Appropriation (2010/11 Estimates) Bill

Hon BILL ENGLISH (Minister of Finance) Link to this

I move, That the Appropriation (2010/11 Estimates) Bill be now read a third time and the Imprest Supply (Second for 2010/11) Bill be now read a second time. This is an opportunity for Parliament to debate the economy, and I had been looking forward to it, until I saw what a mess the Labour Party had made of its internal rifts, splits, and divisions.

Hon PHIL GOFF (Leader of the Opposition) Link to this

When Bill English got to his feet and began to decry the runaway spending habits and the bad culture of the Public Service, I thought that at last we were hearing a mea culpa. He is paid the highest housing allowance of any beneficiary in the country; he is paid thousands of dollars to live in his own home. If it started off as a bitter speech, we can understand why. He is the man who took National to 21 percent in the 2001 election—21 percent. Worst of all, he was a leader doing his best who was stabbed in the back by his own current party leader, who had promised to support him the night before the party ballot and instead gave his support to Don Brash. It is no wonder that Bill English is a bitter man in the House.

But I do not want to waste time on Mr English; I want to talk about what National promised New Zealanders. John Key said that the fundamental purpose of his Government was to narrow the wage gap with Australia. On any measure, the Key-led National Government has failed in that purpose. The media showed that the wage gap with Australia had increased by $40 a week since John Key was elected Prime Minister. John Key came into the House and said that was untrue and had not happened. He tabled a document of the best-massaged figures he could provide, and it showed that the wage gap had grown by $23 a week. But then—and this is what I objected to most—from Mr Brownlee and Mr Key there was the dishonesty of trying to disguise figures that represented the reality that New Zealand workers are much worse off.

Mr Key and Mr Brownlee proudly became the joint holders of the title of “Wallies of the week” in the Dominion Post last Saturday. Let us hear what the Dominion Post had to say: “[Gerry] Brownlee for so brazenly claiming that the wage gap with Australia has shrunk under National when by any measure it had grown,”. But, wait, there is an even better award for John Key. He was joint “Wally of the week” “for thinking anyone would be fooled by his inept attempt to manipulate the statistics to support his Minister.” They are the “Wallies of the week”.

Well, New Zealanders are not so easily taken in. They know they are not better off, they know wages are not increasing at the rate of prices, and they know the wage gap with Australia is growing wider and accelerating by the day. We got that information from Statistics New Zealand, which today stated that the wage increase in the last year was 1.6 percent. Well, inflation went up by higher than that amount. Every New Zealander going through the supermarket checkout knows that when John Key tells them that they are better off, it is not true.

What else did we find? We found that the wage increases in New Zealand in the year ended June grew at half the rate of the wage increases in Australia—half the rate. Most of all, we learnt that the wage increase under this National Government in the last year was, as reported by Statistics New Zealand, well under half of what Labour gave workers in its last year of office. That is where the truth lies.

Mr English can talk as much as he likes about Labour’s legacy; Labour’s legacy was a country with one of the lowest rates of unemployment in the world, where wage increases were consistently above price increases, and where people were better off in their workplace, in the social policies that were being pursued, and in their living standards. Mr English made a half-hearted attempt to say what his plan was. Well, I hold up the real plan, taken off the National website today. It is the policy statement 2010 Budget: Building The Recovery. What does the policy say? It is a blank piece of paper. Oh no, it has a copyright on it. But this sheet of paper is as blank as the ideas and the plan that National has to address the problems of this country. There is no plan.

Mining in a national park or a protected conservation area is not a plan. John Key, Kate Wilkinson, and Gerry Brownlee told the House at the start of this session that that was their big plan for step change. They were going to dig up our national parks. Ask anyone in New Zealand, and they will tell members that it was a load of nonsense economically and a load of nonsense environmentally. Now those members have slunk away from that policy with their tails between their legs. John Key denies that he ever had anything to do with it. But the truth is that 6 months was wasted during which this Government should have had a plan to lift New Zealand wages and employment rates and close the wage gap.

I asked the Prime Minister in the House today whether he had the courage of his convictions and would stand by the promise that he had made to set benchmarks for progress towards the objective of closing the wage gap with Australia by 2025. The answer was no. There was no courage of convictions. We know that the promise to close the wage gap with Australia was simply empty electoral rhetoric. There is no plan, we are not catching up, and it is getting worse. The wage gap is growing. For the first time in more than a decade, we have a higher unemployment rate than in Australia. Under John Key’s watch we have a higher unemployment rate than in Australia.

When challenged this afternoon in question time as to whether he would predict that the employment gap with Australia would narrow, he declined to make the prediction. I will tell members why. The Ministry of Social Development statistics already show that our dole queues are growing bigger while the Australians are cutting down their unemployment rate. The projection this week is that will continue.

We do not have to be rocket scientists to know what New Zealand needs. It is pretty clear how we can move forward, and Labour has put this into its plan. Labour’s plan is about upskilling the workforce, because we know we need more apprentices, not fewer. We know there is a looming skills shortage, but this Government is doing absolutely nothing about it. We know we need more people with tertiary education, but the Government is locking out an unprecedented 5,000 people. We know we need to achieve better in education. National standards do not achieve anything; they just measure achievement. What achieves better standards is better early childhood education, but that is what the Government is cutting.

We know we need more savings, because if we save more, we invest, own, and control our own country. Why, then, did National cut KiwiSaver, when the Australians were expanding their scheme? Why did the National Government cut the money that was going into the Cullen fund so that baby boomers could contribute towards their own retirement? We have fewer savings because of what the Government is doing. Government members can whine all they like about being tenants in their own country, but they are causing that situation because they do not have a plan for savings.

We know we need to invest in a smart economy. We will not catch up with Australia by making workers worse off by cutting their entitlements and cutting their wages. We will catch up with Australia and do well through a smarter economy, smart technology, and a highly educated, highly paid, and highly skilled workforce. This Government is not going in the right direction; it is going in the wrong direction.

Hon TONY RYALL (Minister of Health) Link to this

When their colleagues were applauding, what was going on with George Hawkins, the young guy from Rimutaka, Chris Hipkins, and the chap from Palmerston North, Iain Lees-Galloway?

I must pick up from where the Minister of Finance finished, because it really is going according to the playbook of what happens when the Leader of the Opposition is on the skids. In that situation the leader has a speech, and a little note will go around in an email stating “The leader is about to speak; please all make your way down to the Chamber”—and they did. But I have to say, after hearing that speech from Phil Goff, that it can only be summed up with these words from Chris Carter: Mr Goff is a very nice man, but he just cannot win. What is more, Mr Carter went on to say that there are many members of the caucus who feel the same way. They are the ones who did not stand when we saw the ovation following Mr Goff’s speech today, and a lot of the members who did stand are also included in that group.

The statement that Mr Goff is a very nice man but just cannot win came from someone who was one of his front-benchers until a few weeks ago, Mr Carter. It is a bit like what used to happen in the Soviet Union where, if anyone disagreed with the leader, that person would be sent to the asylum. That is what they are saying about Chris Carter. It is very, very impolite, and it is not a reflection of the situation that Mr Goff finds himself in.

What was sad about Mr Goff’s speech was the fact that it is clear Labour does not get that its “more debt, higher tax” policies will not work for New Zealand. There is no awareness from the party opposite that we are coming out of the worst recession since the 1930s. Mr Goff was in a party that, during the best of times, squandered the opportunities New Zealand had, and he now represents a party that has no coherent vision for the future of this country. He is a very nice man, but he just cannot win when he has no plan or policies for New Zealand other than to spend another $300 million, which is what Ruth Dyson is going around the country and saying we should do. Apparently we will fix everything by spending another $300 million. What we know is that that is not the case.

During its term the previous Labour Government spent recklessly, interest rates were persistently high, exporters were struggling, and the tax system clearly was not working. Under this Government we have a six-pillar programme of economic recovery for New Zealand, the first of which is growth-enhancing tax cuts, which are putting large amounts of money in the pockets of ordinary New Zealanders. Many New Zealanders will remember that Phil Goff and Annette King voted to put $500 a week tax cuts into their pockets and the pockets of Cabinet Ministers when they were in Government between 1984 and 1990. That is what they voted for: $500 a week in the pockets of Cabinet Ministers. Annette King and Phil Goff stuck their hands up and said “Yes, thank you, we’ll have the $500 a week tax cut.”

What this Government has done is to give average wage earners the significant benefits they deserve. A family on the average household income will be $25 a week better off, and the vast majority of New Zealanders will face a tax rate of no more than 17.5c in the dollar.

Hon ANNETTE KING (Deputy Leader—Labour) Link to this

We have just heard from Mr Ryall, who is not a nice man. He is not winning for the sick and vulnerable people of New Zealand. When we go around this country we hear that they call him “Minister of Cuts”. People tell us, daily, of cuts that are occurring in health, and most of it is by stealth. People wake up and find they have had their health service cut only after he has passed through and after it is too late to do anything about it. He had the cheek to mention the Healthy Homes project, but he forgot to tell the House and listeners that the National Government cut that project by 60 percent in this year’s Budget. But, of course, he says it is not a cut; it is only a change.

In 2008 we saw from National so many promises, so many commitments, many political bribes, so much hype, and more slogans than Goebbels could produce. We could call 2008 the “Year of the Great New Zealand Con”, because 2008 was the year that John Key sucked in thousands of New Zealanders by his great propaganda machine. He talked about a “brighter future”; the “unrelenting focus on catching up with Australia”, the “turbocharged economy”; the “fresh start for young New Zealanders”, the “step change” in every policy one could see. Amongst all of that he promised to keep all Labour’s major policies. He said he would also keep those, and that is why the media called him “Labour-lite”.

Then we have to remember that the very policies that he said he would keep, he voted against when he was in Opposition. He voted against Working for Families; he called it “communism by stealth”. But in the election campaign he promised that he would keep that “communism by stealth” programme. He does not now recognise that the programme lifted 130,000 families out of poverty, and last week in the House he had the cheek to say that the previous Government had done nothing about poverty.

The Minister promised to keep interest-free student loans but in Opposition he said it was “irresponsible economic vandalism”, and that National members would oppose it with every bone in their body. I say to them now: “Where is their spine?”, because one part of their body has disappeared. National members were going to oppose it with every bone in their body, but in the promise—the great New Zealand con—they promised they would keep interest-free student loans. National said it would keep the 20 free hours early childhood education policy, but then it took out the word “free” and now we know what it means. It means “free with a fee”.

National also opposed the seabed and foreshore legislation. How many members of this House have forgotten the “Iwi/Kiwi” billboards? National ran that campaign against Māori up and down New Zealand to divide this country, and that has been forgotten by the National Government. It was all about optics when National was in Opposition. Now I believe that New Zealanders are starting to see through the great New Zealand con. They are saying they voted for a different Government. On a daily basis Opposition members—whether getting into a taxi, meeting people on the street, walking through the supermarket, or collecting for charity somewhere—have people coming up to them and saying: “This is not the Government we thought we were getting. This Government is not giving us what we voted for.” I say that this Government cannot make decisions. It cannot make a decision and stick with it. It seems to us that the last person who spoke to John Key leads to the decision he makes that day.

Today we have found out it is even worse than that; we now have “Government by Google”. Imagine that! We must be the first country in the world that has “Government by Google”, as the chief Opposition whip has called it. When Government members want to find out what is happening, they put a word into the Google machine, a computer, and out spits all the comments that they want. They do not do research, they do not do any work, they do not have a plan; they just have “Government by Google”. Government members do not have the internal fortitude to stick to their principles and policies. They do not stick to a plan. Why do they not stick to a plan? The answer is simple: they do not have a plan. It is so obvious now to all New Zealanders; there is no plan from the National Government in this country. It really is funny, if it were not so sad.

This is National’s plan: “Building the Recovery” policy statements. It is empty, except it is copyright and also has an address on it, for a Mr Oldershaw. Perhaps we should ring him and ask him what happened to the plan because the Prime Minister cannot tell us, the Minister for Economic Development cannot tell us, and the Minister of Finance cannot tell us. I ask whether there is anybody over there who can tell us what the economic plan is for this country.

Hon Dr NICK SMITH (Minister for the Environment) Link to this

The elephant in the room that has been ignored by the deputy leader of the Labour Party is simply two words: Chris Carter. You see, those members opposite want to sort of pretend that the dramatic political events that unfolded in this Parliament last Thursday simply did not happen. I challenge the next speaker for the Labour Party to front up—

Dr RUSSEL NORMAN (Co-Leader—Green) Link to this

I stand to speak in the appropriations debate. I wish to particularly address the Government’s economic strategy. The Government speakers, in between attacking the Labour Party, have outlined an economic strategy with six different elements. I think it is important that we actually address the Government’s strategy.

One of the key elements that the Government has addressed is the issue of changing the taxation system. There, in particular, Government members have talked about the changes they are making to the income tax rates. It is worth noting that the changes overall to the taxation system are fiscally negative—that is, the Government will have to borrow around a billion dollars in order to pay for its tax changes. It seems to me that when the Government is already running a deficit, borrowing in order to fund more tax cuts is fiscally irresponsible. I am genuinely surprised that the Minister of Finance, who quite rightly makes quite a big deal of the fact that he tries to be fiscally responsible, put forward a Budget this year that involved the borrowing of very large amounts of money in order to fund tax cuts.

The second part of the tax cuts is that they tend to go towards the wealthy. New Zealand already has dramatic inequality. We are one of the most unequal countries within the OECD, and that has enormous costs. The fact that we are so unequal is closely linked to the facts that we have one of the highest imprisonment rates, that we have very high crime rates, and that we have real problems with health and education. Those are linked to the fact that we have a highly unequal society. The changes that the Government is making in terms of the income tax rates and in terms of hiking the rate of GST will result in a more unequal New Zealand, and that will have all of those downstream effects.

It is also notable that the other change that the Government introduced was to lower the company tax rate. That was done on the basis of the mistaken belief that Australia would lower its company tax rate further, and that New Zealand had to follow it. As it turned out, Australia did not. But, putting that to one side, it is interesting to look at the Inland Revenue Department advice on lowering the company tax rate, because the Inland Revenue Department said the major beneficiaries from the lower company tax rate will be foreign companies, and that foreign companies operating in New Zealand have a much higher rate of return on equity than New Zealand companies. The reason that the Inland Revenue Department gave for the differential between the return on equity of New Zealand companies and of overseas companies is that overseas investors in New Zealand tend to target monopolies or oligopolies where they can maximise their profit rates. Those sectors of the economy where there is very little competition, such as the banking sector, where there is very little competition aside from Kiwibank, are targeted by foreign investors in order to have higher rates of profit.

So by cutting the company tax rate, we are rewarding the foreign companies that are involved in the New Zealand economy not to export overseas. Most of the foreign companies involved in New Zealand are not export companies—that is what the Inland Revenue Department advice said. Those companies are in fact largely rentiers that simply receive an above-average rate of return. They are receiving an economic rent from their investment in New Zealand, with very little benefit for New Zealand. The big investment in the telecommunications sector is another example of overseas investors seeking just an economic rent, but producing very little for New Zealand.

The changes that the Government is introducing to the taxation system will not only make New Zealand more unequal, and will not only result in a higher debt for the New Zealand Government—around an extra billion dollars—but will also reward foreign companies, against the best advice of the Inland Revenue Department. It is hard to see how the tax changes that the Government is making are part of any kind of coherent strategy.

The second part of the Government’s strategy that I will talk about is infrastructure investment, which Government members talked about. I think some parts of the Government’s infrastructure investment make sense. I think the grid upgrade makes a lot of sense. If we are to have a number of sources of renewable energy throughout the grid, we need to have the grid in good shape. I also think that making sure that people have high-speed Internet access is very important, particularly in a world where energy prices, and particularly transport energy prices, are very likely to be high. For people to be able to work from home by having high-speed Internet access is a good idea. I think we can question whether having wires rather than having other forms of delivering the Internet is the best way of doing it, but none the less getting high-speed Internet access is a good idea. Likewise, the buildings for schools is a good idea, as is home insulation. Normally that would not be thought of as a piece of infrastructure, but in a way it is infrastructure that is incredibly valuable to New Zealand, in terms of reducing health costs, making sure that kids go to school more often, and making people warmer and drier.

The part of the Government’s infrastructure programme that I think is particularly absurd—there is really no other way to think of it—is the motorway investments. Those are the same waste-of-money programmes that the previous Government followed through. Labour and National share a kind of obsession or fetish with building motorways. This is in a world where quite recently Lloyd’s of London produced a report that talked about rising oil prices, and said Governments around the world needed to look at alternatives to relying on oil and becoming dependent on oil. We have now had more than a decade of Governments—and, no doubt, more are planned—that want to increase the New Zealand economy’s dependence on imported oil. This is in a world where we are somewhere near to the peak rate of oil production, where the price of oil will become only more expensive with time, and where we have to constrain our greenhouse emissions—or we certainly will have to constrain our greenhouse emissions. Yet we are building infrastructure that will result in an increased dependence on oil, and we are building infrastructure that will result in more greenhouse emissions. Not only is that the case but we have to borrow money in order to do it, and we are wasting vast amounts of our taxes on these white elephants. I think the Minister of Finance talked about the $10.7 billion over the next decade that he plans to waste on new motorway projects.

The ridiculous thing about the Minister of Finance’s contribution on infrastructure was that he talked about how the Government wants to upgrade the decision-making process before it makes infrastructure investment decisions. We know from the papers that we forced out of the Government that the benefit-cost ratio on, for example, Steven Joyce’s “Holiday Highway” north of Auckland is actually less than 1—that is, for every dollar that the Government spends on it, it will get less than $1 in return, using the most generous pro-roading assumptions to generate the benefit-cost ratio. So we know that the decision making around these major infrastructure projects is actually very, very poor. The roads of national significance have been selected by a political decision-making process, and now the Government wants to say it has upgraded the decision-making process for infrastructure investment. In fact, its own studies show that the investments it is making in motorways are actually of very poor quality, and are a waste of large amounts of money. Of course, this issue is actually about Steven Joyce running in the Rodney electorate at the next election: getting Mr Lockwood Smith on to the National Party list, so that Steven Joyce can win the Rodney seat by building the “Holiday Highway”. That is the actual decision-making process behind how we have ended up spending billions of dollars on the “Holiday Highway”.

The third part of the Government’s programme is the so-called regulatory reform programme. I say to those who are unaware of this that the last time that National got its hands on regulatory reform, it implemented the Building Act, a laissez-faire regulatory reform that resulted in leaky houses. It will cost the New Zealand economy around $20 billion, according to reasonably conservative estimates, to fix the problems created by the Building Act of 1991, which was the last time that National interfered with the legislation. That Act was a laissez-faire piece of regulation that said the Government did not really care, and people could put up whatever they liked to build. That has resulted in a massive cost. So although it is very attractive in the short term for the Government to say it is saving money, the long-term costs are enormous. Likewise, when the Government weakens the laws around irrigation and the protection of rivers, for example, that has a dramatic impact on our clean and green reputation further down the track.

The other part of the programme that I will touch on is the Government’s approach to innovation. The Government strategy is what I would call an extractive strategy—it is very much focused on mining minerals, oil, and also water—and an innovative strategy really seems to be missing. We need to have a clean technology strategy for the New Zealand economy: a strategy that says we want to make the most of the international market for clean technologies, which is only increasing over time. But the Government seems to pay no attention to the green economy, and seems to have no understanding that the future opportunities around the globe for a country like New Zealand lie in the green economy—an economy where cleantech, greentech, high-tech products and services will be very much in demand. New Zealand would be in a position to supply those.

So when we look at a number of the Government’s strategies, we see that they do not seem to address some of the big issues that face us. How we move our economy towards a much more sustainable basis, how we reduce our carbon emissions, and how we reduce our dependence on oil are all serious issues that seem to be completely missing from the Government’s economic strategy. For that reason the Green Party does not support that economic strategy.

Hon Sir ROGER DOUGLAS (ACT) Link to this

The Budget is now more than 2 months old, and it is becoming more obvious why the Government did not tackle some of New Zealand’s main economic problems, including a lack of economic growth, in that Budget. It is clear that the Government goes about its decision-making process in much the same way as Labour did over its 9 years in Government.

The big problem we have is that the Government always asks the wrong question. When faced with a major issue, the Government asks what it can get away with; what it can sell to the public. When one asks that question, one will always come up with the wrong answer. The real question that should be asked is what the Government should do in relation to the particular policy area in the interests of the country. Having decided what one should do in the interests of the country, one then asks how one markets that decision to the public.

Getting that round the wrong way has serious consequences, and I want to talk today about one of the consequences of that approach—that is, the consequence for the poor and disadvantaged. I believe it is extremely harmful. In fact, what makes me more cross than anything else is the way that National, Labour, the Māori Party, and the Green Party claim to want to help the poor and disadvantaged, then implement or advocate policies that do absolutely the opposite.

This afternoon I would like to discuss how we deal with the issue of disadvantage. I agree with the other parties when they say that the key issues faced by the country include unemployment, race, crime, health, education, housing, welfare, and the economy. Where I disagree with the other parties is the way in which we solve these problems. The country simply cannot solve these issues by seeking short-term solutions over the next 3 months or 18 months. None of these issues can be resolved, in my view, to the satisfaction of the public unless they are placed in a medium-term context.

Because these issues are linked fundamentally, and voters know it, they cannot be solved if we look at them in isolation, as we have done over the last 15 years. Poor parenting, lack of motivation, inadequate skills, alienation, unemployment, and delinquency all reinforce each other. Low incomes, inadequate housing, poor health, lack of opportunity, and lack of economic growth are all part of the same syndrome. In these circumstances, delivering real gains to disadvantaged people is crucial because that automatically delivers something of value to everyone else.

Although income is obviously important to disadvantaged people, income in itself is not enough to remedy their situation. Their deeper need is for the incentive and the opportunity to contribute more to society through their own efforts. By helping them to achieve independence and contribute more to society, we not only transform their future but improve everyone else’s.

These gains have an important role to play in creating a dynamic growth economy, higher incomes for everyone, and a fairer society. The alternative is a society with a permanent underclass—alienated people with no stake, prosperity, or social harmony. That is one reason why the community as a whole is desperate to see a recovery of the growth and investment needed to develop our future potential.

The social cost of very low growth over the last 15 years has damaged the security and well-being of people at every level of society. Those costs, however, hit the disadvantaged harder than anyone else, but their reaction to disadvantage has an impact on everyone. Deep down, the public knows that growth is the only way to get sustainable jobs and avoid an ongoing erosion of living standards and well-being. That necessarily involves a reduction in waste, inefficiency, and avoidable burdens on those who create and contribute to growth, yet Labour, National, and other parties see any proposal to eliminate waste as a negative, and as one to be avoided at all costs. In other words, there will never be a solution to our problems while this mentality actually exists.

If we truly want to help disadvantaged people, we need to end the vicious cycle we have at the moment, where the disadvantaged are often forced into education in which they learn nothing, life on a benefit, or unproductive jobs that simply perpetuate their problem. Until we recognise that scope for constructive personal choice is the basis for the dignity of human beings, we will simply not move ahead.

The central feature of disadvantage is in fact not a lack of money or housing, and so on; it is a total lack of choice. The disadvantaged need the kind of help that puts people on their feet, able to make a contribution and make gains for themselves in doing so. We ignore the policies that can do that, at our peril.

The Government has increasingly allowed over the last 18 months, in my view, Labour and others to portray even the smallest attempt to change as the seeking of heartless efficiency at the expense of equity. Let us be clear about this: without improvements in efficiency, improved equity is in fact impossible to achieve, and even existing levels of equity come under increasing threat. Until New Zealand realises this economic fact, then New Zealand’s relative decline of the last 15 years will continue.

The fact is that waste consumes resources that could otherwise have been available to improve equity levels throughout the community. Certainly, everyone involved in wasting resources collects a rent, dividend, or pay packet, but they do so at the expense of the whole community. We need to be very clear about this: the benefits of privilege are concentrated in the hands of well-organised groups. For example, a lot of the help that this House and the country provide to Māori goes to a few and not to the many, and that needs to change.

The issue of helping Māori people is deeply interlocked with all the other issues of disadvantage, at every level. Perceived equity in these circumstances is critical. The objective for Māori people must be to open up effective opportunities for them to share fully in the nation’s future. Moreover, the need is to place them in a position to do so in a self-sustaining way, based on their own skill and their own imitative. That is not simply or even fundamentally a question of righting past wrongs or of restoring lost lands and fisheries to them.

Complete justice based on the past, in my view, is impossible, and in attempting to restore it, we must take care not to make bitterness a permanent feature of our race relations. Justice for Māori people has to be based on what will work best for them and the community for the rest of the century. Their central problem is a lack of knowledge and skill, which are essential for self-esteem and success in the year 2010 and beyond. Unless that deficiency can be remedied, the Māori people will remain as they are at the moment—at a permanent disadvantage.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) Link to this

I apologise for interrupting Sir Roger Douglas; he was on a bit of a roll in laying down all the solutions for Māori people for the next hundred years. I thank Sir Roger very much.

Exactly 150 years ago to this very day, on 3 August 1860, on behalf of a gathering of chiefs at Kohimārama in Auckland, Tamihana Te Rauparaha presented a petition to the Native Secretary, asking that the Conference of Māori Chiefs of New Zealand be established and made permanent, while at the other end of the country, the warship Victoria was coming into New Plymouth, with the commander of the forces in Australia, and his staff, on board. So as we consider this appropriation legislation today, which allocates extra funding over the next 3 years for Treaty settlements, we are reminded to look to the lessons of our history to help set the guidelines for our future—our history in which 150 years ago today, Māori were looking to step up to the challenge of nationhood while the Crown was girding for war in Taranaki.

It is in line with the importance of settling those historical Treaty claims, in order to help grow the Māori economy, that the Māori Party supports the resourcing in this bill for extra staff to support Treaty negotiations and Treaty settlements, which many iwi and Māori entities are now using to unlock the potential value of the Māori asset base through further research and development.

But we note that this bill is not the only thing we want to see in the Government’s Budget planning; we also note that the Treaty has far greater value to our society than of just backstopping recent Treaty claims. In 1970 Ngā Tamatoa’s activism forced New Zealand to come to terms with Māori issues, particularly those related to the Treaty of Waitangi, and by 1974 Waitangi Day had become a national holiday. In 1975 Whina Cooper led the great Māori land march to Wellington—to protest the loss of millions of acres of Māori land in breach of Te Tiriti o Waitangi—which led directly to the establishment of the Waitangi Tribunal. It was Ngā Tamatoa that helped organise the petition to the Government that gave birth to the revitalisation of the Māori language—a taonga under Te Tiriti o Waitangi—and which led to the emergence of kōhanga reo in the early 1980s.

If we were to question the Minister of Māori Affairs, he would tell us that although significant progress has been made in the area of language revival, it is still not enough. Hence, he announced last week a $250,000 review of the Māori language sector, to update the Māori Language Strategy and to ensure that Government expenditure on te reo was meeting Māori aspirations. Again, that was a great move, and one that we fully support.

Of course, it would be remiss of me to forget to mention the foreshore and seabed march of 2004, which challenged the Government’s intention to deny Māori rights to the foreshore and seabed enunciated under the Treaty of Waitangi, and which gave rise to the Māori Party, for which I speak today.

On another level, just yesterday the Waitangi Tribunal released the second instalment of its report into the history of the conflict in the Urewera, in which the tribunal recommended the return of part of the national park to Tūhoe. I am reminded that only a fortnight ago the United Nations special rapporteur on the situation of human rights and fundamental freedoms of indigenous peoples, Professor James Anaya, respectfully urged the Government to reconsider its decision to refuse to return the Urewera National Park to Tūhoe.

While I am talking about Tūhoe, I see that the Commissioner of Police, Howard Broad, says that he would like to bring Tūhoe and the police together before he leaves his position next year, although Tūhoe say that it is unlikely that the rift between the iwi and the police will be resolved any time soon. None of this is rocket science. As Tūhoe negotiator Tāmati Kruger said, the basis of good relations between Māori and the Crown is goodwill and sincerity, the absence of which jeopardises the very basis of Te Tiriti o Waitangi. In fact, that is also the very reason why I have drafted a bill to establish a parliamentary commissioner for the Treaty of Waitangi: to promote respect for the Treaty as the nation’s founding document and constitutional blueprint, to review and investigate Treaty-related issues, to provide information and analyses to the general public, to promote respect for the Treaty, and to provide advice to Parliament on Treaty issues. I just add again that it was also the advice of the United Nations special rapporteur that the principles of the Treaty provided a foundation for Māori self-determination as guaranteed under the United Nations Declaration on the Rights of Indigenous Peoples, based on a real partnership between Māori and the Crown.

Finally, I wish to speak about the Government’s radical reshaping of our society to cope with the effects of a global recession, and its failure to protect the most vulnerable in our society from its impact. A 2 percent lift in benefits will do nothing to help those already living on a knife-edge, particularly during a period when GST has been increased, prices are going up, job losses have been huge, and the economic recovery has been slow, particularly for Māori. The Māori Party remains committed to ensuring Te Tiriti o Waitangi becomes a document that the whole country will one day see as the basis for good relationships between Māori and all others in Aotearoa, the source of sound environmental policies and practices, the footing for strong and positive growth in our economy, the background to the nation’s commitment to eliminating poverty and addressing the injustices that limit the potential of a great sector of our society, and the foundation for a legal framework that encompasses tikanga Māori and Pākehā legal principles for the benefit of all New Zealanders. Kia ora tātou.

Hon JUDITH COLLINS (Minister of Police) Link to this

It is with great pleasure that I rise to speak in this debate, particularly in relation to the areas of corrections and police, where we have had a standout year in terms of public confidence and the delivery of services. That is not to say that everything is always perfect, and it certainly will not ever be perfect in portfolios that deal with the worst-behaved people in New Zealand—prisoners, and criminals generally. But I can say that there has been a real turn-round. In corrections we have gone from a situation whereby the very best level that public confidence ever reached when Phil Goff was the Minister of Corrections was 40 percent. That is how many people had faith in corrections. That figure is now at an all-time high at 61 percent, and that is a pretty fantastic result, particularly for the hard-working staff at the Department of Corrections, who have to put up with just about every form of abuse from members opposite as they possibly could. These staff have been able to stand up to that and they have delivered well beyond what I think even they believed they could deliver.

Let us look at what they have delivered. At the moment, about 8,500 prisoners are in our cells, which is up from 5,000 prisoners in 1996. The last decade, under Labour, was characterised by massive increases in the prison population. Under Labour’s watch, four new prisons were built, and a fifth was started—the rebuild of Mount Eden Prison. Did Labour increase drug and alcohol treatment for prisoners? Well, nobody noticed if it did, but we are doubling it in the first 3 years of a John Key - led Government. As well as doubling the amount of drug and alcohol treatment for prisoners we are also increasing the availability of literacy and numeracy training.

I was very interested to hear the speech before from the Hon Sir Roger Douglas when he spoke about education and the need for people to get education, and about how it is our poorest people who miss out on so much. It is a sad but true fact that about 90 percent of our prisoners are basically illiterate, and about 80 percent of them do not have basic numeracy skills. When we look at that very sad fact and at the fact that they have also undergone years of education, we have to wonder what went wrong. Well, I do have something to say to them and it is that there is hope, we have national standards, and I am very glad that Minister Tolley has the wherewithal to bring it about. Nothing we ever hear from Labour members in Opposition would ever give any encouragement in education. I am very pleased at the work Mrs Tolley is doing to try to make sure we do not have people ending up in prison.

We have also seen a massive increase in the number of people whom we have to deal with in the Community Probation and Psychological Services. Under Phil Goff’s leadership there was one bad news story after another about that service. We now have a very well-trained group of people—our probation officers and psychologists—who work together with their managers to use their discretion, training, and intelligence to try to bring about change for the better in people’s lives. I have been thrilled with the quality and calibre of the people we have in corrections and I am very proud to be their Minister.

The number of escapes has also come down. In 1999-2000, which was the first year in office of the last Labour Government, there were 40 escapes from our prisons. Now, with a greater number of people in prison, in the last year the number was 12, most of whom were “walk-aways”—people in work parties who are low-security prisoners. We have seen the first of the public-private partnership work going on, with corrections working on that with the Infrastructure Unit at Treasury. It is really good to see the department taking such a lead role in this. We are seeing the first contract management work going on, and that is progressing well. We are seeing double-bunking increase. When Labour was in Government, 21 percent of our cells were double-bunked. We never heard Labour members talk about that when we were in Opposition, but the fact is that that is true. That amount of double-bunking has been increased, because although Labour left us with four brand-new prisons it did not leave us nearly enough beds for the forecasts that it knew were coming down the pipeline at us.

We have also brought in container cells, and I am really pleased with those; they are outstanding. Container cells are cheap, quick, waterproof, and extremely humane, but they are spartan. Although I have been accused by the Opposition of pulling a stunt on this matter, I have to say that they have been a standout success. I understand that prisoners are practically lining up to go into them, because they are considered to be some of the best-quality accommodation we have in the prison estate.

The department has really brought itself together and has looked at ways in which it can deal with the safety of staff and the safety of prisoners. The number of serious assaults on our staff went down to two in the last financial year, down from 11 in the financial year before that. Part of that is as a result of the staff safety project, and part of it is as a result of the razor blade project and change in policy, which now means that people like George Baker are not allowed to retain and store razor blades in their cells so that they can then make them into weapons. That has been a standout success as there has been a 61.5 percent reduction in attacks using razor blades. Of course, it is also a way of dealing with people who sometimes have suicidal tendencies to make sure that we try to keep them safe.

Cellphone blocking, which was started under the previous Government, has been completed under this Government. The New Zealand Department of Corrections is the first such department in the world to have this in all of its prisons. That is a fantastic achievement. I also have to congratulate the technology sector on the way in which it has worked with corrections, and continues to do so as technology consistently improves. I was in Australia recently for a meeting with other corrections Ministers and I was thrilled to see that a New Zealand Government - owned company, Kordia, has been asked to be the lead adviser for the Australian states on how they can bring in cellphone blocking. As a Kiwi Minister it was absolutely marvellous to be able to sit there and say “Isn’t it great.” I did not even once remind the Australians that it was a New Zealand company, but everybody knew, they just were not saying.

In relation to my other major portfolio, police, it is also marvellous to be the Minister of the finest police in the world. [Interruption] I know that Mr Cunliffe might think that that is going a bit too far, but it is not. I ask him to name me one other police force in the world that New Zealanders would rather have. The fact is that there is no other. Our New Zealand police are renowned for their lack of corruption and the fact that they are respected by people from one end of the country to the other. I am sure many people would be very proud to be the Minister of Police. I consistently come across people who want to thank me for the work of the New Zealand Police. I do not want to take credit for it, because it is not actually my work, but I am pleased to be able to say that as a Government we have backed the police. When the police needed Tasers, we got them Tasers. I have no idea why it took the Labour Party about 5 years of fluffing around and trying to work out whether the Greens would support it. Who cares whether the Greens support it; the people support it and that is what we should do. It is the right thing to do. It is good to have a Prime Minister who consistently backs the police and does not blame them when something goes wrong because some criminal has done a particular activity that has caused harm. It is great to have such a Prime Minister in the Rt Hon John Key, who gets out there and backs the New Zealand Police, and who backs me when I have to go out there occasionally and take the odd hit for the police.

I think it is great to look at some of the innovations that the police are bringing in. Obviously, this Government has supported them with a raft of legislation. Police safety orders are one of those measures. They have been in for only the last month or so. The New Zealand Police have taken to them like ducks to water. They have issued a couple of hundred of these orders and have been able to stop family violence before it has got to the stage where people’s lives are being put at risk or where people are being injured. These orders are already working well. The New Zealand Police have been very keen to take up any opportunity that they can in order to deal with the dreadful plague of family violence that we have in so many homes.

The police have also taken up a whole lot of different work streams. Case management projects, rostering to demand, the national crime reporting line, and community neighbourhood policing are all innovations that the police have been trialling around the country, and most particularly in Counties-Manukau. The police have been working with other agencies to try to do better work for victims, particularly the victims of child abuse. I know that that work is continuing.

We are very lucky and very well served by the New Zealand Police. We always know that the 12,000 sworn and unsworn police officers—our constabulary and our employee staff—joined the police force for the right reasons. I am very proud to be their Minister. I am very proud to represent them from time to time, particularly around the Cabinet table. I know that they are the finest police force in the world.

Hon DAVID CUNLIFFE (Labour—New Lynn) Link to this

It is truly a privilege to follow Judith Collins, the most humble and modest Minister of Police and Minister of Corrections in the entire Western World. We have, of course, the most uncorrupted police force in the whole world, and that is all the Minister’s own work! I am gratified that the Minister has got Tasers for the police. Next she will want lasers, then she will want bazookas, and then she will want Sherman tanks for our bobbies on the beat. I am thrilled that the Minister has managed to lock up an extra 50,000 prisoners.

Soon she will be personally locking up the whole of Wellington—ka pai, kia ora, te Minita. It is almost as embarrassing as Nick Smith lecturing our departed former colleague about mental health issues. That would be funny if it were not so sad. He was the man who was the deputy leader of the National Party for about a day and then had to have 3 weeks’ stress leave. So let us not hear from members on that side of the House about stress in politics.

We all know why Nick Smith was stressed, do we not? It was because there was a little vote for the leadership, and the majority of one changed at the last minute. Let us just recall who that one was. Who was to be Bill English’s right-hand man, then mysteriously became Don Brash’s right-hand man? It was none other than the “Prince of Darkness”, the Svengali of the National caucus: John Key. That is why “Honourable English” and “Right Honourable Key” do not take tea to this very day. It is why “Honourable English” says: “We will loosen foreign investment.”, and “Right Honourable Key” says: “We will tighten foreign investment rules.”, and it is why “Honourable Key” says: “It will be an aggressive recovery.”, and “Honourable English” says: “It will be a bumpy ride.” They do not take tea.

The lingering stresses of that time are with us still, and that is one reason why this Government has no plan: its top two Ministers cannot agree on one. Therefore, they lurch from polling and focus group to focus group and polling. I had to pinch myself in this debate, because I thought I was in a parallel universe. I found myself agreeing with Sir Roger Douglas for about 4 minutes of his speech, when he was talking about the importance of principle, of getting one’s bearings, of doing what one thinks is right, and of making a difference for the sake of the country. I agree with him on all of that. I also agree with him that polling is helpful to teach one how to sell it and market it when one knows what to do. That is not what this Government is doing, and he is absolutely right about that.

What this country needs is a strategy. It needs an economic plan, because every New Zealander knows that we are not making it. New Zealanders know that something is seriously wrong in the State of New Zealand, to quote from Hamlet. They know, when they are standing in the cold winds of winter outside boarded-up shops—and 30 percent of the premises in downtown Auckland are empty—that this is no kind of recovery. The families in Kelston and New Lynn in my electorate know, when dad loses his job and they are living in a caravan, that it is no kind of recovery.

When this Government is talking about the brighter future and turbocharging the economy, I say that it should tell that to the people who do not have their own home, who do not have a roof over their heads, and who cannot afford to pay for the groceries while this Government is borrowing to give a third of the tax cut money to the top 5 percent. A third will go to the top 5 percent, and the Government is borrowing to do that—and it lectures us about economic strategy!

The New Zealand people are sick of Government by focus group. They are sick of poll-driven, stop-start flip-flops. They are sick of mining schedule 4 conservation land, firing workers at will, cycleways to nowhere that have created no jobs, and a 2025 taskforce that did not see the light of day. We can always tell when a Government is on the back foot, because to explain is to lose. Somebody should have told the National research unit, when it was writing the key lines for this debate, that to explain is to lose.

That is why it is embarrassing for those members that Bill English, in John Key’s absence, had to reiterate what their so-called strategy was. We took notes, because no New Zealander can work it out. Here is what those members said. They talked about tax reform, infrastructure, deregulation, attacking workers’ rights, and slashing public services. Let us go through them one by one, starting with tax reform. Rebalancing failed. Property depreciation was underdone on private residences, overdone on business assets, and overdone on short-life depreciation. The Government missed $2 billion worth of avoidance rorts on loss attributing qualifying companies, and it lectures us about tax reform!

With regard to infrastructure, it was the previous Labour Government that trebled the investment in infrastructure. It was multimodal, for our roads, our railways, and our ports. It is this Government that has merely continued the level of spending, but it has diverted it 12 times to the Kōpū Bridge, and now the election plan for the new member for Rodney, Mr Joyce, is based on the “holiday highway” to Wellsford. Fantastic! And those members lecture us about infrastructure!

Mr Nick Smith talked about deregulation. Deregulation is like having a hedge and giving it a clip once a year. Of course we clip the hedge to keep it back and at bay, because otherwise it tends to grow, but clipping the hedge is not ploughing a field or landscaping one’s garden. It is just a hedge. Deregulation has its place. It is something that happens every year to keep the public sector in good order, but it is not a growth strategy. Someone needs to tell the Government that deregulation is not a growth strategy.

Then there is the issue of attacking workers’ rights. If the Government could not mine conservation land, then it will mine the well-being of New Zealand workers by giving the right to any boss, from the biggest Fletcher Challenge or Fonterra to the littlest corner dairy, to sack their workers without notice, without cause, without the right to take a personal grievance, and without explanation in the first 90 days of employment.

I predict that there will be a lot of 89-day wonders in the workforce—a lot of 89-day wonders wondering why they got the boot. It is a plan to drive down wage rates. What is that strategy about? Will we get rich by trying to catch up with China on low wages—$1 a day or $1 a week? How low is low in the National Government’s limbo dance for worker degradation? That is not a strategy. I am looking at those members opposite, with their heads hung down. Where is the—[Interruption] Oh, “The Maestro” is awake. “The Maestro” in the back row, the brilliant architect of the Mt Albert campaign and the motorway to Mount Eden Prison, is awake. Thank God somebody is.

It behoves every responsible Opposition to say what it would do if it had the chance, and the Labour Opposition is up for it. Labour has been working hard in the background. We have had policy working groups for Africa, and this Government is in trouble, because when our plan hits town the New Zealand people will see the difference between poll-driven panic and proper policy.

Here is a foretaste in the economic area. No. 1 is a proper growth strategy, and that includes investment in research and development, not cutting research and development tax credits; fixing the innovation pipeline; and developing a productivity framework that covers capital, skills, and technology. Rolling out ultra-fast broadband would be a change. What an oxymoron! There is nothing ultra-fast about that roll-out; it has been 2 years and they have not put an inch in the ground. It is time for a reshuffle for Steven Joyce.

Labour will invest in clean technology. We will leverage our clean, green brand to create jobs, build market opening, and encourage exports with a proper economic development strategy, which the Hon David Parker will lead. We will have a proper rebalancing of the economy. We will invest to close the savings gap, build our domestic savings industry, not cut KiwiSaver, pre-fund New Zealand superannuation, push harder on the tax system, and stop the rorts. It is obvious—stop the rorts and remove distortions.

We will walk the talk on fiscal responsibility, including intergenerational equity. We will not put the cost of superannuation on our kids because we cannot tell the truth to their parents. We will close the external account gap, which is partly exports, partly savings, and is a lot about owning our own future. Otherwise, the one thing that John Key will get right—honourable—is that we will become tenants in our own country. We need Labour’s plan.

Hon ANNE TOLLEY (Minister of Education) Link to this

If that speech by David Cunliffe had been made at a job interview, I would have said “No thanks.” [ Interruption] In fact he is; he is quite a nice guy, I suppose. But I stand here as the Minister of Education in a Government that is serious about raising student achievement. We are serious about making sure that our children leave school with the skills that they need in this modern, 21st century.

I start today by taking us back in time: not too far back; just to the start of the previous Labour Government. Shortly before that time the then National Government had commissioned research from a team of researchers from the school of education at the University of Auckland. They looked at two communities in South Auckland, Māngere and Ōtara, and their research was called Strengthening Education in Mangere and Otara. They were looking to see how they could intervene: at the sorts of interventions that would be needed in schools in order to lift achievement by Māori and Pasifika children particularly, but also by children who were living in a low socio-economic environment. I refer to the third report; there were three reports out of this research. The third and final report, which was published in 2004—so in the time of the previous Labour Government—looked at three things: school governance, reporting to parents, and perceptions of Pasifika student achievement. I will pay particular attention to the conclusions that the researchers came to on reporting to parents.

The researchers say in the executive summary: “The development of a partnership between schools and their communities formed a central tenet of the reforms of education administration”—that is, Tomorrow’s Schools—“… This partnership was to be based on the free flow of information between schools and their communities.” The study examined, described, and explained the reporting practices of schools in Māngere and Ōtara. It “sought to answer the research questions, ‘To what extent did the reporting practices involve parents/whanau as educational partners with the school?’ ”—does this not have a ring of familiarity to it—“and ‘What difficulties were experienced by school personnel and parents/whanau when changing their reporting practices in the directions required by the new regulations?’ ”. The first part of the study found that “student achievement was likely to be evaluated against implicit individual or class-based referenced standards. As a consequence, parents of under-achieving children were frequently misled about their children’s achievement levels.”

The study published a very famous story called “Lita’s Story”, which was an amalgam of the stories that the researchers had heard in Māngere and Ōtara. It was basically about Lita, who arrived at middle school 3 years behind her peers in her reading comprehension, and about 1 year behind them in her reading accuracy. But neither Lita nor her parents or family knew about this. They did not know about it because, first, despite the fact that Lita loved her primary school—she felt safe and secure there, she loved her teachers, and her parents were supportive of the school and attended all the events—the teachers at her school had treated Lita as an individual, starting with what she could do and carefully taking her on to the next level when they believed that she was ready. Apart from the reading assessment that the school did when Lita was 6, it really did not know how her achievement compared with national standards, because it did not have the tools needed to make those comparisons, and some teachers did not think that they were necessary anyway. Second, the school had a policy of not saying anything that was negative in school reports. This meant that the teachers described only what Lita could do, and do well. As a consequence of that, neither Lita nor her parents had any idea of how she compared with other children throughout New Zealand of the same age.

Why do I bring up that research? What happened to Lita in the story? She went on to high school, and she failed. She left school without any qualification, and this National-led Government has heard the same story over and over from parents. The previous Labour Government had that research. It knew that one in five children was failing in our education system, that 150,000 children were being failed by the education system, and what did it do about that? That Government ignored the research. It had strategies and initiatives that piled up on teachers’ and principals’ desks, but it did not address the key issues that the research had shown needed to be addressed for kids —not what teachers needed, but what kids needed. What do kids need? They need honesty. They need their parents to know what they are doing well in, what they are not doing well in, and how their parents and their teachers will change the experience of those kids in the education system. That is what the research had shown that the kids needed. And did the previous Labour Government give that to them? No. For 9 years it sat on research like that, and now the Labour members have the gall to stand up against us when this Government says we have talked about the tail of underachievement for too many years.

Too many parents have told us that they wanted to know about how their children were doing, and they have said that if they had known that their children were falling behind, they would have taken some action and given them some help. Too many kids like Lita have left school without the qualifications that they need, and they are now on the dole without any qualifications and without hope of employment. This Government said it would not stand for that any more. We said we would have national standards that are aligned to National Certificate of Educational Achievement (NCEA) level 2, and we would have that as a goal for every single child in New Zealand.

Hon DAVID PARKER (Labour) Link to this

The Minister of Education was quoted in the House today by Mr Mallard as having said that it is disgraceful that one-fifth of all students are in the bottom 20 percent of student performance. Unfortunately, that grasp of statistical logic is matched in her Cabinet only by Mr Brownlee, because in respect of students it will always be the case that one-fifth of students will be in the bottom 20 percent of performance. It can never be anything else. Sadly, this lack of grasp of the fundamentals of portfolio extends beyond Mrs Tolley into the economic development portfolio, which Mr Brownlee is responsible for. New Zealanders—not just politicians but also journalists, and the wider public—are starting to pay attention to this issue because it has become increasingly obvious that the National Government does not have any plan to meet its promise of catching up with the fortunes of Australia and closing the wage gap with Australia by 2025.

Why has that become obvious? Well, of course, the central plank of the Minister for Economic Development’s part of all that was the step change that he was going to bring about in the New Zealand economy by mining national parks. That was such a silly idea in the first place that it was eventually unpicked. After 40,000 people marched down Queen Street in Auckland, and after similarly large protests in other parts of the country, from Invercargill to the north, the National Government did what it always does and caved in to public pressure. That was the right decision on this occasion, because it was always a nonsense to mine in national parks and other schedule 4 areas like the Coromandel, but it laid bare the cupboard. The cupboard is bare when it comes to realistic ways in which the Government will bridge the income gap with Australia.

The Minister for Economic Development came down to this House and tried to pretend that he was on top of his portfolio. He told the House that the wage gap was narrowing. The media were, of course, all over that immediately, because it was obvious, no matter what way we measure it, that the gap has been growing and has not been narrowing.

This is an important debate to have at this time because this debate is about the estimates. This is when Parliament votes taxes to be gathered and spent by the Government. Unless this Parliament has confidence in what the Government is doing to achieve its aims, this motion that the House is voting upon should go down. This is the second Budget of three that will be delivered by Bill English and we have to ask whether the Government is measuring up. Of course, Mr Brownlee has shown that the Government is not. He has shown that he has not even got a basic grasp on whether the gap is getting bigger or smaller. He said that the gap is getting smaller.

What did the third-party commentators say about that? The Dominion Post said: “Stats prove Brownlee wrong”. That was pretty clear and pretty definitive. On that same day, John Key came down to the House, after that headline had been in the paper, trying to say that black was white—trying to say that the gap was narrowing. He came to this House and thought that we were all so dim that we would accept the statistics that he tried to palm off to the House. Then he was forced to table the document from which he was quoting. That document showed that even in the best massaged figures that the Government could produce, the gap was getting bigger. That was the same day that the Sydney Morning Herald had as one of its main headings: “NZ wage gap with Australia widens”. The article read: “Australian workers are being paid even more than their Kiwi cousins since National became the Government.”

Another interesting paragraph further down noted that Australia’s top tax is higher than New Zealand’s, and the reason that New Zealanders were going to live in Australia was wages, not taxes. Mr English should take a lesson from that. Tax policy is not economic policy; it is but a subset of it. The Government does not have anything other than tax policy when it comes to economic policy—that plus a bit of reform of the Resource Management Act that the Government pretends will somehow cause the gap to narrow with Australia. What did the television stations say in respect of John Key after he came to the House and tried to blather his way through and deny the reality that the gap has been growing rather than shrinking? Under the headline: “Key too selective and slippery”. TV3’s Duncan Garner said: “John Key should stop the slippery act—immediately. … Yesterday’s performance in Parliament was too selective and too slippery for him to get away with.” So it is not just the Minister for Economic Development who has not been on top of things; the Prime Minister has not been, either.

What did the New Zealand Herald say in the weekend? Its editorial on this issue stated: “Trudging along the same old road is not going to produce the desired outcome.” It noted that the stats showed that the gap has been growing with Australia, rather than shrinking. Then it said that “This provided its own commentary on the Government’s attempt to close the gap, which so far has encompassed little more than tinkering with the Resource Management Act and suchlike.” Again, the editorial in New Zealand’s largest newspaper has said that, really, the Government is only tinkering. It has no significant plan to bridge the income gap with Australia. The editorial went on: “In reality, the Government fears the political damage that would result from …” anything more significant. “This accent on short-term popularity has also engendered a cautious approach in other areas that might deliver long-term benefit, including, most recently, the mining of conservation land.” The final sentence of the editorial really sums it up: “But when relatively little is done, relatively little happens. Things can even go backwards.” That encapsulates the story of this Government. Relatively little is being done, and relatively little is happening to bridge the income gap with Australia. As a consequence—

Hon PAULA BENNETT (Minister for Social Development and Employment) Link to this

The speech made by the member who has just resumed his seat, David Parker, was a fine example of a speech from a party that lacks vision, lacks direction, lacks a leader, and needs to step up and step forward for New Zealand. When it comes to Vote Employment there is a lot of talk at the moment about employment opportunities for young people, for those who are struggling most, and for those who are feeling the effects of the recession.

We might think that the Opposition would be holding the Government to account, and we just heard a fine speech on how it wishes to hold people to account and everything else. At the estimates debate this year at the Transport and Industrial Relations Committee the previous Minister for Social Development and Employment, the Hon Annette King, did not even ask for Vote Employment to be debated. Labour purports to be the party that speaks for workers and wants to step up on employment, but it did not even ask the Minister to present on Vote Employment. I ask members to ask themselves how that is asking the questions and identifying problems.

Last year the Opposition did ask for Vote Employment to be debated, so I fronted up, but in the more than half-hour that I was there not one question on employment or unemployment was asked. I suppose after that performance last year Labour members decided to simply wash their hands of it and to not even ask questions about Vote Employment and what it means for people who are trying to find jobs.

In all fairness, I have to say that Annette King is probably kind of busy at the moment. She is trying to rally a party that is falling to bits. She is trying to find some meaning. Her name is not being bandied around as leader, though, which would be pretty hard for her to take, I am sure. Let me quote Annette King directly from last week, when the Chris Carter saga was all unfolding. She said: “I don’t know but, as you know, I am a former minister of police and let’s say we are following some leads.” Was that the handwriting on the letter or the fact that Mr Carter was on camera? Annette King is a former dental nurse, so was she checking dental records? Maybe she was out there seeing whether he had kissed the envelope and whether she could trace it back through some sort of saliva test. That is what Ms King was spending her time on last week. As I say, she did say that as a former Minister of Police she was following some leads.

Annette King is stepping up and holding me to such account that she has withdrawn from the Social Services Committee. Let me put that in perspective: the most senior Labour member on that committee now is Dr Rajen Prasad.

Hon MARYAN STREET (Labour) Link to this

I would find it easier to accept a lecture from the member who has just sat down, Paula Bennett, if I was persuaded that she cared about some of the people whose lives are quite literally in her hands. If she cared enough, then perhaps she would not be taking a 6-week stint, on full pay, to go to America later in the year to attend something that may or may not enhance her ability to do her job. If she had any sense of urgency around people who live on benefits and who are unemployed, then I might have some sympathy for her. I do not get any of that from anything that member says.

A plan is a systematic timetable that gets people towards a goal, and it is very clear that the Government does not have one. The Government simply has a vacuum where a plan should be. A plan requires some strategic overview that links and binds actions together in pursuit of a goal. That means having enough of a vision to join the dots, to be able to see how one portfolio relates to another and how one decision impacts on another, and to be able to guide those in concert to achieve the end goal.

We do not have a plan from this Government. We do not have a plan in this Budget, because the Government has no idea what its goal is, except to get closer to Australia. The Prime Minister has backed away from that goal in recent days because it is clearly becoming less and less achievable under this Government.

To have a plan, to have some sense of strategic forward movement, there needs to be enough vision to join the dots. I will give a couple of examples. This Government has had two ideas about how to improve economic performance. The first was mining the conservation estate—that is, digging up our precious territory, which is part of our tourist attraction—and the second was building a cycleway. It had two ideas: dig up the conservation estate and build a cycleway. Did anybody get the Prime Minister to talk to himself about the connection between his role as Prime Minister and his tourism portfolio, or the connection between Bill English’s role as Minister of Finance and the Prime Minister’s own portfolio as Minister of Tourism?

Here we have two ideas: first, to mine the conservation estate, especially those areas that are most precious and are under the greatest level of protection; and, second, to build a cycleway. I will give the House an example of how those dots are not joined; I will give a very, very local example. I am talking about Dun Mountain in Nelson, where the Government still insists it is going to continue with prospecting, despite the back-down—the humiliating back-down—on the grand plan for improving economic performance. But the Government was also promoting and announcing a few months ago the cycleway around Dun Mountain. One can only assume that now there is going to be a cycleway to view some open-cast mining. Tourists will come to our cycleway and look at our mining. They can look at how we are digging the wealth out of this country from underneath its surface, instead of cashing in on the tourism potential, developing the cycleway so that it can earn tourism dollars. Tourism is one of our biggest earners—if not the biggest earner—of foreign exchange. This is a classic example of the dots not being joined. The Government will continue to prospect on Dun Mountain, regardless of the humiliating back-down, and continue to build a cycleway. This is a nonsense.

I will give the House another example. We had cuts to early childhood education. We will dumb down early childhood education because the Government says that we do not need 100 percent of our early childhood educators to be fully trained and qualified. It says that we do not need our 3 and 4-year-olds to have the best start possible, with the best-qualified early childhood teachers; we do not need that any more. I ask the Government to take a nanosecond to join the dots between early childhood education and rates of incarceration. I tell Mr Key to join those dots. Everybody else in the community can join those dots but the Government cannot.

If we do not invest heavily in early childhood education, as the previous Labour Government did, we do not give children the best start possible. If we do not give children the best start possible, they will not be able to maximise their education opportunities. If they cannot maximise their education opportunities, they will not be eligible for employment. If they are not eligible for employment, they will be unemployed. If they are unemployed, they will get into trouble. If they are unemployed, they will not be able to sustain themselves and their families, and they will head down the inexorable path to incarceration. That is called joining the dots, and the Government seems incapable of doing it.

These estimates have the very real potential to cause, in a very short time, Vote Corrections to be the largest vote that this Government expends on from general taxation. That will be the legacy of this Government. Where Labour would put money, and did put money, into early childhood education—[Interruption] I have not begun on tertiary education yet. Labour invested in early childhood education, because of that long-term vision and the long-term flow through. This Government is chipping away at that investment and it is eroding it. It prefers to spend money on Judith Collins’ portfolio of corrections. That is the portfolio that should have the least money put in it.

I will give one further example; it relates to my shadow portfolio of trade. Somehow, Mr Key cannot join the dots between an attack on workers’ rights in New Zealand and putting the trans-Pacific partnership in jeopardy. I will try to join the dots for the Prime Minister. If he is going on the attack on union rights and on access to workplaces by unions, and if he is going on the front foot in order to shore up his redneck contingent, he needs to realise that the New Zealand Council of Trade Unions does not operate in a vacuum; it operates in an international movement. Richard Trumka, who is from the American Federation of Labor and Congress of Industrial Organizations, was going to visit here, but he has pulled his visit—

Hon STEVEN JOYCE (Minister of Transport) Link to this

I rise to speak in this debate because I am very, very excited about the initiatives this Government is taking to grow the New Zealand economy. Before I continue, I must point out to the previous speaker, Maryan Street, a certain fact of life. If the Department of Corrections is growing to the extent that it is, I ask her whether that is the fault of a Government that has been in office for 22 months, or of the previous Government that had been in office for 108 months prior to that. It was that previous Government that left the legacy of the growing numbers for the department to deal with. In fact, soon after I got the opportunity to sit around John Key’s Cabinet table, we were shown a graph that showed the legacy of the spiralling numbers of prisoners left by the previous Government, which we are now dealing with. We have already managed the numbers down, and we are looking to manage them down further. But that legacy of the previous Government sits in front of this Government right now.

Right across the public services that New Zealanders value, the big issue is getting New Zealand to grow faster. Getting New Zealand to grow faster is how we will afford those services. The Government has a massive economic growth agenda that is unfolding as we speak—

Hon DAMIEN O’CONNOR (Labour) Link to this

It is a pleasure to follow Mr Joyce, who started his speech by saying that the agenda of the Government was unfolding day by day. I will tell members that the way I see it is that the Government wants to build more prisons. The Minister of Corrections said that here in the House. Those members think that that is success. Not only will they build more prisons, but also they will have them in private ownership. That is what the Government’s agenda is. It has also indicated that it will privatise newly built schools. Mr Joyce said that he will build more roads. Well, the only roads that he is building are the ones around the cities. The people in rural New Zealand who create the wealth know that their money is being taken to fund Mr Joyce’s city roads. The only agenda that is going on here is that National is putting more money towards its mates who funded its campaigns. That is the simple fact of the matter. National’s mates will build the prisons, build the schools, and build the roads.

What those members want is higher unemployment and lower wages. I ask whether members know that that is the economic agenda that National is rolling out. We have seen higher levels of unemployment and declining wages. That is not good news for New Zealand. When will the National Government wake up to that reality? Mr Joyce had the stupidity to say, literally 3 minutes ago, that lower interest rates allow the economy to grow. I tell Mr Joyce to wake up. The official cash rate has just been put up and it is likely to go up further and further. The inflationary pressures that this Government has brought to the economy through the rise in GST and the emissions trading scheme is likely to drive up interest rates further. That means that the only thought that Mr Joyce brought to this House is that lower interest rates allow the economy to grow, but he has it wrong.

I must speak on behalf of the rural economy. I picked up a paper today, and the heading was “Does the ‘farmer’s government’ give a damn?”. It could read: “Does the ‘farmer’s Government’ have a clue?”, because it is the same thing. Rural folk up and down this country are asking what this Government is up to. They voted in National as it has been called the “farmers’ Government” for many, many years. They voted National back in. They did that because they were promised that the emissions trading scheme would be scuttled—no emissions trading scheme. The farmers up and down this country thought that National would scupper the emissions trading scheme. Why? Because National campaigned against it. Because it ranted and raved against climate change and the emissions trading scheme, the farmers understandably thought that National would scupper it. National also went up and down the country saying that it absolutely opposed any increase in taxes. Maybe that is true, except that it has put up taxes as GST has gone up. It said that it would cut bureaucracy and cut costs, but it has not. If the step change that it was advocating was a step down, then National should have been upfront about it. For most workers in the country, its economic agenda is a step down.

At least with Labour under Helen Clark we had clear and consistent leadership. Do members know what farmers are saying up and down this country? Mr Guy knows this. They are saying that we have confused and contradictory leadership from National. They do not know whether their Government gives a damn. Those are the facts, and all those members over there know that because they are getting that feedback. The reality—and we were able to expose it today—is if that is one’s plan for building the recovery and for an economic step change, little wonder their leadership is confused and contradictory. That is the fact. People have seen U-turns on so many issues now that National cannot tell a U-turn from a circle. I am guessing that National will go round and round, again and again.

Let us go back to the emissions trading scheme. Contrary to what farmers and rural folk thought would happen, National passed a dumbed-down emissions trading scheme. It is a Clayton’s emissions trading scheme that many of us think will be ineffective. It will not drive behaviour change, but that is what we should be attempting to do. Across the globe, the view is that we are emitting too much and we should reduce that. Does the emissions trading scheme passed by the National Government against the wishes and expectations of rural New Zealand do that? No, it does not. The question is where to now.

CRAIG FOSS (National—Tukituki) Link to this

Mr Goff is a nice man, but he just cannot win at the next election—so said the Hon Chris Carter just last week and once or twice over the weekend. I think the Hon David Cunliffe thinks that Mr Goff is a nice man, but he just cannot win at the next election. I tell members who missed it that Mr Cunliffe gave a speech on the letter “T” earlier on. He is the last person who should give a speech on the letter “T”, and he is on very, very slippery ground if he tries it. I will not go any further.

AMY ADAMS (National—Selwyn) Link to this

As the previous speaker, Craig Foss, just said, it is a pleasure to take a call in this estimates and appropriations debate. It is a useful time, actually, to stop and look back at the 2008 election, when this National-led Government under John Key came to power. When New Zealanders elected us, as they did overwhelmingly in 2008, to lead this country through the recession, they did it on a platform of aspiration and ambition. We did not get mired in the mud-slinging and negative campaigning from members on the other side of the House. We stood up—John Key stood up and our members stood up—and said we thought that New Zealand could do better than it had been doing. We had high hopes for New Zealand, and we offered to New Zealanders a positive vision for a way forward and a package of economic growth that could lead them into the future. That package was the key to our plan, because we knew that in order to be ambitious for New Zealand, and to deliver more for New Zealanders, we had to address the issue of economic growth. That was what had been holding this country back for so long.

Let us take a moment to go over the issue of economic growth, because from listening to some of this debate this afternoon it is very clear to me that members on the opposite side of the House neither know what it looks like and what it means, nor have any clue whatsoever about how to deliver it. So let us have a look at it for a minute. Economic growth is important because it means creating jobs. That is what it means in a real sense. It means more Kiwis being in work. It means having higher incomes; it means lifting the incomes of New Zealand families. That means that they can get ahead under their own steam and are not reliant on handouts from the State, so they are not caught up in the culture of entitlement and of asking what the Government is providing for them. No, we say people should work hard, get ahead, and accept responsibility for their own destiny, and we will back them. That is what economic growth means to us.

Economic growth means getting this country back to having Government surpluses. Why is that important? When we get this economy back to showing Government surpluses, it will mean that we have choices. We will have choices about how to deliver the sorts of public services that New Zealanders deserve. We will have choices about how to deliver the best in education, the best in health—