member is saying is factual. That is correct. But what I want to tell the Committee is that this debate has to be about the total annual and permanent appropriations. So that is where we have to position this debate.

Chris Hipkins: I raise a point of order, Mr Chairperson. I just want to remind you, having had my colleague Trevor Mallard interrupted twice now, that the sole judge of relevance in this debate is you as the Chairperson. Just because a debate cuts a little bit too close to the bone for a particular member, that does not give them the right to interrupt another member to question their relevance.

The CHAIRPERSON (H V Ross Robertson): I thank the honourable member for his contribution. Members, of course, are free to raise different issues within the House as they so choose.

Hon TREVOR MALLARD: Let us now just go straight to the facts. Is money to be spent this year by the New Zealand Government on evidence, on behalf of the FBI, that goes to how much money John Banks took from Dotcom and how much he forgot? Outside the House, John Banks said he got none, and Kim Dotcom indicated that it was quite a lot. One of them is telling the truth, and one of them is a liar. I do not think that Kim Dotcom is a liar, and I want to know whether the evidence from the SIS—

Dr Cam Calder: I raise a point of order, Mr Chairperson. It is not appropriate to suggest, by innuendo, that a member of this House is a liar. That is one point. The other point is that this is an appropriations debate, and I have heard nothing to suggest that that is what it is. It sounded more like a general debate.

Hon Clayton Cosgrove: I have two points. One is that I listened very carefully to Mr Mallard, and he did not breach the Standing Orders in his use of language on the first issue that the member raised. The second point was raised with you, I think by Mr Hipkins, that the constant and deliberate points of order interrupting a member’s speech have been ruled on as inappropriate. You are the person who sets the rules. If Mr Mallard had breached the Standing Orders, I am sure, knowing you and your eye for detail, you would have hauled him in.

The CHAIRPERSON (H V Ross Robertson): Thank you. Can I just advise members. I have had a look at a couple of Speakers’ rulings here. Under Speaker’s ruling 42/2 it says that the use of the word “lie” is out of order: “Many other expressions can be used …”. Under Speaker’s ruling 42/4 it goes on to say that “calling another member a liar … is an offence against the dignity of the House and the assumption that its members behave truthfully and honourably.” The member has come close. I am listening very carefully to the debate, and I am also taking into account the content of what is being said. I just ask the member to be responsible.

Hon TREVOR MALLARD: And I will. As I make the point about the spending of New Zealand taxpayers’ funds on the SIS, I make it clear that I have not accused John Banks of lying to this House. I have not; I did not do that, and I will not do that. But I will not back up his comments—the comments that he made outside the House. I will not make comments on those, but I do say I prefer the version of Mr Kim Dotcom because I think he has been shown to tell the truth, and I think that the evidence from the SIS that has been collected—those computer records that are going to be in court in, I think, August or February, depending on when the appeal is sorted out—will make it absolutely clear who is telling the truth.

Hon John Banks: I raise a point of order, Mr Chairperson. The Standing Orders are very, very clear about members of this Parliament making comments about matters before the courts—very clear. The member should give away the shadow-boxing and start getting back to the debate. But making comments about matters before the courts is not appropriate under the Standing Orders of this Parliament.

Hon TREVOR MALLARD: Mr Chairperson—

The CHAIRPERSON (H V Ross Robertson): Trevor Mallard, speaking to the point of order.

Hon TREVOR MALLARD: No, no. I am just going to keep on speaking, because that is nonsense.

Michael Woodhouse: I raise a point of order, Mr Chairperson. Based on your coaching I am very careful not to reflect on your management of the Committee, but I am struggling, during points of order, to hear the points, because of the constant interjections. It is my understanding that points of order should be heard in silence, and I am having difficulty hearing what the points of order are. So I just wanted to point that out to you.

Hon Clayton Cosgrove: I just want to say that in no way does this impinge on your judgment, but I simply reiterate the point I made. You are the sole judge of what goes, or not, in this place. I have lost count of the number of points of order from that member over there. He tried it on last night, as well, to try to break members’ speeches, and it is not on. I do not have the Speaker’s ruling nor the Standing Order—forgive me—in front of me, but I am pretty sure, from other learned members, that there is a Standing Order and a Speaker’s ruling about deliberate attempts to break up a member’s speech with spurious points of order. It may be that certain people should leave this place if they are going to continue to challenge your ruling and continue to try to prevent a member who is making a speech that falls inside the Standing Orders from exercising their freedom of speech.

The CHAIRPERSON (H V Ross Robertson): Can I thank the honourable members. I have actually pointed out the different Speakers’ rulings that are here. The member is correct. I am the sole judge, and the constant interruptions could lead to disorder. I invite the member to continue his call.

Hon TREVOR MALLARD: Thank you, Mr Chairperson. The point that I want to ask the Minister in the chair, the Minister of Internal Affairs, is how much is going to be spent on the salaries of agents who go to court or who play voice recordings of John Banks talking to Dotcom, because Mr Dotcom has said one thing and Mr Banks has said another. Let us sort out who is telling the truth. How much is going to be spent by the SIS in the current year on establishing the truth in the Dotcom case? I tend to say that most of that case, in my opinion, is rubbish. It has been done at the behest of people offshore, but there is an interesting facet in this case because there is the conflict of evidence between Mr Kim Dotcom and the Hon John Banks. I want to know how much is going to be spent on that matter—

Hon John Banks: I raise a point of order, Mr Chairperson. OK, I now want you to refer to Standing Order 112(1). This is a serious matter I raise. I know the Standing Orders. I have been here a long, long time.

The CHAIRPERSON (H V Ross Robertson): Order! The member will be seated. When a point of order is on the floor, it is to be heard in silence. The point of order is to be terse and to the point, and not a debating issue.

Hon John Banks: Terse and to the point. Standing Order 112(1) states: “Matters awaiting or under adjudication in, or suppressed by an order of, any New Zealand court may not be referred to in any motion, debate, or question … subject always to the … Speaker and to the right of the House to legislate on any matter or to consider delegated legislation.” Matters before the courts should not be debated here, and this matter is before the courts, subject to extradition. I tell the member for wherever he comes from, Mr Mallard, that he should not pursue these matters that are subject to a court decision, under Standing Order 112(1).

Hon TREVOR MALLARD: Speaking to the point of order, Mr Chairman. If that member gives us an assurance that the matter to do with his discussions with Dotcom is currently a matter up for adjudication in the court in New Zealand, I will accept his word and stop referring to it. But I want him to be absolutely specific that that is a matter before the court. If he does that, I will stop referring to it.

The CHAIRPERSON (H V Ross Robertson): I can only look to Standing Order 112(1), which states: “Matters awaiting or under adjudication in, or suppressed by an order of, any New Zealand court may not be referred to in any motion, debate, or question, including a supplementary question, subject always to the discretion of the Speaker and to the right of the House to legislate on any matter or to consider delegated legislation.” I am mindful also, of course, of a number of Speakers’ rulings that relate to issues that can actually lead to disorder—in particular, referring to people as not saying things in the way in which they should do. I want to take the member’s word that the matter is subject to a court order. I ask the member to return to the debate. I have to take the member’s word that it is subject to a court order, and if that, in fact, is the case, then I ask the member to return to the debate.

Hon John Banks: Which member are you referring to?

The CHAIRPERSON (H V Ross Robertson): Is that a point of order?

Hon John Banks: I raise a point of order, Mr Chairperson. The matter I am referring to is the matter that the member has continually referred to: a man called Dotcom—nothing to do with me whatsoever. The matter is in relation to Dotcom’s extradition to the States, which is a matter before the courts, and under Standing Order 112 the member for Hutt South cannot raise it in this House. It is nothing to do with me whatsoever; it is to do with Standing Order 112(1). Dotcom’s extradition is subject to court proceedings and cannot be raised in this House. You should tell the member for Hutt South to desist.

The CHAIRPERSON (H V Ross Robertson): All I can say to the member is that if it is before the courts then it cannot be debated.

Hon Clayton Cosgrove: I raise a point of order, Mr Chairperson. That is the germane point in the Standing Order that the member quoted: “Matters awaiting or under adjudication …”. You indicated that he had confirmed that the matters were under adjudication. I do not—

The CHAIRPERSON (H V Ross Robertson): I understand that that is what the member has said to the Committee.

Hon Clayton Cosgrove: I do not know whether that is the case. You may want to seek some clarity on that, because I do not know whether he did say that. The question is, if those matters referred to by Mr Mallard do not, as I understand it, form part of any extradition proceeding or court matter—they are separate, pertaining to the member in question—then, as far as I understand, they are in no way related to a court case, unless that member can confirm that they are. I would invite you to check that with him, because I do not think he did confirm it.

The CHAIRPERSON (H V Ross Robertson): I am advised that anything pertaining to Kim Dotcom’s extradition cannot be debated here, because that is subject to a court order. That is where we are: anything to do with the extradition of Kim Dotcom cannot be debated.

Hon TREVOR MALLARD: Thank you, Mr Chairperson. I want to go right back to the core here, and that is the spending of SIS funds. I want an assurance from the Minister that not one cent of SIS funds is going to be spent in the current year on any court case whatsoever dealing with Banks and Dotcom. I want to know that the voice tapes that the SIS has of Banks and Dotcom are not going to be used in an extradition case. I want an assurance—

Hon John Banks: I raise a point of order, Mr Chairperson. Get him on a short chain—

The CHAIRPERSON (H V Ross Robertson): Order! [Interruption] Order! The member will be seated. What I was signifying to the member is that he has to use a member’s full name or his title. That is what I was saying.

Hon TREVOR MALLARD: We know the habit of this Government of spending an enormous amount of taxpayers’ funds—the amount the Prime Minister wasted on the teapot tapes, and all that police time. I want to know that the Prime Minister is not wasting SIS funds on covering up John Banks’ relationship with Kim Dotcom. We know that the SIS is holding the tapes of the conversation that Banks had with Dotcom. Banks said one thing; Dotcom said something else. I prefer the Dotcom version of what occurred, but I want to know that not one further cent of taxpayers’ funds is going to be spent on protecting John Banks—the way it was with police funds right through the teapot saga.

New Zealanders are sick of the apparatus of the State being used to protect the ACT Party and those people who are not prepared to be full and frank with the truth, and not prepared to be full and frank with the people of New Zealand, to always tell the truth, and to always make proper declarations. The SIS should not be used to protect those people. They should be allowed to stand or fall on their own word, rather than a cover-up occurring where Dotcom’s tapes, which show what Banks said, have been stolen and sent to the States—stolen and sent to the States. That is an extreme way of protecting a Minister. It is an extreme way of protecting John Banks, to have the apparatus of the New Zealand courts system, the police, and the SIS used to take the evidence right out of the computers of Kim Dotcom and send it offshore. That is a waste of New Zealand taxpayers’ funds. It is a waste of the SIS, and we want an assurance from the Minister in the chair—and, frankly, I am very surprised that we have such a junior Minister in the chair representing the SIS. I am surprised. The SIS would normally be present during the estimates. Clearly—

Hon Annette King: In raincoats.

Hon TREVOR MALLARD: Well, no, not normally in raincoats; they normally leave them outside. The SIS, which would normally be present for this debate, has chosen not to come and back up John Banks. It is embarrassed by John Banks, as most New Zealanders are embarrassed by John Banks, because he is—

• Vote agreed to.

RINO TIRIKATENE (Labour—Te Tai Tonga) : Tēnā koe, Mr Chair. I am pleased to make a contribution in this appropriations debate. Can I draw the Committee’s attention to the low-budget movie set known as the tourism portfolio. It is a “best supporting actress” in the John Key show. The tourism industry deserves much, much more. The Prime Minister, just like Prime Ministers of the past, has been entitled to pick his portfolio as a matter of priority. Robert Muldoon had finance, David Lange took foreign affairs, and Helen Clark made a name for herself in the arts. For better or for worse, these areas became their legacies. John Key gave himself the tourism portfolio as a matter of priority, and yet 4 years on he has let it languish.

Hon Annette King: Flop.

RINO TIRIKATENE: It is a flop. Talk about taking his job too seriously! In colloquial Te Reo we say that John is taking a tiki-tour on the job. He is taking a tiki-tour. I am reminded of that memorable New Zealand ad, which I am sure members of this Committee will remember, of a generation ago, where Kiwis were reminded: “Don’t leave town until you’ve seen the country.” On that ad, there was a Kiwi bloke—

Hon Trevor Mallard: Tell that to John Key. His country’s Hawaii.

RINO TIRIKATENE: That is right. On that ad, a Kiwi bloke is paddling down a river and he is asked by a local if he knows where the Victoria Falls are. Our intrepid Kiwi kayaker replies: “Somewhere near Taupō.” Or in those days he said “T-ow-poe”. But Mr Key’s efforts to date remind me of that punchline, because the Prime Minister is taking tourism over the Huka Falls. In colloquial Te Reo we say he has gone tipi haere.

If we look at the tourism portfolio and at the tourism industry, $63 million a day is contributed to New Zealand’s economy. It employs—directly and indirectly—180,000 Kiwis. It is our second-biggest export earner. It provides jobs, money, and vibrancy to our communities. But it is not getting the leadership it deserves under this Minister. If we look at what is in this appropriation, there are no significant changes to the tourism funding, only $97.5 million on international marketing, and a fraction on policy advice and research.

But I think, in terms of the reaction from the industry itself, we just have to look at the mood of the industry in terms of its tourism sector report, which was reported recently. If we look at the wording from tourism operators themselves, right across the country, they are saying that the sector has lost its edge, it is in holding-on mode, and it is economically flat. Tourism has fallen off the radar with this Government. New Zealand is no longer the desirable destination that it was amongst our key visitor export markets. We are stuck in a rut and the industry needs to change.

The industry is calling for change, and it has called Martin Snedden. He did a fantastic job leading the Rugby World Cup last year, in addition to his heroics when he was on the cricket pitch in the 1980s. But Martin Snedden alone cannot pull the industry out of the doldrums. There needs to be leadership from the Prime Minister on this portfolio. We need some more hard graft being put into the tourism portfolio. We are not getting that hard graft, and the tourism sector is suffering as a result, and those comments are being made by operators up and down the length of the country.

The tourism sector is made up of small businesses—large and small businesses the length and breadth of the country, and they are hurting. We are not seeing leadership, and we are definitely not seeing resources and funding being put in to stimulate the sector. So tourism is not where it needs to be. Unfortunately, this Government does not have a plan, and it has not got the right amount of resources that it is putting into such an important sector, our No. 2 export earner—$63 million a day, as I mentioned, and 180,000 jobs. It is a vitally important sector for our country, and we need to have more leadership taking place.

We want to see that tourism is no longer the supporting actor of this Government. We want to make sure that tourism is at the forefront and that we are seeing growth, because the comments that are coming out of the sector are not encouraging. We need only to turn to Rob Fyfe, the outgoing chief executive for Air New Zealand—

Hon CHRIS TREMAIN (Associate Minister of Tourism) : It is a real privilege to stand on behalf of the Government to shape up our debate in this wonderful estimates debate. It has taken us half an hour to get to some substantive debate in this. Up until now it has been about playboys, pies, and conspiracy theories from Mr Mallard on the other side of the Chamber.

But I want to shake up the debate on how our team will be approaching this going forward, because there are four key priorities for this Government in this estimates debate—four key priorities. The first is to responsibly manage the Government’s finances, the second is to rebuild Christchurch, the third is to deliver better public services, and the fourth is to build a more competitive and productive economy. Just on each of those issues—before I get into the substantive part of the tourism debate—if we think about responsibly managing the Government’s finances, well, if there is a Government that is right for the moment it is this National Party and its coalition parties. We have set an agenda to get us back to surplus by 2014-15 and to keep our debt under 40 percent of GDP. On any measure, that is putting us amongst leaders in the globe.

On a second point, in terms of rebuilding Christchurch, you saw the Prime Minister and Gerry Brownlee present that wonderful plan down in Christchurch to take it forward. At the moment I hear the Opposition members not saying too much about that, because they support that plan, too. They do not want to get out there and talk too much about it, but they support that plan. In terms of delivering better public services, across the Public Service we are seeing a commitment, a real focus, to taking public services forward, whether it be in health or in police. They are doing a fantastic job, and I congratulate them on that. The 10 result areas that we have rolled out will back up that and provide key targets as we try to improve the statistics going forward.

The key area that I want to focus on—which many of my colleagues will also join me on—is in building a competitive and productive economy. If there is a part of the economy that is important in that, it is our second-biggest export earner, tourism. The direct contribution to GDP for the year ending March 2011 was some $6.9 billion. This industry is a fantastic industry in the country. I had the pleasure this morning of opening the international events management conference down at the Wharewaka and talking about the priorities of our Government in that tourism space. What could the Opposition say about that? Mr Tirikatene-Sullivan stood up and talked about it being a low-budget movie set. I am not sure how $84 million is low budget, Mr Tirikatene-Sullivan. And what does that party do to support the promotion of our country? The Hobbit set of movies—the trilogy of movies—has the opportunity to promote this country like never before, and what did that party do?

Chris Auchinvole: What did they do?

Hon CHRIS TREMAIN: It voted against The Hobbit. These are the Hobbit haters over that side of the Chamber. Will Labour members be lining up at the premiere for their tickets? Do you think David Shearer will be there? Do you think Clayton Cosgrove will be lining up for his premiere tickets? They will be there. They want to be at those Hobbit premieres. That set of movies will promote this country like never before.

We have a business growth agenda that will drive that productive economy. Within that business growth agenda, tourism is a huge player, and there are a number of initiatives that I want to talk about today. Firstly, in terms of the $84 million that goes to Tourism New Zealand, we have seen a new strategy that will roll-out, focusing on the markets that are growing, particularly China. We have seen a 20 percent growth—a 20 percent growth—from the Chinese market. It is somewhat low value at this point in time, so we are looking at how we can increase the value out of that market, away from the shopping tours, and improve the fit independent traveller market. It is a fantastic initiative and a wonderful opportunity. We continue to see growth from Australia coming across here. They love our tourism opportunities—absolutely fantastic.

I know that Mr Cosgrove is waiting and dying for me to talk about the wonderful New Zealand Cycle Trail. Nineteen trails, including the Otago Central Rail Trail, have been rolled out. The Otago Central Rail Trail was launched in 2000. By 2003-04, there were 6,000 riders; after 10 years there will be 12,000 riders. A huge number of jobs are attached to the Otago Central Rail Trail. It is an absolutely sensational opportunity in terms of tourism. We are rolling out 18 other rides as part of our initiative. People around this country love the cycle trails.

• Vote agreed to.

Hon DAVID PARKER (Labour) : I am interested to hear from the Minister of Finance why he thinks that after 4 years in Government it is acceptable to be overseeing an economy where record numbers of New Zealanders are moving to Australia, notwithstanding the fact that New Zealand has had the best terms of trade in a lifetime, and notwithstanding the fact that our two main trading partners, China and Australia, have been having very good rates of growth. How can he say that he is succeeding as Minister of Finance when record numbers of people are leaving for Australia, given that that is the very metric that he invited the New Zealand public to judge him by, prior to being elected? He said that if National were elected, they would say to goodbye to higher taxes, not their loved ones—I think that was one of its catchphrases. Another catchphrase was promising New Zealand a brighter future. How can he accept that 4 years into his Government, he can blame Greece? He stands up in this house and he says that “Planet Labour” is out to lunch—that is essentially what he says.

He tries to claim the excuse that the problems of other parts of the world like Europe are responsible for the record number of people leaving from New Zealand to Australia. I think it is 158,000 people since he took office, and 53,000 people in the last year alone, and 40 percent of them are between the ages of 18 and 30. These are people who should have hope and opportunity in New Zealand, who have given up on a decent lifestyle in New Zealand and are instead putting their shoulder to the wheel of the Australian economy. I want to suggest to the Minister that the reason that they are doing that is that he has failed in his ambitions, and he has not rebalanced the economy towards the jobs and growing incomes that New Zealand needs from growing our productive export sector. He has not pulled the levers that need to be pulled in order to grow the depth of our capital markets through having a universal KiwiSaver scheme. He has not addressed the concern that was raised by Treasury in its briefing to the incoming Minister, where it said that this differential between taxing capital income and other sources of income needs to be fixed, otherwise we have too much money going into the speculative sector and not into the productive export sector. He is not willing to pull those levers, and as a consequence we have a rising current account deficit. We are getting poorer every year as a country. This is projected to get worse.

By 2016 the very cause of the last downgrade of New Zealand’s credit rating is said to be getting worse again, rising to over 6 percent of GDP. In the 2016 year—by which time, if we are unfortunate to have a National Government, it would have been in power for 8 years—New Zealand’s current account deficit will be at 6.7 percent of GDP. We will have borrowed or sold assets worth $16.8 billion in that year alone, because our economy will have not rebalanced, and this Government is not bringing forward the new jobs, the new exports, that we need not only to get wealthier in the world but also to keep our New Zealanders in our own country by giving them hope and opportunity.

We are seeing the hollowing out of the provinces. This is not just a city problem. In fact, it is worse in the provinces, because the inflow that we have from migration is largely concentrated in Auckland, yet the people that we are losing are from Whangarei, for example, with 1,200 people from Whangarei going to Australia, and 460 from Nelson to Australia. These are big population losses. These are our young, productive people. We have an ageing population as a consequence of this, according to the demographer from Massey University Paul Spooner on Q+A recently—

Phil Twyford: Spoonley.

Hon DAVID PARKER: Sorry, Paul Spoonley from Massey University told us on Q+A that this increases the problem we have with an ageing population, which is another problem that this Government will not address. This Budget—this zero Budget, as National tried to describe it at the start—brings forward assets sales that make the Government deficit worse by $100 million a year, that do not change the output of the economy, that put up power prices, and that put up the current account deficit. The centrepiece of Mr English’s Budget was wrecked within days when the Prime Minister backtracked on improving student outcomes by increasing class sizes, which was never a good idea.

Dr CAM CALDER (National) : Citius, altius, fortius—faster, higher, stronger. We all recognise the Olympic motto, but “faster, higher, stronger” can also describe New Zealand’s performance in the tradable sector under this Government. It is a stark contrast as, despite the best economic times in decades, under the heavy regulatory hand of the unlamented last Labour Government the tradable sector languished. We have turned that round. We are building a more productive economy. We are encouraging faster growth. We are producing products that people want and need, and getting higher prices for our products, and our tradable sector is stronger and more resilient under the indefatigable Tim Groser and his team. We have got a clear goal of trade contributing to 40 percent of our GDP by 2025.

Hon Clayton Cosgrove: What are you doing about it?

Dr CAM CALDER: Growth in New Zealand, Mr Cosgrove, over the next 4 years is forecast to be higher than growth in Europe, the US, the UK, Japan, and Canada—citius, altius, fortius. This Government is a safe pair of hands, a responsible pair of hands, and we are getting on with the job.

Prudent management of our debt and fiscal discipline is fundamental to New Zealand’s well-being. The financial markets are intolerant of poor fiscal policy. Any profligacy would be penalised by higher interest rates and increased debt-servicing costs. We need a buoyant New Zealand economy, weighed down by the least debt possible, to ride out the troubled waters ahead. The global markets, in case you have noticed or have not noticed, are experiencing ongoing turmoil.

Let us take a look at the international financial situation. In the US, unless Congress acts, across-the-board income taxes will expire on 31 December, meaning there will be steep tax increases. The deep automatic Government spending cuts of US$1.2 trillion over 10 years are slated to begin on 2 January 2013. There is a need early in 2013, of course, to raise the US borrowing authority or face a debt default, and Congress must decide to fund programmes beyond 30 September, the end of the current fiscal year, to avert Government shutdowns.

These factors combined will be enough, according to some commentators, to push the US economy over a fiscal cliff—colourful language, but what does it mean? Well, the Congressional Budget Office estimates that with these spending cuts and the increase in taxes, the US gross domestic product could drop by 4 percent—4 percent. Right now, the US economy is not looking a picture of health, as growth has slowed to an annual rate of 1.5 percent as Americans have cut back on spending. This will not be enough to lower the unemployment rate, which was 8.2 percent last month. House sales are weakening, and there is a fair old notion that the US economy is threatening to stall.

Hon Clayton Cosgrove: Let’s talk about the New Zealand economy.

Dr CAM CALDER: Sadly, the political environment ahead of 6 November is not likely to be one of compromise and negotiation. Once again, local political brinkmanship and posturing in the US is likely to severely discommode the global financial confidence in structures.

Let us look at Europe, Mr Cosgrove. I know your view is normally somewhat more insular—summit follows summit, band-aid is applied to elastoplast. Two elections were necessary before Greece could receive its latest tranche of funds. The IMF, the European Central Bank, and the EU are all looking at it to see whether the austerity measures demanded will be enforced, and already last-chance options are being considered. Portugal and Ireland are also under scrutiny. Are they following the tough austerity measures demanded of them?

Hon Clayton Cosgrove: I raise a point of order, Mr Chairperson. I apologise to the member. I was very reluctant to raise a point of order, given what we had some half an hour ago, and I am conscious of Speaker’s ruling 20/8, but last time I checked, these are the New Zealand appropriations. This is Vote Finance—in New Zealand. It is not Greece, or Spain, or the US, or Botswana, or anywhere else. This is the New Zealand financial accounts and a New Zealand debate. I know it is appropriate to refer to other jurisdictions from time to time, but we have had 4 or 5 minutes talking about every country other than this one. Last time I checked, this was the New Zealand Parliament.

The CHAIRPERSON (H V Ross Robertson): Well, thank you for bringing it to the attention of the Committee, Mr Cosgrove. I appreciate that. But I know that the member is coming closer and closer, and he has not got too much time left.

Dr CAM CALDER: Thank you. I will speak more slowly for Mr Cosgrove, because I did mention that the whole point of this was prudent financial management. Meanwhile, Spain is putting up its hand and signalling that between now and 2015 we are going to need €540 billion to bail Spain out. And, of course, the principal point here is that a Greek-style bailout of Spain is not possible once—

Hon Trevor Mallard: I raise a point of order, Mr Chairperson. I have done a quick check of the estimates, and there is no €540 billion to bail out Spain in these estimates.

The CHAIRPERSON (H V Ross Robertson): Can I just say to the member that it is a debatable point, and the member has—

Hon Trevor Mallard: No, it’s fact.

The CHAIRPERSON (H V Ross Robertson): Well, I can only go on what the member is saying in the Chamber, and I would expect the member to be able to refer to the appropriations as they reflect for this financial year.

Dr CAM CALDER: Thank you, Mr Chair. It is all about context, and really the Opposition benches are showing why it was such a disastrous period of time when they were in power, because they had no idea of the global context that this country is operating and trading in. The President of the European Central Bank, Mario Draghi, told business leaders in London just in the last week that it will do “whatever it takes”.

Dr RUSSEL NORMAN (Co-Leader—Green) : I rise to speak in this debate on Vote Finance. I want to speak briefly about the central, if you like, economic strategy of the John Key - John Banks Government. The central economic strategy of the John Key - John Banks Government is around asset sales. What the John Key - John Banks Government has as its central pillar is the privatisation of assets. This has been justified on financial grounds, and I think it is worth referring to the Government’s own books as to what the fiscal impact will be of going ahead with this privatisation programme.

I think the Government has misled New Zealanders about what the real fiscal impact of this privatisation is if it goes ahead. If you look at the Budget Economic and Fiscal Update from 24 March 2012, on page 42 you will see Treasury’s estimate of the actual impacts of this privatisation programme if it goes ahead. What you will see is that the estimate is that in 2016 the loss to the Crown as a result of privatisation would be $360 million in a single year because of the forgone profits, and the savings, because of the reduced finance costs, would be about $250 million.

What this means is that if the privatisation of the assets goes ahead, the Crown position will be worse off by $100 million per year. That, I think, puts to a lie the fundamental argument that the Government has put forward that this is a fiscally rational strategy. So when the John Key - John Banks Government tells us that it makes sense to go ahead with this privatisation programme fiscally, the lie is to be found in the Government’s own books. When you look at the Government’s own books, the estimates—

The CHAIRPERSON (Lindsay Tisch): Order! The member just needs to be very careful about saying the word “lie”—Speakers’ Rulings, page 42. I just bring the member back. Just be very careful about that.

Dr RUSSEL NORMAN: Thank you, Mr Chair. If you look at page 42 of the Government’s Budget Economic and Fiscal Update, you will see there the actual fiscal impacts of the privatisation programme. I think it is worth repeating the numbers in this table, because in this debate around asset sales and privatisation there have been a lot of arguments put forward that this makes fiscal sense, but when you look at the actual numbers you realise that this is not the case. I would like to repeat those numbers for the benefit of the Government members, who obviously have not looked at it very closely. If the John Key - John Banks Government goes ahead with privatisation, it means that in 2016, in just that single year, the forgone profits as a result of it will be $360 million—$360 million. It means the estimated finance cost savings—the benefit to the Government—will be about $250 million. So we are $360 million worse off, and there is $250 million in savings for finance costs. What that means is that the net impact on the Government’s operating balance will be that it is worse off by about $100 million in a single year.

This is the Government that says it is going to veto the extension of paid parental leave because it is going to cost $108 million a year. This is the Government that says it cannot afford to help working families and new mums and dads with paid parental leave, because it costs too much—it would cost about $108 million a year. Yet here it is: as a direct result of the asset sale programme that the John Key - John Banks Government is promoting, the Government books will be worse off by about $100 million per year. That is the fundamental fiscal reality of this asset sale programme.

So when people are considering whether this makes any fiscal sense, whether it makes sense in terms of the Government’s position and in terms of the Government books, you need to not listen to the rhetoric from the Government; you need to look at the actual figures that are printed in the Budget Economic and Fiscal Update 24 March 2012, put out by the New Zealand Government. I refer you again to page 42. You will see in black and white the reality of the impact of the privatisation programme. This privatisation programme, remember, went through on one vote—the vote of John Banks—with 61 votes to 60. It went through with one vote.

The impact of that programme will be that the fiscal position of the New Zealand Government is worse off by about $100 million every year going forward into the future as a result of privatisation. That is the truth that underpins the John Key - John Banks privatisation programme. That is the truth that we need to keep at the heart of our minds as we have this debate around asset sales going forward. We actually look at the Budget documents rather than the rhetoric.

TODD McCLAY (Chairperson of the Finance and Expenditure Committee) : It gives me pleasure to rise and speak on Vote Finance in the Appropriation (2012/13 Estimates) Bill debate. Can I say that there was the real Opposition, the real leader of the Opposition, that great Australian Russel Norman. He is the one who is standing up and speaking up for everyday New Zealanders, at least as far as he says.

Here is the problem, you see. What has happened in this last Budget is that this Government, led by the Prime Minister, John Key, and with our Minister of Finance, Bill English, has delivered a Budget to New Zealand that focuses on responsible management of Government finances and on how to make the engine that is New Zealand go faster—how to make it grow, and grow faster. What we have seen in the last week or two is the Labour Party rebranding itself, grabbing great, strong, National Government policies and saying: “We’ll have a little bit of that, as well.”

So what have we heard from those members? They are in favour of mining. In fact, they want to do more mining. It is good that they have finally woken up to that, because before the Budget they were saying they did not mind New Zealanders going to Australia to work in mines, but they could not be doing that here. Well, everyday New Zealanders want to work hard, they want to stay in their own country, and they want good jobs. This Government is focused on finding the very best way to balance the environment with mining so that our economy can grow. So Labour is saying it wants more mining. The real Opposition, that great leader of the Opposition, that great Australian Russel Norman, is saying he is not opposed to mining; it is just he has never found a mine that he agrees with: “No problem, we don’t mind mines, but we don’t like any of the ones that are here or any that are proposed.”

We have also heard from the Labour Party that it is now in favour of reducing debt. It does not like borrowing any more; it is in favour of reducing debt. The problem with that is that before the last election and before this Budget was delivered, those members said they had no problem with getting some more debt, as we could pay it off some time in the future. Well, here is the difficulty: the real Opposition, that great Australian the real leader of the Opposition, Russel Norman, is saying that debt is fine: let us tax New Zealanders more, let us go out and borrow a lot more and spend it on lots of things for New Zealanders, but let us not find a single way to grow the economy, to grow a way for the Government to get more resource and make our economy stronger and better.

And then, finally, what has happened? The Labour Party has said that it, too, now accepts that we should get back to surplus by 2014-15—that is its policy. Labour members have said they believe that the Government will do it then, or thereabouts, and that that is something that they too would do. Before the last Budget that was not their policy at all. Certainly, before the last election they were saying they would borrow a lot more money, make a lot of rash decisions around spending, and make New Zealanders work longer and harder to pay that back into the future, but now they have changed their position. Getting back to surplus by 2014-15 is acceptable to them.

The problem they have got on the other side is the real Opposition, that great Australian Russel Norman, who is the leader of the Opposition, is actually saying that it is not about going back to surplus then; it is about borrowing more money, spending more money, racking up debt on behalf of New Zealanders, and then finally, some time in the future, paying it off.

The reason I raise this is because our Budget and our focus on finance deliver a better, more competitive and productive economy for New Zealanders. We have heard others in this debate today refer to the John Key - John Banks Government. Well, I have got to tell you, based upon what we have heard from the Opposition, I would rather have that. I would rather have John Banks any day than a Russel Norman - David Shearer - Hone Harawira Government, which is what the Opposition parties are pitching to us. So it is fine for the Labour Opposition to say at the next election: “We’ve changed our position. We’ll have more mining. We’ll have less debt, less borrowing, and we will certainly get back to surplus sooner.”, but the people it will have to do a deal with to try to form a Government in New Zealand are that great Australian, the real leader of the Opposition, Russel Norman, and Hone Harawira, who have different policies across the board and will not accept that at all.

On this side of the Chamber we are focused on what matters, and I say it again: give me John Banks any day over some of the others whom that lot over there will have to cast their lot in with, come the next election. I look forward to the debate that we will have as we go forward, and to hearing from the Labour Opposition what its position is on water in New Zealand and whether it backs some of the claims that are being made around the country. I bet you we are not going to hear anything about that, at all.

Delivering better public services is something the Opposition hates. It hates us doing better with the money we are entrusted with to spend on behalf of New Zealanders. Well, the Budget that has been delivered by Bill English does that. It focuses on better public services for New Zealanders, rebuilding Christchurch—

Hon CLAYTON COSGROVE (Labour) : We have heard it here, and it will go now in the annals of this Parliament, as Todd McClay wraps his arms firmly around John Banks—firmly around John Banks—who is the political version of a human pinata in this House, being pinged every day for his conduct. He is the walking dead, the political version of a cadaver that is hanging this Government together. It is selling our assets that people already own on the vote of John Banks, the human political cadaver. Todd McClay gets up and flings his arms around John Banks like a lifeline. Well, I am going to enjoy quoting from that speech for years to come.

Here is the issue with this Budget, with these appropriations, and with this finance. This Government is responsible for some achievements, that is true: exports are down, the current account deficit is up, unemployment is up, and 1,000 people a week—1,000 people a week—are leaving for overseas. These are all things that the English-Key Government said it would fix.

I do not want to get on to tourism, because we have done it. The only thing I will say, as we are talking about jobs, is that if one consults page 582 of the Estimates, on tourism, one will see that we asked the Associate Minister of Tourism about jobs—job creation in relation to the cycleway—because this finance appropriation helps to fund that. He could not tell us how many businesses and how many permanent jobs have been created thus far by the silver bullet of this Government, which was to be the cycleway. The Associate Minister of Tourism could not tell us. He could give us a few anecdotes about a fish and chip shop that had opened in Napier, and apparently the local cycle shop in Napier is going gangbusters, but apart from that he could not name how many permanent jobs had been created.

We know that 1,000 people a week are leaving these shores. I say to Mr Calder that it is not about Greece, as Mr Parker has said. Mr Calder spent 90 percent of his speech, ironically, talking about every other country in the world except the one that he represents in this Parliament. He talked about Greece, talked about Spain, talked about Ireland, talked about the US, and talked about every other country except the one that he is in charge of as part of this Government.

We look at asset sales. I remember a debate during the election campaign, the famous “Show me the money” debate. Remember that? I say to this Government, because this Government is always quick to hold everybody else’s feet to the fire in terms of fiscal prudence, fiscal accountability, and costings, that we had an example of utter—I cannot say that; it is the “h” word. We had an example of saying one thing outside this Parliament and doing another thing inside this Parliament when it came to the asset sales loyalty scheme. We had a Prime Minister get up at his conference and come out—as if, you know, everybody loves this Prime Minister coming out at his conference, so the National Party people said; people are going to love these asset sales—and announce a loyalty scheme without one dollar of costings having been done. He announced hundreds of millions of dollars’ worth of a loyalty bonus shares scheme. When asked in this Parliament how much it was going to cost, where the dough was coming from, and what the counterfactual was in terms of losses to the taxpayer and the Crown of providing these free shares for those who can afford $1,000 or $2,000, he had not one shred of evidence or data to back up the policy. If that had been us, oh, would we have been shredded by the National Party for not costing things!

It seems it is OK to dish it out but not be accountable when you are in Government and announce a major plank of a policy costing hundreds of millions of dollars so that those at the top, again, can get a major wealth transfer in bonus shares and those who have their noses presses against the glass, who cannot afford the $1,000 and $2,000 they need to get in to buy back what they already own, end up paying for it. So I say to Mr English that I would be really interested, as is addressed in the report of the Finance and Expenditure Committee, whether he could tell us the costings around the loyalty scheme and whether he could also tell us, if his Government is so certain—as it has told us week after week and month after month—first, that Kiwi mums and dads will be first in the queue and, secondly, that they will hold on to these shares ad infinitum because it is such a good deal. I would like him to tell us, if he is so confident of that, why it is that he needs a loyalty scheme.

I would like him to tell us when this loyalty scheme is going to mature. Is this loyalty scheme going to mature prior to the next election? Oh no. The stated position on the loyalty scheme is that it will mature after the next election—about 6 months after it, I think. The Government said that it would be a 3-year scheme.

Dr David Clark: What a coincidence.

Hon CLAYTON COSGROVE: It is quite a coincidence, as my colleague Mr Clark said. Why is that a coincidence? That is a cynical con, because that is simply about the Government being able to try to cobble together an argument in the next election campaign to say: “Oh, look at all these Kiwis. They’re hanging in there; they’re keeping their shares. We told you so.” Mr Key will say that and then, hey presto, 6 months after an election campaign, the free bonus shares will mature and be delivered, and the same thing that happened with Contact Energy will occur, when Kiwi mums and dads—those who remain—will sell out the windfall gain.

Of course, those who have got in to get that windfall gain will be those Kiwi mums and dads who can afford $1,000 or $2,000 to flick on to the old share market. I do not see many of them in Christchurch or around the country. By the way, if you are paying 20 percent on your credit card, and you are going to get 5 percent, maybe, off the back of these asset sales, then would not the smart thing to do—and I do not think many financial advisers would disagree with me—be to pay off your credit card or pay down your mortgage if you have a discretionary $1,000 or $2,000 just hanging around in your back pocket?

The point is this. I know that Mr Goldsmith, the member for—no, he is not the member for Epsom; I got confused there for a minute—the soon-to-be member for Epsom, will be able to afford 1,000 bucks or 2,000 bucks. I would wager that most people in his electorate would probably be able to have a go, and that is the nature of it. But for those people on Struggle Street—those people who do not have 100 bucks to get the kids a couple of new pairs of school shoes, pay the school fees, or put bread on the table—I cannot see too many of them sitting around with, you know, mum talking to dad and saying: “Hey, we’re going to dig up $1,000 or $2,000 and do you know what we are going to do? We’re scratching to make ends meet, but we’re going to take Bill English’s advice. We’re going to invest in shares that we already own and we’re going to buy them back again.”

So let us get real about this. This is about a wealth transfer, from those who have the least to those who have the most. This is also about an election year con.

I just ask Mr English again, if he is so confident that Kiwi mums and dads will hang on to these shares, why does he need a loyalty bonus? There is no answer, apart from the fact that he knows the inevitable will happen. Contact Energy, it was floated in 1999, had a share register of 225,000 individual Kiwi shareholders. Today, that number is 78,000, and that company is overwhelmingly and predominantly owned by foreign interests, most of them in Australia.

I just say to Mr English that if I am wrong—and he can laugh and cackle—he should stand up, take a call, and tell the Committee why it is he is promoting a loyalty share scheme if he does believe, in his heart of hearts, that Kiwis will hang on to these shares and that it will not be the case that in, say, 3 years, just after the loyalty scheme expires, the share register is turned on its head because the Kiwis go out with their windfall gain and the foreign investors move in. That has been the precedent after precedent with asset sales historically.

Eighty percent of New Zealanders do not want it. Mr English has botched this from stem to stern. He has inflamed Māori interests. He has not spoken. We had Tūwharetoa come to the select committee, lawyered up, saying that they had gifted back water resources to the Crown for the public good, but now the rules had changed, and they wanted a slice of the action. What was the Government’s reaction to that? Well, according to Mr Ryall in this House, it had planned for all this. So it had planned for a dust-up with Māoridom, it had planned for a Waitangi Tribunal hearing, and it had planned, presumably, for the inevitable court action that will follow and, therefore, for the delay in the initial public offering. Only a fool—to quote Mr Key—would float an asset, would do an initial public offering, with court action and tribunal action hanging over their head.

I say this to Mr English. He will go down in history as the person who dudded—to use an Australian expression—the Kiwi taxpayer by selling assets that they already own, dudded them because the least in our community could not afford to buy them, dudded them because he transferred the wealth to the most, and then dudded them with a loyalty issue that should be unnecessary if he believes in his heart of hearts that Kiwis will hang on to these shares. “Dudded the taxpayer” will be his legacy, and that is what we will go to the next election about.

PAUL GOLDSMITH (National) : I am very glad to hear from the member for “Struggle Street”, Clayton Cosgrove. By my calculation he could get about 17 lots of shares worth $1,000 each.

Todd McClay: How much does that add up to?

PAUL GOLDSMITH: About $17,000, I recall.

I was interested to read, a couple of days ago, of what was said of Mr David Parker: “if you closed your eyes and just listened to David Parker speaking—it could just as easily have come from National”. If only it were so. If only it were so of David Parker that if you closed your eyes, you could think that he came from the National Party. If we were to contrast the Government’s Budget—we have this excellent Budget here, which is about investing in New Zealand’s future, stimulating jobs, and delivering better services for families while keeping the Government on track for surplus in 2014-15, with what we would have seen if Mr Parker was the finance Minister, aided and abetted by that great Australian Russel Norman, we would be looking at a capital gains tax, would we not? We would be looking at a partial capital gains tax, which excludes the family home.

It always amazes me to wonder how it would help grow the economy if we were to add a new tax on all businesses and small businesses in the form of a capital gains tax, and if every farm had to pay a capital gains tax. How that is going to grow prosperity and encourage entrepreneurialism in New Zealand is beyond me, given the fact that such a tax is in place in Australia, the US, and the UK, and they seem to have had housing bubbles. How that is going to solve New Zealand’s housing affordability is beyond me.

Another aspect is that we would be looking at GST reform right now, would we not? We would be taking the GST off the asparagus that is flown first-class into my local fruit and vegetable shop at Jack Lum’s. We would be taking the GST off that in order to bring about greater social cohesion in New Zealand. I do not see how that would have helped New Zealand, by any stretch.

Mr Parker is now in favour of fiscal responsibility. Well, it is one thing to talk about it; it is another thing to actually do it, and actions speak louder than words. When we look at the last term of the Labour Government—when I was not nearby—it did not show much fiscal responsibility, in my book. It increased incredibly the growth of Government spending and left this country pregnant with 10 years of deficits ahead of us. So those are the actions rather than the words. In terms of fiscal responsibility for Mr Parker and the Labour Party, it seems to be all about not controlling spending, but just raising taxes more and more in order to meet the never-ending desire for more moneys that they can spend.

Apparently he is now in favour—this member who, if you closed your eyes, you could believe was a member of the National Party—of labour flexibility. Well, I am not sure. Is Mr Parker now supporting the 90-day trial for workers? I do not think so, but I hope he is, because that would make good sense. That is the sort of flexibility that we need when employers are starting out and trying to grow their business—to have some flexibility about who they employ. That is how we grow the economy. At the end of the day it is businesses who think that they can sell something the world wants who will feel confident to hire new people and to grow their businesses. That is how the economy grows, not by taxing hard-working New Zealanders even more in order to grow the size of the Government, and somehow think that that is going to grow the economy.

What about mining? I understand now that Mr Parker is in favour of mining. Well, that does not seem to have filtered through to the Local Government and Environment Committee, where Labour members are opposing the Exclusive Economic Zone and Continental Shelf (Environmental Changes) Bill with everything they have got. The exclusive economic zone bill is all about balancing the needs of growing the economy and preserving the environment, where the Government has come through a very careful balancing of those two aspects, and Labour opposes it every step of the way. I do not know how he is in favour of mining, on that score.

Let us look at some of the other areas. Intensification and development of the agricultural sector? No, Labour is not in favour of that. Australian companies moving jobs to New Zealand? No, it is not in favour of that. Making welfare work? Well, here we are, having had the welfare system in place now for 70 years. It was supposed to end poverty when it was brought in by Mr Parker’s great—[Bell rung] It was supposed to end poverty back in 1938, and we have not quite got there yet, and we have entrapped 300,000 families in the welfare system, relying on the Government. Labour seems to think that that is perfectly acceptable, and that it is a good thing.

This Government does not. We have reformed, and we want to continue to reform, the welfare system, not because we do not care about people but precisely because we do care, and precisely because we do think we can do better and we must do better. That is what this Budget is all about, in terms of focusing on getting more effective results out of the welfare system, rather than just continuing to pour the money in: “Here’s your money. We don’t care anything about what you do with it. We don’t care how long you receive it. It can be for ever and a day, as long as you like.” That, somehow, was supposed to reflect a caring Government. Well, that is not a caring Government in my mind, at all.

What else would we be looking at here—$1.5 billion to invest in ultra-fast broadband in terms of opening up schools and businesses to the world. Would Labour be investing in that? No, it would not be. Foreign investment in New Zealand? I have been surprised at the Labour Party, which for a couple of decades now has been a party that has understood the importance of trade, and there has generally been an awareness across the House that New Zealand makes its living out of international trade. Getting ourselves closer to free trade in a number of industries and environments is very important to the future of New Zealand, but I cannot help but get a sense that Labour is backing away from that now. It is continually talking in a protectionist way about stopping the foreign investment coming into New Zealand and opposing that on every score. So how is that being supportive? Finally, I just want to see whether, if you closed your eyes and thought that Mr Parker was a member of the National Government, he would be talking in the same way about the emissions trading scheme, where Labour wants to extend that to farming and a whole range of other areas. I do not see how that is going to help New Zealand grow faster.

So all in all, when I look back and see what the Government has achieved through this Budget, and when we stand and look at the international economic context of developed countries around the world struggling, New Zealand in this context has continued to have growth—albeit modest growth, but growth nevertheless—over the last 4 years. It has been a remarkable achievement, and one that I am very pleased to be a part of in a small way. So I support the work of this financial element of the estimates debate. Thank you very much.

Dr DAVID CLARK (Labour—Dunedin North) : We have just heard from the member Paul Goldsmith some very rich rhetoric, and I guess that is what we might expect from the member from Epsom. Unfortunately, however, the facts will get in the way of that good story. If we examine the Government’s record we will find that the growth he has spoken of has not eventuated.

The Government’s record on growth is the worst record of a Government in 50 years—the worst economic growth record of a Government in 50 years. There are over a thousand people a week leaving for Australia, for good reason. People are discontented with the growth, or the talk of growth, that this Government has offered. They want real growth. They do not want talk. We have had a 50 percent increase in unemployment. That member said that he was concerned about it, and that the Government must do better. Well, it must—it must do better. It needs to be providing jobs. Talking a big game does not achieve anything at all. If we actually look at the record on growth, we can look at the GDP record of the last Labour Government, which grew the economy in real terms—in real terms—by 25 percent. That made the pie one-quarter bigger, and that contrasts starkly with this Government, where real wages per capita are dropping. That is all about priorities.

When it comes back to Vote Finance, it is about where the money is being spent. Is it being spent to best effect to grow our economy, to grow the policies within Treasury that will grow our best economy, and to make sure that jobs are provided for New Zealanders who want them and who want to contribute to our country’s future?

That raises a very important question, which was covered in the estimates and related items for Vote Finance in the Finance and Expenditure Committee. We asked the Secretary to the Treasury about the Crown Retail Deposit Guarantee Scheme, and asked just what work Treasury was doing, or, indeed, what work the Minister had asked for, in respect of that scheme. We know that it is quite likely that hundreds of millions of dollars were lost as a result of the Government’s mishandling of that scheme. We know that its handling of the scheme could have lost more taxpayer money than INCIS did. This could be the greatest loss of taxpayer funds in New Zealand history. I want to know, in the current financial year, what Government resource will be allocated to finding out just how much money was unnecessarily lost in addition by Treasury’s poor handling of this scheme. I would like the Minister of Finance, when he takes his call, to tell us how much resource he will be devoting in his department toward quantifying this loss to the taxpayer—quite possibly the greatest loss to taxpayers in New Zealand history.

A quick look at the estimates tells us that the Government’s priorities are not Labour’s priorities. We know that the asset sales programme will take this country back by $100 million a year. We know that, because Treasury has quantified it. We know that it was a rushed process. We know that the Government is trying to rush it through because it is embarrassing—80 percent of New Zealanders are against it. We know that 99.4 percent of the submissions that we heard in the select committee were against it, and we know that New Zealanders do not like it, because it is a bad idea. But the Government continues to push ahead. It continues to push ahead with its plan to deprive us of revenue that the Crown could have to ensure that we pay off our debts faster and that we can invest in the assets that we all value as New Zealanders over the longer term, rather than some kind of sweet, sugary quick fix. We know that the sale of these assets will lead to future cuts in services for all New Zealanders. We are talking about hospitals and schools. Once the capital that is gained from any asset float has gone, the revenue will dry up, and we will all be worse off.

This Government is refusing to take the big decisions. That is also clear from these estimates. We know that superannuation is one issue it is not prepared to tackle. It is saying it is not an issue until 2020. Well, it is an issue. We all have to plan for our retirements. We need to know with certainty whether this Government intends to go on spending more money on New Zealand superannuation than it is spending on the entire education system, or whether it is actually prepared to tackle these harder issues.

We also want to know about the Government’s economic management. We know that this Government has borrowed more from overseas, under John Key, than any previous Government. This Government’s borrowing would make Muldoon blush. This Government’s borrowing record is shameful. We know that we need pro-growth tax policies, we need research and development policies, and we need proper savings policies.

Hon BILL ENGLISH (Minister of Finance) : Well, there was another visit from one of the aliens from “Planet Labour”, David Clark. Funnily enough, a lot of them look the same. Just a couple of points that were raised on the way through. Apparently, low-income New Zealanders cannot afford—and this may be right—to buy $1,000 worth of shares in Mighty River Power, but, according to Labour, they can afford compulsory superannuation contributions. So can those members explain that to us? We have heard all this ranting about how those people cannot afford $1,000 once in their life, for $1,000 worth of shares, but they can afford what Labour euphemistically calls universal KiwiSaver, which means compelling people on the minimum wage to make savings every week for the rest of their lives. Apparently, they can afford that. So I look forward to the explanation of how those two bits fit together.

Listening to the Labour Party lecture about the current account deficit is unbelievable. I recall the campaign in 1999 when a finance spokesman from the same city who looks a bit similar to this one campaigned on getting rid of the current account deficit. At the time it was 4 percent. Then Labour had 9 years of the great moderation—the best economic conditions, apparently, that the globe had seen in a generation—and at the end of it, not only did Labour not get rid of the current account deficit, but it was double what it was when Labour started.

Mark Mitchell: Double?

Hon BILL ENGLISH: Double. First mortgage interest rates were 10 percent, there was 5 percent inflation, and we had a doubled current account deficit. And today we are hearing, in this debate about the estimates, the same kind of hocus-pocus of some magic mix of research and development incentives and something else that, apparently, will fix all this. The Government’s plan is a consistent plan, and if we stick to it—which this Government certainly will—then we are going to see New Zealand less vulnerable. It will be less vulnerable over time, but it is a huge challenge, not only because of the multigenerational build-up of that external indebtedness, but also because we are now in a world where dealing with it is going to be a bit more difficult.

One of the speakers talked about the greatest losses over the Crown Retail Deposit Guarantee Scheme. Let us just run through a quick list of the mess that the wasteful, hopeless last Labour Government left. There were multibillion-dollar losses in ACC, because it cranked up entitlements, and cut and tried to hold levies—multibillion-dollar losses. The Housing New Zealand Corporation has $5 billion worth of houses in poor condition in the wrong place that cannot really be used to help serious housing need—$5 billion. It is not a theory. That is paid for by the PAYE of people who voted Labour believing it knew what it was doing—$5 billion of PAYE invested in housing that cannot be used properly to help the people Labour says it stuck up for. Student loans—$1 billion worth of write-offs, because when we became the Government no one was in charge of student loans. No one in that whole Government was in charge of a $10 billion asset, and I had to sign off write-offs of hundreds of millions of dollars because of negligence and lolly scrambles being the outstanding characteristics of the previous, wasteful Labour Government.

Then today in the House Labour was criticising us over welfare reform. It was another one of its lazy, thoughtless spokespeople who do not do any work and contribute nothing, even in the area where Labour is meant to be the experts: welfare policy. Labour members are a generation behind in their thinking, if they are thinking at all. These estimates include hundreds of millions of dollars invested to get on top of long-term welfare dependency—dependency on which labour parties rely because that is what feeds the government system from which they draw their personnel and their ideology. We believe we must change long-term welfare dependency, and these estimates show the best ideas in a generation to get on with that.

Hon DAVID PARKER (Labour) : I will respond to a couple of issues raised by the Minister in the chair, the Minister of Finance. He asked why it is that we think New Zealanders can afford compulsory savings through a universal KiwiSaver scheme. The truth is, New Zealand cannot afford to ignore these long-term problems. New Zealand has slid down the rankings of the international wealth tables over recent decades, and although it is true that in the next few years there are a couple of countries that are going to pass us going down faster than we are—some of these European countries to which Bill English has referred—the truth is that the countries that have done better than us do better in labour productivity. They do better in labour productivity because they have the right tax signal into the economy, and their precious investment capital goes into businesses based on the profitability of the investment rather than tax advice. And they do better in labour productivity because they have more money to invest in their economy, because they save more.

How is that paid for by low-income people? It is a very good question, because low-income people spend everything they earn. That is why, allied with our policy of a universal savings scheme, we have a proposal to increase the minimum wage, because an increase to the minimum wage is necessary in order to help those people save. Mr English, you might laugh in the chair, but, you know, one of the reasons why people head to Australia is that it has got a more competitive wage structure. That competitive wage structure is born of the universal savings scheme. New Zealand would be in a similar position if an earlier National Government, under one of his predecessors, the Rt Hon Robert Muldoon, had not abandoned an earlier Labour universal savings scheme that was designed by Roger Douglas and put in place by Norman Kirk. That is how the contributory saving scheme would be introduced, and, as one of the New Zealand First contributors interjected, there is a difference between a lump sum and a contribution over time, even if the Minister of Finance does not get that distinction.

We heard from Paul Goldsmith. Paul Goldsmith, biographer of John Banks—another person who is very close to Mr Banks—said that it is a new recipe from Labour that we were in favour of returning to surplus by 2014-15. It is not. We campaigned upon it. We produced detailed fiscals at the time of the last election that are the most detailed that have ever been prepared by an Opposition—far more so than we had from National when it was in Opposition. Not only that but we actually properly costed what was happening with the State-owned enterprises; the Government did not. In fact, the Government did not come clean on the fact that the State-owned enterprise sales were going to make the deficit worse by $100 million per annum until this year in this very Budget process, in the pre-Budget fiscal update.

Not only that but under Dr Cullen we did run nine surpluses in a row. In a time of plenty, when a lot of Governments around the world were not putting away money for a rainy day, New Zealand was. Every one of those Budget surpluses was opposed by Bill English—every one of them. Every one of those Budget surpluses was opposed by his finance spokesperson predecessor, John Key, and by his predecessor, Don Brash. Every one of those Budget surpluses is absolutely essential if you are going to run Keynesian economics. There are lots of people now who favour a Keynesian approach in a recession, and they are right. You have a danger of running into a deflationary spiral if you do not run a deficit, and that is why I am not critical of Bill English for having run a deficit in the last couple of years. It was absolutely necessary. If you run surpluses for all those years, then you have the worst recession around the world since the Great Depression. It is absolutely appropriate for the Government, for a period, to run a deficit in order to keep the economy moving. He has done that. We have not criticised that. We criticise the shape of it, we criticise the fact that 40 percent of his income tax cuts went to the top 7 percent of people, but we do not criticise the fact that there has been a deficit. New Zealand can afford that deficit for a period because for 9 years we—and, indeed, the prior National Government—ran surpluses during the good times so as to put money away for the tough times.

In terms of welfare reform, I am not going to put up with being lectured on welfare reform by a Government that says that it does not have to move on the age of eligibility for superannuation, despite the fact that a million people within a decade and half—or a bit more than that—will be on superannuation, and that by 2016 we will be spending more on superannuation than on the whole of Vote Education.

DENIS O’ROURKE (NZ First) : New Zealand First does not underestimate the magnitude of the issues facing New Zealand over the Canterbury earthquakes. We acknowledge the efforts made so far by the Government to address these, but we do have a duty to highlight what we see as the Budget inadequacies of those efforts.

Firstly, regarding the new central city plan, it is of course the people’s plan, not the Government’s plan. It was based on submissions by Christchurch people and the employment of local architects and others. It is conceptually sound. The use of a green “frame”, the emphasis on the Avon River, and anchor projects are well identified. But all this is very expensive to implement. It is all very well to dream up a vision; it is another thing to see how it might be implemented. Private insurance and Earthquake Commission contributions will be very substantial, but council insurance is completely inadequate. Additional council investment in the plan will mean a large burden to meet all demands.

Additional Government investment is required over and above the land purchase requirements. It is not good enough to leave the Christchurch ratepayers to foot the bill alone. That would require excessive borrowing beyond prudential limits by the council. It is also likely to so pressure the council and community that unwise and short-term decisions might be made. Christchurch deserves better from the Government. The whole country has an essential stake in Christchurch’s success and early recovery. Without additional Government investment, the risk is that the rebuild will take far too long to achieve the building of the major anchor projects, especially the convention centre, the stadium, and the sports facility in particular.

What is not an option would be Government pressure to sell the city’s strategic assets, especially airport shares, port company shares, and Orion shares. They deliver a dividend stream far exceeding the cost of borrowing: 15.2 percent on average recently, versus under 5 percent. They also underpin the city’s asset base, which enables borrowing on advantageous terms. I have had decades of experience serving on the boards of some of these companies, and I am certain that the sale of any part of the shares in them would weaken the city’s recovery and would not enhance it at all. To do so would be only a band-aid fix, and what we need is long-term recovery.

So what should the Government’s priorities be? Firstly, to ensure that the residential areas are fixed very soon—that is the first priority—then to assist the city council in the overwhelming burden it faces concerning the central city recovery. Firstly, it should actually invest adequately in the major projects indicated in the plan, such as the convention centre, the stadium, and the sports facility. Secondly, of course, it should ensure that basic infrastructure is quickly repaired—and that is happening far too slowly currently, if you look at the performance, especially that of New Zealand Transport Agency. The third priority would be to fast track the replacement of major Government buildings—courts, police, administration offices, and so on. That also needs a boost. So the Government’s provision for these purposes, I think, is completely inadequate.

The Government often talks up the Christchurch recovery as one of its main priorities. But I question its actual commitment to dealing with those priorities, for the reasons I have just given. But that is not all. There are other issues, and one of them is insurance. It is still too hard to get. Insurance companies are still acting far too slowly—some quite deliberately, I think. And it is not enough for the Minister for Canterbury Earthquake Recovery just to talk tough about this. We need some funding support too. The funding would be used for issues such as a decent disputes resolution process that is able to take classes of issues for resolution and to ensure practical results for people, and that is not happening currently. In addition, long term we need to reassess the whole regime of disaster insurance, the place of the Earthquake Commission, and the need—we in New Zealand First think—for a State-operated New Zealand insurance company to ensure availability of cover on fair terms and to be more responsive in a large-scale disaster.

I would like to go on and talk about the white zone, because there we have similar issues. Delays so far taken are excessive—acknowledging the technical issues involved. The issue here is also who pays for remediation actions. Uncertainty causes failure to act, especially, for example, with rockfall fencing. I know of one area near me in Sumnervale where people are very worried by the fact that the council originally decided to put up rockfall fencing because it thought that it was going to be paid for by—shared between—the Government and the council. When the council found out that that is not likely to be the case, it suddenly decided that it would not put such fencing up any more. Of course, this is a serious safety issue. The Government needs to take its fair share of that sort of burden to make sure that those safety issues are dealt with.

When we come to resources generally for the rebuild, with homes progress is still far too slow. Yes, thousands of homes have been repaired, but there are tens of thousands still to go. Fletcher EQR is the sole manager. We in New Zealand First think that what we need is at least one other manager, to ensure competition. That would allow a cross-comparison of the performance of the two and would increase the management resource available, and in those ways would speed up, we think, the progress with the repair of homes.

Similar issues apply to the business rebuild. We think there needs to be a 5-year target for the central city for people to focus on for investment. They need incentives. They need rates holidays, tax holidays, and fees exemptions. We see none of those sorts of incentives in this Budget, which is silent on those obvious needs.

When we come to red-zone purchases, yes, there has been good progress made, and that is good to see. But our concern is for people trapped by red-zone land decisions, because in too many cases the sale price is not enough for a new home, and no other funds or mortgage are available to many people. New Zealand First calls again on the Government to ensure there is bridging finance for people in this position of up to $100,000 at zero interest, repayable upon sale or upon death. That sort of provision would help people who are trapped in the red zone because they cannot afford a new home with the proceeds of sale to move on.

Those are the sorts of practical provisions that New Zealand First wants to see implemented. Again, we are not seeing any good, practical policies of that kind included in this Budget. So it is not good enough to hear Government members constantly say that one of their top priorities is the Christchurch rebuild and recovery, when there is a complete failure to address so many of these issues and to make a real commitment in the Budget to see that those things are done.

I was at an announcement on Monday, hearing the Minister talk about the new central city plan, and it was good to hear it—there is a lot of good stuff there—but he did mention that there would be billions of dollars more required. But there were no details, no serious commitment, and no indication of where that money would be spent and what it would be spent on.

What we in Christchurch want to know is what those priorities are. How will people in their homes find that their repair programme can be sped up? How will people with businesses in the central city know that there is going to be not just a plan but actually a financial commitment from the Government, beyond just land purchases, to ensure that that plan gets implemented? Those are the sorts of issues that we do not hear about from the Government and are not provided for in the Budget. We in New Zealand First do not think that is a good enough commitment whatsoever. Much more needs to be done, and there needs to be more investment in the Christchurch recovery than we have heard so far.

Finally, I want to repeat this: any expectation that the Christchurch City Council can borrow its way out of these difficulties is a myth, and any expectation that Christchurch people will commit their valuable strategic assets is also a myth.

NICKY WAGNER (National—Christchurch Central) : I am pleased to take a call on the estimates for Vote Canterbury Earthquake Recovery—that is, CERA, or the Canterbury Earthquake Recovery Authority. It is a highly important part of Christchurch and Canterbury. Although it was established only in March 2011, the Canterbury Earthquake Recovery Authority has overseen an enormous amount of activity in the last year and has a huge amount of work to look forward to supervising in the next year.

I just want to take up what Denis O’Rourke was talking about. This Budget covers the cost of running the Canterbury Earthquake Recovery Authority, and it is for it to work in partnership with the three local councils and to plan and administer the recovery. But, of course, it does not cover the cost of the overall recovery or rebuild, which Treasury actually estimates at over $20 billion; many believe that it is going to cost even more than that. The appropriation for this Budget in 2012-13 is $90.653 million.

I would just like to pay credit to Roger Sutton and his team for the excellent work that they have done in the time they have been there, under really difficult circumstances. This cost is much less now simply because of the work that has been done in the past. The last 22 months have been a time of great uncertainty for Cantabrians, because we have had thousands of earthquakes—over 11,000—and with those earthquakes have been many accompanying challenges, and they have come in waves. But I think we are making some real progress. When I say the appropriation for the Canterbury Earthquake Recovery Authority is significantly less this year, it is because so much has been paid out in 2011-12. The majority of the red zone residents have been paid out. I think over 6,000 people in the red zone have settled, and 5,000 of those have been paid out.

There has also been over $1 billion of work done in terms of infrastructure. That is the repair work for roads, for waterworks, for pipes, for sewers—the things that you do not see, but the things that are incredibly important. That work is being done by SCIRT, which is the Stronger Christchurch Infrastructure Rebuild Team, of which the Canterbury Earthquake Recovery Authority is a participant. As Denis O’Rourke mentioned, thousands of houses have been repaired. About 20,000 have been repaired and people have gone back into them. That is more houses than there are in Timaru, but, of course, there is still a lot more to do. They are saying that probably about another 40,000 have work to be done on them. There has also been quite a lot of work done in terms of preparing land for subdivision, and people are beginning to be able to move out of their houses and onto new land. Of course, there are many more huge challenges in front of us and a huge amount of work to do.

I would just also like to reflect on what happened this week when the CCDU, which is the Christchurch Central Development Unit, announced its blueprint for Christchurch. That blueprint was developed with the Christchurch City Council and Ngāi Tahu. It was launched on Monday night, and I think it was really impressive. In fact, I think it was brilliant. Again, I would like to give credit to Warrick Isaacs and his team, who have worked long and hard to get that 100-day plan out there. It is inspirational, it is innovative, and it is going to create what looks like a very people-friendly and environmentally friendly city. The good thing about this is that it really builds on the ideas that have come from the people of Christchurch. The city council developed its Share an Idea campaign, and 106,000 submissions were put in by the ordinary people of Christchurch to go towards the development of this plan. I think the blueprint really delivers on their vision that came out of that project, which was for a garden in the city.

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

NICKY WAGNER: Before the dinner break, I was talking about the new blueprint, the 100-day plan for Christchurch, and how well it has been received, how it is inspirational and innovative, and how I would like to congratulate the team of Warwick Isaacs and his people, who have worked so long and hard to get this result. The blueprint identifies a dozen or so exciting anchor projects for the city. They will provide real amenities for local residents, for the Greater Christchurch area, and also for tourists. [Bell rung] But the beauty of this new plan—

The CHAIRPERSON (Eric Roy): Order! The bell may not be very loud.

NICKY WAGNER: Mr Chair.

The CHAIRPERSON (Eric Roy): Are you seeking another call?

NICKY WAGNER: Yes please, Mr Chair.

The CHAIRPERSON (Eric Roy): Well, you must do that the moment the bell rings.

NICKY WAGNER: Thank you, Mr Chair. The beauty of this new plan is that it will build a more compact, well-designed, and, we hope, people-friendly and environmentally friendly city. I really like the idea of the green “frame” and the fact that the River Avon runs through the city, and that will be a focus. It will be a focus for walking, for sitting, for biking, for just enjoying the outdoors on the two sides of our city, and on the other two sides we will have this large green space. I think that that is going to make our city something that we will all be proud of.

It is also a compact city, so near the Square you will have the convention centre and that will open up into Cathedral Square and Victoria Square. We will also have the theatre complex very close to it, and on the other side of the retail area we will have the new justice and emergency services centre and also the bus exchange. Past that we are going to have the innovation centre, which is based around the Christchurch Polytechnic Institute of Technology, where young people will want to go. But the whole key here is that the whole city will be very walkable and will be a place that people will want to hang out in and spend some time there.

It is particularly important that this city plan works well. There has been some debate in the community that we should really be focusing on the residential areas before we focus on the central business district, and I agree with that—it is really important that people are in homes that are warm and safe—but the problem is that unless we get this central business district up and running, we lose the attraction of our centre city. Not only do we have to be responsible to our local citizens and the Greater Christchurch area, but also we have to be responsible to the South Island, because Christchurch is the gateway to the South Island. We need to have a vibrant city that will attract tourists, so that they not only will come to Christchurch, but will feed out through Christchurch, right around the South Island. We have seen a drop-off in tourism in the rest of the South Island because Christchurch has been damaged.

I think this exciting, new-look city will bring people back to the centre. Christchurch people have been amazingly resilient. It is hard to believe that before the earthquake 63,000 people worked within the four avenues and there were 10,000 people living there. All those 63,000 people have found another place to work, and gradually over the next few months and years they will be able to come back to the city.

I also just want to focus on the residents within the four avenues for a few minutes, because that is where I live. Before the earthquake, there were 10,000 people living within the four avenues. Of course, that was immediately shut down after the quake in February. We had the police and the army at the end of the four avenues, and nobody could go in and out. Many people had to leave their homes and could not get back to them. Some of the people who lived in the centre, which is still under the red cordon, never got back to their homes and could not even get their possessions out of them. So the people who live in the centre city have had a pretty long row to hoe. We have also got quite a large red zone around the Avon River and we have got plenty of technical category 3 land. So it is really good that the people who live there—and I think there are probably only about 5,000 of that original 10,000 left—have got these new things to look forward to and can use the amenities. The amenities are cleverly planned so that we will bring people into the city and they will be able to work there, to play there, and to enjoy our new city.

Overall, I would like to thank the Canterbury Earthquake Recovery Authority for all the work it has done. I know it has been a really tough time. I know the authority has been challenged, but it has managed to bring in a large number of really skilled, professional people who have got through the work that had to be done. They have come up with innovative solutions in terms of the Stronger Christchurch Infrastructure Rebuild Team and also the Christchurch Central Development Unit with the 100-day plan. They have dealt with these issues creatively, they have been innovative, and I think they have come up with good results. I think that there is no doubt that the people of Christchurch will and can rebuild a stronger, better, more beautiful city. Thank you.

EUGENIE SAGE (Green) : I am pleased to take a call on schedule 1 of the Appropriation (2012/13 Estimates) Bill. Vote Canterbury Earthquake Recovery totals over $90 million. As the Finance and Expenditure Committee report notes, this is a substantial reduction on previous appropriations, as most of the demolition costs and purchases of the red zone properties were funded over the past 2 years. But $42.5 million of that $90 million is funding to support the Canterbury Earthquake Recovery Authority in planning and facilitating the city’s recovery and for policy advice. Quite a chunk of that money in last year’s appropriation has obviously gone into the blueprint document, which was released earlier this week.

I would like to congratulate the Minister for Canterbury Earthquake Recovery and the Christchurch Central Development Unit team of the Canterbury Earthquake Recovery Authority on many of the concepts that are in that blueprint. The “frame” on the south and east of the city to contain a much more compact central core is a very good idea, as is the potential for more intensive residential development in that area to make Christchurch a more compact city and to reduce urban sprawl. The Ōtākaro Avon River park is narrower than some of us would like it at the moment, but that is a welcome concept, as is the proposal to improve water quality in the river. There is very welcome recognition of Ngāi Tahu and its heritage in Ōtautahi. So, certainly, the team deserves congratulations on the hard work that it has put in.

But one of the key principles in the recovery plan is to listen to the people—whakarongo ki te tangata. That is based on the very innovative consultation exercise that the city council did in Share an Idea. So the Canterbury Earthquake Recovery Authority needs to continue that theme of listening to the people. People in Christchurch have a strong voice. They want it to be one that the authority listens to not just in developing the recovery plan but also in implementing it. Where concerns have arisen have been in the authority’s very hasty demolition of a number of heritage buildings—the way in which it issues notices under section 38(4) of the Canterbury Earthquake Recovery Act. That needs to be followed up. We need a recovery strategy for heritage. It is supposed to have been produced, but has not been. Then there is the issue of the public being shut out of decisions around heritage buildings. But there is also a concern that the public is likely to be shut out of decisions around buildings and facilities in the heart of the city. The recovery plan provides that where buildings breach the development standards in the plan in relation to matters that are quite fundamental for the amenity of the city, like recession planes and the amount of sunlight, those resource consents are restricted only to discretionary, non-notified activities, so there will not be a chance for public input.

Another key issue is that several of the civic facilities that are proposed in the authority’s blueprint are much bigger and more expensive, potentially, than those proposed by the Christchurch City Council in its annual plan and long-term plan. So that raises the fundamental issue of who is going to make the decisions on the affordability and the scale of some of these civic facilities—the city council or the Canterbury Earthquake Recovery Authority and the Government? The Christchurch City Council’s long-term plan provides, for example, for a 21,000 - square metre convention centre, at a cost of $205 million plus inflation, but the blueprint provides for a bigger facility of 24,000 - square metres. The Christchurch City Council, in its plan, has a preference for retaining the iconic Christchurch Town Hall and the outstanding acoustic qualities of the auditorium in the town hall. Yet the blueprint maps show that the town hall is demolished and that area is completely green. So the Christchurch City Council and the people of Christchurch need to have a say in the funding of these facilities and whether we are going to get the big, shiny facilities proposed in the blueprint, or something that is more affordable. Today’s Press reports that there have been discussions between the Christchurch City Council staff and the Canterbury Earthquake Recovery Authority about the council contributing another $155 million for new projects in the central city. That would bring the council’s contribution to more than $787 million. I assume that the Minister for Canterbury Earthquake Recovery and the Canterbury Earthquake Recovery Authority will encourage the councillors, on behalf of the people of Christchurch, to decide whether that $155 million should be provided—

• Vote agreed to.

Hon SIMON BRIDGES (Associate Minister of Transport) : It is a great privilege to take a call to speak about transport.

Phil Twyford: This is the junior Minister. Where’s the real one?

Hon SIMON BRIDGES: It is a very exciting sector, the transport sector. The Government, within the transport sector, is, of course, providing real leadership. Gerry Brownlee, the Minister of Transport, and I—Mr Twyford—as Associate Minister of Transport, have four goals that we are pursuing vigorously in transport—

Andrew Little: What happened to the 120-point plan?

Hon SIMON BRIDGES: —better quality regulations, better investment in infrastructure—just four—creating a safer transport system, and opening more international and domestic markets. Mr Brownlee is taking a real lead in pursuing that vigorously.

These are important goals. I want to focus on infrastructural investment very shortly, but can I just say this: despite what some in the Labour Party and the Green Party say, we are committed to a multimodal approach. We do roads, we do rail, we do public transport very well in this country, and we are investing in it. When we are characterised as being just about roads, I say that is absolutely wrong. Of course we invest in roads, and we are proud to do so, because that is where, pragmatically speaking, people are still driving, and the vast majority of freight is still being moved.

To talk about infrastructure, I think it is important to start out and say how vital it is to transforming our economy, to creating jobs, and to lifting productivity. I know that in my own area, for example, the Tauranga Eastern Link is going to reduce a huge amount of time and allow many more journeys from heavy trucks as they take produce and as they take logs to the Port of Tauranga. This is a multimodal approach.

Let me just say that in the period 2009-12 we have spent some $8.7 billion investing in transport infrastructure. That is $4.6 billion in the State highway network. That is $1.9 billion in local roads—that is in addition to what our friends in local government are investing—and $900 million in key urban public transport networks. In direct investment—I know Julie Anne Genter of the Greens will be interested in this—there has been direct investment of $2 billion in metro rail in Auckland and in Wellington so that commuters can get into town on rail. And there has been a $750 million additional investment into KiwiRail—I was going to say KiwiSaver—and its Turnaround Plan.

Let us just focus in on some of what I think are the significant pointers in relation to roads. As I say, there has been big investment. Over a decade, $12 billion has gone in to improve the State highway network. Of course, a big focus is roads—and we are unapologetic about that—in Tauranga, in Auckland, and all over New Zealand. Well-targeted investment in infrastructure is going to help lift productivity over time, resulting in better wages and higher living standards for New Zealanders and their families. It is a substantial investment that we are making. I remember some time ago an economist saying that in a recession, when you are wondering where to spend money, investing in quality transport infrastructure is a very good way to go.

We have heard a lot about rail. Of course, some of the members here in the Opposition have asked questions in the House about the Turnaround Plan. It is not going to be easy. It is not going to be something that is going to happen overnight, as Andrew Little or Rachel Hunter—it was one of the two—once said. But we are committed to KiwiRail becoming sustainable by 2020 so that it can fund itself and so that, actually, the jobs that members like Clare Curran say they care so much about can be sustainable in that industry. Could I just say this: some 4,300 people, I think it is, work for KiwiRail at this present time. I say let us back them.

JULIE ANNE GENTER (Green) : Tēnā koe. Thank you, Mr Chair. It is a great pleasure to speak on Vote Transport following the Associate Minister of Transport, Simon Bridges. I would really like to address some of the specific points that he made. I think that the great tragedy of this Vote Transport is the incredible missed opportunity. The Government is missing a huge opportunity. At a time when the world is undergoing a fundamental economic restructuring—of course, the Government does not even bother trying to analyse what the reasons for that might be; it uses it to justify whatever policy it would like to implement—we need to be investing in the smartest transport infrastructure that we possibly can, and that is infrastructure that will reduce cost to the household and cost to business.

What we have learnt here in the House over the past few months, through oral questions to some of the Ministers, and what we have seen even on Television One on Saturday night is that this Government did no economic analysis before it decided on its programme of roads of national significance. In fact, in 2008 Sinclair Knight Merz, the consultants that are now working on the investigation of the project, did a report on strategic options for State Highway 1 north of Auckland to Wellsford. What it determined in that study is very, very clear: the costs of a brand new alignment of a new four-lane motorway vastly outweigh the benefits. What is clear to me is that the National Party when in Opposition sat down and did some focus groups, and it asked these focus groups what they would like to see it invest in. National got back the answer “infrastructure”, so it came up with a little package of motorways that are going to look like it is doing something important. The Government is throwing most of our money now at five projects—$14 billion at five projects.

What I heard from Mr Bridges just now is that this is well targeted, and that National is unashamed to be investing in roads. But, unfortunately, it is not even investing in roads. It cannot even be said to be a Government that is investing in roads, because what it is doing is spending 95 percent of all new money on infrastructure on roads, but 75 percent of all new money on infrastructure in Vote Transport is going on five projects—just five. How many vehicle trips travel on these routes that it is focusing on? It is less than 3 percent. So the Government is spending 75 percent of the money on new infrastructure on 3 percent of vehicle trips. How is that logical? How is that going to improve economic productivity? It is not going to affect 97 percent of vehicle trips in the entire country.

At a time when oil prices are rising, the Government should be interested in the opportunity that it has, through our increased understanding of how it is that transport infrastructure contributes to economic development, and that, actually, this is the time to be investing more in rail and to be investing more in buses and trains and walking and cycling. What happens when you invest money in buses and trains? Well, more people take buses and trains, so that is good. But then what also happens is fewer people are on the roads, so the people on the roads find it easier to get where they need to go. So that kills two birds with one stone there.

Phil Twyford: Stop being so logical!

JULIE ANNE GENTER: I know! I have all the figures right here. I even have Treasury’s advice on the National Government’s policy statement on transport funding, which is that Treasury would prefer to see economic evidence that the Government policy statement of 2009 has been a success before we continue along these lines. Even Treasury has significant doubts about the Government’s infrastructure programme. But all we will continue to hear, I am sure, from the National Government is an empty mantra. It thinks that if it says it enough times, it will be true, and unfortunately it will not.

What the Government has missed is an opportunity to invest in transport infrastructure that would actually make our roads safer, that would actually reduce transport costs, and that would actually address congestion issues at peak hour in our towns and cities. It is missing that opportunity, which would even save us money at a time when it is worried so much about debt. You would think it would be interested in saving money. Thank you.

PHIL TWYFORD (Labour—Te Atatū) : I want to make three points. The first is that the National Government’s fetish for building new State highway projects, otherwise known as the roads of national significance, has crowded out and squeezed out every other category of Government funding, including local roads. All over New Zealand, provincial communities are having to face up to the fact that this Government has slashed the funding for local roads.

My second point is that the roads of national significance themselves are poor value for money, overall. This National Government has utterly corrupted the whole process of evaluating the economic value of these infrastructure projects.

My third point is that the National Government’s approach to transport is so completely unbalanced in favour of roads that other important parts of our transport network are suffering. I am talking particularly about public transport—and I want to talk some more about that—and also about KiwiRail. As a vital piece of our national transport infrastructure, KiwiRail has been set up to fail by this National Government.

But let me go back to local roads, because I recently, in the last adjournment, travelled around parts of the South Island, including Invercargill and Southland but also including parts of Otago and Clutha, Queenstown Lakes, and Central Otago. What I found in every place I visited is that the community, the local council, and the local mayor were very upset with the National Government for having cut their funding to local roads. If I may say so, the people of Southland were particularly embittered by the fact that the National Government has cut the funding for local roads in that area. As you will know, Mr Chairperson—

The CHAIRPERSON (Eric Roy): Order! You cannot bring the Chair into the debate.

PHIL TWYFORD: Sorry. As I was saying—

The CHAIRPERSON (Eric Roy): The member can traverse the area as he is, but he must not bring me into it.

PHIL TWYFORD: As I was saying, the member from Southland knows well that that area has the largest network of local roads in the country. It has one of the smallest bases of ratepayers, and it is feeling the financial squeeze because of the policies of this Government. Everywhere I went, the people in those communities said: “You know what? We haven’t seen Bill English for a long time around here. We haven’t seen Jacqui Dean in Alexandra for a long time. She hasn’t shown up since the last election.” And they said: “When you go back to Parliament, say to the National MPs that we’d quite like to see them, we’d quite like them to show up, and we’d like them to explain why rural and provincial New Zealand has been hung out to dry by this Government.” They are told that they have to pay more for their local roads. They do not want to subsidise the roads of national significance, because they know that mostly they are a crock and that they are a waste of taxpayers’ money, which is being badly spent—billions and billions and billions of dollars of taxpayers’ money, wasted on projects that will be white elephants around their necks, just like the Think Big projects. It is Think Big all over again. This Government wastes billions of dollars of taxpayers’ money, and it does not care if rural and provincial New Zealand has to subsidise its follies.

It might be justifiable, it might be defensible, if the roads of national significance made economic sense to this country, but they do not. Most of the roads of national significance would never have been built 5 years ago, because their benefit-cost ratios are so low. Several of these gold-plated motorway projects were made roads of national significance even before the most basic economic assessment—the analysis of their worth—had been done. But, no, the colossus of roads, Steven Joyce, the former Minister of Transport, declared with a great triumphalism that National was going to build these seven great motorway projects come hell or high water. We found out the other day that more than $200 million has been spent by this Government on design and investigation work for motorway projects, many of which will not be built for a very long time. That is absolute profligacy. There is no justification for it.

You know what? Under this Government, transport has become a kind of Bermuda Triangle of Government spending. Vast amounts of cash go missing constantly, nobody can explain it, and the normal rules of public sector financial management, somehow, do not seem to apply. It is amazing. What did we have the other day? We had Gerry Brownlee saying that one of the things you have got to be careful about is relying constantly on cost-benefit analysis. That is very strange. In the next 10 years $12 billion will be spent on the so-called roads of national significance, and the benefit-cost ratios, for some reason, are a bit overrated—you must not rely on them. That is very strange. But when it comes to something like the city rail link in Auckland, oh, well, then the benefit-cost ratios are very important. In fact, the city rail link has to be subject to the Government’s better business guidelines. That makes complete sense. Why not? We want our Government infrastructure spending to be sensible, to be well spent, and to be rigorously tested. But that does not apply to the roads of national significance, and this Government should be ashamed of that.

Hon Annette King: The vote-buying roads.

PHIL TWYFORD: That is right, the roads of national vote-buying.

The third point I want to make is that transport under this Government is so completely unbalanced, and the city rail link is a really good example of that. Not only was the Mayor of Auckland elected on a platform of building a city rail link, not only did the opinion polls tell us that an overwhelming majority of Aucklanders regard it as the No. 1 transport project, not only has its business case been internationally peer reviewed, not only will it double the capacity of the existing rail network in Auckland, and not only will the Britomart Transport Centre hit capacity by 2020 unless the city rail link is built, but this Government has no plan to deal with Auckland’s traffic congestion. It has no idea and it has no plan. The Minister sits in this House day after day and rubbishes the city rail link, yet he has got nothing constructive to put on the table to address the problem of traffic congestion in our country’s biggest city. All the Minister has got is a proposal that the Ministry of Transport has written up that would see 1,000 diesel buses in the Auckland central business district per hour—1,000 buses an hour. That demonstrates the utter bankruptcy of transport thinking by this Government.

My last point is about KiwiRail. The Government loves to trumpet the Turnaround Plan. It is going to put $750 million into KiwiRail’s capital expenditure. Yet the real story about the Turnaround Plan is that KiwiRail has been forced to put in $4.75 billion from its own balance sheet. This is not some act of charity by the Government. KiwiRail is having to pump its own balance sheet for $4.75 billion. That completely unrealistic Turnaround Plan is forcing KiwiRail to do things like lay off 220 track workers and defer 3 years of track maintenance. The Government is forcing KiwiRail to do crazy things like sell off the Hillside railway workshops, sell off the tourism side of the business—

Todd McClay: That’s enough punishment, Phil.

PHIL TWYFORD: The member does not like to hear this, because he is ashamed. He is embarrassed by this Government’s transport policy. It is forcing KiwiRail to close regional lines and regional commuter services like the Capital Connection. It is unrealistic. This Government does not like rail, it does not believe in KiwiRail, and it is setting KiwiRail up to fail. Because of the Turnaround Plan and the completely unrealistic financial targets in it, KiwiRail is in a situation where it is chopping off one limb after another, and soon it will be left with only a torso. Nowhere else in the world is a national railway expected to run as a stand-alone corporation and turn a profit. It is a vital piece of our country’s transport infrastructure. This Government does not believe that. It is setting KiwiRail up to fail, instead of investing properly in a multimodal approach. And I am afraid to say that the junior Minister in the chair, the Associate Minister of Transport, would not know a multimodal approach to transport if he fell over it on a dark night.

National’s transport policy is unbalanced. The Government has a fetish for building new State highway projects at the expense of every other activity class in the transport budget. That is leading to the neglect of local roads. The Government has cut the funding for new public transport infrastructure. The Minister would know it if he bothered to pay attention, but he is so obsessed with building his roads of National Party significance that he does not give the time of day to any other major transport project. The Government is wasting billions and billions of dollars of precious taxpayers’ dollars—

Hon TAU HENARE (National) : This debate is supposed to be about Vote Transport, and all Phil Twyford can talk about are fetishes. But, Mr Speaker, I just want to talk on—

Julie Anne Genter: Mr Speaker?

Hon TAU HENARE: Pardon?

Julie Anne Genter: I don’t think the Speaker is there.

Hon TAU HENARE: Yes, whatever.

Phil Twyford: He doesn’t have anything to say.

Hon TAU HENARE: Oh, I have got plenty to say. I have got plenty to say. All I can say to poor old Phil Twyford is this: just say yes. You know, this is the guy who is having a public meeting in a couple of weeks, and he has already promised two things.

Julie Anne Genter: I raise a point of order, Mr Chairperson. I thought that this debate was specifically on Vote Transport, and so far I have not heard the member refer to Vote Transport at all.

The CHAIRPERSON (Eric Roy): The point is well made. This is Vote Transport.

Hon TAU HENARE: How long have I got, Mr Chair?

The CHAIRPERSON (Eric Roy): Not long now—4 minutes.

Hon TAU HENARE: Four minutes. I have been talking for a minute. This is what he has promised in Te Atatū: a ferry service from downtown Auckland to Te Atatū—a ferry service from downtown Auckland to Te Atatū. We have not even got any of the infrastructure, and he is promising a half a billion dollar exercise. But that is not the only thing that he has promised the good folks of Te Atatū. He has promised them a busway that is going to cost up to about $600 million. So two promises—two promises—are already over the billion-dollar mark. I wonder how he is going to pay for that. I wonder how he is going to pay for that.

Todd McClay: Is he promising to bring the ferry back to Te Atatū?

Hon TAU HENARE: No, he is not bringing a ferry back to Te Atatū; he is bringing a ferry service to Te Atatū. It is a billion-dollar promise for the good folk of Te Atatū.

How is he going to pay for all of this? Well, he is going to screw the people. He is going to screw the people of Te Atatū out of their own taxes. That is what he is going to do. How is he going to pay for it? I have got another bit of news for—

Phil Twyford: “Holiday Highway”.

Hon TAU HENARE: Oh, he does not like it. You see, for every question about the ferry service and the so-called new busway, not once has this guy got up and said how much it is going to cost. Not once has he said: “This is how we are going to pay for it.” He says: “We might stop a couple of roads that National is building.” That is not enough for Mr Twyford’s promises.

Phil Twyford: That’s more than enough.

Julie Anne Genter: Actually, that’s plenty. It would be more than enough—14 times more.

Hon TAU HENARE: More than enough—a billion dollars is more than enough! This is how he is going to pay for it. He is going to up the petrol tax, because he is a mate of—

Hon Simon Bridges: Brown town.

Hon TAU HENARE: Brown town—274. That is how he is going to pay for it. He is going to take it out of the back pockets of good, working-class people, the very people whom he professes to represent. And he has not even got the cojones to go and say yes to the gay marriage bill, for goodness’ sake. He has not even got the cojones to do that. But I digress.

Julie Anne Genter: I raise a point of order, Mr Chairperson. I am sorry, Mr Chair, but I really do not believe that this speech has referred to Vote Transport at all. He has been talking about something completely different, which is the transport policies that have been proposed by Mr Twyford, but those are not actually in Vote Transport.

The CHAIRPERSON (Eric Roy): Order! Points of order are not an opportunity—[Interruption] Order! I am on my feet. Points of order are not an opportunity to make a speech. Members raising points of order should do so succinctly. Can I also say that it is tempting to use points of order to interrupt speakers who are actually speaking, and I think the Chair normally has a fair appreciation of what the Standing Orders are and where members are moving. I think that on this occasion the member has been inside the boundary of what the tenor of the debate has been to date. But I will just caution the member: do not get off-track.

Hon TAU HENARE: No, I will not get off-track; I will stay on roads, Mr Chair. I will stay on roads, because here is a fact that poor little Phil Twyford does not really know: in fact, funding for local roads has actually gone up. All he needs to do is go to—[Interruption] In fact, the funding has gone up by 2 or 3 percent. All he needs to do is sit down like a good local member and have a look at the plan for Te Atatū Road and Edmonton Road, and the widening, and the cycleway. That is what he needs to do.

So instead of the pie in the sky fetish that he thinks he is talking about, he needs to front up to the good folk of Te Atatū and say: “Mr and Mrs Te Atatū, this is how I am going to pay for the new ferry service. Mr and Mrs Te Atatū, this is how I am going to pay for the busway.” But he has not. And do you know why? Because he has not got a clue—because he has not got a clue. Labour thinks that by having a good idea—or an idea; it does not even have to be a good one—it will just appear. It is the same with “Planet Green”. I cannot wait—well, I actually can wait—until they get to the Treasury benches, but this is how they do it. They sit there, smoking the old weed—well, not these fullas—and then they come up with some harebrained idea, and because that harebrained idea sort of sounds OK, then it is just going to appear: the road and the ferry is just going to appear.

I wonder whether he has even asked the good people of Te Atatū about the ferry service.

Hon Member: He is.

Hon TAU HENARE: He has not. So not only has he not costed it out but he was told by the New Zealand Transport Agency that it had already looked at the busway and it was cost-prohibitive.

Julie Anne Genter: That is untrue.

Hon TAU HENARE: My advice to the Green member is to jump on one of those roads, and get the other half of the tattoo done. I tell you what: there is no way in hell that the good people of Te Atatū can afford the harebrained schemes of Mr Phil Twyford, who has only been in the electorate 5 minutes. He has not even paid off a quarter of his mortgage.

David Bennett: Has he got a mortgage?

Hon TAU HENARE: He has got a mortgage all right. This is nothing but pie in the sky dreams from a party that is not going to be anywhere near the Treasury benches for one reason, and one reason only, and that is that they do not do the hard yards and they do not do the costings. Those costs will be put on the good folk of Te Atatū—a billion dollars. We cannot afford it, and here he is promising the earth to the good folk of Te Atatū. Shame on that member.

CLARE CURRAN (Labour—Dunedin South) : Just before I start I would like to put on the record that on this side of the Chamber there are a few people who have got a bit of experience in transport. Speaking as someone who has got their heavy traffic licence, I would love to know who else in the Chamber has got their heavy traffic licence. Hands up those on that side of the Chamber who have got their heavy traffic licence. OK, good—pretty good. Hands up anyone who has had anyone in their family who has worked in the railways. That is good.

Hon Tau Henare: I seek leave to make a personal explanation about just that.

The CHAIRPERSON (Eric Roy): Look—

Hon Tau Henare: I have a right to seek leave.

The CHAIRPERSON (Eric Roy): You have, but the practice of this House is that it is done after a member has finished speaking, not to interrupt.

Hon Tau Henare: She called me a liar.

The CHAIRPERSON (Eric Roy): Well, look, the member should raise a point of order about that if that is the case. I never heard that, and I am not entering into dialogue with the member. If the member wishes to make a personal statement, he should do that when the bell goes.

CLARE CURRAN: Maybe he can talk to me about it later. I would like to agree with Simon Bridges on one thing, and that is to let us back the workers. Let us back the workers of KiwiRail—4,300. Let us back the workers of KiwiRail. Let us back their skills, let us back their jobs, let us keep their jobs in New Zealand, let us value their jobs, and let us make sure that those jobs are valued in our country and that those people have a future. We actually do think that it is worthwhile building rolling stock in this country, and not buying dodgy stock from other countries.

There are a few things that New Zealanders are known for, the things that make us as a nation stand out. The first one is Kiwi ingenuity. That is that thing, that No. 8 wire thing, that thing that makes us creative. We are a nation of resourceful people. We are creative inventors. The other is value for money. We like to get the best out of things, and we do not like to spend too much. We like quality and we like things to last. We also like a fair go. All of those values have been undermined by this Government’s decision to put the screws on KiwiRail and to buy cheap. You buy cheap and you get cheap. That is what this Government has done. It is rueing, and will be rueing, the day that it did.

This Government’s KiwiRail Turnaround Plan is coming back to bite it. It is turning round to bite it on the bum. Its decision to procure the rolling stock from outside New Zealand is coming back to bite it. The first one—well, the one that we heard about a week ago—was the 500 wagons that had to have all of their brake pads replaced. What an outrage. All of those wagons could have been produced in this country. Then this week we hear that the prize locomotives—$75 million worth of locomotives that John Key, Steven Joyce, and Gerry Brownlee have all praised to the heavens—are a lemon. In fact, they are a whole lemon tree. They are plagued by serious faults, faults of execution—faults of execution.

The Chinese have built lots of locos but they have never designed them. We were a test market for them to design those locos. As a result, the locos have got serious faults and we are having to pay the price for that. They are costing us around $150 million, and the Minister for State Owned Enterprises today could not answer the question in the House as to whether we have paid for the second lot. So maybe the junior transport Minister could get up here tonight and tell us whether this country has paid for that second lot of locos. I think it is pretty important that we know the answer to that question.

There are some serious questions around this. How long does this warranty last? What is the estimated cost of repairing those locos? What is the loss of revenue to KiwiRail from freight movements while they are under constant repair? And what is the impact on KiwiRail’s freight business? That business is so important to the KiwiRail Turnaround Plan, and it is integral to this Government’s turn-round plan.

I just want to read you a little story about what is happening. The Hillside railway workshops are currently up for sale. Currently, KiwiRail Freight wants the ZH wagons modified—

Hon TAU HENARE (National) : I seek leave to make a personal explanation with regards to the comments made earlier about my New Zealand Railways whakapapa.

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

Hon TAU HENARE: Back in the 1920s my grandfather was a locomotive driver here in Wellington for some 25 years. He had three sons. His oldest son, Mita Robert Hoturoa Hēnare, was actually general manager of the New Zealand Railways Department, the first Māori to be head of a New Zealand Government department outside the Department of Māori Affairs. He was also the first Māori to graduate as an engineer from Auckland University. His son—

Hon Damien O’Connor: You clearly missed your calling.

Hon TAU HENARE: Actually, you are not supposed to interrupt.

His other son, my father, was Paul William Hēnare, who was a plumber on the New Zealand Railways. His other brother, my uncle Māui David Hēnare, was an electrician on the New Zealand Railways. All three sons of Mita Te Tai Hēnare also have sons on the railways, including my two brothers, one an electrician, and one now in Perth, who is driving trains.

JAMI-LEE ROSS (National—Botany) : One has to be a little concerned about what happens in the Labour Party during the dinner break. Firstly we have got Phil Twyford talking about fetishes, then we have got Clare Curran sitting directly behind him talking about people getting bitten on the bum, and then we have talk about lemon trees as well and what goes on underneath a lemon tree. I am a bit concerned about what happens in the Labour Party during the dinner break.

What we know from the speeches that we heard from the Opposition benches is that they are completely missing the point about the economic benefits that transport has for New Zealand. We know that the Labour Party members oppose just about everything we do on the economy. We know they oppose just about every job creation policy we have. And now we also have further proof that everything we want to do that will bring an economic benefit to New Zealand through the transport system, they also oppose.

Let us have some real figures around roads. We know the Opposition dislikes roads. Those members hate roads. They think they are evil. They think every dollar spent on roads is terrible, when actually the opposite is true. Let us have some numbers. Six percent of roads in New Zealand carry 35 percent of traffic. They carry 19 percent of freight. These high-use roads need further investment. They did not get the further investment required, for the last 9 years, but we are putting our money where our mouths are. We are spending an extra $12 billion over the next 10 years—$12 billion on transport and roading infrastructure that would never have been spent if it was up to the Labour Party, if it was still in Government. That $12 billion is going towards those high-use roads. Ninety-two percent of freight in this country moves on roads. Freight in this country helps to build the economy in this country, and 92 percent of freight would be under-invested in if Labour was in office.

We have got the priorities right with transport. We have got the priorities right with transport because we know New Zealanders have endorsed our plans. They endorsed our plans during the election. They like what we are doing. The provincial areas in this country have been heavily supported through the roads of national significance and the other National Government roading projects.

One of the most offensive comments that Opposition parties make on transport is to call the Pūhoi to Wellsford road a “Holiday Highway”. The people living in the far north and the people living in Rodney know the economic benefits that road will bring. They know that they need to grow as a local economy up there. They know that moving freight from one part of that local economy to another is important for their future growth. And they know that provincial New Zealand needs investment in roads—the investment we are putting in. The Minister in the chair, from Tauranga, knows this. Todd McClay from Rotorua knows this. Provincial New Zealand knows that we need further investment in this area.

The Labour Party probably woke up after election day last year wondering why it had such a poor result in provincial New Zealand. It had such a poor result in provincial New Zealand because it offends provincial New Zealand by speaking against the important roading infrastructure that we are making progress on around the country.

Let us take the central business district rail loop, because the panacea, the great transport hope in New Zealand, is the central business district rail loop. The central business district rail loop has a benefit-cost ratio of 0.3. Those members like to go on about the roads of national significance. At least the roads of national significance programme has a positive benefit-cost ratio, but the great hope for transport in New Zealand, the central business district rail loop, has a 0.3 benefit-cost ratio.

Let us talk about the number of cars that the central business district rail loop would take off the road: 1,400 cars. That is all the central business district rail loop would do. For $3 billion we would see 1,400 cars taken off the road, out of the 29,000 car movements every day that we have in Auckland.

I am an Auckland MP. I know that Aucklanders are very, very sceptical about the central business district rail loop. They like the fact that we are putting money into the Waterview Connection instead. They like the fact that we have put money into the Victoria Park Tunnel. They like the fact that we are putting money into the Pūhoi-Wellsford project, and other roads of national significance. Money going on the central business district rail loop, without the numbers stacking up, would be a waste. For members opposite to tell us that a project that has a 0.3 benefit-cost ratio is more important—[Bell rung] Mr Chairman.

The CHAIRPERSON (Eric Roy): Jami-Lee Ross.

JAMI-LEE ROSS: I will be very short, Mr Chairman. I will just say that for members opposite to make comments saying that the central business district rail loop is more important that the roads of national significance is wrong, it is poor policy, and it has been rejected by New Zealanders.

Hon Dr NICK SMITH (National—Nelson) : I want to make a contribution to this debate in respect of the comments that have been made about KiwiRail. There has been some talk about people whakapapa-ing back to their railway destiny in terms of the future of KiwiRail. I started my interest in politics as a consequence of an experience with the railways. Rather than talking about dads or somebody else, I was working on a rail bridge project in North Canterbury. Let me give you the experience each day: each day we were building the bridge, and there were five of us contractors there to build the bridge. Every day a bus full of railway workers—26 of them—came to supervise and ensure that we did not get in the way of the trains. It was a total disgrace. In fact, what actually happened was that I was so appalled that this was going on in my country that I borrowed my brother’s VHS recorder—he had one of those newfangled recorders—and sent it to Mr Quigley, who was then the Minister of Railways. He invited me to become part of Young Nationals, and the rest is history.

The reason this is relevant to this debate about rail is that what has been the death of rail is the interference of politicians in running a good business. I am appalled that members in this day and age somehow believe that it is politicians who should be making the decisions about the sorts of locomotives that KiwiRail should be buying. If that is the sort of backwards culture that we are going to go into, we are going to drag this country back to the sort of Greek rail system that has dragged that country into bankruptcy.

You see, the Government plan that has been set down around the KiwiRail Turnaround Plan is actually about—

Hon Damien O’Connor: Why did you fire John Judge?

Hon Dr NICK SMITH: —Mr O’Connor—running rail as a proper business. That means not having decisions about the types of locomotives and the number of staff who are employed—all of those decisions—being made by politicians with agendas a long way from making a successful business.

I plead with members opposite and with this Committee to learn the lessons of history around railway. The deal that the previous Government did to pay over $600 million for rail in 2008 was totally driven by politics, it was a dog of a deal for the taxpayer, and it cost this country a fortune. I urge this Parliament, if it really wants to have a quality transport system, and if it really wants to have a railway system that can serve this country well, to let us appoint a qualified, robust board of directors. Let them run that enterprise in a proper way, rather than the sort of politics that members opposite want to drag railways back into and that will destroy that important part of our transport infrastructure.

• Vote agreed to.

JACINDA ARDERN (Labour) : We come to what I believe should be a centre point for this Government. One of the key platforms that it should be campaigning on currently is a plan around employment and job creation. This is where we should be seeing the most significant forms of relief to the New Zealand public. It is work and jobs that people desperately need in the midst of what is a very dark recession. Instead, what have we seen from this Government around the area of employment? We did hear a very grand plan around the potential creation of 170,000 jobs some Budgets ago. Unfortunately, at that time we saw no proof that those jobs would actually be generated. In fact, over the period through to March 2012 we were meant to have 36,000 new jobs coming on stream.

Hon Member: How many?

JACINDA ARDERN: That was 36,000 new jobs. What have we seen? We have seen roughly 20,000 materialise. That may sound significant to some. But when you take into account our growth in population, those coming on to the job market, and those coming out of tertiary education, Mr Joyce, because they cannot afford to stay in there any more with the changes that are being made by this Government to that sector, 20,000 is simply not enough. That has been manifest in some of the statistics that we have seen through, for instance, our household labour force survey: 6.7 percent of the New Zealand public are unemployed and seeking jobs. We have 87,000 young people not in employment, not in education, and not in training, and that is an absolute waste of potential. When your unemployment rate for young people sits at 19 percent, that is an explosion just waiting to happen—a ticking time bomb, as it were.

But that actually does not go across all of the measures that tell us we have an issue. The number of people who are jobless has gone up. That is the number of people who are actually willing to work, if there was a job for them, but have simply given up. Underemployment, those who want more hours than what they already have—we have seen that trending up, as well. Yet the Government, across all of these indicators, chooses instead to hone in on the number of people on an unemployment benefit, because those numbers are often smaller because of the eligibility questions around who can access that benefit and who cannot. Even on that measure, we have gone from roughly 18,000 when Labour left office to roughly 50,000 now that National is in office.

The Government tries to have it both ways. Any time you bring up the staggering statistics around unemployment and joblessness, what do you hear from this Government? It is the recession. It is the global financial crisis. Any time you hear us raise that the statistics were so much better under a Labour Government, you will hear the Government again say that we did not have a global financial crisis or a recession. Yet what do you hear when the Government stands up and talks about benefit changes and about welfare reform? You hear that people are lazy, that they do not want to work, and that they are taking advantage of the system, and that is why we need reform. You cannot have it both ways. Kiwis want to work, and the Government’s job is to make sure that businesses are supported to create those jobs, that the economy is thriving, and that people have the skills, training, and education to move into work. What should we be seeing, therefore, in our benefit system as an enabler? We should see intensive case management, and we should see, as I said, sound economic management.

As I have said, fixing the welfare system is actually linked to the idea of a strong, well-functioning economy. It is a link that this Government chooses not to make. If you want to fix welfare, fix the economy. In fact, on this side of the Chamber we have promoted a few ideas around that area. We have a housing shortage. Anyone who lives in Auckland knows this to be a fact. In Christchurch, equally, we have a significant housing crisis. We also have a skills crisis. We also have a huge number of people seeking work and employment. Labour put all of those things together and suggested to the Government, around the last election, that it bring in a dole-to-apprenticeship scheme. We said to transfer the amount of money you are spending on the dole for a young, unemployed person to a willing employer to subsidise an apprenticeship for that young person.

Hon Dr PITA SHARPLES (Co-Leader—Māori Party) : Tēnā koe, Mr Chairman. I would like to take a call on employment, because although MPs do not exactly create jobs, they are in a position to influence the creation of jobs and most certainly training. Everyone knows that many of the unemployed are Māori and many of them are young people. The previous speaker referred to trade training and creating opportunities for people to enter into the workforce, and that is what has been happening. Under Te Puni Kōkiri we have established 1,800 cadetships in a scheme where people go and work for a company for 6 months. It is subsidised by Te Puni Kōkiri—$10,000 per student. They are trained for 6 months and are often kept on longer. Many find jobs in those particular areas. These include the electrical supply industry, aviation, travel, infrastructure, InfraTrain—all those companies. It is working very well.

But the good thing that I believe that we have to move into is actual trade training. In Christchurch, straight after the earthquake, we negotiated with the main builders down there that they should become involved in supporting a trade training programme, in particular for Māori, because that is my portfolio but also because they are overrepresented in the unskilled, untrained, and unemployed. So we started this programme, He Toki ki te Ringa, which is “a tool in the hand to work with”, and trained 200 Māori in trade training. It is a joint deal between the Māori education institutions down there, along with the Christchurch Polytechnic and the iwi, Ngāi Tahu. So working together—one providing pastoral care, another one providing the actual tuition, and another one providing tools and support in that area. It has worked very well. Just recently the Government has put another $1 million into that project so it can carry on and grow.

That is the formal programme, but also down there the Māori who trained in trade training in the 1960s, 1970s, and 1980s who live in Christchurch, where a lot of it was done, have come together. They now own companies in carpentry, plumbing, and the like—the trades—and they have come together and formed a co-op. They have tono-ed and got jobs from Fletcher’s, Mainzeal Property and Construction, and Hawkins Construction, the builders down there. They have got contracts, and what they do is they take on young unemployed Māori to work alongside them for a minimum wage, but afterwards they give them a full wage, in working towards an apprenticeship. I think that is a really good thing that they are doing.

Now we are going to do another one in Auckland, under a programme called “MITE”—Māori into Tertiary Education. It is a programme between all the tertiary institutions there, where any young person can trace how to become a carpenter, how to become a nurse, how to become a doctor, how to become a lawyer, or whatever profession or trade they are interested in. Once again, we are going to get different employer groups together to see whether they would also take on young people and train them in those areas of work, as well. We will be calling all the trade trainees of the 1960s and 1970s in Auckland to come together for a hui and a dinner, and at that time we will present the kaupapa to them. We expect quite a lot of support from them to take up these apprentices to work for them.

I think these are all positive, and what I do think about it is that it is something that any of us can get involved in. For example, down in Napier we have a situation where young gang prospects were gathered together by the local iwi and told to take off their jackets, and come into the compound. A tutor from the local polytech in Napier comes in and he gives them free tuition for 1 year in carpentry. At the end of that they enrol formally into the polytech and become students there to carry on and do their apprenticeships. Out of the 29 students, or gang prospects, 27 are still on that programme. They have lost only two. They have got rid of their jackets; they do not even bring them any more. They are looked after in pastoral care by the elders, who teach them the etiquette of the marae and teach them how to speak Māori. They teach them about pride, dress, and the basic pastoral care of living and belonging. I think that combination, for many people who have been long-term unemployed, of pastoral care together with training and together with guidance is a very good formula that actually works. So I look forward to that programme extending. We are going to take it to Waipukurau, just a few miles down, then hopefully it will extend to Wairoa, where there is real need for employment. So there is much we can do, even though we are MPs and do not actually have the industry ourselves to create jobs. But we can work with other people to do so. Thank you.

Hon STEVEN JOYCE (Minister for Economic Development) : It is very important that we have this discussion around employment, because it is a crucial thing. I think what the whole Committee is interested in is the growth of jobs in the economy. In fact, I think nearly everybody in the Chamber, if you said to them: “Do you want more and higher-paying jobs in New Zealand?”, would say: “Yep, that’s a very good thing. I’ll sign up to that.” Where the problem comes immediately is where they go next.

I would firstly like to thank the Hon Pita Sharples for his comments on the training programmes, because they are an important part of bringing the economy forward. In fact, I made some announcements on industry training today, which we may get the opportunity to discuss in a later vote.

The real challenge of growing the economy is what you are prepared to do to let jobs grow here, and what you are prepared to do to let businesses have the opportunity to succeed in this country. That means what opportunities you are going to let them take to actually be successful. Where it all unravels on the other side of the Chamber is that they say they are very concerned about jobs, but all of their initiatives involve, effectively, taxpayers subsidising some activity some more. As we know from Spain, Greece, and other countries like that, that is a path that leads down in only one direction, and that is too much debt, which basically removes the sovereignty of those countries to decide what it is they want to do. So that is your problem. The solution for everybody on that side of the Chamber is to spend more borrowed money in order to persuade people to do things that they would not otherwise do.

What are the opportunities? The opportunities are hugely important. There are opportunities in things like oil and gas, in things like the intensification of agriculture, in things like allowing people to build convention centres, and in things like allowing foreign investors to come in and invest in businesses here. All those things are things that the Labour Party opposes and that various other members of the Opposition oppose. So on the one hand we have the member Jacinda Ardern popping up and saying: “I really care about jobs. I really care about jobs.”, and then she sits down and, once again, those members go back to opposing oil and gas exploration, they go back to opposing intensification of agriculture, they go back to opposing most things that could immediately—

Hon Dr Nick Smith: Aquaculture.

Hon STEVEN JOYCE: Aquaculture is another one that they are against, and all of those things. They do not want to change the Resource Management Act, and they do not want to speed up the consenting processes to get decisions made more quickly—not to change the decisions but to get the decisions made more quickly. That is why nobody takes them seriously when it comes to economic growth and jobs. Every time they open their mouths they prove they are not interested in them. It is weasel words and crocodile tears about the job situation in this country.

Do you know that the lowest unemployment rate in Australasia is in a place called Western Australia? Western Australia has the lowest unemployment rate in Australasia. It is about 3.5 percent—

Hon Member: And why is that?

Hon STEVEN JOYCE: —and that is in Western Australia. Well, why do you think that is? I think it is because in that state they allow oil and gas exploration and mineral exploration. That is why. Tasmania, incidentally, has strong opposition to economic growth, and its unemployment rate is 7.4 percent. That is where the Labour Party would take us. It would take us further down the Tasmanian path. That is where the Greens want to take us. Well, frankly, we on this side of the Chamber know what it takes to create jobs and growth, and we are focused on it. It is not about just sitting there wringing your hands and thinking up another rinky-dink scheme where you can borrow some more money from, incidentally, foreign moneylenders, spray it around the place, and consider that you are doing something useful when, in fact, you are just heading us towards the Spanish situation, which nobody in this country wants except for the Labour Party. That is why it is as popular as it is.

Dr MEGAN WOODS (Labour—Wigram) : I am more than happy to take a call on Vote Employment, because we have a major problem in this country: 87,000 of our young people are not in any form of education, employment, or training. We just heard the Minister in the chair, the Minister for Economic Development, take a call. He spent the whole time telling us the problem with Labour without actually putting out a plan to get people into jobs. We have a dole queue that is growing, and we see him sitting there saying that Labour opposes things, but we are not seeing any kind of positive plan from the Government about how to arrest this.

We have 87,000 of our young people thrown on the scrap heap. There are 87,000 of our young people who do not see hope in this country. They do not see opportunity in this country, and what is happening? They are leaving on a jet plane. They are literally stampeding to Australia—61,937 young New Zealanders aged 18 to 30 have packed their bags and have given up making a life in New Zealand since 2008.

We have 19 percent unemployment amongst our youth. There are no jobs, there is no hope, and there is no opportunity. All we can hear in speeches and chipping across the Chamber from members opposite is that this is because Australia has mining. This seems to be the extent of the analysis that the Government is capable of when it comes to looking at what it takes to grow an economy. What we have here is a Government that has an inability to join the dots.

We heard a very good speech earlier this evening about the Māori trade training scheme of the 1950s, 1960s, and 1970s, and what a success that was. That was Labour Prime Minister Peter Fraser’s willingness to see a problem that we had with unemployment amongst Māori youth and to see a solution—that we also needed a stock of housing built in this country. He did not sit idly by and wait for it to happen magically. His Government was an active Government that joined the dots and made it happen.

There is so much similarity with what we are seeing in this country now. We have a housing crisis, we need young people with skills, we need young people equipped, but we have a Government that is failing to even spend the money it has appropriated to train our young people. It is failing to spend the money that it has set aside to train the next generation of carpenters, sparkies, and plumbers. The Government is failing our young people. It could be setting them up for employment for life. There is a failure to seize these opportunities.

The Minister told us at the Transport and Industrial Relations Committee that the Government was not about to frogmarch young people into training, but it is actually reluctant to even see the connections with the opportunities that exist. We have a Government that is more than willing to frogmarch young people all around the places it has shown us, with its welfare reforms, but it has an unwillingness to use this opportunity that we have to train a generation of our young people. It has shown time and time again that this commitment is not there. The Government voted against my amendment that would have explicitly named trade training under Skills for Canterbury as one of the options presented to our 87,000 young people who are not in work, education, or training. It voted it down.

This is a Government that does not even know how many of our 87,000 young people are moving off benefits and into training, because it is not bothering to collect the data that goes across on this. There is absolutely no commitment. We have a whole lot of rhetoric. We have crocodile tears, but we are not seeing an active Government connecting the dots and making sure that young people in this country have a future.

The Government is willing to lay down the law to those on benefits, and suggests training schemes that are not leading to real employment and career opportunities. What the Government lacks is a positive plan to give those on benefits the skills and opportunities to make something of themselves. Canterbury and New Zealand are crying out for skilled workers, and yet this Government just cannot make the connection between our unemployed young people and what is needed in this country. There is a lack of jobs for our young people.

• Vote agreed to.

The CHAIRPERSON (H V Ross Robertson): The question now is that Vote Science and Innovation stand part of the schedules. Those who are of that opinion will please say Aye, to the contrary, No. The Ayes have it.

Dr Paul Hutchison: Mr Chairman—

The CHAIRPERSON (H V Ross Robertson): I am sorry, I have already put the question. It is gone. You were too slow. All I can suggest is that the member seek leave.

Dr PAUL HUTCHISON (National—Hunua) : I seek leave to have a call.

The CHAIRPERSON (H V Ross Robertson): Is there any objection to that course of action? There is. Sorry.

• Vote agreed to.

TRACEY MARTIN (NZ First) : I rise to take a call on the tertiary education estimates for 2012-13, as the education spokesperson for New Zealand First. There is little time to cover all of the contradictory statements and actions with regard to education that this Government, this Minister for Tertiary Education, Skills and Employment, and this Budget make to the students and education professionals of this nation, but I will start with the fact that this Minister and this Government keep making statements about the need for a knowledge-based economy, and then put financial barriers in the way of the very citizens who are seeking to be part of that economy. This Minister and this Government speak of lifelong learners, but one of this Government’s first actions when it came into power was to cut funding to the adult and community education field, removing the opportunities for second-chance learners, to the tune of $14 million. The overall tertiary education expenditure for 2012 is $60 million less than it was in 2011. Adult and community education has suffered even further cuts, and so has the funding of adult literacy and numeracy, while at the same time in this Budget there are increased subsidies for private companies that want to make a profit from selling education.

In my community, from Ōrewa to Whangarei, women hoping to return to the workforce—well, not just hoping any more; these are widows and women living alone, who now, under new legislation, must go out and upskill themselves and find employment—employees who are seeking to upskill to improve their promotional possibilities, and older students who need to get National Certificate of Educational Achievement level 1, 2, or 3 so they can partake in the Minister’s focus on level 4 have zero access to adult and community education. There has been no adult and community education in the area from 2009, and therefore they have zero opportunity to get anywhere near the Government’s rhetorical targets.

Here we have a Government and a Minister that laud our education system overseas. They recognise and market our international reputation as an exceptional education system. They market that fact so that they can draw in foreign students to our shores with the view to making money from those students, while at the same time removing support for its own citizens—the children, the students, of their own taxpayers.

Previously in this House I have had to commiserate with the Rt Hon Dr Lockwood Smith on the direction that the National Party is taking on education matters. Previously that was around technology teachers; now it is around the student allowance. In 2006 Dr Smith told the Sunday Star-Times that he would have preferred a universal student allowance scheme or, at the very least, one that hit wage and salary-earning families less hard.

Let us not forget in all this argument here that the very people making these budgetary decisions, the very people who are telling our students to go out and protest on the streets like in Greece, are the people who pulled the educational investment ladder back up from behind them—that is, Bill English, Steven Joyce, John Key, Hekia Parata, and Peter Dunne, to name just a few. They all got a tertiary education for nothing. They were all invested in by the grandparents of the students who today under this Budget get nothing—or virtually nothing—and I would suggest that those grandparents need to come and get a refund.

When National’s Wyatt Creech introduced the student loan scheme in 1992, 20 years ago this year, the upper allowance for students living away from home was $109.25 per week. Under this Budget the same student can now look forward to $170.80 per week. So over the last 20 years this living allowance—because it is an allowance to live on—has increased by $61.55. That is just over $3 per year. We have heard a lot about the Labour Party living on “Planet Labour”. I do not know what planet the National Government or the Minister live on if they think that over the last 20 years the cost of living in this country has risen by only 1.8 percent per year. In the year 2011 alone the price of fruit and vegetables—just fruit and vegetables for that single year—increased by 8.1 percent.

To add insult to injury, in 2006, when Dr Smith was concerned about these things, the parental income threshold to get a student allowance was $64,000 gross; now it is $55,026. So not only have parents’ incomes got lower because of the rising cost of living, and not only have their children’s allowances got less valuable, but the Government tells their children that without this education they and the country will not be a success. And it has extended the freeze on the increase in the parental income threshold—

DAVID CLENDON (Green) : Tēnā koe, Mr Chair. I would like to talk a little about the tertiary sector. To say that the sector is under stress is almost an understatement. Right throughout this year, for staff, for students, for general staff, for academics, and for technical staff, everybody is feeling the stress of an under-resourced, underappreciated, and under-supported sector. This is despite the fact that, as the previous speaker, Tracey Martin, noted, we are constantly told of the significance and importance of the tertiary sector in producing the New Zealand we want, in terms of economic development, and in terms of building a stronger, better society. Unfortunately, the rhetoric is not matched by the support, by the Budget, as we see from the documents we got earlier this year.

The increased funding committed for the 2012-13 year to the tertiary sector looks like a 3.5 percent increase on the previous year. We know, of course, that with the growing demand for tertiary education at universities, at polytechs, at private training establishments, and elsewhere, there is a greater demand, costs have gone up, and, actually, the 3.5 percent nominal increase looks very much like a cut for the sector. I think that the lack of support and the lack of resourcing of the sector reflect the fact that this Government and this Minister for Tertiary Education, Skills and Employment seem to think that tertiary institutions are more in the nature of machines for processing people. You plug people in one end and you drop lumps of information on them. They swallow those lumps of information and come out the other end with a degree and a credential.

Actually, teaching and learning are not like that. You do not start with a clean slate. Institutions of learning are communities. They are learning communities, or ought to be. I know this because I worked in that sector for 12 or 13 years. When you get a genuine community of academics, of support staff, of funders, of teachers, and, of course, of students, that is when tertiary education actually works. Tertiary institutions are not simply machines for processing, for delivering a commodity called education, because education is not a commodity, it is a lifelong process of give and take, teaching and learning, and ought to be seen in that context.

One of the obvious symptoms, of course, of the lack of support for the tertiary sector is the announcement this afternoon that Canterbury University is going to be obliged to lose some 150 staff over the next 3 years, and that is a great tragedy in many ways. I had a meeting with some senior academics from Canterbury just a couple of weeks ago and they flagged what they knew was likely to be a fairly uncomfortable future for them. They gave me a copy of this document entitled What If an Earthquake Made Us All Smarter?. Being good Cantabrians, they have not sat around waiting for somebody to come to them with a solution. They have been thinking and working incredibly hard to look for a positive future, to rebuild that university, and not only to make it as good as it was—which was very good—but actually to make it better, more sustainable, and more resilient.

They make the point in this document, which has been around for a few weeks, or a month or two at least, that “Without significant investment, the earthquakes foreshadow a concerning future for [the University of Canterbury] over the next 10 years.” The announcement today indicates that that concerning future is a reality. I have some sympathy for the vice-chancellor, Rod Carr. I am sure he did not enjoy making that announcement today that 150 academics and/or other staff can expect to lose their jobs over the following 3 years.

Canterbury University is in an incredible position to exploit a tragedy, quite frankly. These academics understand this. They talk about having a centre of research, a “global centre of research and teaching in earthquake studies and disaster resilience and recovery;”. Canterbury has always had a very strong reputation. The Centre for Advanced Engineering, along with Scion and other agencies, has been doing a great deal of very good work around building in timber. We know that there is a laboratory, a living laboratory called Canterbury where we could discover how it is that communities rebuild, how they come back—[Interruption]

The CHAIRPERSON (H V Ross Robertson): Order! There is a telephone ringing in the Chamber. This is not a tollbooth or a telephone box; this is a debating chamber. The member who has it, please turn it off.

DAVID CLENDON: There is a wonderful opportunity to attract academics internationally to provide opportunities for our own academics and our own students to engage in action research, which is research intended to understand, to discover things as they happen, and to feed back projects, processes—

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment) : I thank the previous speaker, David Clendon, for his lecture as to what a university does and also for his assertion that this Government is about rhetoric when it comes to tertiary education. I would like to now dispel that with some facts. I would have thought that somebody who lectured at a university might be focused on a few facts, because facts can be quite helpful to discern the difference between what is actually happening and what could be known as rhetoric. So I would like to make a few comments, if I could, because I think this Government has made very good progress in strengthening our tertiary system. Here is some of the evidence. In 2012 we are funding the highest number of core tertiary places that have ever been funded in New Zealand universities and the wider tertiary system—13,200 more places in 2012 than in 2008. It is not “bums on seats”, either, as we are also funding for performance, for completing courses, and for qualifications, and every institution has 5 percent of its tuition funding at risk so that they focus on that.

We are getting better results for priority learners than has been done previously for those who have struggled historically. For example, Māori at university now have 5,500 more places than in 2008, and their completion rates are up, too.

We are making great progress in literacy and numeracy. I note that the member for New Zealand First was concerned about that. Well, she will be pleased to know that the expectation out of embedded literacy and numeracy at foundation levels means that this year there will be 122,000 people taking courses at foundation level with embedded literacy and numeracy, which is up from 36,000, 2 years ago, and is up from 15,000 just after we came into office.

We have also made great progress in simplifying and reducing qualifications in New Zealand, which was a big issue when we arrived in office. People were crying out for a reduction in the number of qualifications between levels 1 and 6. We are down to 3,500, and we will be down to about 1,300 by the end of 2014.

We have also made some very good progress in the industry training space, which is very, very important because the industry training space was not going at all well when we came into office: 53 percent of trainees in 2008 and 54 percent in 2009 achieved no credits at all—no credits. They were phantom trainees. They were trainees of the previous Government’s imagination. We have since seen a real lift in performance of industry training organisations. We have had a 19 percent increase in credit achievements from 2008 to 2010, and the provisional results for last year now suggest that we are getting a 70 percent credit rate achievement in industry training. So that is a good result, too.

On top of that we had the Green member saying that New Zealand universities were poor and struggling. Well, I can tell him the good news. They may have been in 2008, but in 2012 we have now got university incomes up by 13.5 percent, in the global financial crisis. So they may have been struggling 4 years ago, but their incomes 13.5 percent higher today, with a 2.9 percent increase in university incomes in the last year alone. So that should help Mr Clendon with his problems with the facts.

New Zealand’s tertiary education system is healthy, it is getting healthier, and it is also doing it during the global financial crisis. And in Budget 2012 we are investing more. We are investing an additional $42 million in engineering over the next 4 years. We are investing an extra $17 million in science teaching at universities, we are putting $100 million extra into research at universities, we are putting in $30 million to reduce the funding gap between public and private tertiary providers, and we are putting in 3,000 more Youth Guarantee places over the next 4 years. That is what we are doing to invest in tertiary education. So we have a member popping up, criticising the Government for being about rhetoric and telling stories, and then doing exactly what he said the Government was doing. Then he sits down, and he does not realise that all these facts say that the New Zealand tertiary system is going much better.

What is more, we are supporting Canterbury University. Yes, it is in times of trouble. We have maintained its funding. We have made sure that we have stood behind it. We are working with the university in terms of investment opportunities going forward, so that it can lift itself again to actually invest in areas where there is strong student support. We are taking that business case forward. Yes, Canterbury University has had difficulties. One of its faculties has lost 1,000 students as a result of the earthquake, and the member seems to be suggesting that it should not adjust its staffing at all to reflect its new reality. Well, it is tough, and I feel for those people who are not necessarily going to be able to stay in that role, but for the sake of the other 2,000 people working at that university and the thousands and thousands of students, we have to acknowledge the reality of what happened. We have to invest in the future, but we have to take it forward, and we have to be realistic about what is going on.

We are investing significantly in the tertiary education system. Before I sit down I would like to make one comment for Tracey Martin, the speaker before Mr Clendon, who criticised the idea of international students coming to New Zealand as if it was a bad thing. Well, it is not a bad thing. It is good for this country. It is good for this country to have the people-to-people links that international students bring to this country when they come in. Frankly, when the Chinese, the Indians, students from the other Asian communities, the English, the Europeans, and those from the US come here, they do some learning. Yes, they provide some income for New Zealanders, and when they go back they are lifelong friends for New Zealand. That is helpful to have when you are a small country in a small waka at the bottom of the world. International education, despite what New Zealand First members think, is not bad. It is good for this country, actually. Those members need to realise that it is a positive thing that we invest in it and, happily, it does not take away any places from domestic students. So it is all good stuff.

So you can relax, Mr Clendon, because the tertiary system is in good hands. If you want to debate facts, I am happy to do so at any time.

The CHAIRPERSON (H V Ross Robertson): I call the honourable member—

Dr Paul Hutchison: I am taking a short call on the tertiary education estimates—

The CHAIRPERSON (H V Ross Robertson): I have not called the member yet. I have not called the member.

Dr Paul Hutchison: Oh! I thought you had.

The CHAIRPERSON (H V Ross Robertson): I see you were out of the starting gates really early this time. I call the honourable member.

Dr Paul Hutchison: Oh, you have called me without naming me.

The CHAIRPERSON (H V Ross Robertson): I have called the honourable member.

Dr PAUL HUTCHISON (National—Hunua) : It is an absolute pleasure to take a call on the tertiary education estimates. I must say I thought it was somewhat mean-spirited and sad that Mr Hipkins from the Labour Party denied me a call on the science and innovation part of these estimates, because tertiary education and science and innovation are inextricably linked, and we have a great story to tell. It is very, very sad that the Labour Party is not interested in this vital area for New Zealand’s future, for our economic growth—

Chris Hipkins: I raise a point of order, Mr Chairperson. As you well know, members are entitled to object to leave being sought, and it is not in order to then go into a rant and a rave about that. If the member is too incompetent to get up and seek the call—

The CHAIRPERSON (H V Ross Robertson): Order! The member was doing very well up to a certain point, and then he went a step too far. But I notice that the member is coming to the debate.

Dr PAUL HUTCHISON: Absolutely. I am talking about the estimates for tertiary education, because it is all very good news. What I wanted to make very clear was that the total, direct cross-portfolio science, innovation, and research funding, which includes tertiary education, has risen significantly—17 percent year on year since 2008—and this is in pretty difficult economic times. So the record is one of substantial progress.

What is of particular note is that this Government has indeed recognised that New Zealand’s future economic growth cannot be dependent just on primary products and cannot be dependent just on tourism, but, indeed, is highly dependent on value-added products, whether they are manufacturing or our agrifood products, which this Government has indeed concentrated on. I wanted to just make the comment that the Minister for Tertiary Education, Skills and Employment did—that these estimates include $100 million of additional research funding, in terms of the Performance-based Research Fund, to $300 million by 2016.

Chris Hipkins: Judith wants to get on to ACC.

Dr PAUL HUTCHISON: This is hugely welcomed—hugely welcomed, Mr Hipkins—by the various universities, because this is the one area where they do indeed have the opportunity to do this sort of research. And this is the funding that creates the idea flow that is absolutely vital for innovation and its ultimate commercialisation in New Zealand, and I would hope, Mr Hipkins, that in the future you may take some interest in it—Mr Hipkins?

Chris Hipkins: Yes.

Dr PAUL HUTCHISON: So the point is, Mr Hipkins, be well aware that this Government has cemented in a substantial $100 million in these estimates over the next 4 years. As well as that, there has been this increase of $42 million in operating funding for engineering; an additional $17 million operating funding for science students, which is a 2 percent funding increase per equivalent full-time student; and $100 million, as we have said, for the Performance-based Research Fund, which is hugely important for the wider science and innovation budget. Clearly, this Government has made a great focus on this area over the last 4 years, making a transformation from a time when New Zealand had really forgotten about the area of science and innovation. The percentage of GDP that was invested had been static for 9 to 10 long years, and now, fortunately, it has come up.

So I just want to finish by once again saying that this is an area that, under this National Government, has seen a renaissance in funding, has seen a renaissance in focus, and indeed is going to make a huge difference in terms of the economic development and the ability to retain graduates who go through our tertiary education system as we have it right now.

• Vote agreed to.

ANDREW LITTLE (Labour) : As we all know, ACC is a very vital institution to the well-being and the livelihood of this great country of ours. It contributes enormously, and it is a key part of the productivity of this country. Every wage and salary earner contributes to it, every business contributes to it, and every owner of a motor vehicle contributes to it. It is a very vital institution in this country. This House appropriates around about $1 billion a year for it, in this current financial year, both for the non-earners account and also to fund the work of what was the Department of Labour, which is now a division of the ministry of various other things, under Steven Joyce, in terms of the support work it does on ACC policy. Because of the importance of ACC in New Zealand, the need for careful stewardship cannot be understated or underestimated. So the question has to be asked: why is it that this Government has made such an almighty hash of this vital institution?

We all know it started with the previous Minister for ACC, who will go down in New Zealand’s history as the worst Minister for ACC in the entirety of the life of that institution. He ran it in such a way that he has fleeced New Zealanders of $5 billion, or more, over 3 years. He ran down the quality of the service of ACC and led a culture of disentitlement that the present Minister has now had to try to fix up. The question now, looking ahead, will be: is this Minister for ACC, and the measures that she has put in place, up to the job of restoring confidence in ACC?

Until now we have had the massive levies that had to be cut, because this Government was so embarrassed about the size of them.

The number of reviews and appeals being applied for by claimants has shot up. The proportion of cases lost by ACC has shot up, because the truth is that the previous Minister for ACC and the previous administration could not care less about what happened to ACC claimants, until Bronwyn Pullar came along. Then the previous Minister showed an interest in ACC that hitherto had not been shown. It was his old mate, Bronwyn Pullar. The Minister intervened. It was a bit like an episode of Undercover Boss, where in a large organisation the boss descends from on high, finds one problem with one person, and fixes that problem, but forgets that there are systemic problems throughout the organisation. So he did such a fantastic job that when the Government was re-elected, he had to resign as a consequence. That is the successful performance of the previous Minister for ACC with this institution.

But the truth is that that privacy breach—that massive privacy breach—was symptomatic of much deeper problems in ACC. There was a total failure of service and support to so many claimants, particularly those who were long-term claimants who had serious conditions and who needed the attention of ACC. It has led to a meltdown of catastrophic proportions. What have we seen? We have seen a chair of ACC go. We have seen the chief executive officer go. We have seen three directors of ACC—and it does not have that many—go. We now have three separate inquiries, two by the Privacy Commissioner and one by the Auditor-General, into this once-fine institution. Public confidence in ACC has been totally shattered, and it is entirely because of the failure of political leadership.

The fact that so many people at the governance level have left ACC is, in my view, a stunning vote of no confidence in this Minister. But let us give her the benefit of the doubt. She has set out a new plan. There is a new service and purchase agreement with this Minister, which she herself signed last month. Let us just have a look at it. “Priority 1:”—for ACC in the period ahead—is “Improved Trust and Confidence”. Then let us have a look at the detail of that. Improved trust and confidence—a demand for a culture change. It says: “ACC will invest in ensuring quality leadership of the Corporation through increasing management capability and training. The investment will aim to facilitate a real culture change within ACC resulting in better management of relationships …”.

What is the measure for this improvement? What is the measure for this lifting of public trust and confidence? “Quality leadership will be measured by an increase in the number of managers who participate in management and leadership training modules.” That is the measure. It is not about the number of complaints that go to ACC’s internal complaints office. It is not about the number of reviews and appeals that it faces because people have had bad decisions made about them. It is about the number of training exercises that management have been on.

So what is the answer going to be to a claimant who is deprived of their just entitlements in the scheme? “We have declined you, but, goodness me, don’t complain, because the person who declined you went on a management training regime just recently.” Well, that is not an answer. That is not about lifting quality. There is no measure in the service and purchase agreement that is about measuring what actually matters to people who use ACC, and that is the quality of support and service that they are getting.

What else have we got? Vocational rehabilitation and home care—under this Minister a whole new arrangement has been entered into, a procurement arrangement, for rehabilitation and home care. A contract has been let for the management and coordination of vocational rehabilitation. The largest contract has gone to, would you believe it, an Australian company to manage ACC vocational rehabilitation. This is another Australian company—30 percent of ACC’s vocational rehabilitation is now going to be managed by an Australian company.

The way it works is this. ACC decided that 12 percent of the cost of vocational rehabilitation is tied up in management, so ACC is going to give that to the Australian contractor—at least the 30 percent of the business that it has got. That is going to come out of the back pockets of the service providers, who are stressed enough as it is, and ultimately the price will be paid by those who look to ACC for vocational rehabilitation. It will be paid through fewer visits and less service and support by those providers. So much for the culture change. So much for improving public trust and confidence in ACC.

What else have we got? We have got the Cabinet decision made in October last year, on the eve of the election, to expand the Accredited Employers Programme. This is the private part of ACC, but we do not hear much about it. It has got its own problems. But under this Minister we have a plan by this Government to expand it. The complaints we are getting about the Accredited Employers Programme are that HR managers are intervening in decisions about health care, treatment, and rehabilitation, which are properly the province of medical providers.

What else have we got? Spending on injury prevention has been going down steadily under this Government, and is expected to go down more in the year ahead.

Then, what about this? ACC—more than $20 billion of funds under management—is expected to have an ethical investment regime. What do we see it investing in? ACC is a 30 percent investor in the private company now set up to build and run Wiri Prison. ACC is an investor in the Wiri Prison. How is it that an institution that is set up to provide care and support for those who are injured, those who are victims of accidents, finds itself investing in locking up people, removing their liberty, and penalising and punishing them? That is not part of ACC’s remit. That is not part of its mandate.

I say to this Committee that if the current plan is anything to go by, this Minister, who is called upon to restore public trust and confidence, is simply not capable of doing it. Restoring public trust and confidence is not going to be measured by what we know is written in the plans for ACC in the year and years ahead. That is the appalling thing about it.

The challenge for this Government is to restore this institution to what it once was—an institution that was about giving people the support and assistance, the medical care, the medical treatment, and the vocational rehabilitation that sometimes are needed for those who are victims of accidents. That is what ACC was set up for, as part of a community partnership between people, wage and salary earners, business, and the Government—not as an investor in prisons, and not about cutting vocational rehabilitation and making it worse for those who need it, but as an institution that we can look to again to be proud of and to do the job that we expect of it.

MICHAEL WOODHOUSE (National) : Just listening to the previous speaker, Andrew Little, my mind drifted to an old Elton John song—remember the one from the 1970s or 1980s—that went something like this: “Sorry Seems to Be the Hardest Word”. I think there are a couple of members on the other side who might reflect on whether “sorry” is such a hard word to say for the things that they have said inside and outside this Chamber. But the biggest apology should come from the party and from the previous Labour Minister for ACC, Maryan Street, for the total mess that that party when in Government left ACC in. It seems like it is a broken record, having to remind the public and members of this Committee what that mess was: $2.4 billion in 2008 and $4.2 billion in 2009. The member who has just resumed his seat talked about the almighty hash of ACC. I kind of agree with that; I just do not agree with the time frame that he was talking about. And I can think of a few worse Ministers for ACC in its history than the previous Minister, Nick Smith. In fact, I would suggest to that member that it is not quite mission accomplished, but given the financial mess that this Government has inherited and the $7.2 billion—

Sue Moroney: Ha, ha! What a joke.

MICHAEL WOODHOUSE: See, they chuckle, they laugh, and they think it is a joke. They think that, somehow, reporting a combined deficit of $7.2 billion is something of a joke.

Andrew Little: It wasn’t a deficit.

MICHAEL WOODHOUSE: And that member, when not a member of Parliament, accused everybody else of a jack-up—accused the Minister—

Andrew Little: This member can’t read accounts.

MICHAEL WOODHOUSE: I am sorry, did the member say I cannot read an account? Well, I am sorry, I am only a member of the Institute of Chartered Accountants. Apparently, a union hack now can read accounts better than a chartered accountant. Well, I am sorry, but I think it is worth repeating something in this Chamber: how many times have you been an accountant—

The CHAIRPERSON (H V Ross Robertson): Order!

MICHAEL WOODHOUSE: —has that member been an accountant? I apologise. We have heard that a bit before.

Hon Member: How many times has he been sued?

MICHAEL WOODHOUSE: That is right. Clearly, if you think that a $7.2 billion loss is OK, then somebody needs to go back to accounting school, do they not? If they do not think the loss was real, here is what was real: the 55 percent increase in levies that the levy payers of this country were faced with, on average, had the turn-round not been put in place—a 55 percent increase. That is not mythical. Every single levy payer in this country—every employer, every employee, every motor vehicle user, every person who uses those services—was faced with a 55 percent increase. And why? Well, it is a simple reason. The previous Labour ACC spokesman, David Parker, seemed to think it was because of the economic downturn. There is no doubt that the investment returns in ACC were lower as a consequence of the recession, but that is only half the story. The simple fact is that ACC had budgeted for that and had built it into its levies. In fact, its investment returns were higher than budgeted, and certainly higher than the average returns being enjoyed by other institutional investors. Here is why—

Hon Maryan Street: No, they had not built it into their levies, Mr Woodhouse.

MICHAEL WOODHOUSE: Ah, welcome to the debate. It is a simple word, I say to that member; it is just a five-letter word: it is “sorry”. And here is why: rehabilitation rates plummeted. Exit rates at 90 days, 180 days, and 12 months dropped. For every percentage that the rehabilitation rate at 1 year dropped, that was $500 million more on the levy payer—$500 million more. The cumulative effect of that on the net present cost of the claims into the future was billions and billions and billions of dollars. It is absolutely not acceptable to say that ACC had a few billion dollars in the bank. It had a $24 billion liability. Thankfully, it is being turned round. I congratulate this Government on being able to return half a billion dollars of levies back into the pockets of hard-working levy payers. There are some issues with privacy, I accept that, and I have a lot of sympathy for those who have been affected by the privacy leaks. But I am very, very confident that the Minister is able to articulate very clearly what this Government’s expectations are for ACC. It is about restoring trust and confidence, because no doubt they have taken a dent, but I can tell the members they are much, much higher than they were 3½ years ago when this Government inherited the mess and took office; it is continuing to fix the mess. I look forward to that continuing under this Minister.

Hon JUDITH COLLINS (Minister for ACC) : Thank you for the opportunity to speak on this matter of Vote ACC. I have enjoyed the contributions tonight, particularly those from Mr Woodhouse, and I was interested in some of the comments made by Mr Little. I thought I would come back to the estimates, because, after all, this is actually the debate on the estimates, and see just how important Mr Little thought this area of ACC was. I found out that it was not at all important, obviously, because there is no transcript and there is no report; it is simply all accepted. Not one question was asked of me in the estimates hearings. That tells me that the crocodile tears that we have referred to tonight were, in fact, absolutely there, present, this evening.

I also noted his comments describing my predecessor, Dr Nick Smith, as—what was it—the worst Minister for ACC. Oh no, I beg to differ. The worst Minister for ACC was the Minister who completely forgot about the injury prevention programme and who got caught drink-driving. I think that was the worst Minister for ACC. That was the Hon Ruth Dyson, who, as I recall, after a wee while out in the cold was brought back in as a Minister in the Helen Clark - led Government. What was that about standards I heard them talking about today? I actually think she was the worst Minister for ACC, and I thought that was a stunning—stunning—comment from Mr Little, given that he must know about Miss Dyson’s problems and yet he continued to go down that road.

I think it is a very serious issue to actually look at the service agreement, and I notice that Mr Little referred to only one of the areas where I said to ACC that I expect to see improvement. I thought I would speak to the Committee tonight about some of the areas. Apart from improving public trust and confidence, which I believe is an absolutely paramount important issue for ACC, I expect to see improved management and security of private information. I believe that that has not been given the priority that it should have been given, primarily because the board and the organisation of ACC were so focused on having to fix up the financial mess they inherited.

The next one is to maintain a focus on levy stability and financial sustainability. That is absolutely crucial. ACC is an icon in this country. This is the only country in the world with accident compensation. It is a world leader, and we are pretty much out on our own. Some countries and jurisdictions have things similar to ACC—

Andrew Little: How much in funds under investment?

Hon JUDITH COLLINS: —but nothing to the extent that it is here. I see that Mr Little is now going to be a big lion. He was a real mouse in the select committee, I understand.

The other focus is to provide high-quality services for clients, and to ensure early resolution of disputes. Mr Little was talking about the reviews in that. He forgot to mention that to the Committee—he has forgotten a few things. It is about ensuring early resolution of disputes and providing high-quality services for clients. What is there to argue about with that?

Andrew Little: Why have you cut the funding for vocational rehabilitation?

Hon JUDITH COLLINS: Did he mention that? No, he did not. Oh, he is talking about vocational rehabilitation. Of course, Mr Little does not like Australians. We found that out tonight. We already know that the Labour Party does not like Chinese—we heard that today in question time—but now it does not like Australians. I did not hear a peep out of him when he was a trade union official and he realised just how much money ACC pays to the trade unions to provide health and safety assistance.

Hon Tony Ryall: How much?

Hon JUDITH COLLINS: I understand that it is around $1 million a year—around that. It is all contracted, of course, to provide that. So Mr Little, when in his New Zealand Amalgamated Engineering, Printing and Manufacturing Union organisation, might have received some of that. I am not sure whether he did. Did your organisation receive any of that, Mr Little? He does not want to answer that one. We do know that Mr Little does not want to answer it, because he does not like Australians. We already know that the Labour Party does not like Chinese, and now it does not like any organisation that might take some of the business away from trade unions. I have got no problems working with trade unions on this. I am happy to be able to do so. I met with Helen Kelly the other day, who is very good to deal with. I am happy to work with them, but I think we do need to be just a little bit up front about some of the financial realities in this.

Hon Tony Ryall: What did she say about Andrew Little?

Hon JUDITH COLLINS: Oh, she did not say a thing.

• Vote agreed to.

Hon JUDITH COLLINS (Minister of Justice) : I want to take just a short call on this. There is so much good news. In fact, I thought what we would do is talk a little bit about the courtesy and the very good questions that I have received from the Justice and Electoral Committee. I thought it was an outstanding committee, well chaired by Tim Macindoe, MP for Hamilton West, and, as I say, the questions were all intelligent and focused on what they needed to be, and, mostly, that is about delivering better public services.

I will happen to indulge members by showing them the fantastic booklet that has been put out for everybody to be able to see. This is the Government justice sector agencies working together witha plan. We all have our areas, obviously: the Ministry of Justice, the New Zealand Police, the Department of Corrections, Crown Law, and the Serious Fraud Office. All these various agencies of Government in the justice sector have committed to not just working together, but seriously working together with the leadership board, with our justice sector Ministers meeting very regularly, and with something that is a serious innovation for this Government—and any Government, frankly—for the first time ever, which is a Justice Sector Fund. What that means is not that the New Zealand Police loses its budget or that the Ministry of Justice loses its budget; it means that we have our budgets, but we also are looking across our sector to say how we can better use the money that we have got within our sector.

We have been given the confidence of Cabinet to be able to say this is how we think we could better spend our money, and this is how we could get a better result. Our results are very clearly and unashamedly focused on bringing down crime, having less youth crime—having fewer young people go through the Youth Court—having fewer people coming before the courts in the first place, and having less crime, and so far it has been working really well. Even though we did not have a formal system of this in the last term of Government, we were certainly working towards it, and this is formalised now.

We have a great story to tell in New Zealand about justice, particularly in the last 3 years, and that is that crime is now down to 1982 levels. Minister Tolley, as the Minister of Corrections, was able to announce a wee while ago the closure of a couple of prisons, particularly old, dilapidated prisons like the one at New Plymouth and also Mt Crawford prison, which belong to not just another century but another two centuries ago. It is absolutely impossible to expect serious rehabilitation to be undertaken in prisons such as the Taranaki one—the New Plymouth one—which was built as a hospital during the Land Wars of Taranaki.

I have visited most of these prisons and I can tell the Committee it really is important to focus on rehabilitation, and we have to have the right environment for that to occur. We also need some economies of scale so that the right rehabilitation programmes can be undertaken, and that the culture of the organisation in the prison can be very much focused towards that. So we have a great story happening in the Department of Corrections and happening in the New Zealand Police—particularly around the Policing Excellence programme, which I announced about 2 years ago, and that is now tracking along well. Neighbourhood policing teams have been put in place, and the police are focused on Prevention First, which I think is incredibly sensible and is showing such reductions in the crime rate, but also increases in public safety, the public’s feeling of safety, and the public’s confidence in the police. I can advise the Committee that the New Zealand Police is now the highest ranked and rated agency in the country, even ahead of family general practitioners. That has never happened before.

Hon Tony Ryall: And nurses.

Hon JUDITH COLLINS: They are the highest—according to what I have read, Mr Ryall—ranked and rated organisation. That tells me that the police have been doing a fantastic job. They have great leadership, they have the right people there, and they are backed 100 percent by this Government to do their job.

That does not mean to say that we accept any slacking behaviour, any behaviour that is not in accordance with their code of conduct, but what we do know is that they joined the police for the right reasons, and we want them to be there for the right reasons. I would like to also thank members for the amount of support they have given the police over the last few years.

• Vote agreed to.

Dr PAUL HUTCHISON (Chairperson of the Health Committee): It is an absolute pleasure to speak on the estimates of Vote Health, because the National Government has been growing and protecting our public health service during very tough times. In fact, these latest estimates are a benchmark in showing that we are investing $14.1 billion in health. This is $2 billion more than was invested back in 2008, and we are making every endeavour to ensure that every health dollar is well spent, with better services and less bureaucracy.

Undoubtedly, it is quite extraordinary that this Government has been prepared to continue, during these tough times, to invest in this very vital area of health, in education, and, of course, in science and innovation—all areas where the increased investment has occurred. I think it was particularly significant a few weeks ago when under the excellent leadership of the Hon Tony Ryall it was pointed out that New Zealand had the third-highest growth in health spending of 28 OECD nations for 2009-10. This is quite remarkable, as the average growth of health investment by OECD nations was zero. During these tough times, there have been quite a few countries that have actually reduced spending, such as Denmark, Norway, and the UK, where there have been considerable funding cuts. We have seen New Zealand continue to invest in health, with spending increasing by 3.4 percent per year in real terms, which is a very remarkable record. We now have the fifth-highest level of public health spending as a percentage of GDP in the OECD. This may or may not be a great thing, but I believe that in New Zealand’s case, where we are concentrating on increasing productivity and increasing front-line services, we are, indeed, making great headway.

I think we have seen across the spectrum in the world—for example, countries like Singapore, which has a remarkable spend on health totalling about 4 percent of GDP, compared with Australia, which is a bit above us. I think for public and private we are at about 10 percent; public is probably at about 8 percent. Australia is a wee bit above that, and the UK a bit under.

Hon Tony Ryall: A much younger population.

Dr PAUL HUTCHISON: It has a much younger population, as you say. But the United States is at about 18 percent of GDP. In Singapore, Singaporeans live longer, and infant mortality is less than half of ours. So what we have got to do is exactly what the Government has been doing: increasing focus on diminishing bureaucracy, bringing in the front-line services, and ensuring that productivity is increased. This is in stark contrast with what happened with the previous Labour Government, which doubled the health budget, yet, in real terms, fewer people got operations—an awful indictment on those last years.

It is very, very encouraging when we look at what has happened to the health workforce over the last 4 years. Only today I got the updated numbers, and I understand we have delivered over 1,000 extra doctors in the last 4 years and 2,400 extra nurses in public hospitals. That is a pretty good record, because all we heard from the previous Labour Government was Annette King strutting around, talking about her workforce reports. She had 42 of them—42 of them in 9 years—with very little increase in the workforce during that time. It was a huge amount of talk.

It is very exciting, again, that this National-led Government has brought in a programme to combat rheumatic fever, a Third World disease, which, indeed, was identified by the previous Labour Government. It talked and talked but it did nothing. In these estimates there is an increase of $12 million, which adds to the previous $12 million, and already those children in various parts of New Zealand are being swabbed and treated as appropriate.

Of course, not only has the National Government done that but also it has insulated in the order of 140,000 homes—more than that, Tony Ryall says; it is more than that. One hundred and sixty thousand? It is something like that. Whatever it is, it is a significant amount, and a significant amount more than the previous Labour Government ever did.

Then we go on to elective surgery. Once again, the record of this National Government is extraordinary. Twenty-seven thousand extra patients a year are now getting elective surgery. Indeed, we have decided that there is going to be a new target. We are lifting our game by ensuring that all patients booked for elective surgery receive it within no more than 4 months by the end of 2014. That was something the Labour Government could never have dreamed of. What did it do? What was the term? “Cull”. It used to cull patients in their thousands—not just in their thousands but in their tens of thousands. Thirty thousand at a time were culled by the previous Labour Government from waiting lists.

I must say that I am very, very excited by the National Government’s record in immunisation, because it is spectacular. It is absolutely spectacular that only 4 years ago, for the average 2-year-old, the immunisation rate was 73 percent, and it has now boosted to 92 percent. In 4 years’ time it has gone from 73 percent to 92 percent. This is one of the most effective methods of preventive health that we know of, and, under National, it has been delivered. We have set a new and ambitious target for this as well: to have 95 percent of 8-month-old children fully immunised by the end of 2014.

I think it is worthwhile at this point acknowledging all those wonderful health professionals who are out there making this happen up and down the length and breadth of New Zealand. They have been absolutely wonderful, with the passion they have for their patients. I must say, I happened to be in Middlemore Hospital the other day with a relative who was having a baby, and the service she had was superb. Ten years ago there might have been six or seven shifts during a 24-hour labour, but while I was there one midwife came on for 12 hours during the day, and during the night there was another midwife for 12 hours. It was very, very impressive. Then my relative went off to a little country hospital in Pukekohe, where they looked after her just superbly. There was no rushing home; she was allowed to go home when she wanted to, when she was ready to go home, and when the breast milk was in. It was all being done under a new philosophy and a new efficiency where front-line services are being focused on by an excellent National Government.

I want to say that the zero fees for doctors’ visits for under-sixes scheme is also going extremely well under this Government. National has boosted the proportion of children under 6 receiving free doctors’ visits during the daytime to 93 percent. That has got to be pretty good. This is a massive improvement since 2008, when it was 70 percent—70 percent at the end of Labour’s tenure.

Dr JIAN YANG (National) : Ni hao. I also would like to speak about National’s commitment to growing and protecting our public health system. The honourable member Paul Hutchison has done an excellent job of elaborating some of those achievements. We are committed to delivering a strong, reliable public health system for all New Zealanders. This commitment is illustrated by our investment of $14.1 billion in health—the most ever—in Budget 2012. This investment is a clear signal that our National Government is delivering on our priority of providing better, sooner health care services for all New Zealanders.

As the honourable member Paul Hutchison just said, I am very proud of the National Government’s track record on delivering our health services. A recent OECD report said that out of 28 OECD countries, we had the third-highest growth in health spending for 2009-10—an increase of 3.1 percent in real terms, compared with the OECD average growth rate of zero. This investment in health has led to better services and less bureaucracy. Also there are a record number of patients now getting elective surgery, as the honourable member Paul Hutchison has just said. There are 27,000 patients a year who are getting operations such as hip and knee replacements. These people, who would otherwise be living their lives in discomfort, are now looking forward to a brighter future thanks to National.

We are offering better care for cancer patients. They have access to faster treatment, with radiation starting within 4 weeks for those who need it. National has expanded this target to include chemotherapy. Since National came to power in 2008 no patient has had to travel to Australia for radiation treatment. Under Labour some patients either had a 15-week wait for radiation treatment or had to be shipped to Australia because the health service was failing under Labour. Under the leadership of National, New Zealanders can be assured that they will be getting the best medical assistance, should they need the services of the public health system.

Other significant improvements under National have seen record successes of emergency departments treating patients faster. Ninety-two percent of emergency department patients are admitted, discharged, or transferred within 6 hours. Record numbers of children are being immunised—92 percent of 2-year-olds, compared with 73 percent under Labour—and record numbers of smokers are quitting. And we are not stopping there. We want to see more improvements so that New Zealanders have access to better, sooner health care. That is why 93 percent of under-sixes can now see their general practitioner for free during the day, compared with 70 percent in 2008. This year National has extended this to include free after-hours doctors’ visits, and 90 percent of children under 6 benefit from this. This has been possible because National has invested $65 million in the zero fees scheme over the past 3 years.

We are committed to eradicating rheumatic fever, with a doubling of our spending to $24 million in this year’s Budget to fight the disease over 5 years. This includes school-based sore throat swabbing services, involving 100 schools and 35,000 children, to help with the early detection of throat infections, which could lead to disease. Just the other week our Minister of Health announced that Auckland District Health Board will receive an extra $2.5 million over the next 3 years to improve productivity and provide more care for patients. That is good news.

The National-led Government is committed to building a brighter future for New Zealand. We are on track to achieve this. Thank you.

Hon TONY RYALL (Minister of Health) : Nothing is more important to New Zealanders than their health. That is why this Government works every day with a huge number of very smart people in the New Zealand public health service to deliver better services for New Zealanders in these resource-constrained times. All around the world, health services are retrenching. They are cutting the services they offer their people, they are cutting the numbers of staff, and they are cutting the offering they have to the public. But here in New Zealand, under the leadership of both a Prime Minister and a finance Minister strongly committed to the New Zealand public health service, we continue to invest strongly. We continue to invest in priority interventions that will not only improve the health of individuals but also move to improve the health of the population within a framework of a need to get greater value.

I want to thank particularly the chairman of the Health Committee, Dr Paul Hutchison, who before he came to Parliament was one of New Zealand’s leading obstetricians and gynaecologists, for the work he does as chairman of the Health Committee. I thank him for the very strong interest he has, particularly in maternity and child health policy here in New Zealand. I think Dr Hutchison’s very strong focus on the importance of immunisation has to be recognised, but also I thank him for the very strong advice he has given to Parliament over a number of years about the need to invest in maternal and newborn health. I thank him for working with the Government on the significant announcements that will be made in the next few months about another very significant investment coming in the area of maternal and newborn health, and I thank him for the contribution he makes there.

The Government is very focused on improving child health in New Zealand. We worked hard to lift the immunisation rate, which has gone from 70 percent when we started to 93 percent today. In fact, the richest families and the poorest families have the best immunisation rates of 94 percent of their 2-year-olds at the moment. We have also invested very heavily in rheumatic fever. As Dr Hutchison said, it is a Third World disease that has an incredible impact on Māori and Pacific families in particular. It has actually been a national health strategy since 2001, when Annette King announced that it would be one of the Government’s health strategies. Basically, that Government did nothing, so we put in $12 million last year and another $12 million this year—huge. Tens of thousands of kids will be regularly throat-swabbed in order to try to really stamp out this rheumatic fever over a period of time.

This Government has also created a turning point in the fight against tobacco. We have created a turning point in the fight against tobacco. Information in the next couple of months, when it is released, will show that this Government, in a 4-year period, has delivered the most sustained reduction in smoking rates of any country in such a period. That information will indicate what happens when you have a focus on not only these sorts of punitive measures, which we might have seen elsewhere, but also the need to encourage people to change their lifestyle and their addiction to tobacco. That is the huge effort the Government has made to roll out brief intervention conversations between smokers and health professionals, not only in our hospitals but also in general practice. One of the most effective interventions to reduce smoking is to have those sorts of conversations, but, of course, the most effective, as Professor Blakely from the University of Otago said in the room opposite last night, is increasing tobacco excise tax.

The CHAIRPERSON (H V Ross Robertson): I am sorry to interrupt the honourable Minister, but the time, honourable members, has come for me to report progress.

• Progress reported.

• Report adopted.