Supplementary Estimates

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

I move, That the Appropriation (2005/06 Supplementary Estimates) Bill and the Imprest Supply (First for 2006/07) Bill be now read a second time. These two bills give us a chance to dwell yet again upon the achievements of this Government and the obvious failings of the Opposition. Under this Government we have seen the most sustained period of economic growth for the last 30 years—

JOHN KEY (National—Helensville) Link to this

That was the current Minister of Finance. In the National Party we are never quite sure who the current Minister of Finance will be, because, frankly, those members are all lining up on television and claiming their credentials. A few weeks ago Phil Goff in his caravan did so, and Trevor Mallard told us in the weekend that he should be the Minister of Finance, but he does not know the difference between an asset and a liability. What a remarkable interview there was with Trevor Mallard on Saturday. When he was asked a question by Lisa Owen, he said that it was OK if bonds owned by Meridian Energy went down, because the Government still owned the assets. I hate to tell Trevor the bad news but the Government actually owns the liabilities, and they are the ones that will have to be repaid, with that kind of thinking.

I am glad Michael Cullen raised in his speech the little issue about bribes. Let us go to the major bribe that this Labour Government had in its campaign: the student loan policy. It was a very interesting policy, and it was the first thing in the Budget that Michael Cullen got a clap for, and that took 14 minutes—it was about 12 pages into the Budget. Why did he get a clap? Because the blowout in cost was going to be slightly less than he originally thought. That came from a man who, when I asked him, before Parliament adjourned at the end of the last session, what the impact was on the New Zealand balance sheet and what it cost the taxpayer of New Zealand, looked at me and said: “I don’t know. I’ll have to go and ask somebody.” When he came back with the answer, the figure was $1.5 billion. That has been the write-off to the New Zealand balance sheet. That is what mum and dad have had to pay for, and 40c of every new dollar of every loan that goes forward.

That answer came from the man who claims he is an economic genius. It is no wonder that he is about to retire. Actually, the interesting question is whether he will retire. We have it on pretty good authority on this side of the House that the only person who supports Michael Cullen is his wife, because Helen Clark certainly does not. She does not talk about Budget 2006. Members opposite refer to it as “Michael’s Budget”, because nobody wants to be associated with it. It was a shocker, and the message that she was sending—

Hon CLAYTON COSGROVE (Associate Minister of Finance) Link to this

For the uninitiated out in the real world that was John Key, who currently sits beside Bill English. As we know, they are both auditioning. That was audition No. 1 for the leader’s job, and I bet we also have a speech from Bill English, which will be audition No. 2. I am told that the only reason Don Brash is still sitting in the leader’s seat and Gerry Brownlee is sitting in the deputy’s seat today—or maybe Mr Brownlee is sitting in both seats; I do not know—is that no one in the caucus, neither John Key nor Bill English, can get a majority. Neither of them can get there, and the caucus cannot make up its mind.

After listening to that speech I have to say that the “$50 million man”, who talks about what the message for workers is, is no further ahead. Dr Cullen said something very profound in that speech, and John Key agreed with him. The first thing the pretender to the throne of the National Party leadership and the man who would one day be Minister of Finance thinks about is not the people of New Zealand or the message to the workers whom he talked about in that speech—oh, no! It is numero uno. It is he who is No. 1. It is him and his personal wealth.

What he did in that speech was try to ridicule a number of people who, if Dr Cullen were to be hit by a bus—which ain’t going to happen—could take his place, stand in for him, and do a very credible job. I have two messages for Mr Key. The first message is that Dr Cullen is not going anywhere. The second message I have is, could he stand up and say whether, if National were ever returned to Government—heaven forbid—he could name two people on his side of the Chamber who could replace members on that front bench if they were to be hit by the proverbial bus. The answer is no, because those members are hollowed out, they are bereft of talent, and also because people like Dr Lockwood Smith, who is yesterday’s man, did his time in Cabinet and still has not got over being bumped back to the second row.

I say that the message to the workers of New Zealand today is that this Government is delivering and members opposite cannot get over it. This Government is delivering to 350,000 working families today. That is three out of every four families in this nation. They are not the greedies whom John Key represents, but 350,000 families—three out of every four families—who are receiving, on average, $88 a week of their money back. The difference is quite clear. Three out of four families—hold this thought—are receiving $88, on average, a week. Then we have the Opposition’s prescription for growing the economy. It is simply this: John Key adds to the $50 million he already has, by $91 a week. That is called a Brash tax cut. Under National, most other Kiwis, including those 350,000 working families, would receive on average about $10 a week. So that is the stark contrast. There are 350,000 families out there who can add up, who are smart, and who understand economics because they go to the grocer’s shop every week and balance their money, and who are receiving, on average, $88 a week.

But, of course, I am sure John Key could spend his extra $91 if Don got into power. He is good at spending; I am sure he could spend it. I am sure he could add to the $50 million he already has. He would wake up even happier in the morning knowing, as he thought about his personal wealth, that Don had given him, in an across-the-board tax cut, another $91 to go out and buy a few more bottles of pinot gris. That is the difference between the parties, that is what an election was fought on, and that is what New Zealanders know.

I say we should look at Labour’s achievements. Dr Cullen outlined them. It is a fact that 313,000 new jobs have been created. Apprentices have been brought back—and I know that every time I say that, Dr Lockwood Smith grins. He is the man who destroyed apprenticeships and who pulled the rug out from under every young person in New Zealand when he got rid of the Apprenticeship Act. He always says that, yes, he did it. He is always proud of having done that. Well, I am proud of the fact that we have backed young people and we are bringing up the number of apprenticeships—from 9,000 on the go now, to 14,000 by 2008. We campaigned on that at every election. We campaigned on that issue in 1999. It was one of the most popular policies—and Dr Smith’s only legacy was to not train a young person or not provide any assistance to a young person. That is why we still have a training gap today. We have some of the lowest unemployment in the Western World.

R DOUG WOOLERTON (NZ First) Link to this

I just want to correct my colleague Clayton Cosgrove. It is true that in the dark of the National Party there is a contest for a leader. Having been there myself many years ago, I understand about these things. The point the member is not correct on is that National members are unsure of their numbers for that challenge. They do know. Each one of them actually has the numbers. The thing is that they do not trust their colleagues, because in the very recent past each and every one of them has been done over by his or her colleagues. So each of them is doing the numbers, but each of them is so unsure the numbers are correct that no one wants to move. Be that as it may—

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

It is becoming just a little bit clearer every day that along with waste, instability is becoming part of the way this Government does business. We have only to see the charade that has been played out in the last few weeks by Trevor Mallard over his aspirations to the role of Minister of Finance to understand what is happening in the Labour Government. Helen Clark has now essentially left Wellington and she sees herself as campaigning full time for a fourth term. We know that her mind is on the big picture when her office instructs organisations that organise events to which she goes to make sure of two things: firstly, that the National Party has no official role in the public function, and, secondly, that the Labour candidate for that electorate must be on the platform. She did this in Lawrence, in my electorate. I found out because the organisers rang me to find out who the failed Labour candidate was, and none of us could remember. I do not yet know whether that person found his or her way to the platform.

That is the petty level to which the Prime Minister of New Zealand is now descending. She is going around the country and handing out large cheques with $1 million written on them, and is making sure that the local National MP, who in most cases worked very hard for the project, is not allowed on the platform and the failed Labour candidate is. Helen Clark does not want to be in Wellington because what is going on here is much more important to the country and it has now slipped out of her control—the battle for succession of the Minister of Finance’s job. Helen Clark has effectively given Phil Goff and Trevor Mallard permission to go into battle. She has done that by doing what she does with such masterly effect—nothing. When Dr Cullen’s Budget fell flat and the public decided that he was getting far too much of the surplus and they were not getting enough, Helen Clark did not lift one finger to defend him. In fact, if one was not a New Zealand voter, one would not have known after the Budget that Helen Clark was the Prime Minister of New Zealand. One would have thought it was Michael Cullen. She had nothing to say. She has taken no position on whether there should have been tax cuts. She left Dr Cullen to it, and that gave permission to Trevor Mallard and Phil Goff. Well, what a battle that will be. Trevor Mallard will be much better at fighting his way to get the job than he ever will be at doing the job. Phil Goff, as my colleague Tony Ryall has said, is sitting in his caravan in Mount Roskill and waiting, waiting, waiting.

When the members on the Government front bench are starting to talk openly about their ambitions, and when the Prime Minister has lost control of those headstrong individuals, we then know that the Government is headed for a period of trouble. In its third term, that period will extend to the election it will lose. The signs are all there. It does not matter how much Dr Cullen protests about journalists or about his colleagues, as I am sure he did when Trevor Mallard lost his grip on the difference between assets and liabilities. Trevor Mallard is the man who wants to be in charge of—what is the size of the New Zealand Government’s balance sheet? He does not know which side anything should be on. Actually, that does not surprise me in Trevor Mallard’s case. I do not know why everyone else is surprised—we have always known that.

The problem with Dr Cullen is that the public has stopped believing him. He has kept shifting the fiscal goalposts. He started out with the operating balance as his fiscal target, and that got too big, so he changed it to the operating balance excluding revaluations and accounting changes, which is a variation of the operating balance, and that got too big to justify not giving tax cuts. So he reverted to the 1950s and started talking about cash flow. Then that got too big to justify not giving tax cuts. Worst of all for him, the public has simply stopped believing what he says. There is a wisdom in the crowd, because they know that a cash flow measure is simply the wrong measure. It is not a measure of the financial state of the Government or its ability to give tax cuts; it is a measure of how much capital spending Dr Cullen has been able to finance out of current revenue—of how many houses he has been able to buy with his annual income. Actually, because his annual income has been growing pretty fast, he has been able to buy quite a few houses. So the public has just simply stopped believing him, and that is a good thing.

We have had 6 or 7 years when Dr Cullen has spent most of his effort trying to prove that he is more fiscally conservative than Arnold Nordmeyer and Walter Nash. That might be his little personal problem, but this country does not have a problem with debt—it has a problem with growth. It is the prospect for getting our growth up that is the worry—and that he is doing nothing about—not the problem of getting our debt down, which has been substantially dealt with.

So Mr Goff and Mr Mallard are on the go, and we have heard the code for it. Who heard Clayton Cosgrove talk about what would happen if Dr Cullen was hit by a bus? Any caucus knows that that is the tripwire. If someone was hit by a bus, who would the caucus support? If someone was hit by a bus, who would look better on TV? If someone was hit by a bus, who would the public warm to? So the bus conversations have started. In Labour, leadership conversations are barbeque conversations led by Phil Goff, but this is a bus that Phil Goff thinks he is already on.

Hon TREVOR MALLARD (Associate Minister of Finance) Link to this

The time for that member’s speech has expired, and whereas he was quite close to becoming National’s leader about 3 months ago, as time goes on his leadership ambitions will slowly evaporate. That is true also for John Key. National has reached a gridlock. Bill English, John Key, Simon Power, Gerry Brownlee, and Don Brash are all holding 20 percent, plus or minus a bit, in terms of their support. National knows that Don Brash cannot do the job, but that it cannot change its leader until it gets a majority for someone else. National cannot do that now, so Bill English is propping up Don Brash, John Key is now propping up Don Brash, Simon Power is now propping up Don Brash, and Gerry Brownlee is now propping up Don Brash.

The problem with the arguments the previous speaker expounded is that he tried to play both sides of the street. When one is having an economic debate, one just cannot do that. That is the member whose leader, in a taxpayer-funded postcard—and I underline “taxpayer-funded” so that everyone knows the taxpayer paid for those postcards, although about 3 or 4 weeks ago the National Party said it would never do anything like that—that we all got through the letterbox last week, paid for by deliverers and paid for by the taxpayer, committed the National Party to $2.2 billion a year worth of tax cuts. What did the previous speaker say today? He confirmed—

METIRIA TUREI (Green) Link to this

I want to refer to the supplementary estimate on Vote Climate Change and Energy Efficiency.

Hon ANNETTE KING (Minister of State Services) Link to this

I rise to speak on the Appropriation (2005/06 Supplementary Estimates) Bill. At this time a Government can set out its agenda and look at how that relates to its main priorities. Before I do so, I want to refute something Bill English said. He claimed that the Prime Minister controls certain events and who gets invited to them. I absolutely refute that. It is the sort of nasty little thing some people in Opposition will say. I am just sorry that Bill English wants to be one of those nasty people. I can tell this House that Bill English was invited to an event in Lawrence recently—not controlled—and his apology was read out. He had a much more important event to go to than the one in Lawrence. He was going to a National Party conference, which obviously was far more important than the Lawrence event. However, he would like to make out that, in fact, he was not invited. He was invited, and I know of many occasions to which he was invited when I was Minister of Health and to which he may or may not have turned up.

He might like to consider that people who invite him do not take kindly to being abused when he arrives. Recently he did exactly that. At the opening of the velodrome he abused the master of ceremonies because, he claimed, he was not recognised properly. So before Bill English slates the Prime Minister in this House and makes up stories, he should consider his own actions and what he does in his own electorate. This is not the place to be a lion; the place to be a lion is his own electorate, where he should turn up to events he is invited to and make them a priority.

Today I want to talk about two of my four portfolios. I wish to talk about Vote Transport and Vote Police, and how they relate to the Government’s three main themes: economic transformation, families young and old, and national identity. I would like to begin with transport. As the new Minister of Transport I was particularly lucky to receive a major boost for transport in the last Budget. In fact I was very lucky in police as well, with a major boost in the police budget, thanks to our work with New Zealand First and our arrangement with it.

The Budget 2006 transport package really is an investment in the future. The Government is trying to deal with past neglect. It is true that infrastructure investment is sadly lacking in New Zealand. I think it is fair to say that it is sadly lacking in the Auckland area particularly. We have to acknowledge a lack of investment in Auckland. Auckland did not get its proper share of money and investment over a decade in the 1990s, and we need to ensure that Auckland catches up. Auckland is a powerhouse of our economy and an important part of New Zealand. Over a third of the people of New Zealand live there. Although the rest of New Zealand is, of course, important, one neglects Auckland at one’s peril. So part of what the Government is doing with the transport budget is to invest in the deficit gap in transport.

The thing about infrastructure investment is that it must be ongoing; it cannot be stop-start. One cannot put a bit of money in, then stop, look around, and wait to see what will happen. Unfortunately we saw a lot of stopping in the 1990s and not much starting—National stopped and we started. So we have investment going into transport infrastructure. I know that many members of this House welcome that, because they know that it is so important not only for their regions but also particularly for the Auckland area. An extra $1.3 billion of investment is guaranteed to go into the State highway programme, to be locked in for the next 5 years. That is a major change to what has been done in transport in the past. We have usually had a 1-year Budget cycle. It is very difficult to have ongoing infrastructural development, planning, and strategy when one does not know what the funding will be from one year to the next.

As this House knows, the outlook around funding has been uncertain, because funding is related to money that comes in from excise duty, from road-user charges, and so on, and that fluctuates. That made it very hard to plan what roads would be built and how they would be funded in the future. In this Budget we see for the first time the funding locked in over a 5-year period to bring forward projects that were on the 10-year plans of Transit and Land Transport New Zealand—to say that those projects will be done in that 5-year period and to put the funding behind it.

A very important part of that is that we will spend all the money that comes in from road-user charges and excise duty. Not only will we spend it all, but also over the next 5 years we will invest $300 million more than what comes in from those charges. That is important. The National Party says it was committed to doing that—it was committed to moving petrol tax to fund roads over a 6-year period. That was just petrol tax. We have done that now, and over the next 5 years an extra $300 million will go into funding New Zealand’s transport infrastructure. That is a very large investment—in fact, it is an unprecedented level of spending on land transport. It will increase by $13.4 billion over the next 5 years to guarantee and accelerate the country’s largest-ever road-building programme.

I have been asked why we have not spent more on passenger transport and public transport. I have to say that the answer is yes, we should spend more—and we are spending more—but I remind the House that public transport never had a high profile in the 1990s. I have looked back at investment in public transport. Maybe it did not seem so important then, but throughout the 1990s funding for public transport was frozen at around $40 million a year. Members need to know that the annual spending on public transport has increased by over 700 percent since 1999, from $43 million to an estimated $360 million in 2006-07. Of course, I think we can do even better in public transport. As we look at our needs over the years going forward, passenger transport and public transport are very important indeed. But the truth is that alongside public transport we still need the roads for the buses to travel on, and so on.

In the few minutes I have left I want to speak about the New Zealand Police. As a country we can be very proud of the New Zealand Police. If we look around the world we will see that other police forces do not necessarily have the integrity of our police. They are not necessarily as well trained and well coached as our police. I believe that the investment the Government puts in over the next 4 years will be very important indeed as we train 1,000 more sworn police and 250 more non-sworn police over that period of time.

As I said, extra police funding came out of our confidence and supply agreement with New Zealand First. The total funding for this initiative in the Budget and through to 2008 is likely to reach around $500 million. That is a huge investment into New Zealand Police. What is important is not only having the additional human resource, but also how we actually use those police in helping our communities. I believe that the important thing is the engagement the police have with communities, the community safety initiatives they undertake, and the prevention and early intervention of our police to try to prevent the sorts of crimes we see happening in our communities. The police have a big role to play in that.

I have seen—in my short time as Minister—some very, very good projects around New Zealand where police work closely with communities. I ask members to take the example of Neighbourhood Support or Community Patrols. I opened their conference, just a week ago, in Rotorua. We had 300 to 400 people involved in Community Patrol—the eyes and ears of the police—scattered all around New Zealand and working very hard on behalf of, but with, the police. I think that sort of approach is very important as we go into the future.

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

The Hon Annette King has just provided a very interesting contrast to a previous speaker. She actually talked about the Labour Government’s programme as it looks ahead. I do not agree with everything she said, but at least I have to give her some credit for talking about what her Government plans to do. In contrast, there was the Hon Trevor Mallard, the pretender to the role of Minister of Finance. I ask members to compare those two front-bench Ministers. Trevor Mallard just made up anything when he spoke to this House half an hour ago. I came into this Parliament in 1984, the same year as Trevor Mallard. He was just a bully-boy back then—a gutter fighter—and he has not improved. If he thinks he will take over the role of Minister of Finance for this Labour Government, God help this Labour Government!

Mind you, I gather his competition is Phil Goff. I followed Phil Goff as Minister of Education in 1990. The very first appointment the Ministry of Education asked me to have as Minister was with John Gill, the financial controller. He contacted my office and said to my senior private secretary that he had to see me urgently. He came into my office and said: “Minister, there are some things you must know.” He laid out in front of me—as the new Minister—the illegal spending that had been ordered by Phil Goff, the previous Minister of Education, leading up to the 1990 election. Phil Goff had spent money, not appropriated by Parliament, to try to buy votes for Labour, which knew that it was on the skids and on the way out.

That is the integrity of Phil Goff when it comes to financial matters. Phil Goff was illegally spending taxpayers’ money—hundreds of millions—to try to buy votes for Labour on its way out. I have never forgotten that, because—as the new Minister—I had to pass legislation through Parliament to make Phil Goff’s dishonest spending legal. And Phil Goff wants a claim to the role of Minister of Finance! Mind you, the guy they seek to replace, Michael Cullen, was Associate Minister of Finance at the time and he brought into Parliament one of the most deceitful Budgets, and one of the most dishonest Budgets, seen here in the last 20 years. Michael Cullen, as Associate Minister of Finance, brought into Parliament the 1990 Budget. It claimed a $79 million surplus—

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

Tēnā tātou te Whare. I understand that, amongst other things, the supplementary estimates list the changes in appropriation since the Budget, and often, I hear, those changes mean funding cuts. That means, of course, that when the spotlight is on the Budget, Treasury can promise the earth knowing that it can make the cuts later when nobody is watching—good politics, probably, but hardly good leadership.

These estimates can take into account policy shifts and reality checks and they can even be used to respond to extraordinary actions of the moment, such as the tragic and preventable deaths of the twins over the weekend. As usual, talkback radio has been freely accusing all and sundry over the epidemic of child abuse and murder—who did it, and who is responsible for stopping it.

Knowing that I would be speaking to this bill today, I decided to have a look at the supplementary estimates for Child, Youth and Family Services. What did I find? Well, it would seem that the State has been so successful in putting an end to child abuse and promoting the well-being of children, young people, and their families, that the supplementary estimates show funding has actually been cut. For example, funding was withdrawn from the “Prevention Services” output because of—members should get this—“Changes in Departmental structure in response to the first principles baseline review.”, whatever that means. In another output, ”Family Wellbeing Services”, we see a further $1.5 million slash from services to improve the life outcomes for children, young people, and their families through programmes to prevent future harm and abuse.

These cuts are being made while the statistics are telling us that in the 10 years from 1990 to 2000, 86 children were killed—34 Pākehā, 42 Māori, 2 Indian, 3 Asian, 3 Pacific, and 2 others. The nation is reeling from the double tragedy over the weekend, and we are all struggling to find the answers. An unfortunate by-product of that debate, of course, is the rehashing of the names of other children whose deaths have also become burnt into our souls.

It is also inevitable that the names of Māori children who have been senselessly and sometimes brutally killed rise quickly in the public memory. New Zealanders are quick to ask what Māori are doing to stop this trail of despicable murders while somehow not being able to remember even one of the names of the many non-Māori kids killed during the same time. But I do not dodge the question about Māori deaths, because as a past chairman of a kōhanga reo and current chairman of a kura kaupapa Māori, it is a question that is very, very close to my own heart.

There is much that is being done, and I am happy to acknowledge the work being done by iwi in my own home electorate as part of a joint project known as Amokura—involving the iwi authorities of Ngāpuhi, Aupōuri, Ngāti Kahu, Whāingaroa, Te Rarawa, and Ngāti Wai. They made a strong statement to encourage and promote a culture of non-violence. They have not done it by just trying to lecture people either. Last year their contribution to the Amokura project, Te Rūnanga Whāingaroa, launched a waka tētē to symbolise the value of women and to recognise in a special way mana wāhine, mana tāne, and mana tāngata. Although the construction of the waka was overseen by internationally renowned carver and navigator, Hekenukumai Busby, women were also called in to help with the carving. The waka Uerangi projects the sense of unity between men and women and the sanctity of the children born by us all.

Another Amokura project was the launching of a series “Step Back” concerts to promote non-violence, and the production of a series of radio stings such as “Raising a hand don’t make you a man”, asking people to step back and think before their rage takes over. Initiatives such as these are not just happening up north. Next week Kahungunu launches its own violence–free strategy and action plan to help its iwi reject violence because it wants its actions to be based on meaningful and productive tikanga and kaupapa rather than simply adopt Government’s family violence prevention strategy, which is not kaupapa based.

We need more of these initiatives, not less. We need all citizens of Aotearoa to step back and think and to make the changes necessary to stop us from lashing out. Last summer more than 6,000 kids suffered from family violence, and for those 6,000 last summer will be a holiday they will never forget. We must stop the blame, step back, and think for a bit, and then step forward together with answers and resources. Yes, there is much that is being done, but, equally yes, there is much more that can be done. We challenge this Government to invest in positive action and flourishing communities rather than take money away from those who desperately need it most. Kia ora tātou.

GORDON COPELAND (United Future) Link to this

I am going to use the majority of my time in this debate on the supplementary estimates for 2005-06 to talk about our forecast liability under the Kyoto Protocol. Our liability period begins in 2008 and goes through to 2012. It is interesting to note that on 30 June 2005 our liability under that protocol was estimated in the Crown accounts at $310 million. In these supplementary estimates it has gone up, on a forecast as at 31 March 2006, to $627 million. That is an increase of some $317 million. The report we have received on this matter is that that is still only an estimate and it could go up further by the time the Crown accounts are finalised on 30 June 2006. So this is like an interim measure.

I am very, very concerned indeed, because a large part of that increase in our Kyoto Protocol forecast liability results from the fact that there has been a faster rate of deforestation than the former Minister responsible for Climate Change Issues forecast. That, of course, boosts New Zealand’s Kyoto obligations because, in cutting forests down, we actually reduce the amount of carbon capture and the number of forest sinks in our country. The converse of that is also true, of course, that by planting more trees and encouraging harvesters to delay harvests we indeed increase carbon capture and with that reduce our liability to the rest of the Kyoto Protocol nations.

This represents a serious breakdown of policy of the most serious kind. Time spent by the Government on its failed “burp and fart tax” and time spent on the flawed carbon tax could have been used to strongly incentivise the planting of new forests. That should have begun 6 years ago. One of the problems with this whole area is that time is against us. We cannot recapture the last 10 years; we cannot go back now and reinvent them. So there has been a real failure over the last 6 years. We have not incentivised the planting of new forests in this country. Instead of being $700 million in deficit at this point of time, I think that if action had been taken earlier over that 6-year period we could have reduced that amount, and reduced it very significantly. In fact, I would venture to say that we could probably have come to a break-even situation.

It is not really rocket science. The Government needs to stop dragging the chain on getting trees planted and move into getting strongly incentivised forestation campaigns under way. We have already lost 6 years. How much more time will be allowed to drift by? Every day is important and every hour is important. Surely it is better to spend a few hundred million dollars now on tree planting, rather than pay out up to $700 million a year to some overseas jurisdiction under the Kyoto Protocol. But that is where we are heading. Continued delay is a disgrace. I ask the Government to please get on with doing something about planting more trees in this country.

The other thing I want to mention to do with the Appropriation (2005/06 Supplementary Estimates) Bill concerns the New Zealand Railways Corporation. ONTRACK is its trading name, but we have gone back to using the more old-fashioned name for it now, the New Zealand Railways Corporation. Another $93 million has been put aside for railways. Of course, the Crown again now owns the land around and under the tracks, the stations, etc. I suggest to the House that the Crown has an opportunity to look at building parking buildings around railway stations in the Auckland and Wellington suburban areas. Overseas they call it park-and-ride. People would like to catch the train, because of the increased price of motor fuel, but all the surveys show that they still have to use their car to get from their home to the station, and when they get to the station there is nowhere to park it. So I suggest to the Government that it looks positively at that issue over the next few years to see whether we can indeed build parking buildings at railway stations. The private sector will put up the money. This would be an opportunity for what we call public-private partnerships. As I said, the Crown owns the land and it could lease the land to a private sector company. If we built some car-parks then a lot more people would travel on our trains as a result.

Hon STEVE MAHAREY (Minister of Education) Link to this

It is a pleasure to take part in this debate on the Appropriation (2005/06 Supplementary Estimates) Bill and to look at the expenditure for the Government, because, of course, this debate takes place within the context of the broader programme that the Government has embarked on—and, in fact, the country has embarked on. It is, I think, common knowledge now that the focus of the Government is on a programme of very serious change in New Zealand. In fact, we have gone so far as to use the words “transformation of New Zealand”, by which we mean that we want to go from the way we were to the way we are meant to be if we are to succeed in the 21st century.

Stated quite simply, what I mean by that is that if we look at what we were, we can see that most of the people in this House—not some of the people here, but the majority of them—who have grown up here during the past century have lived in a country that had low skills, low wages, and low productivity, and that was highly successful in employment. It was a highly successful society, but it was a society based largely on the production of things that we did not have to do much about. We took advantage of the fact that we lived in a country with good water, good air, good grass, good growth, and a good climate, and we lived, as people used to say in the old days, off the sheep’s back. We know today that that simply will not get us through the 21st century. We know that we must go through a period of major change. We have been going through those changes, but we are not there yet. We have not yet got over the hurdles that will take us to what we need to do in the 21st century.

What we need to do today is to become what most people would refer to as a knowledge-based economy and society. In simple terms, that means we have to produce more knowledge in New Zealand—we produce about 0.01 percent of the world’s knowledge in this country at the present time—and we need to apply more knowledge. We may be able to produce a little more but we can apply a lot more, because we can take the whole stock of knowledge around the world that is relevant to us and make use of it right here in this country. That is the aim of this Government. We can call it a smart society or a smart economy—whatever we want to say—but we know we need to do that. We need to focus ruthlessly on the process of making ourselves a knowledge-based economy and society. If we are to do that, then we have to invest. That is really what this debate is about. It is about how to invest the money we take off New Zealanders like ourselves, like the families who are working hard to get by, and like the businesses. We take money off them and we invest it.

One of the arguments we have heard so far is that an investment would be to cut taxes—to give large personal tax cuts. What would happen if that was done? Would person X in Wanganui today say to Mr Ryall or anybody else on the National Party side: “Thank you. I’m an average income earner and I know you’ve just given $250 to people who are well off like Dr Brash, but as an average earner I have $10. I am sitting at my kitchen table, and I want New Zealand to be a knowledge-based society and economy because my kids need to have a real future. So I will take the $10 and invest a little bit in health, to make Mr Hodgson happy that he can do things about trying to resolve the issue of all New Zealanders getting access to health care when they need it. Health care is always going to be rationed. It’s a tough job, but he could always use some more money, so I will give him some. I will give a bit to Mr Maharey, because we want to have great schools and to employ more teachers. And I will give a little bit to Mrs King, so we can have a few more roads.” And the old $10 is being split up in that example in a way that just will not happen in reality—it just will not happen.

Does any member in the House—it is packed in here at the present time, I tell those listeners to this debate who are at home—think New Zealanders in the average household who have their $10-a-week tax cut would sit there and divide it up in that way? No, they would not. They would spend it across the shop counter and cause inflation in our already overheating economy. So that $10 would be worth nothing in minutes, because people would have pumped it into the economy for consumption. That is what would happen, and then those people would come back and ask where the investment was for health, education, roads, housing, driving our economy, science, and everything else we need to transform the country. It is a simple choice to make. How do we invest the taxes we take? Do we invest them through individual microchoices in households where people spend their 10 bucks, or do we aggregate that money so we can attack the issues that are holding back the transformation of this country?

It is interesting that in Australia people have had exactly that debate in the business communities there. Where is the investment in the things that will transform Australia? Where is the money that underpins the research and development Australia needs in order to get smarter businesses, so they can sell elaborately transformed manufactured products and earn a better living long term for Australia? Eventually, Australia will have to stop digging up coal and sending it to China. It will actually have to make a living off being smart. That is what Australia argued for, and that is what New Zealand argues for, and that is why in this Budget we see investment in the economy, in society, in groups like Māori, in groups that are concerned about our biosecurity and environment, in infrastructure like roading, and in the creativity that will drive this country to do the kinds of thing I am talking about.

As someone who is interested in social policy issues, I am pleased to see that the Government will continue to invest in the social areas of this country, because it is not, as many people see it, the case that when we invest in areas like health or education and so on it is like having a limitless blank cheque. Those investments are made into trying to keep New Zealanders healthy so they can contribute, educated so they can contribute, and well housed so they can contribute. In fact, we now know that if we do not develop socially, there is an eventual break in what we can do economically. If we do not invest in literacy and in the kids in South Auckland who are living in homes where they are not eating properly, and who are going to school without having the aspiration to stay there after they are 16 and get a qualification, then they are not going to be part of the transformation of New Zealand, at all. So social investment is important.

In this Budget we have seen some wonderful social investment in the areas I am closest to, such as education. We know, and have argued for a long time in this country, that investment in early childhood education—in the kids with the smallest shoes, as they used to be called—is the best expenditure we can make of any education dollar. If we can get those kids to become socially and educationally poised to go on to the compulsory school system and really start to take advantage of what they are doing, we know they will accelerate right through the education system. So we have put money into free early childhood education and playcentres. We have adjusted the funding rates for early childhood education. We have invested in the primary school sector—in new teachers, in school property, and in the operations fund going up by $37 per child every year. We have invested in information and communications technology, so we can make sure that people have a choice, wherever they may be in terms of their education.

We have invested in the other area that helps us with what we are doing in knowledge, and that is research, science and technology. We are boosting commercialisation. We are investing more in our Crown research institutes. We are investing in pastoral research, energy, biosecurity, and biodiversity. We are investing in our partnerships with scientists all around the world. We are piloting new programmes to get young people in schools interested in science, so they can go on and make a career that includes science in whatever they may do.

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

If Phil Goff is in his caravan this afternoon with the transistor turned on, I think he will be sitting there—having heard from Minister Maharey, one of the pretenders who offers no hope for the future of New Zealand—and thinking: “I haven’t got long to wait.” The House is sitting at a time of untold industrial strife within the public health service, and at a time when fewer and fewer New Zealanders are getting the services they want. Listeners would have been angry at Mr Maharey’s comment that this Government was investing in social infrastructure in this Budget. Minister Maharey should tell that to the 8-year-old girl who cannot get plastic surgery for a smile. He should tell that to the women of New Zealand who cannot get breast reconstruction following their mastectomies. He should tell that to the New Zealand women who have been told they were culled off the radiotherapy waiting list during the radiotherapists’ strike. Those women have still not been given a date for their treatment, and they have heard the Minister of Health in the House today say some patients may wait 2 months to get back on to the theatre list. How do those women feel, given that they need to have their treatment now? What about their social structure? What about those women who are waiting?

What will happen to the thousands of New Zealanders who have been dumped from hospital waiting lists in the last few months? What about the 20,000 New Zealanders who will be dumped from hospital waiting lists in the next financial year because of the Minister’s edict? We know that that is what New Zealanders are facing. In the Health Committee that considered the issues of the estimates in Vote Health last Wednesday, Ministry of Health officials said that it was their expectation that the district health boards would cull their waiting lists down to the targets set by the elective service indicators—that is a 6-month waiting list—and officials said that that added up to around 25,000 New Zealanders—

HEATHER ROY (Deputy Leader—ACT) Link to this

I rise to speak to the Appropriation (2005/06 Supplementary Estimates) Bill, and I want to devote my short speech to the supplementary estimates for Vote Defence Force. No doubt the Government thought it was being very generous in allocating an extra $39 million to Vote Defence Force, and I expect that New Zealanders are supposed to be eternally grateful for that move, as are probably the Army, Navy, and Air Force. But when we look at the supplementary estimates, we see that most of the extra allocation, although perfectly reasonable, is symptomatic of the chronic underfunding of our military defence forces at present. Most of the extra money goes to various line areas in the estimates and covers changes to the capital charge and depreciation, so we will see very little extra as a result of that extra spending.

In fact, at Budget time the estimates themselves referred to a multi-year appropriation, which means that funding will be spread over 3 years as opposed to being year by year. The concept is a sound one and it gives some security in planning. However, there are fishhooks in there, and I will highlight those today. On page 333 of the estimates, under the heading “Operationally Deployed Forces”, is a very interesting paragraph. It is almost at the very end of the estimates, and I quote from it: “It is projected that the total three-year funding appropriated for this MYA”—multi-year appropriation—“will have been expended by the end of the second year”. What is the point in having a 3-year plan, when the Government has sanctioned the spending of all the money by the end of the second year? Very little, I would have thought.

The same paragraph goes on to state $24.8 million is the expected actual expenditure “as at year end 2005/06 year, and $40.575 [million] being budgeted for 2006/07. This projection is based on projected commitments to operational deployments in 2006/07.”, the financial year we are about to move into. Heaven help us if anything else happens, and we need peacekeeping troops or whatever in the 20007-08 year, because there is no money for that. What would happen is the Defence Force would have to go cap in hand to the Government yet again for extra spending. That very point was highlighted earlier in the estimates document under the heading “Comparison of Departmental Output Expenses: 2005/06 and 2006/07”, where the document states: “the NZDF may request an additional appropriation from Cabinet for the incremental costs” of any major operational deployment. But that hardly gives the Defence Force any surety or ability to plan for what may be proposed or for any engagements it may have to undertake.

One thing that I think has not been highlighted at all in the estimates is the fact that our reserve forces are undervalued. Balanced, capable forces have strong reserves, and we do not need to look very far overseas to see that that is absolutely true. Why do we have reserves? They are a contingency plan, and they provide extras in the times of need. In fact, our regular forces do rely on our Territorial Force now. Very recently we have had extra troops go to Timor and to the Solomons. The troops were deployed very quickly because of escalating tensions, and our Government felt that it was right and proper that we should contribute towards peacekeeping in both of those places.

What we are seeing because of the lack of funding is a complacency. The attitude of the Government is one of complacency. The implication is that our Government can predict every eventuality, and that, of course, is not the case. We need to see some sort of commitment to our reserves and Regular Force troops, and an avoidance of Government complacency. They should not be buried in outputs in hefty tomes and documents such as the Budget ones, but we need to ring-fence some specific funding. This Government, despite the fact that it can justifiably say it has increased military spending, needs to go a long way further than it has gone. Our forces operate on a shoestring, and it is time they were looked at seriously so that we can fulfil our obligations to the rest of the world.

KATHERINE RICH (National) Link to this

In tonight’s debate I will turn my mind to some of the commercial announcements the Government has made. I would like to focus on some of the recent announcements made by the Minister for State Owned Enterprises and Minister for Economic Development, Trevor Mallard. When we looked at some of the budgetary documents, many of us had hoped to see some kind of indication of where the big changes would be to put in place this grand plan for economic transformation. It comes with great regret to evaluate some of those plans and to talk about some of the latest announcements—in particular, the new plan for State-owned enterprises.

I think that what the Government has attempted to do is to point to some activity in the area of State-owned enterprises so it can look as if it is doing something in the area of commercial development, but, of course, the rhetoric does not necessarily match the activity. So some of the announcements made by Minister Mallard are cause for concern, because it is very clear from comments that have been made after those announcements that policy has been made on the hoof.

In fact, the nature of the announcement in the Government’s grand plan seems to change almost on a daily basis with every interview that Mr Mallard makes. In the last interview he started discussing the issue of privatisation—not privatisation of State-owned enterprises, one must understand, but privatisation of subsidiaries of State-owned enterprises. So how he can start to discern a difference between not selling the silver, as he would put it, in one area, and putting the silver in another drawer and selling that, I do not know.

But what is of concern is the total lack of analysis from those officials whom many of us put faith in. Many of us rely on their views and their knowledge in a lot of areas, and the rather damning comments made by various officials—albeit in diplomatic language—about some of the changes that Minister Mallard was putting forward were of concern. The Ministry of Economic Development, just as one example, said that it was very concerned about governance, and about the ability of State-owned enterprises to undertake some of those risky expansion plans, as presented by the Minister.

That is an interesting point, which was overlooked by Cabinet, I think, in approving those plans, and it is exactly the point we have heard discussed in the House today. As a result of research done by Victoria University, we have seen today that concerns are held not just by the Opposition or the Ministry of Economic Development, in relation to governance; they are held also by enterprise board directors themselves, who have responded to an anonymous survey in which they have told the researcher how they felt about some of the capabilities around the board table. The results of that research today is rather telling. Board directors are saying they have real concerns about the types of skills they have around the tables of State-owned enterprises, and they are concerned that some of the processes around the selection of board directors are more about political selection and the rewarding of people for party activity than about having the capabilities and skills to be able to do the job.

Minister Mallard in the House today started talking about State-owned enterprises being training grounds for new directors. That in itself is cause for concern, because if someone is going to go on to a State-owned enterprise board it should be as a result of the experience that person has had in the financial community, and he or she should already have demonstrated the ability to make good commercial decisions before entering into businesses that are very complex and increasingly more risky, as a result of the plans that have been announced. State-owned enterprises are not simple businesses. Over the years they have become very complex businesses, and very large businesses. Frankly, we do not need trainees; we need people who are at the top of their game, who have the ability to make good commercial decisions, and who understand the financial implications of various investments.

It is not an area where one puts people just on the basis that they have had lots of life experience, as Minister Mallard said he would like to do. Life experience is great, and it counts for something, but when we are talking about the governance of State-owned enterprises we need to appoint board members who are able to understand facts, figures, and business, and who have worked at a very high level. It is not good enough suddenly to use those appointments as paybacks for those who are party-friendly. If Labour has done anything, it has methodically placed on those boards people who are to the boards’ detriment, as we have seen in the research released today.

The Minister wants everybody to think he knows more than the officials who advised Cabinet in making this decision. The Ministry of Economic Development expressed huge concerns; Treasury said there were associated risks with that new plan, and that those risks were significant; and the Crown Company Monitoring Advisory Unit said the same. So I think that it is the height of arrogance for the Minister to override their concerns and pretend he knows more than they do when it comes to expanding the role of State-owned enterprises.

The Minister continued to use glowing examples of successes offshore, but of course overlooked the fact that those projects had already been conducted and carried out prior to that new announcement. He pointed to Southern Hydro, which was a success for Meridian Energy, and which generated some $600 million, but that will not be the case for many other risky projects that State-owned enterprises embark on. The Minister seems to think that if State-owned enterprise projects go belly up, something quite different will happen to those enterprises that does not happen to other companies that face financially dire circumstances. He seems to think that a State-owned enterprise going belly up is OK, because the Government still owns the assets—the dams, the windmills, etc. Well, I have news for Mr Mallard: creditors do not care who owns a company; creditors just want their money back at the end, and they will do anything they can to get it back. So I think it showed major commercial naivety on the part of the Minister even to make a statement of that kind.

But, as we have seen in just recent announcements, that Minister thinks he is the pretender to Michael Cullen’s throne. Well, I would like to think that anybody who inherits that title would at least know about risk, and would at least know that assets come hand in hand with annoying things called liabilities, and that the Minister who takes over would at least have a basic grasp of what is required on those boards as they look at new projects. I think the Minister will be upset to hear that the business community does not share the same faith he has in his ability to have the final sign-off on many commercial projects.

One of the things I think we need to address is the whole governance issue, and when Minister Mallard says he will deliberately continue to make placements of people on that board who do not have commercial skills, that is something I think all of us should be concerned about. We need to hear more from the Minister about his reconciliation between his statements in the House last week—that he was more than happy with the skills around the board table—and today’s revelation that board members themselves are frustrated by the capabilities that as a combined board they have access to, as well as the statements that have been made through that research, which demonstrate that the reality is quite different for those who are actually trying to do the work.

State-owned enterprises, within their present framework, have always had the flexibility to get into new projects. Some chief executives of State-owned enterprises are privately saying that very little will change—that this is more about spin than actual reality—but it concerns me that the Minister will want to come up with some pet projects he can point to and herald as being successes. That is not the way I think State-owned enterprises should conduct their business, and the business community is not feeling at all confident that an ex-teacher and an ex-historian have the ability to sign off what could be complex projects put forward by those enterprises in an ever-complex business arena.

It is not good enough for the Minister to say that he knows best, when, in fact, all his officials have said that the contrary might be correct, and that there are some real concerns. Economic transformation cannot be achieved if the Government continues to ignore the big issues like tax, the Resource Management Act, etc., so that is why this Budget has been a real disappointment to all of us.

Hon PAUL SWAIN (Labour—Rimutaka) Link to this

The great opportunity of this debate is for the public to have some view of comparison between, and to weigh up, what the Labour-led Government is doing and the proposals put forward by National. It was a bit rich for the previous member to talk about State-owned enterprises, because that is clearly where one of the differences lies between the two parties. National would go back to flogging off those enterprises, but the Labour-led Government has said that, no, it will retain them.

When Dr Brash made the following comment in 2003, everyone thought that it sounded a bit refreshing. He said that he did not want National to show fear of the electorate by watering down its message. The big problem, of course, is that unless National waters down its message, it is not electable. That is the huge dilemma National has, and everyone recognises that.

On the subject of State-owned enterprises, for example, it is interesting to hear what Dr Brash said a few years ago, back in 2003. He said there were some things he would not sell, like Transpower for example, but he could not quite see the logic of the Government owning a business that was operating in a very competitive environment. Did we hear much about that during the election campaign? I do not think so. Did we hear Dr Brash go out and say that National would flog off State assets again? No, he did not say that. He said, first of all, that National would get rid of Kiwibank. Then I seem to remember National members saying they would keep it. Then they talked about flogging off Landcorp, but when the pressure went on, they said that, oh no, they would sell only one or two farms.

So the problem National has—and the public has—is that the public does not understand what National is on about. In my view, that move is quite deliberate. National does that quite deliberately, because if it told the public exactly what it wants to do in relation to flogging off State assets—and I will refer to that a bit later; it was completely avoided in the speech made by the previous speaker—then it would be unelectable. So it is a case of the old “tell the people something before the election, and do something else after the election” trick. I tell members that the New Zealand public have had a gutsful of that. That is why they do not trust the National Party, and that is why National will not be back in Government for a very, very long time.

Let us compare National’s approach with the incredibly productive and constructive approach this Labour-led Government is taking. We have the three main themes around economic transformation, around families, and around building national identity. The Budget itself, and the estimates, build on the things that have already been done. What are the key things this time? More funding is going into transport. After many long hours of arguing by very good and capable former Ministers of Transport, who have been arguing for transport issues now for many years—one is sitting next to me and another one is close by—what do we hear from the National Party? It wants to cut taxes, but at the same time it does not tell people that in doing that, it will have to cut money from roading.

It goes back to the old National Party economics. Something I have never understood about the National Party is that it believes that somehow we can cut taxes—cut revenue—and spend more. I have never quite understood that. It is something the National Party has tried to kid the rest of New Zealand about, but, of course, the fact is that people do not believe it. That is why National Party members are sitting over there and we are sitting here.

We are unbundling the local loop, and there is a whole new phase around industry training, picking up on the fact that in the 1990s it was completely demolished. Bill Birch brought the apprenticeship system to its knees, and we have had to completely reconstruct that. We are also doing things around student support and research, science, and technology, and we have a whole export-led innovation programme.

So when people weigh up what this Labour-led Government is doing, they can see quite clearly that this Government is trying to take New Zealand forward. The National Party wants to take us back to the 1990s, where the National Party told the public one thing in 1990, and then did completely the opposite thing through the “mother of all Budgets” in 1991. Those are the things that the public of New Zealand remember.

The reason why the National Party does not want to come clean to the public about what its message is and what it will do is that, if it did, it would not be electable. That is the difference. The Labour Party does what it says, and the National Party confuses people by not doing what it says. It knows that if it does do what it says, it will never be back on the Government benches again—and thank God for that.

Hon DAVID CARTER (National) Link to this

We know that a Government is in trouble when it brings a has-been like Paul Swain down to the Chamber to make a Budget speech. The supplementary estimates debate is one of the most important debates we have in the year, and along came Paul Swain. He did not manage to struggle through a 10-minute speech; all the man could manage was a 5-minute contribution. We know that the Government is in trouble.

However, to be fair to Paul Swain, it was my understanding that that speaking slot was meant to be taken by the Hon Jim Anderton. That was what was determined at the Business Committee. But Mr Anderton, who is part of the Progressive party—in fact, he is the only part of the Progressive party—was unable to come to the Chamber to make his contribution to the supplementary estimates debate, because he knows there is nothing he can say his party achieved in that Budget. Mr Anderton is also a has-been, the Progressive party is a has-been, and nothing in the “Bondi Budget” of 2006 can be attributed to anything that Mr Anderton and his political party have been able to achieve.

I am delighted to take part in this debate, because it is a fascinating debate in which the Government has the opportunity to defend the “Bondi Budget”. For me, what has really been interesting in this debate is the fact that none of the Labour Ministers who have come to make a contribution have actually spent any time at all talking about the good things in the “Bondi Budget”.

We had a really interesting contribution from that up-and-coming star of the Labour Party, the heir apparent Minister of Finance, the Hon Trevor Mallard. One would have thought, after his public statements of the last few days, that if he does want to be the next Minister of Finance, he would have taken the opportunity to come to the Chamber tonight to make a serious contribution in order to display to the listeners of New Zealand and to Parliament that he actually understands something about finance. But no, he came to the Chamber and he managed to display his lack of knowledge of even who the 121 members of Parliament in this House are. I heard Mr Mallard say he did not know who Jo Goodhew was, who Jacqui Dean was, or who Chester Borrows was.

Hon PETE HODGSON (Minister of Health) Link to this

That speech is another example of why National is not about to reach the Government benches any time soon. That gentleman spent most of his discussion, which was supposedly about the Budget, on a sort of rollicking, ad hominem attack on people who have been defeated by other people. I ask the member, who did he defeat in the last election? Who did he take out in the last election? What electorate success does that member think that he can offer the House? That member ought to do something more with a debate like this than talk about who defeated whom. I congratulate those members of Parliament on the opposite benches who enjoyed electorate success in the recent polls. I congratulate them. I hope their stay here is good. I do not, of course, hope that it is long.

In the election we have just mentioned, we actually had a debate going on in our society about whether we would use the idea of investment as a way forward or whether we would disburse the largesse of the State into tax cuts we could not afford, especially as the National Party made sure that it had targeted them towards the rich. The National Party put $11 billion on the table and asked: “Are you interested?”, and, of course, New Zealanders around the country were, and they sniffed pretty hard at it. They gave it a sniff test and they said: “This is not affordable. The damage to be done to roading investment, health, police, education, or whatever, would be too high.” That is why this Government was returned.

That happened, despite the fact that National promised $11 billion of tax cuts, and despite the fact that National rolled out the Exclusive Brethren, a very strange group of white men who do not even vote, who put a million dollars on the table to help the National Party get across the line and went very close to breaching electoral law in this country in doing so. That is a very strange group of people. They were the people that Don Brash “did not meet” until he met them “oh, well, perhaps once”, then until he met them “oh well, perhaps more than once”, and then until it became clear, in the course of the campaign, that he had met with them several times. Then the scales dropped from the eyes of those New Zealanders who were taken in by the $11 billion worth of tax cuts, and the Labour Government was returned to office.

New Zealanders said no. Because they said no, we have funding to make student loans interest-free. Because they said no, we can build roads, rail, and public transport infrastructure throughout New Zealand. Because they said no, we can invest further in research, science, and technology in both the public and private sectors; we can invest in economic development; we can develop exporters further; and we can invest in our tertiary education, our early childhood education, and, for that matter, in our primary and secondary education. We can invest in health because New Zealanders said no to the $11 billion tax bribe. They said no to $11 billion over 4 years and, of that $11 billion, precisely $3 billion is going into health over the next 4 years.

We will put $3 billion extra into health. That is enabling us to build hospitals, to continue the building programme that starts in Kaitāia and finishes in Invercargill. Not far from here, an entire new hospital is being built in Wellington. The one most recently opened was in the Wairarapa just a few weeks ago, with the Prime Minister. We are able to invest in new buildings, but we are also able to invest in primary health care. We are able to say to New Zealanders that there can be lower fees when they go to the doctor. We can say to people working in our primary health care sector that we are pleased they are doing better than they were before, that general practices around the country are somewhat more sustainable, and that general practitioners are making more money and are worth more on the market. One would not know that, if one heard the National Party talking. But that is the fact of the matter.

While I am on that point, I would like to congratulate all those people who were party to the negotiations that concluded at 9 o’clock this morning, as we saw the roll-out of the next phase of the Primary Health Care Strategy, so that 45 to 64-year-olds can have access to cheaper doctors’ fees from 1 July—just 10 days from now. I thank those people who took part in those negotiations. We have achieved a good deal. We have made sure we have transparency. We have made sure we have worked out what a consultation actually is. We have made sure that, in the unlikely event that a recalcitrant doctor decides to put the money in his or her pocket, we have a way of stopping that. All those things are important. That has been achieved and I congratulate those who were involved in the negotiations.

We have made progress in this country. Because the people said no, we were able to roll out further funding into mental health, further funding into Māori health. One never hears the National Party talking about those areas of health. National does not care about them. We have made further investment into mental health, further investment into Māori health, and further investment into the health of older people. We have made a bigger investment this year than ever before, when all the bits are added up. We have made a bigger investment than we have ever had before into the disability support directorate, into those people who do not consider themselves part of the health system but who live with a disability of one form or another and who are supported to live a more ordinary life—one day, one hopes, an even ordinary life—because we are able to improve the support services for those people.

What about children’s health? One does not hear the National Party talking about children’s health. It could not care less when it was announced today that there had been a 90 percent reduction in meningococcal disease amongst Māori children in Auckland. Members opposite could not care less that nine cases out of 10 now do not occur, and that we have had a very successful roll-out of a vaccination for a very, very serious disease. They seem to be uninterested that this country is about to move into the screening of newborns for hearing loss, so that if children are discovered to have hearing loss, it can be addressed very early in their life.

National seems to be unconcerned that we have decided to pay attention to oral health for children. It is a fact that the improvement in oral health in New Zealand’s children has stopped. Our children’s teeth used to get better and better as each decade went by. Now it is not getting better any more; in some measurements it is actually getting worse. That situation cannot be allowed to continue. How did it happen?

CRAIG FOSS (National—Tukituki) Link to this

I rise to speak to the Appropriation (2005/06 Supplementary Estimates) Bill, which is related to the 2006 Budget. I was going to raise a point of order earlier—but I let it lie—because I think the bill may be misnamed. It should probably be the “Misappropriation of Taxation Bill” because about $60 billion of hard-earned New Zealand funds have been snaffled by Mr Cullen and his cohorts on the other side for the purposes they deem best for the country, to build their socialist utopia.

I thank the previous speaker for his congratulations on my winning the seat of Tukituki. I came into this House about 9 months ago, having won the seat of Tukituki, Hawke’s Bay. This is a House full of great history, and I thought it should have a Government with integrity, accountability, transparency, and, most of all, one that took responsibility. It should take responsibility, not abdicate responsibility. It should admit when things go wrong. It should admit when it has mucked up. It should fess up and take responsibility. That is what gives integrity, accountability, and adds to the great history of this House.

I understand that the scuttlebutt about the Prime Minister and Cabinet was that they were furious that they lost the two Hawke’s Bay seats, Napier and Tukituki. They could not understand it. Labour lost those two seats and it could not understand how ungrateful the people of Hawke’s Bay were, because it had pumped so much welfare into that area. So much welfare dependency was created in Hawke’s Bay that Labour could not understand why the good people of Hawke’s Bay kicked out two of its MPs, one of whom was a Minister. That shows how out of touch Labour members are. That was the exact reason they got kicked out. The good people of Hawke’s Bay and the rest of New Zealand do not want to be dependent on some bureaucrats and the whims of a Cabinet that will do anything for the front page, and whose members think of short-term gain for themselves as opposed to the medium - long-term future of New Zealand.

It has been 7 long years, and all that this Labour Government could deliver recently was the “Bondi Budget”. It is getting pretty tiresome. Every line from the previous speakers opposite, every attack, and every debating point is about the 1990s. Labour members should get over it and get up with the programme. Every time a point of order is raised by certain Government poodles, it is prefaced with comments referring to 1996, 1992, and so on. They should get over it and lurch into the next millennium. If you keep looking back as you are now, New Zealand is in trouble.

SHANE JONES (Labour) Link to this

I follow the mokopuna of Granny Smith from the Hawke’s Bay, otherwise known on the Finance and Expenditure Committee as “the Fossum in the headlights”.

I rise to support the programme that has been outlined. I, along with everyone else, have heard a great deal of drivel from our friends in the Opposition—but I shall say more about that shortly. Some underlying themes inform our thinking in relation to the programme that, as a consequence of our capturing the attention and imagination of the voting public, we on this side are presenting. One of the key notions is caring; another is being prepared to invest in equity. What does that actually mean? It means looking at a person’s life, identifying those who are unable always to fend for themselves, and ensuring that they can rely upon the compassion and appropriate interventions of the State from the time they are very young.

That is why we are very proud to introduce and sustain policies that will improve the prospects of those children before they go to school, and assist the parents of those children to enrol them and to promote their education. This would be impossible if we were proceeding on the ill-founded thinking of the Opposition, with indiscriminate tax cuts and attendant service cuts.

Moving on from that, we have invested substantial amounts of money in the school sector, because we want a school sector that—unlike the unfortunate experience we saw recently in Vanuatu—is available to all people at minimal cost irrespective of creed, colour, or background. The State has an ongoing role to play in that regard.

As we have listened to the various speakers during this debate and earlier debates, we have witnessed the fact that no credible Opposition exists, only a group of personalities here who treat politics as a hobby, not a vocation. When they do not get their own way they sink very quickly into personality sniping. Of course they come off second-best there, because we on this side of the House have some of the most able parliamentary debaters. What the Opposition particularly did not do during the election campaign—and we did, which is why we are rolling out this fantastic programme—is talk about anything but tax cuts. For example, what about something as important as the future shape, form, and funding of welfare policy?

What do we find when we go to the Opposition’s website to try to find out what it would do about welfare in the unlikely event that it ever occupies this side of the House? We find the message “This domain is parked”. Well, we know that as a consequence of leadership squabbles the Opposition is parked. The current leader is just about to move out of “park” mode, but he is in a horseless carriage. We know that Mr Key, with his fantastic ambitions, is running on high-octane fuel in a very flash vehicle. But will that go down well with the Kiwis? No. The Kiwis do not like a smart alec approach to politics and people who feel they constantly need to wear either their wealth or their earlier prowess—enjoyed and demonstrated in another life—in this House. The Kiwis like a political culture and political personalities that care for people and bring a sense of humility to this very important vocation. So we see that the domain is parked.

Recently Mr Key, leader-in-waiting—in the unlikely event that he comes to enjoy that status; I am sure Bill English will deny him that as time goes on—presented his Budget ideas. He basically said that we needed to, firstly, increase infrastructure spending; secondly, invest more in schools; thirdly, have a competitive tax system, especially in corporate affairs; fourthly, encourage more research and development spending; and, fifthly, increase savings. He is not only an aspirant to the leadership but also a plagiarist of exactly what this Budget does. Firstly, this Budget increases expenditure on infrastructure to a level that has not been heard of, or seen, for many a generation. Secondly, this Budget revitalises skill training.

I have recently been through the Tairāwhiti and up and down the East Coast. One of the common complaints in that area is shortage of skilled staff—shortage of qualified tradesmen and related personnel. I will tell the House why. The reason is that during the 1990s some brilliant schemes—not the least of which was the Māori apprenticeships scheme—were smashed and nothing was put in their place, because of a silly, naive belief that somehow the market would deliver a suitable level of skills. On occasions, of course, the market works. I have had the pleasure of seeing it work to our benefit. But on the question of human capital, training, and skills it did not work. It has left us with a deficit. It has left us with a situation we are now scrambling to remedy—and fortunately we are in power and we are able to do so.

I lament the day apprenticeships and skill enhancement strategies were smashed in the 1990s. Had fate dealt us a sinister hand and put the members opposite on this side of the House, we would now be seeing a similar destruction, decrease, and undermining of the entire human capital strategy—a reversion to the 1990s.

I will talk very briefly about the third point; why Mr Key has flattered the Government by plagiarising what exactly this Budget proposes to do. Not least, he overlooked the fact that in the OECD, the average worker in New Zealand enjoys the status of having the third-lowest tax burden. Why and how do we arrive at that calculation? Firstly, it is lower than Australia’s rate. Secondly, there is a very competitive corporate tax system that does not involve stamp duty, payroll taxes, land taxes, and a myriad of other obscure taxes that conveniently do not find a place in either the rhetoric or the dodgy narrative put forward by Dr Brash.

I am sure listeners up and down thehau e whā, the four winds, listening to this level of oratory will not fail to notice that we have a business tax review coming up soon that will substantially improve our competitiveness. With assistance from our friends in New Zealand First, there will be a particular focus on not only export activities but on identifying how businesses will gain greater efficiency and greater competitiveness.

On the question of research and development, it is beyond cavil. The evidence is clearly outlined in the various pages comprising the Budget, and the different policies that we are rolling out, that research and development is not only identified as a key component but also has been substantially and handsomely invested in. That beats the rhetoric of envy and deep disappointment. Those are the sorts of policies the Opposition had the time to put before the country, chose not to, and sought to cakewalk from Opposition into Government on the basis of promises of tax cuts. I am sorry, it did not work then and it will not work in the future.

My final point is on savings. Recently, we had the Singaporean Prime Minister here and we also know that Mr John Key and a host of others have been to Singapore recently to look at how its economic miracle has been constituted. He did not need to go to Singapore to learn about the importance of savings. We have a Government with the character and courage to introduce a savings scheme that will be very soon faithfully implemented called the KiwiSaver. To all Kiwis listening I say, kia ora tātou katoa.