Supplementary Estimates

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

I move, That the Appropriation (2006/07 Supplementary Estimates) Bill and the Imprest Supply (First for 2007/08) Bill be now read a second time. The Labour-led Government welcomes the chance at this time to debate its record and the alternatives put up by the Opposition across a broad range of issues. It welcomes particularly debating them at this time, when John Key’s cocky crowing of only a week or two ago that there would be a National Party landslide is already turning to dust in his mouth.

We also want to talk particularly about what is happening this coming Sunday, 1 July. This is the day when KiwiSaver, the new scheme to enable all New Zealanders in employment to save, begins; the day that 20 hours’ free early childhood education begins; the day that sees extensions to paid parental leave; and the day that sees the new primary health care strategy have its final roll-out, for 25 to 44-year-olds. This is a Government of energy and ideas that is delivering to the people; it is not a bunch of clapped-out, past-it, recycled 1990s front-bench people with no single new idea among them. The contest is between a Prime Minister of substance and a Leader of the Opposition whose full shallowness has yet to be completely explored. Indeed, for political speleologists this will be a very interesting year or so as we explore the shallowness of the Leader of the Opposition.

KiwiSaver is the most important macroeconomic reform in this country for something like 20 years. It is a scheme that offers security to individual New Zealanders, a scheme that builds upon personal responsibility, a scheme that will build personal wealth across the New Zealand population—not just a property owning democracy such as National used to stand for in the 1950s—and a scheme that will build national economic sovereignty and stronger capital markets. With that set looking pretty much like a royal flush, if it were a poker hand, it is not surprising that the members opposite, who have about an 8-high nothing in their hand, say they are opposed to it. This is a scheme that is good for Kiwis, good for business, and good for New Zealand.

It comes on top of the fact that this Government restored the level of New Zealand superannuation as its first action in office, then built the New Zealand Superannuation Fund to ensure that we could afford New Zealand superannuation from age 65 as a universal payment for the indefinite future. And what does National do and say? In 1999, when Mr English was in Government, National cut New Zealand superannuation to pay for tax cuts. Members should remember that linkage. Secondly, in 2000 National opposed creating the New Zealand Superannuation Fund.

In 2005 National opposed “KiwiSaver Mark I”, and this year it voted against the improved “KiwiSaver Mark II” and the tax credits that will go into the individual funds of Kiwis in the KiwiSaver scheme. When John Key was asked about “KiwiSaver Mark II” he said: “Oh no, there are no guarantees over ‘KiwiSaver Mark II’.” So let the message go clearly out to the public: when Mr Key sidles up to them, loving to be liked and liking to be loved, and wanting to say anything to impress, they should remember that he said there are no guarantees about “KiwiSaver Mark II”. Only a Labour-led Government can guarantee KiwiSaver being locked in place. As only Labour could guarantee the New Zealand Superannuation Fund in 2002, and as only Labour could guarantee 4 weeks’ annual leave in 2005, in 2008 only Labour can guarantee the improved KiwiSaver scheme staying in place.

I come now to 20 hours’ free, quality, affordable early childhood education, the biggest single improvement in quality early childhood education in New Zealand’s history for decades and decades. Mr English says that National opposes the 20 hours free policy. It cannot be clearer than that: National opposes the 20 hours free policy. And Mr Key, of course, said: “We want these young kids to be able to have 20 free hours. We want them to be able to go to school.” Well, they can go to school already; that is not a problem. In New Zealand children have been able to do that for a rather large length of time. I think that since 1877, basically, children in New Zealand have been able to go to school; school here has been compulsory, free, and secular. We want to make sure that Kiwis get the best start in life, and get not just childcare but quality education as early in life as possible.

Hon BILL ENGLISH (Deputy Leader—National) Link to this

The response of the Prime Minister today over the issue of standards in the police sums up the moral bankruptcy at the heart of the Labour Government. The people who run the police courses say that the standard of recruits is dropping. The police wrote an internal report, which said that the standard of police recruits is dropping, and the police were so worried about the conclusions of that report that they spent months keeping it secret. When the Prime Minister was asked today in the House about the standard of police recruits, she said that the standard is higher. Actually, it is not. In 2004 a new test came in, but they are letting a lot more people through it. That is what is happening. There is a new test, but they are letting a lot more people through.

There is absolutely no doubt whom we should believe. We should believe the police who wrote the report and who were so worried about it that they believed they should hide it from the public. It is in the public arena only because the Ombudsman made them put it there. If the standard was higher, why did they not just release the report? The Prime Minister is wrong—she knows she is wrong; she said it for the purposes of the House—and the police are right. She misled the public about a matter of public safety, again. That means she is putting the political requirements of the Labour Party ahead of public safety.

But that kind of dishonesty is not unusual. For instance, there is the “Minister of Free Childcare for Which There is a Charge”. Actually, as the Minister knows, about half of the children whom he will count as receiving free early childhood education already get it free, because they go to kindergarten. Forty thousand are at kindergarten. In fact, the effect of his policy is that the kindergarten movement now has to bring in compulsory payments. It used to be free under the so-called nasty right-wing National Government. Now, under the soft, left, slithery, slippery Steve Maharey, kindergarten is being turned into childcare by bringing in full-day sessions, and they are bringing in charges. That is what it is. The parents who have already paid their donations now want to know why it is compulsory. They are thinking: “I’m getting 20 hours’ free childcare, but my donation has become a compulsory fee.”

Well, what is going on with this Government is that it cannot tell the truth any more. It is really about that simple. It just cannot tell the truth. I will give another example—in fact, Mr Maharey knows all about this. These appropriations today really sum up the fact that the Labour Government is continuing to spend more and more taxpayers’ money for low quality. We heard today about the health situation in our emergency departments. There was a measuring system in the past—that statement was a lie. More and more money—40 percent more—has been spent on health, the output is the same, and the emergency departments still cannot offer timely service to patients.

That is because Labour members do not really care. What they care about is that the health system is public and that they have spent more money on it, because that is their whole political strategy. Dr Cullen went through it. He just went through the long list of all the things he is spending money on. He has treated the economy like a cash machine. He goes to that cash machine with the cash card belonging to all New Zealanders, and he never bothers to put any money into the back of the machine. It is a cash machine that just keeps throwing up cash that he and Mr Maharey keep spending.

In tertiary education, Mr Maharey and Dr Cullen have overseen the expenditure of $400 million on thinking about tertiary education—thinking about it. None of that money has actually gone on educating young New Zealanders, but $400 million has gone on thinking about it. I asked Dr Cullen the other day whether he could explain any of the $400 million, and do members know what he said? He said: “I am here to talk about the future, not the past.” He would not even stand up to defend Steve Maharey’s mess in tertiary education. It starts on 1 January, after 8 years of thinking, reform, and endless document strategies, workshops, launches, and ministerial cocktails.

Hon STEVE MAHAREY (Minister of Education) Link to this

Usually when one comes down to the House for a Bill English speech, one gets a speech that is pretty scintillating. I noticed earlier this year that Bill English was singled out as having given perhaps the best speech that the journalists had heard in the House this year. He was noted as having been a kind of orator; he was full of passion, and he had something going on. But I have to say to my colleagues today that that speech was flat, do they not think? I do not think that it was just that he was rated below the cat when John Key went away; I actually think I begin to detect amongst the National Party members that the honeymoon is over. I think the shine is off. I think that while the aspirational marketeer is currently off overseas trying to see whether he can find his way to America—and that is not working very well any more—the sort of role that Bill English has carved out for himself as the bean counter for the aspirations is also starting to wear a bit thin too.

Do members know what is starting to happen? Comparisons are starting to be made. Did members notice the way that Katherine Rich said today: “Oh, don’t focus on us during the question. What are you doing, focusing on our policies? Isn’t that a bad thing to be doing?”. Well, she should get used to it. Over the next year or so the entire country is going to do what it always does. People will ask themselves something very, very simple: whose plan will take this country forward? They will say they know about the aspirations, and about the notion that we can count up all the beans that go around those aspirations. But people will ask whose policy will get them a job, help them to raise their kids, give their kids an education, and make sure they have superannuation. Whose policy will do that? That is what people will ask themselves. They will start to make comparisons between the Labour Party wanting New Zealanders to work together and the National Party wanting to leave them on their own, between the Labour Party wanting effective Government and the National Party not wanting any Government, and between the Labour Party saying it wants to invest in the things that will make a real difference to people’s lives and the National Party saying: “Here is 30 bucks a week, or whatever it is. Go and get your own roads, your own health system, and your own education system—buy it for yourself.” That will be the comparison that is made.

There is a stark difference between Labour and National when one gets down to real policies. One finds that the National Party does not want primary health organisations and cheaper health visits. It does not want paid parental leave. It does not want the most stunning superannuation scheme, a scheme that virtually everybody in this House would love to be part of and wishes he or she was able to move into, or 20 hours’ free early childhood education—it does not want that either. I want to focus on 20 hours’ free childhood education, because that highlights a great deal of what the National Party is going to have to wade its way through. The National Party has opposed the policy of 20 hours’ free early childhood education all the way through, because it has to make room for tax cuts. All its policies are about tax cuts. I tell people to beware, by the way, of any party that has the same answer to every question. If one has a problem with his or her children, National says there should be tax cuts. If one has a problem with health, National says there should be tax cuts. If one has a problem with the roads, National says there should be tax cuts. If things are not working very well and one is not feeling good about life, National says there should be tax cuts. When a party gives people with a problem one answer to every problem, that shows the party is not thinking.

National is trying to say the same thing with regard to early childhood education, as well. National has campaigned against 20 hours’ free early childhood education and has lost on that—National knows that, and members saw it today. Today members saw Ms Paula Bennett, who has campaigned up and down this country—she is a sliver of the person she used to be as a result of that—and who has lost. In fact, we would pay for her to go around the country. She went to Whakatāne, and when she left more people came into that fantastic scheme. She was running around the country trying to run it down, and more people took it up.

The thing that Ms Bennett has missed is that this is part of the biggest change in early childhood education in the history of this country, and probably one of the biggest changes in that area in the whole world. The National Party has never understood that 20 hours’ free early childhood education is part of a 10-year strategy, and that the whole sector is committed to the strategy. The sector wrote the strategy. It believes in the strategy, and the last thing the National Party is going to get away with is going around and telling people Labour does not have the strategy and not to turn childcare into education. Well, what would one want to turn it into education for? Let me tell members that we want to do it because it builds more centres, it means the teachers will become professional, it means the sector has proper regulations, and it means the centres have funding—a 142 percent increase in funding in early childhood education since 2000.

Bill English says we should not waste money, but should let him give tax cuts to his well-off mates. What are we wasting money on? “Wasting” a 142 percent increase in early childhood education means providing wages for teachers, building centres, providing quality environments for kids, and having a curriculum that works. That is what Bill English calls wastage, because he wants to spend it on his tax cuts.

Now 20 hours’ free early childhood education also means stable education. It means there is ongoing funding, like that of a school. One goes down to the local school and one has guaranteed funding for the education of a child for the entire time that the child is there. Early childhood education is going to be treated in the same way from now on. Even today the National Party members still get up and talk about childcare. I am aching to be in front of an audience of early childhood people and to have a National Party member come along and tell them about its childcare policy. I am waiting for that. In fact, I would organise the meeting, drive Katherine Rich to it, and listen for the entire time. I would not say a word. She could talk about childcare, and I would see whether she got out of the building alive. It will be a very interesting campaign when we go out with our two kinds of policies.

Meanwhile, the National Party is actually offering an alternative. That is what we finally heard from Paula Bennett. She is the spokesperson, it seems, in this area, and she tells us it will be a tax credit for parents. Let me tell the House what a tax credit means. First of all, it means bureaucrats will give the tax credit to parents. The National Party members tell us they hate bureaucrats and one has to get rid of officials, but they base their policy on—for instance, one of us who has children; someone like Sue Bradford over there—parents saving their slips up all year for their children in a little file, and then going down to the Inland Revenue Department and saying to the official, whom the National Party hates and is trying to get rid of: “Here is my annual return for my children, so can I have my tax credit, please. I have been paying for the children all year, and here I am out of pocket, with no money. I’ve saved up all my chits, and I would like my money back, please.” Sometime in the future the Inland Revenue Department will get around to giving the tax credit. But when the parents receive the tax credit, they will find that whereas they might have received $3,600 under the Labour-led policy, they will receive $2,000 less than that under the policy that the National Party follows, and if the parent is a beneficiary or he or she does not go to work, the parent will receive nothing. He or she will not get anything. Those parents do not get a single sausage under that policy of the National Party.

So on the hustings, when we are arguing about childcare versus education, when we are arguing about how much a parent receives from the 20 hours free policy versus the tax credit childcare policy, and when we are arguing about the whole notion of the comparison between the two, the pigeons will come home to roost. One can be as aspirational as one likes, and one can have co-leaders and divide up the jobs as much as one likes, but eventually people are going to say they want to be shown the National apple to compare with the Labour apple. They will ask to be shown what National has that will help a family to receive early childhood education. The answer from the National Party will be that it is going to give them a tax cut that will not give them education and will not give them real money, and that if they are in the wrong position, they will not even get any money at all.

That is the difference between the two parties. Nick Smith is an experienced, senior, front-bench politician, who has been around the track a few times and looks as though he has. He has been here before, and he knows that he will stand on the hustings soon. He will have to have a concrete plan for New Zealand. He will have to say: “I don’t want cheaper doctors’ visits. I don’t want paid parental leave. I don’t want KiwiSaver. I don’t want your kids to have 20 hours’ free early childhood education; I want them to have a tax credit. I don’t want them to have education; I want them to have childcare. I want to give you a measly little tax cut. That will mean you can go and buy your own paid parental leave, you can go and buy your own KiwiSaver, you can go and buy your own health care, and you can go and buy your own early childhood education, all out of the $20 a week I will give you back in your tax cut.” That is the choice. Which plan would members choose?

R DOUG WOOLERTON (NZ First) Link to this

I am pleased to follow the Hon Steve Maharey, because New Zealand First is concerned about exports and about exporters, and we have been waiting to hear the National Party’s answer to these things. National members have talked about tax cuts, too. But I think people should know, and should understand quite clearly, what the deal is when the National Party talks about tax cuts. The proof of the pudding is in the eating, so they say. I think people should understand exactly when the last time was that a National Government gave a tax cut.

I am not an expert on this sort of thing, but I mentioned this to a Minister in the Labour Government the other day, and he was not even alive when a National Government gave a tax cut the last time. That is fair dinkum. He said: “I was not alive in 1966.”, and he is a Minister in the Labour Government today. That was the last time a National Government gave a tax cut. However, I can say the last time National voted against a tax cut—I can say when that was. It was only a few weeks ago, at the last Budget. New Zealand First voted for a tax cut for business, and the National Party voted against it.

New Zealand First is prepared to put its money where its mouth is. We are prepared to say that we want to do something for exporters. We want to help exporters and we want to help business. We are prepared to say that there is something missing in the mix, that we want to fix. We are going to put a bill in the ballot, as my leader mentioned publicly the other day. We believe that the Reserve Bank of New Zealand Act needs to be amended. It should not be done away with, thrown in the rubbish bin, or anything like that; it should be enhanced. We believe that the Reserve Bank of New Zealand Act needs to be enhanced by giving the governor the ability, when he is setting the official cash rate, or the interest rate, as most people know it, to consider what his increase—or decrease, if it comes to that; we will look forward to that day—will do for the dollar in this country. We want to know what it will do for growth in this country, and we want him to have to consider what it will do to employment and manufacturing, and particularly, because we are talking about it today, to exports.

At the present time he has just the one issue to concentrate on, and that is keeping within the inflation band of 0 to 3 percent. That is not something that happens in very many places in the world, because they have a broader view of these issues. It is something that goes back to the days of Ruth Richardson and Roger Douglas, and those sorts of people. It may have been needed then. I did not think it was, but it may have been needed then. But today we need to enhance the Reserve Bank of New Zealand Act so that the governor is required to take these other things into consideration when he sets the cash rate.

I hail from the Waikato, and, as everybody knows, the Waikato is the dairy land of New Zealand. We have recently been told some good news, that next year we will be seeing an increased payout for the dairy farmers. One would have thought that the Government and the country would be delighted about this, because we all know that it is our exports that set our standard of living, and if there is an increase to the dairy farmers for their produce, we would all be the beneficiaries of that. But no, sadly, the Governor of the Reserve Bank thought that this increase was one of many factors that would add to inflation. So recently, just following the announcement of that price, as it happened—probably coincidentally, but it may not be—he said we would have to raise the interest rates or raise the official cash rate, and that in turn raised the dollar. The net effect is that farmers will receive less than they otherwise would, because of the governor’s action.

We say that if he had to consider these other issues, including what it would do to exporters, vis-à-vis the farmers, then he would think twice about stepping into the market quite so quickly. As anybody on the other side of the House will know, if we raise the official cash rate, the dollar follows, and that affects our exporters. But what it means is that another flood of money comes into this country, and again we are dealing with what trips off the tongue of Bill English and company—what they call the uridashi bonds, the Japanese spare money. It comes over here, because where they can get 1 percent interest, or perhaps 2 percent if they are really, really lucky, they can come over here and get 8 percent or some discounted rate around that.

So we are in a cycle that has no end, unless it is to end in tears and we certainly do not want that. We believe that there is a solution. We believe that it does not have to turn the finance sector on its head. We believe that we have to enhance the Reserve Bank of New Zealand Act, and we think that that is exactly what should be happening. If we are going to be serious about an export year, and 2007 is Export Year, we should also be serious about the environment in which our exporters have to carry out their business. It is simply not right that they have to face a dollar around the US75c or US76c mark. That is simply not sustainable for this country.

We all know that a higher dollar means cheaper imports. We know, conversely, that a lower dollar means more expensive exports. But, as in anybody’s household, it is the amount of money that one earns, compared with the amount of money spent on consumables, that means how well off one is. In New Zealand, because of this trade with the price of the dollar, and with the exchange rate, we are consistently, year upon year, compounding, spending more than we earn. We believe that something needs to be done about it before it ends in tears.

There was always the fundamental failing with people like Roger Douglas and Ruth Richardson because they were working to an ideological model—a model that was set, in the absence of any reality, for countries other than New Zealand. It was not set for New Zealand. Dr Cullen, just the other day at the select committee, suggested that this was a problem with housing. We agree with that, but it is certainly a problem for our exporters. We have a way of fixing it. We believe that the Governor of the Reserve Bank should be required to take into account our dollar, our growth, our employment, our manufacturing, and our exports, and we will have a far better balanced economy, and money in our pockets. Thank you.

Hon Dr NICK SMITH (National—Nelson) Link to this

Our economy is being mismanaged. The core public services of health, education, and the police are in a mess. We have the extraordinary situation where for the first time ever in New Zealand history a former Labour Minister is in court on corruption charges. It is no wonder that every member of this Labour Government is wanting to talk and make up stories about National policy. All the way through question time and this debate, the Labour Party members have not been talking about what they are doing in Government or about their ministerial portfolios; they have been setting up straw men about what National’s policies might be. If we want a sure sign that the Government is on the way out, that is it.

I want to talk about the first issue that is on the minds of ordinary New Zealanders as thousands of them receive letters from their banks about their interest rates being pushed up, because I want Labour members opposite to understand what that means for those household incomes. At the weekend, a constituent came to see me. He had just got a letter from the bank to say that its fixed-term interest rate had gone up from 6 percent to 9.75 percent.

DARREN HUGHES (Labour—Otaki) Link to this

I seek leave to table an extract from the Nelson Mail where Nick Smith says that one of the problems in Parliament today is MPs indulging in too much personal abuse.

KEITH LOCKE (Green) Link to this

On behalf of the Green Party, I wish to address the Vote Transport section of the supplementary estimates. If members look at that section they will see two very big figures there. One, in relation to the State highway construction programme, is $60 million. The note says this is “To ensure that the State Highway Construction Programme can be delivered in the event that the input cost escalation …”. Then there is another item, for ALPURT B2—that is, the Albany to Pūhoi northern motorway extension—which is a figure of $65 million. Taken together that is $125 million in the supplementary estimates under Vote Transport, which is a very large amount.

There was some controversy back in March over the way extra money was being poured in beyond that budgeted, when Jeanette Fitzsimons, our co-leader, in a question to Michael Cullen as Minister of Finance, raised some information that she had obtained under the Official Information Act about the advice given to the Minister relating to supplementary expenditure for State highway construction. She asked whether the Minister agreed with officials’ advice to the Cabinet economic development committee that “Singling out the activity class of State Highway construction for Crown guarantee would signal a preference for funding State highways over all other forms of transport.”, and that “This may be perceived as being inconsistent with … the LTMA [Land Transport Management Act 2003] or integration of the transport sector”. I think that was very relevant and we can see the problem being reflected in the supplementary estimates.

Under the Land Transport Management Act 2003, Land Transport New Zealand has a very sophisticated and deliberate funding allocation process. It is actually outlined in a document I received in my office today, a fact sheet dated June 2007 on the National Land Transport Programme. That body, which is delegated under the Act to determine these things, goes through what it describes as a six-stage process for the formulation of funding options, which have to come from all sectors of land transport—not just road building but also public transport, walking, cycling etc. Under the Act the programme is supposed to be balanced.

The stages are, firstly, the formulation. Secondly, there is the assessment, where the proposals are assessed by approved organisations in terms of the requirement of the Act, and all of that is looked at. The third stage is that Land Transport New Zealand uses the profiles to assist prioritisation. Stage four is the programming. stage five is the approval of funding activities, and stage six is the monitoring and review. So everything is worked out, and authority is delegated to Land Transport New Zealand.

But, clearly, what has happened is that over the past year, in the year 2006-07 covered by the supplementary estimates, Cabinet has intervened in that process, and has not taken account of the officials’ advice that was quoted by Jeanette Fitzsimons in her question to Michael Cullen on 20 March. Michael Cullen effectively said the Government was just guaranteeing all the top-ups, to make sure the roads were built. I think there are problems with that.

One is when that is done to only one activity class, as it has been, and not to public transport. If we leave aside the operational dimension of public transport, which obviously fluctuates according to demand, in terms of infrastructural funding public transport does not get that preferential treatment, and the officials’ advice was right.

The other thing is how Government spending can be made really cost-effective for the taxpayer if there is a provision that if the cost of building a particular highway goes up—be it ALPURT B2, or State Highway 20, or whatever—then the money will be forthcoming. An extra $65 million will just be chucked in, as happened with ALPURT B2 over that financial year. It is not very good discipline. If the contractors know there is a cost-plus approach, they will put their tenders up to meet what is available, particularly when we know that the contracting system is quite stretched at the moment in terms of all these roading projects. The contractors can benefit by many millions of dollars more—at the taxpayers’ expense—if we have such a funding system.

It is true that, in the Budget, the Government has put some serious money into public transport. The Greens, of course, have been very keen on seeing extra money put into rail, although it must be said that the $500 million put into electrifying Auckland suburban rail, even though it is very good, is in the form of an infrastructure bond. Sure, it is Government guaranteed, but it does not immediately come out of the Budget; the provision is that the interest on that infrastructure loan will come out of a petrol tax. That is how it is working. The Greens have supported that, as have all the Auckland local bodies, as enabling electrification to go ahead. But it is a more conservative approach than the Government just throwing in $125 million, as is recorded in the supplementary estimates, for State highway construction.

The Government has admitted that it has gone against the proposal of funding Land Transport New Zealand, which then works out, in a balanced way, what is funded. It actually says in the note in the supplementary estimates on the ALPURT B2 funding: “Contribution to support the construction of the Albany to Puhoi Northern Motorway Extension … Reason for Change: As per funding profile agreed by Cabinet.” That indicates that Cabinet itself has said there is some political pressure from the roading lobby for this road to go ahead, and, to make sure it goes ahead at a certain pace, it will throw money in that direction, even though it is not incorporated in the land transport budget.

In the answer to Jeanette Fitzsimons back in March, Michael Cullen said it was like superannuation in that it was demand driven. Well, it is true that superannuation is demand driven, and that we do not know the number of older people etc., so there has to be a bit of flexibility there and the situation changes year by year. But when we are talking about motorway construction, we cannot draw the parallel that it is demand driven. We have these different projects: public transport infrastructural projects and road infrastructural projects. Whether money is allocated is not demand driven. That is where the parallel with superannuation is not right, in that the funding process through Land Transport New Zealand is a contestable system, and a balance has to be reached. It is, I think, quite wrong for Cabinet to intervene in that way, and it is quite contrary to the concept of carbon neutrality that the Government is aiming at.

If one is going to spend extra money, above and beyond the Budget, surely that money should go into public transport infrastructure, if we are serious about getting New Zealand’s greenhouse gas emissions down, because a lot of those emissions come from cars and trucks on roads. So if we put the extra money into roads, we are not dealing with that problem; in fact, we are encouraging people to stay in their cars, rather than allowing for the availability of more public transport that can take people out of their cars. Or, if we put more money into rail, then we have more goods travelling long distances by rail as opposed to trucks. Surely that would be very beneficial. So I think we should seriously note the problem in the supplementary estimates with so much money being diverted by Cabinet down this track.

The other problem is that the earlier funding for State highways was actually done before Land Transport New Zealand had published its programme, and that is undercutting that body. Thank you.

Hon PETE HODGSON (Minister of Health) Link to this

I am not sure whether the House has realised that which is obvious to me and to anyone on this side of the House, which is that the National Party cannot stand success. It cannot stand it when this Government continues to make progress. It continues to frustrate that progress and continues to opine that progress will not be made. It continues to hold the view that things will not come to fruition: that we will not be able to make progress on 20 free hours, that KiwiSaver will not work, that the roll-out of the Primary Health Care Strategy will not work, and so on. National members are desperate for this Government to not make progress, and the reason is that they have decided they want to go into the next election with one policy: no change from what is going on now, but to do things with more style. That will be National’s policy approach: no change, but they will do things with more style and maybe they will have some tax cuts.

You see, the problem National members have got themselves into is that this Government does not lack ambition. We are keen to improve the lot of New Zealanders in this, that, and the other sphere. In the short term, in the medium term, and in the long term we have a plan, one might say. That plan is rolling out inexorably, and the National Party, if it is to have no change, must embrace every part of the plan as it comes to fruition. Otherwise, it will have to say it will roll it back. So if we look at our policies, we see that the Primary Health Care Strategy is a cracker. If we look at National’s policies, we see that its members went into the last election saying they would not have any more of the Primary Health Care Strategy roll-out. They said they would keep it for the under-25s, and, verily, they would keep it for the over-65s—that part of the policy having already been rolled out—but, oh no, they were not going to roll out any more. Well, National lost the election, and the roll-out continues. So National will do a U-turn and say it did not mean that. It will say it will keep the Primary Health Care Strategy in its totality, with not one bit of change, but will do it with more style, and there will be tax cuts.

One can see that that approach is what National members are hoping for throughout all of the policy areas. They are desperate for the 20 free hours’ early childhood education policy to not work. They are talking it down as fast as they can, because they know that when it does work they will have to embrace it. If they do not embrace the policy, then a whole lot of people will say it was good and ask why National would want to take it away. So, you see, National members are on a rolling U-turn, and they will stay on that rolling U-turn unless or until they finally, one year a long time from now, get themselves on to the Treasury benches.

This Government does not lack ambition. We intend to roll out KiwiSaver, and people will join it. Members can mark my words: people will join KiwiSaver. And what is more, KiwiSaver will change the macroeconomic settings in this country significantly. It will, over time, improve our savings record. It will, over time, address the current account. It will, over time, mean that we will start to own more and more of our own country. And National will not be able to roll it back.

That is also the case with regard to another change that is coming next Sunday: the 20 free hours’ early childhood education. That will be taken up, and those who have been grizzling about it will join it. Some of them will not join immediately; they will want to hang out for a while and see what the market does. Well, I can tell those people that they will end up with a niche position in the market if they want to keep charging a lot of money, or they will change. When they change, the National Party will change, too.

And so it is in the health system, and so it is with regard to anything else that is going well in this country: the National Party is determined that it is not going well. So when we have the lowest unemployment rate in the world—except, sometimes, for that of South Korea—the National Party assures us that there are far more people on benefits than there ever were before, even though we know that the numbers of people on the domestic purposes benefit, the unemployment benefit, the sickness benefit, and, most recently, the invalids benefit are plummeting. The numbers are coming down. When we look at youth unemployment, where the unemployment number has nearly hit the bottom, we see that the National Party asserts, week after week, that the number is very high. Soon the number will be so low that we really will know the names and addresses of New Zealanders aged 18 and 19 who are on the unemployment benefit—again; just like the situation that existed in the 1960s. But the National Party will have no truck with that; its members cannot stand that success.

National members cannot stand Working for Families being a good success. They cannot tolerate the notion that 130,000 New Zealand children have been lifted out of poverty in recent years—they cannot stand it; they just do not like it. They say that they will take away bits of Working for Families, and that as soon as Bill English and John Key can agree on which bits, they will have a bit of policy. But so far they have not done so. Instead, National members say that everyone is being made into a State beneficiary. Well, Working for Families is optional. People can join it if they want to, but National says we are making everybody a State beneficiary. Some of those National Party members are themselves State beneficiaries, who earn $122,500 for doing not much work. I would have thought that those members needed to reflect on what is a reasonable allocation of wealth across this country. In particular, they should look at the way that children are treated in most other Western nations, because there they will find some equivalent of the New Zealand Working for Families package. But no, National members do not like it.

The National Party is facing a Labour Government that refuses to stop its very substantial incremental changes for the future of this country. In respect of economic development, National has the same argument that it has in other areas. Here we decided that our economy needed to be thickened up, that it was not OK to rely on commodities alone, and that we needed to move beyond that situation. And so arrived the fashion industry, the film industry, and many, many other things beside that, courtesy of the work of New Zealand Trade and Enterprise. What does National want to do? It wants to throw out New Zealand Trade and Enterprise. It thinks it is corporate welfare. Well, no Western nation in the world agrees with the New Zealand National Party, but that is the position it holds, and that is certainly the position it held in the 1990s. The position it had in the 1990s, when it was in Government, was that all of that stuff was corporate welfare, and that it was not going to have anything of it.

So, you see, the National Party is in trouble, because the business community thinks that New Zealand Trade and Enterprise does a good thing. The business community agrees with this Government’s approach to economic development. The business community thinks that the change that occurred in 1999 is a good change, not a bad change.

Dr WAYNE MAPP (National—North Shore) Link to this

I have news for the Minister of Health. Yesterday I was speaking to a young person in the North Shore. She said she is going to Sydney. Why is she going to Sydney? She is going because she can get $20,000 extra. She said she really wanted to stay in New Zealand, but how could she look past $20,000 extra and more opportunity? She has made a decision against this Government, which is to say that it has not delivered. Each and every week 750 people are making exactly that same decision.

The Government has made a great deal of KiwiSaver. I ask the Government this question: “Is that all there is?”, because the Budget was all about KiwiSaver, and on that basis the Government expects to be re-elected.

Dr PITA SHARPLES (Co-Leader—Māori Party) Link to this

Kia ora, Madam Speaker. Tēnā koe. It is entirely appropriate to be examining the Appropriation (2006/07 Supplementary Estimates) Bill at this time—the time of Matariki. Matariki signalled a time of abundance, when the fishing was thriving, the moki and korokoro were plentiful, and kūmara and other vegetables were gathered. It was a time of plenty for our tipuna. It was a time for planning ahead: for planting new soils, and for preparing the ground for fertile growth in the months ahead. So it is that we turn to the task ahead: the need for parliamentary authorisation of individual appropriations and changes in the expenditure.

It would be fair to say we come with high expectations. In the week preceding this debate, we have witnessed David Richwhite and a company involving his former partner Sir Michael Fay pay over $20 million to the Securities Commission to settle insider-trading proceedings relating to Tranz Rail—$20 million, the cost of innocence! We have watched shares rocket exponentially from 14c to $5.15 as the news came to hand that the Skycity Entertainment Group Managing Director, Evan Davies, is to receive a $1.7 million exit payment. So one would think the scene is set for new beginnings, for planning ahead.

Part of that scenario setting is the allocation of an additional $2 million to host the World Heritage Committee and for the chairing of that committee. It is a very important committee, which takes up a global surveillance role in protecting and preserving the world’s most outstanding and precious cultural and natural heritage. We have the incredible honour of hosting the World Heritage Committee meeting, in Christchurch. It opened on Saturday and will run through to 2 July 2007. Matariki is a time to share and present offerings to others. In this regard we are particularly proud of the international leadership being demonstrated by the Ngāti Tūwharetoa paramount chief, Tumu te Heuheu, in his role as chairperson.

What else does the new year herald? It appears to herald a very significant investment in operationally deployed forces—an additional $72 million, to take up the balance of three financial years. This is in addition, of course, to the $329,952 million appropriated for defence equipment, $10 million for fixed-wing transport forces, $9 million for maritime patrol forces, $8 million for land combat support forces, and $21 million for naval combat forces—just a few among the items on the armed forces shopping list.

I have come to this House on many occasions urging Parliament to consider the notion of a genuine progress index, or GPI, as the measurement of all aspects of our wealth, human and other. It assesses all our social and environmental assets, as well as our deficits. The index basically tracks all the flows of income that are not in the cash economy. It includes the widest range of measures that affect the health of the economy. So when we consider the supplementary estimates of appropriations for the year ending 30 June 2007, we expect to see planning for those who lack the fortune that others so clearly possess. I am reminded of that old 1970s poster: “It will be a great day when schools have enough money for books and the air force has to run a cake stall to buy another bomber.”

All I need to do is to turn to my electorate to see that the fortune is not shared with all. Tamaki Makaurau has the highest proportion of youth. It is one of the fastest-growing regions in population terms, and one of the lowest-income regions in Aotearoa. It is in the spirit of Matariki that we will be supporting the Minimum Wage (Abolition of Age Discrimination) Amendment Bill, to ensure that a sincere though small start is made in spreading the abundance, the wealth of this country, amongst the youth and families of Ōtara and similar low-income areas. We expect that all who have a genuine interest in sharing abundance and wealth will also support the bill.

We have been meeting together for months now to address what others may describe as the dysfunctionality of our youth gangs. Yet when we called the Minister to support us with one simple measure, the call for an 0800 number—a team of workers was all ready at the other end to intervene in this negative culture—no funding came forward. When we come to this House we hear “Ban the patches!” and “Ban the gangs!”, but nothing to say that here is a helping hand or a willing ear, to offer a positive step forward.

This is the south of Auckland, where a 3-year-old boy died after being beaten to death with all manner of weapons, including a baseball bat and a vacuum-cleaner pipe. I have a 3-year-old mokopuna, and when I think of that precious life lost, I wonder where our priorities are as a nation. This shameful, horrifying abuse just keeps on occurring, but with no sign of any response in this list of supplementary estimates.

This is the south of Auckland, where workers at the Centra Auckland Airport Hotel took strike action to highlight wages so low that people cannot make ends meet. One of the workers at that hotel, Lopa Muliaga, like many hotel staff, earns just $12 an hour, while the hotel spends over $10 million on refurbishments. That is not enough to get by, to keep the power bills at bay, to survive. I think of the statement made yesterday by the Mercury Energy boss, who said: “Financial hardship is a social problem and it requires a coordinated community response. It requires us all to play our part, and that includes not just the power industry but social agencies and Government as well.”

It will be a grim Matariki for some. How can we have any hope of reinventing and rejuvenating ourselves, of preparing for the cold, hard winter ahead, of anticipating the bounty of the season, when that resourcing is clearly not evident in this Appropriation (2006/07 Supplementary Estimates) Bill? Although Māori Party members support, of course, any increase in the appropriations to settle Treaty of Waitangi claims, the plans to establish a contestable aquaculture planning fund, and the investment in a digital strategy for high-speed connectivity and growth, this bill is sadly lacking in making the real difference to families in my electorate. I refer to the basics of life: a hot, nutritious meal; essential services, including water; and being able to avoid disconnection of power. The purely market-based approach is doing nothing to help the constituents who come to my office, and, probably, many others as well. We must be brave enough to admit that the parlous existence of too many low-income families cannot be disregarded.

How did we get to such a state that the balance is so skewed? The rising costs of electricity, water, and transport are all well above the rate of inflation, and threatening the very viability of families to survive. Genuine progress must be reflected not just in sharemarket prosperity but also in gross total family incomes. Yet New Zealand exhibits a very uneven distribution of wealth. The richest 10 percent in our nation have increased their net worth to just over 50 percent of the total wealth of our country. Genuine progress is about the nation being able to host the Rugby World Cup and the World Heritage Committee at the same time as families and communities can host each other in their homes, and can share the collective vision where benefits are shared by all.

When we think of benefits we think of beneficiaries. We must ensure that those who find themselves on income support—some 37 percent of whom are Māori—are not turfed out in the cold, or forced to sign up to the perplexity of a paper war without their real needs being met. We must build community resilience and community responsibility, helping each other to help ourselves, and caring in the broadest sense. We must combat the parasites of poverty—the loan sharks, the pokie machines, the addictions, the alcohol and drug abuse—that feed this dysfunction. We must do it now, because we can, and we should. That is the promise of Matariki that we in this House are morally bound to take up.

MARYAN STREET (Labour) Link to this

In speaking in this estimates debate I want to highlight the significance of 1 July, which is a day that sees another step being taken in this Labour-led Government’s set of ambitions for this country. I begin by highlighting what we are doing in health as of 1 July. We have cut in half the cost of seeing the doctor, and from 1 July all New Zealanders will be able to access affordable doctors’ visits and affordable prescription drugs. These are policies that directly impact on the families that the previous speaker, Pita Sharples, was referring to. These remain the families about whom the Labour Party and this Labour-led Government care. This is a historic achievement in health that is coming to pass on 1 July and that only a Labour-led Government could deliver. We have invested $2.2 billion in order to make it happen. This is what it costs to make primary health care affordable for all families.

This investment has reduced doctors’ fees by around $25 and lowered the standard prescription charges from $15 an item to $3 an item. Three million New Zealanders are already benefiting from lower fees, and on 1 July they will be joined by people in the 25 to 44-year-old age group. We are just getting started. Lowering doctors’ fees is the beginning. We will be stepping up efforts to improve screening to prevent diabetes and cardiovascular disease, and to boost vaccination rates to protect the health of all children.

Another initiative that will come into effect in its fullness on 1 July is KiwiSaver. This initiative is vital for Kiwis in securing their financial security. There are a whole range of complex repercussions and implications from the KiwiSaver initiative that comes into effect on 1 July. First of all, it secures the future. Saving more will secure better futures for our families, and it will also help New Zealand companies to access local capital, and expand both here and overseas. It is a non-inflationary policy. Savings mean less consumption, taking pressure off interest rates—which is, in part, an answer to the Hon Dr Nick Smith’s comments earlier in this debate. The answers to the problem of high inflation rates are complex, but KiwiSaver is a large step in the process of taking pressure off interest rates, off inflation, and off the dollar. It is a non-inflationary policy.

KiwiSaver means that we will be investing in ourselves. We will have a larger pool of domestic capital so that New Zealand businesses can expand and grow, and our economy can become more self-reliant, rather than being reliant on overseas investors who have no long-term interest in the state of the New Zealand economy but are keen to make a short-term profit.

Another significant impact of KiwiSaver is that it will mean more New Zealand ownership. New Zealand business can grow under New Zealand ownership, rather than being dependent on the overseas investment I referred to a moment ago. Profits can stay in the country and fuel more new businesses and jobs.

KiwiSaver makes it easier for New Zealanders to take the hard step of saving for the future, and helps to develop long-term savings habits. In fact, KiwiSaver is the best opportunity ever for low-income families to make provision for their retirement and to develop savings habits that, in the long term, benefit not just them but also the country, because of the anti-inflationary effects I mentioned a moment ago. Under this Labour-led Government more people will have better financial security in their old age.

Further to that, KiwiSaver impacts on homeownership. This Labour-led Government believes that all hard-working New Zealand families deserve the best and that if they want their own home they should be supported to achieve that goal. KiwiSaver tax credits and the employer contribution make it easier for New Zealanders to save more, and for many to save for their first home. We have made sure that KiwiSaver is flexible enough to be applied to the ownership of a family’s first home, and the flexibility around that is a very significant contributor to the future well-being of New Zealand families.

KiwiSaver gives a helping hand to workers early in their working lives because hardworking young New Zealand families deserve support, and it is our way to promote family savings beyond the family home, as well.

July 1 will also see the introduction of 20 free hours’ early childhood education. I want to talk about that for a moment because it is a very significant contribution to education in this country. In fact, it is the most significant contribution to education in this country since we saw compulsory secondary education introduced by the first Labour Government. It is a very significant milestone and a very significant step for education, and the education of very young children in particular. It means that up to 20 hours a week, up to 6 hours a day, are free for enrolled 3 and 4-year-olds. It is an excellent policy, and the early childhood centres that I have visited recently—including the Inglewood Childhood Early Education Centre, which I visited yesterday—are delighted with the policy, are applying it in exactly the way it was intended, and are confident that they will see more and more parents taking up early childhood education for their children. Staff from the Inglewood centre talked about the benefits to the families in Inglewood and about those people on low incomes in the Inglewood area who are delighted that this will now be within their reach.

People remember the National Government. Despite the fact that some of the new National members opposite do not remember their own heritage, people out in the electorate do. They remember things like the wage and price freeze in the 1980s. They remember the Employment Contracts Act and the increased surcharge on superannuation in the 1990s, and the questions are building for National. The questions will come from the electorate. What will National do? Will it rescind prescription drugs charges? Will it make them more expensive and out of the reach of many? Will it take away 20 hours’ free early childhood education? Will it axe KiwiSaver? Will it, in fact, renege on the doctors’ fee support that 1 July will see made available to everybody? Will it make primary health inaccessible? Those will be the questions for this National Party to answer in the forthcoming election. Thank you, Mr Assistant Speaker.

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

This is truly an incompetent Government that sits opposite the National Party today. It is a Government of slick slogans and no delivery at all. It is a Government completely fixated with spending more and getting less for what it is spending, and there is no area where that is more stark than in Vote Health. This is a Government that measures its performance solely on how much money it has spent on health. If we ask the Government whether things are improving in the hospitals, its answer is that because it is spending billions of dollars more, yes, they must be improving. If we ask the Government whether maternity services are improving, it says that, yes, they must be, because it is spending hundreds of millions of dollars more in that area. If we ask the Government whether our hospital services are improving for people who need non-urgent but vital surgery, it says that, yes, they must be, because it is spending more and therefore we must be getting more.

Nothing could be further from the truth. This is a Government that has produced more spending and lower quality. I will give an example in relation to maternity services. The Government says it is spending more than ever before on maternity services. But the question about quality has to be asked. In Waitematā 24 percent of women presenting at the hospital to give birth this year did not have a lead maternity carer. A quarter of all the women who presented at the Waitemata District Health Board hospital did not have a lead maternity carer. What does that say about the quality of support that those women of west Auckland and the North Shore have received from this Government, when they cannot get a lead maternity carer?

JUDY TURNER (Deputy Leader—United Future) Link to this

I was very interested in some recent comments from the Office of the Health and Disability Commissioner. The office highlighted the fact that it had very few complaints from the disability side of its mandate compared with the health side. It became apparent that because people in the disability sector have a long-term, ongoing dependence on the people who work for them, there is a greater reluctance to come forward—and even sometimes a fear of doing so—with a complaint in case the services that those people rely on are jeopardised in some way. It is an issue that the Office of the Health and Disability Commissioner plans to do something about, and I commend it for that.

It highlighted for me a parallel situation that I see with Child, Youth and Family, whereby people who are on the receiving end of an intervention by that department—particularly when it uses the statutory powers it has to uplift and remove children from the home, and then determine the level of contact parents and family members are to have with those children and the conditions under which they are able to see their children—have the same fears regarding laying a complaint. In fact, they are right to have those fears. I have seen case notes from Child, Youth and Family where parents or relatives have gone in and complained about the way their case was handled, and it has been written into the case notes and they are now seen as troublemakers. United Future is now deeply, deeply concerned about the fact that currently there is no proper complaints procedure in place for adults who have concerns at the way their case is being handled.

I think that this needs to change, and that two things need to be put in place. United Future believes that, first of all, there needs to be a complaints authority—we think something similar to the Police Complaints Authority—that is independent from the workings of Child, Youth and Family so that those who have concerns know that when they lay a complaint, it will not be added to their case notes. That is the first thing that we believe sincerely needs to be put in place.

The second thing we have noticed is this. Most members in this House will have received tragic emails, phone calls, and letters from members of the public who believe that they have a grievance against that department. None of us is in a position to know how credible those complaints are. We do not have the investigative powers or resources to check out those stories. But I do understand at a very gut level what it must be like for mum and dad to find that their children have been removed and that they are no longer considered fit and able to care for their children, regardless of how much truth there is in the accusation. One of the common threads I have become aware of from the families that have contacted me is that these people are in desperate need of a calm, sensible, rational advocate to hear their story, to write it down, and to give them advice as to how they should then proceed.

This is not about naming, shaming, and blaming Child, Youth and Family social workers; that is far from what we want. We want to set up a system that is similar to the health concept of quality assurance activities that feeds into professional development. We need a complaints authority that sends messages to the Minister about the developing trends of the complaints it receives.

The Minister acknowledges that, currently, most of the complaints are about the quality of social work. We need to understand what aspects of social work are falling short of international standards. Child protection work is cutting-edge social work, and it should be the domain of our most qualified and competent social workers. Yet, due to the high staff turnover, and to training and workforce issues, sometimes we see very young and newly trained social workers having to work in this extremely difficult area—yes, with some professional supervision, but certainly with very little feedback, because the very people whom they need feedback from are too scared. They are blind terrified to go in and lay a complaint.

As we move through into the next financial year and beyond, United Future would call on the Government, and on the National Party too, to consider very seriously what they will do about the missing ingredient in this important Government department. We want to see both advocacy and opportunity for those cases to be investigated thoroughly in order to make sure that good social work practice is happening, that families are getting the fairest outcomes, and that children are well protected.

HEATHER ROY (Deputy Leader—ACT) Link to this

I rise to speak in this debate on behalf of the ACT party. One dollar in five of Government spending goes on health and we need to ask ourselves seriously whether we are getting value for that dollar. If there is one thing that scares me in New Zealand these days, it is the thought of getting sick and having to depend on a health system that, quite frankly, is failing in many respects. We know, courtesy of a Treasury report that the Government tried to keep quiet, that despite Labour spending an extra $4.5 billion a year on health since it came to power, there have been no extra health services as a result. The number of Ministry of Health staff has increased by around 40 percent during that time, with district health boards and primary health organisation bureaucracies costing this nation over $40 million a year. That would pay for a large number of heart operations, hip operations, grommet operations, and the like.

What has this extra spending achieved? According to yet another internal report from Treasury, absolutely nothing. I quote from one of its reports: “Increased staff numbers have not led to higher outputs.” In the language of everyday people, that means not a single extra operation has been performed. In fact, when we take into account population growth since 1999, fewer operations are being done now per head of population. I thought that I was over being shocked by the state of our health service, but even I was left speechless when told there are now more bureaucrats than hospital beds in the system. That is right; if every single health bureaucrat fell seriously ill tonight, then there would not be enough hospital beds for them all, let alone for anybody else.

JUDITH COLLINS (National—Clevedon) Link to this

This is definitely a tax-and-spend Government. One of the things we need to think about when I make that statement is the fact that New Zealanders now pay $20 billion a year more in taxes than they did when this Government came into office—that is $20 billion spelt with a “b”, not an “m”. That says to me that a lot of money has been pulled away from New Zealanders who have earned that money and it has then been thrown out as a lolly scramble. We have seen it in health. We have seen $4 billion extra go into health, and we have seen no better health care than people had before this Government started spending. We have seen it in education, we have seen it in welfare, and we have seen it all the way through.

We have also seen an economy that has benefited from relatively low interest rates until recently, we have seen high immigration and emigration, and we have had very high commodity prices for our farm produce. That has been a recipe for having more people come into the country, more people wanting to build houses, and more people wanting to get into work. That has been very good, and one cannot argue with that.

There is nothing like having people wanting to spend, except that New Zealanders now face a huge increase in their interest rates. A lot of 2-year mortgages are coming up for renewal, and those times will really hit New Zealanders hard. These are the people who are working, who are saving, and who are incredibly productive. They have children, they work, and they want to get ahead. We are losing these people every single week now—750 a week are going to Australia under this Labour Government.

People say that they are sick of slogans and no delivery. They are sick of hearing about 20 hours’ free early childhood education and finding out that free comes with a fee. People are sick of hearing about having a single core benefit that will be the major welfare plank of the Labour Government, and then finding out there is to be no single core benefit. The Government will now ask people whether they would like to work and, if they do, whether they will work. Well, that is a really big effort—not! Many New Zealanders will say that they have to get up in the morning to go to work because that is how they earn a living.

We know there are jobs available. We know also that this Government has overseen a massive increase in sickness and invalids beneficiary numbers. We now have 125,000 working-age New Zealanders who are too sick to work. That is despite the fact that $4 billion a year extra is now spent on the public health system. That tells us that it is not good value for money.

We have seen a decrease in unemployment, and it would be churlish not to acknowledge that. But we have also seen a huge transfer of people from the unemployment benefit to the sickness and invalids benefits. We have heard doctors say that they are intimidated at times by people and that they are infuriated that Work and Income sends along people whom it knows have nothing wrong with them other than, let us say, an attitude against work. Doctors are sick of being pulled hither and thither. They are constantly told that if they complain about it, then they are party to a fraud. Those doctors are simply trying to do their job and we should have far better controls over that situation.

We have heard about tax cuts from the Government. We have heard from Mr Mallard that we are to have personal tax cuts.

Hon DAVID BENSON-POPE (Minister for Social Development and Employment) Link to this

It is a real pleasure to be able to stand in this House and talk about the policy initiatives that are due for implementation this weekend. I will spend a bit of time on the ones we have introduced earlier in the year, and also mention some important new initiatives for the whole of this country that have already been introduced in the 7½ years of this Labour-led Government.

First of all, of course, as a number of my colleagues have already mentioned, we have the introduction of the enhanced KiwiSaver programme next Sunday, which was announced in the Budget. I think it is essential that we do revisit the comments that Dr Cullen made at question time earlier today. Most New Zealanders, including those in the workplaces around my electorate, have already realised that not signing up to KiwiSaver—or not staying in it, because signing up is already the default for everyone—is an absolute no-brainer. What a surprise it is to us that National Party members oppose the enhanced KiwiSaver. We are not quite sure—indeed we are not sure they are sure—what their policy is on the first phase of KiwiSaver, but they are quite clearly not supporting “KiwiSaver II”. Why? Well I suppose it is because it expects employers to make a contribution, and we know the focus of some of the sad policies that we see from the Opposition.

Of course, as of a few days’ time, we also have the 20 hours’ free early childhood education. It has been fascinating to see the evolution of that discussion. We have not heard any policy from Opposition members. We know they oppose the $285 million new policy extending the availability of early childhood education to younger children, but they do not have a replacement for it. We know they oppose the paid parental leave initiatives that this Government has introduced, and we know—

KATHERINE RICH (National) Link to this

It is quite clear that the Government has already decided it will soon be in Opposition, because most of the speeches I have heard have concentrated on National and on what will occur after 2008. It is clear that the members on the other side have already started to pack up their offices. They are concerning themselves not with what they will do and what was in the Budget and the estimates but with what National will do. With the sort of lemming-like confidence that the Labour Government is showing, I will tell some of those members what we will not do in 2008.

One of things National will not do is to pretend that the 20 free hours policy is free, because it is not. It is a fraud. The Government members, with some kind of Orwellian idea, might think that the word “free” can mean a payment, but on this side of the House we think the word “free” means free. Steve Maharey is standing up in the House, day after day, saying it will be OK to have a quality surcharge, a payment for books in early childhood education centres, a payment for music appreciation, or a payment for any kind of service the centre will be offering in order to cover its day-to-day costs, but we do not think it is OK. We think that is fraudulent. We think that the 20 free hours policy is not free, no matter how many times the Minister might say it is.

National also will not pretend that the standards of police are higher in the light of evidence that some of the recruits going through the police schools are needing help with their alphabet—needing help with one of the basics of the English language. The Prime Minister stood up in the House today and said that the standards are higher. She can continue to say that as much as she likes but the New Zealand public does not believe her in the light of reports from people who are actually involved in training police cadets. Those people say there are some serious problems when it comes to quality and some serious problems with some of the people we are letting into our police colleges.

We will not pretend that the health system is getting better. We will not pretend that longer waiting times in accident and emergency departments and people dying while they are waiting for basic services is acceptable. Although we have spent more and more as a country, we are getting less elective surgery than we did years ago.

One of things members on this side of the House looked at when we looked at the estimates was what will change in education. In the light of some really problematic issues in education we were looking for something new, something that would make a difference to Kiwi kids in our schools. Truancy is an issue that has concerned members on this side of the House for some time. Since 2002 the rate of truancy has risen by 41 percent under this Government, and for young Māori women it has risen by over 60 percent. What was in the estimates to deal with the problem of truancy? There was nothing new. There was nothing in terms of any kind of thrust or initiative to make a difference to this growing tidal wave of a problem facing New Zealand schools, where some 30,000 New Zealand kids play hookey each week.

We looked to see what changes might be made in the early childhood sector. The Government is still pushing the 20 free hours policy and pretending that “free” can mean a payment, which is interesting in itself. We looked to see whether the Government would keep its promise. Members will remember that back in 2005 the Government said that all 3 and 4-year-old children would be eligible for this policy. But what we will see come 1 July is something totally different. The Minister will stand up and say that so many thousand kids are receiving it, but he will also include the over 40,000 kids who are already in kindergarten and already receive a free service of sorts. He will count those kids even though, in many cases, they are not receiving 20 hours, at all. We will see a number of parents who are deeply angry about the failure of this Government to keep that promise. Many Kiwi parents saw that as a promise and many people voted as a result of that policy. It is certainly an example of how to spend $178 million and please absolutely no one.

We also saw the slithery shape-shifting when it came to the discussion of ratios in New Zealand schools. The promise back in 2005 was very clear: by 2008 all junior classes would have no more than 15 students. When we looked at the Budget and looked at the expenditure that was analysed by the Education and Science Committee, we saw that the Government had moved that ratio to 1:18 and pretended—or hoped, I suppose—that nobody would notice. Certainly the education sector has noticed, and when questioned specifically on this point Steve Maharey continues to say until he is blue in the face that there has been no change in policy. Well, that is news to schools, and it was certainly news to schools that this policy had not been costed as late as December 2006. It is just another example of this Government promising one thing and doing either the absolute opposite or not fulfilling those clearly communicated policies.

One of the things we heard the previous speaker discuss was the supposed changes that have been made in the welfare sector. Well, that Minister and his predecessors have been talking about the universal benefit ever since Labour came into Government. They have been announcing it, re-announcing it, launching it, and holding functions, but have we seen any progress? No. Year after year it is absolutely the same.

We have seen some changes to scholarship. I find these changes quite entertaining, because this is one area where the Government has made one of its new announcements, but it is quite bizarre in my view. Parekura Horomia made the announcement that one of the momentous changes to scholarship was that students who have grown up with a certain language as their first language—for example, they are native Mandarin speakers, French speakers, or German speakers; they are not studying a second language—will now be able to enter the scholarship exams and win monetary awards. The Minister argues that this is to create a level playing field for all students.

I wonder how it can be that in an attempt to create a level playing field, we are now letting students who have that language as their first language going head-to-head with Kiwi students to win those monetary awards. Those Kiwi students will have been learning Mandarin, French, German, Spanish, or whatever it might be as a second language, and now they will get monstered by other students who have had that language as their first language. That was one of the strangest announcements I have heard for some time.

The issue is that Government members have run out of ideas, and that is evidenced by the fact that all their speeches have been about the National Party. Their speeches have not been about what they are doing or what their vision is for this country. If we look at the estimates we can see that there is nothing new, particularly in the education area. There is nothing that will deal with the rising problem of truancy in our schools. There is nothing to deal with concerns about exams or the behaviour of certain students.

Certainly there is more spending in the early childhood area, but I do not think there is a single parent in the country who thinks that the 20 free hours policy is free. There is not a single parent who feels happy about handing over what are now compulsory payments for something they were receiving in the first place. Certainly, there is not a parent who is happy about the dramatic change in the kindergarten movement. This Government has created a huge change to the kindergarten movement, meaning that for the first time a movement that prided itself on being free is now charging fees. A service that prided itself on providing sessional education is now moving to sessional and long-term care and education.

There is nothing here that provides a vision for this country. Those members have given up. That is why they are spending all their time talking about what National will do in 2008.

SHANE JONES (Labour) Link to this

Tēnā koe.

Hon TAU HENARE (National) Link to this

Kia ora, Mr Assistant Speaker. That member, Shane Jones, thinks he will be the new leader of the Labour Party. Did members read the Listener article? He will be the leader of the Labour Party. It might not be next year, it might not be the year after that, but it might be in 25 years, when we have all gone home, got old, and retired.

He talked about National thinking it can sleepwalk to victory. We will not sleepwalk to victory; we will just walk to victory, because we have the nous and the policy that goes with it. New Zealand is crying out for some new ideas.

Hon RUTH DYSON (Minister of Labour) Link to this

Mr Assistant Speaker, I am usually pretty familiar with the Standing Orders, but I just want clarification, which I am sure you will give me at the conclusion of my time, about whether the fact that the Hon Tau Henare has not been able to continue his call—because he is participating in urgent public business, I am sure—means I will be able to take an extension of his time and have 13 minutes. I am sure you will clarify that matter at the end of my contribution.

It is a privilege for me to speak in this estimates debate. Throughout the entire debate this afternoon it really has given the House the opportunity to look at the Labour-led Government’s commitments for the next little while, and at what National is proposing to do in its place. One of the biggest initiatives that has been debated, of course, is the “KiwiSaver Mark II”—the announcement made by the Hon Dr Michael Cullen in the Budget of the extension of KiwiSaver and about the contribution from employers, the subsidy of that contribution by the Government, and how the KiwiSaver programme will give New Zealanders and our future generations of New Zealanders financial security. It will promote savings habits; something that we are not good at. We are not good at saving and, as our generations develop, we tend to get worse. KiwiSaver will help us save for our retirement.

We have to be very proud of the retirement income that we already have for our over-65-year-old New Zealanders. Because of the Labour-led Government’s legislation, retirement income is guaranteed at 65 years of age. It is guaranteed for a married couple at 65 percent of the average, ordinary time weekly wage. But we know that that does not leave a lot of spare money for people, particularly when they have major capital calls on their income. KiwiSaver will develop a larger pool of domestic capital, so that we can promote New Zealand investment in New Zealand. It will reduce demand. That will take pressure off interest rates and will help our New Zealand companies to retain skilled workers.

All of those things are very good for New Zealand and for New Zealanders, and we know that National has said no to the KiwiSaver extension. John Key is on the record as saying that it is not something his party will support. I have not heard Bill English comment on it; he may well have an entirely different view. That is the wont of the co-leader of the National Party, but John Key, as the current leader, has said quite clearly that he does not support the extension being made to KiwiSaver. That is bad news for New Zealanders, particularly those who work very hard during the week but who do not have enough money left over to put substantial amounts of money away for their retirement savings or who do not have the ability to easily purchase a house. Those things really are core bread and butter issues for Labour, because we believe people should have financial security in their retirement years and should be helped to buy their first home.

A number of other key policy initiatives—some of which I am responsible for—have been raised during this estimates debate. In fact, some of them were raised at the Transport and Industrial Relations Committee last week. One of the issues not discussed, and I am not surprised, was the extension of the paid parental leave scheme. Many people in New Zealand now take paid parental leave for granted. Of course we have it, like most other civilised societies, but actually we have had it for only 5 years. We have had for only 5 years a payment scheme for women who have been in a paid job and who leave that paid job to have a child or to adopt a child.

We introduced the scheme in 2002 at the rate of 12 weeks’ paid time. We then extended it to 14 weeks, which brought us into an international comparison. That is what the International Labour Organization says we should have, and we have now achieved it. We then extended the scheme so that self-employed women could also have the benefits of paid parental leave. So now 90 percent of women who are in a paid job are entitled to apply for the paid parental leave scheme. That is another policy that National opposes.