Financial Review Debate

The CHAIRPERSON (H V Ross Robertson) Link to this

The Standing Orders provide for the financial review debate to be the Committee stage of the Appropriation (2004/05 Financial Review) Bill. The debate is organised into three distinct parts. It commences with a debate on the annual financial statements of the Government as reported on by the Finance and Expenditure Committee. Once this debate is disposed of, the Committee debates individual financial reviews of the departments and Offices of Parliament, as reported on by select committees. There is a list of financial reviews available for debate on the Table, along with copies of the select committee reports, for members.

The debate on the Government’s financial position may be fairly wide ranging, but the debates on the individual financial reviews of departments and Offices of Parliament should be relevant to their performance in the 2004-05 financial year and their current operations. Members should note that they may have no more than two calls on each financial review.

Four hours is allowed for these two segments of the financial review debate. At the conclusion of the 4 hours, a single question is put on the provisions of the bill. There is no amendment or debate on this question. The Chairperson reports the bill to the House and it is set down for its third reading forthwith. There is no debate on the third reading.

I ask members to turn to the report of the Finance and Expenditure Committee on the annual financial statements of the Government. The question is that the report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June be noted.

JOHN KEY (National—Helensville) Link to this

Let me start by saying that the financial statements in relation to the year ended 30 June 2005 will make a lot better reading than the financial statements for the year ended 30 June 2006. As we know, this Government has presided over an economy it inherited—that it did absolutely nothing to create—and over the 6 years that it has had the economy under its control, it has done nothing to improve it. It squandered the conditions and failed to pick up the most fundamental of challenges around our economy—the ability to make sure that New Zealand is competitive and goes forward with a spring in its step, and the ability to cope with the down cycles that happen in every economic cycle.

I contrast that performance with the performance in Australia. What I saw, and what New Zealanders see every day, in Australia is a Government committed to lowering taxes and the tax burden, to pouring billions of dollars into infrastructure, to welcoming the private sector, to fixing tertiary education, and to fixing outputs from skills. What have we seen from this Government? We have not seen a single private toll road constructed in New Zealand. The energy sector is in complete disarray. The Minister of Finance, or the Minister for Tertiary Education—wearing one of his many other hats today—is finally coming out and recognising that there is a major blunder in the tertiary education sector. We had a growth rate that was zero for the 6 months of last year and is likely to be considerably poorer for the balance of this year. Yesterday Treasury told the country that growth would be weaker than it thought. All of this has come from a Government that has had all of the revenue in the world to do some decent things, but has failed miserably.

What is even worse, and is probably even more alarming than that—and I know that it privately worries Dr Cullen a great deal—is a report in the “Business Herald” today about Fletcher Building, one of the icons of the New Zealand business community, that it is looking, with its advisers Credit Suisse First Boston, to move its head office to Australia.

New Zealanders might wonder why a company like Fletcher Building, which has been very successful, is considering joining many others like Lion Nathan and Nufarm that have picked up their head offices and moved them to Australia. Dr Cullen knows exactly the reason for companies doing that: our company tax rate is higher than the company tax rate in Australia. Our tax revenue is being hollowed out because Australian investors are snapping up New Zealand companies left, right, and centre. Those Australian shareholders want imputation credits and fully franked dividends. So a company like Fletcher Building, which can be and has been a very successful company, providing an enormous amount of ancillary business and growth in our economy, is looking at moving to Australia when it should be staying in New Zealand. I say that move, if nothing else, is a sheer sign of this Government’s failure in the last 6 years. The fact that Fletcher Building is looking at moving its operation is clear and demonstrable evidence that this Government has failed in the last 6 years. That company is not alone; many other companies are doing the same thing.

Today we came down to the House and we asked Michael Cullen, the Minister of Finance, the most simple question of all on the very same topic: does he support a business tax review that would be revenue neutral—that is, one that he has to take from one hand and give to the other. We asked whether that was the reason he is exploring these crazy options, such as a payroll tax, and looking at all these unusual things. The Minister of Finance—the man who has said: “The fiscal buck stops with me.”—could not even get up in the House today and tell us whether the whole aim of the business tax review is to be fiscally neutral.

When we asked him the question a couple of weeks ago, he came out with what I thought was a pretty interesting answer. When I asked him whether the review would be fiscally neutral, he said: “The review will determine what the review will do.” It was not one of Dr Cullen’s greatest lines, I have to say. He is known for saying better one-liners than that. Even though I may not have agreed with the comment about the “ideological burp”, at least it was half-amusing when he said it. He told us that the review will decide what the review will do—even though he told us that he actually decides whether these things happen and that the fiscal buck stops with him.

Well, the Minister of Finance is losing it because he does not even know whether he will still be the Minister of Finance when Budget 2007 and Budget 2008 roll around. I do not think Helen Clark was trying to give him the message publicly. Journalists asked me that question yesterday and I answered that it was a bit unkind to say Helen Clark was trying to move Michael Cullen on permanently—she just does not know whether he is coming or going.

Dr the Hon LOCKWOOD SMITH (National—Rodney) Link to this

Yesterday Treasury warned us of a possible recession. Treasury says the economy has stalled. We know it stalled in the second half of last year, and Treasury says it does not look as if it will grow much this year. I think it is fair to say that all the barriers, hurdles, bureaucratic red tape, and the huge tax grab of this Labour Government are finally catching up and throttling our economy.

A classic example of one of the things that is throttling New Zealand’s economy is Transit New Zealand’s assumption of the role of the ultimate dictator of development. I could do no better than to read to this Committee what the Rodney Economic Development Trust has said. The trust is a group based north of Auckland that contains some of the serious business hitters north of Auckland, including some of the major business players who have business investments around most of the North Island. The trust states: “It is not the people of Rodney who are determining our district’s future, but Transit New Zealand. They now decide where people will live, where people will work, where we will develop our infrastructure, where our children will go to school, how we use our land, where business will locate.”

Transit is now dictating totally the development of the Rodney district. Yesterday I met with a constituent who has a proposal for a major investment in part of Rodney. It would require the purchase of land. He does not know whether to go ahead and buy that land, because he is worried that Transit will say he cannot go ahead with that development and, therefore, he cannot afford to buy the land if he cannot go ahead with the development. That is the extent to which Transit now totally dictates investment north of Auckland. That example is the tip of the iceberg. At present there is $2 billion worth of investment ready to go ahead in Rodney, which would create a lot of growth. Do people know how much of that growth can go ahead because of what Transit dictates? One-tenth of that investment can go ahead, because of Transit’s dictating and saying no to 90 percent of it.

The Rodney Economic Development Trust also said that only 15 percent of the knowledge economy zone in Rodney—which is the largest industrial development in Auckland—can go ahead, because Transit says it will not construct off ramps because it cannot connect that development to its motorway. So the rest of that development will not be able to go ahead.

I want this Minister, the Hon Dr Michael Cullen, to explain to this Parliament how New Zealand’s growth can go ahead when Transit is dictating and controlling so much development. Even in Helensville—in my good colleague John Key’s electorate—Transit has said a birthing unit cannot expand because it will not be allowed to have extra vehicles come on to Transit’s highway. That is how dopey this situation is becoming.

The economy and growth are being throttled. The Rodney Economic Development Trust has said Transit’s control has now cost Rodney 6,251 jobs. In just one area 6,251 jobs have been lost, and $129 million worth of export earnings are gone because of Transit’s dictatorship and Transit’s saying no to all developments. The President of the Labour Party, Mike Williams, is on the Transit board, and that is the extent to which cronyism and the Labour Party are now crippling and throttling our economy. It is not just the high taxes or the high interest rates that people are labouring under with this Government; it is also the direct control over and the throttling of investment by Transit New Zealand.

Do members know what Transit has said to the people of Warkworth? It has said that 50 years ago it built a bypass there and, because those stupid people have dared to build houses on the other side of that bypass, it will not build them another one. Imagine if Telecom had that attitude. I invite members to think back to the telephones of 50 years ago. In my patch we had party lines. One picked up the telephone receiver and said: “Working?”, and if no one said: “Yes I am working.”, one would ring the handle. If Telecom had said it would not put in any more infrastructure compared with what it had 50 years ago, we would still be on party lines and Telecom would be saying we could not have any more people live, invest, and work in an area because it would not put in any more infrastructure. That is what Transit is saying. Michael Cullen cannot hide behind Transit because, at the end of the day, this Labour Government funds Transit, so it cannot complain about loss of growth opportunity when Transit is crippling this economy.

SHANE JONES (Labour) Link to this

In speaking to the set of statements, I want to focus on three themes. Although members of the Finance and Expenditure Committee did not, obviously, have the pleasure of agreeing with each other, we had the pleasure of the Minister of Finance’s company, and that of the senior civil servants from Treasury. In particular, I want to direct members’ attention to an element that reflects the very moderate, if not conservative, approach that has been taken and that we are likely to see a great deal more of. I direct members’ attention to page 5 of this very lucid document, which reflects quite a great deal of sensible discussion.

A great deal of nonsense has been spoken about in relation to whether there is a ballooning number of either wages or bureaucrats, and about how we, as the Government, are doing precious little about it. I direct those members’ attention to page 5, where it is quite clearly stated that the Government and the senior advisers from Treasury have injected a tone and a note of moderation into future discussions to do with the personnel costs of the State.

Of course, this issue takes me on, as well, to respond to those unwise remarks made in relation to productivity. Yes, over recent time we have seen a great deal of growth and improvement in fortunes on the basis of labour utilisation rates, but there is now a great deal of focus on productivity. I have no doubt that, during the upcoming 12 months, when we exercise and show the moderation reflected on page 5, we will remind the key people—as Treasury and, indeed, the Minister of Finance have reminded people—of the importance of achieving more productivity.

But let us remind the many New Zealanders who are either listening or who remain concerned that a more balanced account is given as to what is happening in terms of our strategy to drive fine ideas. We had a fantastic tranche idea to use the use the term “dividend day” to describe 1 April, when the third tranche of our family assistance package was rolled out. It is something that was a key part to the election contest, but, indeed, it has been well and truly built into our fiscal projections. The group of people on this side of the House, when they conceive of the role of the State in relation to our economic stewardship, believe there are very few things more precious than those who have the role of raising children. The education, productivity, attitude, and aptitude of the next generation we are raising—I have more than a passing interest in this, having enjoyed the pleasure both of fathering and rearing seven children, and I look to many mokopunas on the way. However, Working for Families is an element that clearly distinguishes the way in which we conceive of our role in the wider debate about political economy.

A great deal of nonsense, including unwise statements made on websites, etc., has been spoken about our interest-free student loan programme. I can tell members that people up and down Te Taitokerau, throughout Auckland, and in a variety of far-flung places, are completely and utterly over the moon with the bold step our Prime Minister took in relation to the student loan scheme. It will cause a whole host of people to enjoy coming back to Aotearoa to join the great march of achieving productivity outcomes, but, more important, it will also remove a great deal of burden from the minds of parents and grandparents as they watch their children and mokopuna move on to university.

In relation to business tax changes, it is unfortunate today that a great deal has been said and that rather emotional and inaccurate words such as “secrecy” have been used in respect of the business tax change reform agenda. The reality is that when the civil servants are providing advice and when the Ministers are looking at options, they need the space, the scope, and, indeed, a small measure of privacy so that when public documents are being prepared for consultation, that process can be done on the basis that no injudicious or unwise things are thrown out into the public before the appropriate time. I hope that the very people who have been making those accusations and using, in a very silly fashion, emotional words such as “secrecy” bear in mind that a key element to our system is that officials must be able to give free and frank advice and that Ministers have the scope to take or reject it.

We have had the election, we have identified and have been very public about those things that we will spend our time on, and business tax changes and policies are an important element into the future. I look forward to the not too distant future when the sentiments that the people invested in can be shown to have been true.

CRAIG FOSS (National—Tukituki) Link to this

Where do we stand on the Appropriation (2004/05 Financial Review) Bill? We oppose it, of course. Why? Are we against investment in the economy? No. Are we against quality spending? No. But given the track record of this current Labour Government, of course we oppose the bill. We have to oppose it.

There has been a massive growth of taxpayer funds. We have referred to its misappropriation—to turn a phrase—which the Finance and Expenditure Committee discussed at some length throughout its deliberations. Even in spite of what we have just heard from the previous speaker, we have recently had Treasury’s forecast that the economy is stalled and has shrunk. That is not an ideological burp. They are hard economic numbers and the chickens are starting to come home to roost. How can that be? How can we be going into recession, as warned by Treasury and numerous other forecasters, after we have had a nominal GDP growth of 43.1 percent over the last 6 years, according to forecasts for 1999-2000 to 2005-06? The economy has grown 43 percent. Congratulations to the dairy farmers and lamb producers on helping us grow, but here is perhaps a clue. Core Government revenue grew 55.7 percent over the same period. That core Government revenue was taken from the productive part of the economy.

But why on earth are we going into recession, given the policies and the accolades that the previous speaker was talking about? This Government is spending and taxing us into recession. Again, it is not National Party doomsayers who have made those accusations. This is not spin from some public relations unit. These are hard economic statistics and fact backed up by Treasury and numerous other producers. Growth in the last quarter, December 2005, was negative 0.1 percent. Combine that with September 2005, which was plus 0.1 percent, and members will see that we are already in a flat economy of 0 percent.

There has been a lot of talk lately in various speeches around the place from various Ministers about economic transformation. What a massive admission of defeat! After 6 years of 43-odd percent growth, we have to somehow transform the economy? I tell Mr Cullen that that is a massive admission of defeat. I say to Mr Mallard that he is about to get a hospital pass, because he is about to inherit a bit of a lame duck, I feel. There is nothing to show for the 43.1 percent nominal growth we have had over recent years, which, again, was no thanks to, and in spite of, the current policies of the Government. We have nothing to show for it. Is this as good as it gets after such growth? In the 1999-2000 year $41.6 billion in revenue was taken by the Government. The 2005-06 forecast is $69 billion—money that the Government has decided it needs to take out of the economy to run affairs as it thinks it should. Yet hospital waiting lists are as bad as they have ever been. There have been no new roads and no real roading infrastructure has been invested in. Again, this bill is not an appropriation bill; it is a misappropriation into the welfare for families package. It should be called the “Kiwislaver Bill”.

With regard to electoral spending, there has been a large growth in misappropriation of public funds for election spending, which is under review by the Auditor-General. Where has that money gone? Is the 10.3 percent growth in Government administration in the December 2005 year not a mass misappropriation of funds? What on earth are all those people doing? Even given the growth and the statistics, with $69 billion - odd about to be taken from our economy by this Government to be redistributed, our OECD standings are exactly the same as they were about 5 or 6 years ago. In spite of about $18 billion more being taken by the Government out of the economy and in spite of the 43 percent growth in GDP, our OECD standings have not moved.

Other nations are rocketing up behind us. Previous socialist economies are rocketing up behind us and are totally rejecting the idea that someone earning $480 a week should have some of his or her taxes redistributed to some family earning over $100,000 per annum. People will reject that model; they know that it does not work, and, for the life of me, I cannot understand why this current administration keeps looking back to the past to find some solution to the future. That administration is wrong. If we keep looking to the past we will stay in the past. With growth at that rate there will be nothing left to redistribute. Is this the utopia that the current administration has taken us towards?

JOHN KEY (National—Helensville) Link to this

We know from this Government that it has run out of puff, just like the Minister of Finance has. That is why Helen Clark does not know whether the Minister will be in the job in another 12 months or 24 months. I can assure him that he will not be in the job in 30 months, because by then, at least, there will have been an election and he will be gone, along with a whole lot of his colleagues. They are destined to sit on some park bench somewhere to reflect on 9 years—6 years when they inherited an economy with which they could have delivered substantial changes to New Zealand, and 3 years when they sat around contemplating their navel, unsure of what to do.

My parliamentary colleague the Hon Dr Lockwood Smith talked very eloquently about the issue of infrastructure. Infrastructure is a very interesting issue as it relates to New Zealand. New Zealand’s infrastructure is failing us, and not just in roading. I heard a very interesting example just the other week about the New Zealand Herald, whose sales force used to achieve something like 14 calls a day around Auckland and now achieves six. That is not a productivity gain. Mr Jones can read some sort of clapped-out piece of research on productivity that ignores half the economy—the fast-growing bit around the public sector. He can ignore at his peril if he chooses to, as Dr Cullen has, the research from Treasury that told him: “We don’t know quite where you’re spending the $4 billion a year, each and every year, in health; we don’t really know what you’ve got for it, but we think you’ve got nothing, we think it’s delivered nothing, and we think that fundamentally you’re going down the wrong track.” We think that is called a productivity disaster. We are not surprised that Dr Cullen referred to the Treasury report as an “ideological burp”, although, funnily enough, Dr Cullen himself has made it quite clear that he will not keep funding a health system that is clearly out of control. He demands results from it, because he knows it is on the wrong course and it has failed miserably.

But my colleague Dr Lockwood Smith made a point around infrastructure that I thought was absolutely right. New Zealand cannot drive productivity and greater growth without infrastructure in our community. It is not just roading, it is around all sorts of areas of infrastructure, such as energy. We have a lakes system that is low. We are not building power generation in this country at the level that we should, that we demand, and that we need. The Government has no solutions at all. We are starting to see some very interesting mutterings and utterances coming out of places like the Commerce Commission, which runs the risk, I think, of frightening off some New Zealand businesses in relation to the amount of investment they might make.

It goes on and on. It goes around the area of telecommunications, and ultimately goes around the issue of water. New Zealand’s infrastructure cannot cope with the kind of growth that New Zealand needs. Yet we are seeing a Government that is quite happy to trade that position for a position that says: “We would rather have the support of the Greens, and therefore we will let the Green Party negotiate and draft probably one of the most important pieces of legislation in New Zealand’s history, the Land Transport Management Bill, even though we know that it will do very little.”

I want to make some comments in relation to Working for Families and the Inland Revenue Department. The department made a number of comments when it came before the Finance and Expenditure Committee. One of the comments that I think will prove very interesting over the next 12 to 24 months related to the number of New Zealand families that find themselves debtors of the Inland Revenue Department. I say that because “Welfare for Families”—the package the Government rolled out on April Fool’s Day—requires New Zealand families to estimate exactly their level of income. If they incorrectly estimate their income and therefore underestimate their paid income, they will be overpaid under Working for Families. A very similar policy was involved in Australia. That policy was rolled out, and Australian families ran up about $1 billion in debt. After 24 months those Australian families had to have their debts written off because they could not afford to repay them. When we raised this issue with Dr Cullen, he was kind enough to tell us that the Inland Revenue Department had made numerous changes and that those issues would not occur in New Zealand. The only small problem is that although the department has invested a little bit in technology, it does not seem to have the people who can ring to tell New Zealanders that they have been overpaid. They will be ringing past tense, so the families will be in debt anyway.

By the way, Dr Cullen might be a little alarmed to know that people in the department have been emailing to tell me that they are under huge pressure from the Minister to try to comply, even though they have no hope of doing it. These emails are telling us that those people cannot comply with the issues, and that New Zealand families will become debtors. What a disgrace it is to put families in debt.

RODNEY HIDE (Leader—ACT) Link to this

One of the interesting questions, as we look at what might be Dr Cullen’s final Budget, is what will his legacy be as Minister of Finance. I struggle, during my time in Parliament, to think what Michael Cullen’s legacy, as Minister of Finance, will be. What will he be known for? Will it be for hiking taxes to 39c in the dollar? Perhaps the “chewing gum Budget” might be the one that sticks in people’s memories. It might be the dopey Cullen fund that is his legacy. It is a struggle to think what Michael Cullen’s legacy will be for the financial health and financial management of this country. That shows that the Clark-Cullen Government has lost any sense of vision, any sense of purpose, and any policy programme.

We know that Michael Cullen is one of the only competent Ministers that Helen Clark has, and that is why Michael Cullen is exhausted. He is absolutely exhausted because he has to do everything. He has to come to the House and rescue his ministerial colleagues. He is the one who has to mop up when a Minister is in trouble. What is the reward that Helen Clark gives Michael Cullen for those years of service? It is this: “Well, he is in his early sixties, and he will do this Budget, but maybe no more.” Helen Clark does not say something like that by mistake. She sunk the knife into her own Minister of Finance; that is what she did. How can New Zealand have confidence in the Minister of Finance, Michael Cullen, when Helen Clark herself, the Prime Minister of New Zealand, has said: “Well, he is in his early sixties. He may not do any more Budgets.” That is what she said. She has wrecked what little vestige of credibility Michael Cullen had. Helen Clark is signalling that he will not be around for much longer.

By the way, what difference would it make if Michael Cullen were not the Minister of Finance or the Treasurer? It would not make any difference at all, would it? Last year’s Budget was a “nothing” Budget. Mike Williams tried to talk it up, and he talked it up rather well. The problem was that there was nothing to talk up. That is why I think Helen Clark has come along, ladies and gentlemen, boys and girls, and stuck the knife deep into Michael Cullen’s side. How like Helen Clark it is! I guarantee she has not sat down with Michael Cullen to discuss his future with him. I guarantee she has not sat down with Michael Cullen and said: “Michael, we have been good friends for 30 years.” Oh no, she would not say that, would she? She could not say that. It would be: “We were terrible friends for 30 years, and we’ve been working together for a few.” She would say to him: “What are your plans?”. But no, Helen Clark has gone public and said that this year’s Budget could be Michael Cullen’s last because he is getting to be an old man. That is what Helen Clark has told the nation.

I have to ask what Michael Cullen did as Minister of Finance when he was young, when he was fresh, when he was new, and when he had enthusiasm for the job. The only thing I can recall is his putting up taxes rather than letting ordinary, hard-working Kiwis keep the money. And there was the New Zealand Superannuation Fund. Oh, and he accidentally bought an airline. He said: “I didn’t mean to end up being the owner of it, but I sort of accidentally found myself being the owner.” Michael Cullen’s legacy will be a sad, empty legacy—a legacy of lost opportunity. The best economic growth conditions in my adult lifetime have been squandered. We are now facing growth of next to zero, a possibility of some negative growth, a loss of economic confidence, and a Minister of Finance whom Helen Clark has no confidence in.

Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this

That member has had his one call in the debate, and as usual he has wasted it. At least, for once, he managed to exit from the sewer for a brief moment to talk about the state of the economy. How his cheeks must be blushing—all four of them—from the attacks on him by his previous leader and founder of the ACT party, who has accurately summed up Mr Hide’s contribution to politics in this country.

But one thing that happened this afternoon is that I did not hear a single call from Mr Key—who has become the Tony Ryall of fiscal policy more and more in this House—for massive borrowing in order to fund tax cuts. That is another policy being prepared for dumping by the time of the next election, because that was the core of National’s policy at the last election. But of course Mr Key will not be the finance spokesperson by the time of the next election, if he achieves that ambition, because he is spending every week white-anting Don Brash, trying to take over the job of Leader of the Opposition. Well, bring another one on, and another one down, and another one up, and another one down. It is a bit like National’s policy on trade in honey and apples. It depends where one sits as to which side one is on.

We inherited an economy that had been through nearly 2 years of sub-zero growth under National, with 7 percent unemployment under National. That is what we inherited. We have delivered not merely 43 percent nominal growth but also the lowest unemployment rate in the developed world. If that were my only legacy I would be damned proud to leave it, because none of the members opposite can claim that. Nor can the previous leader of the ACT party claim that as his legacy as a Minister of Finance. Unfortunately for them, I will be around for a lot more years yet. I have seen off so many National Party finance spokespeople in the last 15 years I have lost count, and I expect to see off a fair few more yet, as Mr Key gives up his great hope to save New Zealand and goes back to being merely a very rich man.

What else do we have to show for our growth? We have seen real income growth for New Zealanders—not just for the rich, as under National, but for the great bulk of New Zealanders, who are seeing real income growth. We have seen a massive increase in infrastructure spending, particularly in roading—and more is to come. We have seen the creation of the super fund, and the Government saving for the long-term future. We will see the creation of the KiwiSaver scheme. We have reduced spending on benefits as a proportion of Government spending and a proportion of GDP. We have increased spending on health, education, science, and roading. And what does National come here and call for every day? It asks us to spend, spend, spend. Half National’s questions every day are about why the Government is not spending more in some area or another. Well, it will take a large pot of indigenous honey, spread as thinly as the National Party thinks it needs to be spread, to pay for all the promises National is implying at present.

The National Party has discovered the bottom of the cycle. Dr Lockwood Smith has discovered a particular interest in the bottom of the economic cycle. Let me tell him that National’s bottom was a lot flabbier than the bottom will be under the Labour Government. National’s bottom was sub-zero growth for nearly 2 years. Its bottom was rising unemployment. Its bottom was increasing poverty. Its bottom was cutting the level of New Zealand’s superannuation. That is what we saw in the last 2 years of the previous National-led Government. I must say that my cheeks are firm and rosy compared to the bottom under the National Government in the late 1990s. We are very proud of our record and our success.

Business is telling National to stop talking the economy down. Business is telling National that we will not have a recession; this economy is healthy. The chief executive of Fletcher Building—which is not planning to go offshore—has told National many times that he prefers New Zealand’s corporate tax system to Australia’s corporate tax system. But Mr Key will not listen, because he has no respect for the people who actually produce and make things. His idea of an economy is people who make money out of nothing by shuffling paper around and speculating on the foreign exchange market. That is the kind of Minister of Finance he would be—a Minister of Finance for international financiers, not for New Zealand’s productive sector.

GORDON COPELAND (United Future) Link to this

Every year the Government distributes hundreds of millions of dollars to various non-governmental organisations dealing with health, social development, sport, and education, to mention but a few. Shortly after I arrived in Parliament I was very struck by the number of people who came to me spontaneously with tales about how much of that money is poorly spent or, indeed, misappropriated. They told me that massive wastage was going on in the system. Since then, of course, there have been scandals—such as that involving the Pipi Foundation, and all kinds of misappropriation of funds in polytechs and many other areas—to actually prove the point.

About 2 years ago I first raised with the Auditor-General the question of whether non-governmental organisations were obliged to produce audited accounts before the Government disbursed money to them. I was told that there was no such requirement. Two years later—the first time since then that the Auditor-General has appeared before the Finance and Expenditure Committee—I was able to ask him the same question. By the way, the Auditor-General made it clear 2 years ago that he would like to see the Government adopt a strategy whereby no Government funds would be granted to a non-governmental organisation unless the organisation first produced audited accounts. So again I asked the Auditor-General whether that was now a requirement in that situation, and again he said it was not. So the fact is that as we sit here today Government funds continue to be disbursed willy-nilly to many, many non-governmental organisations in all the sectors I have mentioned, and others, without the necessity of audited financial accounts being produced as a prerequisite. I believe today that Parliament needs to determine—and I recommend this strongly to the Government—that that situation be brought to an end.

I have asked many people whether they would be prepared to hand, say, $5,000, of their own money, in $1 coins to a stranger, for a purpose to be determined, without that person producing audited financial accounts, and, of course, everyone has told me that they would not be so stupid. I then ask them whether the standard should be any lower when the $5,000 in $1 coins is handed to a stranger—a non-governmental organisation, in this context—without previously produced audited accounts simply because that money belongs to someone else. That is the situation we are talking about. We are talking about money that has been compulsorily collected from taxpayers being given to non-governmental organisations without the prerequisite of financial statements. I answer that question myself by saying surely that requires of us not a lower standard than we would apply to our financial affairs but a higher standard. Therefore, I believe it is time the Government said that it will not dispense as it currently does. I agree there needs to be a threshold. I have suggested in the Finance and Expenditure Committee that it could be, say, $5,000.

I suggest that figure because that is the threshold the Lottery Grants Board insists on when it gives away money that has been collected from the profits of gambling. It does not give more than $5,000 to any organisation without two prerequisites being met: first, that the organisation produces audited accounts for the previous financial year; and, second, that the organisation produces a post-grant audit report stating exactly how the funds are spent. That system came into being some years ago when we had the great “ghost-busting” scandal about such grants. I say to Parliament today that if that is good enough for the Lottery Grants Board then surely it is good enough for the Government itself.

I warn that if the Government fails to change the rules and adopt those requirements as a standard right across the whole system of disbursement of Government funds to non-governmental organisations, then we will continue to see scandals coming to the attention of this House. To me it follows, as night follows day and as day follows night, that if we continue to give out money as we currently do, that will be the case. I can tell the House that those scandals will be about league clubs spending grants—grants given to them to promote rugby league—on Friday night booze-ups. I could mention many things that, as I said earlier, people have brought to my attention about the way their money is spent. They tell me that as taxpayers they are brassed off, and they wonder how the Government could be so stupid as to continue with the present line. So with those few remarks, I signal my strong support for change. This is covered in the report of the Finance and Expenditure Committee, and I wanted to strengthen it.

There is another matter in the report, which I want to touch on briefly. I agree there is a need to put in place ethical standards around the question of conflicts of interest in respect of agencies outside the supervision of the State Services Commission. Those agencies include polytechs, other tertiary education institutes, and so on, and all sorts of other non-governmental organisations. If that is not done, the House will continue to hear of scandals in that regard, as well.

Hon DAVID CARTER (National) Link to this

In the brief chance we get to speak on the financial review of the Ministry of Agriculture and Forestry, I want to take the opportunity to put issues to the Minister in the chair, the new Minister of Agriculture, the Hon Jim Anderton. I want him to know that farmers throughout New Zealand have put him on notice that it is his job to represent the concerns of the industry. It has a lot of very significant concerns, particularly as we face a downturn in commodity prices—coming after what I do accept have been 4 or 5 very good years. The Minister’s appointment follows on from the reign of his predecessor, Jim Sutton, who, as Minister of Agriculture, can only be described as a total disaster. He failed, around the Cabinet table, to represent the concerns of farmers. He promoted issues like public access through privately owned farms in this country, and I certainly hope the new Minister will not continue with that sort of debate around the Cabinet table. Mr Sutton also promoted the infamous “fart tax”, which I am sure the new Minister will assure us is completely off the agenda. Is it little wonder, when a Minister like Mr Anderton’s predecessor promoted notions like that, that he lost the once-safe seat of Aoraki to our member, Jo Goodhew?

The farmers of New Zealand treated the appointment of Mr Anderson with absolute dismay, when that Minister was appointed. They took the opportunity to say to the Minister: “We accept that you don’t understand much about agriculture, but we understand that you’re prepared to listen.” I repeat the famous words of Mr Anderton: “I will represent you, because I’m No. 3 in Cabinet.” He said: “What part of No. 3 don’t you understand?”. I think those words are particularly relevant, considering the issue of the microchipping of farm dogs. Mr Anderton had gone to the farming community and said that that law was ludicrous and he would ensure that it was changed. He went to the Cabinet room, on the 10th floor of the Beehive, and he failed to deliver change, because he at No. 3 was rolled by the Minister at No. 18 in Cabinet.

So Mr Anderton to date has failed the first test as Minister of Agriculture. But there is now another issue, which we saw signs of on the front steps of Parliament today—the future biosecurity of New Zealand. Farmers, whether or not they are involved in the bee industry, are watching the Minister to make sure that that decision does not put the biosecurity of this country at risk.

Federated Farmers have presented to the Minister a list of 10 simple doable things they want him to achieve. I have addressed the first issue, which is microchipping. He failed on that account. The second issue is that the Department of Conservation and the Minister have the ability, within the Resource Management Act, to argue in more than an advocacy role. To date the Minister has failed, in accepting the decision that Chris Carter, the Minister of Conservation, made with regard to Whangamata. The third doable issue is for the Minister to achieve a way whereby the Department of Conservation will not continue to increase its landholding around the country, unless it has budgeted sufficiently to ensure adequate management of those lands. National waits to see whether the Minister of Agriculture achieves that one. The fourth doable thing is the funding of rural roads, which is a huge component of the rates that farmers throughout New Zealand pay. I remind the Minister that farmers alone, as an industry, pay more than 20 percent of all rates collected by territorial local authorities. Federated Farmers have said to the Minister that he should ensure there is a fair mechanism for paying for those roads, and that all the funds collected from roads end up being spent on roads.

Dr ASHRAF CHOUDHARY (Labour) Link to this

I would like to congratulate the Hon Jim Anderton on his roles as Minister of Agriculture and Minister of Fisheries. When we were doing the financial reviews, I had an opportunity to go around and talk to farmers and a number of submitters. I looked at Landcorp and visited Asure New Zealand, and in talking to them and to AgriQuality and a number of those people, I was happily surprised at how much confidence they had in the new Minister of Agriculture. It was a delight to hear farmers saying that although they had a few misgivings about the new Minister in the beginning, because in their view he had probably had little to do with farming in the past, that had changed. I received very good reviews from a whole lot of these people during the financial reviews of all those Government entities.

Agriculture is the backbone of this country. We export over 90 percent of what we produce and we have to make sure we keep ahead of other countries in terms of research, increasing value for money, and increasing quality assurance. Particularly in terms of patents and adding value to our products, it is very important that we keep ahead of other nations to make sure that our income keeps coming from export markets.

I was delighted when I had the opportunity to visit Asure New Zealand and also to talk with AgriQuality board members. When we hear about the increase in productivity achieved in this country over a number of years, it is really tremendous. Some years ago about 90 percent of our meat was exported as carcasses, but now 90 percent is processed, which is added-value. That is great to see. I was very pleased to see that the meat industry and dairy industry are progressing and adding value to our export market.

Of particular interest to me is biosecurity. That is of very high importance. As an exporting nation, particularly in agriculture, it is very important to ensure that any products that come into the country do not present any biosecurity risk. We recall the false scare about foot-and-mouth on Waiheke Island last year. We have to act quickly and ensure such problems do not occur here.

I do not want to say a lot more. Suffice to say, I am delighted the financial reviews of these entities and the Ministry of Agriculture and Forestry show they are doing a great job.

R DOUG WOOLERTON (NZ First) Link to this

I too would like to talk about the new Minister of Agriculture and Minister of Forestry, but I want to take a bit of a different tack and say that I think it is appropriate, believe it or not, that we have a Minister of Agriculture who does not have a long history in farming or in matters applying to land. The reason is that on two fronts we have some particular issues that need to be attended to and, with due respect, they need to be attended to by a person who is seen as being, for want of a better word, non-partisan.

The first issue—and I am surprised it is not mentioned more often by my colleagues these days in Parliament—is our huge balance of payments deficit. As everybody in this Chamber knows, or should know, there is only one real sector of the economy we can realistically look to for the sorts of numbers that will do anything about that balance of payment deficit—and I see the Minister in the chair, Mr Anderton, and my colleague Shane Ardern both nodding—and that is the pastoral farming and forestry sector. There is also fishing and tourism, but this discussion is on agriculture and forestry. We need somebody in the role of Minister who can look at all who are in those industries as being exporters, not just as farmers, as pastoral farmers, or as forestry or sector groups, because with any other area of exporting in this country the imports to fuel the exports—if that makes any sense—are so high that the net gain to New Zealand is infinitesimal. This sector is our major exporting area.

We have a Minister who is non-partisan, so, hopefully, he will look at these things in a holistic manner. I have read a couple of things he has written that indicate he will. I hope he thinks I am on the right track and that he sees things as we in New Zealand First do, because we do not accept that all economic activity is good. We believe in the old-fashioned way of earning more than one spends, and our country has not been doing that. We look to the Minister to make this thing right.

The other area is far more difficult, far more delicate, and it something that we all know about. Certainly when I was farming I shied away from it, and my brothers, who are still farming, shy away from it: the quality of our water in New Zealand. About 3 years ago Fonterra took the initiative to try to sort this problem out. It required farmers to fence streams and plant appropriate plantings besides streams. It was criticised at the time, but it is not being criticised now. In fact, I am pleased to be able to say—and I hope the Minister will confirm this—we are ahead of the targets in those areas, which just shows that if farmers are shown the need they will respond. Here I acknowledge my friend Shane Ardern, who I know personally got out there in his gumboots and planted thousands of trees on his properties, or on his numerous blocks of land, whatever he happens to own at this point in time. He is not a man to go along with whatever the current fashion is; he is doing it because the science tells him it needs to be done.

I have heard that from our Minister, as well, that if the science says it must be done, then it will be done. We need input from central government, we need local bodies to attend to the matter, and we need farmers to be involved. But I dare go one step further and say that we need other people downstream of them to be involved in the clean-up too, because clean-up is what it is all about. We in this country cannot have a situation, or accept a situation, where our rivers are being polluted and our lakes are dying—so they tell us.

SHANE ARDERN (National—Taranaki-King Country) Link to this

I say to the Committee at the outset of my speech in this financial review debate that I do not agree entirely with my colleague who has just resumed his seat. There are very few issues on which we disagree, but on this one I do. I think the biggest risk to New Zealand’s economy is our Minister for Biosecurity. He is the single biggest risk. The second biggest risk to our New Zealand balance of payments is our Minister of Agriculture and Minister of Forestry, who is the same person. I shall tell members why I think that is so.

The New Zealand Institute of Economic Research, reporting to Biosecurity New Zealand, put the cost of the didymo incursion in New Zealand at $285 million. We know that that is probably on the conservative side, because its estimates in the past have always been conservative, as will be the estimates we are likely to get from the Ministry of Agriculture and Forestry on this. We know they are probably on the light side. Yet after repeated questioning, the Minister, both through written questions and through questions in the House, has constantly said: “Unlike the member Mr Ardern, I do not believe we could have overcome this problem by treating didymo. There is nowhere in the world that knows anything about killing didymo.” Well, I just bring the Minister’s attention to some of the substantial work that has been done internationally that suggests that the two rivers where the incursion was first found could have, and should have, been chemically treated, which would have brought the situation under control for much less than the conservative estimate of $285 million. That is not to mention the further biodiversity loss that will come from the incursion, particularly when it spreads throughout New Zealand.

Once again today a group of land-based, agricultural-based, hard-working New Zealanders protested on the steps of Parliament against this Government and its suggestion that the importation of honey does not present a biosecurity risk. That is what the Minister said—that it does not present a biosecurity risk. Quite frankly, it does. The Minister also said to the group of bee-keepers on the steps of Parliament that he, as the Minister, cannot, under the Biosecurity Act, intervene on matters that are in the realm of the director-general of Biosecurity New Zealand. I thought that was an interesting comment to make, so I went to the Parliamentary Library—our very good Parliamentary Library—for an explanation of which part of the 1993 Act excludes the Minister from being able to intervene when he is not convinced there is a potential biosecurity risk.

I have the library’s findings here, which are that it cannot find anything to suggest that the Minister is unable to intervene in a decision in terms of imports or potential biosecurity risks. The library, rather than just relying on its reading of the Act, went further and asked for Laws of New Zealand, a legal encyclopaedia, to have a look at whether that was so. The answer came back that it could not find any area in the 1993 Act that precludes the Minister from being able to intervene in this matter. So I say to the Minister—and I am sure he has his officials scurrying, as we speak, to find the relevant legislation—that I will be interested to hear from him on that. I am sure he will take a call and respond, and that will be good.

Also during this financial review debate, the Minister was asked whether he thought the biosecurity structure in New Zealand was adequately resourced, and I think what he said was: “Unlike the previous Government we have resourced this structure better than it has ever been resourced before.” Yet we found in the case of the foot-and-mouth hoax on Waiheke Island that Biosecurity New Zealand was in breach of section 4 of the Public Finance Act, because the Minister had to appropriate—or misappropriate, it could be suggested, because there was not enough money there—$886,000 under Vote Biosecurity to control what could have been a devastating incursion in this country. So members of the House, and anybody else who might be listening, can surely see by this that Minister Anderton is not on top of his portfolio, and therefore we have a major risk to this nation. A biosecurity breach in this country is the single greatest risk to our exports. If it is the case that heat treatment of honey can keep European foulbrood out, then why does the Ministry of Agriculture and Forestry not say unequivocally that this is so? It does not.

Hon JIM ANDERTON (Minister of Agriculture) Link to this

I have to say the biggest threat to any of the portfolios I represent would be if the National Party—if it ever got into Government—ever made Mr Ardern responsible for any of them.

Hon BILL ENGLISH (National—Clutha-Southland) Link to this

This is an opportunity for the Minister of Education to get up and explain himself to the House. The reason he should explain himself is that no Minister of Education has left a longer trail of policy wreckage than the Hon Steve Maharey.

Today’s announcements about tertiary education policy are about as vacuous as we all expected, but at least they are an attempt to try to clean up his mess. The interesting thing about today’s announcements is that they sound an awful lot like what the Government was saying 6 years ago. But the result of 6 years of strategies, reports, reviews, and bureaucratic expansion has been a total failure by this Minister to achieve any of the objectives that he laid out for himself. Apart from the climate change policy, this is the biggest policy mess I have seen in 20 years of watching public policy in New Zealand as it has unravelled.

The Minister might want to explain why the cost of running the tertiary education system has gone from about $40 million a year when he took over, to $140 million this last financial year. What does $140 million worth of bureaucrats and paper achieve for the tertiary education system? The answer is nothing that matters. It makes the Minister feel good. It makes him feel like he has achieved something. But what does it do for the students out there? It does virtually nothing. The result of the sum total of several hundred million dollars spent on running this tertiary education system has been the cancellation of a number of qualifications no one was doing. That is what has happened. That is the result of the big strategic decision he made, and he could have done it in a week with half a dozen bureaucrats at a cost of about $140,000 instead of $140 million.

So I ask this Minister to get up, to apologise to the taxpayers of New Zealand, and to acknowledge that he has wasted the time, energy, and initiative of so many people with a genuine interest in education, by pursuing a dream that could never come to fruition. I have to say that I, among others, felt some relief when Dr Cullen took over the portfolio, although he has been in charge of it for a while now and I am disappointed with what he produced today. He is talking about the plan taking 2 years to implement. The bits of it that make some sense—a common sense to everyone—actually used to be in the system years ago until this Minister came along.

I would also like the Minister to tell us what initiatives he will take in education, because—like the rest of the Government—he thinks he knows it all. He thinks the job has been done. He has got nothing new to offer to children in New Zealand. He will oversee some of the initiatives that Trevor Mallard put in place. Some of those initiatives had some merit, such as the literacy and numeracy project. But I want to know what he will do to generate a sense of urgency about what we can do for our young children.

I also want him to explain the ridiculous answers he has been giving in the House about the SchoolSmart website. The Government is spending millions putting Tana Umaga on TV to try to get parents interested in education. They get to find out what Tana thinks—and that is fine—but they do not get to find out any useful information about what they can do to make decisions for their children. They do not get the information that is available to the Minister about their child’s school. Is that not a disgrace?

The Minister of Education runs a website containing performance information about schools—information that is well presented and in context. It contains a range of data painting a complex picture about a school. The Minister can see it, the ministry can see it, and the Education Review Office can see it. They all use that information to make decisions about which schools are at risk. The teachers can see it, the principal can see it, and the advisory services can see it. In short, everyone in education who is a bureaucrat, and who has no particular interest in any particular child, is allowed to see the information about school performance. But parents are not allowed to see it unless they go to the principal’s office and sit there and watch the principal tap it out on the keyboard because, as the Minister said, that is the right context. Apparently, this information about schools is too dangerous for parents to look at from the safety of their own homes. The whole world is going digital, with real-time Internet access to everything. We spend millions teaching our children that that is where the world is going, but we will not make a publicly funded, publicly owned website available to the parents.

I would like the Minister to tell us how much he has spent on assembling that information. It is actually a useful initiative. It is not the answer to everything, but it does bring together a range of performance information about schools in a way that no Government has been able to before. It does not create league tables. The Minister gets up and rants on about how all we are trying to do is “tear down the social democratic school system”. Was that not a revealing remark? Who says the school system is a social democratic one? That is a Government that believes it now owns, runs, and defines our school system. It is precisely when we get that kind of arrogance in a Minister who is running our school system that parents need access to the objective data about the performance of their child’s school, because, I say to the Minister, not every parent is a social democrat. Not every parent believes that schools are there as an expression of Labour Party values. In fact, almost all parents believe that schools are there to teach our children to become competent citizens based on the values that we have as parents and communities, not the values that the Minister has as a component in a Labour Party machine that is getting more and more tired by the day.

I want the Minister to explain to the Committee why we should appropriate public money so that it can be spent on a social democratic school system. Because that is the first time I have ever heard a Minister claim New Zealand’s school system as an arm of his or her own ideological views. What a disgrace! It is no wonder he does not want parents to know what is going on. The Minister says that access to this website means there will be league tables and that that is privatisation. What a load of nonsense! The website does not create league tables. It presents information about one school measured against anonymous, similar schools. What could be more harmless than that? It does not compare one school with another.

I tell the Minister that what does lead to comparisons of one school with another, which he does not like, is when he releases public information about school performance—and he has to when I ask him to. I can put that information into league tables if I want to. They will be messy, they will be contradictory, and they will present data out of context, but the media have an endless appetite for them. So he is releasing information that achieves exactly what he does not want—that is, league tables—and he is hiding from parents readily accessible, good-quality contextual information that is not about league tables but that informs a parent about his or her school compared with a range of similar schools. So the Minister needs to get with it.

This is the digital age; we are teaching our children about information technology. The Minister can tell us why that information is all there—all public information, publicly funded—but parents can get it only if they hop in their horse and cart, drive off to school, and make an appointment with the principal. Can members imagine if banks said: “You can’t look at your bank statement unless you make an appointment with the bank manager.” Does the Minister not know that parents in the comfort of their own homes can have access to all sorts of information on the Internet? Is he not aware of that? Why does he think he can stand in the way of low-cost, high-quality technology that will make that information available? The Minister is trying to hold back the tide. The information exists; it is public information—and parents could access it if he just decided to let them have it.

ALLAN PEACHEY (National—Tamaki) Link to this

New Zealand is a small nation competing with other nations to find its place in a globalised, market-driven, knowledge-based economy. There is one way, and one way only, that we can find our place in that world, and that is through the initiative and hard work of our people. It is through the ability of our people to read, to write, to do maths and science, and to use technology—not 80 percent of our people, not some of our people, but all of them. Yet, the Education Review Office has reported to the Government that up to 20 percent of New Zealand children—that is, 153,000 children, in the review office’s words, are not experiencing success at school.

I invite the Minister to take a call and explain to the Committee whether he accepts that 20 percent figure. Does he have confidence in the Education Review Office, or does he not? I invite the Minister not to fudge around the issue. I do not want to know how many children are in reading recovery; all I want to know is whether he accepts what the Education Review Office has reported to him—that up to 20 percent of New Zealand children are not experiencing success at school.

I invite the Minister also to explain to us how it can be that a physics teacher with two degrees, including a masters degree in physics, and with a recognised English teacher-training qualification, is being told he cannot teach in New Zealand. As a former school principal, I know how hard it is to staff a school—how difficult it is, particularly in subjects like physics, to find teachers who, first, know their subject, know it backwards, and have a passion for it that they can share with youngsters, and, second, can actually communicate in the language of instruction. But Morrinsville College has found one. So why has the college found that the bureaucracy has said: “Oh, we don't recognise that training programme.”? Those bureaucrats have probably never employed a teacher, or sat—as many principals do—and agonised and worried about who is the best person for the job, the person who is best able to teach those youngsters what they need to know in order to take their place in the New Zealand economy.

The losers are the young men and women who are suddenly, in the middle of this year, going to be without an outstanding schoolteacher. I invite the Minister to take a call and explain how that can be. In fact, I will go further. I invite the Minister also to tell this Committee why the Government does not have confidence in the judgment of principals. Why does this Government seems unable to accept the judgment of a school principal that a particular teacher, who is well qualified with two university degrees and a recognised teacher-training qualification, will not be able to teach in New Zealand?

I invite the Minister to consider the reality of what it means to schools, when they attract good teachers from overseas in the expectation that those teachers will earn, maybe, $50,000, only to find that a bureaucratic decision has been made that those teachers will be paid $26,000. A man has uprooted his family and his children and has come to New Zealand to start a career, but we have insulted that man—a man with a masters degree in physics—by telling him that we will pay him only $26,000 a year. I ask the Minister to explain to this Committee, and to explain to the young men and women of Morrinsville College, why they are likely to lose their science teacher, their physics teacher. Why are they likely to lose a great teacher?

Hon STEVE MAHAREY (Minister of Education) Link to this

That seems to be the contribution from the National Party. I will begin with Mr Peachey’s contribution, because it is good to see him. The other day we shared a platform together at Rangitoto College, which, of course, was Mr Peachey’s school. I had not been there before, and I thought it was a fantastic school. I say to the member that we might disagree on politics in here but that school is a credit to him, even apart from the physical presence of the island, and so on. The pupils and teachers I met in getting around the school certainly stood him well, and I thought I should pass on to him my observations from that day.

The member touched on two questions. Let me start with the case of the physics teacher. As the member will know, of course, that is a New Zealand Teachers Council registration issue, not a New Zealand Qualifications Authority issue. It is a matter of whether we can register the particular teacher, and I certainly take a personal interest in those kinds of issues. I hope that will help to set the member’s mind at rest a little. I too am concerned, when we are trying to recruit a large number of teachers over the next few years because of changes in policy. We will need more teachers in front of kids throughout the country, and when we are trying to emphasise areas like science we certainly want well-qualified teachers—and this person seems to be one. So I have asked for a particular look at that teacher. The issue is a Teachers Council registration issue, and I think that is appropriate.

I understand the argument being made in relation to the question of trusting the judgment of the school, but the member must think about what it would be like if the situation were transposed. We are talking about an issue of professional status. It would be a little like saying: “Why don’t we trust local city doctors to hire a doctor?”. We would not do that; the Medical Council of New Zealand has to register the doctor. We would make the same argument with engineers, psychologists, or whatever. I am totally committed to the professionalisation of teachers. That means that there needs to be a professional body that registers them, and that is what we will try to do. I think the member makes a good point, but if we can support each other through the process of trying to make sure that that person can be registered, we can probably have him back in that school, and I hope we can do that.

In relation to the 20 percent figure, the Education Review Office has tried to clarify the matter. It was raised in the context of a select committee discussion. What the office has tried to argue is that, like most countries, we share—and I do not like this word—the notion of “tail”, which the underachieving group that we are all concerned about. The office estimates that across different subjects, maths, English, and so on, there are about 20 percent of young New Zealanders spread across our schools—which is the interesting part of our debate here in New Zealand—who are, in one subject or another, probably not doing as well as they should be. They are not illiterate, as originally I heard the member suggest in the House, but they are in a situation where they are not really up to where they ought to be for their age group. That is a big challenge for us, because we are not talking about a particular section of the community lumped into one area of the country; we are talking about a situation where we seem to have that underachievement across our schools, and I think it is right that we identify that. I think it is right that we do something about it.

I do not accept that that is an issue where we should start to say to ourselves that it is somehow to be explained as a revelation. It has always been the case, of course, that we have had young people in our schools who are not achieving to the level they ought to for their age group. The question is: what do we do about it? And that is what I am committed to. That is why I think it is good that the Education Review Office has raised this debate, and that is why it is good that we are talking to schools and asking them what they are doing about underachievement—just as we would ask them about gifted children, and so on. So that is what I understand them to mean. It is not a case of 20 percent—as one group we can point out—who are illiterate, innumerate, and unable to do x, y and z. Young people are experiencing underachievement in different subjects. We need to do something about it to fix the problem.

Let me go back to Mr English for a moment. It is always interesting to start a debate with somebody who, on the whole, is basically angry deep down. He will have to deal with that in any way he wants to as time goes by. He is still a young man; he has a chance to do that. It is interesting to listen to Mr English get up and accuse everybody else of failure, when this is a man who ran the health system in the 1990s and was a Minister of Finance in the National Government during a time of recession and crippling performance in our economy. This is a man who was the education person in the National Party when that party was about as popular as a pork chop in a synagogue. That was about the state of things—I am sure Mr Peachey would agree. Mr English was extraordinarily unpopular.

CHESTER BORROWS (National—Whanganui) Link to this

I rise to speak in respect of the appropriation for the New Zealand Police. It is with some degree of frustration that I note the level of confidence has continued to fall in respect of the police, especially after the assertions made by the Minister of Police that she would work tirelessly to pull confidence in the organisation back up. It is an organisation in which I worked for many years, and I still hold a great deal of regard for it.

I certainly wish my two wing mates from previous years, Howard Broad and Rob Pope, the warmest congratulations on their new positions as commissioner and deputy commissioner respectively. I was pleased to be able to write to tell them that at least the decision in respect of their appointments was one that I agreed with the Minister on more than 100 percent. I believe that with the background those two men have, particularly as former detectives, they will focus intently on raising the public level of confidence in the police and on the police’s ability to respond and react, to prevent crime, investigate crime in a timely manner, and protect life and property.

It is a worry that although reported crime may be down overall, the most prominent reason for the lessening in reported crime is the level of confidence that New Zealanders have in the ability of the police to investigate reported crime with any hope of success. It is a shame that within the last couple of years we have seen such a large number of high-profile incidents where the police have been hampered, for one reason or another, from investigating them in a timely manner. There were problems around the communications centre, which we hope have now been fixed or are on the road to being fixed. The truth is, of course, that the police were asking for further resources for the communications centre for some time before they ever saw any progress in relation to that.

People have a perception about crime. When I campaigned at the last election, it was a shame to knock on doors on a sunny Saturday afternoon and hear pensioners unlock three or four locks before they could open the door to speak to me. They were trapped inside their homes by fear. I honestly believe they do not need to be in fear. I think, as many New Zealanders do, that the media have some part to play in response to that situation.

I look forward to seeing the Government come through with its 1,250 new police. I do note with some degree of humour that during the campaign, when we were talking about increasing police numbers, we were told quite emphatically by the then Minister of Police and by local members of Parliament there was no need to increase numbers and the police were completely resourced along the lines they needed to be. But after the pre-election pledges made by the National Party and by New Zealand First, the Government came up with a figure of 250 more community police. Community police definitely have their role, especially in building confidence in the police, but it was not really until after the election and the confidence and supply agreement was made that 1,000 new police were added to the figure of 250.

Even then, there seemed to be some conflict over the pages of the songbook various members of the Government were singing from, because the member Ron Mark told us there were to be 1,000 new front-line police, and the Minister of Police told staff at the Nelson Police Station the figure would be 1,000 new police, including non-sworn as well as sworn officers. She repeated that statement in the House a few days later, but about a week after that it was conceded there would be 1,000 front-line police plus support staff. As a former police officer I am pleased to see that occur, because I believe that the number of front-line staff has been reduced by attrition over time and the police’s ability to respond to incidents has been marginalised, even in my own area.

When I was a police officer working in the Wanganui electorate, the Wanganui Police Station had a sergeant and five officers working 24 hours a day on successive shifts. What happened, of course, was that the number was reduced by attrition. Now we have ended up with the situation where there is a sergeant and two officers working on some days, and I wonder how on earth they can respond—especially at a time when ambulance officers and firefighters, who are the emergency service back-ups for the police in various situations, are not available either because their numbers have been reduced by attrition, as well. In Wanganui City we have lost six police officers and we look forward to seeing them replaced in due course, if it happens.

Hon ANNETTE KING (Minister of Police) Link to this

Can I thank the member for Whanganui for his contribution in the financial review of Vote Police, and—as he knows—I have already congratulated the new Commissioner of Police, Howard Broad. I was interested to learn that the member was in the same wing as both Rob Pope and Howard Broad, and certainly I can be assured of his support for both those two men in their future roles.

I begin by thanking the retired Commissioner of Police Rob Robinson, who picked up the role at a very difficult time, soon after we became the Government, when he needed to address a number of issues. In particular, issues of a historic nature had arisen, and I will not say any more about those at this point, but there were also a number of issues arising from the Martin review of the late 1990s, which saw police resources being removed as the police were asked to pay for the INCIS mistake of the previous National Government. I know that Chester Borrows would have been at the sharp end of those cuts in police numbers back in the 1990s.

I want to say how pleased I am to have the new Commissioner of Police, Howard Broad, in place. I think he will make a very fine commissioner. He has a background of 30 years of policing, including community policing, and of being the district commander in Auckland, where he has had a lot of experience in terms of front-line policing, but also his very reasoned approach to strategy and policy will, I think, be very good going forward.

Rob Pope also has 30 years of experience with the police. I assume that Chester Borrows, if he had stayed in the force, would have had 30 years of experience now, as well. So the member brings to this House those years that he has had in the force, and I was pleased to see today that he was agreeing with comments I was making. Doing that probably got him into trouble with his front bench, but I believe he will perform in an honest manner in this House with the knowledge of policing he has. But I think that Rob Pope, who has 30 years’ experience of policing, has spent many years in the Criminal Investigation Bureau, and who is now responsible for operational matters, will be a good fit with our new commissioner, as will Lyn Provost, who has been reappointed. Lyn Provost’s responsibilities are in the area of resources. I would also like to put on record my thanks to acting commissioner Steve Long, who retires on 7 April, for a very fine police career and for carrying us through the last few months after Rob Robinson retired.

The member expressed a little sorrow, I think, that I have not managed to bring police confidence back up to high levels in the 5 months I have been in the job. I assure the member that I am working very hard on that matter. I am spending my time out on the front line, working with police—

GORDON COPELAND (United Future) Link to this

I shall take a call on the Ministry of Economic Development, but in relation to one specific aspect of the ministry’s wide-ranging interests and that is to do with energy. Although the Finance and Expenditure Committee reported on the Ministry of Economic Development—in fact I thought it was the Commerce Committee, but I stand corrected on that if that is the case—one of the things that the Commerce Committee also covered was a review of the various State-owned enterprises. It is very important to draw to the House’s attention some very serious situations that have arisen around the upgrading of the transmission grid in this country. I refer particularly to the 400-kilovolt line that was planned originally by Transpower between Whakamara and Ōtāhuhu. As members will be aware, that line was announced by Transpower last year. Subsequently, in about April of last year the then Minister of Energy, the Hon Trevor Mallard, who is the Minister now in the chair, asked the Electricity Commission to look again at what Transpower was proposing to do.

I draw to the attention of the Committee the exchange between myself and the Chairman of the Electricity Commission, Roy Hemmingway, about the 400-kilovolt line when he came along to the Commerce Committee. I started off by asking him whether he felt that the responsibilities between himself, on the one hand, and Transpower, on the other, were sufficiently defined, because Transpower had said that it was conscious there was an overlap and it was worried about that. Roy Hemmingway replied—and I want to read these remarks into the Hansard as I think they are very important—“I think they are. We have a set of rules which defines the relationship. We”—that is, the commission—“have a responsibility in respect of approving grid upgrades, to ensure that they are the least-cost approach to the job. That’s what we are required to do.” I then responded to him by saying that I was concerned that in April 2005 the Minister of Energy asked the commission to consult members of the public about the transmission upgrade, whereas in the normal course of things, was it not Transpower’s responsibility to do that.

Roy Hemmingway’s response was as follows: “Yes, I do believe that it was Transpower’s responsibility to fully develop alternatives to its own proposals, to have those costed, and to have consulted the public on them. They didn’t do that.” That was a very important comment, because it suggested that Transpower was not following through on its obligations. In respect of whether Transpower was following through on its obligations his response was: “Well, they didn’t with respect to the 400-kilovolt line from Whakamaru to Ōtāhuhu.” I must say that I was stunned with those responses. It is the first time since I have been at Parliament that we have had the head of the Electricity Commission make such damning comments about one of our largest State-owned enterprises—a State-owned enterprise, I might say, that has no fewer than 156 staff who are paid more than $100,000, 19 staff who are paid more than $200,000, and eight staff who are paid more than $330,000 a year. I have chosen that figure, because that is more than the Prime Minister is paid. Yet the Electricity Commission, through its chair, is saying that Transpower failed to do its job correctly, and that is a very, very serious situation that has arisen. Therefore, we are now reliant on the Electricity Commission getting it right and getting it right quickly, because it is quite clear from the evidence presented to us that that 400-kilovolt line needs to be built and functioning no later than 2010, which is now only about 4 years away.

I might add that if United Future had its way we would completely change the whole thrust of Transpower. We would give it a very simple objective in life, and that would be to get electricity from A to B at the lowest possible cost to the consumer over time. We would have it do that by way of borrowing funds over a 30 or 40 year period, because the grid actually lasts for a period of 30 to 40 years, and therefore it is sensible to take the cost right over the whole period of time to keep that cost as low as possible to electricity consumers. It gets even worse in that the Commerce Commission has also, as one knows, been dabbling with taking price control over Transpower. We have some real problems with that State-owned enterprise.

Hon TREVOR MALLARD (Minister for Economic Development) Link to this

For reasons that I am happy to explain to the member later and that have to do with State-owned enterprise energy portfolios, which I have now delegated to the Hon Mark Burton, it would be inappropriate for me to comment to the Committee on the matters that he has raised.

Hon TONY RYALL (National—Bay of Plenty) Link to this

For the benefit of those who are tuning in to this debate, I will explain that we are looking at the financial performance of the Ministry of Health. This debate gives Parliament an opportunity to review the performance of not only the Government but also the ministry in the last 12 months.

Over the last few weeks in Parliament, the National Party has demonstrated some of the incredible pressures being borne by the public health system in New Zealand and that despite $4 billion of extra money, the services in our hospitals are still wanting. We have demonstrated, through answers to written questions, that fewer New Zealanders are receiving elective surgery today than there were 5 years ago, and that fewer New Zealanders are receiving surgery, full stop, than there were 5 years ago. This country should not be proud of that state of affairs. After 6 years of the stewardship of Annette King as the Minister of Health, $4 billion of extra public funding, and huge pay increases for people who deserve them, what do we have?

After 6 years of Annette King as the Minister of Health and an extra $4 billion in funding, what does her colleague the current Minister, the Hon Pete Hodgson, say about her performance as Minister of Health, with a mark out of 10? Five-and-a-half. What did Annette King say to Pete Hodgson, when he rated her performance in the health portfolio as being five-and-a half out of 10? I have seen the Minister’s face every time—

BARBARA STEWART (NZ First) Link to this

On behalf of New Zealand First I rise to speak to the 2004-05 financial reviews, and in particular the Ministry of Health financial review.

The area of health that New Zealand First wants to see progressed is children’s health. We know that health outcomes are a defining feature of our First World status and that any decline affects our quality of life. New Zealand First believes in, and will actively work towards, the objective of having free health-care for all under-6-year-olds. In 1997 this initiative was implemented, but with escalating costs the initiative was gradually whittled away, basically to the detriment of our children. Today’s primary health organisations have a policy of part charges for medical visits and prescriptions for children, but sometimes even these charges are too high for parents.

It is absolutely essential that we provide our very youngest citizens with certainty about health care, and ensure timely access to all health-care services. We believe that an emphasis on preventive measures at an early age ensures that later problems, like hearing problems and sight problems, that eventuate and reduce educational achievement do not go undetected, and of course an increased amount of investment is required at this later stage. I recently read a report that states that a 1 percent increase in overall literacy results in a 1.8 percent increase in GDP. When we relate this to educational achievement—and health is usually a factor in this—we see that these figures cannot be ignored. We say that investment in this area will definitely produce very worthwhile results for New Zealand.

Last year Minister King spoke of many advances that were to be made in the area of oral health for primary school children. Indications were given in this House that a number of positive issues relating to oral health-care were to be worked on and fixed. This was repeated again prior to the election. To date, unfortunately, I have heard of very little action, and the questions remain around oral health-care. I have heard of some advances, to be fair, but there is still quite a lot that needs to be done in this area.

The facilities and services review was carried out on school dental services, and the final report commenting on this is not easy to find on the Ministry of Health website—if it is even there. We all know that dental decay is on the increase, and although each district health board has its own oral health service—which was repeated in a written answer I received from the Minister—we know that adequate resourcing for this essential service is absolutely paramount. The possibility of having local super-clinics and the increasing reliance on mobile clinics appears to be the best way of managing this scarce resource that is absolutely essential for the well-being of our nation’s children. Perhaps sharing resources between district health boards in order to provide an effective service and ensure that children can actually be seen within a specified time frame is one of the changes that must be managed in order for this service to survive and flourish—because we do want to see it flourish. Good oral health is absolutely essential for the well-being and overall health of every child.

The final area of health care in which we are looking for action is the Government’s intentions regarding the changes to maternity services. The latest addition to the voices calling for change is the Health and Disability Commissioner, who has reported on another avoidable death. The public has a right to know as soon as possible exactly what the Minister intends to do to improve the current system. The proposed alternative that we have heard about—the setting up of a database of maternal and prenatal deaths—provides nothing in the way of reassurance for pregnant women or even for those contemplating pregnancy. I say to the Minister in the chair, the Hon Pete Hodgson, that it is obvious to all New Zealanders that changes are necessary to ensure that women have access to the best possible medical care while they are pregnant, and when giving birth.

Dr JONATHAN COLEMAN (National—Northcote) Link to this

We hear that people are becoming sicker, kids are becoming fatter, diabetes is on the rise, and obesity is at epidemic levels. We also hear the Minister in the chair, the Hon Pete Hodgson, has given his ministry a rating of 5½ out of 10, and we hear that $4 billion more than previously has been spent on health over the term of the Labour Government. I want the Minister to get up and take a call to answer one question: where has all the money gone? What has the $4 billion been spent on? What do we have to show for it? I can say now there is nothing to show for it. We are becoming sicker as a country, and it is becoming harder to get an operation than previously. The health service is absolutely decaying.

There is one place where we can say the health money is going. It is going into bureaucracy. There are 12,000 hospital beds in New Zealand, and there are 12,000 bureaucrats to fill them. That is just outrageous, but it is absolutely true. I was stunned when I heard that statistic. When I came into this Parliament, I had heard that Mr Hodgson was a competent Minister. I had heard that he would do good things in health. Then I picked up my copy of New Zealand Doctor and I saw that he rates himself as being only 5½ out of 10. He says he does not feel confident in the health portfolio, and he does not even feel that he can get to grips with the ministry. Frankly, if that is how the Minister feels about health in this country and about the health service, what do the public think?

I want the Minister in the chair to take a call to admit that, and to explain why, despite the lies that Labour tells the people of New Zealand, we do not have a health service in this country that is free at the point of delivery. The Minister has to get up and admit to that. People are falling through the cracks of the health service. The fact is that people in this country need to have private health insurance. We have heard that time and time again. If someone goes to a hospital anywhere in New Zealand to have a cataract fixed, a joint replaced, or an ear, nose, or throat operation, he or she will not get it. I was talking to an orthopaedic surgeon on Friday. He said North Shore Hospital does not have waiting lists. Why is that? It is because the hospital will not let anybody on to them. That is the actual truth.

We have heard time and time again that if people do get on to a waiting list, they have to be sicker than ever before. All the district health boards, including Capital and Coast District Health Board, are saying that. We had the board’s surgical services manager, poor lady, in front of us at the Health Committee last week. She went through a range of specialties, under questioning, in which one has to be sicker than ever before in order to get an operation—ear, nose, and throat surgery, orthopaedics, gynaecology, and eye operations. I asked her whether one had to be sicker than ever before in order to get an operation in New Zealand, and she said yes, one does. That was a confession that the health service is failing New Zealanders.

I ask the Minister, Pete Hodgson, what he will do about that. Frankly, we see no evidence that under Labour the health system is providing the services people need. Would any member want to be a heart surgery patient in Auckland? Four years ago there were 800 heart operations done in Auckland; this year there will be 400. Frankly, the message is that one has to be sicker than ever before in order to be operated on. The Minister has to tell us where all the money has gone. The Minister owes the people an explanation of that.

People come to my constituency office every day and talk about the operations they cannot have done under the Labour Government.

Dr JACKIE BLUE (National) Link to this

It is the responsibility of Governments to strive to provide the best health care for their citizens. Sadly, I say that this Labour Government is failing its citizens. I add, too, how disappointed and stunned I am at the poor performance of the Minister, Pete Hodgson. But my sadness is balanced by the fact that I am part of a wonderful health team: the marvellous Hon Tony Ryall—what a great leader—Dr Jonathan Coleman, and Jo Goodhew. What a great team I am with!

The House has heard from some of my colleagues already, and will hear from Jo Goodhew, about the deficiencies in the health system. But the real scandal is in pharmaceuticals, and in the 5½ out of 10 performance of Pharmac. That is really bad. Pharmaceuticals and prescription medicines play a vital role in the prevention, amelioration, and treatment of disease and disability, and are an essential tool for improving health outcomes for New Zealanders. With Vote Health now at almost a massive $10 billion, one would expect that the spend on pharmaceuticals would have increased proportionately over the last 3 to 4 years. My colleagues will be aghast—absolutely shocked—when I say that that has not been the case.

JO GOODHEW (National—Aoraki) Link to this

What exactly is the state of the health system? We have heard that it got 5½ out of 10. What is the level of confidence in the new Minister?

Hon PETE HODGSON (Minister of Health) Link to this

I would like to thank Barbara Stewart for her contribution. I freely acknowledge that in its confidence and supply agreement New Zealand First states its interest in both ends of life, in terms of the availability and affordability of health care, and it hopes this would be free for children under 6. I acknowledge the member’s ongoing attention to the health of older people, to the roll-out of the positive-ageing strategy, and to what we need to do to improve home-based support services, and so on. I thank her for her interest in those matters. Embraced in that is her interest in maternity services, and the Government enjoys her support as it seeks to improve linkages between midwives and primary health organisations, and as it seeks to improve data sets still further and introduce a mentoring system for new midwives, and so on.

I give a quick little reminder to the member that my predecessor, the Hon Annette King, indicated in the election campaign a bunch of moves we will be making in the area of child health, and she will have some familiarity with those. They include a newborn hearing screening programme to be rolled out in the course of this term of Government; improved child and adolescent oral health-care, especially a bunch of capital investments to be made there; improved child and adolescent mental health services, where often there is a shortage of adequate health workers; the preschool wellness check, and so on. I enjoyed the contribution from the member and thank her for her support.

All of the other speakers came from the National Party, and it was a bit strange. Mr Ryall, who is the nominal health spokesperson, began, more as a sort of master of ceremonies than delivering a speech. He talked about what would follow, about what this person would say, what another colleague would say, and that verily they would have yet another colleague who would get up and make his or her contribution. Mr Ryall gave us an idea of what we would hear in the future, then sat down, having said only one other thing, and I took significant exception to what that was. It was his assertion that fewer New Zealanders are receiving surgery and elective surgery. Such assertions are wrong. They are simply at variance with the facts. I enjoin the member to try to pay attention to his own credibility and to his own reputation by making sure that he sticks to the facts, at least on occasion, because from time to time, facts ought to get in the way of a good story. It is not OK to say that fewer New Zealanders overall are receiving surgery than was the case 5 years ago. That simply is not true.

The rest of it seemed like a sort of sixth-form cabaret, actually. It was a sort of sing-songy roll-out of some pre-arranged positioning that had been carefully rehearsed in the lobby, complete with graphs that could not be seen on radio, and complete with what were clearly some well-worked-out lines about the “5½ out of 10” theme. “We’ll play that one at the Minister!”, they said to themselves excitedly and breathlessly before they came into the Chamber. I say to members of the National Party health team that they should put in some more practice during their lunchtime, because it was not an auspicious beginning. They need to try harder. Let us hear what my view is of Annette King, because one of those cabaret players asked me to say what it was. [Interruption]

Hon MAURICE WILLIAMSON (National—Pakuranga) Link to this

I tell the Committee that tonight I intend to focus specifically on the issue of funding for roads. I want to use a couple of Government pieces of advice to see whether I can convince the Minister—and I am not try to be smart-alecky, rude, or nasty—that, in fact, road funding needs to be put onto a more consistent, ongoing basis, with some longevity that the industry can work towards.

Dr Michael Cullen makes the claim that at present the Government, with its couple of one-off announcements for Wellington, and with the announcements for Auckland, Waikato—yet to come, I think—and Tauranga and the Bay of Plenty, is currently spending about all the petrol tax at any rate. I think he is right, and I will try to be as fair and balanced as I can. The National Party has, for some time, believed that in order to provide some certainty for the contracting industry, we should take all of the petrol tax that is collected: approximately $1,200 million rather than approximately half a million dollars, with the other half a million dollars being put into the consolidated account.

Those are just rough numbers, but there is a difference. If Dr Michael Cullen is right in saying the Government currently spends about $1,200 million on roading, which is money from the consolidated account, why is there a need for the change if the amount of money is the same? The reason is that it provides some certainty for the industry and for road-building contractors in the future. They will know, as the money is collected, that it will go towards the National Land Transport Programme, and work its way through to the National Land Transport Fund, so it can be spent. All that money will be required over the coming years, and I think the Minister is very aware of that in terms of an infrastructure deficit that has accumulated over decades. I am very happy to openly admit now there is an infrastructure deficit—and I know my colleague Tau Henare has admitted that on his radio show—so I will say again that I think we have underfunded roading in this country for decades.

If one looks at the figures, one sees they show that back in the 1980s there was a massive funding drop. When the new Labour Government came in, in 1984, the funding dropped from about 1.3 percent of GDP down to under 1 percent, and it has stayed there. But anywhere else in the OECD the average has been about 1.3 percent. For those countries we would aspire to be like, such as Australia, and certainly its eastern states—New South Wales and Victoria—the percentage is about 1.5 to 1.6, or, in fact, 1.8 when one adds private sector spending to the percentage. So even if we were to move all the petrol tax over, and according to Dr Cullen we are spending a similar amount to that right now, it will not be enough and extra money will need to be spent.

In the two 5-minute calls that I will take I want to draw attention to some advice that I think Ministers in this Government should be very wary of with regard to how the current amount of money—and it is not enough—is being spent. The first issue I want to refer to is a Treasury report marked “In confidence” and dated 28 June 2005, so it certainly comes into the period we are considering. The report is to the Minister of Finance, and I am happy to table the report or give a copy to members if they would like to see it. This is not the National Party’s view, but that of Treasury analysts, who state in section 20 of the report, on page 8: “Insufficient infrastructure may constrain productivity growth. Treasury’s report on New Zealand economic growth argues that infrastructure is a facilitator of economic activity. If investment in infrastructure fails to respond to a growing economy, then bottlenecks result.” We agree with that. I think no one here in this Committee, except maybe the Greens, would fail to agree with that.

The report goes on to state: “A recent internal Treasury project examines the questions of whether, from a national welfare perspective expenditure on roads is sufficient.” The report then gets to be really interesting: “Transfund conducts comprehensive cost-benefit analysis of potential projects and generally rejects projects that have rates of return less than 55 to 60 percent.” I repeat: “and generally rejects projects that have rates of return less than 55 to 60 percent.” The report goes on to state: “The methods Transfund uses to conduct the cost-benefit analysis appear to be sound”—so that is good news; they appear to be sound—“and may, in fact, be underestimating the return from proposed projects.” Again, that is something really worthwhile to focus on. They appear to be sound methodologies, but they may actually be underestimating the value of these roads. The report then states: “This suggests substantial road infrastructure underinvestment.”

That comes from Treasury, not the National Party, and I remind the Minister that we are not having a smack at him. The Treasury report states: “New Zealand seems to be passing up road investments that would earn a very high return”. I will repeat some of that, because it is good: “New Zealand seems to be passing up road investments that would earn a very high return (certainly much higher than the return earned by marginal investments in the private sector). Insufficient road investment may be a bottleneck constraining overall productivity, although we don’t know just how big the problem is, or how much the aggregated productivity would be if these constraints were eliminated.” I say that every member of this House should read that report, because I think that nails it in a nutshell from one side.

I will tell the Minister why I am concerned about the one-offs and the bits and pieces—we will fund this, and we will give a bit to that, so Wellington will get a chunk of this and then it will get that, and we will do the Waikato next, and we have done the Bay of Plenty, and so on. It is because the incoming Treasury briefing to the Minister of Finance is almost the complete antithesis of what I have just read out. On page 16 it states: “Any further investment in the short term is likely to result in cost escalation rather than improved transport outcomes. … Since 2004 there has been a move away from the benefit-cost approach for determining funding priorities as a consequence of the New Zealand Transport Strategy,”—so that the New Zealand land transport strategy that was brought in a few years ago has a consequence, and we have moved away from that approach—“as well as a number of regional transport packages. There is a danger that this had led to some projects that have relatively low BCRs”—benefit-cost ratios—“being funded.” So there is the Treasury warning.

Hon PETE HODGSON (Acting Minister of Transport) Link to this

The last few remarks of Maurice Williamson were not as well put together as his earlier remarks, which I thought were very helpful and contributed very usefully to the debate. The member said he wanted to talk about funding for roads. Land Transport is about a lot more than roads, but I will respond on the topic he has raised, because that is the fair thing to do. Although the national land transport strategy is about much more than roads, we can talk about roads for a while. I thought the member made a pretty good point. He has witnessed, when he was Minister and subsequently—during the course of this Government—lots of changes of plans, delays, advancements, things coming on and off the schedule, money being put in by Governments, though it needs to be said that that has happened more since the change of Government than before. As he pointed out, there has been a bunch of regional joint official group projects—in Auckland, initially, then in Wellington a couple of times, in the Bay of Plenty, and, soon to be announced, in Waikato. All of those things are true. The Government has continued to put more money into the National Land Transport Fund by capital injection. Maurice Williamson has argued that we simply need to shift all of the money that is nominally put across to the consolidated account to the National Land Transport Fund, in order to give certainty.

It is not a bad argument. I say to the member that the Government is currently looking not at doing what he suggests—I say straight up—but at ensuring that we can get a higher level of certainty, especially in the next few years. Certainty in years 9 and 10 will always be a challenge. Certainty in the first several years is certainly a possibility.

I need to point out to the member that because oil is experiencing a very significant increase in demand, and because it will soon, at some stage—in some year, some decade—show a maxing out of supply, we will see the price of petrol go up. In the event of us not being able to shift adequately or quickly enough to, for example, biofuels or other forms of motive power, we will see the use of motor cars drop. Indeed, technology already allows for the use of motor car revenue to drop, so he does not have a panacea. If members can imagine in 3 years from now the importation of second-hand hybrids into this country, or the very significant increase in the sale of new hybrids, they will begin to see that the certainty that the member is seeking is actually quite elusive. He is a smart enough guy, and he has been—

Hon TAU HENARE (National) Link to this

It gives me pleasure to speak in the financial review debate of the Ministry of Māori Development. This report is the second draft that has been released. I want to give my thanks to the Chief Executive of Te Puni Kōkiri, Leith Comer, for turning up and giving his dissertation to the Māori Affairs Committee.

When one moves through the report, one sees that Te Puni Kōkiri appears to have moved its focus and resources away from its monitoring role. The Ministry of Maori Development Act states specifically that the role of the Ministry of Māori Development is to monitor other Government agencies.

Hon PAREKURA HOROMIA (Minister of Māori Affairs) Link to this

I laboured tediously over the report, and I did so when the report was rightfully released, not when some fools tried to accelerate some of the nonsense that was pushed out of the Māori Affairs Committee. I am sure that if we were on another journey, the Ministry of Māori Affairs’ financial results would not be before this Committee tonight.

I want to be quite clear in relation to what the Act states, so that we can put this right tonight—properly. Although the Act makes the ministry responsible for a monitoring and liaising role, it does not provide any powers to carry out that role; nor does it specify how the role should be carried out. This Government and the ministry carried it out well. [Interruption] That is right. Leith Comer and his committee carried it out well. I commend the Ministry of Māori Affairs for the effort it put in over that period of time.

I remind my friend Tau Henare, a former Minister of Māori Affairs—whom I used to go fishing with on Thursday nights because he was so out of work that he did not know what to do; he used to get senior public servants from ministries to go fishing with him, and he was so hopeless that he never caught anything—of his time as Minister. This guy thinks he knows better as to what is good for Māori and what is bad for them. In his time and on his watch 48,000 Māori were unemployed; on my watch, there are now 16,000. That is the result of great support from the Ministry of Māori Affairs—Te Puni Kōkiri—and hard effort from this Government. When Tau was last a Minister, his Government froze the minimum wage.

TE URUROA FLAVELL (Māori Party—Waiariki) Link to this

The consideration of the estimates and financial reviews in the Committee of the whole House has traditionally been regarded as the time dedicated to holding the Government to account. And what better day to hold the Government to account for the work of the Ministry of Justice than today—a day on which the nation is reeling from the damning Report of the Special Rapporteur on the Situation of Human Rights and Fundamental Freedoms of Indigenous People, presented to the United Nations by Rodolfo Stavenhagen. I urge the Minister of Justice to spend his adjournment time in looking over that report, and in considering how he may implement the many recommendations, in terms of both policy formulation and practice.

The special rapporteur considers that New Zealand’s human rights legislation does not provide sufficient protection mechanisms regarding the collective rights of Māori that emanate from article 2 of Te Tiriti o Waitangi—in other words, our tino rangatiratanga. The Māori Party has made approaches to the Auditor-General and the Human Rights Commission regarding the Foreshore and Seabed Act, and the response, in our view, was inadequate. The report of the special rapporteur supports our view. He also considers that the underlying legal and political fragility of Māori rights translates into a human rights protection gap that seems not to be sufficiently covered by existing legislation.

The legal and political fragility of Māori was brought home to us most vividly this morning, with reports of our car-koi allegedly breaking the law. We were advised by members of the car-koi that yesterday two of their cars, one with Mr Hone Harawira’s face featured on it and another with a Māori Party flag flying from the window, were followed through the fine town of Tokoroa, a haven for Māori Party activity. When apprehended, the car driver was charged with unreasonable use of a warning device. Cars were sounding their horns in support, in a celebration of democracy. The alleged offence incurred an infringement fee of $1,000 for one driver and $750 for the other. The offences included driving in a manner likely to annoy other people. Well, although I cannot see it, I suppose the dial of Mr Harawira has the potential to annoy other people, who may envy those incredible good looks, but it does seem bizarre to me that the only cars pulled out of the line of cars travelling that road were those identified with the Māori Party insignia.

The legal and political fragility of our people—as proven in Tokoroa—is seen day after day in the courts of this land. It is little wonder that the special rapporteur also became aware of it. As the House was told earlier today, the United Nations special rapporteur’s report found: “The inherent rights of Māori were not constitutionally recognized…”. For that reason the report of the United Nations included a very strong recommendation about the urgent need for constitutional reform, in order to regulate clearly the relationship between the Government and Māori people on the basis of the Treaty of Waitangi and the internationally recognised rights of all people to self-determination. The special rapporteur recommends that the Treaty of Waitangi should be entrenched constitutionally. He also recommends that the MMP electoral system should be constitutionally entrenched to guarantee adequate representation of Māori in the legislature and at regional and local government levels.

That is a key recommendation for the Minister of Justice, and it could hardly have had better timing than the very start of the Māori electoral option campaign. We are greatly heartened by reports from political analysts that the political landscape will change dramatically through the proactive decisions of large numbers of young Māori who are enrolling to vote. We know that the numbers of Māori seats in this House could be increased to 13 if all tangata whenua enrolled on the Māori roll.

This is the most exciting opportunity for tangata whenua to increase our influence in the political decision-making of this nation. The independent Māori political voice is a means to achieving tino rangatiratanga—that is, a degree of self-determination consistent with Te Tiriti o Waitangi. The independent Māori political voice in this House has created a wave of interest for many Māori people to participate as equals. Is that not worth sounding our horns for?

Hon MARK BURTON (Minister of Justice) Link to this

I am pleased to take a brief call. I think this has been a week in which we can take some sadness at the performance of the National Party when it comes to the Māori electoral option. I was not planning on taking a call on this but, frankly, I was appalled at the failure to rise to the challenge of leadership shown by Dr Brash in terms of the Māori electoral option.

Monday was an opportunity for members of this House, regardless of their party political persuasion, to participate in encouraging New Zealanders to get on to an electoral roll. I do not care what roll it is, frankly. As Minister of Justice I could not care less which roll people get on to. I absolutely, passionately care that all New Zealanders take the opportunity to get on to an electoral roll, to make that decision for themselves, and to participate. I suggest that every member of this Parliament should share that passionate commitment. To have the leader of the National Party—a party that once, I think, could pride itself on its commitment to our democracy—trying to score cheap political points on a Sunday afternoon, when not much else seemed to be happening around the press gallery, was disappointing. So yet again, predictably, I suppose, he trotted out the stir up—the “pick off the nasty scab”—of the issue of race relations, and one or two people bought into it. But I was disappointed, and somewhat surprised, that even Dr Brash would sink to that, because this is an opportunity to say to young New Zealanders in particular: “Get on a roll, participate, and make your choice—whether it is the Māori roll or the general roll.” While we are about it, I tell any New Zealander who is of a mind to—because we are focusing on electoral rolls—to get on a roll and be a participant in our democracy. That is what this is about. But instead of that, we saw this cheap, tacky attempt to score a political point off the back of the same tired, old, prejudiced, and divisive process.