Financial Review Debate

The CHAIRPERSON (Hon Marian Hobbs) Link to this

Will members please turn to the report of the Finance and Expenditure Committee on the annual financial statements of the Government. The question is that the report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2007 be noted. I note that this report also relates to the Finance and Expenditure Committee’s financial review of Treasury, so the performance in the 2006-07 financial year and the current operations of Treasury may also be debated.

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

It is part of the New Zealand way of life that when New Zealanders face economic uncertainty, they look to their Government not necessarily to take that uncertainty away but to show a path through it. New Zealanders know that we have a small, open economy, and that making a living in the world is difficult at times. But what did they find out today? They found out today that in the face of growing uncertainty in the world economy and in our own economy, this Government has no idea what it is doing—no idea what it is doing.

Dr Cullen should be here to tell us who is right. Was Dr Cullen right when he said there could be a recession, given the drought, the international financial turmoil, the credit squeeze, the housing market coming off its peak, and, of course, the squeeze on New Zealanders’ incomes? He said he would not rule out a recession. That is Dr Cullen’s assessment. He is not basing that on some kind of secret advice; he is basing it on what he sees in the media. I hope Dr Cullen is wrong, actually; I hope we do not have a recession. At the moment, although New Zealanders are facing uncertainty about a whole lot of things, and although their household budgets are under severe pressure, they do have job security. But a further downturn in the economy would undermine that job security, push up unemployment, and create real problems for households already under pressure. But it is Dr Cullen’s assessment that there could be a recession.

Helen Clark’s assessment is completely different from that. She says there is no problem, and she does not expect there will be negative growth, saying: “The Treasury advice we are getting is that the economy will continue to grow …”. So which is it? Does the Government have a view about where the economy is going? Well, it does; it has two views. The Prime Minister and the Minister of Finance have quite divergent views about where the economy is going. That means that we cannot expect the Government to put together the kind of Budget that will be suitable for the times, and that New Zealanders cannot expect this Labour Government to show a path through these times of growing economic uncertainty. Dr Cullen says one thing; Helen Clark says another. Well, we know for sure that Helen Clark says another thing because she is just out of touch. She is completely out of touch with the pressures that New Zealanders are facing every day in their household budgets from high interest rates, high inflation, dropping house values, and growing uncertainty about their economic prospects.

Dr Cullen looks at the environment, and today he lost his apple. Instead of showing New Zealanders that he had a plan and a pathway to get through this economic uncertainty, he has just given up. He has just said that there will be a recession. Now Labour’s tactic is to blame everybody else, and to say that this is all to do with the world and with other things that are going on—that it is nothing to do with the Government. Well, I want to say this to Labour: after a Government has spent 8 years claiming credit for every fraction of economic growth, the public will not buy the argument that that Government has absolutely no responsibility when the situation turns on us. Having claimed credit for every single new job, Labour will have to take the hit for every single job that is lost. Having claimed the credit for every dollar that has been put into people’s pockets, Labour will have to take the blame for every dollar that interest rates are taking out of them.

CHARLES CHAUVEL (Labour) Link to this

I am delighted to follow the previous speaker, Bill English from the National Party, on this question. He spoke about the New Zealand way of life in a tough economic time. He talked about New Zealanders looking for leadership. Well, that is exactly what New Zealanders have had over the last 9 years from this Helen Clark and Michael Cullen - led Government. One look at the record lets us see that this Government just needs to keep the course steady, keep the achievements clocking up that we have kept on clocking up over the last 9 years, and New Zealanders will get exactly the leadership from the Government in economic terms that the deputy leader of the National Party talked about.

We have had the longest period of economic expansion in this country in 30 years. Average growth rates since 1999 have been faster, on average, than those in Europe, Japan, the US, and the UK. Company tax returns are evidence that recent profit growth has averaged over 20 percent per year. New Zealand has consistently rated highly in international comparisons of openness, competitiveness, and the ease of doing business. Again this year, despite the attempts by members opposite to talk the New Zealand economy down, which is what they always do, we were rated second in the world in this area. Those are fantastic achievements. They have built a base that we should be very proud of, and the fundamentals that those achievements demonstrate are very sound, which means that New Zealand is securely placed going forward, even though times are looking darker on an international basis.

Since 1999 New Zealand’s annual economic growth has averaged 3.6 percent. That is well above the OECD average of 2.5 percent. As a result of that, the New Zealand economy today is around a third larger than it was in 1999. Real household incomes are 25 percent higher than they were when this Government took office. That has enabled this Government to do great things with the wealth that has been created. It has created 370,000 new jobs, reduced unemployment to its lowest level ever, and extended targeted tax relief through Working for Families, so that many of our families on low and middle incomes with children do not pay any tax whatsoever. That is a fantastic record. The Government has made student loans interest-free, in order to ensure that Kiwis can pay off their loans sooner, start a family sooner, buy a house sooner, and keep their skills here in New Zealand. It has invested in infrastructure and accelerated New Zealand’s largest-ever road building programme, reviewed business tax, and made payments into the New Zealand Superannuation Fund.

That is the record. When New Zealanders look for leadership—the leadership that the deputy leader of the National Party referred to—that is what they will look at, to reassure themselves that, going forward, the economy is in good hands and the country has good management. They can be satisfied that not only has the cake grown over the last 9 years but that it has been cut fairly and cut in a way that meets the basic New Zealand cry for social justice.

Mr English talked about views that he tried to claim Dr Cullen and Helen Clark were at odds over. Well, why do we not look at the two sets of views that manifest themselves not even from two people on the Opposition benches but from one person, the leader of the National Party? We have all heard about John Key’s big flip-flops. On Iraq, in September 2003 he said that New Zealand was “missing in action” during the invasion of Iraq; in July 2007 he said “we wouldn’t have sent troops to Iraq”. On climate change, John Key said in May 2005 it was “a complete and utter hoax.”, yet in November 2006 he said “I firmly believe in climate change and always have.” With regard to student loans, in November 2005 he said interest-free loans were unaffordable and an irresponsible cost to the country. Do members know what John Key said in January 2008? He said “We will keep interest-free student loans for tertiary students.” The nuclear-free policy, the antinuclear legislation, was bad news for economic growth and for our job market, according to John Key in October 2003, but in September 2007 he said National was going to stick with the antinuclear legislation.

So I do not want to hear from Bill English that there are two views from two different leaders in the Labour Government on this side of the Chamber. There are two views from the one person who supposedly leads the National Party on the other side. In June 2006 John Key went on to say the building of affordable housing at Hobsonville was economic vandalism, but in February 2008 he said he was in favour of the affordable housing that we might build there.

That is the record of the member opposite, and it needs to be contrasted with the great record over here of the Government.

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

The Labour list member Charles Chauvel, who has just resumed his seat, said in response to the challenge from my colleague Bill English about what the Government has to do in this time of real economic uncertainty—and I think I quote him correctly—“We have just got to keep the course steady.” Is that what the member said—“We have just got to keep the course steady.”? Well, where has the course taken us so far? I will tell the Committee where it has taken us so far. It has taken us to a place that a few years ago we used to make jokes about—Tasmania. I bet Doug Woolerton can remember that. We used to make jokes about the standard of living in Tasmania. The joke is now on us. Tasmania has gone way ahead of us in terms of its standard of living. That is what “keeping the course steady” has done to Kiwis; it has taken us, under a Labour Government, to a standard of living way below that of Tasmania. The joke is now on New Zealand.

I am now going to talk about the period under review—which is a bit of a novelty, because Labour members did not even bother talking about it—and that is the last financial year. One of the damning indictments on the Labour Government in that period is its performance on productivity growth in this country. That is what the standard of living is determined by; without productivity growth we will not get an increasing standard of living. The Labour Government in that last period, just like in all periods under it, squandered so much opportunity.

What has happened in terms of this country’s productivity? During the 1990s—and I have here the latest statistics, which were released on 13 March—growth in our labour productivity was up between 2.5 and 3 percent. It was between 2.5 and 2.8 percent a year. What happened under Labour? It collapsed. The headline says “Labour productivity growth subdued since 2000”. That is when Labour came in. Since then, our productivity growth has declined to just 1.1 percent, which is less than half what it was in the 1990s. In the year under review, labour productivity growth declined to 0.5 percent—almost nil. Multi-factor productivity growth, which is equally important, if not more important, shows the same pattern. In fact, in the year under review multi-factor productivity growth under this Labour Government was negative—minus 0.6 percent.

It is no wonder our standard of living has fallen below that of Tasmania. When we do not have productivity growth, we do not get wage growth without inflation. It is the most fundamental economic issue. If Labour thinks more of the same will deliver for New Zealanders, it is wrong, wrong, wrong. Labour, so far, has delivered a lower standard of living relative to that of the rest of the world, because it has collapsed productivity growth.

We should not be surprised by that. Anyone who has been involved in business knows that under this Labour Government the tentacles of Government regulation now reach down to every aspect of business. It is fascinating to watch members of this Parliament coming to terms with the Electoral Finance Act, because it is regulatory legislation. Members all around this Parliament are trying to make their way through the minefield of electoral legislation and regulation. I know that members on that side of the Chamber do not know what the hell to do in response. What I say to them is welcome to what they have done to other businesses, welcome to what they have done to the housing and construction business, welcome to what they have done to any developmental business. That is the kind of regulatory minefield that businesses have had to try to find their way through since 2000, since Labour introduced the Building Act and the Local Government Act, and changed the Land Transport Act. All those pieces of legislation have added more regulation, just like the Electoral Finance Act does. I say to those Labour members: “Welcome to the real world. The regulations that you have imposed on yourselves you’re struggling to comply with.” That is the problem: regulations are crippling this country. More of the same will see New Zealand go further and further down the tubes.

Under the years of this Labour Government there has been a period of golden international economic weather. Since the Asian crisis of 1998 there has been a remarkable international economic environment. Labour has been happy to claim the credit for that. Let it now cope with the negative consequences of its poor management.

R DOUG WOOLERTON (NZ First) Link to this

In speaking to the financial review debate, I would like to say that I rise not to berate the Government but, rather, to appeal to the Government. I think it is reasonably well known now, and if it is not it soon will be, that we will—

TIM GROSER (National) Link to this

Central to the political challenge that we will have to front up to at the end of this year is the underlying Crown debt/revenue position. What is the real extent of the fiscal envelope available for different mixes of expenditure and taxation policies? That will be a major backdrop for political debate later this year, if that is not already the case. Against the background of that observation I would like to compare and contrast—if we go back to school—the statement in the financial review of Treasury with the farce that unveiled itself today over the statement issued by the Secretary to Treasury and the Commissioner of Inland Revenue.

If we go back to the statement in the financial review of Treasury, we see an admission that Treasury has made a mistake. It states: “The financial statements of the Government show that the OBERAC”—which is one of the technical measures we can use—“was $0.5 billion larger than forecast at the time of the 2007 Budget.” Stripped of the official language, what Treasury is saying, or what we are recording as members of Parliament, is that Treasury screwed up and the operating balance is actually larger than it estimated. The question would then arise as to what the consequences of that screw-up were for Treasury. What was the reaction of Dr Michael Cullen, the great helmsman, to that mistake? Well, it was absolutely nothing. Members should just park that on the shelf for a minute.

Last week Michael Cullen was the happiest man in New Zealand politics, because, finally, he had discovered—or thought he had discovered—a deficit. This is not a minor point. This is actually a fundamental point, because right throughout the golden years that Bill English, our deputy leader, has been talking about in the course of this debate—when so much wind was in the sails of the Labour Government, and it had so many obvious, soft choices to make and it usually made the wrong ones—Dr Cullen, the great surplus denier, was trying to deny the basis for a consolidation of taxation policy, and for a systematic process of putting in place incentives that would build on the economic growth, low unemployment, and lower inflation that Labour had inherited from the previous Government. That is the underlying politics of this situation. But because Dr Michael Cullen, the great surplus denier, did not want to go there, the mistakes that Treasury was making in underestimating the surplus were actually very welcome to the Minister.

Today we saw an extraordinary statement from two of our top public servants. What had happened was that although last week Dr Cullen was the happiest man in politics, because he thought he had discovered a deficit for the first time—he had been searching for a deficit for 8½ years and, finally, under this operating balance before gains and losses measure he thought he had found one—Treasury told him today it was sorry, but it had screwed up. It was actually a very minor error of exactly the same magnitude as is contained in the document before us today, but, crucially, it was a mistake that went against the political interests of this Government and this Minister.

And boy, did Treasury pay for that error! Talleyrand, the great cynic but master of politics, once said “It was worse than a crime; it was a blunder.” This small technical blunder elicited today at, I think, around 11 a.m. an extraordinary press statement from two of our most senior public servants. Members should listen to this; it is an abject apology made in public. “I regret any error in the Financial Statements, and I am taking this matter very seriously”, Mr Whitehead said. Not to be outdone by his colleague, the Commissioner of Inland Revenue added that this “was a human error, but a bad one. It should not have happened, and I have apologised to the Minister of Revenue and the Minister of Finance.” To add to this, a commission of inquiry has been set up, would you believe. A commission of inquiry has been set up to investigate a technical accounting mistake, as if this is the Spanish Inquisition. We can infer from this that Dr Michael Cullen must have been stamping his little feet in absolute and total fury at this accounting change. What is more, it is totally unnecessary.

Hon DAVID CARTER (National) Link to this

When the Primary Production Committee examined the Ministry of Agriculture and Forestry for 2006-07 I must say that I felt some sympathy for the officials who came before it, because this committee has a very large workload at the moment. It has a huge number of important discussion documents out there, none of which are being brought to fruition, and this fault lies with none other than the Minister himself. Mr Anderton is a person who, when he got the job, clearly had no interest in or knowledge of this sector and he has failed to grasp the serious situation it is in. We had that explained to us recently, whereby the sheep and beef industry in this country—a $5 billion industry—is under peril. A rescue plan has been proposed by Alliance Meats, based in Southland, but before that plan could be presented to the Minister in detail he was suggesting that any support for such a plan would be a subsidy. Such a notion is absolutely rubbish, and for the Minister to stand by and do nothing when this industry is in such significantly poor shape is, frankly, totally irresponsible.

The issue that came to the fore during our examination was the emissions trading scheme legislation, the Climate Change (Emissions Trading and Renewable Preference) Bill, which has now been introduced to Parliament and is before the Finance and Expenditure Committee. What surprised the committee members was the fact that the Ministry of Agriculture and Forestry appeared to have done very little work around the economic impact of this legislation on New Zealand agriculture.

Subsequent to our examination I received a huge raft of official papers, via the Official Information Act, that show that the Ministry of Agriculture and Forestry has been working very consistently and is well aware of the economic impact of this legislation on New Zealand agriculture. For instance, the papers declare that should the emissions trading scheme be enacted as proposed it will lead to an 80 percent drop in profitability of our sheep and beef farms. Those farms are making nothing now. To further impose this sort of cost, which looks as if it will not be imposed on any other farmer in the world, will make sure that that industry does not survive in this country. Further, the papers reveal that there is a distinct likelihood that production will leave New Zealand, to move offshore. The first question I ask the Minister is what good that will be for New Zealand agriculture. If he will not answer I will tell the Committee that it will be of no use at all.

The second point noted in these papers is that if production leaves New Zealand it will actually end up in countries that are less efficient from a global point of view and from a carbon emission point of view. In actual fact, the environment will be worse off by sending this sort of production offshore. That was certainly the big issue. It comes after a history of inaction and stupidity by the Labour Government around this issue. The Government ratified Kyoto, then proposed a “fart tax”—and we all know how successful that was. It then proposed a carbon tax, and had to back away from that. It now has the emissions trading scheme before the select committee, which, I will accept, is the best option we have. But to impose restrictions on agriculture, well ahead of any of our trading partners, has the potential to be absolute economic suicide.

The final issue I will touch on is a conference held in November last year, which was Mr Anderton’s big initiative—$1 million was spent on a conference. It would attract hundreds of farmers, so Mr Anderton said. I am aware of about half a dozen farmers who managed to pay the $800 to attend. That was typical of this Minister of Agriculture. He is huge on the rhetoric, as we saw in the Chamber today, but very, very poor on delivering the substance. [Interruption] I say to Sue Moroney that if she bothered to get out of Wellington and go around the farmers of New Zealand she would quickly realise that Mr Anderton is held in very, very poor regard. He is a person who goes up and down the country promising the earth, and delivering very, very little.

The latest example we have had is the research and development fund that he announced the other day—$700 million, which he says will grow to $2 billion in 2 years. In the next breath he said that we will be spending capital and interest. What we did find out, after we had had the razzmatazz with the launch of the programme, is that there will not be $100 million available next year for research and development; there will actually be only $20 million. This is an industry that seriously needs research, particularly if we are going to impose an emissions trading scheme on the country. I say to Mr Anderton and to other Labour members who think $20 million will be enough next year, that it simply will not be enough.

Dr ASHRAF CHOUDHARY (Labour) Link to this

Is it not incredible that we have not heard a word from Mr David Carter about what National will do about innovation and about research and development in agriculture? It is unbelievable. It is unbelievable that we have four farmers here—Nathan Guy, Phil Heatley, David Carter, and the member who has just left the Chamber, Eric Roy—who are members of the Primary Production Committee but they have not said a word about research and development in agriculture. What are they going to do? Their leader has said that the Fast Forward programme is a gimmick. Here we are; we have put in $700 million, which will be doubled by private industry. It is not before time that we have put in so much money as a capital fund. The generation of the income from that will be invested in agricultural research and development.

I am getting a whole lot of calls from my scientific colleagues. They are asking what has gone wrong with the National Party, which is supposed to be farmer friendly. What is it doing? It is opposing this research and development fund that we are putting in. Is it not incredible? The whole industry is saying how delighted it is with this money being put into the sector. This is a country that takes pride in research and development in agriculture. It is for the future of this place that we have to make sure we keep ahead of the rest of the world and make sure we have innovation. Over all these years we have had innovation in dairy production, animal production, and the wool industry. In all those sectors we have been a leader in the world. We have to make sure that this money is invested in future research and development, and that our scientists are kept in this country to work for us and for the farmers. And here we have our four members of the Primary Production Committee who oppose this investment.

I am really totally disappointed that David Carter has spoken out the way he has in relation to the investment we have made, and that the Leader of the Opposition has said that it is a gimmick. It is unbelievable that our farmer friends across the other side of the Chamber are actually opposing the money invested in this industry. But I am really very sad. I am sad for those guys, when they go back to their constituents. What will they tell the farmers among their constituents about what National is doing? I know that the calls I am getting now will be the calls those members will get from the science community and from Crown research institutes, asking what is going on in the National Party and why it is actually opposing this investment in this industry. Where are the alternatives? Can we hear from the National Party about the alternatives to what we have done? What is the National Party going to do? How much money will it put into this sector?

The number of initiatives that this Government is taking is incredible. Let us look at the whole sustainability issue covering land and water action. This country has recently gone through a bit of a drought—whether it is the Waikato area, or in the south, where the select committee has been in recent times. Of course, I understand that the drought has broken in the south now. The horticultural industry in this country, particularly on the East Coast, is dependent on irrigation, and in some of the areas we have to provide better irrigation. The water sources have to be managed better. Here we have some of the water action in place, so that farmers in the future can benefit from it. Of course we have to provide sustainability in the whole farming system because this country, as I said earlier, is based on the future of agriculture, particularly in the area of dairy production. Fonterra has done very well, in terms of the export of dairy products. Clearly, there are issues to do with the dairy quota that we are looking at now. It has to be streamlined. There is also the whole climate change issue. We heard earlier from my colleague, who was talking about climate change. Again, this country is the leader in providing innovation in agriculture.

NATHAN GUY (National) Link to this

Wow! Gosh, was not that a stupid address from the member Ashraf Choudhary? That member has been sitting in this Government over the last 8 years and I ask him why, under his stewardship in the Primary Production Committee, the number of employees in the Ministry of Agriculture and Forestry has gone up from 1,200 employees in 2003 to 1,650 employees. Why cannot that member tell us the reason for the increase? When that member came into Parliament 15 employees in the Ministry of Agriculture and Forestry were earning over $100,000, and now there are 160 earning that amount. Why has this bloated bureaucracy suddenly arisen under Labour? I say to that member’s colleague whom he is in coalition with—

Hon DARREN HUGHES (Deputy Leader of the House) Link to this

I seek leave to table a speech from John Key, where he says that public service numbers will be frozen at the same number that they are at under the Labour Government.

RON MARK (NZ First) Link to this

That about sums it up, does it not? The National Party has 48 members in the House and a leader who claims to be the Leader of the Opposition and who collects $100,000 a year plus a limousine—more than other leaders in the House—and those members cannot put up a speaker on what they so often tell people is a very important issue to their party. The reason I said “that about sums it up” is that, when it comes to defence matters, it is New Zealand First that the public is listening to on these matters—not Mr Mapp or any of those other members.

What is even more appalling is that New Zealand First enjoys a proxy seat on the Foreign Affairs, Defence and Trade Committee, but with no voting rights, no ability to sit on the committee on anything other than defence, and no ability to contribute to discussion that might require deliberation. That was vetoed, of course, by Mr Murray McCully and Mr Wayne Mapp at the Business Committee. But then, I guess, we do not have to turn up to that meeting to get the oil, because we know what is going on in defence.

I want to raise a couple of issues. When going through the report from the Foreign Affairs, Defence and Trade Committee I see that a number of issues were canvassed, such as housing for defence force personnel, and some comments were made on Project Protector, helicopters, personnel, and remuneration. The personnel, remuneration, and housing issues have concerned New Zealand First for many, many years. I ask the Committee to cast its mind back to when Jenny Shipley was the Prime Minister. New Zealand First lobbied strongly for a pay rise for defence force personnel. Her answer was “But Ron, they get free dental care.” That about summed it up from the National Party.

We continued to lobby the new Labour Government, and, eventually, after 12 months it moved and gave four pay rises in small increments over a 5-year period. We said it was not enough. We have consistently said that we need to stem the outflow of highly trained, competent personnel in a very tight and competitive labour market. They need a substantive pay rise. We have consistently fought for that for the 12 years that I have been in this House. I ask the Minister whether he would care to make a few comments as to where we stand on that issue, because as we know from the reports in the newspapers, we are losing naval personnel—particularly marine engineers, who are very important to the navy. In fact, our ability to put to sea is restricted if we do not have the numbers, and I understand that currently only a third of those offered the lump-sum payment to sign on again took up the option.

We in New Zealand First are worried. We have consistently asked for and called for a pay rise for defence force personnel. We worry not only about the lives of everyday service personnel and their ability to meet the needs of their families in a very tight labour market and a very tight economic situation where the cost of living for average households is consistently going up—look at the petrol prices, look at the grocery bills, look at getting a house in the New Zealand market—we worry also about their morale and we worry about how they see themselves. We need to understand that defence force personnel do not like being treated as beneficiaries. They joined to serve their nation, not to dip into social development funding like some sort of a beneficiary and to be told that they should be happy that they can get the accommodation supplement, the emergency benefit, or draw down on the social services that are available to all other New Zealanders. They actually have a greater degree of pride than that.

One of the disappointing comments that came out of the Shipley-led National Government at the time was when it said that they can go to Work and Income for assistance. Defence personnel are not beneficiaries, and they should not be treated as such. They should receive a pay and salary remuneration package equivalent to that of the police and nurses, and we in New Zealand First are watching what is happening with the primary teachers because we understand they are going to get a very good settlement as well. [Interruption] I am sorry, the primary teachers already have that. We understand that the New Zealand Educational Institute is about to get a very good settlement.

That brings us right back to the point New Zealand First has been making for years. Defence force personnel are in a unique situation that disadvantages them severely. They do not have a union; they have a Chief of Defence Force who is meant to advocate for them, but he is constrained by the Act to take into consideration the interests of the taxpayer and that handicaps his ability to lobby for his troops.

Hon PHIL GOFF (Minister of Defence) Link to this

Mr Chairman, I agree with Mr Mark’s first remark that when you called the vote, there was absolute silence on the National benches—absolute silence. Not a single person on the National benches had the interest in the Defence Force to stand up and debate it. I am not surprised, because in the 9 years that National last had in Government it ran down the armed forces’ equipment to the point that they were required to operate with obsolete equipment, at times putting their members’ safety at risk because of it. In every year of the previous National Government’s term in office it ran down the New Zealand Defence Force. The numbers fell year after year after year.

Mr Bennett can nod his head in the negative all he likes; he is obviously ignorant of that fact. “Noddy” is about the best description we could give him now. I ask members to look at him there; he is nodding from one side to the other.

That is a bit like the National Party—a flip to the left, a flop to the right. Finally, National came up with a defence policy. It was called “We will support the air combat wing”. It condemned the Government for the dismantlement of the air combat wing. National members said we would be left defenceless and that we would be bludging off our mates. Then what happened last year, the financial year under review? National members flip-flopped. Suddenly they say that it is OK to disband the air combat wing. It is a bit like interest-free loans for students. They said that they would fight that change with every bone in their bodies, but suddenly they say it is a good thing to have those interest-free loans. It is the same thing in defence. They have nothing to say about defence. They have contributed nothing to defence.

I pay tribute to my colleague Ron Mark, who takes a real interest in this area, and I thank him for that. He actually took the time to come up with me last year to Afghanistan to see our men and women on the ground doing the job that they are doing, and it is a fantastic job they are doing as well.

Let me for a moment pay tribute to the men and women in the Defence Force. Today the latest rotation—44 men and women, mainly Territorials—left for the Solomon Islands. We have had members of the Territorial Force doing that job for the last several rotations and they perform to the highest level. They perform to the highest level and that should give us confidence in what they are doing.

Let me say something about the people in Afghanistan. Two weeks ago Governor Sarabi of the Bamian Province was here. She spoke with the highest praise not simply for the professionalism of our forces and the fact that New Zealand had sent our forces there to protect her people but also for the fact that our soldiers, airmen, and naval personnel treat her people with respect. That is the thing we celebrate about members of the New Zealand Defence Force. They go in, they work effectively as peacekeepers, they treat people with respect, and they get that respect back. That is why we can look at Bamian and agree with the United Nations, the United States, and other forces serving in Afghanistan that we have a model provincial reconstruction team in Afghanistan.

I want to say something too about the men—I think they were all men—who served in the Lebanon, dismantling cluster munitions. They dismantled 1,800 cluster munitions, making that territory safe for the children and civilians who live in that part of southern Lebanon. Again, I am very proud of and grateful for their contribution in that regard.

As for Timor-Leste, I am going to Timor on Easter Monday. I will be paying tribute to the men and women who are serving there. Again, they are serving with real professionalism and, again, making a difference to the lives of the people in that country by helping to maintain stability and security in a situation that would otherwise become tragic if New Zealand, Australia, and those other countries that have participated did not play their part.

I finish on the question of pay rises that Ron Mark has raised with me. He understands that there is a remuneration review. I am expecting the results of that remuneration review, and I am expecting that the pay round following it will take into account the recommendations that have been made. In every year but one, this Labour-led Government has increased the pay of the men and women in the New Zealand Defence Force. Under the previous National Government, year after year, they went without. Let me say again that National would again slash the real wages of our people in the Defence Force, because it has never cared about them. All rhetoric, no action, and no substance—that is National.

SIMON POWER (National—Rangitikei) Link to this

The year 2006-07 was an unmitigated and absolute disaster for the Department of Corrections. [ Interruption] I think the Minister of Corrections should hear me out before he laughs. The year 2006-07 was, of course, the year in which the Liam Ashley tragedy occurred and the year in which the murder of Karl Kuchenbecker by Graeme Burton occurred. If by no other measure, those two events alone made the year in review a disastrous year for the Department of Corrections. I will come back to both those incidents shortly.

We know that in the year under review we found out that the four new prisons being built by this Government would cost $1.2 billion as opposed to the original quote of $400 million, which was given to a select committee in 2002. Even with the extra beds factored into that increase, we know that the prisons came at a cost of $1 million per bed. We know too that no pricing or quotes were done, that no “target output costs”—the phrase used these days—were taken.

We know that a system called a collaborative working arrangement was used to design and build those prisons, and that meant that, in the case of the Spring Hill prison, it was not until 20 months after the earthworks had begun that the department had even the foggiest idea what it would cost to complete that prison. In the end, it cost about $380 million. When we questioned the chief executive officer of the department during the financial review, we asked him whether, if collaborative working arrangements were an effective method of building prisons, they would also be used for the extensive maintenance programme that the department must undertake in over half the prisons. He replied that, no, that particular system would not be used for those particular works. If nothing else, that tells members how effective those arrangements were.

We know that when the financial review occurred, the muster of people in our prisons was about 8,200. It would be interesting to know whether the Government’s major initiative in the year in review—the Effective Interventions package—is actually working. Its stated aim was to reduce the prison population—not to keep the public safe. Reducing the prison population was the single aim of that particular package. It is nice to see that, finally, the Department of Corrections is involved in the forecasting of muster arrangements. Up until now, of course, it has been done by the Ministry of Justice, which got it wrong every single year.

We know that in respect of the bureaucracy of the Department of Corrections, interesting trends have emerged. When I first started in this portfolio some 2½ years ago, two or three people were involved in the PR and communications side of the department. There are now 15.3 equivalent full-time staff involved in that particular work. That tells us that this period has been particularly appalling for this department, which has struggled to keep its head above water.

We will now hear, hopefully, from Mr Goff, who is the sixth Minister of Corrections since this Government took power in 2000. If nothing else, that tells us what disastrous management this Government has had in place in respect of this portfolio. The last Minister of Corrections in the financial year under review had the portfolio stripped from him following a series of debacles and upsets that culminated in a suspended prison officer touring the world with the Minister as part of a rugby tour.

The last 12 months for this department have been an absolute disaster. No other department or ministry has had such an appalling 12 months; 12 months that needlessly resulted in the death of young Liam Ashley, and needlessly resulted in bungles that saw the probation service, the Department of Corrections, the Parole Board, and the police all involved in an almost comic—if it was not so tragic—series of events that saw Mr Burton at large for several days before any real action was taken by the probation service, the department, or the police.

In short, the year ahead for this department looks slightly brighter only because it is likely to have a National Minister running it following the general election later this year. One thing is for sure: we cannot afford to take on a seventh or an eighth Labour Minister of Corrections who would continue this shambles.

Hon PHIL GOFF (Minister of Corrections) Link to this

I cannot let that rubbish go unaddressed. That member, Simon Power, has a reputation across New Zealand, amongst the management and the staff of the Department of Corrections. They say to me that they do a tough job. They tell me they are at the end of the justice pipeline. They have to deal with the worst people in society, and they have to work under conditions that are sometimes threatening, because they deal with psychopaths and with people who have deep-rooted problems and who are a risk to their fellow people. They say: “We do a good job, overall. Sometimes we make mistakes, and when we do, we apologise. But why is it that Mr Power continually runs us down?”. That is what the men and women who serve in the department say. Why is it that he can never find something positive to say about those hard-working individuals who work in an environment that Mr Power or any of his colleagues on the National benches would not want to spend 10 minutes in?

I challenge Mr Power to say just one thing that is positive about the New Zealand men and women who work in this department, instead of constantly denigrating them. They have had a gutsful of him. They do not trust what would happen if there were a National Government, because National’s answer would be privatisation. National’s answer would be to run down the service, like it did during all of its years in Government.

Mr Power talks about an unmitigated disaster. I will tell him some of the facts of this unmitigated disaster. When Nick Smith and Tony Ryall were Ministers of Corrections and Justice respectively, the level of escapes from New Zealand prisons was running at 100-plus a year. Mr Power said that the primary role of prisons was to keep New Zealanders safe. But after 8 or 9 years of a National Government the level of escapes over that period averaged over 100. What are those levels now? They are running at 20—a sixth of where they were. That is because of the investment of this Labour Government in keeping New Zealanders safe by proper staffing, by proper training, and by ensuring that there were actually fences around the prisons. That might sound quite astounding, and people might say: “Fences around prisons? Of course there are fences around prisons.”

Let us take the example of the prison near Mr Power’s electorate. It had a No. 6 wire fence around it—a farm fence. People from the local population used to bring drugs, and they would pass them through the window to the inmates.

SIMON POWER (National—Rangitikei) Link to this

It is nice to see Damien O’Connor in the chair. It takes me back to years gone by, and I look forward to getting answers to some of the questions in the appropriation financial review of the Ministry of Justice. Several issues need to be debated in respect of this financial year in review. I have no doubt that my colleague Mr Finlayson will cover many of those issues in his contribution.

I ask the Minister a serious question: why is it that the Ministry of Justice is no longer the lead law reform agency in this country? Why is it that all of the law reform work that has been done by this Government in the last 12 to 18 months has been done by the Law Commission? Why is it that the Law Commission has at its fingertips a work programme that, frankly, would rival most departments under this particular Government, yet the work output from the Ministry of Justice just seems to have come to a halt? Why is it that law reform is being led by the Law Commission, and not the Ministry of Justice? I would appreciate an answer from the Minister, because this is a serious decision.

What leads the Minister of Justice to make the decision about referring work to the Law Commission and not to the Ministry of Justice? The Hon Clayton Cosgrove has done his best; he has sent them a couple of bones—real estate work, and the JPs’ amendment bill. He has done his best to keep them busy, but he is only one man. This ministry is a behemoth of an organisation, with something like 2,500 employees washing around in there, yet it is Geoffrey Palmer and his colleagues who seem to be doing all the work.

The extraordinary thing about this set-up is that as well as all these people at the Ministry of Justice, who are doing their best to write the legislation that Mr Cosgrove has sent to select committees, this ministry has seen 400 consultants and contractors paid more than $10,000 in the year in review. So not only is this ministry not actually doing any law reform work any more, because it is all done by the Law Commission, but also it has taken on 400 consultants and contractors, each of whom has been paid more than $10,000 in the year in review. We have to ask ourselves what they are all doing. If most of the hard work for law reform is going to the Law Commission, and if we have taken on 400 consultants and contractors who have been paid $10,000 or more to deal with outsourcing the tricky stuff, what is it that officials at the Ministry of Justice have done in the year in review? I think that the New Zealand public is entitled to know that answer.

If Geoffrey Palmer and his crew are going to write legislation, table reports, and on the whole make useful suggestions for law reform—and I certainly do not begrudge the commission the quality of its work; I think that on the whole it is very good—the question is why is it doing it and why is the ministry itself not doing it? We know that the ministry will also be facing a forecast of $800 million in unpaid fines in the year ahead. What has it done in the year in review to reduce those outstanding fines?

What has the ministry done in the year in review to make sure that reparation in the sum of about $80 million has made its way to the victims of crime? The Minister of Justice has told us that this is the year—forget about the last 8 years—in which the Government is going to do something about victims. We should not worry about the last 8 years—they were the years of the criminal; this is the year of the victim. What we need to know today from the Minister in the chair, the Hon Damien O’Connor, is what will be done to get those reparation payments to victims. What will be done to get the $800 million forecast in unpaid fines to be paid by those who owe it? More important, what does the Ministry of Justice do?

CHRISTOPHER FINLAYSON (National) Link to this

What does the Ministry of Justice do? Although with a Minister of the calibre of this one in the chair, the Hon Damien O’Connor, we will not get any answers, we will certainly be asking the questions. The Ministry of Justice plays a fundamental role in maintaining the rule of law in this country. It is extremely important that we have a civil and criminal justice system that works adequately. Much of the work that this ministry does is not simply party political; it is black-letter law, and it is of fundamental importance.

It goes without saying that this ministry has failed in relation to the electoral finance legislation, but if we look at some of the other work that it is doing, we see that its record is very poor indeed. The Ministry of Justice is a very large department that is soon to move to a splendid new building on Kate Sheppard Place. As Mr Power has observed, it is employing increasing numbers of consultants and civil servants, but its work product, as identified by the Justice and Electoral Committee, is very poor indeed, and I intend to look at a number of those issues right now.

I think it is rare, when one goes through this bundle of reports of select committees, to see a report that is more critical—and bipartisanly more critical—than the report on the Ministry of Justice. Let us look at few issues. The first is court workloads. The reality of the matter is that we have courtrooms in this country designed for a population of about 3.5 million people, and there are now about 4.3 million. Some courtrooms in this country are bursting to overflowing. Let me tell the Committee that just last week in Auckland a judge was available to hear a case, lawyers were ready to argue it, but there was no courtroom because the High Court in Auckland was full to overflowing. As the select committee’s report says, providing court services is fundamental to the ministry’s rule. Good services provided in a professional and timely way are vital in ensuring that justice is accessible to all. It is simply unacceptable that we have a situation, like we had in Auckland last week, where courtroom facilities are now so poor in the High Court in Auckland that a certain case could not be dealt with.

Time and time again, when we deal with some of these black-letter, non-party political questions, we are fobbed off by the Ministry of Justice. What about electronic filing? Every country has it, but we do not have it. That is a question I have been asking for some time. What about the Court of Appeal? Why has the Court of Appeal not got a permanent presence in Auckland to serve the Auckland people? It does not mean appointing any more judges; all it means is finding a building and putting a courtroom in it, in order to service, for example, the commercial community in Auckland. These fundamental issues are not being looked at.

Let us look at the Law Commission, because the reality of the matter is that the Law Commission has had to take over the law reform responsibilities of the Ministry of Justice. What we have with Sir Geoffrey is some kind of latter-day Cardinal Richelieu doing an enormous amount of work behind the scenes, because the ministry is simply not up to it. The role of the ministry is to peer review the work of the Law Commission, to ensure that the work product is acceptable. I take issue with just one thing that my learned friend Mr Power said. Some of the work product of the Law Commission is not all that flash, and it requires the ministry to take a good look at it. There is an argument that sedition laws should not have been passed in the way that they were, but rather, that they should have been part of a comprehensive criminal law reform. The Minister should look at the exposure draft of the Law Commission on the proposed law of limitation, which we have been waiting for years for. He will find it to be a very poor piece of work.

Just to show the failure of the ministry, we should look at the final point that was raised by the Justice and Electoral Committee, which concerned the Evidence Act. The Evidence Act was enacted on 1 August 2007, and there have been no Orders in Council yet under section 51. This was a report that the select committee made following hearings on 15 and 22 November. The ministry said this was an issue that was actively under consideration, but we have almost come to the end of March and we still have no Orders in Council under section 51, so foreign practitioners cannot be deemed to be people whose advice will be subject to legal professional privilege—a very real practical problem for the New Zealand legal profession.

LYNNE PILLAY (Labour—Waitakere) Link to this

It is a pleasure to stand and talk in this debate about the wonderful ministries, and in this case I will talk about the Ministry of Justice and acknowledge all of the good work the ministry does. I will, in particular, talk about victims’ rights, because I was really heartened to see the Government’s response to the select committee’s inquiry into victims’ rights. There were some fantastic recommendations from the hard-working Ministry of Justice.

CHESTER BORROWS (National—Whanganui) Link to this

I rise to speak on the 2006-07 financial review of the New Zealand Police and to reflect on what a torrid year the police have had. It has been a year with its ups and its downs, but, overall, I believe that the police have done a fantastic job in looking after our safety and well-being and protecting life and property within New Zealand.

One of the highs, for instance, was the resignation, finally, of Clint Rickards, when he came to understand what the rest of New Zealand understood, which was that he had to go. The work done by the police in Operation Austin saw several hearings go before the High Court, and a number of varied decisions came out of that. The public, unfortunately, felt hoodwinked by the rule of law that did not allow them to understand just how many charges there were and just how many trials there would be. Mr Rickards, after maintaining his salary for 3 years while he was suspended, and after maintaining other fringe benefits, such as the use of a vehicle, finally came to the conclusion, when he saw the evidence that the police had, that it was pointless for him to maintain his innocence. He knew that he was due to face charges before the tribunal, he knew that police Commissioner Howard Broad had to prove only one of those charges for Rickards to be dismissed, and he knew that if he appealed, he would be paying for it out of his own pocket and not out of the taxpayer’s pocket. I congratulate the members of the police who worked on that inquiry on coming to the conclusion that they did. I only wish that the jury had seen the matter in the same way.

Another point that drew a lot of flak through the year was the execution of the Operation Eight search warrants in respect of terrorist-type crimes occurring around the country. A number of members of the public and political parties were very quick to oppose the police and their operations. The fact is they were acting on information that they had. The protocols around obtaining search warrants and listing the various crimes suspected meant that the police had to include the Terrorism Suppression Act in their affidavit for a search warrant. When news of that got out, the brown stuff hit the fan and the police came under enormous pressure. I look forward to seeing the continuation of those prosecutions and where they end up.

In the last 12 months we have seen the release of the Bazley report, with its 48 recommendations about the future conduct of the police. We have since seen a response from the police and the release of a code of conduct, but it is disappointing to note the lack of references within it to sexual behaviour, bearing in mind that the whole reason for the Bazley inquiry, which led to the report, was sexual misconduct within the police. I look forward to seeing the police address that issue in due course.

We also saw other debacles. These incidents have been disappointing, to say the least. One was the issuing and distribution of stab-resistant body armour. These stab-resistant vests were supposed to have been allocated over 3 years ago. Initially, there were problems with the fabric. The fabric chosen was disintegrating in the sunlight. So they changed the fabric. Then someone had the bright idea—“bright” being ironic—that it would be really good to make these stab-resistant vests fluorescent. The only problem with that is that if one is hiding in the shadows, trying to catch the baddies, one is a pretty easy target. So they decided to change the colour, and to go back to blue. Then they realised they had the design wrong. The police needed to be able to hang stuff off the bottom of the vests, like a duty belt. So they had to change the design of it. Then they let out the contract, and in spite of the contractors offering to do the measuring for another $300,000, the police decided that they would save money by doing the measuring themselves, that it would not be a problem at all. Unfortunately, they stuffed that up, as well. Now, millions of dollars worth of undersized vests that cannot be allocated to anybody are stored under the Police College at Porirua. The police then found that the design of the vests was such that the shirts that were worn under them were too hot. Staff were refusing to wear the vests because of the state they left them in. The police then had to let a contract for 35,000 moisture-wicking, breathable shirts.

Later on we saw a debacle over recruiting standards. Pressure came on the police to describe the standard of recruits coming into the Police College, bearing in mind the standard of graduating constables, and the feedback that Opposition members were getting about those constables when they ended up on the street. A report was issued by the head of the human resources department within the police, and he said there was not a problem. He had done some tests and everything was fine. Then a conflicting report from Senior Sergeant Saunders of the Police College found that all the protocols and systems that had been used by Mr Annan in deciding that the recruits were well and truly up to standard were completely and fundamentally flawed. Eventually, there was a discussion around that. Mr Saunders was on leave for some time because of the pressure that was being brought to bear on him for raising the point and criticising the police. Eventually, with a third inquiry having been contracted by the Minister of Police, there has been some sort of resolution.

Finally, of course, there was the problem around Mr Burton and his arrest. Whereas the police did an excellent job in making the arrest, we found from the report that was released just a few weeks ago that the warrant for Burton’s arrest had lain undisturbed for 2 weeks over the Christmas period of 2006 because no one took ownership of the fact that there was a warrant to arrest him, and thus the public was placed in further danger. National members also asked questions—and we have never really had this matter substantiated by the Minister—around the request for the assistance of the police surveillance squad to locate and arrest Burton. That assistance was withheld, and the allegation there was that the squad was not available because its members were on leave, and the police were not prepared to pay them a standby allowance.

Later on in the year, in September 2007, we saw the announcement that the Organised Crime Agency would form part of the police, and that the Serious Fraud Office would be moved within the police, yet, 2 weeks before that, the Serious Fraud Office had no idea that that was planned. The police still cannot tell us how it is going to work. The Government cannot tell us what powers that office will take with it into the police, or exactly how it will operate.

The National Party, thankfully, has released policy in respect of the police. In November it released information to the effect that, should there be a favourable report, it will promote the carriage and use of Tasers by the police as the situation requires. We are still waiting for that report to be released. We also announced that DNA testing will be in the same form as fingerprinting and photographing, and will be carried out every time somebody is arrested. We look forward to being in Government and seeing how that works. It will add to the crime library and collection of DNA samplings, and we look forward to a quick resolution of crimes as a result. We have indicated that we will roll back the bail laws that were implemented in October that see more serious offenders being released on bail rather than remanded in custody. Our final plank in respect of police policy running into this election is that the police will be able to issue short-term protection orders for the protection of women and family members who have been abused by their spouses. The interesting thing about three of those things is that as soon as we announced the measures in respect of Tasers, DNA testing, and short-term protection orders, the Minister, having said that National had no ideas in respect of law and order and policing, said: “Oh yeah. We’ll do that, too.” Thank you, Mr Chairperson.

Hon DAMIEN O’CONNOR (Minister of Tourism) Link to this

I would like to acknowledge the wonderful work that the police do. I acknowledge the member, Mr Borrows, who has just spoken. He referred to the fantastic job that the police have done, and I think he made a very good speech, except for the last part, where he put forward a proposition that we had followed some of National’s ideas or policy. We have yet to see any policy or ideas from National, so we would never be following them. In fact, a number of wonderful initiatives have been put in place this year, and through a difficult period for the police, I would have to say; it has not always been easy. These initiatives have been put in place over a period where we have seen a reduction in crime. We have seen one particular area—violent crime—stubbornly stuck, I guess, at too high a level, but there has been a zero-tolerance approach to domestic violence. What that has done is to expose more trouble in the homes around this country, and the police have acted on it immediately, and I think that is to be applauded. It is not an easy area for police work.

The drug and alcohol-fuelled violence and crime around this country is also a challenging area, and we have to continue to work on that. That is why this Government has committed, as part of the confidence and supply agreement with New Zealand First, to 1,000 more police on the beat. We are halfway towards that target, and I think that is a wonderful achievement. It is not that we have just put those police on the beat, in dilapidated facilities; we have committed also to a building programme, which has seen major police stations built in places like Manukau and on the North Shore. It is not happening in only the big places, because new police stations have been built in small places like Tokomaru Bay and Masterton. Those people have appreciated this Government’s commitment.

I would just like to put on record that the Government is committed to reducing crime over time, with its Effective Interventions programme, which is a whole-of-justice approach. We are catching the people, because the police are far more effective. We are processing them through the courts in a more efficient way, and we now have more options for dealing with those offenders, such as more sentencing options, more treatment options, and better rehabilitation facilities. So I would just like to put on record that across the whole of the justice sector, including the police, this Government has made a significant contribution to progress in this country through a long-term reduction in crime and repeat offending.

Hon MAURICE WILLIAMSON (National—Pakuranga) Link to this

I will speak to page 415 and subsequent pages of the report, which contain the financial review of the Ministry of Transport. But I will cover only some stuff on page 422 of that report, because we get only a 5-minute call, and I want to focus on one issue.

The issue is that during the financial year of 2006-07 the Government’s land transport funding agency, Land Transport New Zealand, finished the year with $224 million of money unspent. Here is the first question for members of this Committee. Is there any member who represents an area that does not need any more infrastructure like roads, public transport, or anything else? I ask members who think it is all finished and done with to put their hands up. Well, there is the first question answered—not one hand went up.

Members should remember that the Government is actually pilfering around $600 million of the petrol tax to start with. Yes, it has a proposal for hypothecation, but that is not until the next financial year. In the financial year we are reviewing, $600 million was siphoned off to start with, so that was gone and not spent on roads or public transport. But then Land Transport New Zealand, with all the money that it still took from the motorist even after that money was pilfered, could not spend it. I have to say that there is a very good reason that a Government department may not be able to spend its money: there are no projects left to do. I want to know, from anybody, whether that is the case in roading. Is there a single area of this country that does not advocate that it is coming apart at the seams? Dianne Yates will tell us about how wonderful things are in the Waikato, I am sure.

Hon DAMIEN O’CONNOR (Minister of Tourism) Link to this

I have to stand up and challenge that outrageous speech made by a member who should know better.

Dr RICHARD WORTH (National) Link to this

It is a privilege to speak on this Appropriation (2006/07 Financial Review) Bill. I am speaking about the Ministry of Economic Development, with particular reference to schedule 2, which shows a shocking overexpenditure in non-departmental output expenses, so we should not take too seriously the comments of the previous speaker.

This is a very challenging time for New Zealand. The Government has run out of luck, and it is crippled by its ideological commitment to policies that are simply not grounded in reality. Interest rates under Labour are at a 10-year high. We have the second-highest interest rates in the whole of the OECD. The Reserve Bank confirmed only a couple of weeks ago that interest rates will be staying higher for longer, and that food, petrol, and electricity prices will be going higher this year.

The Reserve Bank said that Government spending has been growing twice as fast as the economy. Last year, every time the bank raised interest rates, it said that loose Government spending was a factor. Look at how it is hitting New Zealanders. The average floating mortgage rate was 7.04 percent in December 1999. In December 2007 it was 10.44 percent. That is another $133 a week on mortgage payments on a $250,000 mortgage.

Economic development covers a very wide sweep of activity. Of course, the role of a Government may be interventionist or it may be facilitative. It may be concerned, in that latter case, with setting the frameworks.

I was interested that at the financial review of the New Zealand Trade and Enterprise entity, held before the Commerce Committee, the chairman of the New Zealand Trade and Enterprise structure spoke about tough international trading conditions, high energy prices, skill shortages, and a flat and competitive domestic market, combined with things like high exchange rates and high interest rates. He made the point, so easy to make, that we are in a challenging environment. We need skill and competence to be brought to the table. But, sadly, this Government is dominated by policy writers and analysts.

The figures that have emerged in the last few days are sobering, to put it at its lowest level. Treasury reports show that between 2000 and 2006 employment in Government departments that mainly provide services grew by 34 percent, while employment in policy departments, including the Ministry of Economic Development, grew by 72 percent. That is a stupendous increase. To get a picture of the whole State sector we need to look at survey data from the quarterly employment survey, which shows that since 2000 the number of bureaucrats has grown from 26,200 to 36,000. In addition, Treasury reports show that between 2000 and 2006 personnel costs for Government departments that mainly provide services grew by 69 percent, while in policy departments these costs grew by 142 percent.

I would like to make three short comments about New Zealand Trade and Enterprise that directly arise from this bill. It is time that New Zealand Trade and Enterprise focused on proper systems of measurement, so that it can truly determine what gains spring from its activities. Second, there are highly complex funding systems within New Zealand Trade and Enterprise—in fact they are labyrinthine. They need to be simplified so that those who can access those funds can do so with a degree of confidence that the system will not be bogged down in bureaucratic red tape. Third, New Zealand Trade and Enterprise needs to focus more on the less critical aspects of its activity and move away from those activities.

We are witnesses at the moment to an extremely disturbing set of events in the financial sector. These events are both bizarre and worrying. They touch on finance and investment company collapses.

Hon TAU HENARE (National) Link to this

This past year has been an appalling one for not only the Minister of Māori Affairs but also, unfortunately, Te Puni Kōkiri. I do not particularly blame the staff of Te Puni Kōkiri; I blame the Minister, who—just as a point of reference—is not even in the Chamber tonight to hear the debate on the financial review of his own department.

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

Tēnā koe, Mr Chairperson. At the start of this month a Marae DigiPoll of over 1,000 Māori voters revealed that if the opportunity arose, over 40 percent of those surveyed would transform into “Mozzies”—Māori living in Australia—yet not one headline, not one letter to the editor, not one talkback show raged in response. It was not breaking news; it merely confirmed the study released last year that revealed that at least 100,000 Māori are living across the Ditch. My point is that it should have been breaking news. Last year’s study, funded by Te Puni Kōkiri, stated that Māori believed they were pushed out of home because of prejudice and social dysfunction, and they were pulled to Australia by higher wages and better employment options. Now, having been faced with the glaring push and pull factors, one would think that Te Puni Kōkiri would be doing all it could to retain Māori in this land.

According to its annual report the purpose of the Māori Potential Fund is “to make outcomes-based investments that realise Māori potential by enabling improved life quality for Māori”. That would be beautiful if it actually meant something. The financial review told us that the ministry had dropped the use of memoranda of understanding to “lessen the perception that monitoring agreements are focussed on compliance”. We are told that for a similar reason Te Puni Kōkiri will not publicise or publish the work it carries out with other Government agencies, as this may limit its effectiveness. Yet again, this appears to be another case of this Government undermining the role of the Public Service by being unprepared to stand by the professional, free, frank advice offered by the ministry staff. Yet again, this Minister is undermining the capacity of the staff in his ministry to advise the Government, by making them politically compliant. The picture is hardly better when we look at individual sectors and votes of Government. In response to the concerns of the Māori Affairs Committee about a key priority for Māori, housing and homeownership, Te Puni Kōkiri told us that it was not in a position to comment, and to allay our fears. No comment is supposedly acceptable.

Our focus turned to international and indigenous rights. One of the most significant developments in the last 20 years and more was the remarkable event that occurred last September, when some 143 countries signed the United Nations Declaration on the Rights of Indigenous Peoples. Despite widespread international criticism of the contradictory and reprehensible position of the New Zealand Government, we were one of the four countries to vote against it. So we asked the Ministry of Māori Development how it could justify such a hostile position. The ministry officials told the select committee that their official advice was to tell the Minister to abstain, even though “the principles of the declaration were right,”. That is what they said. The Māori Party believes that the advice given to Te Puni Kōkiri in advising the Minister to abstain was woefully inadequate, and the fact that the Ministry of Māori Development undertook neither any leadership nor consultation with Māori was disturbing.

What does the ministry do? Well, the financial review confirmed that it has dished up some 410 investments in Māori potential—grants for rugby and stuff—that the select committee questioned as having been made on an ad hoc basis. We learnt also that nearly half of the overseas travel allowance for Te Puni Kōkiri in the 2006-07 year was spent on one staff member, the general manager of the Māori Trust Office. It is the same office, we are reminded, that is seeking to dip into the pockets of Māori Trust shareholders to the tune of $35 million.

Finally, the financial review made the interesting observation that Te Puni Kōkiri had decided to defer its formal feedback survey of stakeholders during 2006-07. If the views of the participants of the Marae DigiPoll survey that asked who would go to Australia were anything to go by, then it was probably the best decision they made. It would appear that the only thing this Government is doing in realising Māori potential is in its wretched belief that the only news is no news, and that it is better to be silent and abstain than to publish and remove all doubt. Thank you, Mr Chairman.

LOUISA WALL (Labour) Link to this

Kia ora, Mr Chair. I rise to speak about the Māori Affairs Committee’s financial review of the 2006-07 performance and current operations of Te Puni Kōkiri, the Ministry of Māori Development. The review found that Te Puni Kōkiri was financially a good performer with an unqualified audit opinion.

I note that Te Puni Kōkiri describes its purpose as “realising Māori potential.” What does that mean? Firstly, it means working with Māori to identify the areas of potential that Māori have, based on their natural resource bases—that is, cultural, te reo me tikanga Māori, economic, and forestry and fisheries assets, to name a few. As part of realising Māori potential kaupapa, Te Puni Kōkiri published last year in Ngā Kaihanga Hou the results of analysis it undertook, looking to the future to understand what opportunities, and indeed what challenges, might exist for Māori. The insights contained in that work were drawn from exploration and linked to known demographic, scientific, political, and attitudinal trends.

Ngā Kaihanga Hou identified key drivers that will influence the way Māori participate in the economy, leading to the year 2030. We know that the Māori asset base is growing. In 2003 the Māori asset base was estimated to be $9 billion. This has since been updated and as of 2005-06 is now estimated to be $16.5 billion. There continues to be an increasing level of Māori economic contribution to the national economy. Labour celebrates this, yet there is more good news. Between 2002 and 2007 there was a net gain of 26,500 jobs. That is something to celebrate—Māori working and participating in New Zealand’s economy. This is coupled with the steady reduction in Māori unemployment.

However, the current challenge is positioning Māori with the qualification base and skills to ensure optimal employment and work choice in the future. Te Puni Kōkiri has played a key role in providing policy advice in Māori education. This advice has culminated in the release of a draft Māori education strategy, Ka Hikitia: Managing for Success, which is a broad-reaching draft 5-year strategy aiming to transform and change the education sector, ensuring that Māori are able to enjoy education success as Māori.

Te Puni Kōkiri’s principal focus in Māori cultural development over the period of review was on Treaty settlements, including a portfolio of work around broad issues associated with enhancing the Crown-Māori relationship; and on promoting Māori language and broadcasting, principally through the drivers of the Māori Language Strategy and Māori Broadcasting and e-Media strategy. The results of the Māori Language Survey 2006 were published and showed significant gains in the proficiency and use of the Māori language since 2001. In particular, there was an overall increase in speaking and listening proficiency—8 percent and 9 percent increases, respectively—and gains in terms of Māori language use in whānau and community settings. Māori Language Week 2007 received considerable recognition, with daily coverage and items on Television New Zealand, TV3, Māori Television, Radio New Zealand, and iwi radio and in print media. Several hundred organisations organised or participated in events to celebrate Māori Language Week.

Te Puni Kōkiri has supported the Minister of Māori Affairs with four bills before the House. They are significant pieces of work, and Māori have been consulted extensively during this process in the last financial year. Kia ora, Mr Chair.

ALLAN PEACHEY (National—Tamaki) Link to this

It was H G Wells who said many years ago that civilisation is a race between catastrophe and education. For too many of our children in this country today the race is leading to catastrophe. How can it be that a country of the wealth and background of New Zealand is still reporting to its Parliament that something like a quarter to a third of our children are not learning to read, write, and do mathematics to a level sufficiently high enough to let them function as reasonable, sensible, thoughtful adults and to take their place as contributing members in a market-driven, modern world economy? That is what is happening in the New Zealand education system now. What we get from the Minister is a whole pile of platitudes, excuses, and reliance on ideologies that we know do not work. That is the point of this financial review. The ideologies of the Government mean that it has demonstrated that it is not capable of getting to grips with the issue of why so many of our children are not learning.

One of the things the ministry said to us in the select committee, as part of the review, was that, yes, there is a shortage of teachers in South Auckland where some of our poorest children and the children who are in most urgent need of top-quality teaching are, but we should not worry, because there are spare teachers in the South Island. The bit that is missing, of course, is that those teachers are in the South Island; they are not where the demand is.

I have to ask the question of how many of our children in New Zealand schools are currently being taught by teachers who are not in command of the language of instruction. Language is the great skill that a good schoolteacher has to communicate with children of all backgrounds, abilities, and interests. Time and time again, school principals are telling us that they are not able to hire teachers with that ability.

When we look at the secondary sector we see that secondary teaching is no longer getting its share of the top graduates: those men and women who will bring intellectual rigour to the curriculum and to assessment. They are no longer being attracted in sufficient numbers into secondary school teaching. What we have instead—and this is the failure of the Minister, his predecessors, and that Government—is an uncontrolled growth in bureaucracy: the Ministry of Education, the New Zealand Qualifications Authority, the Teachers Council, and the Education Review Office. More and more taxpayers’ money is being spent on pointless bureaucracy, because that Government does not get it that children learn in classrooms and in positive relationships with their teachers. No child whom I know ever learnt to read, write, or count in the office of a bureaucracy. No child has ever learnt in the office of a bureaucracy. Yet this Government’s only answer to the critical problems facing our education system is to hire more bureaucrats and get bigger offices, then try to regulate the initiative, the sense of responsibility, and the ambition out of schoolteachers, school principals, and boards of trustees. The desperate call of the children and their parents in this country must be to get that money out of the bureaucracy, into schools, and to teachers, to give them a fair chance at developing the programmes and teaching that are required to ensure that not just some of our children but every single child has the opportunity to learn. At the moment, because of the policies of that Government and because of its obsession with bureaucracy, centralised control, and strangling initiative, too many of our children are not getting the opportunity they need.

Hon CHRIS CARTER (Minister of Education) Link to this

The previous speaker, Mr Peachey—who is a great advocate of bulk funding, which I will talk about in a minute—opened his speech with a quote from H G Wells. I was reminded that H G Wells’ most famous book was The War of the Worlds. There are two different worlds that we are talking about here. There is the world of the Labour Government, which sees education as critical to the fulfilment of individual potential and to the establishment of a society, a culture, and a population that is well-educated. Then there is a world like Mr Peachey’s, which sees winners and losers, which has bulk-funded schools that are in competition with each other. That is an education system that is not collaborative, not cooperative, and does not interest itself in the realisation of the potential of all individuals.

He challenged the Government as to what it has done with education. I tell the Chamber and anybody who is listening that this Labour Government has invested an extra $5 billion into education—not $1 billion, not $2 billion, but an extra $5 billion. Mr Peachey also made reference to staffing. He talked about bureaucrats. I would like to talk about the 5,000 extra teachers above what was required by roll growth that the Government has employed in the last 8 years.

In the last 2 years we have brought in 20 free hours of early childhood education. That is the greatest revolution in early childhood education that has ever occurred in our country. It allows every 3 and 4-year-old access to quality early childhood education so that they are set on the path to become a learner for life. It is about creating opportunity and quality for the individual and the whole of society.

We have also opened 36 new schools, and 1,500 new classrooms have been built under this Government.

Hon MARIAN HOBBS (Labour—Wellington Central) Link to this

As I begin speaking to this financial review, I want to recount a story. It was the day after the 1996 general election and I had the option of taking up my appointment as principal of Wellington Girls’ College or taking up my seat here in the House. As I walked down the corridor the Prime Minister asked me whether I had made the right decision. When I review what this Government has done in education, I know that by being a member of this Government I have achieved far more for education than I might have done if I had spent 12 years as principal of Wellington Girls’ College. We have been delivering policies that make a real difference in education.

For instance, we have delivered 20 hours’ free early childhood education. From July 2006 to July 2007 there were 20,000 more enrolments in early childhood education. [Interruption] If those members opposite, who were diplomats and who have not necessarily worked in education, think that that is making no difference to children’s learning and to where society is going, then they do not understand the absolute importance of early childhood education in setting up the base for kids to be able to read, to write, and to be numerate.

We are building a platform for the future. We want our students to stay at school. We noted what a report from the Education and Science Committee said. Finally a new system was put in place to find out where our truants were. It replaced the old brown cards, and those of us who have worked in schools know that the brown cards very rarely followed the students from school to school; they stayed in offices. We did not know where students were. This Government put a wonderful scheme in place; when it first came out it frightened the pants off Opposition members, because they came to know the real number of kids who were truanting. Now we know, and now the work is happening to get them in school.

There are several ways to improve the chances for our children. I refer to a great piece of work called Staying at School, which is a collection of case studies on how schools are supporting their students to stay. I will give the Committee two examples. Some of the members will know Queen Charlotte College in Picton, in the Sounds. It is up against Marlborough Boys’ College and Marlborough Girls’ College, two traditional schools. Queen Charlotte College is the only coed school in the area. Sometimes people make sure their kids go to the boys’ and girls’ colleges, to avoid their going to Queen Charlotte College. However, it is a brilliant school that works really hard at meeting the needs of kids.

Here is Queen Charlotte College student Melissa, in year 12: “In year 9 and 10 I wasn’t into school. I was bottom of the class and I didn’t want to go to uni—I thought it would be too hard. Then in Year 10 I started talking to Ms Wood and researching what I wanted to do.” This is a kid like many of the kids that members in the Chamber understand and know. “Horses are a passion for me so I’m doing equine studies unit standards by correspondence through Telford Rural Polytechnic. The school pays for it with STAR funding. I’ve done lots of standards, some even at level 4. I feel pretty good about that. It’s easier studying something I really love. In the future,”—and this is a kid who wanted to leave school—“I want to do Equine Studies at Massey in Palmerston North, then work in a breeding facility. I’d like to travel and get experience.” This is a kid who, without this sort of innovation, without this sort of work in schools, and without Secondary Tertiary Alignment Resource (STAR), would be a statistic of non-achievement. This is a kid who now has a future. This is Gateway; this is positive.

We go to the North Island, to Havelock North High School. “I go out each Thursday and learn about hairdressing by doing workplace training at Andrea’s Hair Design in Havelock. I also complete theory units at school which are assessed by the Hairdressing Industry Training Organisation. Now I’ve been offered a part-time job and at the start of next year I’ll begin my hairdressing apprenticeship, which is for three years. I think it’s really good that the school organises these types of opportunities for us. It’s a lot easier to achieve these things having the school’s help behind you. They’ve been very supportive and encouraging … We’re 7th form now and you’ve got to know what you want to do. So this programme gives you a good heads up on the options.” This is the kind of difference this Government has made. This is building for the future.

So we come to Schools Plus. What problem was this Government trying to address there? We cannot build our country’s future on low skill and low wages. That is why we need change in education and a quantum leap upwards. At present almost 30 percent of young people leave school before they turn 17, and 40 percent do not achieve a National Certificate of Educational Achievement level 2 qualification. This Government has achieved a buoyant economy and a strong labour market, and unemployment is right down. We therefore need people out there to have the skills to go on. So in February 2007, almost 1 year ago, the Secretary for Education was asked to develop a plan for all young people to achieve their potential through education. The Opposition thought this was forcing kids to stay at school. It is not. It is using the school like a base, rather like in those two studies of Havelock North High School and Queen Charlotte College I have just given members. It is schools being a base to get kids out there in apprenticeships, building on the skills they have, building on the strengths that every child has within him or her, finding that strength, finding that ability and building on it, and finding courses. The schools of the future will be the base from which young people begin Youth Apprenticeships, obtain work skills, and continue with study. We will make significant new investments.

In education we have been delivering policies that make a real difference: free early childhood education, a revised curriculum, and truancy. But we are about constant improvement; we are not resting on our laurels, and that is why we have 4,000 to 5,000 more teachers beyond what is required by roll growth, we have rebuilt schools, and we now are planning for the future with Schools Plus.

I end by making this comment. This morning I was listening to a discussion from the building industry. People were stating that because the Australians pay higher wages, they are probably likely to pinch apprentices from New Zealand—particularly building apprentices. There has been a centre-right Government in Australia. How many building apprentices are in training in that country of so many million more people than us? There are 2,000. How many do we have in a country with one-quarter of the population? We have 4,500 people in building apprenticeships. That is about building for the future. That is about building an economy. That is where we want to go and that is what we are about.

Dr JONATHAN COLEMAN (National—Northcote) Link to this

It is very timely that we are having this financial review of the Ministry of Health today because yesterday we had a report released into the public domain commissioned by the Ministry of Health into the goings on at Hawke’s Bay District Health Board. We had an urgent debate about that same report today where we were treated to, frankly, a histrionic display by the Minister vainly trying to justify his actions and the position that he has taken. There is no question that the actions the Minister has taken in sacking that district health board will mean there will not be much of a vote for Labour in the Hawke’s Bay this coming election. If people like Rick Barker think they are coming back to Parliament as constituency MPs, although I do not think even the Hon Rick Barker would be that—[ Interruption]—optimistic, that would be right.

The interesting thing about this report is not what it says but rather what it leaves out, and there are some glaring omissions. The key thing we have to ask when we read that report is why on earth the former Minister of Health, Annette King, appointed Peter Hausmann to the Hawke’s Bay District Health Board in the first place. This is a man who had been extensively tied up with business interests and doing work for the Hawke’s Bay District Health Board since 2003. So if the Minister could not see a conflict of interest on the horizon, goodness knows what it would have taken to draw that to her attention. But, you see, in this report there is absolutely no mention of why Annette King appointed Peter Hausmann to the district health board.

The other interesting point is that there is absolutely no comment on management’s conduct and performance—no mention at all. We have to ask why that is. Why was the focus so intensively on the board’s performance rather than on that of management? When we look at who was involved in senior management there and trace some of the connections back, maybe the answer starts to become a bit more apparent. The chief executive officer of Hawke’s Bay District Health Board, one Chris Clarke, was a long-term employee of the Prime Minister working as a special adviser in her office. Then, of course, the chief operating officer was Mr Ray Lind, who is married to the now former Minister of Health Annette King. So members can see that there were some people in senior management roles there who had very, very senior Labour connections and that there may well have been a vested interest for the Government to look after those people. This is a clear case where the cronies at Hawke’s Bay District Health Board were in senior management rather than on the board itself.

But a lot of other issues are not covered in this report. Quite crucially there is the question of what happened to the deleted emails. Why is there is no mention of the treatment of the whistleblower who actually brought these severe conflicts of interest to light? There was talk previously, in the leaked draft report, of the taping of conversations by Ray Lind—that is not covered at all. Of course, there is nothing about any disclosures that Mr Hausmann made prior to his appointment; they are not covered.

This report says that Mr Hausmann was pretty severely conflicted, and that should have been quite evident to any Minister of Health who appointed him. We have a situation here where things really do stink at the Hawke’s Bay District Health Board. The Government’s reaction has been to sack the board. That has been very unpopular. National does not believe it goes to the root of the problem. We believe it is a cover-up for some of the things that went on behind the scenes that have not been addressed in this report.

We know about this type of report because there was one last year; it is very much like the Ingram report. The terms of reference are framed so tightly that the inquiry can never actually answer the crucial questions that the public deserve to get answers to. That is a real problem and I think it is going to hang around this Government right through to the election.

When we look at what else is happening in health, when we look at the stories we have heard at the Health Committee—stories of Wanganui Hospital where the surgeon Roman Hasil was appointed, who was not qualified to do the work he was doing and ended up maiming 26 women in Wanganui, and stories of what has happened at the Waitemata District Health Board where patients are lying on stretchers in corridors and people cannot get into the accident and emergency department—we know that this Government cannot deliver on health. It has had 9 years now and, quite frankly, if it cannot fix it after 9 years we know that it never will. The Government has doubled spending from $6 billion to $12 billion a year, but things are getting worse, not better.

I was at Waitemata District Health Board yesterday for a meeting and I thought I would call in. What did I find? I found someone sitting on a trolley in the waiting room.

BARBARA STEWART (NZ First) Link to this

On behalf of New Zealand First I am very pleased to talk on the Appropriation (2006/07 Financial Review) Bill. When the committee examined the reports we saw that some good work had been done in the health system. Some good work was under way, but in some areas more needed to be done. I am the very first to admit that the health sector has a huge job on its hands.

Action is overdue on maternity services. We are in the middle of a baby boom; it is very obvious right around the country. It is totally irresponsible to ignore this boom or to hope it will go away, because it will not. Services need to be right in this area; the cost is far too great if they are not. We are currently short of about 200 midwives, and the likelihood that we can fill that number of vacancies is extremely remote. The Minister has to be proactive and investigate ways in which the workforce can be increased, and that does not mean importing huge numbers of people from overseas, like seasonal workers, to gain experience in hospitals and learn on our mothers and babies. We want more than that. We need to encourage some of the midwives that have left the service to return, or else to talk to New Zealand general practitioners to find out how many of them are willing to resume providing maternity services in order to alleviate this ongoing shortage of midwives. Another alternative would be to follow the recommendations of the New Zealand Medical Association that primary maternity services be contracted to primary health organisations, so that general practitioners can again become involved and provide mothers with continuity of care with their general practitioners and their practice nurses.

This also raises the whole issue of staff shortages. Right across this area staff shortages need to be addressed. In most medical fields there are huge staff shortages, and the job cannot be done on a sustainable basis. We know that in the short term locums are flown around the country, and even across from Australia. This type of service is expensive, and although it fills an immediate, short-term gap, it does have a serious downside, apart from the huge cost to the health system. Patients cannot be guaranteed to see the same doctor twice, and that can be really upsetting for most people. New Zealanders need certainty about their health care, and medical students should be encouraged to work off their student loans right here in New Zealand. The fact that many of them head off overseas for better money to pay back those loans just exacerbates the problem. It is a shame to export our First World medical people. Although additional places have been made available in medical schools—a measure that New Zealand First applauds—we need to ensure that these students stay in New Zealand if the workforce problem is ever to be sorted.

We need to attract some of these people back to New Zealand. A number of doctors who are interested in nuclear medicine have contacted me, and they say they would come back to New Zealand instantly if this branch of medicine were available here. The purchase of a publicly funded PET scanner would be an incentive for some of those doctors to return, but at this point in time there is absolutely nothing here in New Zealand for them. We train them here in New Zealand, but we cannot attract them back unless our equipment catches up with that of the rest of the world. A PET scanner has many medical uses, for heart patients as well as for cancer patients. Our patients would have more and better treatment options if we had one of these pieces of equipment. There are staff who are interested in this field of medicine and want to return to New Zealand and, quite frankly, it is time we had this valuable piece of equipment. We are being left behind by most other countries because of bureaucratic dithering over cost. The matter needs to be sorted out by the Minister, very, very promptly. We all know that prompt access to cancer treatments and services is absolutely essential. Patients need certainty of care in this very important area. It is a serious disease, and we need to act in relation to it. So in New Zealand First we are looking to see what will happen with the purchase of this equipment.

JO GOODHEW (National—Aoraki) Link to this

Is this not timely? Here we are in the financial review debate, and I just wonder how the Government members feel when the Opposition gets this wonderful opportunity to hammer home the message that we heard last week from John Key, the Leader of the Opposition, about the ever-growing State sector—the bureaucracy—that bogs down the spending of New Zealand taxpayers’ money. When the Health Committee did the financial review for the Ministry of Health, interestingly, we cut straight to the chase in the report. If members view the report at page 184, they will see not just that there are 806 fulltime equivalent staff in the core ministry and a further 457 fulltime equivalents in eight other business units but that this particular ministry has grown since 2002 in terms of the number of staff earning over $100,000. The number of staff earning over $100,000 a year has grown from 94 to—wait for it. Maybe it is a 50 percent increase. No, it is more than a 100 percent increase. There are 194 people within the Ministry of Health who are earning over the magic figure of $100,000.

We have heard from John Key that that is the fastest-growing part of our economy. New Zealanders have welcomed the news that the National Party will cap that bureaucracy. We will simply not let it grow at that pace. The National Party has reassured the people of New Zealand not to fall for the abysmal statements we heard before the last election. We have reassured them so they do not fall for the scaremongering reports that National will cut the number of nurses, doctors, and teachers. It is absolute and utter rubbish. We have said we will grow front-line services. [Interruption] And those folk over there will grow bureaucracy. The people of New Zealand certainly have come to understand that.

In the financial review for 2005/06 the ministry was asked to review the Ageing in Place strategy and look at the acuity of older people who were going into aged residential care, to see whether it had increased—in other words, to see whether the people going into aged residential care were requiring on average much more care. Well, we waited with bated breath to hear from the ministry what it had found out in the ensuing year, then we worked out what those bureaucrats had been doing—big fat nothing, absolutely nothing. They took no notice of the Health Committee—no notice whatsoever. They ignored our recommendation, and that is absolutely scandalous. So we got the opportunity to tick them off somewhat. It is absolutely reprehensible that they did not follow the Health Committee’s recommendation. They were told that that was unacceptable. We reiterated that they need to get on with that recommendation, and to do so soon. Maybe these bureaucrats are so busy piling on, pile on pile, their reports that they cannot see the wood for the trees, and there are certainly plenty of trees in those reports.

The bureaucracy is growing, but so too is the unease of the New Zealand public. They are really wondering whether their taxpayer dollars that have been put into health—and we know there has been a significant increase in funding from $6 billion to $11 billion—have been well spent under this Labour Government. They do not have confidence that those taxpayer dollars have been well spent when they hear about continual problems with district health board after district health board.

I ask Government members to please tell me what the difference is between the Hawke’s Bay District Health Board, the troubled Capital and Coast District Health Board, and the Southland District Health Board, which is sharing services with the Otago District Health Board because it is having difficulty in attracting staff. They have so many vacancies down there. If members ask what the difference is between the Hawke’s Bay District Health Board and the Whanganui District Health Board, I can tell them one very big difference. The people of Hawke’s Bay trusted their district health board; the people of Whanganui appear not to have done so. It comes back to asking the people of New Zealand whether they trust the Labour Government to spend their taxpayer dollars well. Certainly the message that I am getting loud and clear, over and over again, is that the public of New Zealand are not convinced that their money is spent wisely. They will do much better under a National Government later this year.

Hon DAMIEN O’CONNOR (Associate Minister of Health) Link to this

I will take the opportunity to speak on this area of health, where this Government is very proud of its record. Since coming into power in 1999, as one speaker said, we have doubled the amount of money going into health to almost $12 billion, and, yes, there has been an increase in the number of people overseeing that expenditure in the ministry—and so there should be, too, because we expect that they will monitor that money very carefully.

I refer to the Health Committee report, and I acknowledge the good work done by the committee, and by people like Barbara Stewart, who have very carefully gone through and scrutinised this expenditure, assisted the ministry, and come up with a very, very good report. Barbara Stewart referred to the workforce, and of course that is very important to the whole health sector—to have people with the skills to do what is needed, when it is needed. We came in to Government off the back of inadequate, hopeless, and useless workforce planning. Nothing was in place. We saw the rundown in specialists across the board in all areas of skill needs, and we have had to boost and fund that area of training to ensure that we have the people on the ground for that.

I refer to the Hawke’s Bay District Health Board. All I will say to members is for them to read the report and just wait and see; I think things will become clear and evident before too long.

I must refer to a number of areas of success in the health system. In the area of primary health we have put our money where our mouth is. Everyone knows that prevention is better than cure. We have spent literally hundreds of millions of dollars in this area, and 94 percent of the New Zealand population is now enrolled in a primary health organisation. When such organisations work properly—and some still have to work through a number of issues—they take a holistic approach to the primary area of prevention and care for people before they become unwell or ill. Seventy percent of children under 6 years of age are now receiving free standard consultations from practices participating in either the zero fees for under-sixes initiative or the very low-cost access initiative. This means that parents can go and get help when they need it for their children, which prevents the very quick escalation of medical problems with children in particular.

A member spoke about the area of cancer control, which is a very difficult and challenging area. We have put in place a comprehensive plan—the Cancer Control Strategy Action Plan—that runs from 2005 through to 2010, and we are monitoring the progress of that plan all the time. It is a very, very difficult area. We have put over $83 million of new funding into cancer control since the release of that plan, and we are spending an additional $85 million, at least, in extra funding for hospital cancer treatment. Still more needs to be done, because with the evolution of technology and new drugs there will always be pressure in this area. But I think we have taken a fair and responsible attitude across the continuum of cancer care, and I applaud all those people who are involved. We are right at the early stages now. We have a substantive plan in the preventive area through the Healthy Eating - Healthy Action programme—good nutrition and healthy activity—to try to reduce, over time, the incidence of cancer in this country.

But we have not forgotten about the difficult area of palliative care, where, for example, we have seen the development of a national programme of training rotations for palliative medical registrars. There has never previously been a pathway into the speciality area before. That is huge progress in the area of care for those who are facing the challenges of cancer.

We have innovative community carer support and treatment services. I was privileged enough to launch one of those services down on the West Coast, in my home patch. There are two others, in west Auckland and Rotorua. This service is where all the players involved in cancer care and treatment come together through community support, managed by the primary health organisation, to provide the support for those who need it. A young guy with children who was living down in Ross on the West Coast spoke evangelically—with such passion—for the level of care he had received through this new initiative. We will roll these initiatives out across the country as we learn best practice and how best to help the people who are facing these challenges.

I take the opportunity to mention mental health, where we have made huge progress. We have spent an additional $600 million in the area of mental health. I think we have done an amazing job in shifting people’s attitudes towards mental health. That is aside from increasing the workforce in this area by training people in the area of alcohol and drug addiction treatment, and across the whole spectrum of mental health. I would like to acknowledge the Like Minds Like Mine programme, which is now going into its fourth stage. One does not often get the chance to do this, but I would like to acknowledge John Kirwan. He should be thanked, up and down this country, for fronting up in that campaign and assisting to change the attitude of the vast majority of New Zealanders towards those with mental health challenges. In my home patch a guy named Les Warren is someone who also fronted those ads. He is an ordinary guy, an ordinary Kiwi, who was prepared to front up and say “I have a problem that I live with in the community, and with the good assistance of my family and those around me, I can live a relatively normal life.” That is huge progress for a large number of New Zealanders who are challenged by mental health issues.

I could go on and on. I acknowledge all of those people who work in the health system; it is challenging, and there is never enough money because of the costs of technology, the demands, and the locations. I acknowledge the nurses, the general practitioners, the specialists, and those people who are carers up and down this country. Finally, I acknowledge the patients, who are New Zealanders who face challenges all of the time.

It is very important that I acknowledge the three Ministers: Annette King, Pete Hodgson, and now David Cunliffe, who I think have done a remarkable job to get the funding, put in place the strategies and programmes, and move forward the health system in this country in quantum leaps from where we took it up in 1999, after it had been neglected for 9 years under a National Government. If National ever gets close to managing the health system again, that is exactly where it will be again. Thank you, Mr Chairman.

LESLEY SOPER (Labour) Link to this

It is like being pelted with popcorn to listen to members from the National benches speak in what is meant to be the debate on the financial review of the Ministry of Health. It was quite refreshing to hear Barbara Stewart of New Zealand First actually refer to the Ministry of Health financial review. One would have thought, from listening to the National members, that they had no idea at all that there was any need to mention quality health services, whatsoever.

Insubstantial stuff has been coming from members on the other side of the Chamber, and that is absolutely typical of them. There was no concentration on quality health services and no compliments were given to our excellent health services and ministry staff. There were no compliments given to our clinicians—the doctors—or to the nurses, support staff, deliverers of Healthy Eating - Healthy Action programmes, or deliverers of the enormously successful “Get Checked” Diabetes Aotearoa programme, which now covers 80,000 people. That is quite typical of a party that not very long ago was promising to remove the cap on doctors’ fees. All we got from National was insubstantial, popcorn negativity. National members droned on and on. The two speakers between them could not even agree on the amount of extra funding that the Labour Government has put into health.